Emmaus South Wales - Charities report - 18.1

REGISTERED COMPANY NUMBER: 07188459 (England and Wales)

REGISTERED CHARITY NUMBER: 1136010

REPORT OF THE TRUSTEES AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

FOR

EMMAUS SOUTH WALES

(A COMPANY LIMITED BY GUARANTEE)

EMMAUS SOUTH WALES

CONTENTS OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2018

Page

Report of the Trustees

1 to 10

Report of the Independent Auditors

11 to 12

Statement of Financial Activities

13

Statement of Financial Position

14 to 15

Statement of Cash Flows

16

Notes to the Statement of Cash Flows

17

Notes to the Financial Statements

18 to 31

EMMAUS SOUTH WALES

REPORT OF THE TRUSTEES

FOR THE YEAR ENDED 30 JUNE 2018

The trustees, who are also directors of the charity for the purposes of the Companies Act 2006, present

their report with the financial statements of the charity for the year ended 30 June 2018. The trustees have

adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice

applicable to charities preparing their accounts in accordance with the Financial Reporting Standard

applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015).

OBJECTIVES AND ACTIVITIES

Objectives and aims

Emmaus is an international movement, independent of religious or political affiliation. It originated in France

in 1949, based on Abbe Pierre's original idea of Solidarity: "serve first those who suffer most", as set out in

the Universal Manifesto of the Emmaus Movement. (Available for download at

http://www.emmaus-europe.org).

Emmaus is a homelessness charity with a difference. Emmaus does not just give people a bed for the

night; it offers a home, meaningful work and a sense of belonging. For many people who have experienced

homelessness, losing their self-esteem can be the most damaging part of their experience. Being on your

own, with no support around you can be soul-destroying, leaving you feeling worthless. Finding your way

out of that situation is not easy, particularly when the only options available are temporary fixes, offering a

bed for the night but little to occupy your days. Emmaus is different because it provides a home for as long

you need it, in an Emmaus community. This gives you the opportunity to take stock of your life, deal with

any issues you might have, and often re-establish relationships with your loved ones.

"Companion" is the name given to those who live in an Emmaus community. Applicants join our community

as companions, having been homeless or otherwise vulnerably housed and unemployed. Potential

companions can apply directly or be referred by a third party (probation officer or outreach worker for

example) with their permission. We have developed partnerships and referral relationships with other

services from which we are generating referrals and encouraging homeless people to contact us.

Companions are required to take an active part in the daily life of the community, including working to the

best of their ability in the social enterprise where they support themselves and one another. This is not an

employee/employer relationship as the work is adapted to suit the capacity of the companion (which may

be very limited) rather than the companion being made to adapt to the work. This approach enables

opportunities for training and future employment but most importantly of all it allows companions to regain

their dignity.

Emmaus Communities in the UK enable people who are homeless to rebuild their lives within

self-supporting Communities. Companions can live at our Community home at Nant Lais, and receive

support to gain extra skills to equip them to look for work and make a success of finding and living in, their

own accommodation.

Emmaus South Wales is fully committed to an equal opportunities policy and will not discriminate on the

grounds of gender, gender reassignment, marital & civil partnership status, age, race, colour, nationality,

national origin, ethnic background, religion or belief, disability, sexual orientation, pregnancy & maternity,

past criminal convictions or offending background unless it can be shown to be justified.

Emmaus works in cooperation with the Local Authority and Government

The report ('Better than cure? Testing the case for enhancing prevention of single homelessness in

England 2016') by Crisis, in conjunction with the University of York and the University of Pennsylvania,

estimated the annual cost to the taxpayer of a single person being homeless to be around £35.5k. The

only cost to the taxpayer of a Companion living in our Emmaus Community is Housing Benefit of around

£10.5k per Companion, which is paid to Emmaus as the rent for residence in Nant Lais. So, 19

Companions safely housed in the Community Home at Nant Lais and kept from homelessness, save the

UK taxpayer nearly £500K per annum. This is an impressive social investment.

The Companions sign off benefits on joining Emmaus and volunteer full-time in their Community's social

enterprise with the Community receiving their Housing Benefit as a form of rent. Emmaus provides

substantial "public benefit" by reducing the dependency of Companions on the public purse, both by way of

the renunciation of primary benefits and, more particularly, by the savings to the welfare and criminal

justice system by their adoption of more stable lifestyles.

Faced with the introduction of Universal Credit, Emmaus throughout the UK, lobbied MPs and AMs to give

their serious consideration to maintaining the traditional Housing Benefit support which was essential for

Emmaus to serve homeless people. Emmaus South Wales greatly values the support of our Bridgend MP,

The Rt. Hon Madeleine Moon in raising awareness of homelessness and in the Emmaus meeting with the

then DWP Secretary of State, The Rt. Hon David Gauke MP to make the case for Emmaus communities to

remain secure throughout the rollout of Universal Credit.

The news that our Companions will continue to receive Housing Benefit has come as a relief to the charity

since this income is essential to the charity's viability. The impact of Universal Credit upon the Emmaus

model, including volunteers, is yet to be fully understood. Emmaus South Wales long-term strategy is to

develop its Social Enterprise to cover as much of the costs of the Community as possible. However, at

present, that has not been achieved and increased support from Government and donors is essential to

carry out our work of supporting the homeless.

The Community Home at Nant Lais

In March 2015, the Community building and two acres of land on which it stands, were purchased for

£175,000 from Valleys to Coast Housing Association, and a further £1.1 million incurred to convert and

equip the building to form a Community home for 24 Companions. The Community was opened in January

2016.

The fund-raising efforts of Emmaus South Wales and the generous support of organisations, individuals

and foundations ensured that the costs of refurbishment were entirely covered. Nant Lais, in the Newcastle

ward in Bridgend, is the first Emmaus Community home established in Wales, a Community where

homeless people live and work, recover self-confidence and support both themselves and others.

During the year July 2017 to June 2018, 11 new Companions moved into Nant Lais. We are grateful to

those who have referred Companions. Occupancy of the community home reached 21 companions, nearly

90% of its capacity during the year, with several new companions joining, whilst others moved on. At the

time of writing, the Community houses 18 Companions.

Some companions have complex needs and, during the year, additional staffing was required, with agency

staff being employed at high cost. Enhanced Housing Benefit from the local authority has now been

agreed, to cover the increased costs of accommodating and supporting the formerly homeless people who

join the community. The community is now being operated as economically as possible with companions

committed to helping run their social enterprise.

Our Companions cover a wide range of demographics, coming from all parts of the United Kingdom with

ages ranging from 22 to 65. During the year, the Community had a Welsh contingent of 30%, with a

proportion of those from the Bridgend area. Companions present with many needs. Several have a history

of substance misuse, whilst others have experienced alcohol addiction. The Community management

team find it necessary to deal with depression, ADHD, transgender issues and anger management.

Counselling is arranged for Companions with emotional issues when they arrive; specialist support which is

helping to maintain a safe and stable community. Other support for Companions includes training related to

health and safety, substance misuse, bereavement and the effects of trauma. Our focus has been to grow,

building a safe and stable Community with Companions committed to work in the social enterprise to

support themselves.

The Community had successful visits from local organisations during the year, Companions and staff being

interviewed by the media to describe the work of Emmaus South Wales. This has promoted Emmaus

values and its social enterprise model, highlighting the benefits it offers to local homeless people.

Companions welcomed staff from the Bridgend branch of the Nationwide Building Society to the Nant Lais,

Community home for a corporate volunteering day, after two branches (Bridgend and Neath) chose

Emmaus South Wales as their local charity of the year, carrying out a number of activities and fundraising

on our behalf. In December 2017, Companions invited staff from Brynmennyn Family Hostel for an early

Christmas lunch after hearing they would be working with their service users on Christmas Day.

Emmaus South Wales enjoyed the support of a number of local businesses and organisations throughout

the year: receiving the local Aldi's surplus food on Christmas Eve; the proceeds of a concert at the Ewenny

Arts Festival: £650, and hundreds of items of bedding and towels from The Clayton and Radisson Blu

Hotels in Cardiff to support our Community home and solidarity work.

The charity has again enjoyed support from The Lloyds Bank Foundation, The Moondance Foundation,

The Oak Foundation and The Waterloo Foundation.

Creating "a sense of Community"

The Community and social enterprise work together to ensure the transition from applicant to Companion

is as seamless as possible. Companions have individual development plans, designed and reviewed to

provide the training and support required. They are aspirational in planning for future employment and

move-on. Induction commences the day the Companion arrives, with formalities such as housing benefit

forms and GP registration taking place immediately. The Companion is given a rota which explains where

they will work, to whom they will report and where they will be trained. Close monitoring of that process is

undertaken by the Business Manager and Community staff and kept under weekly review by shop

managers and volunteers.

Companions are encouraged to live effectively together as a Community. Companions take the lead on

conflict resolution and weekly Community meetings address any behavioural or procedural issues. The

Community's effective relationship with our local Police ensures that Companions develop healthy

responses to law enforcement, and our local Police act quickly if any issues arise.

Trustees meet periodically with Companions to ensure that Companions are aware of the Trustees

commitment to their support and welfare and that Trustees are fully aware of the operation of the

Community.

The Social Enterprise

The social enterprise comprises seven shops in Bridgend, Porthcawl, Maesteg, Neath, Cowbridge and

Aberdare together with a warehouse and two vans. It creates employment and training opportunities for

staff, Companions and volunteers. Its dual purposes are to contribute towards the running costs of the

Community: Companions' home, food, upkeep and modest weekly allowances and also, through working in

their social enterprise to support themselves, Companions regain self-respect as they see their actions

make a real difference, both to their own lives, and the lives of others.

The social enterprise sold donated goods worth £687,834, a decline of £36,807 compared with the

previous year. Sales of donated goods generated a net surplus of £79,137, a decline of £64,072 compared

with the previous year. New goods sales of £99,998, increased by £30,788, but show a net deficit of

£37,425. Although apparently loss-making, new goods sales of beds, mattresses and refrigerators are

ancillary to our traditional business and make a net contribution over variable costs.

Over 7,000 donated items, weighing over 209 tonnes, were sold, which might otherwise have ended up in

landfill - a significant environmental contribution. Selling online through a new E-Bay shop and website has

begun.

The social enterprise continues to achieve the multiple objectives of demonstrating that Emmaus South

Wales is a serious player, saving waste through re-use and recycling, supplying needy people with low-cost

furniture and household goods, creating employment and volunteering opportunities and generating funds

to support an Emmaus Community serving homeless people.

Increased costs included increases in minimum wage, utility costs and on essential compliance, with shop

improvements and better health and safety provision for staff, companions, volunteers and visitors. The

shops are serviced by a van team with two vans. On a vehicle recently replaced, Emmaus is partnering

with four local businesses who advertise on the sides of the vehicle.

As a reuse charity, Emmaus relies on generous donations from local people, especially of furniture. With

less new furniture being sold by high street shops, the charity experienced some decline in donations

received. Several shops failed to make a net contribution. Action has and continues to be taken to reduce

costs and raise income. Opportunities are under examination to broaden the base of our social enterprise,

by offering other products and services including house clearances and on-line sales.

The focus for the current year is to maximise sales, cut costs, ensure maximum commitment by

Companions to working in the social enterprise and build an excellent working relationship between the

staff and companions of the Community and the staff in the shops.

Staff and Volunteers

The past year has been a challenging one for Emmaus South Wales with several changes in staff. The

social enterprise has a team of 19 full and part-time staff, committed to delivering excellent customer

service. The charity's investment in employees' training includes Level 3 in Education and Training, Health

and Safety in the Workplace Level 2, Bike Maintenance and PAT testing.

Staff are trained, during their induction, in the Emmaus ethos, its code of conduct and the policies of the

charity, as well as the running of the shops. In addition to its core staff, the charity enjoys the support of

some exceptional volunteers who gave 21,672 hours of their time to support the charity; a value to

Emmaus of £169,692, based on the minimum wage hourly rate.

Our Marketing Co-ordinator is contributing to informing supporters and the public generally on the role of

Emmaus in enhancing the lives of companions through their living, training and working in the Emmaus

community.

The Trustees express their appreciation for the work of all the staff of the charity, including management of

the social enterprise, without whom the social enterprise would not be successful. Staff and volunteers,

several of whom have suffered long-term unemployment with its accompanying stresses, describe their

time in Emmaus as rewarding and, indeed, life-changing.

Acts of Solidarity

Emmaus South Wales' ethos commits us to acts of solidarity and, in the past year, the charity has carried

out more solidarity than ever. We have supported Emmaus International's solidarity projects by donating a

day's takings from our shops in our 'Solidarity Day Sale'. Our shops donated furniture worth £12,420,

delivered by the community van, to local people in need, identified through our links with local housing

associations, contributing to reducing social exclusion and poverty in local communities. Emmaus

undertake this outreach activity to help the less advantaged in society in a practical way.

Companions' acts of solidarity throughout the year included supporting the Moldova Project, Maesteg's

Community Garden Project and regularly donating surplus food to local refuges and hostels.

We are working with local people to receive relevant and appropriate referrals, and increase local

participation and raise awareness through our solidarity work. This will assist in maximising occupancy,

retaining and developing the Companions we have.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

The social enterprise continues to achieve the multiple objectives of demonstrating that Emmaus South

Wales is a serious player, saving waste though re-use and recycling, is a credible supplier to needy people

of low cost furniture and household goods, creating employment and volunteering opportunities and

generating funds to support an Emmaus Community serving homeless people who live and work in a

community, recover self-confidence and support both themselves and others in greater need.

Emmaus South Wales' relationship with the local community

Establishing and maintaining good communications with local householders is a key requirement of a

successful Emmaus Community. Leaflet drops and talks have been delivered to various companies,

bodies and community groups. Our policy is to be "good neighbours". We enjoy good working relations with

Bridgend County Borough Council, which administers Housing Benefit.

Our social enterprise has been working hard to forge strong links with the local communities surrounding

each shop. This has led to successful partnership working with a number of local voluntary organisations

and schools.

Emmaus South Wales continued to engage with our local communities and in particular focused on

educating the next generation about homelessness and Emmaus South Wales as a charity, speaking, this

year, to over 650 children aged 9-17 at talks and workshops in schools and clubs in South Wales. By

engaging with the next generation, we hope to educate children to empathise with those who are suffering

homelessness and encourage them to support Emmaus South Wales, as their local charity working to end

homelessness.

FINANCIAL REVIEW

Financial position and financial performance

In the year to 30 June 2018 Emmaus South Wales incurred a deficit of £167,095 compared with a surplus

of £6,993 in the previous year. Note 9 to the accounts on page 22, shows where this substantial

deterioration occurred.

The social enterprise made a net contribution of £41,712, a deterioration of £72,182 from £113,894 last

year. Social enterprise sales grew in the first half year but declined by some 15% in the second half and

have yet to fully recover in the current financial year. Substantial expenditure was incurred to ensure health

and safety in our shops. In the community, housing benefit increased with higher numbers of companions,

but staffing and overhead expenditure was excessive, resulting in a net deterioration of £37,345. The other

substantial overspend was the £75,509 increase in expenditure in the central office costs.

In total, the charity experienced a £78,000 rise in staff costs, with the charity addressing several staffing

issues in the year. Costs bore a heavy depreciation charge of £109,872, but with substantially lower capital

expenditure of £45,122.

The Trustees, appreciating the seriousness of the situation, initiated action to correct shortcomings in the

charity in order to eliminate losses as soon as possible. To strengthen its financial management the

charity recruited a part-time, Chartered Certified Accountant as Financial Controller. Central and

Community overheads, which had substantially exceeded budgets, are now under control. At the Trustees'

invitation, the Chief Executive of BAVO and the Emmaus UK Federation provided valued advice and

support to the Trustee Board, both in the Community and social enterprise, resulting in appropriate action

being taken, to achieve a rapid and full recovery.

In December, our Chief Executive resigned to pursue a career in training. We wish him well. Emmaus

South Wales is fortunate that Tony Ferrier, recently retired as the highly successful Chief Executive of

Emmaus St Albans, has joined us to "hold the fort" on a part-time, pro-bono basis, whilst a replacement

Chief Executive is recruited.

This year's budget prudently assumed a reduced result with a delayed recovery, but further losses have

been experienced in the opening half year. Further action is being taken to eliminate losses, including cost

reductions, grant applications, and enhanced performance of the social enterprise.

Working Capital Reserves

The Trustees have reviewed their working capital reserve which they confirm at £100,000. The loss

reduced net current assets in the year by £100,643 to £186,512, which is still substantially above the

charity's working capital reserve. To maintain the net working capital, repayment of the loan of £43,250

from Emmaus UK has been deferred and is likely to be deferred again at the end of the current financial

year.

The Board has reviewed a forecast of the charity's financial results to the end of the 2019 calendar year

and confirm their confidence in the charity as a going concern.

FUTURE PLANS

Realising its serious loss-making position, the Board invited proposals from Emmaus UK on a turnaround

plan to be implemented and monitored at monthly meetings of both the Board and its Enterprise & Finance

Committee. The plan comprises cost reductions and tight budgetary control throughout the charity, coupled

with increased income, from Housing Benefit with a full community of Companions, and enhanced

effectiveness of shop management, generating higher sales. Grants from our supporting charities are

sought to "buy us time" whilst the other measures fully take effect. The Board of Emmaus South Wales,

supported by the Federation: Emmaus UK, are fully committed to the long-term success of Emmaus South

Wales. Other Emmaus Communities have experienced serious "growth pains" in their early years and have

gone on to grow and become highly successful. There is no reason why this should not be true of Emmaus

South Wales. The Trustees are very grateful for the full support of Emmaus UK.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company,

limited by guarantee, as defined by the Companies Act 2006.

The charity was constituted in 2010 as a company limited by guarantee, controlled by its governing

document, the Memorandum and Articles of Association, as defined by the Companies Act 2006.

The objects of the charity are the alleviation and relief of poverty, hardship and distress arising therefrom,

in conformance with the principles of the Emmaus Movement; the provision of accommodation for

homeless people in South Wales, the rehabilitation of the beneficiaries and the provision of education and

training, including employment training and work opportunities with the purpose of developing their skills to

enable them to gain employment in the future and thereby develop a sense of self-worth and dignity

through having a self-supporting life.

Recruitment, appointment and training of new trustees

The Charity is directed by a Board of Trustees who are elected and co-opted under the terms of the

Memorandum and Articles of Association. Trustee nominations must be approved by existing Trustees.

Each new Trustee is briefed about the Community, their legal and ethical responsibilities, and an induction

programme is in place. The Emmaus South Wales Board has adopted the NCVO Code of Good

Governance.

Induction and training takes the form of attendance at Board Meetings and its Committees, escorted visits

to other neighbouring Emmaus Communities, attending the Emmaus UK Federation induction day, formal

training in the responsibilities of a Trustee and assumption of appropriate roles in support of the

Community and its social enterprise. Attendance at the Emmaus Annual Assembly and other conferences

and meetings of the Emmaus Movement form an important way in which new Trustees learn the Emmaus

ethos and best practice and gain essential contacts.

All trustees give their time voluntarily and receive no benefits from the Charity. Any expenses reclaimed

from the charity are set out in the notes to the accounts. None of the trustees has any beneficial interest in

the company. The Board of Trustees has again recently reviewed the skills and experience of its members,

identifying any gaps requiring recruitment of Trustees to ensure the Board has the strength in depth to

create and manage an effective Emmaus Community.

Organisational structure

The Trustee Board is responsible for the strategic direction and policy of the Charity. It has been meeting in

Bridgend monthly in the past year to address the financial difficulties faced by the charity.

A delegation framework is in place, with the day to day responsibility for the operations of the Charity

resting with the Chief Executive to ensure the charity delivers the activities specified and that key

performance indicators are met.

Trustees and staff are members of the Enterprise & Finance Committee. The Board decided to revert to

meeting monthly and subsume the work of all other Board Committees into the work of the Trustee Board.

At its November 2018 Meeting, Peter Knapp handed over the role of Chair to Julie Raikes and Jean Fenner

as Joint Chairs.

Wider network

Emmaus South Wales is a member of the Emmaus UK Federation which consists of 29 established

Communities which offer accommodation to over 750 homeless people. There are also Groups working

towards the opening of Communities. Emmaus in the UK is part of the international Emmaus Movement,

made up of 330 member groups working in 37 countries around the world. The work that the members do

varies, depending on the needs of the country that they work in, but all Groups share a commitment to

"serve first those who suffer most", as set out in the Universal Manifesto of the Emmaus Movement (see

previous reference above under 'Objectives and Aims'). Emmaus South Wales has trial membership of

Emmaus Europe and Emmaus International & affiliate membership of Emmaus UK.

As part of an International Movement, we learn from one another, share experiences and work together to

support those in greatest need. Staff, companions, volunteers and trustees in the UK participate in

exchanges, meetings and in solidarity sales, where money is raised for Emmaus projects in poorer

countries.

Emmaus South Wales was represented at last year's National Assembly in Coventry. Our staff and

Companions attend workshops, briefings and short courses on the strategic direction of Emmaus.

Related parties

Emmaus South Wales is assisted by the Emmaus UK Federation, and the Board greatly appreciates the

support received from Emmaus UK, from local organisations such as the Bridgend Association of

Voluntary Organisations (BAVO) and Wales Co-operative.

Trustees identify risks to which the charity is exposed and ensure appropriate controls are in place to

minimise undue risk and guard against fraud and error.

The Trustees have established a complete portfolio of policies and procedures, which are subject to

regular review. This includes a comprehensive risk register, which has been comprehensively revised and

is reviewed annually. They seek to minimise the risks which the Charity, its employees, Companions,

volunteers and customers might encounter. Internal control risks are minimised by the operation of stock

management and cash control systems and the implementation of procedures for authorisation and control

of financial transactions. The Charity is committed to effective health and safety risk management in

accordance with our Health and Safety policy. Risk assessments and specific procedures are completed,

reviewed, and maintained. All new activities and potential risks are risk assessed. All staff and volunteers

participate in a health and safety induction, with specific training offered when desirable or necessary.

FUNDS HELD BY TRUSTEES FOR THIRD PARTIES

The charity holds funds (savings) on behalf of Companions, which are built up weekly at £5 per Companion

from his or her weekly allowance. This builds up so enabling each Companion to have some savings when

they move on from Emmaus South Wales. The savings are held solely for the benefit of the Companions.

The amounts saved are recorded at the Community home at Nant Lais and are kept separate from other

funds as required by FRS102 module 19.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

07188459 (England and Wales)

Registered Charity number

1136010

Registered office

6 Caroline Street

Bridgend

CF31 1DQ

The Board and Trustees

P. Knapp (Chair until November 19th 2018)

J. Fenner ( Joint Chair from November 19th 2018)

J. Raikes (Appointed on October 9th 2017. Joint Chair from November 19th 2018).

G.E. Cheetham (Vice Chair, resigned November 19th 2017)

M.E. Roberts (Vice Chair)

C.A. Lowry (Company Secretary)

M. Barry

M Major MBE

Revd Dr P. Manghan (Appointed September 17th 2018)

J.A. Noble

P. Tanner (Appointed on October 9th 2017 and resigned on September 17th 2018)

Bank

National Westminister Bank Plc

Bridgend

CF31 1EN

Company Secretary

C A Lowry

Auditors

Graham Paul Limited

(Statutory Auditor)

Court House

Court Road

Bridgend

CF31 1BE

THANKS

The Trustees would like to express their thanks to all who have supported Emmaus South Wales in the

past year, especially Heidi Bennett, the Chief Executive of BAVO, the Chief Executive and staff of Emmaus

UK and to those Trustees, staff and volunteers, who have supported the Emmaus Community home in

Bridgend during the year.

We remain grateful for the support received in 2017/18 for grants received from The Waterloo Foundation

and the Moondance Foundation, who have each contributed over £30,000 towards the costs of running the

Community, the Lloyds Bank Foundation continued to contributed £25,000 towards the cost of

administration for the charity and the Oak Foundation has also contributed £27,887.

Emmaus UK has provided enhanced support to the Board to restore the profitability of the charity.

And, last but not least, thanks to our generous donors of furniture, clothes, books and bric-a-brac and to

our wonderful customers who then buy them and signpost others to our shops!

STATEMENT OF TRUSTEES RESPONSIBILITIES

The trustees (who are also the directors of Emmaus South Wales for the purposes of company law) are

responsible for preparing the Report of the Trustees and the financial statements in accordance with

applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted

Accounting Practice), including Financial Reporting Standard 102 "The Financial Reporting Standard

applicable in the UK and Republic of Ireland".

Company law requires the trustees to prepare financial statements for each financial year which give a true

and fair view of the state of affairs of the charitable company and of the incoming resources and application

of resources, including the income and expenditure, of the charitable company for that period. In

preparing those financial statements, the trustees are required to

-

select suitable accounting policies and then apply them consistently;

-

observe the methods and principles in the Charity SORP;

-

make judgements and estimates that are reasonable and prudent;

-

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.

The trustees are responsible for keeping proper accounting records which disclose with reasonable

accuracy at any time the financial position of the charitable company and to enable them to ensure that the

financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the

assets of the charitable company and hence for taking reasonable steps for the prevention and detection of

fraud and other irregularities.

In so far as the trustees are aware:

-

there is no relevant audit information of which the charitable company's auditors are unaware; and

-

the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

AUDITORS

The auditors, Graham Paul Limited, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

Approved by order of the board of trustees on 18 February 2019 and signed on its behalf by:

J Fenner - Trustee

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

EMMAUS SOUTH WALES

Opinion

We have audited the financial statements of Emmaus South Wales (the 'charitable company') for the year ended 30 June 2018 which comprise the Statement of Financial Activities, the Statement of Financial Position, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

In our opinion the financial statements:

-

give a true and fair view of the state of the charitable company's affairs as at 30 June 2018 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

-

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'; and

-

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditors

responsibilities for the audit of the financial statements section of our report. We are independent of the

charitable company in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical

responsibilities in accordance with these requirements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us

to report to you where:

-

the trustees' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The trustees are responsible for the other information. The other information comprises the information

included in the annual report, other than the financial statements and our Report of the Independent

Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent material misstatements, we are required to determine

whether there is a material misstatement in the financial statements or a material misstatement of the other

information. If, based on the work we have performed, we conclude that there is a material misstatement of

this other information, we are required to report that fact. We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-

the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-

the Report of the Trustees has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in

the course of the audit, we have not identified material misstatements in the Report of the Trustees.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

-

adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or

-

the financial statements are not in agreement with the accounting records and returns; or

-

certain disclosures of trustees' remuneration specified by law are not made; or

-

we have not received all the information and explanations we require for our audit; or

-

the trustees were not entitled to take advantage of the small companies exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Trustees.

Responsibilities of trustees

As explained more fully in the Statement of Trustees Responsibilities, the trustees (who are also the

directors of the charitable company for the purposes of company law) are responsible for the preparation of

the financial statements and for being satisfied that they give a true and fair view, and for such internal

control as the trustees determine is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company's

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using

the going concern basis of accounting unless the trustees either intend to liquidate the charitable company

or to cease operations, or have no realistic alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent

Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in

the aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms

part of our Report of the Independent Auditors.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3

of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the

charitable company's members those matters we are required to state to them in an auditors' report and for

no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the charitable company and the charitable company's members as a body, for our audit

work, for this report, or for the opinions we have formed.

Andrew Lee BSc ACA (Senior Statutory Auditor)

for and on behalf of Graham Paul Limited

(Statutory Auditor)

Court House

Court Road

Bridgend

CF31 1BE

18 February 2019

EMMAUS SOUTH WALES

STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 30 JUNE 2018

2018

2017

Unrestricted funds

Restricted funds

Total funds

Total funds

Notes

£

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

2

29,786

-

29,786

33,602

Charitable activities

5

Grants more than £5,000

-

87,504

87,504

81,887

Grants less than £5,000

-

-

-

8,096

Social enterprise

820,858

-

820,858

768,326

Other trading activities

3

102,094

-

102,094

71,446

Investment income

4

237

-

237

102

Total

952,975

87,504

1,040,479

963,459

EXPENDITURE ON

Raising funds

6

67,802

-

67,802

42,601

Charitable activities

7

Support Costs

136,885

85,332

222,217

126,039

Finance costs

8,235

-

8,235

11,420

Social enterprise

823,049

56,089

879,138

760,893

Other

9

30,182

-

30,182

15,513

Total

1,066,153

141,421

1,207,574

956,466

NET INCOME/(EXPENDITURE)

(113,178

)

(53,917

)

(167,095

)

6,993

RECONCILIATION OF FUNDS

Total funds brought forward

285,401

1,198,614

1,484,015

1,477,022

TOTAL FUNDS CARRIED FORWARD

172,223

1,144,697

1,316,920

1,484,015

EMMAUS SOUTH WALES

STATEMENT OF FINANCIAL POSITION

AT 30 JUNE 2018

2018

2017

Unrestricted funds

Restricted funds

Total funds

Total funds

Notes

£

£

£

£

FIXED ASSETS

Tangible assets

14

67,867

1,120,139

1,188,006

1,259,994

CURRENT ASSETS

Stocks

15

19,441

-

19,441

9,219

Debtors

16

176,632

-

176,632

76,275

Cash at bank and in hand

91,431

24,558

115,989

284,509

287,504

24,558

312,062

370,003

CREDITORS

Amounts falling due within one year

17

(125,550

)

-

(125,550

)

(82,848

)

NET CURRENT ASSETS

161,954

24,558

186,512

287,155

TOTAL ASSETS LESS CURRENT LIABILITIES

229,821

1,144,697

1,374,518

1,547,149

CREDITORS

Amounts falling due after more than one year

18

(42,732

)

-

(42,732

)

(38,492

)

ACCRUALS AND DEFERRED INCOME

21

(14,866

)

-

(14,866

)

(24,642

)

NET ASSETS

172,223

1,144,697

1,316,920

1,484,015

FUNDS

22

Unrestricted funds

172,223

285,401

Restricted funds

1,144,697

1,198,614

TOTAL FUNDS

1,316,920

1,484,015

These financial statements have been prepared in accordance with the special provisions of Part 15 of the

Companies Act 2006 relating to charitable small companies.

The financial statements were approved by the Board of Trustees on 18 February 2019 and were signed on its behalf by:

J Fenner -Trustee

J Raikes -Trustee

EMMAUS SOUTH WALES

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2018

2018

2017

Notes

£

£

Cash flows from operating activities:

Cash generated from operations

1

(129,383

)

54,797

Interest paid

(2,118

)

(5,647

)

Interest element of hire purchase and finance lease rental payments

-

(1,224

)

Net cash provided by (used in) operating activities

(131,501

)

47,926

Cash flows from investing activities:

Purchase of tangible fixed assets

(45,122

)

(23,005

)

Sale of tangible fixed assets

1,189

-

Interest received

237

102

Net cash provided by (used in) investing activities

(43,696

)

(22,903

)

Cash flows from financing activities:

New loans in year

6,677

-

Loan repayments in year

-

(64,462

)

Capital repayments in year

-

(5,790

)

Net cash provided by (used in) financing activities

6,677

(70,252

)

Change in cash and cash equivalents in the reporting period

(168,520

)

(45,229

)

Cash and cash equivalents at the beginning of the reporting period

284,509

329,738

Cash and cash equivalents at the end of the reporting period

115,989

284,509