Cunninghame Furniture Recycling Company - Charities report - 19.2

REGISTERED COMPANY NUMBER: SC382630 (Scotland)

REGISTERED CHARITY NUMBER: SC041863

Report of the Trustees and

Financial Statements for the Year Ended 31 March 2019

for

Cunninghame Furniture Recycling Company

Cunninghame Furniture Recycling Company

Contents of the Financial Statements

for the Year Ended 31 March 2019

Page

Report of the Trustees

1 to 3

Report of the Independent Auditors

4 to 5

Statement of Financial Activities

6

Balance Sheet

7

Cash Flow Statement

8

Notes to the Cash Flow Statement

9

Notes to the Financial Statements

10 to 17

Cunninghame Furniture Recycling Company

Report of the Trustees

for the Year Ended 31 March 2019

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 31 March 2019. 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

The principal objectives and activities in the period under review were that of:-

Obtaining, refurbishing and distributing furniture with the objective of improving the conditions of life of the residents of

Ayrshire.

The advancement of environmental protection or improvement in the community by management of waste recycling

restoration and redistribution of unwanted furniture.

Significant activities

Hazeldene Horticulture

This is a Public Social Partnership with North Ayrshire Council, which runs from 2017-2019.

Hazeldene provide work placements for adults with learning disabilities, operate a Garden Tidy scheme on behalf of

North Ayrshire Council, carry out estate maintenance work for CHA, provide training for Modern Apprentices and carry

out landscaping and garden work for private households.

These works broke even within Cunninghame Furniture Recycling Company.

Income in the year was £268,256 (2018 - £236,280). Costs incurred in the year were £268,256 (2018 - £246,367).

STRATEGIC REPORT

Achievement and performance

Charitable activities

The company continues to operate the furniture recycling facility based in Irvine.

Financial review

Principal funding sources

Cunninghame Furniture Recycling Company received funding from a number of organisations and different sources.

During the year it received funding from North Ayrshire Council, Scottish Government and Scottish Council Voluntary

Organisations (SCVO).

Future plans

The Trustees will continue to appraise the strategy of the business to maximise the long term sustainability of the

company.

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.

Recruitment and appointment of new trustees

Trustees are appointed at the discretion of the Board.

Organisational Structure

The directors, as Charity Trustees of the Charity, are legally responsible for the overall management and control of the

company and meet at regular intervals.

Related Parties

The majority of the Trustees are members of the Board of Management of Cunninghame Housing Association Limited, a

charity registered with the Office of the Scottish Charity Regulator.

Risk Management

The trustees have assessed the risks to which the charity is exposed, in particular those related to the operations and

finances of the charity and are satisfied that procedures are in place to mitigate these risks.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

SC382630 (Scotland)

Registered Charity number

SC041863

Registered office

Quayside Offices

Marina Quay

Dock Road

Ardrossan

Ayrshire

KA22 8DA

Trustees

Ms H Neill

- resigned 18.7.18

A Ramsay

- resigned 9.7.18

Mrs E Schlesiger

Mrs J Strang

Ms M Kirke

J Kelly

Mrs M Whitelaw

- resigned 17.6.19

D Reid

L Keenan

Ms B Johnstone

- appointed 13.9.18

Company Secretary

F A Sweeney

Auditors

Armstrongs Chartered Accountants

Victoria Chambers

142 West Nile Street

Glasgow

G1 2RQ

Bankers

Santander

Customer Service Centre

Bootle

Merseyside

L30 4GB

Solicitors

Harper MacLeod LLP

45 Gordon Street

Glasgow

G1 3PE

General Manager

H McGhee

STATEMENT OF TRUSTEES RESPONSIBILITIES

The trustees (who are also the directors of Cunninghame Furniture Recycling Company 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).

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;

-

state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-

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

A resolution to appoint French Duncan for external auditor services will be put to the members at the forthcoming Board

meeting to approve the financial statements.

Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 17 October 2019 and signed on the board's behalf by:

L Keenan - Trustee

Report of the Independent Auditors to the Trustees and Members of

Cunninghame Furniture Recycling Company

Opinion

We have audited the financial statements of Cunninghame Furniture Recycling Company (the 'charitable company') for the year ended 31 March 2019 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement 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).

In our opinion the financial statements:

-

give a true and fair view of the state of the charitable company's affairs as at 31 March 2019 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; and

-

have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 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.

Opinions 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 and the Charities Accounts

(Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

-

the charitable company has not kept proper and adequate accounting records 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.

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, and to the charitable company's trustees, as a body, in accordance with Section 44(1)(c) of the

Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland)

Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members and

trustees 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 and trustees as a body, for our audit work, for this report, or for the opinions we have

formed.

Adam Armstrong, LLB, CA, (Senior Statutory Auditor)

for and on behalf of Armstrongs Chartered Accountants

Eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006

Victoria Chambers

142 West Nile Street

Glasgow

G1 2RQ

28 October 2019

Cunninghame Furniture Recycling Company

Statement of Financial Activities

for the Year Ended 31 March 2019

31.3.19

31.3.18

Unrestricted fund

Total funds

Notes

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

2

152,689

99,596

Charitable activities

4

Hazeldene Horticulture

268,255

236,279

Other trading activities

3

425,362

338,276

Other income

-

1,250

Total

846,306

675,401

EXPENDITURE ON

Raising funds

5

517,372

389,390

Charitable activities

6

Support costs

46,743

35,462

Hazeldene Horticulture

268,256

246,368

Other

8

1,107

1,215

Total

833,478

672,435

NET INCOME

12,828

2,966

RECONCILIATION OF FUNDS

Total funds brought forward

43,141

40,175

TOTAL FUNDS CARRIED FORWARD

55,969

43,141

Cunninghame Furniture Recycling Company

Balance Sheet

At 31 March 2019

31.3.19

31.3.18

Unrestricted fund

Total funds

Notes

£

£

FIXED ASSETS

Tangible assets

12

10,855

16,158

CURRENT ASSETS

Stocks and work-in-progress

13

5,045

6,945

Debtors

14

133,018

101,621

Cash at bank and in hand

18,351

28,437

156,414

137,003

CREDITORS

Amounts falling due within one year

15

(102,712

)

(96,787

)

NET CURRENT ASSETS

53,702

40,216

TOTAL ASSETS LESS CURRENT LIABILITIES

64,557

56,374

ACCRUALS AND DEFERRED INCOME

18

(8,588

)

(13,233

)

NET ASSETS

55,969

43,141

FUNDS

19

Unrestricted funds

55,969

43,141

TOTAL FUNDS

55,969

43,141

The financial statements were approved by the Board of Trustees on 17 October 2019 and were signed on its behalf by:

L Keenan -Trustee

Cunninghame Furniture Recycling Company

Cash Flow Statement

for the Year Ended 31 March 2019

31.3.19

31.3.18

Notes

£

£

Cash flows from operating activities:

Cash generated from operations

1

16,237

12,836

Interest paid

(875

)

(1,750

)

Net cash provided by (used in) operating activities

15,362

11,086

Cash flows from investing activities:

Purchase of tangible fixed assets

(448

)

(67

)

Sale of tangible fixed assets

-

1,250

Net cash provided by (used in) investing activities

(448

)

1,183

Cash flows from financing activities:

Loan repayments in year

(25,000

)

(25,000

)

Net cash provided by (used in) financing activities

(25,000

)

(25,000

)

Change in cash and cash equivalents in the reporting period

(10,086

)

(12,731

)

Cash and cash equivalents at the beginning of the reporting period

28,437

41,168

Cash and cash equivalents at the end of the reporting period

18,351

28,437

Cunninghame Furniture Recycling Company

Notes to the Cash Flow Statement

for the Year Ended 31 March 2019

1.	RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

31.3.19

31.3.18

£

£

Net income for the reporting period (as per the statement of financial activities)

12,828

2,966

Adjustments for:

Depreciation charges

1,107

1,215

Profit on disposal of fixed assets

-

(1,250

)

Interest paid

875

1,750

Decrease/(increase) in stocks

1,900

(4,954

)

Increase in debtors

(31,397

)

(11,420

)

Increase in creditors

30,924

24,529

Net cash provided by (used in) operating activities

16,237

12,836

Cunninghame Furniture Recycling Company

Notes to the Financial Statements

for the Year Ended 31 March 2019

1.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been

prepared in accordance with the Charities SORP (FRS 102) '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)',

Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of

Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost

convention.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it

is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the

charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and

the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has

been classified under headings that aggregate all cost related to the category. Where costs cannot be directly

attributed to particular headings they have been allocated to activities on a basis consistent with the use of

resources.

Tangible fixed assets

Tangible fixed assets are stated at cost. Depreciation is provided at the following annual rates in order to write

off each asset over its estimated useful life as follows :

Plant and machinery

-

20% straight line

Fixtures and fittings

-

10% straight line

Stocks

Stocks and work-in-progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Taxation

The charity is exempt from corporation tax on its charitable activities from the date of attaining charitable status.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions

arise when specified by the donor or when funds are raised for particular restricted purposes.

Pension costs and other post-retirement benefits

The charity operates a defined contribution pension. Contributions payable by the charity to the pension scheme

are charged to the Statement of Financial Activities in the period to which they relate.

Donated goods

The nature of the donated goods are predominantly high volume and low value items and on that basis these

donated goods are not recognised on receipt, rather the value to the charity of the donated goods for resale is

recognised as income when sold. Funds expended in bringing certain donated goods to a saleable condition are

recognised as a cost of stock on the Balance Sheet until sold. On sale of the donated goods the value of the

related stock cost is charged against the related income under the heading 'other trading activities'.

Grants

Where the acquisition of tangible fixed assets have been financed by capital grants, the asset is incorporated at the

cost of acquisition. The grant is incorporated as deferred income and is released to the Statement of Financial

Activities over the expected useful life of the asset to which the grant relates.

Grants of a revenue nature are credited to income in the period to which they relate.

2.	DONATIONS AND LEGACIES

31.3.19

31.3.18

£

£

Gift aid

39,652

17,598

Grants

113,037

81,998

152,689

99,596

Grants received, included in the above, are as follows:

31.3.19

31.3.18

£

£

Other grants

113,037

81,998

3.	OTHER TRADING ACTIVITIES

31.3.19

31.3.18

£

£

Sales - donated furniture

263,626

230,010

Sales - house clearance

9,465

15,866

Sales - other

83,084

41,141

Contract work

35,000

35,000

Estate management

34,187

16,259

425,362

338,276

4.	INCOME FROM CHARITABLE ACTIVITIES

31.3.19

31.3.18

Activity

£

£

CHA Contract work

Hazeldene Horticulture

91,448

57,148

NAC Contract work

Hazeldene Horticulture

39,000

32,653

NAC Garden tidy contract

Hazeldene Horticulture

87,750

87,600

Sales - other

Hazeldene Horticulture

20,791

19,620

Grants

Hazeldene Horticulture

29,266

39,258

268,255

236,279

Grants received, included in the above, are as follows:

31.3.19

31.3.18

£

£

Other grants

29,266

39,258

5.	RAISING FUNDS

Other trading activities

31.3.19

31.3.18

£

£

Staff costs

293,002

217,611

Rent and rates

61,144

58,939

Insurance

7,169

6,390

Energy cost

14,124

12,981

Post and stationery

4,346

3,799

Telephone

932

4,019

Advertising

15,355

2,236

Subscriptions

1,155

1,512

Cleaning, refuse disposal and landfill cost

13,572

6,987

Bank charges

3,833

2,027

Sundry expenses

1,877

1,683

Office equipment maintenance

2,117

3,904

Recruitment

2,456

3,449

Training

2,352

1,619

Health and safety

1,979

2,613

Premises repair and maintenance

2,808

3,204

Vehicle expenses

30,249

21,651

Office repairs & maintenance

3,969

1,373

Recycling costs

3,240

3,156

Purchases of stock

50,818

28,487

Interest payable and similar charges

875

1,750

517,372

389,390

6.	CHARITABLE ACTIVITIES COSTS

Direct costs

Support costs

Totals

(See note 7)

£

£

£

Hazeldene Horticulture

268,256

-

268,256

Support costs

-

46,743

46,743

268,256

46,743

314,999

7.	SUPPORT COSTS

Governance costs

£

Support costs

46,743

Support costs, included in the above, are as follows:

Governance costs

31.3.19

31.3.18

Support costs

Total activities

£

£

Auditors' remuneration

1,500

1,450

C H A support

30,000

30,000

Legal and professional fees

15,243

4,012

46,743

35,462

8.

OTHER

31.3.19

31.03.18

£

£

Depreciation - net of amortised grant

1,107

1,215

9.	NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

31.3.19

31.3.18

£

£

Auditors' remuneration

1,500

1,450

Depreciation - owned assets

5,751

6,140

Surplus on disposal of fixed asset

-

(1,250

)

Amortisation - deferred income

(4,645

)

(4,925

)

Other operating leases

17,478

9,523

The above excludes £15,983 (2018 - £18,284) in respect of Hazeldene Horticulture vehicle leasing.

10.	TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31st March 2019 nor for the year ended

31st March 2018.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31st March 2019 nor for the year ended 31st March

2018.

11.	STAFF COSTS

1.3.19

31.3.18

£

£

Wages and salaries

270,113

202,572

Social security costs

15,532

11,575

Other pension costs

7,357

3,464

293,002

217,611

The above excludes £202,752 (2018 - £176,959) in respect of the Hazeldene Horticulture staff.

The average monthly number of employees during the year was as follows:

31.3.19

31.3.18

CFRC Employees

19

25

No employees received emoluments in excess of £60,000.

12.	TANGIBLE FIXED ASSETS

Plant and machinery

Fixtures and fittings

Totals

£

£

£

COST

At 1 April 2018

19,525

35,952

55,477

Additions

448

-

448

At 31 March 2019

19,973

35,952

55,925

DEPRECIATION

At 1 April 2018

17,863

21,456

39,319

Charge for year

1,856

3,895

5,751

At 31 March 2019

19,719

25,351

45,070

NET BOOK VALUE

At 31 March 2019

254

10,601

10,855

At 31 March 2018

1,662

14,496

16,158

13.	STOCKS AND WORK-IN-PROGRESS

31.3.19

31.3.18

£

£

Stocks

5,045

6,945

14.	DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.19

31.3.18

£

£

Trade debtors

133,018

101,621