ACCOUNTS - Final Accounts

ACCOUNTS - Final Accounts

THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED - Company Information

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Caseware UK (AP4) 2020.0.247 2020.0.247 2020-03-312020-03-3138truefalse2019-04-01The principal activities were to facilitate the achievement by the collaboration framework of its objects as set out in the company's articles of association dated February 2016, namely to provide a means by which the collective voice of the Constituent Authorities can be articulated and represented to Government departments, the Local Government Association and other bodies; to commission research or strategic policy work on topics of common concern; to pursue relationships with other public sector bodies, as agreed; to pursue efficiency and effectiveness across the Constituent Authorities, including through the provision of a collaborative procurement service; and to pursue any other matter which the Constituent Authorities agree is of common concern.44true 05014821 2019-04-01 2020-03-31 05014821 2018-04-01 2019-03-31 05014821 2020-03-31 05014821 2019-03-31 05014821 c:Director5 2019-04-01 2020-03-31 05014821 d:CurrentFinancialInstruments 2020-03-31 05014821 d:CurrentFinancialInstruments 2019-03-31 05014821 d:CurrentFinancialInstruments d:WithinOneYear 2020-03-31 05014821 d:CurrentFinancialInstruments d:WithinOneYear 2019-03-31 05014821 d:RetainedEarningsAccumulatedLosses 2020-03-31 05014821 d:RetainedEarningsAccumulatedLosses 2019-03-31 05014821 c:FRS102 2019-04-01 2020-03-31 05014821 c:Audited 2019-04-01 2020-03-31 05014821 c:FullAccounts 2019-04-01 2020-03-31 05014821 c:CompanyLimitedByGuarantee 2019-04-01 2020-03-31 05014821 c:SmallCompaniesRegimeForAccounts 2019-04-01 2020-03-31 05014821 2 2019-04-01 2020-03-31 iso4217:GBP xbrli:pure

Registered number: 05014821










THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED










FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 MARCH 2020
 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
REGISTERED NUMBER: 05014821

BALANCE SHEET
AS AT 31 MARCH 2020

2020
2019
Note
£
£

  

Current assets
  

Debtors: amounts falling due within one year
 4 
1,026,651
1,757,174

Cash at bank and in hand
  
7,190,816
5,069,665

  
8,217,467
6,826,839

Creditors: amounts falling due within one year
 5 
(3,072,886)
(3,107,175)

Net current assets
  
 
 
5,144,581
 
 
3,719,664

Total assets less current liabilities
  
5,144,581
3,719,664

  

Pension liability
  
(3,054,000)
(2,477,000)

Net assets
  
2,090,581
1,242,664


Capital and reserves
  

Profit and loss account
  
2,090,581
1,242,664

  
2,090,581
1,242,664


The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 November 2020.




Simon Henig
Director

The notes on  form part of these financial statements.

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020

1.


General information

The Association of North East Councils Limited is a private company limited by guarantee incorporated in England and Wales, registered number 05014821. The registered office is County Hall, Durham, County Durham, DH1 5UL.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The financial statements have been prepared on a going concern basis.  In adopting this basis, the Board have reviewed forecasts and confirmed that the company will be able to continue in operation for the foreseeable future.  The Board have taken into account the possible effects of the Coronavirus pandemic and have concluded that adverse effects are not likely to be of such significance to amend their conclusion as to the going concern of the company.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The following principal accounting policies have been applied:

 
2.2

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Revenue comprises subscriptions receivable from the members of the association, and rebates receivable from suppliers relating to associate members, exclusive of Value Added Tax. 
Subscriptions are recognised on a straight line basis over the period covered. 
Rebates are recognised when due to the company under the supplier agreement - this is based on the date on which the member or associate member incurs the expenditure.

 
2.3

Debtors

Short term debtors are measured at transaction price, less any impairment.

 
2.4

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, or loans from banks and other third parties.

 
2.5

Creditors

Short term creditors are measured at the transaction price.

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020

2.Accounting policies (continued)

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

 
2.7

Pensions

Defined benefit pension plan

The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:

a) the increase in net pension benefit liability arising from employee service during the period; and

b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.


3.


Employees

The average monthly number of employees, including directors, during the year was 44 (2019 - 38).


4.


Debtors

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2020
2019
£
£


Other debtors
943,124
1,709,840

Prepayments and accrued income
83,527
47,334

1,026,651
1,757,174



5.


Creditors: Amounts falling due within one year

2020
2019
£
£

Other taxation and social security
190,032
264,383

Other creditors
2,584,384
2,640,563

Accruals and deferred income
298,470
202,229

3,072,886
3,107,175




6.


Company status

The company is a private company limited by guarantee and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation.

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020


7.


Pension commitments

The Company operates a Defined Benefit Pension Scheme.

The pension cost and provision for the year ended 31 March 2020 are based on the advice of a professionally qualified actuary. The most recent triennial valuation is dated 31 March 2019, which has been updated to reflect conditions at the balance sheet date. The assumptions that have the most significant effect on the results of the valuation are the discount rate applied to the defined benefit liability and those relating to the rate of increase in salaries and pensions. It was assumed that salary increases would average 3.4% per year (2019: 3.6%) and that present and future pensions would increase at the rate of 1.9% (2019: 2.1%) per year. The discount rate was assumed to be 2.3% p.a. (2019: 2.5%).

On 26 October 2018 the High Court ruled that equalisation for the effect of unequal Guaranteed Minimum Pensions (GMPs) is required. The ruling confirmed that trustees have a duty “to equalise benefits for men and women so as to alter the result which is at present produced in relation to GMPs".  According to HM Treasury, any impact of GMPs is unlikely to be material to the pension valuation and therefore no allowance for GMP equalisation has been made in the FRS102 pension liability for this year. Full GMP indexation will be applied to the pension liability once changes to the scheme have been formally announced.



Reconciliation of present value of plan liabilities:


2020
2019
£
£

Reconciliation of present value of plan liabilities


At the beginning of the year
14,063,000
13,481,000

Current service cost
323,000
198,000

Interest cost
349,000
348,000

Actuarial (gains)/losses
90,000
46,000

Contributions
62,000
45,000

Benefits paid
(257,000)
(246,000)

Past service cost
-
191,000

At the end of the year
14,630,000
14,063,000

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
 
7.Pension commitments (continued)



Reconciliation of present value of plan assets:


2020
2019
£
£



At the beginning of the year
11,586,000
10,802,000

Interest income
289,000
279,000

Actuarial gains/(losses)
(223,000)
620,000

Contributions
181,000
131,000

Benefits paid
(257,000)
(246,000)

At the end of the year
11,576,000
11,586,000




2020
2019
£
£


Fair value of plan assets
11,576,000
11,586,000

Present value of plan liabilities
(14,630,000)
(14,063,000)

Net pension scheme liability
(3,054,000)
(2,477,000)


The amounts recognised in profit or loss are as follows:

2020
2019
£
£


Current service cost
(204,000)
(198,000)

Interest on obligation
(349,000)
(348,000)

Interest income on plan assets
289,000
279,000

Past service cost
-
(191,000)

Total
(264,000)
(458,000)



The cumulative amount of actuarial gains and losses recognised in the Statement of Comprehensive Income was £1,999,000 (2019 - £1,686,000).


 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
 
7.Pension commitments (continued)





Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):

2020
2019
%
%
Discount rate


2.3

2.5
 
Future salary increases


3.4

3.6
 
Future pension increases


1.9

2.1
 
Inflation assumption


1.9

2.1
 
Mortality assumption:



 
- for a male aged 65 now


21.8

22.2
 
- at 65 for a male aged 45 now


23.5

23.9
 
- for a female aged 65 now


25.0

25.3
 
- at 65 for a female member aged 45 now


26.8

27.2
 






8.


Related party transactions

The company transacts with the following local authorities, who are related parties by virtue of being members of the company, and having the ability to appoint one director each to the board of the company.


Stockton-
on-Tees BC
Newcastle
City Council
Gateshead
MBC
2019
Total
£
£
£
£

Provision of computer equipment and support
20,406
-
-
31,544
Rent
-
14,100
-
14,100
Finance, HR and legal services
-
-
33,650
33,500
20,406
14,100
33,650
79,144

No balances were due to/from related parties at the year end.

 
THE ASSOCIATION OF NORTH EAST COUNCILS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020

9.


Auditor's information

The auditor's report on the financial statements for the year ended 31 March 2020 was unqualified.

The audit report was signed on 27 November 2020 by Detlev Anderson (Senior Statutory Auditor) on behalf of Ryecroft Glenton.