ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
(A company limited by guarantee)
For the year ended
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Company Information
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Contents
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report
For the year ended 31 March 2021
The directors present their report and the financial statements for the year ended 31 March 2021.
The directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare 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'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Directors’ review of the year Turnover for the year was £2,621k (2020: £4,391k) with an operating loss of £179k (2020: £83k). After deducting the cost of financing the defined pension scheme which closed in 2009, the deficit for the financial year is £261k (2020: £167k). The pension liability for the closed pension scheme has increased by a net £208k in the year to its current level of £3,758k. The operating deficit reflects the impact on the Chamber from the Covid 19 pandemic which has decimated the events and conferencing business, had a significant impact on membership sales, meetings and discretionary spend and in conjunction with the impact of Brexit on export and import levels reduced the demand for export documentation services. Whilst turnover decreased by £1,770k year on year, the operating deficit increased only by £96k.This was due, in a large part, to the measures taken by the Board throughout the year, which included:
∙Taking advantage of government support in reducing business rates, emergency grant support and utilising the Job Retention Scheme;
∙Provoking the pandemic clause in the Elliott House lease, reducing rent costs;
∙Introduction of a four-day week for all employees to reflect new working patterns and reduce employee costs; and
∙Taking measures to cease all non-critical activities and capital expenditure.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report (continued)
For the year ended 31 March 2021
Balance Sheet
Capital and reserves are £317k (2020: £607k) before accounting for the impact of the closed pension scheme. After charging the liability on the closed pension scheme, calculated under FRS 102 of £3,758k (2020: £3,550k), this becomes a net liabilities position of £3,441k (2020: £2,943k). Net current liabilities at the year-end are £752k (2020: £444k). Included in current liabilities is deferred income of £799k (2020: £444k) in relation to membership fees and other income received in advance of the period to which it relates. The release of these liabilities will not result in a cash outflow. Going concern
The directors have prepared the financial statements on a going concern basis. The directors have made this assessment after a considering the company’s financial position, cash flow forecasts and forecast covenant metrics for a period of 12 months following the date of signature of these financial statements.
The process the directors have undertaken has included preparing base case cash flow forecasts and then applying a range of downside sensitivities that they consider to be reasonably possible of occurring, either individually or in aggregate. Given the backdrop of the continuing pandemic, other geopolitical considerations and the inherent uncertainties facing all businesses at present, these scenarios included consideration of the impact of potential further lockdowns on various aspects of the business, including conferences and events, membership sales and retention, and commercial income (including the demand for export documentation and related services). The directors also gave consideration to the schedule of contributions agreed with the pension scheme trustees, which whilst agreed up to 31 March 2022, may be subject to change thereafter following the outcome of the ongoing triennial valuation. The company had cash reserves at 31 March 2021 of £538k, net current liabilities of £744k, and net liabilities (including pension deficit) of £3,441k. At 31 March 2021, the company was funded by a bank loan of £155k which was secured on freehold property. Post year end, the company entered into a £150k overdraft facility, of which £nil has been drawn down as at the date of signature of these financial statements, and also received a CIBILS loan of £150k. The overdraft is renewable annually in April. The CIBILS loan has a three year term and is subject to a liquidity based covenant, which is tested annually at 31 March. The base cash forecasts show the company to have access to sufficient liquidity to meet its liabilities as they fall due. However, in the reasonably possible downside scenarios, absent any mitigating actions, additional liquidity would also be required. Thus, the directors have given consideration to what mitigating actions would be available to them, and fully within their control, to be able to maintain sufficient liquidity in the event that the downside scenarios materialised. The directors are confident that such mitigating actions would be available, could be taken promptly and would ensure that the company continues to be able to discharge its liabilities as they fall due. On the basis of the process undertaken, the directors therefore have a reasonable expectation that the company will have adequate resources to continue in operational existence for a period of not less than 12 months following the date of signature of these financial statements, and thus have prepared the accounts to 31 March 2021 on a going concern basis.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report (continued)
For the year ended 31 March 2021
The business plan for 20/21 was developed and approved before Covid 19 had reached the UK and as such the Chamber’s original plan was expecting a buoyant year and a return to profitability. However, the pandemic has adversely affected every aspect of the business and management had to rapidly adapt services to react to fast changing demand. As well as the pandemic, the impact of Brexit was profound, and the International Services team had to deal with an unprecedented level of enquiries and requests for advice and help, which were often of a complex nature because of all the uncertainties following the ending of the transition arrangements with the EU.
The primary focus in the early part of the year was balancing the financial sustainability of the Chamber with providing the maximum level of support for members, clients and the wider business community in Greater Manchester as they faced increasingly difficult circumstances. In response to rapidly declining turnover and increased demand on the business to support the members as the crisis intensified, the Chamber was forced to look differently at the way forward. In the immediate short term, the introduction of the Coronavirus Job Retention Scheme, the shift to a 4-day working week and the subsequent introduction of other support measures enabled the business to balance the need to rigorously control costs with having the staff in place to continue to provide the best service possible. Later in the year a “Revival and Transformation Strategy” was developed that looked beyond the pandemic and aimed to establish a much more centralised approach to service development and sales. During the year, the Chamber received government grants under the Coronavirus Job Retention Scheme totalling £391,512. The introduction of a 4-day working week for non-furloughed staff was made permanent for all staff in September 2020. This was well received by the staff as it reflected the long-term impact that the pandemic was likely to have on working practices and employee attitudes to work life balance. GMCC continues to be a leading voice in promoting the flexible working practices employers need to adopt to attract and retain staff in a working environment that was unimaginable prior to 2020. The Chamber has been at the forefront of the development of the Greater Manchester Good Employment Charter which has generated national interest, and became an early full member. GMCC maintained its position as the leading Chamber of Commerce in the UK with the largest membership which in turn employs about 30% of the working population of Greater Manchester. It was imperative that the Chamber reacted quickly to maximise resources and provide strong support and advice to business. The membership team made c5700 proactive calls in April-June 2020 to deliver this objective. This was well received and was an important part of the strong membership retention experienced in the year. In order for the Chamber to reach out to business beyond the membership during the crisis, the free of charge GM Business Community scheme was launched within a fortnight of the first UK lockdown. Membership of this scheme grew to over 800 in the year, and a number of these companies have now become full GMCC members. The Membership Team, under the leadership of a young, dynamic management team, was restructured to create a more multi-skilled team that could be deployed across an increasingly complex range of activities. This approach enabled the Chamber to become a successful Gateway delivering the Government’s flagship Kick Start Scheme (which provides funding to employers to create jobs for 16–24-year-olds on Universal Credit), delivering substantial future revenue to the business, an added value service to members and enhancing the Chamber's reputation in a new area of activity. The Cabinet Office cited GMCC as an example of a successful Gateway and used some of our placements as examples of best practice. In partnership with the Growth Company Business Growth Hub, the team also delivers the GM Combined Authority's ambitious Skills for Growth programme which aims to provide skills development support to over 4000 SMEs and 17000 individuals. A range of commercial opportunities, previously only available to strategic partners and patrons, was made available to the wider membership and the team continued to develop strategic partnerships to broaden the reach of the business. A good example of this is the one with HOST, an innovation hub at the heart of Media City in Salford, which provides access to world class innovation and digital expertise and growth opportunities.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report (continued)
For the year ended 31 March 2021
As referred to above, the International Trade Team faced the double challenge of the pandemic, and Brexit and the surge in demand for advice in January led to the team helping over 450 companies with a wide range of often highly specialist advice and support. This was achieved by much closer working with Membership, who provided a triage service to ensure that the most complex enquiries were dealt with by the international specialists. A new package of advisory and training services was quickly developed which was delivered by a combination of external partners and in-house experts. The Chamber’s Brexit Hub also offered high quality resources, information and guidance to help business navigate the prodigious amount of official information that was complex and confusing, particularly for those companies who only had experience of trading within the European single market. The Department was restructured, with the emphasis on the creation of a multi-skilled team with wider knowledge to enable them to better commercialise the advisory service and reduce the use of external experts. A number of new recruits were brought into the team, which now has an increasingly wide range of nationalities within it.
Export documentation volumes, in line with the rest of the Chamber network, reflected the sharp fall in exports and imports following Brexit, and this was particularly marked in relation to EU trade because, amongst other things, many UK based companies acted as EU distribution hubs; large numbers of UK exporters only had experience of exporting within the single market. Many economic forecasters think the long-term economic scaring from Brexit will be worse than the pandemic; documentation volumes will start to recover, but this will be a gradual process. GMCC and the rest of the UK Chamber network, in partnership with the British Chambers of Commerce, launched a Customs Declaration Service in January 2021 to address the lack of capacity in the UK to serve substantially increased demand for customs declarations following Brexit. Although volumes are currently lower than forecast, these will continue to build and will accelerate sharply when staged border control processes for UK imports are implemented in January 2022. Events and Training courses moved online as the pandemic took hold and although the number of events delivered was lower than normal, the attendance at virtual sessions increased sharply, reflecting the increased level of demand for training in particular. The team worked closely with GMCA, DIT, HMRC and BEIS, providing both feedback on the barriers facing business and ideas to alleviate the immediate operational problems along with longer term policy development input. The Chamber Space conference, meeting and events business was decimated by the pandemic during the reporting period, in line with the rest of the sector and the wider hospitality industry. The new conferencing facility was opened in March 2019 and business levels grew sharply until the pandemic struck. Early cancellations in March 2020 were rescheduled, in anticipation of eased restrictions, within a few months but had to be rescheduled again or cancelled as the long-term implications of continued restrictions began to be understood as the year progressed. Some of the high fixed costs associated with Chamber Space were mitigated by a range of measures taken by management and by the support offered by national and local government to the sector. Management is confident that the quality and flexible and responsive nature of the service means Chamber Space is well placed to benefit from pent-up demand for conferences, meetings and events when restrictions are lifted. The brand operates in the small conference market segment, which is the most likely to pick up quickly as there may well be more sustained resistance to attend large scale conferences and events for the foreseeable future. The scale and breadth of the engagement with members and business generally in GM means that the Chamber is regarded as the genuine voice of GM business. Large volumes of valuable, real-time information and data is constantly gathered from business to inform our policy work and to influence key government figures (national, regional and local), officials and policy makers. The Chamber’s Campaign for Business reflected the critical issues discussed above and increased attention was given to championing good employment practices, including diversity and inclusion, as the pandemic shone a sharp light on the disproportionate impact on the poorest, most disadvantaged and vulnerable communities and individuals. The Chamber was active across a range of activities in relation to net-zero, infrastructure, and levelling-up and supported development work led by local authorities which aimed to strengthen and better support local economic activity. At the national level, continued support and resources were provided to the British Chambers of Commerce across a range of policy-specific groups. In addition to the economic insight provided by the Qtly Economic Survey, the Chamber continues to build its skills and labour market intelligence capacity and work closely with partners at both the GM and local authority levels to provide increasingly accurate, real-time data and analysis on skills shortages and fundamental changes in the labour market caused by external shocks.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report (continued)
For the year ended 31 March 2021
In September a new Finance Director, Sarah Blatch, was appointed following the retirement of the previous incumbent. This appointment had an immediate impact on the business and a range of improvements have been made in relation to financial controls, management information and financial management systems. The senior management team as a whole has seen a number of changes and is a younger, more energetic team that is better attuned to the needs of the members. In addition to this the overall structure of the business is flatter to encourage the speed of decision making and greater initiative being taken at the operational level.
Management remains focussed and determined to ensure that the Chamber emerges from the pandemic in the best possible shape to meet the challenges and opportunities arising from the eventual economic recovery and rapidly changing market conditions.
The directors who served during the year were:
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Directors' report (continued)
For the year ended 31 March 2021
This report was approved by the board and signed on its behalf.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Independent auditors' report to the shareholders of Greater Manchester Chamber of Commerce
We have audited the financial statements of Greater Manchester Chamber of Commerce (the 'Company') for the year ended 31 March 2021, which comprise the Statement of comprehensive income, the Balance sheet and the related notes, 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, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Independent auditors' report to the shareholders of Greater Manchester Chamber of Commerce (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Independent auditors' report to the shareholders of Greater Manchester Chamber of Commerce (continued)
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 an Auditors' report 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Independent auditors' report to the shareholders of Greater Manchester Chamber of Commerce (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 Auditors' report.
This report is made solely to the 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 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 Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Statement of comprehensive income
For the year ended 31 March 2021
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Registered number: 5245944
Balance sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 26 form part of these financial statements.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
Greater Manchester Chamber of Commerce is a private company limited by guarantee incorporated in England and Wales. The address of the registered office and principal place of business is Elliot House, 151 Deansgate, Manchester, M3 3WD. The company's registered number is 5245944.
2.Accounting policies
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 Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The directors have prepared the financial statements on a going concern basis. The directors have made this assessment after a considering the company’s financial position, cash flow forecasts and forecast covenant metrics for a period of 12 months following the date of signature of these financial statements.
The process the directors have undertaken has included preparing base case cash flow forecasts and then applying a range of downside sensitivities that they consider to be reasonably possible of occurring, either individually or in aggregate. Given the backdrop of the continuing pandemic, other geopolitical considerations and the inherent uncertainties facing all businesses at present, these scenarios included consideration of the impact of potential further lockdowns on various aspects of the business, including conferences and events, membership sales and retention, and commercial income (including the demand for export documentation and related services). The directors also gave consideration to the schedule of contributions agreed with the pension scheme trustees, which whilst agreed up to 31 March 2022, may be subject to change thereafter following the outcome of the ongoing triennial valuation. The company had cash reserves at 31 March 2021 of £538k, net current liabilities of £744k, and net liabilities (including pension deficit) of £3,441k. At 31 March 2021, the company was funded by a bank loan of £155k which was secured on freehold property. Post year end, the company entered into a £150k overdraft facility, of which £nil has been drawn down as at the date of signature of these financial statements, and also received a CIBILS loan of £150k. The overdraft is renewable annually in April. The CIBILS loan has a three year term and is subject to a liquidity based covenant, which is tested annually at 31 March. The base cash forecasts show the company to have access to sufficient liquidity to meet its liabilities as they fall due. However, in the reasonably possible downside scenarios, absent any mitigating actions, additional liquidity would also be required. Thus, the directors have given consideration to what mitigating actions would be available to them, and fully within their control, to be able to maintain sufficient liquidity in the event that the downside scenarios materialised. The directors are confident that such mitigating actions would be available, could be taken promptly and would ensure that the company continues to be able to discharge its liabilities as they fall due. On the basis of the process undertaken, the directors therefore have a reasonable expectation that the company will have adequate resources to continue in operational existence for a period of not less than 12 months following the date of signature of these financial statements, and thus have prepared the accounts to 31 March 2021 on a going concern basis.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
Membership Services
∙Membership income is recognised over the membership period (normally 12 months). One twelfth of the membership fee is released to the Statement of comprehensive income in each month of membership.
∙In the event of non payment, all revenue accrued to date is removed from the accounts in the month that it is concluded that payment will not be received.
Export Documentation
∙Revenue is recognised in the month when the documentation is prepared and amounts invoiced to the customer.
∙Direct costs associated with each document are charged to the Statement of comprehensive income in the same month as income is recognised.
∙These costs cover both costs incurred and costs to complete.
Room Rental and Events
∙Revenue is recognised in the month when the rooms and associated services are occupied by the customer.
∙Direct costs associated with each booking are charged to the Statement of comprehensive income in the same month as income is recognised.
Publicly Funded Contracts
∙Revenue is recognised over the period of the contract in line with the level of activity associated with its delivery.
∙Direct costs associated with the contract delivery are written off to the Statement of comprehensive income in the month in which they arise.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Individual freehold and leasehold properties are carried at fair value less any accumulated depreciation.
Fair values are determined by the directors from market based evidence, with formal external valuations undertaken by professionally qualified valuers on a periodic basis. Revaluation gains are recognised in the Statement of comprehensive income unless a gain reverses a revaluation decrease of the same asset previously recognised in profit or loss.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
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, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
The Company has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 1 April 2016 to continue to be charged over the period to the first market rent review rather than the term of the lease.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds. 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. 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'.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
2.Accounting policies (continued)
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
The Company is incorporated under the Companies Act 1985 as a company limited by guarantee and not having share capital. In the event of winding up each member undertakes to contribute such an amount as may be required (not exceeding £2) to the Company's assets if it should be wound up while he/she is a member, or within one year after he/she ceases to be a member and of the costs, charges and expenses for winding up and for the adjustment of the rights of the contributions among themselves.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
Defined Benefit Pension Scheme
The Company operates a Defined benefit pension scheme.
The pension cost and provision for the year ended 31 March 2021 are based on the advice of a professionally qualified actuary. The most recent formal trustee valuation of the scheme is dated 31 March 2018.
The Greater Manchester Chamber and Chamberlink Staff Pension Scheme consists of one sponsoring employer being Greater Manchester Chamber of Commerce. Under an approved withdrawal arrangement following the reorganisation of Chamberlink Limited and Skills and Work Solutions Limited, Chamberlink Limited ceased to be a participating employer in the scheme from August 2009. In July 2009 Skills Solutions Limited formally became the guarantor for the Chamberlink Limited liabilities to the Scheme. The results below show the Greater Manchester Chamber of Commerce figures only. The plan is a final salary pension arrangement where members receive benefits based on their final salary. The plan ceased all future service benefit accruals with effect from 31 March 2009 so all member benefits are now paid up. The assets of the scheme are held separately from those of the company, being invested with an independent investment manager. The plan also provides benefit to spouses and dependants in the event of a member's death before or after retirement. Pension contributions are determined by a qualified actuary on the basis of triennial valuations using the projected unit method. The company expects to pay contributions of £137,000 (2020: £133,000) to the plan during the next accounting period.
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
13.Pension commitments (continued)
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
13.Pension commitments (continued)
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Greater Manchester Chamber of Commerce
(A company limited by guarantee)
Notes to the financial statements
For the year ended 31 March 2021
The company has operating lease commitments totalling £5,653,661 (2020: £4,096,006) at the balance sheet date.
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