Emmaus Burnley - Charities report - 21.2
Emmaus Burnley - Charities report - 21.2
REGISTERED COMPANY NUMBER: |
REGISTERED CHARITY NUMBER: |
Emmaus Burnley |
Report of the Trustees and |
Unaudited Financial Statements |
for the Year Ended 30 June 2021 |
Emmaus Burnley |
Contents of the Financial Statements |
for the year ended 30 June 2021 |
Page |
Reference and Administrative Details | 1 |
Report of the Trustees | 2 | to | 4 |
Independent Examiner's Report | 5 |
Statement of Financial Activities | 6 |
Balance Sheet | 7 | to | 8 |
Notes to the Financial Statements | 9 | to | 16 |
Emmaus Burnley |
Reference and Administrative Details |
for the year ended 30 June 2021 |
TRUSTEES |
COMPANY SECRETARY | JA Baggaley |
REGISTERED OFFICE |
REGISTERED COMPANY NUMBER |
REGISTERED CHARITY NUMBER |
INDEPENDENT EXAMINER | McMillan & Co LLP |
Chartered Accountants |
28 Eaton Avenue |
Matrix Office Park |
Buckshaw Village |
Chorley |
Lancashire |
PR7 7NA |
Emmaus Burnley (Registered number: 06172441) |
Report of the Trustees |
for the year ended 30 June 2021 |
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 2021. 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 2019). |
OBJECTIVES AND ACTIVITIES |
Objectives and aims |
The Objects of Emmaus Burnley, as set out in the Memorandum and Articles are: |
The Objects of the Charity shall be the alleviation and relief of poverty hardship and distress arising therefrom, in conformance with the principles of the Emmaus movement as published from time to time by Emmaus UK, to those in need without distinction by: |
- | The provision of accommodation, or assistance in such provision, for homeless people in the Burnley area and such other places as may seem appropriate from time to time (the 'beneficiaries'); |
- | The rehabilitation of the beneficiaries as appropriate and the provision of education, training (including, without limitation, employment training) and work opportunities and satisfaction for the beneficiaries for 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; |
- | The support of the work of other Emmaus Communities and Groups or other agencies in the relief of poverty and homelessness whether in the United Kingdom or elsewhere in the world and in particular (without limitation) by the exchange of resources, information and expertise with other Emmaus projects worldwide. |
Significant activities |
Emmaus Burnley provides a home, training and work for people who have been homeless or socially excluded. The community offers stability, companionship, support and security for people to rebuild their lives. Supported accommodation is provided for 24 people, called companions. |
There is no time limit placed on length of stay however companions are supported to move on to independent living when they are ready. |
Our companions are encouraged to live as a community and to work within our social enterprise which is the collection and sale of donated furniture and other household goods. |
Public benefit |
The trustees confirm that we have paid due regard to the Charity Commission guidance on public benefit reporting in deciding what activities the charity should undertake. |
Our public benefit derives from the fact that we provide safe housing for people who would otherwise be homeless and, in many cases, struggling to cope with the work demands of the Universal Credit system. Our companions sign-off benefits when they join us and, whilst we do receive an enhanced rate of Housing Benefit for each companion, this is our only call on taxpayer's money: the running costs of Emmaus communities are met from a combination of Housing Benefit and money received from selling donated furniture in our stores. |
Emmaus Burnley (Registered number: 06172441) |
Report of the Trustees |
for the year ended 30 June 2021 |
ACHIEVEMENT AND PERFORMANCE |
Charitable activities |
Our Burnley store has been closed since December 2019. Originally this was planned as a temporary measure but retailing all donated goods solely through our Rochdale store has proved to be so successful that we did not renew the Burnley store's lease which expired in January 2022. |
Despite four months' enforced closure as a result of the Covid pandemic, the Rochdale store has traded very well and we renewed the lease for a further three years from December 2021. |
The residential Community faced significant risks from Covid-related illness but, thankfully, we did not experience any positive cases during the national lockdowns. However, we have struggled to maintain full occupancy of the residential facility at Emmaus House, Burnley which we attribute to the success of the government's Everyone In initiative which placed most homeless individuals into hotel accommodation and off the streets during the pandemic. We are recovering occupancy levels very slowly and we are discovering that many individuals now presenting as homeless to us have complex addiction issues which we are not able to manage. |
In May 2021 we started work on an exciting new project called Free Streets. This project has been funded for one year by the Freemasons. We have employed two Homelessness Outreach Workers to work across many towns of the former County Palatine district of Lancashire. We work nights seeking out street homelessness and offering clothing, toiletries and advice with a view to referring individuals to Emmaus communities or to local agencies who can help. |
The board has agreed in principle to merge with Emmaus Preston and we have made good progress with the technical work required for the merger which we hope takes place by the Spring of 2022 following which we plan to re-badge as Emmaus Lancashire. |
FINANCIAL REVIEW |
Financial position |
In this financial year we have made an accounting surplus of £90,640 (2020: deficit of £811,393 which includes the impairment to property of £780,546) which is broadly in line with expectations. At the end of the year we had £245,216 (2020: £112,240) cash at bank. This year has demonstrated a significant improvement in our financial performance with trading having increased on the previous year, despite four months' closure. |
Emmaus Burnley has a loan debt to Emmaus UK of £224,000 (2020: £224,000) against which we are paying interest only at this stage, with capital repayments being subject to a repayment holiday which is reviewed by Emmaus UK on an annual basis. The transfer of this loan into a non-repayable grant by Emmaus UK is a condition of merger imposed by the Preston board and this treatment has been formally agreed by Emmaus UK. |
Reserves policy |
At the year end the charity held no free reserves, with a deficit on the general fund of £66,124 (2020: deficit £154,869). This deficit is funded by loans from Emmaus UK. The priority of the trustees is to reduce this deficit and in due course repay the loan at which point the trustees will be in a position to formulate a reserves policy. |
STRUCTURE, GOVERNANCE AND MANAGEMENT |
Governing document |
The Charity is a company limited by guarantee formed on the 20th March 2007. The company's Memorandum and Articles of Association established its objectives and powers and it is governed under its Articles of Association. The directors of Emmaus Burnley are also the Trustees for the purpose of Charity law. In the event of the company being wound up, members are required to contribute an amount not exceeding £1. |
Emmaus Burnley (Registered number: 06172441) |
Report of the Trustees |
for the year ended 30 June 2021 |
STRUCTURE, GOVERNANCE AND MANAGEMENT |
Induction and training of new trustees |
Each new Trustee is briefed about the Community, their legal responsibilities and ethical responsibilities and an induction programme is in place which included visiting other communities and attending Emmaus UK Federation induction day. Periodic appraisals are undertaken of trustee's skills and suitable training is offered. |
Related parties |
Emmaus Burnley is a member of Emmaus UK, a federation of 29 independent Emmaus communities in the UK. Emmaus Burnley receives training, publicity, policy development, HR, corporate fund-raising and best practice services from Emmaus UK. |
John Dean, Jim Caldwell and John Baggaley are also trustees of Emmaus Preston. Our director, Stephen Buchanan, is also Emmaus Preston's director; in addition, we share the post of Operations Manager. Both posts are employed by Emmaus Preston. These sharing arrangements are formalised within a Joint Working Agreement agreed between Emmaus UK, Emmaus Preston and Emmaus Burnley in June 2016. |
Risk management |
The trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error. |
SMALL COMPANY PROVISIONS |
The report has been prepared in accordance with the small companies regime under the Companies Act 2006. |
Approved by order of the board of trustees on |
Independent Examiner's Report to the Trustees of |
Emmaus Burnley |
Independent examiner's report to the trustees of Emmaus Burnley ('the Company') |
I report to the charity trustees on my examination of the accounts of the Company for the year ended 30 June 2021. |
Responsibilities and basis of report |
As the charity's trustees of the Company (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ('the 2006 Act'). |
Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity's accounts as carried out under section 145 of the Charities Act 2011 ('the 2011 Act'). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5) (b) of the 2011 Act. |
Independent examiner's statement |
Since your charity's gross income exceeded £250,000 your examiner must be a member of a listed body. I can confirm that I am qualified to undertake the examination because I am a registered member of Institute of Chartered Accountants in England and Wales which is one of the listed bodies. |
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe: |
1. | accounting records were not kept in respect of the Company as required by section 386 of the 2006 Act; or |
2. | the accounts do not accord with those records; or |
3. | the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or |
4. | the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities (applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)). |
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached. |
Neil McMillan FCA |
Institute of Chartered Accountants in England and Wales |
McMillan & Co LLP |
Chartered Accountants |
28 Eaton Avenue |
Matrix Office Park |
Buckshaw Village |
Chorley |
Lancashire |
PR7 7NA |
17 February 2022 |
Emmaus Burnley |
Statement of Financial Activities |
for the year ended 30 June 2021 |
2021 | 2020 |
Unrestricted | Restricted | Total | Total |
funds | funds | funds | funds |
Notes | £ | £ | £ | £ |
INCOME AND ENDOWMENTS FROM |
Donations and legacies | 3 |
Charitable activities |
Other income |
Total |
EXPENDITURE ON |
Raising funds |
Charitable activities | 4 |
Other |
Total |
NET INCOME/(EXPENDITURE) | ( |
) | ( |
) |
RECONCILIATION OF FUNDS |
Total funds brought forward | ( |
) |
TOTAL FUNDS CARRIED FORWARD | ( |
) | 99,023 |
Emmaus Burnley (Registered number: 06172441) |
Balance Sheet |
30 June 2021 |
2021 | 2020 |
Unrestricted | Restricted | Total | Total |
funds | funds | funds | funds |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 | ( |
) | ( |
) | ( |
) |
NET CURRENT ASSETS/(LIABILITIES) | ( |
) | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
NET ASSETS | ( |
) |
FUNDS | 14 |
Unrestricted funds | ( |
) | (154,869 | ) |
Restricted funds | 253,892 |
TOTAL FUNDS | 99,023 |
The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30 June 2021. |
The members have not required the company to obtain an audit of its financial statements for the year ended 30 June 2021 in accordance with Section 476 of the Companies Act 2006. |
The trustees acknowledge their responsibilities for |
(a) | ensuring that the charitable company keeps accounting records that comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the charitable company as at the end of each financial year and of its surplus or deficit for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the charitable company. |
Emmaus Burnley (Registered number: 06172441) |
Balance Sheet - continued |
30 June 2021 |
These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime. |
The financial statements were approved by the Board of Trustees and authorised for issue on |
Emmaus Burnley |
Notes to the Financial Statements |
for the year ended 30 June 2021 |
1. | GENERAL INFORMATION |
The charity is a registered charity in England and Wales and is incorporated. The address of the principal office is Emmaus House, Old Hall Street, Burnley, Lancashire, BB10 1BE. |
The presentational currency of the financial statements is the Pound Sterling (£). |
The amounts in the financial statements have been rounded to the nearest £1. |
2. | 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 2019)', 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. |
Going concern |
The Trustee's have prepared the financial statements on the going concern basis despite the excess of liabilities over assets on the unrestricted funds, based on the forecast performance of the Charity and the funding provided by Emmaus UK, as explained in note 13. |
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 |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. |
Freehold property | - 4% on cost |
Fixtures and fittings | - 25% on reducing balance |
Motor vehicles | - 25% on reducing balance |
Provision is made in the profit and loss account in the event of any permanent diminution in the value of the properties. |
Taxation |
The charity is exempt from corporation tax on its charitable activities. |
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. |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
2. | ACCOUNTING POLICIES - continued |
Fund accounting |
Further explanation of the nature and purpose of each fund is included in the notes to the financial statements. |
Pension costs and other post-retirement benefits |
The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate. |
Financial instruments |
Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument. Basic financial assets, which include debtors, prepayments and bank balances, are initially measured at transaction price and are subsequently carried at cost unless the arrangement indicates otherwise and then the asset is measured at the present value of the future receipts discounted at a market rate of interest. Basic financial liabilities, which include creditors, accruals, bank loans and group borrowings, are initially recognised at transaction price and are subsequently carried at cost unless the arrangement indicates otherwise and then the liability is measured at the present value of the future obligations discounted at a market rate of interest. |
Government Grants |
CJRS and small business local authority grants are accounted for under the accruals model. Where the grant is classed as revenue, it is recognised in income on a systematic basis over the periods in which the company recognises the related costs. |
3. | DONATIONS AND LEGACIES |
2021 | 2020 |
£ | £ |
Donations - Group and Individual |
Gift aid |
Grants |
Local authority grant | 46,250 | 25,000 |
Job retention scheme grant | 3,520 | 726 |
Grants received, included in the above, are as follows: |
2021 | 2020 |
£ | £ |
Other grants | 13,346 | - |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
4. | CHARITABLE ACTIVITIES COSTS |
Support |
Direct | costs (see |
Costs | note 5) | Totals |
£ | £ | £ |
Housing | 263,928 | 2,450 | 266,378 |
Trading | 3,677 | - | 3,677 |
267,605 | 2,450 | 270,055 |
5. | SUPPORT COSTS |
Management |
£ |
Housing | 2,450 |
6. | NET INCOME/(EXPENDITURE) |
Net income/(expenditure) is stated after charging/(crediting): |
2021 | 2020 |
£ | £ |
Depreciation - owned assets |
Deficit on disposal of fixed assets |
7. | TRUSTEES' REMUNERATION AND BENEFITS |
No trustees received any remuneration during the year or the previous year. |
Trustees' expenses |
No trustees received any expenses during the year or the previous year. |
8. | STAFF COSTS |
2021 | 2020 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
99,108 | 103,405 |
The average monthly number of employees during the year was as follows: |
2021 | 2020 |
Charitable activities |
No employees received emoluments in excess of £60,000 in the current or prior year. |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
9. | COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES |
Unrestricted | Restricted | Total |
funds | funds | funds |
£ | £ | £ |
INCOME AND ENDOWMENTS FROM |
Donations and legacies |
Charitable activities |
Other income |
Total |
EXPENDITURE ON |
Raising funds |
Charitable activities |
Other |
Total |
NET INCOME/(EXPENDITURE) | ( |
) | ( |
) |
RECONCILIATION OF FUNDS |
Total funds brought forward | (187,595 | ) | 1,098,011 |
TOTAL FUNDS CARRIED FORWARD | (154,869 | ) | 253,892 | 99,023 |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
10. | TANGIBLE FIXED ASSETS |
Alterations |
to |
leasehold | Fixtures |
Freehold | land and | and | Motor |
property | buildings | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 July 2020 |
Additions |
Disposals | ( |
) | ( |
) |
At 30 June 2021 |
DEPRECIATION |
At 1 July 2020 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 30 June 2021 |
NET BOOK VALUE |
At 30 June 2021 |
At 30 June 2020 |
The freehold land and buildings are the company's registered and principal office at Emmaus House, and the alterations to leasehold land and buildings are to the Emmaus Second Hand Store on Ivy Street, Burnley. |
In 2020 a formal open market valuation for Emmaus House was confirmed at £250,000 on 30 June 2020. Subsequently, in accordance with professional advice, directors approved an impairment of £780,546 which reflects the reduction in the carrying value of Emmaus House. It is expected that the changes to the loan will take place upon the merger with Emmaus Preston. |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
Other debtors | 136 | - |
VAT |
Prepayments and accrued income |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Other loans (see note 13) |
Trade creditors |
Social security and other taxes |
VAT | - | 392 |
Companions Allowances |
Accruals and deferred income |
13. | LOANS |
An analysis of the maturity of loans is given below: |
2021 | 2020 |
£ | £ |
Amounts falling due within one year on demand: |
Other loans | 224,000 | 224,000 |
Other loans of £224,000 are loans from Emmaus UK and the facility was rolled forward post year end as set out below; |
1) The loan is secured against the Emmaus Burnley property and Emmaus UK has 1st charge against the property. |
2) There is a capital repayment holiday until 31st January 2022 and further deferral is under discussion together with the rate of interest: |
a) The financial performance of Emmaus Burnley |
3) Interest rate: 1% APR from June 2018 |
a) Quarterly interest payments to Emmaus UK |
14. | MOVEMENT IN FUNDS |
Net |
movement |
At 1/7/20 | in funds | At 30/6/21 |
£ | £ | £ |
Unrestricted funds |
General fund | (154,869 | ) | 92,795 | (62,074 | ) |
Restricted funds |
Freehold Buildings | 250,000 | (31,051 | ) | 218,949 |
Fixtures and Fittings | 3,892 | (973 | ) | 2,919 |
Masons | - | 29,869 | 29,869 |
(2,155 | ) |
TOTAL FUNDS | 90,640 | 189,663 |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
14. | MOVEMENT IN FUNDS - continued |
Net movement in funds, included in the above are as follows: |
Incoming | Resources | Movement |
resources | expended | in funds |
£ | £ | £ |
Unrestricted funds |
General fund | 402,843 | (310,048 | ) | 92,795 |
Restricted funds |
Freehold Buildings | - | (31,051 | ) | (31,051 | ) |
Fixtures and Fittings | - | (973 | ) | (973 | ) |
Masons | 39,982 | (10,113 | ) | 29,869 |
( |
) | (2,155 | ) |
TOTAL FUNDS | ( |
) | 90,640 |
Comparatives for movement in funds |
Net |
movement |
At 1/7/19 | in funds | At 30/6/20 |
£ | £ | £ |
Unrestricted funds |
General fund | (187,595 | ) | 32,726 | (154,869 | ) |
Restricted funds |
Freehold Buildings | 1,092,822 | (842,822 | ) | 250,000 |
Fixtures and Fittings | 5,189 | (1,297 | ) | 3,892 |
1,098,011 | (844,119 | ) | 253,892 |
TOTAL FUNDS | 910,416 | (811,393 | ) | 99,023 |
Comparative net movement in funds, included in the above are as follows: |
Incoming | Resources | Movement |
resources | expended | in funds |
£ | £ | £ |
Unrestricted funds |
General fund | 383,436 | (350,710 | ) | 32,726 |
Restricted funds |
Freehold Buildings | - | (842,822 | ) | (842,822 | ) |
Fixtures and Fittings | - | (1,297 | ) | (1,297 | ) |
- | (844,119 | ) | (844,119 | ) |
TOTAL FUNDS | 383,436 | (1,194,829 | ) | (811,393 | ) |
The restricted funds relate to the purchase and development of the Emmaus House property which was used to create an Emmaus Community in Burnley. |
Emmaus Burnley |
Notes to the Financial Statements - continued |
for the year ended 30 June 2021 |
15. | CONTINGENT LIABILITIES |
There is a contingent liability for grants received from Emmaus UK in current and prior years, amounting to £145,000 (2020: £145,000) recorded as income, that will become repayable if Emmaus Burnley leaves the Emmaus UK Federation. This does not include the loan referred to above. |
16. | RELATED PARTY DISCLOSURES |
Controlling entity |
The charity is controlled by the trustees who are all directors of the company. |
There were no related party transactions in 2021 or in 2020. |