Emmaus Burnley - Charities report - 22.2

REGISTERED COMPANY NUMBER: 06172441 (England and Wales)

REGISTERED CHARITY NUMBER: 1120889

Emmaus Burnley

Report of the Trustees and

Unaudited Financial Statements

for the Year Ended 30 June 2022

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

TRUSTEES

JA Baggaley

JA Caldwell

JR Dean

M Khan

S Parker

EA Saville

COMPANY SECRETARY

JA Baggaley

REGISTERED OFFICE

Emmaus House

Old Hall Street

Burnley

Lancashire

BB10 1BE

REGISTERED COMPANY NUMBER

06172441 (England and Wales)

REGISTERED CHARITY NUMBER

1120889

INDEPENDENT EXAMINER

McMillan & Co LLP

Chartered Accountants

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

Chorley

Lancashire

PR7 7NA

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 2022. 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.

On 30 April 2022 the activities of the Charity ceased and were transferred to Emmaus Preston (registered company number 03643570; registered charity number 1073677).

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.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

Our Burnley Ivy St store has been closed since December 2019 and, since this time, all retail has been carried out at our Rochdale store which has traded well throughout this financial year. However, it does remain a challenge to maintain companion levels on the shopfloor when occupancy levels are lower and the working day for our companions is a long one.

In January 2021 our lease for the Burnley Ivy St store expired and this was not renewed. Our lease for the Rochdale store was renewed in December 2021 for a further three years, this time in Emmaus Preston's name.

It has been a challenging year to maintain consistent occupancy levels in our residential facility at Emmaus House, Burnley. Many homeless individuals were housed during the pandemic and it remains the case that many reject the Emmaus model, or we do not have the resources or expertise to deal effectively with those individuals with more complex needs.

The Free Streets project has been running since April 2021 and our workers have engaged and offered assistance to many street homeless individuals across the county, and we have housed a small number of cases. We have learnt that the majority of individuals have complex needs which we are unable to cater for.

On 30 April 2022 the activities of the Charity ceased and were transferred to Emmaus Preston (registered company number 03643570; registered charity number 1073677).

FINANCIAL REVIEW

Financial position

In the financial year we made an accounting deficit of £189,663 (2021: surplus of £90,640).

In March 2022 the board approved the merger and the transfer of Emmaus Burnley's assets to Emmaus Preston as at the 30 April 2022 and the legal documents to enable the merger have now been completed successfully.

Emmaus Burnley ceased trading on the 30 April 2022 and the board anticipates that the charity will be wound-up in due course. Our residential facility at Emmaus House continues under Emmaus Preston as does the Rochdale store.

The deficit in the year includes the transfer of net assets to Emmaus Preston of £503,833 and is after writing back the loan payable of £224,000 to Emmaus UK.

Reserves policy

The remaining reserves of the Charity were transferred to Emmaus Preston upon cessation of the charitable activities, as outlined above.

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.

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.

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 26 January 2023 and signed on its behalf by:

S Parker - Trustee

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 2022.

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

26 January 2023

2022

2021

Unrestricted

Restricted

Total

Total

funds

funds

funds

funds

Notes

£

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

3

97,385

-

97,385

90,100

Charitable activities

Housing

112,921

-

112,921

130,440

Trading

209,984

-

209,984

222,285

Total

420,290

-

420,290

442,825

EXPENDITURE ON

Raising funds

58,662

-

58,662

82,130

Charitable activities

4

Housing

201,411

26,432

227,843

266,378

Trading

35,000

7,115

42,115

3,677

Other

63,143

218,190

281,333

-

Total

358,216

251,737

609,953

352,185

NET INCOME/(EXPENDITURE)

62,074

(251,737

)

(189,663

)

90,640

RECONCILIATION OF FUNDS

Total funds brought forward

(62,074

)

251,737

189,663

99,023

TOTAL FUNDS CARRIED FORWARD

-

-

-

189,663

2022

2021

Unrestricted

Restricted

Total

Total

funds

funds

funds

funds

Notes

£

£

£

£

FIXED ASSETS

Tangible assets

10

-

-

-

237,756

CURRENT ASSETS

Debtors

11

-

-

-

16,363

Cash at bank and in hand

-

-

-

245,862

-

-

-

262,225

CREDITORS

Amounts falling due within one year

12

-

-

-

(310,318

)

NET CURRENT ASSETS

-

-

-

(48,093

)

TOTAL ASSETS LESS CURRENT LIABILITIES

-

-

-

189,663

NET ASSETS

-

-

-

189,663

FUNDS

14

Unrestricted funds

-

(62,074

)

Restricted funds

-

251,737

TOTAL FUNDS

-

189,663

The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30 June 2022.

The members have not required the company to obtain an audit of its financial statements for the year ended 30 June 2022 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.

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 26 January 2023 and were signed on its behalf by:

S Parker - Trustee

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

On 30 April 2022 the charitable activities of Emmaus Burnley ceased and were transferred to Emmaus Preston. As such, the financial statements have not been prepared on the going concern basis.

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.

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

2022

2021

£

£

Donations - Group and Individual

5,025

21,776

Gift aid

2,249

5,208

Legacies

90,000

-

Grants

111

13,346

Local authority grant

-

46,250

Job retention scheme grant

-

3,520

97,385

90,100

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

2022

2021

£

£

Other grants

111

13,346

4.	CHARITABLE ACTIVITIES COSTS

Direct

Costs

£

Housing

227,843

Trading

42,115

269,958

5.	SUPPORT COSTS

Management

£

Other resources expended

281,333

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

2022

2021

Other

resources

Total

expended

activities

£

£

Independent examiner's Fee

1,500

2,450

Emmaus UK Loan

(224,000

)

-

Transfer to Emmaus Preston

503,833

-

281,333

2,450

6.	NET INCOME/(EXPENDITURE)

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

2022

2021

£

£

Depreciation - owned assets

31,158

34,253

Deficit on disposal of fixed assets

-

875

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

2022

2021

£

£

Wages and salaries

81,025

93,564

Social security costs

6,572

4,168

Other pension costs

1,167

1,376

88,764

99,108

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

2022

2021

Charitable activities

4

4

No employees received emoluments in excess of £60,000 in the current or prior year.

9.	COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted

Restricted

Total

funds

funds

funds

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

90,100

-

90,100

Charitable activities

Housing

130,440

-

130,440

Trading

182,303

39,982

222,285

Total

402,843

39,982

442,825

EXPENDITURE ON

Raising funds

82,130

-

82,130

Charitable activities

Housing

224,241

42,137

266,378

Trading

3,677

-

3,677

Total

310,048

42,137

352,185

NET INCOME/(EXPENDITURE)

92,795

(2,155

)

90,640

RECONCILIATION OF FUNDS

Total funds brought forward

(154,869

)

253,892

99,023

TOTAL FUNDS CARRIED FORWARD

(62,074

)

251,737

189,663

10.	TANGIBLE FIXED ASSETS

Alterations

to

leasehold

Fixtures

Freehold

land and

and

Motor

property

buildings

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 July 2021

776,276

29,316

61,307

21,071

887,970

Additions

-

-

-

10,995

10,995

Disposals

(776,276

)

(29,316

)

(61,307

)

(32,066

)

(898,965

)

At 30 June 2022

-

-

-

-

-

DEPRECIATION

At 1 July 2021

557,327

29,316

57,027

6,544

650,214

Charge for year

25,876

-

814

4,468

31,158

Eliminated on disposal

(583,203

)

(29,316

)

(57,841

)

(11,012

)

(681,372

)

At 30 June 2022

-

-

-

-

-

NET BOOK VALUE

At 30 June 2022

-

-

-

-

-

At 30 June 2021

218,949

-

4,280

14,527

237,756

The freehold land and buildings were the company's registered and principal office and 30 bed accomodation block at Emmaus House, and the alterations to leasehold land and buildings were 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. On 30 April 2022 the tangible fixed assets were transferred to Emmaus Preston.

11.	DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Other debtors

-

136

VAT

-

1,964

Prepayments and accrued income

-

14,263

-

16,363

12.	CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Other loans (see note 13)

-

224,000

Trade creditors

-

31,898

Social security and other taxes

-

1,815

Companions Allowances

-

3,030

Accruals and deferred income

-

49,575

-

310,318

13.

LOANS

An analysis of the maturity of loans is given below:

2022

2021

£

£

Amounts falling due within one year on demand:

Other loans

-

224,000

Emmaus Burnley were released from the loan obligation to Emmaus UK on 30 April 2022.

Prior to that, the terms of the loan were as set out below;

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 1/7/21

in funds

At 30/6/22

£

£

£

Unrestricted funds

General fund

(62,074

)

62,074

-

Restricted funds

Freehold Buildings

218,949

(218,949

)

-

Fixtures and Fittings

2,919

(2,919

)

-

Masons

29,869

(29,869

)

-

251,737

(251,737

)

-

TOTAL FUNDS

189,663

(189,663

)

-

Net movement in funds, included in the above are as follows:

Incoming

Resources

Movement

resources

expended

in funds

£

£

£

Unrestricted funds

General fund

420,290

(358,216

)

62,074

Restricted funds

Freehold Buildings

-

(218,949

)

(218,949

)

Fixtures and Fittings

-

(2,919

)

(2,919

)

Masons

-

(29,869

)

(29,869

)

-

(251,737

)

(251,737

)

TOTAL FUNDS

420,290

(609,953

)

(189,663

)

Comparatives for 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

253,892

(2,155

)

251,737

TOTAL FUNDS

99,023

90,640

189,663

Comparative 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

39,982

(42,137

)

(2,155

)

TOTAL FUNDS

442,825

(352,185

)

90,640