The trustees, who are also directors of the charity for the purposes of the Companies Act, present their annual report and the financial statements for the year ended 31 July 202 2 .
The financial statements have been prepared in accordance with the accounting policies set out in the notes to the accounts and comply with the charity’s governing document, the Charities Act 2011 and 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 published on 16 July 2014 (as amended by Update Bulletin 1 published on 2 February 2016).
Governing document
The organisation is a charitable company limited by guarantee, incorporated on 11 May 1995 and registered as a charity on 25 January 2002. The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association. The Articles were updated in 2014 to more accurately reflect the modern activity undertaken by the Charity. Under these revised Articles the Board comprises four trustees and the geographical area of scope is extended. The objectives of the Charity are to promote any charitable purpose for the benefit of the East Durham community and in particular for the advancement of education and the furtherance of health and the relief of poverty, illness, distress and sickness.
The directors of the charitable company are its trustees for the purpose of charity law, and throughout the report are collectively referred to as the trustees.
Recruitment and appointment of trustees
Under the requirements of the company’s Memorandum and Articles of Association one third of the trustees are required to retire by rotation at each Annual General Meeting.
New trustees are elected at the Annual General Meeting as other trustees stand down. Once elected trustees are given appropriate roles and have one vote each which will contributed to the decision making process.
Trustee induction and training
Trustees undergo an induction period which includes specific training relevant to financial regulations and other responsibilities and accountabilities. Current trustees have attended a formal training programme which will be continually updated. Trustees are kept abreast of current developments by means of Charities Commission bulletins.
Trustees and directors
The following people served during the period:
K. Hawkridge-Smith (company director)
M. McNichol ( Deputy Chair, company director)
J. T. McLoughlin (company director)
B. Hart (Chair, company director)
Organisational structure
The organisational structure has contracted and now consists of a part time Chief Executive Officer and a small team of staff with delegated responsibility, each of whom is in charge of a specific area of activity. The team meet regularly and report back to the trustees who retain ultimate authority for making decisions. The financial manager oversees financial transactions in conjunction with the Chief Executive Officer. The board of trustees retains paid consultants who support and advise the board on an ongoing basis with regard to financial audit, Human resources and health and safety. The board can elect to co-opt advisers as and when appropriate to inform the decision making process.
Risk management
The trustees have reviewed the major risks to which the charity is exposed and systems have been established to mitigate those risks. The Charity has been re-accredited with the Matrix Quality standard demonstrating the high level of importance placed on the provision of quality programmes by the trustees and the management of associated risks. External risks to funding have resulted in a strategic plan which allows for the diversification of funding and activities. Internal risks are minimised by the implementation of procedures for authorisation of all transactions and projects and to ensure consistent quality of delivery for all operational aspects of the charitable company. These procedures are periodically reviewed both internally and externally to ensure that they still meet the needs of the charity. Financial controls are monitored regularly and further new controls have been introduced since the end of the period.
Related parties
Mr JT McLoughlin, Trustee, is an employee of the company’s bankers Lloyds.
Transactions with related parties are disclosed in the notes to the financial statements.
The objectives of the company are to promote within the UK any charitable purpose and in particular the advancement of education and the furtherance of health and the relief of poverty, distress and sickness.
The trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the company's aims and objectives and in planning how the company's future activities will contribute to the aims and objectives they have set. Trustees to be aim deliberately flexible in their approach to planning and adopt a strategy of adaptation to change in order to be able to direct available staff and resources towards delivery of activities and projects matched to ever changing local needs. The East Durham Community comprise many super output areas where the need exists for action which addresses chronic poverty and hardship. Consequently during 21-22 the Charity has prioritised provision of essential household items and services in collaboration with statutory agencies as a priority, supplemented by provision of a food bank for disadvantaged residents. Staff have significant experience in delivery of such projects and many live and work in disadvantaged areas themselves.
Additionally in 2021-22 The Trustees have planned to re-start a menu of activities locally typically those supporting people with mental health issues/loneliness, isolation and dementia including not least the many elderly people still unsure of the lasting implications of the Covid pandemic.
The company has endeavoured to achieve its aims for the public benefit by maximising its projects which support third and public sector agencies where the ability to react quickly to new temporary funding is only possible through collaboration. High volume collaborative contract work delivered in particular with DCC and Greggs Foundation has resulted in dual benefit to both disadvantaged residents and to the Charity itself by sustaining employment for 10 staff who would otherwise be unemployed and also offering goods for sale to members of the public who are mostly on low incomes. The volume of activity in this area of work increased substantially due to delivery of sub contracted work funded though local authority household support grants. The warehouse projects also offer work experience for the disadvantaged members of the community.
Trustees have regard to CCNI guidance on public benefit and regularly review the Charity’s aims and objectives to reflect this.
The trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the company's aims and objectives and in planning the company's future activities. The trustees consider how planned activities will contribute to the aims and objectives they have set.
The company endeavours to achieve its aims for the public benefit by maximising its projects which support third and public sector agencies to provide household goods for disadvantaged residents and undertaking Local community projects (typically those supporting people with mental health issues/loneliness, isolation and dementia). The warehouse facility provides employment for 10 staff who would otherwise be unemployed and also offers goods for sale to members of the public who are mostly on low incomes. The warehouse projects offer work experience for the disadvantaged members of the community.
2021-22 was a year of further change following the relaxation Covid -19 restrictions. Plans were implemented to slowly re-introduce contact activities
A financial review had involved the redundancy of one staff member whilst a continuation grant from the Sir James Knott Foundation helped to fund essential service provision.
Succession planning and up skilling of senior members of staff in preparation for the planned retirement of the current CEO has been ongoing.
Results
Incoming resources increased by 2.9% from £753,693 in 2021 to £775,631 in 2022.
Overall funds decreased by £59,310 in the year from £810,178 to £750,868 compared with a decrease in funds of £42,041 in the previous year from £852,219 to £810,178. Included within this are restricted funds totalling £470,022 (2021: £483,383).
The company retained key staff during the year. The maintenance of its furniture staff presence at its property in Horden, Peterlee is considered fundamental to the operations of the Charity and its public image.
The level of unrestricted reserves of £280,846 and the level of cash held at bank of £152,865 at 31 July 2022 are deemed to be sufficient to allow the charity to continue to operate for a period of at least the next 12 months from the date of signing this report.
Principal funding sources
The main source of income derives from furniture contracts and the sale of furniture and white goods, with the addition of small grants and donations.
Investment policy
The trustees consider that any excess cash funds should be placed on bank deposit. This policy will be reviewed by the management committee should excess funds become significant. An amount of £53,133 was held in an interest-bearing account with Lloyds at the balance sheet date.
The Trustees has assessed the major risks to which the charitable company is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
Reserves policy
The trustees have established a policy whereby unrestricted reserves are maintained at a level sufficient to meet management and administration costs for the foreseeable future. The strict control of unrestricted cash flows and income from the delivery of charitable projects has enabled the charitable company to achieve this aim at the balance sheet date. However, in view of uncertainties facing the charitable sector in the current economic climate, the reported level of reserves may not be maintained in future periods. The trustees have decided that the organisation must aim to retain sufficient reserves to fulfil its financial commitments should income generated from the company's core activities cease. The commitments would include six months operational and salaries costs for existing members of staff. At the balance sheet date, this equates to approx. £130,000 which is more than covered by cash at bank. The level of reserves are monitored on a weekly basis by the financial manager in an attempt to maintain the desired level of reserves.
Plans for future periods
The trustees have agreed to continue with current initiatives such as supporting individuals to access DCC and Greggs Hardship grants and low cost loan support from NEFCU. Local disadvantaged residents will continue to be offered work placements and free advice and guidance. Given the company’s long standing presence and reputation for reliability, the Trustees consider that it is essential that the facility is kept open and fully stocked as far as is possible notwithstanding post pandemic implications.
Although the financial future is uncertain at this point, we are confident we have sufficient resources and plans in place including additional contracted work resulting from collaborations established during the pandemic.
Short term planning involves continuation of current projects alongside ongoing modernisation of the premises to meet changing demands (to include leasing of specific unused areas in order to increase income) and developing a succession strategy in view of the potential retirement of staff and Trustees.
The Future direction of the Charity is to continue strengthening EDPs establishment in terms of staff and Trustees by becoming more self- reliant whilst simultaneously maximising benefit resulting from collaborative project.
The trustees' r eport was approved by the Board of Trustees.
The Trustees, who are also the directors of East Durham Partnership Limited for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
In relation to the financial statements which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the related notes:
The Trustees approve these financial statements and confirm that they are responsible for them, including selecting the appropriate accounting policies, applying them consistently and making, on a reasonable and prudent basis, the judgments underlying them. They have been prepared on the going concern basis on the grounds that the charitable company will continue in operation .
The Trustees confirm that they have made available to Azets Audit Services, all the charitable company's accounting records and provided all the information necessary for the compilation of the financial statements.
The Trustees confirm that to the best of their knowledge and belief, the accounting records reflect all transactions of the charitable company for the year ended 31 July 2022.
I report to the Trustees on my examination of the financial statements of East Durham Partnership Limited (the charitable company) for the year ended 31 July 2022.
As the Trustees of the charitable company (and also its directors for the purposes of company law) you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 2006 (the 2006 Act).
Having satisfied myself that the financial statements of the charitable 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 the charitable company’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act) . In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
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 that in any material respect:
accounting records were not kept in respect of the charitable company as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements 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
the financial statements 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 financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
East Durham Partnership Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is 1 Kilburn Drive, Seaview Industrial Estate, Horden, County Durham, SR8 4TQ, United Kingdom.
The financial statements have been prepared in accordance with the charitable company's governing document, the Companies Act 2006 and "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)". The charitable company is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling , which is the functional currency of the charitable company . Monetary a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the Trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
The Covid 19 pandemic has had an impact on every business, due to the nature of the charitable company the effects have so far been limited.
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Grants, including capital grants, are recognised when the charitable company becomes unconditionally entitled to the grant.
Income from sales of stock is recognised at the date of sale. Donated goods for resale are recognised in the period in which they are sold. A stock of donated goods for resale is also held, but not recognised on the balance sheet, on the basis that valuation of the donated goods is not possible at the time of receipt.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, 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 classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Expenditure is recognised on an accruals basis as a liability is incurred.
Costs of generating funds comprise the costs associated with the provision of management and educational services and operation of the furniture, recycling and other activities.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities .
At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any ) .
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell . Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charitable company 's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future p aymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charitable company ’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Furniture
Furniture
Furniture
Furniture
The average monthly number of employees during the year was:
During the year there were no redundancies (2021: £1,002).
Building and reuse initiative
The company purchased its premises during 2006 as a base for its furniture reuse operation, management and support function. The building was extended in 2008/9. Funding relating to the building was received from The Coalfields Regeneration Trust, Northern Rock Foundation and Easington District Council.
The company is restricted to using the building for its charitable objectives and activities to generate funds, and it does not benefit from any appreciation in the value of the property. In the event of a sale, it is probable that the sale proceeds would revert to the grant providers, unless the company acquired alternative premises to continue with its activities.
Durham County Council – CREE Project
Our CREE project funds activities for clients with emotional health issues. Funds were spent on PPE and supervision. The CREE Plus grant was spent on employing a part time member of staff for one day a week.
County Durham Community Foundation (CDCF)
The Covid19 Sustainability Fund was a £5,000 grant from CDCF to support delivery of PPE for client and staff, running costs and equipment accessories for home working purposes.
The remuneration of key management personnel is as follows.