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Report of the Directors and |
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Audited Financial Statements |
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for the Year Ended 31 March 2020 |
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for |
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Coventry and Warwickshire Reinvestment |
Trust Ltd |
REGISTERED NUMBER:
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Report of the Directors and |
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Audited Financial Statements |
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for the Year Ended 31 March 2020 |
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for |
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Coventry and Warwickshire Reinvestment |
Trust Ltd |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Contents of the Financial Statements |
for the Year Ended 31 March 2020 |
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Page |
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Company Information | 1 |
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Report of the Directors | 2 |
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Report of the Independent Auditors | 5 |
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Income Statement | 8 |
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Balance Sheet | 9 |
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Notes to the Financial Statements | 10 |
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Coventry and Warwickshire Reinvestment |
Trust Ltd |
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Company Information |
for the Year Ended 31 March 2020 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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SENIOR STATUTORY AUDITOR: |
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INDEPENDENT AUDITORS : |
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Chartered Certified Accountants and |
Statutory Auditor |
Leofric House |
Binley Road |
Coventry |
CV3 1JN |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Report of the Directors |
for the Year Ended 31 March 2020 |
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The directors present their report with the financial statements of the company for the year ended 31 March 2020. |
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PRINCIPAL ACTIVITIES |
CWRT is a not-for-profit, FCA accredited, specialist finance and business support provider committed to supporting businesses and individuals primarily based in Coventry and Warwickshire. We lend to individuals, to those who are looking to start a business, and to existing businesses that have been unable to raise enough, if any, low-cost finance from elsewhere. CWRT also provides specialised business support services in Warwickshire which are specifically tailored to meet the needs of client groups that are not always well served by mainstream providers. Our services are therefore designed to fill gaps in the market and to generate a beneficial impact upon the local community. |
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REVIEW OF BUSINESS |
A significant setback for the next phase of Duplex funding in the latter part of the year 2019/20 delayed, and in some cases halted, impending important loan deals. This carried over to a dramatic reduction in income. However, prudent cash management meant that CWRT was able to end the year confidently. |
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CWRT continues to make a growing contribution to Coventry and Warwickshire's small businesses and its communities. The company have stayed true to their core mission, even more so throughout the COVID-19 pandemic, by ensuring proactive and tailored support is provided to create a positive economic and social impact in Coventry and Warwickshire's local economy. |
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CWRT has made important changes to its operations and to its product portfolio to help businesses meet the challenges of market disruption, liquidity, job losses, and tightening access to credit. CWRT are devoted to tackling local disparity in the marketplace and are well positioned to channel investment into traditionally overlooked businesses, helping them to rebuild, adapt, diversify, and add new employment in the months to come. |
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FUTURE DEVELOPMENTS |
Towards the end of the financial year, coronavirus resulted in a global pandemic affecting trading businesses globally, including within the UK. These effects have been felt by the company. Demand for the Duplex Fund and traditional commercial loans have been significantly below expectations, as both these loan products are designed to assist businesses to grow, which is generally not appropriate in the current environment. |
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The company has also been affected by customers being in financial difficulty, due to the government lockdown and the ongoing effects to customers' businesses. As part of a proactive plan developed by the management team, CWRT has engaged with such businesses and restructured and refinanced debts where appropriate. This plan is reviewed on an ongoing basis to mitigate the effects of the lockdown, nevertheless, as of the date of issuance it remains uncertain whether loans receivable will require further provisions against their recoverability. |
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CWRT hold an existing accreditation under the Enterprise Finance Guarantee (EFG) from the British Business Bank, which has been temporarily replaced by the Coronavirus Business Interruption Loan Scheme (CBILS). Our commitment to £7m accreditation remains. In supporting the government agenda to safeguard jobs, businesses and ensure continued access to appropriate finance through the pandemic, CWRT has strengthened its position in the local marketplace as an ethical and responsible finance provider by collaborating with Warwickshire County Council, Coventry City Council, Nuneaton and Bedworth Borough Council, Rugby Borough Council, Warwick District Council, and the Coventry and Warwickshire Local Enterprise Partnership (CWLEP) to provide up to £6.25m of funding for CWRT to on-lend to businesses in the Coventry and Warwickshire area under the CBIL scheme. |
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Through the innovative capital raising activities, April to November saw the Company achieving a record-breaking level of loan delivery. CWRT lent a total of £5.7m, safeguarded 691 jobs and enabled these businesses to create 124.5 jobs within the next 6 months. The overall economic impact from these activities is worth circa £19.18m for the Coventry and Warwickshire region. |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Report of the Directors |
for the Year Ended 31 March 2020 |
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Due to the nature of the government guarantee under CBILS loans, and via the provision of funding detailed above, CWRT has been able to offer larger loans to customers than in the past. This level of activity has transformed the Company's financial position. It has strengthened the loan book and balance sheet, whilst generating significant surplus over obligations. This increased scale has definitively moved the Company's impact investing beyond a niche portfolio to a broader and diverse range of borrowers than ever before. Furthermore, the income generated through the lending has cemented CWRT's foundations for the next 12months and beyond. |
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On the basis that the significant proportion of the company's portfolio of loans are guaranteed by the Government under EFG or CBILS, and the further increased performance of the company post year-end, the directors continue to believe it appropriate to adopt the going concern basis of accounting in preparing the financial statements. They are also confident that their proactive response through their COVID-19 contingency planning has also served to reduce the risk of capital losses through this time. |
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Whilst CWRT continues to take a transparent, fair and relationship-based approach in the lending decision-making process, the company has to be astute to its own appetite to risk in order to maintain a presence in this market while remaining sustainable. The directors are confident that the loan approval procedures remain robust. |
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Amongst other things, CWRT has strengthened its Credit Control and Lending Teams with new staff and continues to modify procedures to ensure that its service levels are appropriately improved. |
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In addition, CWRT's business support operations continue to play an important role in supporting businesses from the creative sector, and in supporting people to grow their skills to help them withstand the impact of the pandemic and become more economically resilient. |
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The speed and severity of the impact has been unprecedented and while the UK government has introduced considerable measures to help business through this extremely challenging time, and results to the date of signing these accounts are extremely positive, the full impact of COVID-19 on the company is currently unknown. |
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EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
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DIRECTORS |
The directors shown below have held office during the whole of the period from 1 April 2019 to the date of this report. |
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Other changes in directors holding office are as follows: |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Report of the Directors |
for the Year Ended 31 March 2020 |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
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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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 surplus or deficit of the company for that period. In preparing these financial statements, the directors are required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
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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 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. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
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AUDITORS |
The auditors, Leigh Christou Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
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This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
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ON BEHALF OF THE BOARD: |
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Report of the Independent Auditors to the Members of |
Coventry and Warwickshire Reinvestment |
Trust Ltd |
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Opinion |
We have audited the financial statements of Coventry and Warwickshire Reinvestment Trust Ltd (the 'company') for the year ended 31 March 2020 which comprise the Income Statement, Balance Sheet and Notes to the Financial Statements, 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). |
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In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 March 2020 and of its deficit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis for opinion |
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 UK, including the FRC'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. |
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Material uncertainty related to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
- | the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
- | the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
Without qualifying our opinion, we draw your attention to Note 14 of the financial statements which indicates a material uncertainty related to going concern. The effects of the COVID-19 pandemic has had a detrimental impact on the company's operations and cash flows and the directors have identified from these issues that a material uncertainty exists that may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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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. |
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In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Report of the Directors has been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Coventry and Warwickshire Reinvestment |
Trust Ltd |
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Matters on which we are required to report by exception |
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 Report of the Directors. |
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit; or |
- | the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors. |
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Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
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In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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Auditors' responsibilities for the audit of the financial statements |
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 a Report of the Auditors 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. |
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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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Coventry and Warwickshire Reinvestment |
Trust Ltd |
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Use of our 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 a Report of the Auditors 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. |
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for and on behalf of
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Chartered Certified Accountants and |
Statutory Auditor |
Leofric House |
Binley Road |
Coventry |
CV3 1JN |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Income Statement |
for the Year Ended 31 March 2020 |
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31.3.20 | 31.3.19 |
Notes | £ | £ |
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TURNOVER |
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Cost of sales |
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GROSS SURPLUS |
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Administrative expenses |
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OPERATING (DEFICIT)/SURPLUS | 4 | ( |
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Interest receivable and similar income |
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(145,435 | ) | 2,326 |
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Interest payable and similar expenses |
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DEFICIT BEFORE TAXATION | ( |
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Tax on deficit |
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DEFICIT FOR THE FINANCIAL YEAR | ( |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Balance Sheet |
31 March 2020 |
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31.3.20 | 31.3.19 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 5 |
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CURRENT ASSETS |
Debtors | 6 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 7 |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one year | 8 |
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NET ASSETS |
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RESERVES |
Other reserves | 11 |
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Income and expenditure account | 11 |
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The financial statements were approved by the Board of Directors and authorised for issue on
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements |
for the Year Ended 31 March 2020 |
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1. | STATUTORY INFORMATION |
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Coventry and Warwickshire Reinvestment Trust Ltd is a
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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Going concern |
The Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including the current state of the balance sheet, future projections of profitability, cash flows and capital resources and the longer-term strategy of the business. |
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The impact of COVID-19 has been assessed against the 2020-21 financial and business plans. Whilst the COVID-19 impacts are not yet fully known and will depend on many factors including the length of the enforced closure of certain businesses and social facilities, the social distancing measures and the success and continuity of the government and Bank of England measures put in place to support the economy and businesses, the company has assessed its capital and liquidity over the going concern period. The Directors assessed the financial implications of the risks associated with COVID-19, including the expected effect of Management actions taken in response. |
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After making enquiries, the Directors believe the company has sufficient resources to continue its activities for the 12 months from the reporting date. |
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Significant judgements and key sources of estimation uncertainty |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
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Key sources of estimation uncertainty |
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material misstatement to the carrying amounts of assets and liabilities within the next financial year are as follows: |
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Loan bad and doubtful debt provision. |
The calculation and measurement of expected credit losses requires significant judgement and represents a key source of estimation uncertainty. Details of the critical judgements and accounting estimates are set out below. |
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Turnover |
Turnover represents loan interest receivable and loan arrangement fees derived from capital advanced to new and existing business and social enterprises and individuals. Loan interest and arrangement fees are recognised on legal entitlement. |
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Tangible fixed assets |
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Computer equipment | - |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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Deferred taxation |
Deferred tax is recognised in respect of all timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. |
Deferred tax assets and liabilities are measured at the rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
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Grants received |
Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. |
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Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred. |
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Capital loan funding grants |
Capital grants received for onward lending are credited to the commercial funding reserve account or personal funding reserve account, where the value is maintained according to the specific rules of each grant scheme. |
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Personal loans funded by the Department of Work and Pensions (DWP), require capital to be continually held and used for new lending. Therefore, these are held as personal funding reserve. Any bad debt provision and write-off is offset against the funding reserves. |
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Similarly, bad debt provision and write-off is offset against commercial funding reserves. When the age or the rules of the fund permit, a transfer to the income and expenditure account reserve is made to reflect any changes in what remains restricted. |
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In broad terms, the amount remaining in the funding reserves accounts are equal to the grant funded element of the performing loan book, net of specific bad debt provisions, write offs and released reserves. |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Loan bad and doubtful debt provision |
Understanding the appetite for risk inherent in the market sector in which the Company operates, the directors have made a provision for bad and doubtful loan debts on the following basis: |
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Commercial | Personal |
Number of days value of loans in arrears | loans % | loans % |
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1 - 30 days in arrears | 0 | 20 |
31 - 60 days in arrears | 10 | 40 |
61 - 90 days in arrears | 20 | 60 |
91 - 120 days in arrears | 40 | 80 |
121 - 150 days in arrears | 60 | 100 |
151 - 180 days in arrears | 80 | 100 |
180 plus days in arrears | 100 | 100 |
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The bad debt calculation is initially on a strict day basis. Management then review the level of bad and doubtful debt provision, updating the above basis to reflect other relevant factors such as communication with the customer, and any guarantees or security in place that would mitigate the expected credit losses. |
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Loan debts deemed irrecoverable are written off in full as soon as it becomes clear that repayment will not be received. |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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4. | OPERATING (DEFICIT)/SURPLUS |
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The operating deficit (2019 - operating surplus) is stated after charging/(crediting): |
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31.3.20 | 31.3.19 |
£ | £ |
Depreciation - owned assets |
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Profit on disposal of fixed assets |
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Auditors' remuneration |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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5. | TANGIBLE FIXED ASSETS |
Computer |
equipment |
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COST |
At 1 April 2019 |
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Additions |
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At 31 March 2020 |
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DEPRECIATION |
At 1 April 2019 |
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Charge for year |
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At 31 March 2020 |
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NET BOOK VALUE |
At 31 March 2020 |
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At 31 March 2019 |
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6. | DEBTORS |
31.3.20 | 31.3.19 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
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Other debtors |
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Amounts falling due after more than one year: |
Trade debtors |
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Aggregate amounts |
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Loans outstanding represent capital advanced to new and existing businesses, social enterprises and to individuals in order to fulfil the aims of the company. Loans are made within an agreed repayment schedule; they are however repayable on demand in certain circumstances. Accordingly, these have been disclosed within current debtors but if settled to terms, the repayment would be split as shown above. |
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These loans represent a mix of secured and unsecured lending at varying rates above the bank base rates fixed at the time the loans are advanced and are repayable in accordance with a payment schedule agreed at the commencement of the term. Generally, the loans are made over a 12 month to 60 month period. |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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7. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.20 | 31.3.19 |
£ | £ |
Trade creditors |
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Other creditors |
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8. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.3.20 | 31.3.19 |
£ | £ |
Other creditors |
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Amounts falling due in more than five years: |
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Repayable otherwise than by instalments |
Other loans more 5yrs non-inst |
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Included within other creditors as detailed at note 7 and 8, is a loan of £304,091 (2019 - £144,822) from Warwickshire County Council which is to support the work of the company's small business lending scheme. The repayment of this loan is made in bi-annual instalments to the Council based upon the amount repaid by the relevant businesses to the CWRT. |
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Included within other creditors as detailed at note 7 and 8, are loans of £410,000 (2019 - £0) from The Council of the City of Coventry, and £900,000 (2019 - £0) from Warwickshire County Council which are to support the work of the company's Duplex lending scheme to businesses in the Coventry and Warwickshire area. Interest is payable quarterly in arrears, with capital repayments commencing June 2029. |
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9. | LEASING AGREEMENTS |
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Minimum lease payments under non-cancellable operating leases fall due as follows: |
31.3.20 | 31.3.19 |
£ | £ |
Within one year |
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Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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10. | SECURED DEBTS |
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The following secured debts are included within creditors: |
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31.3.20 | 31.3.19 |
£ | £ |
Other loans, within one year | - | 110,488 |
Other loans, over one year | 1,310,000 | 237,872 |
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Funds have been provided by and Warwickshire County Council, and The Council of the City of Coventry. |
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These loans are secured by debentures dated 30 September 2019. |
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These loans are secured legal charges over the loan portfolio dated 30 September 2019. |
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Securities in relation to the Unity trust bank loan were settled on 30 September 2019. |
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11. | RESERVES |
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Reserves consist of the following: |
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Income and | Commercial | Duplex |
Expenditure | Funding | Grant |
Account | Reserve | Reserve | Total |
£ | £ | £ | £ |
At 1 April 2019 | 435,726 | 1,186,387 | 0 | 1,622,113 |
Grant funds received | 1,300,000 | 1,300,000 |
Reserve transfer | 16,830 | (16,830 | ) | - |
Surplus/deficit for year | (169,136 | ) | (169,136 | ) |
Movement in provisions | (343,442 | ) | (343,442 | ) |
|
283,420 | 826,115 | 1,300,000 | 2,409,535 |
|
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Commercial Funding Reserve and Duplex Grant Reserve relate to Restricted Funds. These funds relate to grant funding received, to be utilised in line with the funding restrictions in place. |
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Duplex Grant Reserve relates to grant funds held in partnership with The Council of the City of Coventry, Warwickshire County Council, and Coventry and Warwickshire Local Enterprise Partnership. |
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Reserve transfer relates to WCC SBL 2015 partial transfer. Funds have been released to unrestricted funds. |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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12. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
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The following advances and credits to a director subsisted during the years ended 31 March 2020 and 31 March 2019: |
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31.3.20 | 31.3.19 |
£ | £ |
|
Balance outstanding at start of year |
|
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Amounts advanced |
|
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Amounts repaid |
|
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Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
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|
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13. | RELATED PARTY DISCLOSURES |
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ADECS LImited |
Common directorship |
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The company received goods and services from ADECS Limited, a company in which Mr A Bhabra is a director. The total value of goods and services provided during the year amounted to £1,325 (2019 - £11,618). At the balance sheet date, £192 was owed to ADECS Limited |
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|
G M Simpson |
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The company received services from a director Mr G M Simpson. The total value of services provided during the year amounted to £14,810 (2019 - £42,698). At the balance sheet date no amounts were owed to or owed by Mr G M Simpson. |
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|
Coventry and Warwickshire Growth Hub Limited |
Common directorship |
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The company received goods and services from Coventry and Warwickshire Growth Hub Limited, that has a subsidiary company Growth Hub Business Solutions Ltd, a company in which Mr C Humphrey is a director. The total value of goods and services provided during the year amounted to £22,084 (2019 - £20,788). At the balance sheet date no amounts were owed to Coventry and Warwickshire Growth Hub Limited. |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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14. | POST BALANCE SHEET EVENTS |
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Towards the end of the financial year, coronavirus resulted in a global pandemic affecting trading businesses globally, including within the UK. These effects have been felt by the company. Demand for the Duplex Fund and traditional commercial loans have been significantly below expectations, as both these loan products are designed to assist businesses to grow, which is generally not appropriate in the current environment. |
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The company has also been affected by customers being in financial difficulty, due to the government lockdown and the ongoing effects to customers' businesses. As part of a proactive plan developed by the management team, CWRT has engaged with such businesses and restructured and refinanced debts where appropriate. This plan is reviewed on an ongoing basis to mitigate the effects of the lockdown, nevertheless, as of the date of issuance it remains uncertain whether loans receivable will require further provisions against their recoverability. |
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CWRT hold an existing accreditation under the Enterprise Finance Guarantee (EFG) from the British Business Bank, which has been temporarily replaced by the Coronavirus Business Interruption Loan Scheme (CBILS). Our commitment to £7m accreditation remains. In supporting the government agenda to safeguard jobs, businesses and ensure continued access to appropriate finance through the pandemic, CWRT has strengthened its position in the local marketplace as an ethical and responsible finance provider by collaborating with Warwickshire County Council, Coventry City Council, Nuneaton and Bedworth Borough Council, Rugby Borough Council, Warwick District Council, and the Coventry and Warwickshire Local Enterprise Partnership (CWLEP) to provide up to £6.25m of funding for CWRT to on-lend to businesses in the Coventry and Warwickshire area under the CBIL scheme. |
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Through the innovative capital raising activities, April to November saw the Company achieving a record-breaking level of loan delivery. CWRT lent a total of £5.7m, safeguarded 691 jobs and enabled these businesses to create 124.5 jobs within the next 6 months. The overall economic impact from these activities is worth circa £19.18m for the Coventry and Warwickshire region.scheme. |
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Due to the nature of the government guarantee under CBIL scheme, and via the provision of funding detailed above, CWRT has been able to offer larger loans to customers than in the past. This level of activity has transformed the Company's financial position. It has strengthened the loan book and balance sheet, whilst generating significant surplus over obligations. This increased scale has definitively moved the Company's impact investing beyond a niche portfolio to a broader and more diverse range of borrowers than ever before. Furthermore, the income generated through the lending has cemented CWRT's foundations for the next 12months and beyond. |
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On the basis that the significant proportion of the company's portfolio of loans are guaranteed by the Government under EFG or CBILS, and the further increased performance of the company post year-end, the directors continue to believe it appropriate to adopt the going concern basis of accounting in preparing the financial statements. They are also confident that their proactive response through their COVID-19 contingency planning has also served to reduce the risk of capital losses through this time. |
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Whilst CWRT continues to take a transparent, fair and relationship-based approach in the lending decision-making process, the company has to be astute to its own appetite to risk in order to maintain a presence in this market while remaining sustainable. The directors are confident that the loan approval procedures remain robust. |
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Amongst other things, CWRT has strengthened its Credit Control and Lending Teams with new staff and continues to modify procedures to ensure that its service levels are appropriately improved. |
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In addition, CWRT's business support operations continue to play an important role in supporting businesses from the creative sector, and in supporting people to grow their skills to help them withstand the impact of the pandemic and become more economically resilient. |
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The speed and severity of the impact has been unprecedented and while the UK government has introduced considerable measures to help business through this extremely challenging time, and results to the date of signing these accounts are extremely positive, the full impact of COVID-19 on the company is currently unknown. |
Coventry and Warwickshire Reinvestment |
Trust Ltd (Registered number: 05188971) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2020 |
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15. | ULTIMATE CONTROLLING PARTY |
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Throughout the current and previous period the company was controlled by the directors. |
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16. | SHARE CAPITAL |
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The company is limited by guarantee and has no share capital. |