Emmaus Preston - Charities report - 21.2

REGISTERED COMPANY NUMBER: 03643570 (England and Wales)

REGISTERED CHARITY NUMBER: 1073677

Emmaus Preston

Report of the Trustees and

Unaudited Financial Statements

for the Year Ended 30 June 2021

Page

Reference and Administrative Details

1

Report of the Trustees

2

to

5

Independent Examiner's Report

6

Statement of Financial Activities

7

Balance Sheet

8

to

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

to

19

TRUSTEES

JA Baggaley

JA Caldwell

MG Conlon

JR Dean

KC Derbyshire

PR Leeming

S Savage

J Swindells

S Parker

JJB Rawkins

DJ Mein

N J Edwards (appointed 24/9/2020)

COMPANY SECRETARY

JA Baggaley

REGISTERED OFFICE

The Birches

165 Ribbleton Lane

Preston

Lancashire

PR1 5ST

REGISTERED COMPANY NUMBER

03643570 (England and Wales)

REGISTERED CHARITY NUMBER

1073677

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 2021. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OBJECTIVES AND ACTIVITIES

Objectives and aims

Emmaus Preston provides a home, work training and development for people who have been homeless or socially excluded. People who become homeless do so for a variety of complex reasons. Many of the community members have slept rough. Emmaus offers stability, companionship, support and security for people to rebuild their lives. Accommodation is available for 26 people in the Community Home.

The Community is fully inclusive. Companions are encouraged to play an active role in the day to day running of the Community.

The trustees confirm that they have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity's aims and objectives.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

We have accommodation for up to 26 formerly homeless people, whom we call Companions, in our house on Ribbleton Lane. This is supported by our three retail outlets in Preston including own town centre store in Preston and the largest charity store in the country which we opened in September 2016 a former B and Q. Most of our costs are paid for through our own social enterprises which are run by our Companions with support from a small staff team.

Emmaus Preston currently supports Emmaus Burnley under a Joint Working Agreement which commenced in July 2016. This agreement means a small number of Emmaus Preston staff and Trustees are shared with Emmaus Burnley.

Covid 19

This year was massively affected by the global pandemic with our shops just reopening in July 2020 after three months being closed. We then closed again in August 2020 for two weeks after a Covid Case in the house and government shutdowns in November 2020 and January - March 2021 not only affected income but also the work that our Companions do daily. Whilst we tried to offer some normality to the people we support often we had to find a new way of working and a new way to offer support. When one of our long standing support staff members left in July we changed the way we offered support with our team changing to development workers and offering both support and development as well as moving to be based mainly in our stores. We recruited a new staff member to oversee our online sales and developed both our own online selling site as well as listing on EBay and other marketplaces and this gave new work to our Companions when our stores were closed.

Companions

The Companion numbers were lower than usual on average across the year, undoubtedly due to so many homeless people being housed within hotels by Local Authorities. Our offer of people signing off benefits and working within Emmaus to pay your own way, get work experience, qualifications and move on is less attractive when all you want is a bed and benefits. This is a situation we will monitor as we have started to see towards the end of this financial year more people arriving off the streets but with much higher needs.

Emmaus Preston Companions have managed to do a whole host of mainly online courses from Health and Safety to Health and Social Care and whilst face to face courses were almost impossible to deliver safely, the computer has made a difference. We upgraded our broadband three times during the pandemics with so much reliance on online and so many people in the house doing courses, gaming and attending meetings or events on Zoom and most people found their own family home sharing data our house was sharing data between twenty people - a first world problem I am sure but never the less important for keeping busy and in contact with others who you could not see.

A number of supporters have asked how our Companions have coped with lockdowns and Covid and in the main very well as one explained "you have to be resilient on the streets to survive and so that's the one thing that stands you in good stead for the rest of your life, resilience".

Throughout 2021 and into 2022 we will increase staffing to improve the support we offer, look at new work experience opportunities, as well as developing new courses and Companions attending college for one and two year courses to gain further accredited qualifications to support them into paid work and their own accommodation.

The Companions in Preston are amazing and the way they deal with the past and a lot that has happened to them previously, for quite a few of whom it was no fault of their own, is exceptionally admirable. We talk about a hand up and not a hand out for Companions in Emmaus and the people that come through Emmaus in Preston not only take that hand firmly to pull themselves up, most offer the other hand to pull a fellow Companion up too.

Business

The Social Enterprises we run, mainly retail, support the running costs of our Emmaus including paying for food, support, training courses, move-on and some of the accommodation costs of our Companions. The more money we can generate the more support we can offer to Companions and our Companions are proud that as a charity we do not chase grants and are predominantly self-funding through our own work. Compared to some of the big national charity retailers where twenty pence or less per pound of shop income goes to support the charity we are dependent on our retail income.

This financial year we took a real hit with Covid closures seeing a fall in retail income of just over £150,000 against budget.

Trading when we were open was actually excellent, no doubt buoyed by people spending more money on their home as they could not go on holiday or have nights out in the same way and so despite nearly 5 months of closures, our shops only being down just under third of income was amazing.

Our Ecommerce site www.emmauspreston.co.uk was launched in November 2020 and between January to March 2021 alongside EBay listings we managed to bring income in whilst Companions learned how to photograph, layout and upload listings. We now need to work harder and smarter to run the shops and online together and this will mean during this next year investing in an EPOS system across all our stores.

This was a tough financial year and had it not been for government grants for retail, local people spending well with us when we were open, very tight management of costs and our online sales income then losses would have been much higher and I am pleased we have survived where sadly big names on the high street fell BUT we need to look at various other social enterprises to ensure retail is not our only source of income, spreading our risk.

We thank our Companions, volunteers, supporters both business and local people, Trustees and staff for their hard work and endeavours in the year and hope they are up for it once again next year.

The Effect of Covid

In addition to the National Covid shutdown a case of covid amongst our companions caused an additional closure of 2 weeks.

The total loss of sales was just under £140,000, but to offset this we received £16,394 in furlough reimbursement and £71,966 in grants to assist in managing with the disruption.

FINANCIAL REVIEW

Reserves policy

The reserve policy is kept under review by trustees.

In line with advice from Emmaus UK we at least hold the equivalent of three months costs in reserves to cover overheads in event of closure.

The landlord of our main outlet anticipates that he will redevelop it in the near future and we hold a reserve to cover the cost of removal.

The proceeds of the sale of a property previously rented out are to be used on a long term project to teach companions useful skills in building and property maintenance.

Grants received (excluding Covid support) totalled £2,193 (2020: £3,420) and Gifts and Donations totalled £29,003 (2020: £36,239).

Rents and Housing Benefits were £123,399 (2020: £139,588).

The net movement in funds was £47,041 (2020: £21,515).

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The Charity was incorporated as a company limited by guarantee on 2 October 1998. The company's Memorandum of Association established its objectives and powers and it is governed under its Articles of Association. The directors of Emmaus Preston 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 Preston is a member of the Emmaus Federation in the UK. Emmaus UK is a federation of all the Emmaus Groups and Communities in the UK.

Emmaus Preston's Chair, Director and Community manager participate in Federation peer group meetings where best practice is shared. Emmaus Preston receives support from the Federation staff on recruitment, training, publicity, policy development, best practice and fund raising.

Approved by order of the board of trustees on 24 February 2022 and signed on its behalf by:

JR Dean - Trustee

Independent examiner's report to the trustees of Emmaus Preston ('the Company')

I report to the charity trustees on my examination of the accounts of the Company for the year ended 30 June 2021.

Responsibilities and basis of report

As the charity's trustees of the Company (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ('the 2006 Act').

Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity's accounts as carried out under section 145 of the Charities Act 2011 ('the 2011 Act'). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5) (b) of the 2011 Act.

Independent examiner's statement

Since your charity's gross income exceeded £250,000 your examiner must be a member of a listed body. I can confirm that I am qualified to undertake the examination because I am a registered member of Institute of Chartered Accountants in England and Wales which is one of the listed bodies.

I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe:

1.	accounting records were not kept in respect of the Company as required by section 386 of the 2006 Act; or

2.	the accounts do not accord with those records; or

3.	the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or

4.

the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities (applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)).

I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.

Neil McMillan FCA

Institute of Chartered Accountants in England and Wales

McMillan & Co LLP

Chartered Accountants

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

Chorley

Lancashire

PR7 7NA

24 February 2022

2021

2020

Unrestricted

Restricted

Total

Total

fund

funds

funds

funds

Notes

£

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

3

119,556

-

119,556

73,118

Charitable activities

6

Emmaus Community

123,399

-

123,399

139,588

Friends of Fishwick and St Matthew

-

16,275

16,275

32,550

Other trading activities

4

365,857

-

365,857

401,621

Investment income

5

4,954

-

4,954

6,298

Total

613,766

16,275

630,041

653,175

EXPENDITURE ON

Raising funds

7

248,729

-

248,729

250,453

Charitable activities

Emmaus Community

318,968

22,570

341,538

316,240

Friends of Fishwick and St Matthew

-

22,647

22,647

29,899

Emmaus Bolton

-

-

-

10,000

Emmaus UK

-

-

-

15,000

Other

3,476

-

3,476

3,000

Total

571,173

45,217

616,390

624,592

Net gains/(losses) on investments

33,390

-

33,390

(7,068

)

NET INCOME/(EXPENDITURE)

75,983

(28,942

)

47,041

21,515

RECONCILIATION OF FUNDS

Total funds brought forward

726,050

1,122,617

1,848,667

1,827,152

TOTAL FUNDS CARRIED FORWARD

802,033

1,093,675

1,895,708

1,848,667

2021

2020

Unrestricted

Restricted

Total

Total

fund

funds

funds

funds

Notes

£

£

£

£

FIXED ASSETS

Tangible assets

12

96,007

1,073,318

1,169,325

1,226,152

Investments

13

336,620

-

336,620

203,230

432,627

1,073,318

1,505,945

1,429,382

CURRENT ASSETS

Stocks

14

48,591

-

48,591

50,116

Debtors

15

66,455

-

66,455

52,829

Cash at bank and in hand

331,901

20,357

352,258

364,985

446,947

20,357

467,304

467,930

CREDITORS

Amounts falling due within one year

16

(77,541

)

-

(77,541

)

(48,645

)

NET CURRENT ASSETS

369,406

20,357

389,763

419,285

TOTAL ASSETS LESS CURRENT LIABILITIES

802,033

1,093,675

1,895,708

1,848,667

NET ASSETS

802,033

1,093,675

1,895,708

1,848,667

FUNDS

17

Unrestricted funds

802,033

726,050

Restricted funds

1,093,675

1,122,617

TOTAL FUNDS

1,895,708

1,848,667

The charitable company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 30 June 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 30 June 2021 in accordance with Section 476 of the Companies Act 2006.

The trustees acknowledge their responsibilities for

(a)	ensuring that the charitable company keeps accounting records that comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the charitable company as at the end of each financial year and of its surplus or deficit for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the charitable company.

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 24 February 2022 and were signed on its behalf by:

JR Dean - Trustee

Cash flows from operating activities

Cash generated from operations

1

61,326

97,219

Net cash provided by operating activities

61,326

97,219

Cash flows from investing activities

Purchase of tangible fixed assets

(2,323

)

(20,300

)

Purchase of fixed asset investments

(100,000

)

-

Sale of tangible fixed assets

23,316

-

Interest received

4,954

6,298

Net cash used in investing activities

(74,053

)

(14,002

)

Change in cash and cash equivalents in the reporting period

(12,727

)

83,217

Cash and cash equivalents at the beginning of the reporting period

364,985

281,768

Cash and cash equivalents at the end of the reporting period

352,258

364,985

1.	RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

2021

2020

£

£

Net income for the reporting period (as per the Statement of Financial Activities)

47,041

21,515

Adjustments for:

Depreciation charges

52,048

50,433

(Gain)/losses on investments

(33,390

)

7,068

Profit on disposal of fixed assets

(16,214

)

-

Interest received

(4,954

)

(6,298

)

Decrease in stocks

1,525

2,361

(Increase)/decrease in debtors

(13,626

)

20,754

Increase in creditors

28,896

1,386

Net cash provided by operations

61,326

97,219

2.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/7/20

Cash flow

At 30/6/21

£

£

£

Net cash

Cash at bank and in hand

364,985

(12,727

)

352,258

364,985

(12,727

)

352,258

Total

364,985

(12,727

)

352,258

1.	GENERAL INFORMATION

The charity is a registered charity in England and Wales and is incorporated. The address of the principal office is The Birches, 165 Ribbleton Lane, Preston, Lancashire, PR1 5ST.

There are no material uncertanties about the charity's ability to continue.

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, with the exception of investments which are included at market value, as modified by the revaluation of certain assets.

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.

Grants offered subject to conditions which have not been met at the year end date are noted as a commitment but not accrued as expenditure.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold land

- nil

Freehold buildings

- 2% on cost

Plant and machinery

- 25% on cost

Fixtures, fittings and equipment

- 20% - 33% on cost

Motor vehicles

- 33% on cost

Fixed asset investments

Listed investments are valued at their mid market price as at the close of trading at the year end date.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

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.

Financial instruments

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument. Basic financial assets, which include debtors, prepayments and bank balances, are initially measured at transaction price and are subsequently carried at cost unless the arrangement indicates otherwise and then the asset is measured at the present value of the future receipts discounted at a market rate of interest. Basic financial liabilities, which include creditors, accruals, bank loans and group borrowings, are initially recognised at transaction price and are subsequently carried at cost unless the arrangement indicates otherwise and then the liability is measured at the present value of the future obligations discounted at a market rate of interest.

Government Grants

CJRS and small business local authority grants are accounted for under the accruals model. Where the grant is classed as revenue, it is recognised in income on a systematic basis over the periods in which the company recognises the related costs.

3.	DONATIONS AND LEGACIES

2021

2020

£

£

Donations and gifts

29,003

36,239

Grants

2,193

3,420

Small business local authority grant

71,966

25,000

CJRS grant

16,394

8,459

119,556

73,118

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

2021

2020

£

£

Other grants

2,193

3,420

4.	OTHER TRADING ACTIVITIES

2021

2020

£

£

Shop and other sundry income

286,121

333,918

Families in need

79,736

67,703

365,857

401,621

5.	INVESTMENT INCOME

2021

2020

£

£

Interest receivable

4,954

6,298

6.	INCOME FROM CHARITABLE ACTIVITIES

2021

2020

Activity

£

£

Rents and housing benefits received

Emmaus Community

123,399

139,588

Grants

Friends of Fishwick and St Matthew

16,275

32,550

139,674

172,138

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

2021

2020

£

£

Big Local Trust

16,275

32,550

7.	RAISING FUNDS

Other trading activities

2021

2020

£

£

Operating costs

248,729

250,453

8.	NET INCOME/(EXPENDITURE)

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

2021

2020

£

£

Depreciation - owned assets

52,048

50,433

Surplus on disposal of fixed assets

(16,214

)

-

9.	TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 30 June 2021 nor for the year ended 30 June 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 30 June 2021 nor for the year ended 30 June 2020.

10.	STAFF COSTS

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

2021

2020

Staff

7

7

No employees received emoluments in excess of £60,000.

11.	COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted

Restricted

Total

fund

funds

funds

£

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

73,118

-

73,118

Charitable activities

Emmaus Community

139,588

-

139,588

Friends of Fishwick and St Matthew

-

32,550

32,550

Other trading activities

401,621

-

401,621

Investment income

6,298

-

6,298

Total

620,625

32,550

653,175

EXPENDITURE ON

Raising funds

250,453

-

250,453

Charitable activities

Emmaus Community

293,670

22,570

316,240

Friends of Fishwick and St Matthew

-

29,899

29,899

Emmaus Bolton

10,000

-

10,000

Emmaus UK

15,000

-

15,000

Other

3,000

-

3,000

Total

572,123

52,469

624,592

Net gains/(losses) on investments

(7,068

)

-

(7,068

)

NET INCOME/(EXPENDITURE)

41,434

(19,919

)

21,515

RECONCILIATION OF FUNDS

Total funds brought forward

684,616

1,142,536

1,827,152

TOTAL FUNDS CARRIED FORWARD

726,050

1,122,617

1,848,667

12.	TANGIBLE FIXED ASSETS

Fixtures,

Freehold

Plant and

fittings &

Motor

property

machinery

equipment

vehicles

Totals

£

£

£

£

£

COST

At 1 July 2020

1,568,500

5,223

60,539

66,835

1,701,097

Additions

-

-

2,323

-

2,323

Disposals

-

-

-

(16,500

)

(16,500

)

At 30 June 2021

1,568,500

5,223

62,862

50,335

1,686,920

DEPRECIATION

At 1 July 2020

385,232

4,439

43,717

41,557

474,945

Charge for year

24,370

200

9,302

18,176

52,048

Eliminated on disposal

-

-

-

(9,398

)

(9,398

)

At 30 June 2021

409,602

4,639

53,019

50,335

517,595

NET BOOK VALUE

At 30 June 2021

1,158,898

584

9,843

-

1,169,325

At 30 June 2020

1,183,268

784

16,822

25,278

1,226,152

13.	FIXED ASSET INVESTMENTS

Listed

investments

£

MARKET VALUE

At 1 July 2020

203,230

Additions

100,000

Revaluations

33,390

At 30 June 2021

336,620

NET BOOK VALUE

At 30 June 2021

336,620

At 30 June 2020

203,230

There were no investment assets outside the UK.

The historic cost of investments is £300,000 (2020: £200,000).