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← Kirklees Community Association

2021-03-31-accounts

CHARITY REGISTRATION NO. 1032305 COMPANY REGISTRATION NO. 02796002 (England and Wales)

KIRKLEES COMMUNITY ASSOCIATION

TRUSTEES’ REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

KIRKLEES COMMUNITY ASSOCIATION CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Pages
Trustees’ Report 1 – 4
Statement of trustees’ responsibilities 5
Report of the Independent Auditors 6 – 8
Consolidated Statement of Financial Activities 9
Consolidated Balance Sheet 10
Charity Balance Sheet 11
Consolidated Cash Flow Statement 12
Notes to the Financial Statements 13 – 30

KIRKLEES COMMUNITY ASSOCIATION

TRUSTEES REPORT (INCLUDING DIRECTORS’ REPORT) FOR THE YEAR ENDED 31 MARCH 2021

The trustees, who are also directors of the charity for the purposes of the Companies Act 2006, have pleasure in submitting their report and audited accounts for the year ended 31 March 2021.

The accounts have been prepared in accordance with the Companies Act 2006, the Charities SORP (FRS102) ‘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)’ and Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. The company is a Public Benefit Entity as defined by FRS 102.

Company Status

The company, which is a registered charity (Charity Registration No. 1032305), is limited by guarantee without share capital. The company is controlled by its governing document, the Memorandum and Articles of Association.

Organisational Structure

A Management Board comprising of up to 12 Directors controls the Association, which includes Councillors of Kirklees Metropolitan Council (KMC), members of the private sector, and members of the voluntary sector. Board meetings are held on a regular basis, and sub-committees are convened to deal with specific issues as and when required.

The company has up to now controlled and therefore consolidated its subsidiary company, Kirklees Housing Association Limited (KHA), with four of the trustees making up the majority of the board of KHA. On 20 June 2020 the KHA rules were amended to remove the parents ability to remove / appoint members and post year end new external members were appointed so that KCA no longer controls the majority of the board. This was done so that KHA could become a standalone organisation and form a Community Land Trust which opens access to new funding streams. KCA remains fully intent on supporting the ongoing work done by KHA.

With regard to induction and training of trustees a comprehensive induction pack containing specific Kirklees Community Association information and more general Charity Commission information has been prepared for all new trustees. Trustees receive training through information briefings as part of board meetings.

Principal Activities

The principal objectives of the company are to promote a range of community facilities including housing, educational, recreational, cultural and general community benefits in the Kirklees area.

Review of Activities

The group has continued throughout the year to provide low-cost and affordable rented accommodation for individuals and families through its portfolio of social housing and housing for social benefit developments around Kirklees. These include Holmfirth, Paddock, Gomersal, Golcar, Milnsbridge, Ravensthorpe, Chickenley, Mirfield and Birstall. The group also has a smaller property investment portfolio where it rents property out to third parties on a market rent basis.

Plans and key objectives for the future

Covid-19 measures have continued throughout the year and affect the current and future operation of the organisation. Office-based staff and contractors continue to work from home with site visits as required. On-site investment works have picked up towards the end of the report period as the restrictions were less strict.

The board meetings continued to be held on Zoom, including the AGM, while the business planning meeting has been postponed until it is safe to hold in the in-person format.

The board will continue to seek and create opportunities and the key objective is to be in a position to use its flexibility to take up opportunities as they arise and to demonstrate that they are actively supporting the council in achieving their housing policies. The key priorities for the future are:

Public benefit

We have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing our aims and objectives.

1

KIRKLEES COMMUNITY ASSOCIATION

TRUSTEES REPORT (CONTINUED) (INCLUDING DIRECTORS’ REPORT) FOR THE YEAR ENDED 31 MARCH 2021

Working for the public benefit of Kirklees underpins the reason for KCA. Projects are broadly aimed at enhancing the quality of life for people, particularly those in need.

The provision of affordable housing to individuals and families in need of housing is a direct public benefit. KCA housing assets of around 200 units provide good quality, affordable housing which would otherwise not be available and helps tackle social exclusion and poverty. Allocations to the properties are based on need primarily using the local authority Choice Based Letting system. Rents are set to be around the Local Housing Allowance levels or are regulated by the Homes and Communities Agency to make sure that they are affordable to those in need.

The wider regeneration work that KCA is undertaking, particularly in the Fieldhead area, is of public benefit by enhancing the physical environment and life chances of the residents of the area.

Fundraising

The group does not carry out fundraising activities.

Financial review

During the year the principal source of income continued to be from the provision of housing, with this income remaining steady year on year. The main variance in net income this year compared with the prior year was the reversal of fixed asset impairment of £2,397,236 (2020 (as restated) - £97,828) and revaluation gain on the investment properties of £270,384 (2020 - £203,566). The group had a surplus for the year ended 31 March 2021 of £3,982,576 (2020 (as restated) - £730,235). The group at 31 March 2021 had fixed assets of £17,001,743 (2020 - £13,209,138) with the main increase arising from the revaluation of the housing properties in the year. Repayments have been made against the bank loans in the year, with these reducing in total by £141,476. The group had cash at bank of £483,468 (2020 - £418,239).

Risk Management

The trustees undertake regular risk evaluation which has included a specific Covid Business Continuity and risk plan to provide services and manage the risks associated with the pandemic and lockdowns. As mentioned elsewhere, the risks to the business, tenants and contractors or staff linked to Covid impact are being managed. Investment projects are moving more slowly than anticipated before Covid-19 because of the restrictions, material scarcity and illness-related absence of workers so the risk of falling behind with required investment is being kept in mind.

The other main risks to KCA as identified by the trustees are the impact welfare reform has on tenants and therefore their rental payments and general financial considerations. The welfare impacts are mitigated by links with the local authority and their underwriting of rents, as well as referral processes to support agencies to support tenants with financial issues. The wider financial considerations are kept in mind in operational decisions, for example loan conditions, access to finance, introduction of accounting software and keeping bank account balances below the guarantee scheme level where possible. There is a standing item for finance updates and decisions at the KCA monthly board meetings.

Health and safety failings and building failures are a risk from a landlords point of view. Such risks are mitigated through the use of a management agreement with KHN who provide day to day management via a 24 hour helpline to tenants with building concerns. Landlord and building insurance is also in place and is reviewed regularly.

Increases in interest rates are a financial risk and the board considers the balanced long term risk of interest rate movements versus the costs of using fixed rates where appropriate. They continue to consider such risks on an ongoing basis.

Reserves Policy

The trustees aim to build up and retain liquid reserves equivalent to the sinking fund provision for the properties. Liquid reserves, after fixed assets and loans, are £222,088 (2020 - £173,593).

At the year end the group is holding unrestricted reserves of £10,057,865 (2020 - £6,075,289). This includes the designated sinking fund of £393,672 (2020 - £363,035) and a revaluation reserve of £2,737,455 (2020 - £1,719,286).

The trustees intend to use any surpluses to contribute to the funding of future schemes and developments, particularly the planned maintenance, and to protect the Trust against identified risks.

2

KIRKLEES COMMUNITY ASSOCIATION

TRUSTEES REPORT (CONTINUED) (INCLUDING DIRECTORS’ REPORT) FOR THE YEAR ENDED 31 MARCH 2021

Funds

Designated funds are unrestricted funds which are determined by a specific need to set aside funds to fund future costs within the charity. The designated fund is a sinking fund set aside to cover any necessary sizeable/capital repairs expected on an ageing portfolio.

Endowment funds represent income received for the purchase of housing properties where there is an obligation on the charity to hold these assets for use in fulfilling the charity’s objectives. If the properties are sold or no longer used as social housing, this fund is repayable.

Directors

The Directors of the company during the year were:

E Firth D M Firth A Hood
R C Iredale N Pinnock-Hamilton P W Rock (Chair)
G Morrison C Pattison M Khan (resigned since the end of the year)

A L Palfreeman was appointed as a director after 31 March 2021 but prior to the date of this report, appointed 3 June 2021.

Kirklees Metropolitan Council nominate “Council members”. “Local company members” are elected through elections conducted by the Kirklees Voluntary Sector Forum. “Appointed company members” are appointed by a majority of members. The Directors are not subject to retirement by rotation.

Reference and administrative details

Registered Office Civic Centre III
Market Street
Huddersfield
HD1 2EY
Company Secretary Zoë Stewart
Auditor Revell Ward Ltd
Chartered Accountants and Statutory Auditors
Bates Mill
Colne Road
Huddersfield
HD1 3AG
Bankers Co-operative Bank plc
Leeds Corporate Centre
14 King Street
Leeds
LS1 2HL

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.

Auditors

The auditors, Revell Ward Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

Statement of disclosure to auditor

In so far as the trustees are aware: a) there is no relevant audit information of which the charitable company’s auditors are unaware, and

b) the trustees have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

3

KIRKLEES COMMUNITY ASSOCIATION

TRUSTEES REPORT (CONTINUED) (INCLUDING DIRECTORS’ REPORT) FOR THE YEAR ENDED 31 MARCH 2021

This report has been prepared in accordance with the special provisions of the Companies Act 2006 relating to small companies.

16/12/2021

Approved by order of the board of trustees on …………………………………. and signed on its behalf by:

Peter Wayne Rock

……………………………………

Mr P W Rock - Trustee

4

KIRKLEES COMMUNITY ASSOCIATION

STATEMENT OF TRUSTEES RESPONSIBILITIES FOR THE YEAR ENDED 31 MARCH 2021

The trustees, who are also the directors of Kirklees Community Association 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 accounts for each financial year. Under company law the trustees 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 charitable company and the group, and of the incoming resources and application of resources, including the income and expenditure, of the group and parent charitable company for that period. In preparing those financial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that are sufficient to show and explain the charitable company’s and the group’s transactions and which disclose with reasonable accuracy at any time the financial position of the charitable company and the group, and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and the group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

5

KIRKLEES COMMUNITY ASSOCIATION

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF KIRKLEES COMMUNITY ASSOCIATION

Opinion

We have audited the financial statements of Kirklees Community Association (the 'charitable group') for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Company Balance Sheets, the Consolidated Cashflow Statement 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 Ireland (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’.

In our opinion, the financial statements:

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 charitable group 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and the parent charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our Report of the Independent Auditors thereon.

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.

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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

6

KIRKLEES COMMUNITY ASSOCIATION

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF KIRKLEES COMMUNITY ASSOCIATION

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees, who are also the directors of the charitable company for the purpose of company law, 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 trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and the parent charitable 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 trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Our 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 Independent 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective judgements such as making assumptions on significant accounting estimates.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, our planning procedures included gaining an understanding of the entity and its environment including the entity's legal and regulatory framework, any fraud indicators and internal control system via both discussions amongst the engagement team and with the directors. We also evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls.

7

KIRKLEES COMMUNITY ASSOCIATION

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF KIRKLEES COMMUNITY ASSOCIATION

Based on our understanding of the company and its industry, the key laws and regulations we considered included the UK Companies Act, Charities Act (2011) and relevant tax legislation.

Audit procedures performed by the engagement team included but were not limited to:

The primary responsibility for the prevention and detection of irregularities including fraud rests with both those charged with governance and management. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements the less likely we would become aware of such non-compliance. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, intentional misrepresentations or collusion.

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 Independent Auditors.

Use of our report

This report is made solely to the charitable 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 charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

=.

Karen Borowski FCA (Senior Statutory Auditor) for and on behalf of Revell Ward Limited

Chartered Accountants and Statutory Auditors

Bates Mill Colne Road Huddersfield HD1 3AG 17/12/2021

Date: …………………………………………….

8

KIRKLEES COMMUNITY ASSOCIATION

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDTURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2021

Notes
Income and endowments from:
Donations and legacies
3
Incoming resources from charitable
activities
4
Income from investments
Other income
5
Total income
Expenditure on:
Charitable activities
6
Net gains on investments
Net income
Other recognised gains/(losses):
Gains on revaluation of fixed assets
Net movement in funds
Reconciliation of funds:
Brought forward as previously
reported
Prior year adjustment
11
Brought forward as restated
Total funds carried forward		 Unrestricted
funds
2021
£
-
723,116
201,654
30,484
955,254
(1,738,769)
270,384
2,964,407
1,018,169
3,982,576
6,075,289
-
6,075,289
10,057,865		 Endowment
funds
2021
£
-
-
-
-
-
-
-
-
-
-
4,344,211
-
4,344,211
4,344,211		 Total
2021
£
-
723,116
201,654
30,484
955,254
(1,738,769)
270,384
2,964,407
1,018,169
3,982,576
10,419,500
-
10,419,500
14,402,076		 Total
2020
as restated
£
37,250
696,917
210,809
25,710
970,686
496,893
203,566
677,359
52,876
730,235
10,605,462
916.197
9,689,265
10,419,500

The notes form part of these financial statements

9

KIRKLEES COMMUNITY ASSOCIATION (COMPANY NUMBER 02796002) CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2021

2021 2021 2020 2020
Notes £ £ £ £
Fixed assets
Tangible assets 13,867,243 10,413,182
Investment property 13 3,134,500 2,795,956
13 17,001,743 13,209,138
Current assets
Debtors 14 51,426 54,240
Cash at bank and in hand 483,468 418,239
534,894 472,479
Creditors
Amounts falling due within one year 15 (454,901) (432,873)
Net current assets/(liabilities) 79,993 39,606
Total assets less current liabilities 17,081,736 13,248,744
Creditors
Amounts falling due after more than one
year		 16 2,679,660 2,829,244
Net assets 14,402,076 10,419,500
Funds
Endowment funds 18 4,344,211 4,344,211
Restricted funds 19 - -
Unrestricted funds
Designated funds 20 393,672 363,035
General unrestricted funds (as restated) 20 6,926,738 3,992,968
Revaluation reserve (as restated) 20 2,737,455 1,719,286
10,057,865 6,075,289
14,402,076 10,419,500

These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime.

16/12/2021

The financial statements were approved by the trustees on …………………………………………...

…………………………………… Mr P W Rock

Trustee

The notes form part of these financial statements

10

KIRKLEES COMMUNITY ASSOCIATION (COMPANY NUMBER 02796002) COMPANY BALANCE SHEET AS AT 31 MARCH 2021

2021 2021 2020 2020
Notes £ £ £ £
Fixed assets
Tangible assets 13,047,243 9,733,182
Investment property 13 3,134,500 2,795,956
13 16,181,743 12,529,138
Current assets
Debtors falling due within one year 14 59,267 76,382
Debtors falling due after one year 14 451,895 445,895
Cash at bank and in hand 473,510 393,927
984,672 916,204
Creditors
Amounts falling due within one year 15 (447,494) (426,474)
Net current assets/(liabilities) 537,178 489,730
Total assets less current liabilities 16,718,921 13,018,868
Creditors
Amounts falling due after more than one
year		 16 2,679,660 2,829,244
Net assets 14,039,261 10,189,624
Income funds
Endowment funds 18 3,897,711 3,897,711
Restricted funds 19 - -
Unrestricted funds
Designated funds 20 393,672 363,035
General unrestricted funds 20 7,049,305 4,253,474
Revaluation reserve 20 2,698,573 1,675,404
10,141,550 6,291,913
14,039,261 10,189,624
Company’s surplus for the financial year 3,849,638 747,201

These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime.

16/12/2021

The financial statements were approved by the trustees on ……………………………………………….

……………………………………….. Peter Wayne Rock Mr P W Rock Trustee

The notes form part of these financial statements

11

KIRKLEES COMMUNITY ASSOCIATION

CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021

Notes
Cash flows from operating activities:
Net cash provided by (used in) operating activities
25
Cash flows from Investing activities:
Purchase of tangible fixed assets
Proceeds on disposal of tangible fixed assets
Net cash provided by (used in) investing
activities
Cash flows from financing activities:
Repayments of borrowing
Interest paid
Net cash provided by (used in) financing
activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at the beginning of the
reporting period
Cash and cash equivalents at the end of the
reporting period
Relating to:
Cash at bank and in hand		 2021
£
£
415,382
(106,816)
-
(106,816)
(141,476)
(101,861)
(243,337)
65,229
418,239
483,468
483,468		 2021
£
£
415,382
(106,816)
-
(106,816)
(141,476)
(101,861)
(243,337)
65,229
418,239
483,468
483,468		 2020
£
£
504,749
(128,522)
191,153
62,631
(278,966)
(118,123)
(397,089)
170,291
247,948
418,239
418,239		 2020
£
£
504,749
(128,522)
191,153
62,631
(278,966)
(118,123)
(397,089)
170,291
247,948
418,239
418,239
(141,476)
(101,861)
65,229
418,239		 170,291
247,948
483,468 418,239
483,468 418,239

12

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting Policies

1.1 Accounting convention

The financial statements have been prepared in accordance with the company's governing document, the Companies Act 2006, the Charities SORP (FRS102) ‘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)’ and Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. The company is a public benefit entity as defined by FRS 102.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

During the year the global economy was affected by the Coronavirus pandemic. Although some modifications have had to be made to the operational activities of the charity, as referred to in the Trustees’ Report, the impact of the charity’s main sources of income and funding has been minor. The trustees continue to monitor the situation and at the time of approving the financial statements, the trustees have a reasonable expectation that the 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.

1.3 Basis of consolidation

The Consolidated Statement of Financial Activities, Consolidated Balance Sheet and Consolidated Cash Flow Statement include the financial statements of the company and its subsidiary undertaking made up to 31 March 2021. Intra-group sales and profits are eliminated fully on consolidation. The entity has taken exemption from presenting its unconsolidated Statement of Financial Activities under section 408 of Companies Act 2006.

1.4 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.

Designated funds are unrestricted funds which are determined by specific need to set aside funds to fund future costs within the charity.

The revaluation reserve represents the excesses arising from the revaluation of the freehold properties over the original cost.

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.

Endowment funds relate to government grants received for the acquisition of housing properties where there are ongoing restrictions as to the use of those properties.

1.5 Incoming resources

All income is generated from the rendering of services. Income is recognised when the company is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Donated assets and services are included at the market value, or where unavailable, the value to the company where this can be quantified.

Grants, including revenue Government grants, are included in the Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the year is shown in the relevant funds on the balance sheet. Where income is received in advance of entitlement of

13

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting Policies (continued)

receipt its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

Capital grants are recognised when receivable and not deferred over the life of the asset on which expended.

Grants receivable where there is no specific service provision are included within donations and legacies. Grants receivable which are capital in nature or are of a general nature are included within donations and legacies.

1.6 Resources expended

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.

1.7 Tangible fixed assets

Tangible fixed assets other than freehold land are stated at cost or valuation less depreciation and any impairment losses. Assets in the course of construction are stated at cost to date. Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows:

Social housing No depreciation charged Housing for social benefit No depreciation charged Fixtures, fittings & equipment 33.33% on cost

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 net income/(expenditure) for the year.

Freehold properties acquired are either social housing or housing for social benefit. Freehold properties are included on the balance sheet at their equivalent use value and no depreciation is provided.

This accounting policy is a departure from the general requirement of the Companies Act 2006 for all tangible assets to be depreciated. In the opinion of the trustees, compliance with FRS 102 is necessary for the financial statements to give a true and fair view. Depreciation is only one of the many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified. There is an annual revaluation of the freehold properties.

1.8 Investment properties

Investment properties are included in the balance sheet initially at cost and subsequently at their market value. No depreciation is provided on the investment properties.

Although this accounting policy is in accordance with FRS 102, it is a departure from the general requirement of the Companies Act 2006 for all tangible assets to be depreciated. In the opinion of the trustees, compliance with FRS 102 is necessary for the financial statements to give a true and fair view. Depreciation is only one of the many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified. There is an annual revaluation of the freehold properties.

1.9 Cash and cash equivalents

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.

1.10 Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' to all of its financial instruments.

14

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting Policies (continued)

Financial instruments are recognised in the company's balance sheet when the 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

Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs less any impairment.

Basic financial liabilities

Basic short term financial liabilities, which include creditors, are recognised at transaction price. Debt instruments are measured initially at transaction price, net of transaction costs, and are measured subsequently 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.

1.11 Company information

Kirklees Community Association is a private company limited by guarantee incorporated in England and Wales. The registered office is Civic Centre 3, Market Street, Huddersfield, HD1 2EY. The company's registered number is 02796002.

2 Critical accounting estimates and judgements

In the application of the company's accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised. The nature of the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. The carrying amount of the estimates and assumptions at the year end are disclosed in the relevant note to the accounts.

Categorisation of housing properties Properties that are held to earn commercial rentals or for capital appreciation, or both, are categorised as investment properties. Properties rented to provide social housing are classed as social housing. Other properties rented as low-cost accommodation are classed as housing for social benefit.

Valuation of investment property and freehold property Investment property is included on the balance sheet at fair value. The trustees estimate this based on annual professional valuations prepared on a market value basis, which they consider to be equivalent to fair value.

Freehold properties acquired are either social housing or housing for social benefit. Freehold properties are included on the balance sheet at fair value. The trustees estimate fair value based on annual professional valuations prepared on an equivalent use value for social housing basis, which the trustees consider to be equivalent to fair value.

As tangible fixed assets are revalued annually, the trustees consider it appropriate to adopt a policy of nondepreciation of these assets.

15

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

3 Donations and legacies

Grant received from Homes England
4
Incoming resources from charitable activities
Provision of housing
5
Other income
Net gain/(loss) on disposal of tangible fixed assets
Other income		 2021
£
-
2021
£
723,116
2021
£
-
30,484
30,484		 2020
£
37,250
2020
£
696,917
2020
£
(4,999)
30,709
25,710

16

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

6 Charitable activities costs

Administration fees
Professional fees
Bank fees
Insurance
Bank loan interest payable
Repairs to property
Property expenditure
Housing management fees
Net (gain)/loss on disposal of tangible fixed assets
Reversal of fixed asset impairments
Miscellaneous expenses
Bank overdraft interest
Sinking fund repairs to property
Share of governance costs		 2021
£
93,255
70,407
10,464
35,898
104,469
129,704
77,471
79,193
-
(2,397,236)
6,666
-
14,732		 2020
as restated
£
111,335
59,252
10,482
44,061
117,860
79,997
43,240
83,409
-
(97,828)
32,724
-
(1,651)
(1,774,977)
482,881
36,208
14,012
(1,738,769)
496,893

Governance costs includes payments to the auditors of £28,273 (2020 - £6,500) for audit fees and £30,445 (2020 - £2,300) for non-audit fees.

7 Trustees

None of the trustees (or any persons connected with them) received any remuneration during the year. No trustee had any expenses reimbursed in the year (2020 – one trustee reimbursed travelling expenses of £75).

8 Employees

There were no employees in either the current or previous year.

9 Surplus/(deficit) of parent charity

As permitted by Section 408 of the Companies Act 2006 and the concession in paragraph 397 of the Charities SORP, a Statement of Financial Activities and the Income and Expenditure Account of the parent charity is not presented as part of these financial statements. The parent charity’s surplus for the financial year was £2,826,468 (2020 - £720,599).

17

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

10 Comparatives for the consolidated statement of financial activities (as restated)

Income and endowments from:
Donations and legacies
Incoming resources from charitable
activities
Other Income
Total income
Expenditure on:
Charitable activities
Net gains/(losses) on investments
Net income/(expenditure)
Other recognised gains/(losses):
Gains/(losses) on revaluation of fixed
assets
Net movement in funds
Reconciliation of funds:
Brought forward as previously reported
Prior year adjustment
Brought forward as restated
Total funds carried forward		 Unrestricted
funds
as restated
£
-
907,726
25,710		 Restricted
funds
£
37,250
-
-		 Endowment
funds
£
-
-
-		 Total
as restated
£
37,250
907,726
25,710
933,436
433,041
203,566		 37,250
37,250
-		 -
26,602
-		 970,686
496,893
203,566
703,961
52,876		 -
-		 (26,602)
-		 677,359
52,876
756,837
6,526,033
(1,207,581)		 -
4,079,429
(4,079,429)		 (26,602)
-
4,370,813		 730,235
10,605,462
(916,197)
5,318,452
6,075,289		 -
-		 4,370,813
4,344,211		 9,689,265
10,419,500

11 Prior year adjustment

During the previous year the trustees recategorised the freehold properties moving £6,826,427 of investment properties into housing for social benefit to better reflect the nature of the properties. This also meant adopting the corresponding valuation basis with the result that their book values fell by a total of £1,319,027 as at 31 March 2018 and by a further £43,670 in the year to 31 March 2019 compared with the values originally reported in those years. Adjustments with a cumulative total of £1,930,258 at 31 March 2019 (2018 - £2,099,639) were also made to the revaluation reserve correcting prior year errors so that the remaining balance relates entirely to social housing and housing for social benefit with a valuation in excess of historic cost.

The prior year financial statements should have included an additional amount in the revaluation reserve of £43,882 (2019 - £41,382) for a housing property in the subsidiary valued at a higher amount than the cost. The revaluation movement in the prior year was incorrectly recorded and retained within the income and expenditure account. A prior year adjustment has been processed to include the revaluation within the correct reserve.

18

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

12 Subsidiary company

Kirklees Housing Association (KHA) is deemed to be a subsidiary of the company by virtue of Kirklees Community Association controlling KHA. At the year end four out of five members of KHA are trustees of Kirklees Community Association. KHA is a registered non-profit-making Housing Association, with registered number IP031705. Its registered office is 1[st] Floor, Civic Centre 3, High Street, Huddersfield HD1 2TG. KHA disapplied the requirement to have an audit of its financial statements in accordance with the Co-operative and Community Benefit Societies Act 2014.

A summary of its results, which are incorporated in the consolidated financial statements, is shown below:


Turnover
Administrative expenses
Other operating income
Interest payable
Surplus for the year

Gross assets
Total liabilities
Net assets
Share capital
Total reserves		 2021
£
39,514
(23,569)
145,000
(23,005)
137,940
2021
£
838,470
(475,650)
362,820
5
362,815
362,820		 2020
as restated
£
39,821
(13,515)
3,500
(22,670)
7,136
2020
£
705,417
(475,537)
229,880
5
229,875
229,880

19

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

13 Fixed assets

Group

Cost or valuation
At 1 April 2020
Additions
Revaluation
At 31 March 2021
Depreciation and impairment
At 1 April 2020
Charge for the year
At 31 March 2021
Carrying amount
At 31 March 2021
At 31 March 2020
Company
Cost or valuation
At 1 April 2020
Additions
Revaluation
At 31 March 2021
Depreciation and impairment
At 1 April 2020
Charge for the year
At 31 March 2021
Carrying amount
At 31 March 2021
At 31 March 2020		 Investment
Properties
Social
Housing
£
£
2,795,956
4,876,500
68,160
-
270,384
1,999,000		 Investment
Properties
Social
Housing
£
£
2,795,956
4,876,500
68,160
-
270,384
1,999,000		 Housing for
Social
Benefit
£
5,536,682
38,656
1,416,405		 Fixtures,
Fittings &
Equipment
£
675
-
-
675
675
-
675
-
-
Fixtures,
Fittings &
Equipment
£
675
-
-
675
675
-
675
-
-		 Total
£
13,209,813
106,816
3,685,789
3,134,500
6,875,500		 6,991,743 17,002,418
-
-		 -

-		 -
-		 675
-
- - - 675
3,134,500
6,875,500
2,795,956
4,876,500
Investment
Properties
Social
Housing
£
£
2,795,956
4,196,500
68,160
-
270,384
1,859,000		 6,991,743
5,536,682
Housing for
Social
Benefit
£
5,536,682
38,656
1,416,405		 17,001,743
13,209,138
Total
£
12,529,813
106,816
3,545,789
3,134,500
6,055,500		 6,991,743 16,182,418
-
-		 -

-		 -
-		 675
-
- - - 675
3,134,500
6,055,500
2,795,956
4,196,500		 6,991,743
5,536,682		 16,181,743
12,529,138

20

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

13 Fixed assets (continued)

The current year has seen an upward revaluation of the social housing stock of £3.275m of which £2.252m has been taken to the SOFA to reverse previous devaluations.

In the prior year valuations were carried out by Boultons The valuations were undertaken to Market Value and Existing Use Value for Social Housing. The valuations were carried out in accordance with the Practice Statements and Guidelines issued by the Royal Institution of Chartered Surveyors January 2020. The valuations were revaluations without internal inspection, in accordance with VPS2 of the RICS manual. The valuations were prepared using the traditional comparable method of valuation with transactions of similar properties in similar localities having been taken into consideration

In the current year valuations were carried out by Bramleys. Valuations were provided on a market value basis as defined by the Royal Institution of Chartered Surveyors Valuation - Global Standards 2020. Compliance with the RICS Professional Standards and Valuation Practice Statements gives assurance also of compliance with the International Valuation Standards (IVS). The valuation has been undertaken using the comparable and investment approaches with transactions of other similar type and quality of property in the locality having been taken into consideration and an investment yield has been applied. The yield and therefore valuation reflects the nature of the tenancy and the rental income produced.

Investment properties were valued on a market value basis.

Social Housing and Housing for Social Benefit were valued on EUV-SH (Existing Use for Social Housing).

Bramleys considered the principle difference in EUV-SH basis of value is that the property will continue to be let by a body pursuant to delivery of a service for the existing use and that the vendor would only be able to dispose of the property to organisations intending to manage the housing stock in accordance with the regulatory body's requirement. This definition of value is therefore on the basis of the existing use for social housing and reflects the rental income stream. The impact of taking into account future discounted rental yields has resulted in the upward revaluation of the social housing stock above.

If the revalued assets had not been revalued, they would have been carried at the following historic cost:

Investment properties
Social Housing
Housing for Social Benefit		 Group
2021
2020
as restated
£
£
2,041,598
1,973,438
7,728,167
7,728,167
4,371,070
4,332,414		 Company
2021
2020
£
£
2,041,598
1,973,438
6,798,456
6,798,456
4,371,070
4,332,414

Fixed assets with a total carrying amount of £12,344,000 (2020 - £9,437,689) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

Housing for Social Benefit with a carrying amount of £737,000 (2020 - £508,800) relates to shared ownership properties. The carrying amount is 50% of the properties’ total value, corresponding to the company’s ownership percentage.

The properties at 19-23 Dale View, Longwood were transferred to the company at nil cost, but were introduced at a market value of £375,000 in accordance with the company's accounting policy.

21

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

14 Debtors

Group
2021
2020
Amounts falling due within one year:
£
£
Amounts owed by subsidiary undertakings
-
-
Prepayments and accrued income
51,426
54,240
51,426
54,240
2021
2020
£
£
Amounts falling due after more than one year:
Amounts owed by subsidiary undertakings
-
-
Total debtors
51,426
54,240		 Company
2021
2020
£
£
16,348
10,000
42,919
66,382
59,267
76,382
2021
2020
£
£
451,895
445,895
511,162
522,277		 Company
2021
2020
£
£
16,348
10,000
42,919
66,382
59,267
76,382
2021
2020
£
£
451,895
445,895
511,162
522,277
76,382
2020
£
445,895
522,277

The company has previously provided a loan to Kirklees Housing Association Limited in the sums of £431,095 and £50,300. The loan is for a term of twenty five years and interest is charged at 5% per annum. As security the company holds a legal charge over 1a to 1e, 28a and 28b Branwell Avenue, Batley, and 1 Scarr Green Close, Meltham, West Yorkshire.

15 Creditors: amounts falling due within one year

Bank loans and overdraft (see note 18)
Trade creditors
Other creditors
Accruals and deferred income		 Group
2021
2020
£
£
142,095
133,987
140,329
-
130,834
130,681
41,643
168,205
454,901
432,873		 Company
2021
2020
£
£
142,095
133,987
135,530
-
130,834
130,681
39,035
161,806
447,494
426,474

Included within creditors above is deferred income as follows:

Group Company
2021 2020 2021 2020
£ £ £ £
Deferred income 4,934 4,934 4,934 4,934

Deferred income has arisen due to rental income being paid in advance. All of the deferred income in the prior year was released in the current year.

22

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

16 Creditors: amounts falling due after more than one year

Group
2021
2020
£
£
Bank loans and overdraft (see note 18)
2,679,660
2,829,244
17 Loans and overdrafts
Group and company
The following secured debts are included within creditors:


Bank loans
Amounts included above which fall due after five years:
Payable by instalments		 Company
2021
2020
£
£
2,679,660
2,829,244
2021
2020
£
£
2,821,755
2,963,231
2,061,660
2,225,820

The Co-operative Bank holds a first legal charge over the properties at Heron Close, Ravensthorpe, Fieldhead, Birstall and Oxford Road, Gomersal.

The Fieldhead property loans are repayable up to twenty years. All loans are repayable on an annual basis, and capital repayments are variable over the term of the loan. Interest is charged at 1.875% above Libor, which is specific to the Fieldhead loan agreement.

The Unity Trust Bank hold a first legal charge over 13 properties located throughout Kirklees.

The Unity Trust Bank loan is repayable over 10 years. The loan is repayable on a annuity basis, and capital repayments are varied over the term of the loan. Interest is charged at 1.75% above the bank's own base rate.

18 Endowment funds

Endowment funds represent income received for the purchase of housing properties where there is an obligation on the charity to hold these assets for use in fulfilling the charity’s objectives. If the properties are sold or no longer used as social housing, this fund is repayable.

Group
Movement in funds
Balance at 1 Incoming Resources Balance at 31
April 2020 resources expended March 2021
£ £ £ £
Endowment fund 4,344,211 -
-		 4,344,211

23

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

18 Endowment funds (continued)

Company
Movement in funds
Balance at 1 Incoming Resources Balance at 31
April 2020 resources expended March 2021
£ £ £ £
Endowment fund 3,897,711 - - 3,897,711

Comparatives for endowment funds:

The prior year financial statements included a prior year adjustment to move a capital grant of £446,550 into the endowment reserve. The capital grant had originally been deducted from the fixed asset balance, this accounting treatment should have been amended on transition to FRS102 with the grant being taken to the Consolidated Statement of Financial Activities in line with the performance model of accounting.

Group
Endowment fund
Company
Endowment fund
19 Restricted funds
Group and company
Restricted funds		 Balance at
1 April
2019
£
-
Balance at
1 April
2019
£
-
Balance at
1 April
2020
£
-		 Prior year
adjustment
£
4,370,813
Prior year
adjustment
£
3,924,313
Prior year
adjustment
£
-		 Movement in funds
Incoming
resources
Resources
expended
Balance at
31 March
2020
as restated
as restated
£
£
£
-
(26,602)
4,344,211
Movement in funds
Incoming
resources
Resources
expended
Balance at
31 March
2020
as restated
as restated
£
£
£
-
(26,602)
3,897,711
Movement in funds
Incoming
resources
Resources
expended
Balance at
31 March
2021
£
£
£
-
-
-

24

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

19 Restricted funds (continued)

Comparative for restricted funds:

The prior year financial statements included restricted funds at 31 March 2019 of £4,079,429. £155,116 of this amount has been transferred to unrestricted reserves as the funds had, in fact, been spent so the restriction had been lifted. The remaining £3,924,313 was transferred into a permanent endowment fund to reflect the nature of the original grant. Restricted funds received and spent during the year to 31 March 2020 comprised a grant from Homes England to provide funding for the Community Housing Programme.

HCA grant re Fieldhead
Other restricted grants
Homes England grant		 Balance at
1 April
2019
£
3,924,313
155,116
-
4,079,429		 Prior year
adjustment
£
(3,924,313)
(155,116)
-
(4,079,429)		 Movement in funds
Incoming
resources
Resources
expended
£
£
-
-
-
-
37,250
(37,250)
37,250
(37,250)		 Balance at
31 March
2020
£
-
-
-
-

20 Unrestricted funds

Note 11 explains the prior year adjustment to include an additional amount in the revaluation reserve of £43,882 (2019 - £41,382) for a housing property in the subsidiary valued at a higher amount than the cost. The revaluation movement in the prior year was incorrectly recorded and retained within the income and expenditure account. A prior year adjustment has been processed to include the revaluation within the correct reserve.

Group
Designated fund
General unrestricted fund
Revaluation reserve		 Balance at
1 April
2020
£
363,035
4,036,850
1,675,404
6,075,289		 Prior year
adjustment
£
-
(43,882)
43,882
-		 Net
movement
in fund
£
(14,732)
2,979,139
1,018,169
3,982,576		 Transfers
between
funds
£
45,369
(45,369)
-
-		 Balance at
31 March
2021
£
393,672
6,926,738
2,737,455
10,057,865

25

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

20 Unrestricted funds (continued)

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

Incoming
resources
Resources
expended
Net gains
on
investments

£
£
£
Designated fund
-
(14,732)
-
General unrestricted fund
955,254
1,753,501
270,384
Revaluation reserve
-
-
-
955,254
1,738,769
270,384
Comparatives for movement in unrestricted funds:
Balance at
1 April
2019
Prior year
adjustment
Net
movement
in fund
as restated
as restated
£
£
£
Designated fund
294,344
-
1,651
General unrestricted fund
5,674,874
(2,317,176)
702,310
Revaluation reserve
556,815
1,109,595
52,876
6,526,033
(1,207,581)
756,837		 Incoming
resources
Resources
expended
Net gains
on
investments

£
£
£
Designated fund
-
(14,732)
-
General unrestricted fund
955,254
1,753,501
270,384
Revaluation reserve
-
-
-
955,254
1,738,769
270,384
Comparatives for movement in unrestricted funds:
Balance at
1 April
2019
Prior year
adjustment
Net
movement
in fund
as restated
as restated
£
£
£
Designated fund
294,344
-
1,651
General unrestricted fund
5,674,874
(2,317,176)
702,310
Revaluation reserve
556,815
1,109,595
52,876
6,526,033
(1,207,581)
756,837		 Gains/
(losses) on
revaluation
of fixed
assets
£
-
-
1,018,169
1,018,169
Transfers
between
funds

£
67,040
(67,040)
-
-		 Net
movement
in funds
£
(14,732)
2,979,139
1,018,169
3,982,576
Balance at
31 March
2020
as restated
£
363,035
3,992,968
1,719,286
6,075,289

Comparatives for movement in unrestricted funds:

Comparative net movement in funds, included in the above, are as follows:

Designated fund
General unrestricted fund
Revaluation reserve		 Incoming
resources


£
-
933,436
-
933,436		 Resources
expended
as restated
£
1,651
(434,692)
-
(433,041)		 Net gains/
(losses) on
investments
£
-
203,566
-
203,566		 Gains/
(losses) on
revaluation
of fixed
assets
as restated
£
-
-
52,876
52,876		 Net
movement
in funds
£
1,651
702,310
52,876
756,837

26

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

20 Unrestricted funds (continued)

Company

Designated fund
General unrestricted fund
Revaluation reserve		 Balance at
1 April
2020
£
363,035
4,253,474
1,675,404
6,291,913		 Net
movement
in fund
£
(14,732)
2,841,201
1,023,169
3,849,638		 Transfers
between
funds
£
45,369
(45,369)
-
-		 Balance at
31 March
2021
£
393,672
7,049,306
2,698,573
10,141,551

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

Designated fund
General unrestricted fund
Revaluation reserve		 Incoming
resources

£
-
940,873
-
940,873		 Resources
expended
£
(14,732)
1,629,944
-
1,615,212		 Net gains/
(losses) on
investments
£
-
270,384
-
270,384		 Gains/
(losses) on
revaluation
of fixed
assets
£
-
-
1,023,169
1,023,169		 Net
movement
in funds
£
(14,732)
2,841,201
1,023,169
3,849,638

Comparatives for movement in unrestricted funds

Designated fund
General unrestricted fund
Revaluation reserve		 Balance at
1 April
2019
£
294,344
5,645,421
812,528
6,752,293		 Prior year
adjustment
£
-
(2,020,081)
812,500
(1,207,581)		 Net
movement
in fund
£
1,651
695,174
50,376
747,201		 Transfers
between
funds
£
67,040
(67,040)
-
-		 Balance at
31 March
2020
£
363,035
4,253,474
1,675,404
6,291,913

27

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

20 Unrestricted funds (continued)

Comparatives for net movement in funds, included in the above, are as follows:

Designated fund
General unrestricted fund
Revaluation reserve		 Incoming
resources

£
-
918,285
-
918,285		 Resources
expended
£
1,651
(426,677)
-
(425,026)		 Net gains/
(losses) on
investments
£
-
203,566
-
203,566		 Gains/
(losses) on
revaluation
of fixed
assets
£
-
-
50,376
50,376		 Net
movement
in funds
£
1,651
695,174
50,376
747,201

The designated funds of the charity have been set aside out of unrestricted funds by the trustees in order to build a sinking fund. A transfer into the sinking fund to cover maintenance and refurbishment of the properties held is made annually based on 1% of the revalued cost of the properties.

General unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

The revaluation reserve represents the excesses arising from the revaluation of the freehold properties over the original cost.

21 Analysis of net assets between funds

Analysis of net assets between funds
Group
Unrestricted
funds

£
Fund balances at 31 March 2021 are represented by:
Tangible assets
9,523,032
Investment property
3,134,500
Current assets/(liabilities)
79,993
Long term liabilities
(2,679,660)
10,057,865		 Endowment
funds
£
4,344,211
-
-
-
4,344,211		 Total
£
13,867,243
3,134,500
79,993
(2,679,660)
14,402,076

28

KIRKLEES COMMUNITY ASSOCIATION

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

21 Analysis of net assets between funds (continued)

Company
Unrestricted
funds

£
Fund balances at 31 March 2021 are represented by:
Tangible assets
9,149,532
Investment property
3,134,500
Current assets/(liabilities)
537,178
Long term liabilities
(2,679,660)
10,141,550		 Endowment
funds
£
3,897,711
-
-
-
3,897,711		 Total
£
13,047,243
3,134,500
537,178
(2,679,660)
14,039,261

22 Capital commitments

At 31 March 2021 the subsidiary company has committed to the purchase of a new property at Denby Dale, Huddersfield with completion being 30 June 2021. The cost of this property, including legal fees and stamp duty land tax is £93,566 and the purchase is being funded by the company. The company and group had no capital commitments at the prior year end of 31 March 2020.

23 Related party transactions Group

During the year Kirklees Neighbourhood Housing (KNH) was related as it is wholly owned by Kirklees Metropolitan Council (KMC) who provide key management personnel services to the group. KNH managed the company and group's properties under a management contract. Services provided amounted to £76,781 (2020- £81,409), of which £Nil (2020- £20,352) was outstanding at the year end. KNH also provided maintenance services amounting to £118,403 (2020 - £68,827) of which £46,029 (2020 - £35,149) was outstanding at the year end. Subsequent to the year end this agreement has been transferred to KMC but is unchanged in all other respects.

KMC provided administrative services to the company which amounted to £75,529 (2020 - £83,045), of which £28,515 (2020 - £Nil) was outstanding at the year end. KMC provided miscellaneous services to the company amounting to £10,001 (2020 - £18,430) none of which (2020 - £6,282) was owed at the year end.

KMC guarantees the company's rent income at the following levels: Fieldhead properties 97.5% and all other properties 100%. KMC provides to the Homes and Communities Agency a performing guarantee that KCA will discharge and perform the grant conditions attached to any of the Social Housing Grant that may be awarded for the redevelopment of the Fieldhead estate. At the year end this guarantee covers the remaining grant included in the endowment fund.

The directors of the company had no material transactions with the company.

Company

The company provides financial and administrative support to Kirklees Housing Association, the company’s subsidiary company. Services provided amounted to £2,000 in the year (2020 - £2,000) of which £Nil (2020 - £2,000) was outstanding at the year end. Kirklees Housing Association owed a loan of £451,895 (2020 - £455,895) to the company at year end. Loan interest of £23,005 (2020 - £22,670) was charged during the year of which £Nil (2020 - £11,242) was outstanding at the year end. During the year the company also provided day to day financial assistance and paid £26,749 (2020 - £Nil) of costs on behalf of Kirklees Housing Association and was reimbursed £10,401 (2020 - £Nil). At the balance sheet date £16,348 (2020 - £Nil) was outstanding in respect of this day to day loan account.

29

KIRKLEES COMMUNITY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

24 Post balance sheet events

The company has up to now controlled and therefore consolidated its subsidiary company, Kirklees Housing Association Limited (KHA), with four of the trustees making up the majority of the board of KHA. On 20 June 2020 the KHA rules were amended to remove the parents ability to remove / appoint members and post year end new external members were appointed so that KCA no longer controls the majority of the board. This was done so that KHA could become a standalone organisation and form a Community Land Trust which opens access to new funding streams.

25 Reconciliation of net income/(expenditure) to net cash flow from operating activities

Net income for the reporting period (as per
the statement of financial activities)
Adjustments for:
Net (gains) on investments
Reversal of fixed asset impairments
Interest paid on bank loans
(Gain)/loss on disposal of tangible fixed assets
Decrease in debtors
lncrease/(decrease) in creditors
Net cash provided by (used in) operating activities

Analysis of changes in net debt
Group
At start of
year

£
Net cash:
Cash
418,239
418,239
Debt:
Loans falling due within one year
(133,987)
Loans falling due after one year
(2,829,244)
(2,963,231)
(2,544,992)		 Cashflows
£
65,229
65,229
133,987
7,489
141,476
206,705		 Group
2021
2020
£
£
2,964,407
677,359
(270,384)
(203,566)
(2,397,236)
(97,828)
104,469
117,860
-
4,999
2,814
35,452
11,312
(29,527)
415,382
504,749
Other non-
cash
changes
At end of
year
£
£
-
483,468
-
483,468
(142,095)
(142,095)
142,095
(2,679,660)
-
(2,821,755)
-
(2,338,287)		 Group
2021
2020
£
£
2,964,407
677,359
(270,384)
(203,566)
(2,397,236)
(97,828)
104,469
117,860
-
4,999
2,814
35,452
11,312
(29,527)
415,382
504,749
Other non-
cash
changes
At end of
year
£
£
-
483,468
-
483,468
(142,095)
(142,095)
142,095
(2,679,660)
-
(2,821,755)
-
(2,338,287)		 Group
2021
2020
£
£
2,964,407
677,359
(270,384)
(203,566)
(2,397,236)
(97,828)
104,469
117,860
-
4,999
2,814
35,452
11,312
(29,527)
415,382
504,749
Other non-
cash
changes
At end of
year
£
£
-
483,468
-
483,468
(142,095)
(142,095)
142,095
(2,679,660)
-
(2,821,755)
-
(2,338,287)
483,468
(142,095)
(2,679,660)
(2,821,755)
(2,338,287)

26 Analysis of changes in net debt

30