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2021-06-30-accounts

HFHGB (Homes)

(Company Limited by Guarantee)

TRUSTEES’ REPORT AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[TH] JUNE 2021

Registered Company No: 03155218 Registered Charity No: 1053213

HFHGB (Homes)

CONTENTS

Page
REPORT OF THE TRUSTEES 1 – 7
INDEPENDENT AUDITORS’ REPORT 8 – 10
STATEMENT OF FINANCIAL ACTIVITIES 11
BALANCE SHEET 12
STATEMENT OF CASH FLOWS 13
NOTES TO FINANCIAL STATEMENTS 14 – 23

Page 1

HFHGB (Homes)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

The Trustees are pleased to present their report together with the financial statements for the year ended 30th June 2021.

Reference and Administrative details

Registered Office 93 Gordon Road, London, SE15 3RR

Bankers

CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ

Auditors

Knox Cropper LLP, 65/68 Leadenhall Street, London, EC3A 2AD

Solicitors Bates, Wells and Braithwaite London LLP, 2-6 Cannon Street, London, EC4M 6YH

Chief Executive Gareth Hepworth

Trustees of the Company

HfHGB (Homes) Trustees serve as directors of the company and members of the Board of Trustees. The following were members of the Board of Trustees during the year:

Brian Clark (Chair) Devika Shah (Treasurer – Appointed Sept 2019) Ian Wilson (resigned May 2021) Phil Beeson (resigned May 2021) Alistair Mugford Dominique Johns (resigned Sept 2020) Ian Whitehead Sarah Lewis HfHGB National Director (ex Officio Post)

The Trustees confirm that the annual report and financial statements comply with current statutory requirements, the requirements of the charity’s governing document and the provisions of the statement of recommended practice SORP (FRS 102) “accounting and reporting by charities” (effective January 2019).

Structure and Governance and Management

HfHGB (Homes) (registered charity number 1053212) is constituted as a company limited by guarantee (registered number 3155218) and is therefore governed by its memorandum and articles of association. During the year each director had a legal liability of £1. Legal responsibility for the management and stewardship of the charity is vested in the Board of Trustees.

Strategic decisions and operational guidelines are made by the Board of Trustees, but the operations are managed by staff overseen by the board. Any decisions that affect the strategic vision of the charity are referred to the Board for a final decision to be taken.

Page 2

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Related Party Transactions

As of 30[th] June 2012 HfHGB (Homes) became the sole subsidiary of Habitat for Humanity Great Britain, whose national director became part of the HfHGB (Homes) board from this date. This relationship affected the accounts of HfHGB (Homes) in that some of HfHGB (Homes) funding was raised by HfHI (the parent charity in the USA) and passed to HfHGB (Homes) via Habitat for Humanity Great Britain. Where funds are passed through in this way no deduction is made by Habitat for Humanity Great Britain. If Habitat for Humanity Great Britain are actively involved in fundraising for the donation then a sum will be retained by them to cover fundraising costs. During the year under review two Habitat for Humanity Great Britain trustees (Mr Brian Clark and Mr Ian Whitehead) were also trustees of HfHGB (Homes). In October 2019 the trustees of Habitat for Humanity Great Britain decided that a merger of the two charities was strategically desirable. Detailed planning was interrupted by the Covid Pandemic and at the close of the year the merger was still under discussion. In October 2020, the boards of Habitat for Humanity Great Britain and HfHGB (Homes) established a sub-committee comprising trustees from both organisations to implement the merger proposal. This proposal is still being discussed and developed and is yet to reach a conclusion.

Appointment and Recruitment of Trustees

Trustees are appointed by the Board of Trustees based on the skills needed by the board and the skills of potential board members. The trustees currently meet quarterly to review strategy and operational management.

Trustee Induction and Training

New trustees undergo an induction when they are appointed, to brief them on their legal obligations under charity and company law, the aims and procedures of the charity, the content of the memorandum and articles of association, the board and decision-making process, the business plan and recent financial performance of the charity. Trustees are encouraged to attend external training events where these will facilitate the undertaking of their role.

The trustee body as a whole is kept up to date with legal and statutory requirements via briefings.

Organisation

The Board of Trustees meets four times per year to discuss the current and future strategic development of the charity and any issues affecting the charity’s objectives.

The staff structure is as follows: the CEO manages the day to day operations of the charity with the assistance of an operations co-ordinator; the CEO is appointed by the trustees who may also be involved in the appointment of other staff together with the CEO. The construction sites are closely managed by an experienced Construction Manager assisted by qualified site staff. The business development manager is employed to develop the relationships needed for new projects to start and manage relationships with key partners, and to manage the programming and future pipeline of projects

Page 3

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Public Benefit

The trustees confirm that they have complied with the duty in the Charities Act 2011 to have due regard to the Charity Commission’s general guidance on public benefit. The trustees have referred to this guidance when reviewing the charity’s aims and objectives and in planning future activities of the charity.

Risk Management

The trustees have overall responsibility for ensuring that appropriate systems of control, financial or otherwise, exist. They are responsible for safeguarding the assets of the charity, taking reasonable steps for the prevention and detection of fraud and other irregularities and providing reasonable assurance that:

The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include:

As part of its management of risk, the Board of Trustees ensures that a risk register is produced which:

Project risks are reviewed at the beginning of each project by the CEO and may be reviewed by the Board of Trustees. Organisational risks are reviewed every year by the Board of Trustees who may take independent professional legal and financial advice to ensure that risks are properly managed.

Objectives, Strategies, Activities and Achievements

Objectives

HfHGB (Homes) has two charitable objects:

HfHGB’s (Homes) vision is to allow everybody access to a decent, affordable place to call home, particularly in London but looking for opportunities in other parts of Great Britain through empowering local people to meet their own housing needs, building vibrant sustainable communities in the process.

Page 4

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Strategies

HfHGB (Homes) has three key strategies which enable us to achieve our charitable objects:

The first is to work alongside partners who have underused land or buildings and work with them to develop sustainable routes for increasing the uses and purposes of these buildings and sites. Our aim is to explore with the partner whether all or part of the site would be suitable for the provision of affordable housing or whether the sites would be better suited to provision of enhanced community facilities.

The second strategy is to assist in the implementation of these kinds of projects. This may include project management or oversight, enabling the project to proceed by sourcing the necessary funding (grant, donations and debt), and possibly acting as the main contractor. Our strategy is to use the resources we can access to enable the development of both community facilities and affordable housing.

Our third strategy is to carry out smaller refurbishment and maintenance works on buildings owned by partners utilising support from partners who are able to fund this level of work. This work provides considerable benefit for both the charity partner and more importantly their clients and beneficiaries.

Achievements and Performance

During the year under review the activities of the charity were dominated by COVID and the need to comply with regulations and lockdowns in order to keep people safe. This has seriously impacted our programmes and in particular our ability to work with the volunteers from all sections of society that has been a hallmark of HFHGB Homes work in the past.

The partnership with Charlie Chaplin Playground has been maintained through the pandemic and also through the change in management to Oasis Play. The name of the site has also changed to Bolton Crescent Adventure Playground. During the year we received a grant that has enabled us to work with Oasis Play in developing a vision for the playground and providing a document which will allow HfH to envision funding partners about the development of the playground and expanding the ability of the playground to serve local children, especially those with complex additional needs.

Partnership - Bringing Sites forward for Development

These partnership schemes have also, like so much during the year, been affected by COVID. One project was cancelled by the church partner; one is subject to a planning appeal following a situation where the planning committee chose to go against the advice of the planners; one is moving forwards through the construction phase, with delays caused by COVID and possibly Brexit, and the final project still proceeding but very slowly. We moved to a position where a partner organisation would buy medium term leases from HfHGB Homes to release funds for future development, the local authority client decided to obtain funding itself and the cycle of approvals was set back by six months. We are hoping to see a return to the level of work in previous years but appreciate that the funding received by our partners, who are mostly churches, has been negatively affected over the last year by the pandemic.

During the year under review HfHGB obtained substantial funding to support the launch of a wide ranging coalition to bring together partners interested in converting empty spaces to affordable housing. This coalition was formally launched in October 2021 and bring together the voluntary sector; public sector and private sector to develop a nuanced and appropriate response to the growing problem of retail and commercial space that has limited commercial potential.

Page 5

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Partnership - Building Out Sites to complete Development

The pilot project with Barking and Dagenham Council was judged to be successful and a further three schemes were finally approved in September 2021. The first one is due to start on site in early November 2021 with the next two starting in 2022.

Partnership – Community based Projects

During the year under review the whole of our corporate volunteering programme was cancelled due to the COVID pandemic. We would like to thank the following companies who supported us despite there being no volunteering activity for the staff to help with the projects:

Philips 66 (P66); SEI Investments; P & G; Wells Fargo; Nationwide Foundation and M & G (via Habitat for Humanity Great Britain).

Covid 19 Pandemic

As noted throughout this report, the Covid 19 pandemic has had a very significant impact on the operations of the charity. All volunteering projects have stopped and are highly unlikely to restart in the next few months. Refurbishment projects have also stopped but we are hopeful these will recommence once outstanding funding issues have been resolved. We remain very committed to the Nationwide Foundation/ Europa Capital training programme for young people and although there are challenges with social distancing, we do hope to recommence this project in the next few months. The advisory work continues but the current environment is not very conducive to getting new assignments started.

We have taken advantage of the government support schemes to retain staff. These have ensured the charity’s survival. We remain committed to our mission and are hopeful of a return to a reasonable level of activity in the next few months. Clearly, volunteer based projects will not recommence until the pandemic has ended, but we are building a pipeline that could give us ‘first mover advantage’ in providing such opportunities when more normal conditions are restored.

Financial Review

HfHGB (Homes) had a deficit for the year to 30 June 2021 of £54,122 which is comparable to the prior year when the deficit was £34,797. The charity’s activities for the year were significantly disrupted by the nationwide restrictions caused by the COVID pandemic throughout the year under review. Although the advisory work was able to continue, albeit at reduced levels throughout this period owing to caution or the inability of clients to proceed during lockdown, all site work was stopped. The lock down has resulted in a considerable restricted fund balance at year end by the standards of previous years. The works planned to start in November in Barking and Dagenham will use these funds in accordance with the donors’ wishes and unrestricted income will continue to be generated as in previous years. The charity took advantage of the government’s support scheme, placing staff on furlough where appropriate. Throughout the pandemic, the charity’s cash position has remained satisfactory. Lease income has all been paid in full and advisory income has continued to flow.

Page 6

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Mortgage Repayments

Mortgage repayments from existing Habitat homeowners have continued to provide a reliable cash flow, with no material arrears to report. There are non-material arrears with mortgage holders which are related to mortgage holidays granted during the COVID pandemic. These repayments are now being made.

Lease and Repair Income

The income streams from the leases that the charity has entered into have been steady through the year and performed in line with our expectations. This is despite the challenges that the Covid Pandemic has bought for HfHGB (Homes) and our partners.

Reserves Policy

The trustees have reviewed the reserves policy for HfHGB (Homes). This policy is meant to apply for general expenditure and does not cover contingencies on individual projects. However, it is not constrained from providing for project contingencies should the need arise.

The trustees conduct an annual review of the level of unrestricted reserves by considering the risks associated with various income streams, expenditure plans and balance sheet items. This enables an estimate to be made of the reserve levels that should be sufficient to:

The risks and issues considered by the trustees in making this judgement on the level of unrestricted reserves will include:

The trustees have established that the level of reserves in the general fund (that is funds that are freely available) that HfHGB (Homes) ought to have is six months of general expenditure which is approximately £140,000. This equates to £80,000 in cash and working capital, with the balance of £60,000 coming from lease receipts and mortgage repayments that we would expect to receive over a six-month period. This is sufficient to permit an orderly transition should this be needed. Designated funds are being put in place to cover the expected costs that are likely to be incurred when leased property is handed back to owners on the expiry of the leases.

Page 7

HFHGB (HOMES)

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 30[TH] JUNE 2021

Investment Policy

In order to comply with the provisions of the SORP (FRS 102), the trustees conduct an annual review of the investment policy for the financial reserves held by HfHGB (Homes). The investment policy enables the trustees to make the best judgements about how and where the reserves should be invested, taking into consideration the return against the risk of investment, the need for growth and the ease of access to the funds. The trustees would expect to place large sums of capital which are not needed for significant periods of time with qualified investment advisors with an instruction to pursue medium risk growth. The trustees would expect to place smaller sums of capital which were required to be readily accessible in a high income earning account such as CCLA.

Ethical Investments

Whilst HfHGB (Homes) does not have a formal ethical investment policy, it will endeavour to follow ethical guidelines when investing money.

Plans for the Future

Our planning for the future has been markedly affected by two factors. Firstly, the Covid pandemic and subsequent lockdown affected areas of our work which are reliant on volunteers and the income that we raise from them. In the current place of uncertainty about what restriction may or may not apply and how long these restrictions will be in place, it means that plans around this area of our work are currently on hold. The other factor has been that discussions around merging with Habitat for Humanity Great Britain have been ongoing through most of the year. The practicalities of merging two organisations with the same ethos but different functions and varied systems has proven demanding, with further hesitation also caused by delays and financial uncertainties to projects during lockdowns. Whilst we have still moved forward with the development pipeline it has increased the uncertainty around some of these planned projects. We are still finalising the partnerships needed to start construction works repurposing empty spaces to become homes in Barking and Dagenham.

Housing Update

The housing situation in Great Britain is still marked by demand exceeding supply with the inevitable consequence of prices rising. These pressures are particularly acute in London and the south east. There are numerous policies in place that should help the situation, but we are not seeing the huge increase in house building that would be needed for people on or around average wages to afford decent accommodation. We are working within very tight parameters to address this, and most of our London-based projects address the urgent need for move on accommodation for people who have been in supported accommodation and are ready for the next stage. Clearly in a very expensive market, in which costs are still rising, this group is one that is hugely disadvantaged and tends to be priced out of the market. We are still waiting to see what effect the pandemic has on the housing market. Currently there appears to only be small changes but with a large projected rise in unemployment, this may change.

This report has been prepared in accordance with the special provisions of Part 15 of Companies Act 2006 relating to small companies.

This report was approved by the Trustees on and signed on its behalf by :

Trustee

Date

Page 8

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF

HFHGB (Homes)

FOR THE YEAR ENDED 30TH JUNE 2021

Opinion

We have audited the financial statements of HFHGB (Homes) (the ‘charitable company’) for the year ended 30[th] June 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow 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, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 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 auditor’s report 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, 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.

Page 9

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF

HFHGB (Homes)

FOR THE YEAR ENDED 30TH JUNE 2021

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.

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 statement, the trustees (who are also the directors of the charitable company for the purposes 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor’s 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 an auditor’s report 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:

Page 10

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF

HFHGB (Homes)

FOR THE YEAR ENDED 30TH JUNE 2021

Auditor’s responsibilities for the audit of the financial statements (continued)

There are inherent limitations in the audit procedures described above and, the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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 auditor’s 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 opinion we have formed.

James Holland-Leader FCA (Senior Statutory Auditor) For and on behalf of Knox Cropper LLP, Statutory Auditor 65 Leadenhall Street London EC3A 2AD Date:

Page 11

HFHGB (Homes)

STATEMENT OF FINANCIAL ACTIVITIES

(INCORPORATING THE INCOME AND EXPENDITURE ACCOUNT)

FOR THE YEAR ENDED 30[th] JUNE 2021

Notes
INCOME FROM
Donations and Legacies
2
Investments
Charitable Activities
3
TOTAL INCOME
EXPENDITURE ON
Raising Funds
4
Charitable Activities
5
TOTAL EXPENDITURE
Net Income/(Expenditure)
NET MOVEMENT IN FUNDS
RECONCILIATION OF FUNDS:
TOTAL FUNDS BROUGHT FORWARD
TOTAL FUNDS CARRIED FORWARD
14		 Restricted
2021
£
132,923
-
-
132,923
-
15,774
15,774
117,149
117,149
38,621
155,770		 Unrestricted
2021
£
(1,391)
-
197,326
195,935
7,218
359,988
367,206
(171,271)
(171,271)
1,110,992
939,721		 Total
2021
£
131,532
-
197,326
328,858
7,218
375,762
382,980
(54,122)
(54,122)
1,149,613
1,095,491		 Restricted
2020
£
69,906
-
26,626
96,532
-
63,445
63,445
33,087
33,087
5,534
38,621		 Unrestricted
2020
£
11,938
133
369,138
381,209
10,069
439,024
449,093
(67,884)
(67,884)
1,178,876
1,110,992		 Total
2020
£
81,844
133
395,764
477,741
10,069
502,469
512,538
(34,797)
(34,797)
1,184,410
1,149,613

All the activities reported above relate to continuing operations.

The Notes on pages 14 to 23 form an integral part of these financial statements.

Page 12

HFHGB (Homes)

BALANCE SHEET AS AT 30[th] JUNE 2021

Notes
FIXED ASSETS
Tangible Fixed Assets
8
Programme Related Investments
9
Work in Progress
10
CURRENT ASSETS
Debtors
11
Cash at Bank and In Hand
CREDITORS : Amounts falling
due within one year
12
NET CURRENT ASSETS
CREDITORS: Amounts falling
due after more than one year
13
NET ASSETS
RESTRICTED FUNDS
15
UNRESTRICTED FUNDS
Designated Funds
14
General Funds
TOTAL FUNDS		 2021
£
£
1,015,820
110,595
80,229
1,206,644
38,365
128,919
167,284
(119,120)
48,164
(159,317)
£1,095,491
155,770
-
939,721
£1,095,491		 2020
£
£
1,086,486
142,424
56,936
1,285,846
89,835
57,681
147,516
(91,271)
56,245
(192,478)
£1,149,613
38,621
-
1,110,992
£1,149,613		 2020
£
£
1,086,486
142,424
56,936
1,285,846
89,835
57,681
147,516
(91,271)
56,245
(192,478)
£1,149,613
38,621
-
1,110,992
£1,149,613
£1,149,613
38,621
-
1,110,992
£1,149,613

These accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act relating to small companies and constitute the annual accounts required by the Companies Act 2006 and are for circulation to members of the company.

The financial statements were approved by the Trustees on and signed on their behalf by:

_____ Brian Clark (Trustee)

Company No: 03155218

The notes on pages 14 to 23 form an integral part of these financial statements.

Page 13

HFHGB (Homes)

CASH FLOW STATEMENT FOR THE YEAR ENDED 30[th] JUNE 2021

2021
£
£
Cash flows from Operating Activities (a) below
Net cash provided by/(used in) operating activities
97,440
Cash flows from Investing Activities
Investment Income
-
Payments to acquire tangible fixed assets
(25,148)
Repayment of Programme Related Investments
31,829
Net cash provided by/(used in) investing activities
6,681
Cash flows from Financing Activities
Loan Drawdowns
-
Loan Repayments
(25,737)
Interest Paid
(7,146)
Net cash provided by/(used in) financing activities
(32,883)
Change in Cash and Cash Equivalents in the Year
71,238
Cash and Cash Equivalents at 1st July 2020
57,681

Cash and Cash Equivalents at 30 June 2021
£128,919
(a) Reconciliation of Net Income/(Expenditure) to Net Cash flow from
Operating Activities
2021
£
Net Income/(Expenditure)
(54,122)
Interest Income Received
-
Interest Paid
7,146
Depreciation
72,521
(Increase)/Decrease in Debtors and Prepayments
51,470
Increase/(Decrease) in Trade Creditors and Provisions
20,425
£97,440
(b) Analysis of Changes in Net Debt
At 1st July
2020
£
Cash
57,681
Loans falling due within one year
(19,232)
Loans falling due after more than one year
(192,478)
£(154,029)		 2020
£
£
35,115
133
(118,233)
27,521
(90,579)
23,500
(15,427)
(5,582)
2,491
(52,973)
110,654
£57,681
2020
£
(34,797)
(133)
5,582
76,122
31,073
(42,732)
£35,115
Cash Flows
At 30th June
2021
£
£
71,238
128,919
(7,424)
(26,656)
33,161
(159,317)
£96,775
£(57,054)		 2020
£
£
35,115
133
(118,233)
27,521
(90,579)
23,500
(15,427)
(5,582)
2,491
(52,973)
110,654
£57,681
2020
£
(34,797)
(133)
5,582
76,122
31,073
(42,732)
£35,115
Cash Flows
At 30th June
2021
£
£
71,238
128,919
(7,424)
(26,656)
33,161
(159,317)
£96,775
£(57,054)
£(57,054)

Page 14

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th ] JUNE 2021

1. ACCOUNTING POLICIES

(a) Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention, and in accordance with the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” (FRS 102), the Financial Reporting Standard 102 and the Companies Act 2006. The company is a public benefit entity.

The financial statements are prepared in sterling, which is the functional and presentational currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern. The Board has considered the impact of Covid-19 on the short and long term health of the Charity, and is content that the measures taken, combined with sufficient reserves, provides assurance that the going concern basis is appropriate in preparing the financial statements.

(b) Company Status

The company is a company limited by guarantee. The members of the company are the Trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company.

(c) Fund Accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors which have been raised by the company for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

(d) Income

All incoming resources are included in the Statement of Financial Activities when the company is legally entitled to the income, it is probable the income will be received and the amount can be quantified with reasonable accuracy.

(e)

Expenditure

All expenditure is accounted for on an accruals basis and has been included under expense categories that aggregate all costs for allocation to activities. Where costs cannot be directly attributed to particular activities they have been allocated on a basis consistent with the use of the resources.

Direct costs, including directly attributable salaries, are allocated on an actual basis to the key areas of activity. Overheads and other salaries are allocated between the expense headings on the basis of time spent. Support costs are those costs incurred directly in support of expenditure on the objects of the Charity and are allocated on the basis of staff cost.

Fund-raising costs are those incurred in seeking voluntary contributions and do not include the costs of disseminating information in support of the charitable activities.

Page 15

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th ] JUNE 2021

1. ACCOUNTING POLICIES (Continued)

Governance costs are those incurred in connection with enabling the charity to comply with external regulation, constitutional and statutory requirements and in providing support to the Trustees in the discharge of their statutory duties.

(f) Tangible Fixed Assets and Depreciation

All assets costing more than £500 are capitalised.

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following basis:

Freehold property - 2% straight line
Plant and equipment - 20% straight line
Computer Equipment - 33% straight line
Short Term Leasehold Properties - Over Life of Lease

(g) Short Term Leases

As part of the empty homes projects, HFHGB (Homes) enters into short term leases with either the local authority or housing association to enable the charity to generate rental income which will fund the cost of the renovation. The costs of the renovation are capitalised and depreciated over the life of the lease to the extent that future rental income will be received. Where the renovation expenditure is funded from grant income, the expenditure is charged to the statement of financial activities.

(h) Programme Related Investments

Programme related investments are stated at cost price at the balance sheet date.

Stocks and Work in Progress

Stocks are valued at the lower of cost and net realisable value after making due allowance for projected losses on long term contracts. Cost includes all direct cost and an appropriate proportion of fixed and variable overheads.

(j) VAT

The charity is registered for VAT.

(k) Taxation

HFHGB (Homes) is a registered charity and is potentially exempt from taxation in respect of income and capital gains received within the categories covered Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

(l)

Financial Instruments

The charity only has financial assets and liabilities of a kind that qualify as basic financial instruments. These are initially recognised at transaction value and subsequently valued at their settlement value.

Page 16

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

1. ACCOUNTING POLICIES (Continued)

(m) Debtors

Debtors are amounts owed to the Charity. They are measured on the basis of their recoverable amount.

(n) Cash at bank and in hand

Cash at bank and in hand is held to meet the day to day running costs of the Charity as they fall due. There are no other cash equivalents held by the Charity.

(o) Creditors

Creditors are amounts owed by the Charity. They are measured at the amount that the Charity expects to have to pay to settle the debt. Amounts which are owed in more than a year are shown as long term creditors.

2.
VOLUNTARY INCOME
M&G
P&G
Wells Fargo
SEI Investments Europe
P66 Ltd (Phillips)
Other		 Restricted
Unrestricted
Total
2021
2021
2021
£
£
£
80,000
-
80,000
21,540
-
21,540
26,206
-
26,206
7,000
-
7,000
-
1,000
1,000
(1,823)
(2,391)
(4,214)
£132,923
£(1,391)
£131,532
Nationwide Charitable Trust
Europa Capital
Legacy
Other		 Restricted
Unrestricted
Total
2020
2020
2020
£
£
£
39,437
-
39,437
10,000
-
10,000
15,000
-
15,000
5,469
11,938
17,407
£69,906
£11,938
£81,844

3. CHARITABLE ACTIVITIES

Professional fees
Contract works
Volunteer facilitation grants
Rental Income -Short Leasehold Properties
Government furlough scheme grant		 Restricted
Funds
£
-
-
-
-
-
£-		 Unrestricted
Funds
£
38,666
1,254
-
103,382
54,024
£197,326		 2021
Total
£
38,666
1,254
-
103,382
54,024
£197,326		 2020
Total
£
75,423
106,795
69,660
117,343
26,543
£395,764

HfHGB (Homes) retains an equity interest in the properties which are subject to mortgage as set out in note 9. During the year, none of these properties were sold (2020: none).

Page 17

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

4.
COST OF RAISING FUNDS
Staff Costs
Other Support Costs
5.
ANALYSIS OF CHARITABLE ACTIVITIES
Construction & Renovation Project Expenditure
East Street
RUSS Community Land Trust
Christ Church, Brixton
Gale Street, Barking & Dagenham
Friends Meeting House, Tunbridge Wells
Claudia Jones
M&G Research Project
Other Project Costs
Amortisation of Project Costs
Broad Street
Ringstead Road, Lewisham
Friends Meeting House, Tunbridge Wells
East Street
Nithdale Road, Royal Borough of Greenwich
Choumert Road, Peckham
Interest Expense
Ringstead Road, Lewisham
East Street, Barking & Dagenham
Development Advisory and Management Services
Livability/Kingsley Hall
St. Leonards Church, Chesham Bois
Hornsey Parish Church
Bethnal Green Methodist Church
Shaftesburt Battersea
Other Project costs
Nationwide Sponsored Training Scheme
Business Development Costs
Support Costs
Governance Costs		 2021
Restricted
£
-
-
-
11,215
-
1,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,559
-
15,774
-
-
£15,774		 2021
£
7,218
-
7,218
2021
Unrestricted
£
3,392
1,511
7
-
9,182
-
9,373
4,645
19,104
16,964
14,546
15,007
4,235
1,733
3,267
3,707
16,513
3,128
3,370
1,460
1,032
-
14,221
146,397
188,290
25,301
£359,988		 2020
£
10,036
33
£10,069
2021
Total
£
3,392
1,511
7
11,215
9,182
1,000
9,373
4,645
19,104
16,964
14,546
15,007
4,235
1,733
3,267
3,707
16,513
3,128
3,370
1,460
1,032
3,559
14,221
162,171
188,290
25,301
£375,762

Page 18

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

5. ANALYSIS OF CHARITABLE ACTIVITIES (Continued)

Construction & Renovation Project Expenditure
East Street, Barking & Dagenham
RUSS Community Land Trust
Charlie Chaplin Adventure Playground, Southwark
Claudia Jones Organisation
Housing for Women Refuge
Christ Church, Brixton
Gale Street, Barking & Dagenham
Other Project Costs
Development Advisory and Management Services
Livability/Kingsley Hall
St. Leonards Church, Chesham Bois
Hornsey Parish Church
Bethnal Green Methodist Church
Amortisation of Project Costs
Broad Street, Barking & Dagenham
Ringstead Road, Lewisham
Quaker Meeting House, Tunbridge Wells
Kings Grove Southwark
Nithdale Road, Royal Borough of Greenwich
Sunray Avenue, Royal Borough of Kingston
Choumert Road, Peckham
East Street, Barking & Dagenham
Financing Costs
Ringstead Road, Lewisham
East Street, Barking & Dagenham
Other Project costs
Young Persons Training Programme
Business Development Costs
Support Costs
Governance Costs		 2020
Restricted
£
-
-
5,534
2,381
-
-
21,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,238
-
36,819
26,626
-
£63,445		 2020
Unrestricted
£
-
84,950
1,568
-
-
48,708
5,390
11,134
21,811
9,645
7,282
6,137
20,847
16,964
14,545
8,194
4,235
-
2,786
7,503
3,683
1,864
-
19,097
296,343
123,149
19,532
£439,024		 2020
Total
£
-
84,950
7,102
2,381
-
48,708
27,056
11,134
21,811
9,645
7,282
6,137
20,847
16,964
14,545
8,194
4,235
-
2,786
7,503
3,683
1,864
7,238
19,097
333,162
149,775
19,532
£502,469

Page 19

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

6. RESOURCES EXPENDED

Staff Costs
Outside Labour
Materials
Other construction costs
Insurance
Legal & Professional
Other Office Expenses
Financing Costs
Depreciation of fixed assets
Amortisation of short term leases
Bad Debts		 Activities for
Raising Funds
£
7,218
-
-
-
-
-
-
-
-
-
-		 Charitable Activities
Direct
Costs
Support
Costs
Governance
Costs
2021
Total
£
£
£
£
47,072
154,804
19,223
228,317
420
-
-
420
7,011
-
-
7,011
1,034
-
-
1,034
3,032
5,571
-
8,603
24,676
11,613
6,078
42,367
336
7,910
-
8,246
7,002
144
-
7,146
-
933
-
933
71,588
-
-
71,588
-
7,315
-
7,315
£7,218 £162,171 £188,290
£25,301
£382,980
Staff Costs
Outside Labour
Materials
Other direct costs
Insurance
Legal & Professional
Depreciation & Impairment
Other Office Expenses
Financing Costs
Amortisation of short term leases
Bad Debts		 Activities for
Raising Funds
£
10,036
-
-
-
-
15
-
18
-
-
-		 Charitable Activities
Direct
Costs
Support
Costs
Governance
Costs
2020
Total
£
£
£
£
90,807
106,960
15,025
222,828
81,092
504
-
81,596
33,667
235
-
33,902
20,476
2,314
-
22,790
2,493
7,381
-
9,874
21,350
16,624
4,303
42,292
-
1,054
-
1,054
2,627
14,703
204
17,552
5,582
-
-
5,582
75,068
-
-
75,068
-
-
-
-
£10,069 £333,162
£149,775
£19,532
£512,538

7. NET INCOME/(EXPENDITURE)

The operating result is stated after charging.

Depreciation
Payments to auditors in respect of audit services
Payments to auditors in respect of other services		 2021
2020
£
£
72,521
76,122
6,000
4,303
-
-

Page 20

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

8. TANGIBLE FIXED ASSETS

9.

Office, Land &
Buildings
Plant &
Machinery
Short Term
Leasehold
Properties
£
£
£
COST
At 1stJuly 2020
30,160
16,806
1,352,998
Additions
-
1,855
-
Disposals
-
(2,928)
-
At 30thJune 2021
30,160
15,733
1,352,998
DEPRECIATION/
AMORTISATION
At 1stJuly 2020
1,530
15,744
296,204
Charge for the Year
102
831
71,588
Disposals
-
(2,928)
-
At 30thJune 2021
1,632
13,647
367,792
NET BOOK VALUE
At 30thJune 2020
£28,630
£1,062
£1,056,794
At 30thJune 2021
£28,528
£2,086
£985,206
PROGRAMME RELATED INVESTMENTS
Cost or Valuation
At 1stJuly 2020
Additional loans in Year
Repayments
At 30thJune 2021
Repayable within one year
Repayable in more than one year		 Office, Land &
Buildings
£
30,160
-
-		 Plant &
Machinery
Short Term
Leasehold
Properties
£
£
16,806
1,352,998
1,855
-
(2,928)
-		 Plant &
Machinery
Short Term
Leasehold
Properties
£
£
16,806
1,352,998
1,855
-
(2,928)
-		 Total
1,399,964
1,855
(2,928)		 Schemes in
Development
£
56,936
23,293
-
30,160 15,733
1,352,998		 1,398,891 80,229
1,530
102
-		 15,744
296,204
831
71,588
(2,928)
-		 313,478
72,521
(2,928)		 -
-
-
1,632 13,647
367,792		 383,071 -
£28,630 £1,062
£1,056,794		 £1,086,486 £56,936
£28,528 £2,086
£985,206		 £1,015,820 £80,229
2021
£
142,424
-
(31,829)
£110,595
32,107
78,488
£110,595		 2020
£
169,945
-
(27,521)
£142,424
36,693
105,731
£142,424

The values stated relate to houses built by HfHGB (Homes) in partnership with low income families which have been sold at cost price with interest free mortgages. This core activity involves the charity disposing of assets at less than market value, requiring permission from the Charity Commission. The Charity Commission has cleared the way for HFHGB (Homes) to sell houses without further reference to the Commission.

Page 21

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

10. WORK IN PROGRESS

2021
£
Building Renovation
24,522
New Building Construction
55,707
Total
80,229
2021
£
Balance Brought Forward
56,936
Additional Costs in the year
23,293
Transfer to Short Term Leasehold Properties
-
Balance Carried Forward
80,229
11.
DEBTORS
2021
£
Trade Debtors
15,355
Prepayments
4,762
Other Debtors and Accrued Income
18,248
£38,365
12.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2021
£
Trade Creditors
9,252
Social Security and Other Taxes
10,101
Accruals and Deferred Income
63,035
VAT
10,076
Loan – Repayable within one year
26,656
£119,120
13.
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2021
£
Loan – balance repayable in 1 – 5 years
113,517
Loan – balance repayable in more than 5 years
45,800
£159,317		 2020
£
17,089
39,847
£56,936
2020
£
223,179
118,233
(284,476)
£56,936
2020
£
41,535
3,969
44,331
£89,835
2020
£
17,654
10,756
35,136
8,493
19,232
£91,271
2020
£
111,490
80,988
£192,478

The loans are secured against the assets of HfHGB (Homes) under a fixed and floating charge. The first loan is repayable in monthly instalments of £1,485.06 which include interest charged at a rate of 3.75%. The term of the loan is 9.5 years from the date of drawdown of the loan. In 2019 an additional loan of £100,000 was drawn down, and in 2020 a further £23,500 was drawn down to fund the East Street development. It is repayable over 10 years from the date of completion and interest is chargeable at 3.25%.

Page 22

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

14. FUNDS

2021
Funds brought forward
Income
Expenditure
Funds carried forward
2020
Funds brought forward
Income
Expenditure
Funds carried forward
15.
RESTRICTED FUNDS
2021
Charlie Chaplin Adventure
Playground, Southwark
Young Persons Training
Programme
Gale Street Redevelopment
Project
Claudia Jones Organisation
2020
Charlie Chaplin Adventure
Playground, Southwark
Young Persons Training
Programme
Gale Street Redevelopment
Project
Claudia Jones Organisation
Government Furlough Scheme		 Restricted
Unrestricted
Designated
£
£
38,621
-
132,923
-
(15,774)
-		 Unrestricted
General
£
1,110,992
195,935
(367,206)		 Total
£
1,149,613
328,858
(382,980)
£1,095,491
Total
£
1,184,410
477,741
(512,538)
£1,149,613
Funds as at
30th June 2021
£
7,000
38,640
103,042
7,088
£155,770
Funds as at
30th June 2020
£
-
42,199
(11,666)
8,088
-
£38,621
£155,770
£-		 £939,721
Restricted
Unrestricted
Designated
£
£
5,534
-
96,532
-
(63,445)
-
£38,621
£-		 Unrestricte
d General
£
1,178,876
381,209
(449,093)
£1,110,992
Funds as at
1st July 2020
Incoming
Resources
£
£
-
7,000
42,199
-
(11,666)
125,923
8,088
-		 Resources
Expended
£
-
(3,559)
(11,215)
(1,000)
£38,621
£132,923		 £(15,774)
Funds as at
1st July 2019
Incoming
Resources
£
£
5,534
-
-
49,437
-
10,000
-
10,469
-
26,626		 Resources
Expended
£
(5,534)
(7,238)
(21,666)
(2,381)
(26,626)
£5,534
£96,532		 £(63,445)

The Young Persons Training Programme is a programme being run in conjunction with Barking College for young persons with learning disabilities.

The Gale Street development project is a project to redevelop unoccupied commercial space in Barking and Dagenham into residential space for vunerable young people.

The Claudia Jones Organisation runs a women's centre in East London. The funds are for renovation of the centre.

The Charlie Chaplin fund represents income received for the development of an adventure playground in Southwark.

Page 23

HFHGB (Homes)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30[th] JUNE 2021

16. EMPLOYEES

EMPLOYEES
Wages and Salaries
Employer’s NI
Pension Costs
Capitalised Staff Costs – Short Leasehold Projects
Other Staff Costs		 2021
£
217,126
20,476
5,225
£242,827
14,512
215,299
£229,811		 2020
£
219,233
23,069
6,450
£248,752
25,924
222,828
£248,752

The total employee benefits of the 2 members of the senior management team amount to £110,759 (2020: £126,915).

Total redundancy benefits amount to £20,092 (2020: nil).

The average number of employees during the year was 5 (2020: 6).

No employee earned £60,000 p.a. or more.

17. TRUSTEES REMUNERATION AND EXPENSES

None of the trustees received any remuneration and no other expenses have been incurred during both the current and preceeding year.

18. RELATED PARTY TRANSACTIONS

HFHGB (Homes) is a wholly controlled subsidiary of Habitat for Humanity Great Britain, a charitable company registered in England and Wales. The company number of Habitat for Humanity Great Britain is 3012626, and the registered charity number is 1043641 (SCO48638 - Scotland). The principal objective of Habitat for Humanity GB is to alleviate poverty by helping people who live in substandard housing to access better living conditions. Control is exercised by the parent of HFHGB (Homes) via mutual Trustee Board members. During the year under review two Habitat for Humanity Great Britain trustees (Mr Brian Clark and Mr Ian Whitehead) were also trustees of HfHGB (Homes), together with Tum Kazunga (CEO of Habitat for Humanity Great Britain and Ex-officio Trustee of HFHGB (Homes). The address from which the public can obtain the consolidated accounts of Habitat for Humanity Great Britain, which include the accounts of HFHGB (Homes), is 10 The Grove, Slough, Berkshire, SL1 1QP.

Some of the funding received by HFHGB (Homes) was raised by Habitat for Humanity GB. During the year, £148,145 (2020: £98,566) of funding was received through Habitat for Humanity GB. During the year, £127,745 (2020: £82,581) of funding was raised by Habitat for Humanity GB of which £10,540 (2020: £32,689) was outstanding at the year end and included within other debtors and accrued income.

19. COMPANY LIMITED BY GUARANTEE

The company, which is a registered charity, is limited by guarantee and is controlled by Habitat for Humanity GB who are the sole member. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity.