YMCA East Surrey (A charitable company limited by guarantee) Report and Financial Statements for the year ended 31 March 2021 Yn¢A Charity Registration No.. 1075028 Company Registration No.. 037 16594 Social Housing Provider Registration No.. 4854 YMCA East Surrey Contents Page Legal and admlnlstrative information Report of the Chief Executive Report of the Trustees lincorporating the strategsc reporti 6-12 In(Jependent Auditor's report 13-15 Statement of comprehensive income 16 statement of changes in reserves 17 Statement of financial positio 18 Statement of cash flows 19 Accounting policies 20-23 Notes to the financial 5tatement5 24-31 YMCA East Surrey Legal and administrative information D1￿CtoTs and Trustees.. Phil Baker (resigned 20 October 20201 Dr Diana Bullock Paul B yrne Freda Clark Nigel Clifford Caroline Fisher Penelope Horsfall Heather Loxley Richard Mantle Rev David Skitt (resigned 20 October 20201 Ian Thomas Treasurer Jeff Travis Ann Woodford (resigned 20 October 2020} The above served as trustees during {and, unless otherwise indicated, throughout) the year ended 3 1 March 2021. Chalrman President Chief Executive and Company Secretary.. Reglstered Office.. lan Burks YMCA East Surrey Princes Road Redhill Surrey RHI 6JJ Registered Charity Number-. Registered Company Number.. Social Housing Provider Registration Number= Bankers.. 1075028 03716594 (England & Wales} 4854 Barclays bank plc Guildford, Gatwick & Woking Business Banking 90192 High Street Crawley West Sussex RHIO IBP Auditors- Crowe UK LLP 55 Ludgate Hill London EC4N 7JW Solicitors: Morrisons Solicitor5 Pr05pero 73 London Road, Redhill RHI ILQ Page I YMCA East Surrey Report of the Chief Executive YMCA East Surrey is a local charity that is here For everyone but focusses on supporting the young, the vulnerable and those facing disadvantage. We offer programmes that instil a sense of belonging and encourage people to contribute and thrive. One of our strengths is our diversity of charitable activity covernng projects and services in sports, physical activity, childcare. youth work. short breaks, housing and therapeutic services. We pride ourselves on our inclusive approach and deliver specialist support for those with different abilitie5 alongside thriving universal services especially in areas such as play and leisure. Our aim Ss to help people stay safe, healthy, happy and fulfilled, building on people's strengths and preventlll9 problems before they become too difflcult to resolve. The last year has been quite exceptional in the history of the YMCA not just because 2020 was our 150th anniversary but also because of the impact of the Coronavirus Pandemic which engulfed us. By April 2020 many of our services were in lockdown including all adult and Child￿n,$ activities at Princes Rd, the Sovereign Centre and Merstham Hub. Much of our other work to support children. young people and families was able to continue but only in an adapted format using telephone. social medla and video cOnfe￿nChn9 to ensu￿ social distancing was observed. Due to their e55ential nature, our hou51ng projects continued under Covid secure measures throughout the pandemic. Thanks to the hard work of trustees, managers and staff we rnanaged to negotiate our way through what was a uniquely challenging year. By the end of March 2021 we were back delivering nearly all of our pre Covid services and had developed new ways of working using technology that enabled us to reach more service users and made us more efficient as an organisation. Thanks to the Support of the Coronavirus Job Retention Scheme we were able to retaln the vast majority of our stafff. The impact of Covid will be far reaching and managers have used the last year wisely to artively planning new services and developments to help young people recover from the loss of education, sack of soclal and sporting activity, isolation and other damage caused by the pandemic. These include a brand new youth work offer funded by the National Lottery, a major expansion of our emotional wellbeing and mental health services and the development of a new housing scherne in Horley. The beneflts of these services will begin to be seen in 2021-22. Housing youn9 people and helping them achieve independence is an integral part of what the YMCA does and the need for these services has increased over recent years and is forecasted to rise further as the econornic impact of Covid ripples through communities in Surrey. This has reinforced the YMCA'S strategic commitment to develop more housing projects for young people. Considerable progress in this area has been made over the last twelve rnonths. In November 2020 a new housing project in Merstham was opened with the help of a Home5 England Grant to extend and refurbish a 4 bedroom property on the London Road. Despite the difficulties of carrying out a building project during lockdown this new development was compleled on time and within budget and is now providing high quality, affordable accommodation plus support for 6 young people between the ages of 18 and 30. Also in November 2020, a former guest house was identified in Horley as a potential new project to meet the housing needs of young people in the South of the Borough, which due to it5 close proximity to Gatwick, was anticipated to see high levels of unemployment and subsequent homelessness. Following discussions with Homes England and Reigate and Banstead Borough Council capital funding was secured toward5 the purchase and development of the property into a new Move On scheme for 12 young people. A loan was also agreed in principle with Barclays Bank to enable the building to be rernodelled and brought up to the highest standards. Contracts were exchanged in March 2021 and the project will be completed by November 2021. The YMCA has also negotlaled an expansion in the numbers of young homeless people that were supported through its contract with Surrey County Council ISCCI. From April 2020 the number of young people with 5CC support packages increased From 26 to 42 and once me￿tham was open in November this increased further to 48 young people. Page 2 YMCA East Surrey Report of the Chief Executive Funding from Homeless Llnk was secured to implement a 'Trauma Informed Approach. to working with young people who in many cases had suffered adverse childhood experiences such as abuse, domestic violence. parental substance misuse or being taken into care. Training has led to the introduction of reflective supervision for staff and a more positive strength-based attitude towards young people facing homelessness. This has been beneficial for staff and young people accessing the service. All these development5 Wlthin housing will enable the YMCA to provide more opportunities to prevent homelessness and will give d1sadvantaged young people the stability and support they need to go into full time educatton or gain employment and thus move on to independence. Providing quality accommodation is just the start of the journey for a young person who ha5 suffered trauma. We a150 offer a range of other support to help young people belong, contribute and thrive. All our residents are encouraged to acce55 YMCA services such as sport and fitness, counselling and Y Focus and over the last year, thanks to funding from the William Waites Nemorial Fund we were ble to offer bespoke volunteering opportLJnities for those young people who still need to boost their confldence and self-esteem before being ￿adY to take on ernployment. Many young people accessing our housing provision are affected by mental health difficulties and this is not an issue confined to those facing homelessness. Increased isolation, mi55ed schooling, bereavement and economic difficultie5 are real issues for many and this ha5 taken its toll on young people's mental health. To address this the YMCA has joined forces with I l other charities and health partners to form an Alliance that will deliver early intervention and preventative activities for those facing emotional wellbeing or mental health difficulties. The new service aims to bring together NHS clinical expertise with local and national third sect()r organisations who have proven track records in supporting children and young people. This new service Starting Aprll 1st 2021 will replace CAMHS (Children and Adolescent Mental Health Service). There will be a greater focus on provlding support when mental health needs begin to emerge. YMCA East Surrey will be working with 2,300 young people and will be delivering 22,000 hours of counselllng, group work and therapeutic services. Another traditlonal area of YMCA provision that supports the emotional health of young people is youth work. National YMCA research has Shown that over the last ten years local authority funding going Into Services for young people has been reduced by 690/0 and this has certainly been seen in Surrey where SCC have made the strategic decision to focus on targeted work only. To compensate for the loss of public funded youtli work SCC have offered charities favourable leases on youth centres to encourage them to deliver positive activities for young people. The YMCA has taken on this challenge at Horley where our new 5ease and service level agreement officially started on 13th January 2021. We are also hoping to take on a similar lease at the Phoenix in Tadworth. This initiative is even more important in the current crisis as open access youth work will be a vital tool to assist young people as they rebuild their lives following sustained periods of lockdown and gaps in education. To support this work the YMCA has secured funding from the National Lottery who have awarded us a grant of £435,736 over 3 years to develop youth work provision across Reigate and 8anstead. This will provide the essential ￿sOurceS to offer at least 12 weekly sessions of centre based activities and detached vwork in areas of deprivation in the Borough. The funding will enable us to employ professional youth workers who will also help us to work in partnership with other agenc1es such as the Community Oeveloprnent Team at the Borough, the Police and Social Services. This Collaborative approach will help young people at risk to build the resilience and self-worth needed to avoid being drawn into dangerous and illegal activity such as sexual exploitation, gangs and county lines. Page 3 YMCA East Surrey Report of the Chief Executive Health and wellbeing services are a key part of what the YMCA offers and work in this area has been hit hard by the Covid lockdowns. Face to face gytn activity and group exercise was closed down for two periods whilst the country was in national lockdown and many staff were furloughed. When the YMCA gym reopened in the summer of 2020 we reconfigured space within our Sports and Community Centre to expand the gym into the sports hall and maintain the necessary social distancing between machines. Thanks to grants from the Clothworkers Foundation and the Beatrice Laing Trust we were able to bring in new more accessible fitness machines for those with mobility problems and ill health. We also seoJred funding from the Community Foundation in Surrey and Surrey Heartlands CCG to move many of our suctrssful exercise referral services online. This proved to be a huge success with many older adults referred by the Reigate and Banstead Wellbeing servi￿ being able to aC￿sS Zoom classes deliVe￿d by our Exercise Referral Coordinator. Nost OF these participants were shielding because of ongoing health issues such as strokes. COPD, M5 or cardiac conditions and this service provided safe and effective controlled exercise, but also important social contact and peer support from others who were experiencing the same i501ation caused by Covid. Our new Health and Wellbeing Manager joined us in September 2020 and q(Jickly set up an online fitness community through his new YMCA Attive Facebook group to maintain contact with universal mernbers. A number of regular compllmentary classes were offered through this platform to YMCA mernbers. This ongoing contact helped us to re-engage with members On￿ the lockdowns ended and brought back an important income strearn from monthly membership. As a result of careftjl financ1al management throughout the pandemic we have seen surpluses in both 'Children and Young People, and 'Hou5ing'. Health and Wellbeing was more of a challenge due to the major drop in income caused by the closure of our universal fitness activltles at Princes Road. Our fundraising activity has been very Suc￿sSfUl throughout the year. and we are extremely gratefvl to a number of charitable trusts who have provided important grants to enable us to ￿SpOnd to the needs of those Most severely impacted by Covid. These vital contributions are listed elsewhere in this document but we are particularly grateful to the National Lottery Communlty Fund for their Coronaviru5 response funding of £95,000 which allowed us to deliver additional services for young people most in need at the beginning of the lockdown. Also, to Children in Need for their grant of £79,643 towards our Y Focus project to help young people at risk of homelessness to access employment. We are also thankful to the Comrnunity Foundation In Sur￿¥ for a grant of £23,783 to fijnd Free place5 on our Y Kids out of school childcare and hollday playschemes for families impacted most heavily during Covid. The YMCA is very fortunate to have some amazingly loyal supporters within the local community who traditionally participate in a thriving prograrnme of community activities and sponsored events supported and led by our Challenge Committee. Much of this programme was postponed beca(Jse of the lockdown5 however we did manège to offer a number of more Snnovative online events including the VirtLJal Fun Run, Sleep Easy and a Quiz Night. We ran a successful Covid Fundraising Campaign and managed to raise £78,670 from these sources through the year. Overall, our financial performance over the past year has allowed us to fnaintain sijfficient free reserves to rneet our polScy of holding funds to cover three months of expenditure and gives US a strong platform to proceed with strategic plans to develop more housing projects to address the growing issue of youth homelessness. The most effertive way to deliver positive change is to collaborate with others and over the last year we have continued to work cl(>sely with some excellent statutory partners including Surrey County Council, Surrey Heartlands Clinical Commi55ioning Group, Homes England, the Department of Housing, Communities and Local Governrnent IMHCLGI, Reigate and 8an5tead Borough Council, other districts and boroughs ènd Surrey and 8orders Partnership Trust. Continued work has been carried out by the Governance Group to further strengthen the governance of the YMCA. A programme of structured training days for trustees ha5 been devised and the first of these sessions on safeguarding was delivered at the beginning of 202 1. Further training on finances and risk was delivered during the summer of 2021. A number OF potential trustees have been co- opted onto committees and Advisory Groups and it is envisaged that at least one will be elected onto the Board at the AGM in Novetnber. Page 4 YMCA East Surrey Report of the Chief Executive During lockdown it became evident that the use of the latest technology was Vltal, not only to offer online support for vulnerable clients but also tts enable staff to work remotely. Fortunately the YMCA had already begun a programme of tt transftsrmation and this involved moving away from an internal network using servers to a Microsoft Office 365 cloud based system. Despite ongoing issue5 Wlth the installation of leased lines, significant progress has been made and staff and trustees are now able to communicate and access relevant documents and data remotely frorn 5harePoint through a variety of devices. The YMCA'S 9￿atest asset is its people and we are fortunate to have a strong team of managers, staff and volunteers who are continually looking for ways to improve and develop the services we offer. They art skilled and passionate about the work we do and go the extra mile to ensure that service user5 get the highest standards of support and care. We also have a dedicated and knowledgeable group ol trustees led by our exTrllent Chair, Paul Byrne, who give their time freely and readily to provide sound governance for the charity. This year Penelope Horsfall and Freda Clark are both standing down from the Board following many years of dedicated service. Penelope will remain our President and Freda will continue to volunteer her time helping with events. I would like to thank all of these people for their fantastic contributions. through what has been an incredibly diffficult period for our community. l am confident that we can build on what we have achieved to offer more opportunities for local people to overcome the challenges in their own lives, realise their potential and be the best they can be. lan Burks Chief Executive 29th September 2021 Page 5 YMCA East Surrey Report of the Trustees (incorporating the strategic report) The trustees present their report and the financial statement5 for the YMCA East Surrey for the year ended 31 March 2021. The financial statements comply wlth the CharitTes Act 2011, the Companies Act 2006, the Memorandurn and Articles of Association, Housing Statement of Recommended Practice 2014, the Accounting Direction for Private Registered Providers of Social Housing Iis5ued by the Regulator of Social Housing in September 20191, the Housing Regeneration Act 2008 and in accordance with the Financial Reporting Standard appllcable in the UK and Republic of Ireland IFRS 1021. Objects and activitles The objects of the YMCA East Surrey (the Charitable Company) are.. To provide or assist in the provision, in the interest of social welfa￿, of facilities for recreation and other leisure time occupations for men and women with the object OF improving their conditions of life To provide or assist in the provision of education for persons of all ages with the object of developing their physical, menral or spiritual capacities To relieve or assist in the relief of persons of all ages who are in conditions of need, hardship or distress by reason of their social, physical or economic circumstances To provide ￿sIdential accomtllodation for persons of all ages who are In need, hardship or distress by rea50n of their social, physical or economic circumstances To provide Social Housing, houses or hostels and any associated amenities induding a counselling service and services for persons in necessitous clrcumstances upon terms appropriate to their means. In thi5 part-social housing" means a) low cost rental accommodation (defined by section 69 of the Housing and Regeneration Act 2008), and bl low cost home ownership accommodation (defined by section 70 OF the Housing and Regeneration Act 20081. As can be seen in the Report of the Chief Executive, these objects are at the heart all of the services and attivitie5 we provide. The Charitable Cotnpany is divided into three distinct service areas in order to rneet these objects, and these are Health and Wellbeing, Children and Young People and Housing. These are all supported by Central Services. When implementing these objects the Trustees have due regard to the guidanTr on -public benefit" of the Charity Comrni5sion. Throughout these reports will be found numerous examples of the ways in which the Charitable Company seeks to broaden both the range of its activities and the groups within the community that are able to access them. At the Sports & Community Centre in Princes Road, Redhill. YMCA East Surrey provides a wide range of services for local people OF all ages and abilities, including out OF school childcare, work with young people and extensive programmes in sports and physical activity. The Charitable Company also offers a variety of activities for children and young people including a Family Centre that operates out OF the Young People's Centre in Horley. At the YMCA Sovereign Centre and in the surrounding boroughs and districts, YMCA East Surrey provides a range of short break activities for children and young people with disabilities as well as recreational activitie5 and preschool. Coordination of the provision of youth work in East Surrey Is also undertaken from this ntre. At Hillbrook House, Redhill, YMCA East Surrey runs a supported housing scheme for young pec>ple aged 16 to 30. The scheme was purchased From YMCA England on 15 November 2017 following YMCA East Surrey becoming a non-profit private registered provider of social housing on l August 2017. Prior to thi5, YMCA East Surrey managed the scheme on behalf of YMCA England. Hillbrook House is also the base For the YMCA'S Next Step Rent Deposit Scheme and Heads Together counselling Service. At Lynwood Road, Redhi11, YMCA East Surrey's supported Move-on project, there are an addltional seven units available for young people aged 18 to 30 providing less intensive housing support options for those in housing need. An additional supported Move-on scheme to house 6 young people was opened in November 2020 at a newly developed property on London Rd in Merstham. Page 6 YMCA East Surrey Report of the Trustees (incorporating the strategic report) In the Report of the Chief Executive, we set out the main achievements during the year. Within this report you can see that the Charitable Company continues to make a great d5fference to the lives of the people it helps and the reach of the Charitable Company's work is contintjing to expand within the county. Financial review The Charitable Company's activities produced a total surplus of £522,996 {2020'. deficit £69,225}. which consisted of a surplus on unrestricted reserves of £592,79512020.. deficit £6,222) and a deficit of £69,79912020 deficit £63,003) on restricted reserves. The deficit on restricted reserves is largely attributable to depreciation and amortisation charges on fixed assets funded by restricted grants and donations. The surplus on unrestricted reserves includes a surplus on revaluation of investments of £107.952 {2020: Loss E5841. The Charitable Company has total reserves of £6,106,665 at 31 March 2021 12020- £5,583,669) as set out in the Statement of financial position on page 17. The majority of the restricted funds of £4,262,871 is attributable to the net book value of the freehoSd premises in Princes Road including the new Inclusive Sports Facility {ISFI. Lynwood Road and London Road move on propertie5 and the leasehold of the s0ve￿Ign Centre in Woodhatch. There are also designated funds totalling £563,751 12020= £501,153) as mentioned above, leaving unrestrirted general funds at 31 March 2021 of EI,280,043 {2020.. £749,846). Principal funding sources The trustees gratefully acknowledge the support of all our donors and funders. More than half of the Charity's income is in the form of contracts and grants from local authorities and other bodies. Such funding enables the Charitable Company to carry on the work in all our lines of service, in turn supporting the objects of Ihe Charitable Company. Resen/es policy The long-term aim is to hold sufficient current asset unrestricted reserves to cover up to three months expenditure, so as to ensure as far as possible the continuation of the Charitable Company's activities in the event of significant fluctuations or shortralls in anticipated income. The Charitable Company has unrestricted reserdes of £1,843,794 as at March 2021 {2020: £1,250,999). This represents Just over 4 fftonths expenditure budgeted for the forthcoming year, which is an increase on the p￿ViouS year. Whilst the designated funds will be matched agèin5t the depreciation on the ISF in the corning years, it is anticipated that in subsequent years we will continue to return a net unrestritted surplus pos1tion. Apart from the Uftrestracted Reserves, the Charitable Company held £4,262,871 (2020.. £4.332,6701 in Restricted Funds, of which £3.952,121 12020= £4,016,817) is represented by the freehold properties at Princes Road, Lynwood Road, London Road and the leasehold property at the Sovereign Centre. The Reserves Pollcy is continuously monitored and reviewed by the Finance and Resources Committee of the Board of Management {the Board) which makes recommendations to the trustees if and when action is needed to maintain the policy or conslderation needs to be given to its modification. Value for money The Board Is committed to achieving value for money IVFM} in YMCA East Surrey's service planning and delivery in accordance wlth its five year strategy, the Value for money policy and RSH'S Value for Money Standard. YMCA East Surrey aims to.. Integrate VFM principles within all management, planning and review processes Adopt appropriate, recognised good practice Promote a culture of continuou5 irnprovement Demonstrate to both internal and external stakeholder5 that the achievement of VFM is sought in all activities undertaken Embed VFM principles within the Cultu￿ of YMCA East Surrey so that all trustees, staff and volunteers recognise their continuing responsibility to seek VFM for the Charity as part of their routine activities Page 7 YMCA East Surrey Report of the Trustees (incorporating the strategic report) Financial review {continued) Value for money (continued) VFM Is about achievlng the right balance between the three 'E's'_ Economy, Efficiency and Effectiveness. E5sentl8lly this requires YMCA East Surrey to assess the impact of all its costs, to best meet its stakeholder's needs. Economy - the price pald for what goes into providing a Service Efficiency - a measure of produrtivity or how much is gained from what is put In Effectiveness - a measure of the impact achieved and can be both qualitative and qLJaatitative VFM is high when there is an optimum balance between all three 'E's': relatively low costs, high productivity and successful outcomes. Since registrarion Tn August 2017 and the purchase of Hillbrook House tn November 2017, we have ensured VFM in a number of ways.. Occupancy levels at Hillbrook House and Lynwood Road have been 95010 and 98Wo respectively. This is above the combined target of 95% for income less voids and bad debts. For Hillbrook House, the speed of resident turnover and referrals has a great impact upon the percentage, In èddition the impact of COVID meant bec15 could not be filled as quickly. For Lynwood road, as this is a 7 bed scheme, a small void period has a proportionally bigger impact on the occupancy levels, however as a result of lockdowns we had a stable population of residents during the year. We work with local authorities to ensure that referrals are congruent to the location and population ol these schemes whilst ensuring the maximum use of our accommodation. Occupancy levels at London Road were at 99.4¥o from opening in November 2020 to the end of the year. Continued use of Outcome Stars ès a method of eValua￿ng residents, progress whilst at YMCA East Surrey housing scheme5 in areas such as people and support, choices and behavlour. Participation in the Charity Finance Group 'Finance Count, as a way of benchmarking ourselves against a relevant peer group. The outcomes for key measures can then be used to drive VFM further, for example by improving processes or procedures Health and Wellbeing monitor attendance levels in the gym and at exerctse classes. This enables them to deterffline what, If anyi changes need to be made to ensure that their facilities and staff members are being used to their maximum potential Children's Services monitor attendance levels on their various scheme5, classes, sessions and courses. This enables them to ensure that any levels set by funders are being met and to ensure that their facilities and staff members a￿ being used to their maximum potential Youth SeNices monitor attendance levels at their sessions. Again, this enables them to be able to ensure that their facilities and staff members are being used to their maximum potential Alongside compliance with the 2018 Value for Money Standard and associated Code of Practice, as a non-profit private registered provider of social housing, the Charitable Company is expected to report on certaln value for money metrics to enable effective comparison across the sector. The metrics are included below: Metric l - Reinvestment 0/0.. This metric looks at the investment in properties (existing stock as well as new 5upplyl as a percentage of the value of total properties held. The investment in properties was 6.201ts 12020.. 6.4010) representing the continued investment in a new Move on property at London Road, Merstham which led to a 6 bed scheme available for occupancy at the start c>f November 2020. Metric 2 - New supply delivered 10. 5%.. This metric sets out the number of new social housing and non-social housing units that have been acquired or developed in the year ès a proportion of total social housing units and non-social housing units owned at period end. The completion of the works at London Road, Merstham to convert this into Soaal Housing delivered 6 new units in November 2020. Metric 3- Gearing 0/0.. This metric assesses how much of the adjtjsted assets (housing propertie51 are made up of debt and the degree of dependence on debt finance. The ratio is -230/0 12020.. 6010 which indicates the Charitable Company has a low reliance on debt finance and is in the lower quartile based on the Regulator of Social Housing's 'Value for Money metrics Summary report published in September 2018. Page 8 YMCA East Surrey Report of the Trustees (incorporating the strategic report) Financial review Icontinuedl Value for rnoney (continued) Metric 4 - Earnings Before Inte￿$t, Tax, Depreciation, Amort15ation, Major Repairs Included IE8ITDA MRI) Interest Cover Wu- The EBITDA MRI interest cover measure is a key indicator for liquidity and investment capacity. It seeks to measure the level of surplu5 that a registered provider generates compared to interest payable,. the measure avoids any distortions 5temfning from the dep￿CiatIon charge. The ratio is 3032Dlo {2020.. 534Qknl whi¢h again confirms the Charitable Cotnpany's low reliance on finance alongside metric 3 and is in the upper quartile of the above mentioned report. Metric 5 - Headline soclal housing cost per unit.. The un&t cost metric assesses the headline social housing cost per unit as defined by the regulator. The cost per unit is £10,90912020.. £10,582). The level of expenditure Is indicative of the small slze of the Charitable Company. Metric 6 Operating margin Qkn.. The Operating Margin demonstrates the profitability of operating a55ets before exceptional expenses are taken into account. The operating margin (social housing lettings only) was 140/0 {2020.' 17010) and the operating rnargin (overall) was IOO/o 12020.. - IOh}. The difference between the two measures is a result of the varied services provided by the Charitable Company achieving different margins. Metric 7 - Return on capital employed IROCEI Qlo.. This metric compares the operating surplus to total assets les5 current liabilities and is a comfflon measure in the commercial sector to assess the efficient investrnent of capital reSoUr￿s. The ratio is 5% {2020.. -10/01. Structurer governance and management Legal status The YMCA East Surrey Is an incorporated Association and is affiliated to the Natlonal Councll of YMCAS in England (charity number 2128101. YMCA East Surrey Is a company limited by guarantee, incorporated on 19 February 1999 and registered as a charity on 9 April 1999. The company and charity registration number5 are Shown on page l. The governing documents are the Mernorandum and Articles OF Association. On the 21 October 2014, the Charitable Company changed its name from Reigate and Redhill YMCA to YMCA East Surrey to reflect its expanding serVi￿S across the local area. On l August 2017, the Charitable Company becarne a non-profit pnvate registered provider of social housing (re9lStered provider). Code of governance The 8oard is committed tts delivering best prartice in all aspects of governance and the Trustees have adopted the Charity Governance Code for Larger Charities. As an evolving organisation, YMCA East Surrey will continue to review and develop its governance in order to besl serve its beneficiaries. Annual revffew of governance and financial ViLibility standard As demonstrated by successfully gaining registered provider status in August 2017, YMCA East sUr￿V was able to demonstrate compliance with all RSH standards, including the governance and fi'nancial viabTlIty standard. The Finance and Resources Committee review the standard on an annual basis and ensure all necessary measures required to ensure compliance are put in pla￿. Organisation The trustees are directors for the purpose of company law as well as trustees for the purpose of charity law. They are responsible For the governance of the Charitable Company and delegate the day to day managernent to the Chief Executive and his management team. The Board of Management meet on a quarterly basis, or more often if activity Shall so require. There are a number of subcomrnittees that comprise of trustees and other5 which report back to the Board of Management for ratification. The Finance and Resources Committees meets 9 times a year whilst other comrnittees meet quarterly. Trustees, as corporate members, guarantee to contribute an amount not exceeding £1 to the assets of the charitable company in the event of winding up. Page 9 YMCA East Surrey Report of the Trustees (incorporating the strategic report) structure. governance and management (continued} Appointment, induction and training of trustees Trustees are appointed at the AGM to serve a period of 3 years. One third of the Trustees retire each year by rotation and are eligible for re-appointment at each AGM. If it is agreed that a Trustee will serve for tnore than nine years, then it IS 5ubjert to a particularly rigorous review and takes into account the need for progressive ref￿ShIng of the Board, and their re-appointment is explained in that years Report of the Trustees. The Board of Management has power to co-opt addititsnal members and fill casual vacancies. Lt is the aim of the Board of Management to attract new trustees with suitable skills who themselves are drawn from the various user groups. All trustees undertake induction5 and on-going training to ensure that they quickly become effective and are aware of developments in corporate and charity governance. Every new trustee Is issued with a personal copy of a comprehensive Trustee5 Handbook together with certain key documents listed within the Handbook, the Charltable Company's Memorandum and Articles and the latest audited Financial Statements among others. They ère also offered induction opportunities Wlth staff and other trustees and are briefed about the various services provided by YMCA East Surrey. Further, there is an annual Away Day where the trustees. the Chief Executive and Senior members of his managernent team rneet to discuss the future d1￿ctIOn of the Charitable Company and to dellver any necessary training and updates. The long term aim is to have well-balanced and appropriately qualified trustees. Pay policy for senior staff Key management personnel in charge of direrting and controlllng, running and operating the Charity are deemed to be the Board of Management and the Senior Managernent Team. The Senior Management Team comprises the Chief Executive and the three Heads of Service. The trustees give their time and expertSse freely and receive no reimbursement for expenses. The pay of the Senior Management Team is reviewed annually and salaries and wages increases will be recotnmended by the Chlef Executive and approved by the Finance and Resources Committee. Pay for the Chief Executive is also set annually by the Finance and Resource5 Committee. Details of related party transactions are set out in Note 20. Investment policy Aside from retaining a pnjdent amount in reserves each year most of the Charitable Company's funds are to be spent in the short term so there are few funds for long term investment. The Finance and Resources Cofflmittee continue to monitor the amounts invested with CCLA Investment Management Limited ICCLAI on a regular basis taking into account the expected unrestricted surplus funds. The level of funds invested with CCLA takes into account the level of expected future pension contributions of the Charitable Company together wlth a proportion of the unrestricted funds to be invested for the long term. The deosion to continue to hold the funds in the CCLA is to ensure that we maximise the expected long term return on our assets within an acceptable degree of risk. This is deemed a low risk strategy. Risk management The Charitable Company has a risk management strategy which comprlses.. An annual review of the principal risks and uncertaintie5 that the Charitable Company faces, and this is summarised in the annual Risk Management Report The establishment of policies, 5ySterns and procedures to mitigate those risks identified in the annual Risk Nanagement Report, and The implementation of procedures designed to minimise or manage any potential impact on the Charitable Company should those rlsks materialise Thls review has identified the following key risks.. A sudden significant funding reduction. The Charitable Company works closely with our local authorities to understand their budgets, and ensure services continue to meet the needs of their priority client groups. We also actively seek new sources OF funding in order to dilute this risk. Page 10 YMCA East Surrey Report of the Trustees (incorporating the strategic report) Structurei governance and management Icontinuedl Risk management (continued) Continuation of the pandemic. COVID-19 has impacted some area5 of operation more than others which have still to return to pre-COVID-19 activity levels. The Impact on areas where service5 could not be delivered has been mitigated by the support available frorn Government which has enabled the Chantable Company to retain staff and resources. Management has determined that there is no materfal uncertainty caused by the pandemic that casts doubt on the Charitable Company's ability to continue as a going concern. Accidental death. The Charitable Company has in place risk assessments and health & safety measure5 to reduce this risk ènd reviews accident and incident reports regularly to amend measures as necessary. The Housing teams have support staff in place and prc>vides ￿gUlar training and support for these staff. Abduction, loss or abuse of a child or vulnerable adult. The YMCA has robust Safeguarding policies, procedures, regulatory checks and training in place to mitigate this risk. Capacity and capabilities of the Board and managernent. The Board reviews its performance through the Governance CommSttee and identifie5 skills required and aims to recruit new trustee5 to meet these needs. The rnanagement structure is kept under review to ensure Key management personnel have the necessary staffing and resources. Breach of GDPR requirements. The Charitable Company has a Data protection Officer in place who reviews and disseminates relevant policies and procedures to staff. Cyber attack. The Charitoble Company outsources the IT funrtion to ensure appropriate measures are in plaTr to mitigate this Fisk. Fundraising The Charitable Company raises funds in a number of way5 a5 set Dut below.. Challenge event5 Corporate and individual donations via one-off or regular payments, Give As You Earn and legaoes Provi5ton of paid services Grant funding The Charitable Company does not use any commercial participatorslprofessional fundraisers and all monitoring of fundraising 15 carried out internally. Whilst the Charitable Company has currently not signed up to any rectsgni5ed fundraising standards, it does have a full and detailed Fundraising Poli that can be found on the Charitable Company's website. This policy helps to ensure that the Charitable Cornpany is protecting the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches, and undue pressure to donate and it specifically references.. Personal InformatTon provided to the Charitable Company will be kept confidential and will not be sold, rented, or given to anyone without consent No cold calling or door to door sollcitatlon of the public is allowed Plans for the future The need for YMC4 charitable services has grown over the past year particularly amongst children and young people in East Surrey who have been impacted heavily by the effects of the Pandemic. The YNCA has responded by developing and expanding services. Income from activities has been forecasted to rise by 27010 in 2 1/22 and this is in part due to three distintt new projects. The first is the expansion of our work within Emotional Wellbeing and Mental Health where the YMCA has secured a new contract from the Surrey Wellbeing Partnership to s(Jpport 2,300 child￿n and young people with a range of counse15ing and other therapeutic services. Thls Initiative will provide early intervention in a range of settings to help young people at risk to deal wlth emerging mental health difficulties. The second key development for the future is the creatlon of a new housing scheme to meet the YMCA'S strategic aims and to address growing homelessness within Horley. Support from Homes England. Reigate and Banstead Borough Council and the charity Landaid has enabled the YMCA to proceed with the purchase of è former Guest House in Massetts Road which will be transformed 1nto a new 12 unit housing scheme for young people aged between 18 and 30 years. Page 11 YMCA East Surrey Report of the Trustees l incorporating the strategic report) Plans for the future (continued) The third area of development is within youth work where the YMCA has secured three year funding from the National Lottery starting in April 2021 to expand open access youth work opportunities across the more deprived areas Df Reigate and Banstead. To help achieve this aim the YMCA has taken on a five year lease with Surrey County Council (SCC) to manage the Children and Young People's Centre in Hortey and will be taking on a lease for the Phoenix Centre, a similar facility owned by SCC in Tadworth. Trustees and management are currently working on the new Strategic Plan which is scheduled to be approved by the Board of Trustees before the beginning of the next financial year in April 2022. Trustee5' responsibilities The trustees (who are also the Board of directors of YMCA East Surrey for the purposes of company lawl are responsible for preparing the Trustee5' Report and the financial statement5 in accordance with applicable law and United Kingdom Accounting Standards {United Kingdom Generally Accepted Accounting Practice). Company law and registered social housing legislation requires the trustees to prepare ffinancial statetnents for each financial year which give a trtje and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financlal statement5, the trustees are required to.. Select suitable accounting policies and then apply them con51Stently Observe the methods and principles in the Housing SORP Make judgements and estimates that are reasonable and prudent State whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements,. and Prepare the financial statements on the going concern basis unless it is inapproprlate to presume that the charitable company will continue in business The trLJStees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Art 2006, The Housing Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2015. They are also respDnsib1e for Safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the trustees are aware.. There is no relevant audit information of which the charitable company's audltor is unaware and The trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information Auditors A resolution to reappoint Crowe UK LLP as auditor will be put to the members at the Annual General Meeting. By order of the board on Ian Burks Secretary 29th September 2021 Page 12 Independent Auditor's report to the members of YMCA East Surrey (Company No. 03716594) We have audited the financial statements of YNCA East Surrey (the Charitable Cornpanyl for the year ended 3 1 March 202 L which comprise the Statement of comprehensive income. the Statement of changes in reserves. the Statement of financial position, Statement of cash flow5 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UnSted KSngdom Accounting Standards including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdofft Generally Accepted Accounting Practice). In our opinion the financial statefflents.. give a true and fair view of the state of the Charitable Company's affairs as at 31 March 2021 and of the income and expenditure for the year then ended., have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,. have been prepared in accordance with the requtrements OF the Companies Att 2006, the Housing and Regeneration Art 2008 and the Accounting Direction for Private Registered Provlders of social Housing from April 2019. Basis for opinion We conducted our audit in accordance with International Standards on Auditing IUKI ("ISAs IUKI'I and applicable law. Our ￿SponSIbl11t1es under those standards are further described in the Auditor'5 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 statetnents 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. Conclusion$ relating to 90in9 concern In auditing the financial statements, we have concluded that the Board's use of the going concern basis of accounting Sn the p￿paratIOn of the financial statements is appropriate. Based on the work we have performed, we have not identified any material unTrrtainties relating to events or condition5 that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period tsf at least twelve months from when the financial statements a￿ authorised for issue. OEJr responsibilities and the responsibilities of the Board with respect to going concern are described in the relevant settTons of this report. other information The Board is responsible for all the Information contalned withln the annual report. The other information comprises the informatitsn 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 infortnation and we do not exp￿55 any form of assurance conclusion the￿On. Our responsibility is to read the other Informatlon and, Sn doing so. consider whether the other information is materia11y inconsistent with the financial statements or our knowledge tsbtained 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 misslatement in the financial statements themselves. 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 nothin9 to report in this regard. Page 13 Independent Auditor's report to the members of YMCA East Surrey (Company No. 03716594) Matters on which we are required to report by exception We have nothing to report in respect of the following matter5 in relation to which the Compènies Act 2006 ￿qUireS US to report to you if, in our opinion.. adequate accounting records have not been kept by the Charitable Company, or returns adequate for our audit have not been received from branches not visited by us,. or the Charitable Cornpany financial statements are not in agreement with the accounting records and returns,. or certain disclosures of Trustees, remuneration specified by law are not made. or we have not received a51 the information and explanations we require for our audit. Respective responsibilities of the Board As explained more fully in the Board's responsibilities statement set out on page 12, the Board is responsible for the preparation of the financia5 statements and for being satisfied that they give 3 true and fair view, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the flnanclal statements, the Board Is responslble 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 unles5 the Board either intends to liquidate the Charitable 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 objertives are to obtain ￿05￿nable 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 accordan￿ with ISAS IUKI 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 user5 taken on the basis of these financial statements. Details of the extent to which the audit was conSide￿d capable OF detecting irregularities, including fraud and non-compliance with laws and ￿gUlationS are set out below. A further descrlption of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council'5 web51te at.. www.frc.org.uk/auditorsre5ponsibilities. This descnption forms part of our auditor's fftport. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularitie5, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. We obtained an understandlng of the legal and regulatory frameworks within which the charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, the Charities Act 201 L, the Housing and Regeneration Act 2008, together with the Housing SORP. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to charitable company's ability to operate or to avoid a material penalty. We èlso Congidered the opportunlties and incenrives that may exist within charitable cornpany for fraud. The laws and regulations we considered in this context for the UK operations were requirements imposed by the Regulator of Social Housing and the Charity Commission, General Data Protecllon Regulations, health and safety legislation and employment legislation. Page 14 Independent Auditor's report to the members of YMCA East Surrey (Company No. 03716594) We identified the greatesi risk of material impatt on the financial statements from irregularities, includin9 fraud, to be within the tirnlng of recognltlon of income and the override of contrals by management. Our audit procedures to respond to these risks included enquiries of managefftent, the Finance & Resources Committee about their own Identification and assessment of the risks of Irregularities, sample testin9 on the posting of journals, an41ytic61 review and sample testing of Income, reviewing accountin9 estimatÈs For biase5, reviewing regulatory correspondence with Social Housing Regulator and the Charity Cornmi55ion and OFSTED inspection reports, and reading minutes of rneetrngs of those charged with 9overnance. Owlng to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statement5, even though we have pry>perly planned and performed our audit in accordance with auditing standard5. We are not responsible for ventin9 non-compliance and cannot be expected to detÈct non-cofnpliance with all laws and re9ulations. These inherent limitations are particulady significant in the case of mi5Statement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including dellberate failure to record transattions, collusion or the provision of intentional misrepresentations. A Further descriptTron OF our responsibilities for the audit of the financial statements Is located on the Financial Reporting Council'5 website at- Thls descriptiort Forms part of our auditorf5 report. Use of our report This report is made solely to the Charitable Company s members, as a bodyi in accordance wlth Chapter 3 of Part 16 of the CompaniÈ5 Act 2006. Our audit work h65 been undertaken 50 that we rnight State to the Charitable Company'5 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 acc&pt 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. Crowe U.K. LLP Statutory Audltor 55 Ludgate Hill Londori EC4M 7JW 30 Septernber 2021 Page 15 YMCA East Surrey statement of comprehensive income for the ear ended 31 March 2021 Notes 2021 2020 Turnover Operating expenditure Operating surplus1(deficrt) 4,232,822 3 797 991 434,831 4, 166,462 4 210 480 (44,0181 Interest and dividends receSvable Interest and financing Costs Movement in fair value of financial instrument5 Surplus/ (deficit) for the year 1.043 120,830) 107 952 522,996 2.920 {27,5431 584 169,2251 io Actuarial gains in respect of pension schemes Total comprehensive income/(deficit) for the year 522 996 All Sncome arises from contlnuing actSvities of the charitable cotnpany. The charitable company had no recogni5ed gains or losses other than those dealt with in the Statement of comprehensive income. The notes on pages 20 to 31 form an integral part of these accounts. Page 16 YMCA East Surrey Statement of changes in reserves for the year ended 3 1 March 2021 Notes Restricted Unrestricted reserves reserves Total Balance at l April 2020 Surplus/(deficitl from statement of comprehensive income Balance at 31 March 2021 18 4,332,670 1,250,999 5,583,669 69,799 4 262 871 592 795 1 843.794 522,996 6 106 665 18 Balance at l April 2019 Deficit from statement of comprehensive income Balance at 31 March 2020 18 4,395,673 1,257,221 5,652,894 18 4 332,670 1 250 999 5 583 669 Page 17 YMCA East Surrey Statement of financial position as at 31 March 2021 Company registration number: 03716594 Notes 2021 2020 Flxed assets Tangible ffixed assets housing properties Tangible ffixed assets - other Investments Total fixed assets 2,242,222 4,03L,954 550 824 6 825 000 2, 130, 131 4, 106,768 442,853 6 679 752 io Current assets Debtors Cash and cash equivalents Total current assets li 12 712,438 1.619,086 2,331,524 250,115 1,015,505 1,265,620 Current liabilities Creditors.. amount5 falling due within one year Net current assets 13 1 095 961 1,235,563 690 592 575,028 Total assets less current Itabilities 8,060,563 7,254,780 Creditors.. amounts falling due after more than one year 14 {1.953,898) (1,671,111) Total net assets 6 106 665 5 583 669 Reserves Restricted reserve Unrestritted ￿serve 18 18 4,262,871 1,843,794 4,332,670 1,250,999 Total reserves 6 106 665 5 583 669 The financial statements on pages 16 to 31 were approved by the Board of Management and authorised for issue on 29th September 2021 and are signed on its behalf by.. Xan Thomas Treasurer The notes on page5 20 to 31 form an integral part of these account Page 18 YMCA East Surrey Statement of cash flows for the year ended 3 1 March 2021 Notes 2021 2020 Cash flows from operating activities Surpluslldeficitl for the financial year Movement in fair value of financlal instrument Depreciation charges Loss on Fixed asset disposals Dividends and interest received Inte￿5t paid {Increasel/decrease in debtors Increase/(decreasel in creditors Increase/ldecreasel in pension provision Net cash generated from operating activitles 522,996 1107,971) 209,092 4,325 {1,0431 20,830 (462.3231 379,532 169,2251 584 191,207 (2,9201 27.543 208.930 {12,2461 590 077 330 994 Cash flows from investing activities Purchase of tangible fixed assets Government grants received Proceeds from sale of investments Interest and dividends received Net cash used in investing activities {250,694) 328,374 1253,4261 235. 125 Cash f Sows from financtng activities Interest paid New secured loans Repayment of borrowings Net cash used in/{provlded by) financing activities {20,8301 127,5431 65,528 Net change in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 603,581 250,085 12 1,015 505 765 420 12 1,619 086 I OL5 505 Page 19 YMCA East Surrey Accounting policies Legal status YMCA East sUr￿Y 15 a company limited by guarantee and is an English registered social housing provider, charity and public benefit entity. The liobility of its members is limited to £1 each in the event of a deficiency arising on the winding up of the Charity. It is also registered as a charity and has received dispensation to offlit the word 'Limited- from its The principal address is YMCA Sports and Community Centre, PrIn￿S Road. Redhill, Surrey, RHI 6JJ. The Charitable Company's principal activities and nature of the Charitable Cornpany's operations are included in the Report of the Trustees. Basis of preparation The financial statements have been prepared in accordan￿ with the Housing Statement of Recornmended Practice 2014, the Accounting Direction for Private Registered Providers of Social Housing (issued by the Regulator of Social Housing in September 2019), the Housing Regeneration Act 2008, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 1021 and the requirement5 of Companies Act 2006. The financial statements have been prepared on the historical cost basis of accounting and on the going concern basis. Judgements and keys sources of estimation uncertainty are set out within note n) of the Accounting Policies. The Charitable Company meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note. Preparation of the accounts on a going concern basls The Charitable Company's financial activities, its current financial position and Fartors likely to affect its futu￿ development are Set out within the Report of the Chief Executive and the Report of the Trustees. On this basls, the Board of Management has a reasonable expectation that the Charitable Company has adequate resources to continue in operational existence for the foreseeable future, being a period of twelve months after the date on which the Report and Financlal Statements are signed. For this reason, it continue5 to adopt the going concern basi5 in the financial statements. Principal Accounting Policies A sumrnary of the principal accounting policies is set out bel()w. al Turnover Turnover, excluding VAT, is ￿COgnISed in the Statement of comprehensive income as follows= Donations are accounted for when re￿iVed Government grants are accounted for on an accruals basis, being credited to the Statement of comprehensive income in the same period as the expenditure to which they relate Grants from non-government sources are recognised using the performanTr model. Grants are recognised as and when the associated performance conditions are met. Fees and subscriptions are accounted for on an accruals basis Hillbrook House and Lynwood Road income is accounted for on an accruals basi5 Income from remaining trading activities Is accounted for on an accruals basis Investment income is accounted for when receivable bl Donated services and facilities Volunteer time Is not recognised, please refer to the Report of the Chief Executive for more information about their contribution. ¢) Expenditure Expenditure is included in the Statement of comprehensive income on an accruals basls, inclusive of any VAT if it cannot be recovered. Liabilities are included as provisions once the Charity has a legal or constructive obligation to make future payments. Expenditu￿ has been classified under the heading that aggregate all costs related to that category. Where costs cannot be directly attributed to particular heading5 they have been allocated to activities on a basi5 consistent with the use of resources. Support and other central costs have been apportioned to each activity on the basis of turnover. Page 20 YMCA East Surrey Accounting policies Principal Accounting Policies (continued) d) Freehold property and depreciation The Charity separately Identifies the major components that comprise its freehold properties. and charges depreciation, so as to wrlte down the cost OF each component to its residual value, on a straight line ba515, over its estimated useful economic life. The Charity depreciates the major components of Sts housing properties at the following annual rates.. Co Land Structure Roof Windows and doors Boilers Kitchens Bathrooms Mechanical systems Electrics Lifts Usefu5 economic life Infinite 100 years 70 years 30 years 15 years 20 years 30 year5 30 years 40 years 20 years el Other tangible fixed assets and depreciation Unless purchased from grant funding or specific donations, other tangible assets with a value greater than £l.000 are capitalised at cost, being their purchase cost, together with any IncSdental expenses at acqulsltlon, in the Statement of financial position. Assets below this level are treated as expenditure and are included in the Statement of comprehensive income in the year the expenditure is incurred. Depreciation is provided on all other tangible fixed assets. so as to write down the cost of each component to its residual value, on a straight line basis, over its estimated useful economic life at the following rates.. Com nent Leasehold buildings Sports equipment Other equipment fl Pension contributions YMCA East Surrey partScSpated Sn a multl-employer defined benefit pension plan for employees of YMCAS in England, Scotland and Wales, which wa5 closed to new members and accruals on 30 April 2007. Due to insufficient information, the plan's actuary has advised that it is not possible to separately identify the assets and liabilities relating to YMCA East Sur￿v. As described in note 7, YMCA East Surrey has a contractual obligation to make pension deficit payments of £20,271 per annum (starting in May 2021, increasing 30/0 per annurnl over the period to April 2027, accordingly this is shown as a liability in note 17 to these accounts. In addition, YMCA East Surrey Is required to contribute £4,797 pa to the operating expenses of the Pension Plan and these costs are charged to the Statement of comprehensive income as made. YMCA East Surrey also operates two defined contribution pension schemes, The Scottish Widows Scheme for Managers and The People's Pension Scheme which is available to all c(Jrrent staff. The amount charged to the Statement of comprehensive income represents contributions payable in the period. YMCA East Surrey a150 contributes to the Local Government Scheme Pension Scheme for employees who were sub]ect to a TUPE transfer from Surrey County Council. Thi5 is a defined benefit scheme, the employer's contribution rate is still to be assessed by the scheme's actuarv. Provision has been made for estirnated contribution levels dunng the year. gl Operating lease5 Rentals applicable to operatsng leases are charged to the Statement OF comprehensive income over the period in which the cost is incurred on a straight line basis. Useful economi Over the term of the lease 4 years 3 to 4 years Page 21 YMCA East Surrey Accounting policies PriTrcipal Accounting Policies Icontinuedl h} Fund Accounting Funds held by the Charity are either.. Unrestricted general funds - are available for use at the discretion of the trustees in furtherance of the general objectives of the Charity and which have not been designated for other purposes Unrestricted designated funds - have been set asTde by the trustees for partlcular purposes. The aim and use of each designated fund is set out tn the notes to the financial statements Restricted funds - are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Charitable Company for specific purposes. The cost of raising and administering such funds are charged against the specific fund and set out in the notes to the rinancial statements. il Investments All investfnents are carried at their fair value. Investments are all traded in quoted public markets. The basis of the fair value for quoted investments is equivalent to the market value, using their bid price. Asset purchases are recognised at the date of trade at cost (that is their transaction value). jl Financial Instruments The Charitable Company has elected to apply the provisions of Sertion Ll 'Basic Financial Instrument5. and Section 12 '0ther Financial Instruments Issues. of FRS 102, in full, to all of its financial instruments. Financial assets and financial liabilities are recognised when the Charitable Company becomes a party to the contractual provisions of the instrument, and are offset only when the Choritable Company currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to rea5ise the asset and settle the liability simultaneously. Derecognition of financial assets and liabilities A financial asset Is derecogni5ed only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards of ownershlp are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. A financial liability (or part thereof) is derecognised when the obligotion specified in the contract is discharged, cancelled or expires. kl Debtors Trade and other debtors a￿ recognlsed at the settlement amount due after any trade discount offered. Prepayments are valued at the amo(Jnt prepaid net of any trade discounts due. A provision for impairment of trade debtors Is established when the￿ is evidence that the amounts due will not be colletted according to the original terms of the contract. Impairment losses are recognised in the Statement of comprehensive income. l) Cash at bank Cash at bank includes cash and short term highly liquid investments with short maturity of three months or less. ml Creditors, provlsitsns and borrowings Creditors and provisions are recognised where the Charity has a present obligation restjlting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are norfflally recognised at their settlement amount after allowing for any trade discounts due. Borrowing5 are initially recognised at the transaction price, including transaction costs, and subsequently measured at amort15ed cost using the effective interest method. Interest expense Is recogn1sed on the basi5 of the effective interest method and is included in interest payable and other similar charges. Public benefit concessionary loans are recogni5ed at the amount re￿Ived by the Charity. Deferred income represents Government grants at the value received which are then released to the Statement of comprehensive income in the same period as the expenditure to which they relate. Page 22 YMCA East Surrey Accounting policies Principal Accounting Policies (continued) n) Judgements and key sources of estimation uncertainty In the application of the Charitable Company's accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and Ilabilities 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 estlmates and underlying assumptSons are reviewed on an ongoing basis. Revision of accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects ￿)th current and future periods. The following are deemed to be the key judgements within the financièl 5tatements'. Tangible fixed assets- depreciation is charged on tangible fixed asset components over their estirnated useful economic Ilves, taking into account any residual vaSue if appropriate. The actual lives of the assets and theTr residual values are as5es5ed annually and may vary depending on a number of èssumptions Pension benefits the cost of defined benefit pension plans and other post-employment benefits are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long tertn nature of these plans, such estimates are subject to significant uncertainty Impairment of fixed assets the carrying amounts of property, plant and equipment are reviewed at each reporting date or whenever events or changes in circumstance5 indicate that the carrying arnount of an asset may be impaired. The recoverable amount of èn asset is estitnated as the higher of fair value less cost of disposal and the value in use, with an impaiment charge being recognised whenever the carrying amount exceeds the recoverable amouftt. Page 23 YMCA East Surrey Notes to the financial statements for the year ended 31 March 2021 Turnover, operating expenditure and operating surplus The turnover, operèting expenditure and operating surplus recognised can be analysed as follows.. Year ended 31 March 2021.. Operating surplus / (deficit) Operating Turnover expenditure Social houslng Rent Service charges Supported housing grants Social hotjsing grants Total social housing Non-social housing Total houslng 238,449 483,448 375,367 10,234 1, 107,498 275 525 1 383,023 1205,3901 1416,4221 (326,772} 25.544 1974, 128) 193 404 1 167 532 33,059 67,026 48,595 133,370 215 491 Non-houslng Health and wellbeing Childcare and children's activities Family and youth servi￿5 Inclusive services Emotional wellbeing Other activitles Total non-housing 415,034 467,095 465,603 807, 155 475,906 219 006 2 849 799 1455.0561 1552,7811 1446,7481 1728,520) 1442,3861 (40,022) 185,6S6) 18,855 78,635 33.520 214 038 219 340 2 630 459 Total 4 232 822 3 797 991 434 831 Year ended 31 March 2020: Operating surplus / {deficit) Operating Turnover expenditure Social housing Rent Service charges Supported housing grants Social housing grant Total social housing Non-social housing Total housing 231,319 469,440 218,825 (192,1251 {389,9001 1268,9561 9,393 {860,3741 171 353 1 031 727 39, 194 79,540 {50,1311 970,841 222 978 1 193 819 110,467 162 092 Non-housing Health and wellbeing Childcare and children's attivities Family and youth services Inclusive services Emotional wellbeing Other activities Total non-housing 573,628 623,913 362,676 902,575 347,238 162 613 2,972.643 1628,198) 1701. 174) 1379,0951 1967,7721 1389,9001 112 614 3 178 753 (54,5701 (77,2611 {16,419} {65, 1971 142,6621 206,110 Total 4 166,462 4,210,480 44,018 Page 24 YMCA East Surrey Notes to the financial statements for the year ended 31 March 2021 Turnover, operating expenditure and operating surplus (continued) 2021 2020 Void losses.. notional calculation of income lost frorrt vacant rooms 33.286 Number of registered accommodation unlts - supported housing 57 55 Operating 5urplu$ 2021 2020 The operating surplus is arrlved at after charging: Oepreciation of owned assets Oepreciation of leasehold assets Auditor's RernU￿eratIon Audit fees: Operating leases 162,075 47,017 19,000 144, 190 47,017 18.000 Interest and dividends receivable 2021 2020 Dividends on listed investments Bank deposit interest 23 2,897 1,043 1,043 Interest and financing costs 2021 2020 Loan interest payable Staff costs 2021 2020 Wages and salaries Social security costs Penslon costs 2,430,077 159,381 89,869 2 679,327 2.553,353 168, 168 103 052 2 824 573 During the year the charlty spent £11,374 on termination payments {2020.' nill. The trustees recelved no ￿M￿neratIon or reimbursement of expenses during the year. The full time equivalent number of staff during the year was as follows.. Health and wellbeing Children's ServI￿S Housing Support Total 2021 2020 No. 12 51 18 15 96 io 46 20 14 90 The average head counr during the year was as follows.. Total 176 222 The number of higher paid employees who received emolurnents in the following bands was: £70,000-E80,000 Page 25 YMCA East Surrey Notes to the financial statements for the year ended 3 1 March 2021 Staff Costs Iconlinued} Key management personnel in charge of directing and controlling, running and operating the Charity are deemed to be the Boèrd of Management and the Senior Management Team. The Senior Management Team comprises the Chief Executive and the three 12020.. Four) Heads of Service. The total employee benefits of the key management personnel of the Charitable Company were.. 2021 2020 Salaries and pension costs Social security costs 242,909 278,406 269,220 307 154 The salary received by the highest paid executive staff member (the Chief Executive) was.. 2021 2020 Salary 78,675 77.871 Contributions to the Scottish Widows defined contribution pension scheme on behalf of the Chief Executive were £5,50712020 £5,451). Taxation The Charitable Company is a registered charity and, as such. its income and gains fallSng within 5ettions 471 to 489 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gasns Act 1992 are exempt from corporation tax to the extent that they are applied to its charitable objectives. Pension costs YMCA East Surrey participated in a contributory pension plan providing defined benefits based on Final pensionable pay for employees of YMCAS in England, Scotland and Wales. The assets of the YMCA Pension Plan are held separately from those of YMCA East Surrey and at the year end these were 1nvested in the Mercer Dynamic Oe-risking Solution, 40% matching portfolio and 600/0 in the growth portfolio and 5chroder {property units only). The most recent completed three year valuation was as at l May 2020. The a55umptions used which have the most significant effect on the results of the valuation are those relatit)g to the assumed rates of return on assets he5d before and after retirement of 2.59¥u and L.090/0 respectively, the increè5e in pensions in payment of 2.990h (for RPI capped at 5¥0 p.a. I, and the average life expectancy from normal retirement age lof 651 for a current male pensioner of 22.0 years, female 24.4 years, and 23.7 years for a male pensioner, female 26.1 years, retiring in 20 years time. The result of the valuation showed that the actuarial value of the assets was £146. Irn, which represented 790kn of the benefits that had accrued to members. The Pension Plan was closed to new members and future service accrual with effect from 30 April 2007. With the removal of the salary linkage for benefits all employed deferred members became deferred members as from l May 20LI. The valuation prepared as at l May 2020 showed that the YMCA Pension Plan had a deficit of £36 million acros5 all participating YMCAS. YMCA East Surrey has been advised that, it will need to make monthly contribution5 Of £1,689 from l May 2021. This amount is based on the ajrrent actuarial assumptions las outlined above), nurnber of participants and may vary in the future as a result of actual performance of the Pension Plan. The current recovery period Is 8 year5 commencing 1st May 2021. In addition, YMCA East Surrey may over time have liabilities in the event of the non- payment by other part1cipating YNCAS of their share of the YMCA Pension Plan's deficit. It s not possible currently to quantify the potential amount that YMCA East Surrey may be called upon to pay in the future. Page 26 YMCA East Surrey Notes to the financial statements for the year ended 3 1 March 2021 Tangible fixed assets - housing properties Social housing propertles held for letting Total Cost.. At l April 2020 Additions D¥5P05a15 At 31 March 2021 2,201,100 2,201.100 146,070 146,070 2 342 473 2 342 473 Depreciation: At l April 2020 Charge Disposals At 31 March 2021 70,969 29,654 372 100,251 70,969 29,654 372 100 251 Net book value.. At 31 March 2021 2 242 222 2.242.222 At 31 March 2020 2 130 131 2 130,131 All social housing propertie5 are freehold. Total cumulative amounts received or receivable at 31 March 2021 2020 Capital grants Revenue grants 328,374 313,000 328 374 363 000 Tangible fixéd assets - other Freehold Leasehold Sports other land and land and Equipment Equipment buildings buildings Total Cost.. At l April 2020 Additions Disposals At 31 March 2021 3,668,436 8,230 904,777 290,552 31,406 766,486 64,988 61.882 769 592 5,630,251 104,624 3 676 666 904 777 321.958 5 672 993 Depreciat10n'. At l April 2020 Charge Disposals At 31 March 2021 269,645 55,858 399,346 47,017 257,040 16,830 597,452 59,733 1,523,483 179,438 325 503 446 363 273,870 595 303 1641 039 Net book value.. At 31 March 2021 3.351, 163 458 414 48.088 174 289 4 031 954 At 31 March 2020 3 398,791 505 431 33,512 169,034 4 106 768 Page 27 YMCA East Surrey Notes to the financial statement5 for the year ended 3 1 March 2021 io Investments Movement in fixed asset listed investments 2021 2020 Market value at l April 2020 Additions to investments at cost Disposal of investments at cost Net gain on investment Market value at 31 Mèrch 2021 442,853 19 443,437 107 952 584 550.824 442.853 Debtors 2021 2020 Rent arrears Less.. provision for doubtful debt 68,821 57,115 64,015 263,284 357,007 57,115 52,177 137,752 Prepayments Projett funding debtors Other debtors 712 438 250 115 12 Cash at bank and in hand 2021 2020 Deposlt accounts Current account Cash 1,457,582 150,681 10,823 1 619 086 932,919 72.618 9.968 1 015 505 13 Creditors: amounts falling due within one year 2021 2020 Bank loans (Note 151 Trade creditors Accruals Income received in advance Taxation and social security other creditors Deferred capital grants (Note 161 Accrued pension deficlt contributions (Note 17) 43,761 198,480 81,057 569,583 58,595 112,807 13,801 39,446 141,138 65,749 217,541 61,161 142,077 5,354 1,095 961 690,592 14 Creditors: amounts fallbng due after more than one year 2021 2020 Bank and other loans (Note IS) Oeferred capital grants (Note 161 Accrued pension deficit contributions (Note 171 1,066,301 734,803 152 794 1 953,898 1,115,005 428,201 127,905 1 671.111 Page 28 YMCA East Surrey Notes to the financial statements for the year ended 3 1 March 2021 15 Bank and other loans 2021 2020 Secured.. In one year or less In more than one year, but not more than two years In more than two years. but not more than five years In more than five years 43,761 838,758 35,202 192 341 1,111 062 39,446 40.704 867,386 206 915 1,154 451 £152,250 was borrowed from Barclays in 2014 at a fixed rate of 5.73Qkn until 30 June 2021 and thereafter at a variable rate of 3.250kn over the bank's base rate and is repayable over a 15 year term. This loan Is secured by a legal charye over the property at 57 Lynwood Road, Redhill. £989,340 wa5 borrowed from Barclays in 2017 at a rate of 1.6% over the bank's base rate. The loan has a 25 year repayment profile with a break after 5 years at which point the loan will be renegoliated. This loan 15 secured by a legal charge over the property on Brighton Road, Redhill. £150,000 was borrowed from the Methodist Church in March 2019, this is a public benefit concessionary loan and is interest free and repayable at the end of the 15 year term. The loan is secured by a legal charge over the property at 200 London Road. Mersthaffl 16 Deferred capltal grants Grant at Amortisati cost on Total net grant As at l April 2020 Grants received in year Arnortisation As at 31 March 2021 437,161 328,374 (3,6061 433,555 328,374 765 535 748 604 17 Accrued pension deficit contributions Pension deficit As at l April 2020 Charged to statement of CoMp￿henSlve income Payments made As at 31 March 2021 146,031 44,272 19,633 170 670 Payable by instalments.. Within one year One to two years Two to five year5 After five years Total 17,877 18,729 61.604 72,460 170,670 YMCA East 5urrey has been notified by the YMCA Pension Plan of their allocation of the overall deficit on the YMCA Pension Plan Isee Note 71. The initial allocation wa5 provided for In full in the 31 March 2007 financial statements in accordance with FRSIO2. Subsequent notification following updated actuarial valualions of the Plan increased the mount and further provisions were made in the 31 March 2009, 31 Narch 20L2 and 31 March 2015 financial statements. Monthly payments of É1,689, increasing by 3010 per annum, in respect of the deficit allocatiori are being made for B years from May 2021. The monthly payment amount also includes a contribution towards scheme expenses. Page 29 YMCA East Surrey Notes to the financial statements for the year ended 31 March 2021 18 Analysis of reserves At l April 2020 Income Expenditure At 31 March 2021 Development capital Sovereign capital Sovereign centre Lynwood Road Move-on Inclusive sport5 facility London Road Move-on Hillbrook capital Health and wellbeing Housing Children's services Youth services Inclusive services Ernotional wellbeing Total restricted reseNes Un￿StrICted reserves.. General Designated Total reserves 1,023,242 505,430 123,295 294,868 1,822,695 296,229 74.353 23,582 109,050 50,704 {11,0451 147,017) 1,012,197 458,413 123,295 290,827 1,826,564 292,457 71,663 24,141 121.273 34,850 {4,0411 140.7771 115,2161 11,9621 194,2941 1258.3691 {82.2511 1203,4881 166.9651 219.416 (1,044,841) 44.646 11,444 1728} 94,853 270,592 66,397 203,488 64.934 219,416 975,042 9,222 7, 191 4.332,670 4,262,871 749,846 501, 153 5 583 669 3,295,983 12,765,786) 8, 194 3 818 821 1,280,043 563.751 6 106,665 4 341 817 At l April 2019 Income Expenditure At 31 March 2020 Development capital Sovereign capital Sovereign centre Lynwood Road Move-on Inclus1ve sports facility London Road Move-on Hillbrook capital Health and wellbeing Housing Children's seryices Youth services Total restricted reserves Unrestricted reserves.. General Designated Total reseNes 1,032,309 552,447 123.295 298.910 1,860,421 300,000 24,676 30.684 117,694 47,152 8,085 4,395,673 {9.0671 (47,0171 1,023,242 505,430 123,295 294,868 1,822,695 296,229 74,353 23,582 109,050 59,926 14,042) (39,6051 (5,0281 (3231 187,1111 {450,3151 1617,0981 611.449 11,871,055) 1,879 1,257 50,000 80,009 441,671 629,872 603,364 1,808,052 4,332,670 773,303 483 918 5 652 894 2,272,911 {2,296.3681 749,846 501 153 5 583 669 4 169 382 4 238 607 General reserves are the 'free reserves. after allowing for all designated reserve5. The designated reserves have arisen frorn Challenge events and rep￿SentS monies received in relation to the capital costs of the new facility completed In December 20L8 at the Princes Road site and supports the work OF other projects within the charity. 19 Restricted reserves The Development capital reserve is held on trust to provide premises for the YMCA East Surrey. It is invested in the freehold land and buildings at Prlnces Road tsccupled by YMCA and it does not generate income. The Sovereign capital reserve holds the leasehold premises at The Sovereign Centre and does not generate income. The Sovereign centre reserve represents funds held to maintain and enhance the facilities at the Sovereign Cent￿ and to support the YMCA'S work with children and young people with disabilities. Page 30 YMCA East Surrey Notes to the financial statements for the year ended 3 1 March 2021 19 Restricted reserves {continued} The Lynwood Move-on holds the freehold premises at Lynwood Road and does not generate tncome. The London Road Mtsve-on holds the freehold premises at London Road and does not generate income. The Inclusive sport facility reserve represents monies received in relation to the capital costs of the new facil￿tY completed in Decefnber 20L8 at the Princes Road site. Housing reserves includes bond balances totalling £86,049 {2020'. £87,862) and equipment funding totalling £17.465 12020.. £17,465), for use in replacernent equipment for H111brook House as required. The remaining balance is represented by donations and other income in relation to housing project5, Still to be matched against the appropriate costs. Donations and other income received in respect Health and wellbeing, Children's services and Youth services are shown as other restrirted reserves and matched with appropriate costs. 20 Related party transactions The Trustee5 all give freely their time and expertise without any form of remuneration or other benefit in kind 12020.. £nill. Further. the Trustees have received no reimbursement of expenses during the year {2020.. £nill. During the year purchase of goods totalling nil (2020.. E2501 were made From Furnistore of which one of the trustees is also a trustee. The purchases were made on normal commercial terms. There was nll outstanding with related parties as at 31 March 2021 12020.. £nill. 21 Operating lease commitments At 31 March, the Charitable Company had total commltments under nOn-Can￿lIable operating leases for land and buildings as follows.. 2021 2020 Within one year Within two to five years After five years 26,818 25,679 11.153 17.539 71,877 22 Capital commitments At the end of the year, the Charitable Company had capital commltments in respett of housing properties of £1,341,091 12020-. £124,730) 23 Net cash Current debt Non-current Cash and cash debt equivalents Net cash At l April 2020 Cash flow Other movements At 31 March 202 1 (39,4461 (4,3151 {1,115,0051 48,704 1,015,505 603,581 l L38,9461 647,970 1 066 301 1 619 086 509 024 At l April 2019 Cash flow Other movements At 31 March 2020 138,2311 (1,2151 (1,154,205) 39,200 765,420 250,085 1427,OL61 288,070 39,446 1 115 005 1,015,505 138,946 Page 31