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2020-03-31-accounts

REGISTERED COMPANY NUMBER: 03909272 (England and Wales) REGISTERED CHARITY NUMBER: 1081902

STREET (UK) FOUNDATION

Group Report of the Trustees and

Audited Financial Statements

for the Year Ended 31 March 2020

Eden Currie Limited Chartered Accountants and Statutory Auditor 2 Highlands Court Cranmore Avenue Solihull West Midlands B90 4LE

STREET (UK) FOUNDATION

Contents of the Financial Statements for the Year Ended 31 March 2020

Page
Reference and Administrative Details 1
Report of the Trustees 2 to 8
Report of the Independent Auditors 9 to 11
Consolidated Statement of Financial Activities 12
Consolidated Balance Sheet & Company Balance Sheet 13
Consolidated Cash Flow Statement 14
Notes to the Consolidated Cash Flow Statement 15
Notes to the Financial Statements 16 to 31

STREET (UK) FOUNDATION

Reference and Administrative Details for the Year Ended 31 March 2020

TRUSTEES S Johnson
Ms E Kelliher
J Tackaberry
P R Tyrrell
CHIEF EXECUTIVE OFFICER K Ali
COMPANY SECRETARY K Ali
REGISTERED OFFICE 50 Cliveland Street
Birmingham
West Midlands
B19 3SH
REGISTERED COMPANY 03909272 (England and Wales)
NUMBER
REGISTERED CHARITY 1081902
NUMBER
INDEPENDENT AUDITORS Eden Currie Limited
Chartered Accountants
and Statutory Auditor
2 Highlands Court
Cranmore Avenue
Solihull
West Midlands
B90 4LE
SOLICITORS Wragge & Co
40 Colmore Row, Birmingham, B2 2AS
Bates, Wells & Braithwaite
Cheapside House, 138 Cheapside, London,
EC2V 9BB
Linklaters & Alliance
One Silk Street, London, EC2Y 8HQ

Page 1

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

The trustees who are also directors of the parent charitable company for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2020. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The objects of the Foundation are the relief of poverty and the relief of unemployment and; in particular (without prejudice to the generality) through:

The Foundation's mission is to support financially excluded individuals with tailored financial services, and offer a secure pathway out of debt, welfare and cash-economy dependency on a sustainable basis.

Public benefit

The trustees are aware of the obligations of the charity, which are set out in the Guidance issued by The Charities Commission under The Charities Act 2006. They are confident that the work of the charity in pursuit of its objects is delivering Public Benefit. The Trustees will comply with the future reporting requirements in this regard.

Trustees indemnity insurance

The trustees are the directors of the Company. During the year and up to the date of approval of the financial statements, there was a qualifying third party indemnity in place for directors as allowed by Section 234 of the Companies Act 2006.

Page 2

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

STRATEGIC REPORT

Achievement and performance

Personal lending

Street (UK) C.I.C granted over 8,000 advances providing nearly £2.6m of affordable credit through its retail branch network. Street (UK) C.I.C now operates a total of six branches across the West Midlands.

Gross income from lending was £1.72m, after write off and provisions the net income from lending was £724k. Bad debt provisions for the year ended 31 March 2020 total £604k, which includes an increase of £120k to recognise the potential financial impact of Covid-19 on the company’s loan portfolio.

Housing loans

Street (UK) Homes granted 147 loans with the total amount being lent over £2.0m. By the end of the year £15.4m of loan funds were under management.

Back office services

Street UK Services continues to offer back office administration services ensuring loans are serviced for numerous entities, in the period over 60m of new loans were setup with over £400m of loan funds under administration.

Financial review

Financial position

The nineteenth year of the Foundation's activities shows a consistent result in unrestricted income increasing by £350k to £3.0m. Unrestricted expenditure has also increased in line with income by £171k to £2.8m, which resulted in a surplus of £284k. The surplus increases unrestricted reserves to £1.8m (2019 - £1.5m)

The trustees are confident that the current level of funding along with funding commitments from charitable, public sector and private sector sources now in place will prove sufficient to meet the operating results indicated in the 2020/21 budget.

Principle funding sources

We are in on-going discussions with a number of potential investors to facilitate the long-term funding requirements for the group.

Investment policy and objectives

The trustees' policy is to invest operating funds in easy access and relatively low risk bank accounts.

Reserves policy

The trustees' reserves policy is to manage the reserves in such a way as to have sufficient funds available for the orderly winding up of the Group without liability should its future income be in such doubt that this is the only credible course of action.

Page 3

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

STRATEGIC REPORT continued

Principal risks and uncertainties

The board of trustees has mandated the Audit and Risk Committee to monitor the risk management process and systems of internal control of the Group. The Board oversees the activities of the Audit and Risk Committee, the Group's internal audit process and external auditors, and the Group's risk management function as delegated to the Group’s Audit and Risk Committee.

The Group's Risk management involves the identification and evaluation of risks and is the responsibility of the Audit and Risk Committee together with the Board. The Group's ability to manage risk is continually growing through the focus on risk management capability to ensure that it remains robust and that emerging risks are identified, assessed and managed effectively.

The Audit and Risk committee have established an effective risk management framework where important and emerging risks are identified, quantified and managed through the Groups Risk Register and movements are monitored.

Key Performance Indicators

The board has developed the evaluation of success against the Group’s strategic and financial objectives. In order to measure performance the board has identified the following key performance indicators (KPI’s) on which it monitors and assesses the Group’s performance:

• Lending KPI: 25% New customer lending growth
Outcome: 28% New customer lending growth achieved
• Bad debt provisions KPI: Bad Debt Provisions not to exceed 15% YE Gross Loan Book
Outcome: Bad Debt Provisions were 15% of YE Gross Loan Book
• Social Impact KPI: % customers with Minimum Income Standard (MIS) of £18,800
p.a >50%
Outcome: 55% of all customers had MIS of less than £18,800
KPI: Net savings to customers
Outcome: Based on Av loan amount of £447, net savings of £327 for each
customer when compared to prominent Doorstep Lender.
KPI: % customers support who live in the most deprived 20%
postcodes >50%
Outcome: 87% of customers served, lived in top 20% deprived postcodes.
• Customer Feedback KPI: Customer complaints % Customer Served not to exceed 5%
Outcome: Complaints totalled 2% of all customer served
KPI: Positive customer feedback >95%
Outcome: 98% positive feedback via independent customer reviews.
• Operational Efficiency KPI: Cost per loan advance <=£100
Outcome: Cost per loan advance £117

Page 4

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

STRATEGIC REPORT continued

Future plans

2019/20 has been a year of success and challenges, significant improvements have been made to increase brand awareness through various marketing initiatives which have resulted in higher than expected customer demand.

However due to the continuing deterioration in personal finances for our typical customer segment, for a variety of reasons including austerity, cost of living and unstable/low income levels, we have not been able to provide affordable credit to a significant number of applicants.

New customer lending has grown by 34%, whilst at the same time we have witnessed a reduction in the number of returning customers for a multitude of reasons which includes progression to mainstream finance, creditworthiness and affordability.

More recently the impact of COVID-19 has been quite significant with a dramatic reduction in lending between Feb-Mar 2020 and an increase in bad debt provisions due to forbearance measures provided to customers.

Leading up to COVID-19 a strategic review had already commenced to define a 5 year business plan for the Group. Due to COVID-19 this project has been extended into 2020/21. The Group has already started or outlined key steps to take to ensure continued growth and success, in the short term these include;

The development of a revised five year business plan will provide the business with a roadmap to build on it’s success and provide a platform for further growth.

Page 5

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

Recruitment and appointment of new trustees

Trustees are appointed by members at the Annual General Meeting. Additional trustees may be co-opted between AGMs. The minimum number of trustees is two there is no maximum.

Organisational structure

The board of trustees meet quarterly to review the progress and activities of the Group. Once a year trustees review and approve a three year business / strategic development plan and the budgets for the following year and agree the remuneration of the Chief Executive. Day to day management of the Group within the agreed strategy and budgets is delegated to the Chief Executive.

Induction and training of new trustees

New trustees are invited to an induction day to brief them on their legal obligations under charity and company law, they also receive an induction pack including guides published by Companies House and the Charity Commission, the Memorandum and Articles of Association, the Audited Accounts and the current business plan and budgets. During the induction day they meet key members of staff and discuss key operational issues.

Key management remuneration

The trustees consider the board of directors, who are also the Charity's trustees, and the senior management team comprise the key management personnel of the charity in charge of directing and controlling, running and operating the Charity on a day to day basis. All trustees give of their time freely and no trustee received remuneration in the year ending 31 March 2020. The remuneration paid to the Charity's employees is reviewed annually and a performance related increase is made where appropriate. The pay is benchmarked against pay levels for other roles with similar responsibilities elsewhere within the sector.

Audit and Risk Committee

The role of the charity's Audit and Risk Committee is to oversee responsibilities in relation to the Charity's financial reporting, internal control system, risk management system and external audit function. The Committee will also review any judgements made in connection with the preparation of the group's financial statements, preliminary announcements and any related formal statements

Page 6

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

Related parties

The charity has two wholly owned subsidiaries, Street (UK) C.I.C. and Street (UK) Services Limited. The board of trustees of the charity also control Street UK Homes Limited. All three companies covenant their profits to the charity.

Street (UK) C.I.C. delivers the objectives of the charity via the provision of specialist financial services to individuals that are financially excluded. Street UK Homes Limited also delivers the objectives of the charity via the provision of relocation, home improvement and disabled facility loans for individuals who for a variety of reasons are unable to secure credit from mainstream financial institutions. Street (UK) Services Limited generates income from the provision of other products and services including sales of Street (UK) C.I.C.'s loan management software 'StreetSERVE'

Risk management

The trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error.

The trustees have a risk management strategy which comprises:

This work has driven the development of new contingency management and disaster recovery plans. This work is on going.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Street (UK) Foundation for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland"

Page 7

STREET (UK) FOUNDATION

Report of the Trustees for the Year Ended 31 March 2020

STATEMENT OF TRUSTEES' RESPONSIBILITIES – continued

Company law requires the trustees to prepare financial statements for each financial year which give a true 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 those financial statements, the trustees are required to

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

In so far as the trustees are aware:

AUDITORS

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

Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 24 July 2020 and signed on the board's behalf by:

P Tyrell – Trustee Ms E Kelliher – Trustee K Ali – Company Secretary

Page 8

Report of the Independent Auditors to the Members of Street (UK) Foundation

Opinion

We have audited the financial statements of Street (UK) Foundation (the 'parent charitable company') and it’s subsidiaries (‘the group’) for the year ended 31 March 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Company Balance Sheet, the Consolidated 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 (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

Other information

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

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Page 9

Report of the Independent Auditors to the Members of Street (UK) Foundation

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 group and parent 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 where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the parent 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 group’s and parent charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.

Page 10

Report of the Independent Auditors to the Members of Street (UK) Foundation

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

Paul Mannion ACA ACCA (Senior Statutory Auditor) for and on behalf of Eden Currie Limited Chartered Accountants and Statutory Auditor 2 Highlands Court Cranmore Avenue Solihull West Midlands B90 4LE

Date: 24 July 2020

Page 11

STREET (UK) FOUNDATION

Consolidated Statement of Financial Activities for the Year Ended 31 March 2020

Unrestricted
funds
Notes
£
INCOME AND ENDOWMENTS FROM
Donations and legacies
2
-
Charitable activities
Provision of loan finance to excluded
Individuals 5
1,835,396
Other trading activities
3
1,172,774
Investment income
4
26,873
Total
3,035,043
EXPENDITURE ON
Raising funds
Other trading activities
6
601,365
601,365
Charitable activities
Provision of loan finance to excluded
individuals 7
2,149,348
Total
2,750,713
NET INCOME
284,330
RECONCILIATION OF FUNDS
Total funds brought forward
1,475,794
TOTAL FUNDS CARRIED FORWARD
1,760,124		 Restricted
funds

£
44
-
-
-
44
18
18
26
44
-
-
-		 Total
funds

2020

£
44
1,835,396

1,172,774

26,873

3,035,087
601,383
601,383
2,149,374
2,750,757
284,330
1,475,794
1,760,124		 Total
funds
2019
£
62
1,505,421
1,161,371
18,172
2,685,026
642,513
642,513
1,937,025
2,579,538
105,488
1,370,306
**1,475,794 **

CONTINUING OPERATIONS

All income and expenditure has arisen from continuing activities.

The notes form part of these financial statements

Page 12

STREET (UK) FOUNDATION

Consolidated and Company Balance Sheet 31 March 2020

Notes
FIXED ASSETS
Tangible assets
13
Investments
14
CURRENT ASSETS
Stocks
15
Debtors: amounts due within one year
16
Debtors: amounts due after one year
16
Cash at bank
17

CREDITORS
Amounts falling due within one year
18
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
CREDITORS
Amounts falling due after more than one year 19
ACCRUALS AND DEFERRED INCOME23
NET ASSETS
FUNDS
25
Unrestricted funds:
General fund
TOTAL FUNDS		 Group
2020

£
95,434
192
95,626
-
2,121,219
19,700
1,113,017
3,253,936
(301,371)
2,952,565
3,048,191
(1,285,534)
(2,533)
1,760,124
1,760,124
1,760,124		 Group
2019
£
158,136
192
158,328
6,356
2,738,828
13,894,431
1,893,481
18,533,096
(370,184)
18,162,912
18,321,240
(16,842,870)
(2,576)

1,475,794
1,475,794
1,475,794		 Company

2020

£
-
4
4

-

1,699,870

19,700

47,600
1,767,170

(7,050)

1,760,124
1,760,124

-

-
1,760,124

1,760,124

1,760,124

Company
2019
£
-
4
4
-
1,446,642
12,150
20,671
1,476,463
(3,673)
1,475,794
1,475,794
-
-
1,475,794
1,475,794
**1,475,794 **

The financial statements were approved by the Board of Trustees and authorised for issue on 24 July 2020 and were signed on its behalf by:

J Tackaberry - Trustee

The notes form part of these financial statements

continued...

Page 13

STREET (UK) FOUNDATION

Consolidated Cash Flow Statement for the Year Ended 31 March 2020

Notes
Cash flows from operating activities
Cash generated from operations
1
Net cash provided by/(used in) operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Interest paid
Interest received
Net cash used in investing activities
Cash flows from financing activities
New loans in year
Loan repayments in year
Fund provider loans3

Net cash (used in)/provided by financing activities
Change in cash and cash equivalents in
the reporting period
Cash and cash equivalents at the
beginning of the reporting period
Cash and cash equivalents at the end of
the reporting period		 Group
2020
£
300,157
300,157
(11,587)
(133,939)
26,873
(118,653)
-
(134,073)
(827,895)
(961,968)
(780,464)
1,893,481
1,113,017		 Group
2019
£
(1,342,405)
(1,342,405)
(14,933)
(143,724)
18,172
(140,485)
250,000
(307,326)
1,349,361
1,292,035
(190,855)
2,084,336
**1,893,481 **

The notes form part of these financial statements

Page 14

STREET (UK) FOUNDATION

Notes to the Consolidated Cash Flow Statement for the Year Ended 31 March 2020

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

Net income for the reporting period (as per the Statement of
Financial Activities)
Adjustments for:
Depreciation charges
Interest received
Finance expense
Decrease in stocks
Decrease/(increase) in debtors
Decrease in creditors
Net cash provided by/(used in) operations		 2020
£
284,330
74,289
(26,873)
133,939
6,356
14,492,340
(14,664,224)
300,157		 2019
£
105,488
59,046
(18,172)
143,724
-
(1,623,582)
(8,909)
(1,342,405)

2.

ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

Net cash
Cash at bank
Debt
Debts falling due within 1 year
Debts falling due after 1 year
Total		 At 1/4/19
£
1,893,481
1,893,481
(178,727)
(1,369,574)
(1,548,301)
345,180		 Cash flow
£
(780,464)
(780,464)
50,033
84,040
134,073
(646,391)		 At 31/3/20
£
1,113,017
1,113,017
(128,694)
(1,285,534)
(1,414,228)
(301,211)

3. FUND PROVIDER LOANS

The balance represents amounts previously received by Street UK Homes Limited, a subsidiary company, from fund providers for the purpose of on lending. Street UK Homes Limited changed its accounting treatment in relation to such funds and as a result of this change the financial statements for the year ended 31 March 2020 do not include the assets or liabilities associated to each fund. This treatment ensures the Balance Sheet position of Street UK Homes Limited as at 31 March 2020 reflects the updated contractual arrangements in place between the company and fund providers. Further details are contained in note 26.

The notes form part of these financial statements

Page 15

STREET (UK) FOUNDATION

Notes to the Financial Statements for the Year Ended 31 March 2020

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value. The financial statements are prepared in sterling which is the functional currency of the charity.

The financial statements consolidate the results of the charity and its wholly owned subsidiaries Street (UK) C.I.C. and Street (UK) Services Limited together with the results of Street UK Homes Limited, a company under the common control of the Board of Directors of Street (UK) Foundation. The results of the three subsidiaries are consolidated within the Statement of Financial Activities (SOFA) to give a true and fair view of the state of affairs of the charity and its subsidiaries, therefore the results of the subsidiaries have not been consolidated on a line by line basis.

The charity has availed itself to Paragraph 3 (3) of Schedule 4 of the Companies Act and adapted the Companies Act Formats to reflect the special nature of the charity's activities. A separate SOFA has not been presented for the charity alone as permitted by Section 408 of the Companies Act 2006.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Grants are credited to deferred income. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the asset. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred. Grants towards capital for on lending are released to restricted capital reserves when the funds are utilised in accordance with the company's principal activity.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Page 16

continued...

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

1. ACCOUNTING POLICIES - continued

Allocation and apportionment of costs

Support costs are those that assist the work of the charity but do not directly represent charitable activities and include office costs, governance costs, administrative and management payroll costs. They are incurred directly in support of expenditure on the objects of the charity. Where support costs cannot be directly attributed to particular headings they have been allocated to cost of raising funds and expenditure on charitable activities on a basis consistent the charity's income profile.

Tangible fixed assets

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

Improvements to property - straight line over the life of the lease
Platform development - 20-50% on cost
Fixtures and fittings - 10% to 30% on reducing balance
Office and computer equipment - 20-30% reducing balance & 10% on cost

Stocks

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

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Financial instruments

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

continued...

Page 17

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

1. ACCOUNTING POLICIES - continued

Financial instruments

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of the company from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments

Share capital issued by Street (UK) C.I.C. and Street (UK) Services Limited is recorded at the proceeds received, net of direct costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Capital funds for on lending received from fund providers for on lending to borrowers are included in creditors due after one year. Funds issued to borrowers which have not yet been repaid are included in debtors, funds received for on lending which have not yet been issued to borrowers are retained in a designated bank account which is included in cash at bank and due for repayment to the fund provider on demand.

The fund provider is entitled to receive all future economic benefit associated to all loans issued to borrowers and retained funds for on lending. In the event of a loan issued to a borrower becoming irrecoverable it is the fund provider's responsibility to suffer any irrecoverable amount.

The effect of any increase or decrease in the value of the loan would be an adjustment to the amount recorded as a debtor and an equal and opposite adjustment to the amount recorded as a long term liability.

The amount Street UK Homes Limited will either receive or suffer is contingent upon the fluctuation in market value of each property. Consequently, any fair value adjustment is contingent in nature and the financial statements do not incorporate the effect of any contingent fair value adjustment.

Going concern

The financial statements have been prepared on a going concern basis as the trustees believe that no material uncertainties exist. The trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the charity to be able to continue as a going concern.

Operating leases

Rentals applicable to operating leases are charged to the SOFA over the period in which the cost is incurred.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Investments

Investments in subsidiaries are recognised at cost.

Unlisted investments are initially recognised at cost, inclusive of any direct costs associated to the acquisition.

continued...

Page 18

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

1. ACCOUNTING POLICIES - continued

Investments

Unlisted investments are assessed for indicators of impairment at each reporting date. An impairment is considered to occur when the recoverable amount of the asset is less than the initial cost. Impairments are recognised in the income statement in the year that they arise.

2. DONATIONS AND LEGACIES

Donations
3.
OTHER TRADING ACTIVITIES
Back office charges
Commission
Other income
4.
INVESTMENT INCOME
Deposit account interest
5.
INCOME FROM CHARITABLE ACTIVITIES
Interest and fees receivable
Activity:Provision of loan finance to
excluded individuals
6.
OTHER TRADING ACTIVITIES
Staff costs
Office and sundry
Support costs		 2020
£
44
2020
£
1,158,599
14,076
99
1,172,774
2020
£
26,873
2020
£
1,835,396
2020
£
226,745
7,043
367,595
601,383		 2019
£
62
2019
£
1,147,287
14,073
11
1,161,371
2019
£
18,172
2019
£
1,505,421
2019
£
284,375
12,990
345,148
642,513

continued...

Page 19

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

7. CHARITABLE ACTIVITIES COSTS

Provision of loan finance to excluded
individuals
8.
SUPPORT COSTS
Other trading activities
Provision of loan finance to excluded
individuals
Support costs, included in the above, are as follows:
Management
Other
trading
activities
£
Wages
150,146
Occupancy
39,967
Legal and professional fees
10,024
Telephone
62,752
Office and sundry
57,216
Interest, fees and charges
32,342
Depreciation of tangible and heritage
assets
15,148
367,595		 Direct
Costs
£
1,659,200
Management
£
367,595
458,107
825,702
Provision
of loan
finance
to
excluded
individuals
£
167,942
59,950
5,455
94,129
85,823
22,043
22,765
458,107		 Support
costs (see
note 8)
£
490,174
Governance
costs

£
-
32,067
32,067
Total

activities
2020
£
318,088
99,917
15,479
156,881
143,039
54,385
37,913
825,702		 Totals
£
2,149,374
Totals
£
367,595
490,174
857,769
Total
activities
2019
£
300,339
92,674
4,160
133,098
184,730
41,952
43,549
800,502


continued...

Page 20

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

8. SUPPORT COSTS - continued Governance costs

8.
SUPPORT COSTS - continued
Governance costs
Provision
of loan
finance
to
excluded Total
individuals activities
2020 2019
£ £
Auditors' remuneration 26,667 20,403
Auditors' remuneration for non audit work 5,400 3,495
32,067 23,898

9. NET INCOME/(EXPENDITURE)

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

2020 2019
£ £
Auditors' remuneration 26,667 20,403
Auditors' remuneration for non audit work 5,400 3,495
Depreciation - owned assets 74,289 59,046
Other operating leases 191,780 186,834
Pension costs 19,235 16,111

10. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 March 2020 nor for the year ended 31 March 2019.

Trustees' expenses

Expenses totalling £696 were reimbursed to the trustees during the period (2019: £1,202).

11. STAFF COSTS

STAFF COSTS
Wages and salaries
Social security costs
Other pension costs		 2020
£
936,017
99,494
19,234
1,054,745		 2019
£
1,035,260
83,477
16,456
1,135,193

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

2020 2019
Staff 45 50

continued...

Page 21

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

11. STAFF COSTS - continued

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

£70,001 - £80,000

2020 2019
1 1

Due to the nature of each employee's diverse roles it is impractical to analyse them between the functions of the charity.

The Group's key management personnel comprise the trustees and the key management of its subsidiary companies; Street (UK) C.I.C., Street (UK) Services Limited and Street UK Homes Limited. The key management personnel of the subsidiaries are the Chief Executive Officer, the Chief Finance Officer, the IT Manager and the Front and Back Office Operation Managers whose employee benefits for the year ended 31 March 2020 total £190,353 (2019 £223,771).

12.
COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES
Unrestricted
Restricted
fund
funds
£
£
INCOME AND ENDOWMENTS FROM
Donations and legacies
-
62
Charitable activities
Provision of loan finance to excluded
individuals
1,505,421
-
Other trading activities
1,161,371
-
Investment income
18,172
-
Total
2,684,964
62
EXPENDITURE ON
Raising funds
Other trading activities
642,485
28
642,485
28
Charitable activities
Provision of loan finance to excluded
individuals
1,936,991
34
Total
2,579,476
62
NET INCOME
105,488
-		 Total
funds
£
62
1,505,421
1,161,371
18,172
2,685,026
642,513
642,513
1,937,025
2,579,538
105,488

continued...

Page 22

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

12. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued
Unrestricted Restricted Total
fund funds funds
£ £ £
RECONCILIATION OF FUNDS
Total funds brought forward 1,370,306 - 1,370,306
TOTAL FUNDS CARRIED FORWARD 1,475,794 - 1,475,794
13. TANGIBLE FIXED ASSETS
Group
Office
Improvements Fixtures and
to Platform and computer
property development fittings equipment Totals
£ £ £ £ £
COST
At 1 April 2019 19,928 84,900 7,447 296,006 408,281
Additions - 10,000 - 1,587 11,587
At 31 March 2020 19,928 94,900 7,447 297,593 419,868
DEPRECIATION
At 1 April 2019 16,336 48,742 3,650 181,417 250,145
Charge for year 651 36,376 770 36,492 74,289
At 31 March 2020 16,987 85,118 4,420 217,909 324,434
NET BOOK VALUE
At 31 March 2020 2,941 9,782 3,027 79,684 95,434
At 31 March 2019 3,592 36,158 3,797 114,589 158,136

Company

The company did not hold any fixed assets at 31 March 2020 (2019: £nil).

continued...

Page 23

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

14. FIXED ASSET INVESTMENTS

Group

Group
Shares in
Unlisted investments
£
COST
At 1 April 2019 and 31 March 2020 73,699
PROVISIONS
At 1 April 2019 and 31 March 2020 73,507
NET BOOK VALUE
At 31 March 2020 192
At 31 March 2019 192

There were no investment assets outside the UK.

The company investments at the balance sheet date in the share capital of companies include the following:

Street (UK) Homes Limited

Registered office: 50 Cliveland Street, Birmingham, B19 3SH

The principal activity is the provision of relocation, home improvement and disabled facility loans for individuals who for a variety of reasons are unable to secure credit from mainstream financial institutions.

%
Class of share: holding
Ordinary 100

Street (UK) C.I.C

Registered office: 50 Cliveland Street, Birmingham, B19 3SH

The principal activity is that of relieving poverty and unemployment through the provision of temporary support.

support.
%
Class of share: holding
Ordinary 100
2020 2019
£ £
Aggregate capital and reserves 2 2

Street (UK) Services Limited

Registered office: 50 Cliveland Street, Birmingham, B19 3SH

The principal activity is the provision of back office services, computer software, training and support.

%
Class of share: holding
Ordinary 100
2020 2019
£ £
Aggregate capital and reserves 2 2

The profits earned by the subsidiaries are donated to the charity.

continued...

Page 24

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

15.
STOCKS
Group Group
2020 2019
£ £
Stocks
-
6,356
16.
DEBTORS
Group Group
2020 2019
£ £
Amounts falling due within one year:
Trade debtors 207,938 217,772
Loan portfolio 1,775,687 2,296,617
Amounts due from subsidiary undertakings - -
Other debtors 30,900 38,450
Prepayments and accrued income 106,694 185,989
2,121,2192,738,828
Amounts falling due after more than one year:
Loan portfolio - 13,882,281
Other debtors19,700 12,150
Aggregate amounts 2,140,91916,633,259
The aggregate loan portfolio figure is shown after the following adjustments:
Group Group
2020 2019
£ £
Loan portfolio before adjustments for bad
debts and accured interest and fees 3,790,380 18,321,890
Specific bad debt provision – personal loans (180,292) (520,647)
General bad debt provision – personal loans 2,830,269) (2,451,066)
Accrual for interest due not yet received995,868 828,721
1,775,687 16,178,898		 Company
2020
£
-
Company
2020
£
-
-
1,668,970
30,900
-
1,699,870
-
19,700
1,719,570
Company
2020
£
-
-

Company
2019
£
-
Company
2019
£
-
-
1,408,192
38,450
-
1,446,642
-
12,150
1,458,792
Company
2019
£
-
-
-





-

Street UK Homes Limited, a subsidiary company, changed its accounting treatment in relation to funds received from fund providers for on lending. As a result of this change the financial statements for the year ended 31 March 2020 do not include assets or liabilities associated to each fund. This treatment ensures the Balance Sheet position of Street UK Homes Limited at 31 March 2020 reflects the updated contractual arrangements in place between the company and fund providers. Further details are contained in note 26.

Page 25

continued...

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

17. CASH AT BANK

17.
CASH AT BANK


Cash and bank and in hand
Total		 Group
2020
£
1,113,017
1,113,017		 Group
2019
£
1,893,481
1,893,481		 Company Company
2020 2019
£ £

47,600
20,671

47,600
20,671
20,671

Included within the group's cash at bank and in hand are funds totalling £nil (2019: £1,480,260) which represent unspent loans for on lending repayable to the applicable fund provider.

18. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Group
2020 2019
£ £
Other loans (see note 20)
128,694
178,727
Trade creditors
44,476
40,791
Social security and other taxes
29,363
34,927
Other creditors
98,838
115,739
301,371370,184
19.
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
Group Group
2020 2019
£ £
Other loans (see note 20)
1,285,534
1,369,574
Other creditors
-
15,473,296
1,285,534 16,842,870
Group
Group
2020
2019
£
£
Fund provider loans
-
15,473,296
Other loans - 2-5 Years
1,285,534
1,369,574
1,285,534
16,842,870		 Company Company
2020 2019
£ £

-
-

-
-

-
-
7,050
3,673
7,050 3,673
YEAR
Company Company
2020 2019
£ £

-
-
-
-
- -
Company Company

2020
2019
£
£
-
-
-
-
- -

Page 26

continued...

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

19. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR - continued

Fund Provider Loans represent amounts received by Street UK Homes Limited, a subsidiary company, from fund providers which have been made available for lending in accordance with the contractual arrangements that exist between the fund provider and Street UK Homes Limited. The fund as at 31 March 2020 consists of the following balances:

Group
2020
£
-		 Group

2019
£
15,473,296		 Company
2020
£

-		 Company
2019
£
-

Street UK Homes Limited changed its accounting treatment in relation to funds received from fund providers for on lending. As a result of this change the financial statements for the year ended 31 March 2020 do not include assets or liabilities associated to each fund. This treatment ensures the Balance Sheet position of Street UK Homes Limited at 31 March 2020 reflects the updated contractual arrangements in place between the company and fund providers. Further details are contained in note 26.

20. LOANS

An analysis of the maturity of loans is given below:


Amounts falling due within one year on demand:
Other loans
Amounts falling due between two and five years:
Other loans - 2-5 years		 Group
2020
£
128,694
1,285,534		 Group
2019
£
178,727
1,369,574		 Company Company
2020 2019
£ £
-
-

-
-		 Company Company
2020 2019
£ £
-
-

-
-
-

21. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

Group Group Company Company 2020 2019 2020 2019 £ £ £ £ Within one year 114,247 128,247 - - Between one and five years 23,688 329,893 - - 137,935 458,140 - -

continued...

Page 27

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

22. SECURED DEBTS

The following secured debts are included within creditors:


Fund Provider Loans
Other loans		 Group
2020
£
-
1,414,228
1,414,228		 Group
2019
£
8,369,718
1,551,766
9,921,484		 Company
2020
£
-
-
-		 Company
2019
£
-
-
-

The Fund Provider Loans are owed by Street (UK) Homes Limited. The Other loans are owed by Street (UK) C.I.C.

23. ACCRUALS AND DEFERRED INCOME

23.
ACCRUALS AND DEFERRED INCOME		 23.
ACCRUALS AND DEFERRED INCOME		 23.
ACCRUALS AND DEFERRED INCOME
Group
2020
£
Accruals and deferred income
2,533
24.
ANALYSIS OF NET ASSETS BETWEEN FUNDS
Group
Unrestricted
fund
£
Fixed assets
92,901
Investments
192
Current assets
3,253,936
Current liabilities
(301,371)
Long term liabilities
(1,285,534)
Accruals and deferred income
-
1,760,124
Company
Unrestricted
fund
£
Investments
4
Current assets
1,767,170
Liabilities
(7,050)
1,760,124
25.
MOVEMENT IN FUNDS
Unrestricted funds
General fund
TOTAL FUNDS






Group
2019
£
2,576		 Company Company
2020 2019
£ £
- -
2020
2019
Total
Total
funds
funds
£ £
95,434
158,136
192
192
3,253,936
18,533,096
(301,371)
(370,184)
(1,285,534) (16,842,870)
(2,533)
(2,576)
1,760,124 1,475,794
Total
Total
funds
funds
£
£
4
4
1,767,170
1,479,463
(7,050)
(3,673)
1,760,124 1,475,794
Net
movement
At
in funds
31/3/20
£
£
284,330
1,760,124
284,330
1,760,124
Restricted
funds
£
2,533
-
-
-
-
(2,533)

Restricted
funds
£
-
-
-
-
At 1/4/19
£
1,475,794
1,475,794
1,760,124
Unrestricted
fund
£
4
1,767,170
(7,050)
1,760,124

continued...

Page 28

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

25. MOVEMENT IN FUNDS - continued

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

Incoming
resources
£
Unrestricted funds
General fund
3,035,043
Restricted funds
Department of Work and Pensions
44
TOTAL FUNDS
3,035,087
Comparatives for movement in funds
At 1/4/18
£
Unrestricted funds
General fund
1,370,306
TOTAL FUNDS
1,370,306
Comparative net movement in funds, included in the above are as follows:
Incoming
resources
£
Unrestricted funds
General fund
2,684,964
Restricted funds
Department of Work and Pensions
62
TOTAL FUNDS
2,685,026		 Resources
expended
£
(2,750,713)
(44)
(2,750,757)
Net
movement
in funds
£
105,488
105,488
Resources
expended
£
(2,579,476)
(62)
(2,579,538)		 Movement
in funds
£
284,330
-
284,330
At
31/3/19
£
1,475,794
1,475,794
Movement
in funds
£
105,488
-
105,488

Department of Work and Pensions - Funding to cover capital expenditure.

continued...

Page 29

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

26. POST BALANCE SHEET EVENTS

During March 2020 the rapid spread of Covid-19 severely affected the United Kingdom's economy. The financial impact of Covid -19 on the Charity’s stakeholders and loan portfolio has been considered and the trustees believe that the bad debt provision associated to personal loans should increase by £120,000 to recognise the potential financial effect of the pandemic on the Group’s loan portfolio. Furthermore, the Trustees confirm that they have considered the effect of any further uncertainties as known at 24 July 2020 associated to the impact of Covid -19 when considering the Group’s going concern position.

In addition, Street UK Homes Limited, a subsidiary company, has changed its accounting treatment for funds received from fund providers for on lending. The reason for the change is as a result of the directors pre year end strategic decision to terminate certain services offered by the company to fund providers.

As a result of the Board’s decision it is anticipated that any assets and liabilities associated to each fund will be returned to fund providers during the year ending 31 March 2021. Consequentially, the contractual arrangements in place between the company and fund providers have changed and therefore a change in accounting treatment is necessary.

As a result of the change in treatment the Group’s Balance Sheet as at 31 March 2020 does not include the following assets and liabilities which are associated to each fund:

£ Loan portfolio 14,688,705 Cash at bank 827,895 Fund provider funds (15,516,600)

The revised treatment ensures the Group‘s financial statements for the year ended 31 March 2020 reflect the updated contractual arrangements in place.

27. ULTIMATE CONTROLLING PARTY

The Board of Trustees control the charitable parent company.

28. PARENT COMPANY’S STATEMENT OF FINANCIAL ACTIVITIES

The parent company has taken advantage of the exemption permitted by Section 408 of the Companies Act 2006 and has not published its own Statement of Financial Activities. The total comprehensive income attributable to the parent company, was a surplus of £284,330 (2019 £105,488).

continued...

Page 30

STREET (UK) FOUNDATION

Notes to the Financial Statements - continued for the Year Ended 31 March 2020

29. ANALYSIS OF INTER-COMPANY LOAN

Balance at 1 April 2019 owed to charity
Donation from subsidiary undertakings
Funds transferred to and from subsidiary undertakings
Balance at 31 March 2020 owed to charity		 2020
£
1,408,192
(266,447)
527,225
1,668,970

As at 31 March 2020 an inter-company loan exists between Street (UK) Foundation and Street (UK) C.I.C., Street (UK) Services Limited and Street UK Homes Limited. The subsidiary undertakings assist in meeting the objectives of the charity.

Page 31