FEARON COMMUNITY ASSOCIATION LTD
(A COMPANY LIMITED BY GUARANTEE)
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Company Number : 6852232 Charity Number: 1130457
Cound & Co LLP
Chartered Accountants 1 Princes Court Royal Way Loughborough Leics LE11 5XR
Tel: 01509 214163
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FEARON COMMUNITY ASSOCIATION LIMITED
TRUSTEES ANNUAL REPORT
The trustees are pleased to present their report together with the financial statements of the charity for the year ended 31 March 2021.
1) REFERENCE AND ADMINISTRATIVE DETAILS
a) REGISTERED CHARITY NUMBER
1130457
b) COMPANY NUMBER
6852232
c) REGISTERED OFFICE
Fearon Hall Rectory Road Loughborough Leics, LE11 1PL
d) BANKERS
Metro Bank One Southampton Row London WC1B 5HA
e) SOLICITORS
Moss Solicitors LLP 80-81 Woodgate Loughborough LE11 XE
f) ACCOUNTANTS AND INDEPENDENT EXAMINERS
Cound & Co LLP 1 Princes Court Royal Way Loughborough Leics, LE11 5XR
DIRECTORS AND TRUSTEES
The directors of the charitable company (the charity) are its trustees for the purpose of the charity law and throughout this report are collectively referred to as the trustees.
The trustees who served during the period were as follows:
R E Thorpe M L Welbourne A B Rhodes Dr C E Tello R M M Cant (appointed 8/9/20) G L Thomson (appointed 8/9/20) M Charlesworth (appointed 8/9/20)
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FEARON COMMUNITY ASSOCIATION LIMITED
TRUSTEES ANNUAL REPORT
2) OBJECTIVES AND ACTIVITIES
The Memorandum of Association dated 19 March 2009 states that the objects of the charity are to provide educational, social and recreational facilities for people living in the North East area of Loughborough and to maintain and run the building known as the Fearon Hall as a centre offering such opportunities.
The Association’s income comprises grants from local authorities, rental income from the hire of the Hall’s function rooms and the sale of lunches.
3) STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing Document
Fearon Community Association Ltd is a company limited by guarantee governed by its Memorandum and Articles of Association dated 19 March 2009. It is a charity registered with the Charity Commission. Membership is open to any affiliated group using the community centre, each of whom agree to contribute up to £10 in the event of the charity being wound up.
Appointment of Trustees
As set out in the Articles of Association, the Association has a minimum of three trustees and it is not subject to a maximum number. One trustee retires in rotation at each Annual General Meeting, but may be re-appointed. Members are invited to nominate trustees prior to the AGM.
Trustee Induction and Training
New trustees are advised of their obligations under charity and company law, the content of the Memorandum and Articles of Association as well as the structure and decision making process of the committee.
Public Benefit
The trustees have had regard to the guidance published by the Charities Commission in respect of public benefit when exercising any powers or duties to which the guidance is relevant.
4) RISK MANAGEMENT
The management committee confirms that the major risks to which the charity is exposed have been reviewed and systems have been established to mitigate those risks.
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(a) The properties are properly insured and well maintained.
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(b) Staff are properly trained in the care of children and in Health and Safety procedures.
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(c) All significant bank transactions have to be authorised by two trustees or senior employees.
5) ACHIEVEMENTS AND PERFORMANCE
Like all organisations, Covid has dominated our year. As we negotiated through the early stages of the pandemic we saw our income drop by 80% overnight when we were all forced into lockdown on the 23 March.
As Fearon Community Association (FCA) exists to support people in our area, we made the decision to continue to do just that, rather than close entirely due to the impact on our finances. In hindsight it was a brave decision to have taken - to keep our service delivery going whilst trying to navigate the fast changing rules and legislation of this new Covid world. As a Board we then agreed to review the financial situation after four months to see if we could afford to continue to support our community moving forward.
.
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FEARON COMMUNITY ASSOCIATION LIMITED
TRUSTEES ANNUAL REPORT
5) ACHIEVEMENTS AND PERFORMANCE (continued)
Our decision was proven right.
Whilst our Centre Manager’s time was diverted to supporting the wider Charnwood Community Action response, closer to home, our Activities and Bookings Manager worked tirelessly to adapt how we support our local residents and regular Hall users within a Covid-secure framework. Between March and June, more than 400 welfare calls were made which covered a diverse range of issues from helping a victim of online fraud to offering advice on how to make Yorkshire puddings rise! Large issues or small, I know what a difference this regular support has made to the lives of our local people in this unprecedented year. You can see from the stories on our website and ‘Our Covid Year’ timeline in this report more about what we have achieved.
Funding from a range of providers has enabled us to cover core running costs, increased cleaning and the wages of the Centre Manager and the Activities and Bookings Manager including making this role full-time to reflect the increased workload. These roles have been vital in ensuring we were able to keep delivering for the entirety of lockdown - all be it virtually when we were physically not able to open our doors - and be able to hit the ground running when Government restrictions were lifted. It has been great to welcome friends old and new back into the Hall.
Time has been taken to focus on our recovery with strong financial planning aimed at increasing room bookings to enable us to continue to deliver community benefit. Improvements to our wonderful building have also been made so that the user experience has been improved.
I am proud to announce security in the building for the next 25 years through the successful negotiation of the lease with the Leicester Diocesan Board of Finance and All Saints with Holy Trinity, and we are also delighted to welcome Charnwood Arts who are now officially making the Hall their home.
As we move into the next year with the security of the National Lottery funding behind us, we are also taking time to reflect on our strategic governance and reviewing our effectiveness as a board to take on the challenges arising from Covid recovery. We remain fully committed to keeping Fearon Hall at the heart of our community as we face the long-term impact of this difficult year on our users’ well-being.
6) FINANCIAL REVIEW
The year to March 2021 was certainly an unusual one. When the realities of Covid started to become clear there were some initial concerns about how things would go for FCA. At that early stage there were enough resources to keep things going and offer services to the community for at least four months so the decision was taken to do exactly that. Very soon after that help from the government and local councils was made available and, along with National Lottery, the grants income across the year has been the most significant area on which to report.
The National Lottery awarded £70,000 for Covid funding, furlough claims totalled £10,647, Leicestershire County Council awarded £11,955 from its Communities Fund, and Charnwood Borough Council awarded £40,809 across a number of business support grants.
And along with the Strategic Partnership Grant of £30,489 Charnwood Borough Council also awarded a grant of £19,734 as match funding for the new kitchen. £25,050 of grants for the kitchen had been received in previous years and these were released into the accounts this year.
Due to lockdowns and other restrictions throughout the year income from other activities fell sharply. However, demand for the services offered has never been better and we expect to see income return to pre-Covid levels very quickly in the coming year.
Most overheads and running costs were reduced in the year compared to the previous year due to fewer activities. The only major increases were some legal costs regarding lease negotiations, the kitchen refurbishment costs , and an increase in wages due to making the part-time Activities Coordinator role into a full-time Activities and Bookings Manager role with Assistant Manager responsibilities.
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FEARON COMMUNITY ASSOCIATION LIMITED
TRUSTEES ANNUAL REPORT
7) RESERVES POLICY
The charity’s reserves policy is to hold, if possible, reserves equivalent to six months expenditure.
……………………………………………
Andy Rhodes Chair
……………………………………………
10 June 2021
Michael Welbourne Treasurer
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INDEPENDENT EXAMINER’S REPORT TO THE TRUSTEES OF
FEARON COMMUNITY ASSOCIATION LIMITED
I report to the charity trustees on my examination of the accounts of the company for the year ended 31 March 2021 which are set out on pages 6 to 13.
Responsibilities and Basis of Report
As the charity trustees of the company (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirement of the Companies Act 2006 (‘the 2006 Act’).
Having satisfied myself that the accounts of the company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your company’s accounts as carried out under section 145 of the Charities 2011 Act (‘the 2011 Act’). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
Independent Examiner’s Statement
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
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accounting records were not kept in respect of the company as required by section 386 of the 2006 Act; or
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the accounts do not accord with those records; or
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the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a ‘true and fair view’ which is not a matter considered as part of an independent examination; or
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the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities.
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
D R Gradon MA FCA Cound & Co LLP Chartered Accountants 1 Princes Court Royal Way Loughborough Leics LE11 5XR
10 June 2021
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FEARON COMMUNITY ASSOCIATION LIMITED
STATEMENT OF FINANCIAL ACTIVITIES
FOR THE YEAR ENDED 31 MARCH 2021
| INCOME FROM: Generated Funds Activities for generating funds Investment Income Charitable Activities Miscellaneous Income Cafe Income Council Grants Fundraising Events Other Grants Donations TOTAL INCOME EXPENDITURE: Charitable Activities Cafe Expenses & Wages Fundraising Event Expenses Operating Costs Pension provision adjustment Governance Costs Classes and Groups expenditure TOTAL EXPENDITURE Net Income (Expenditure) and Net Movement in Funds RECONCILIATION OF FUNDS TOTAL FUNDS BROUGHT FORWARD TOTAL FUNDS CARRIED FORWARD |
Unrestricted Unrestricted Funds Funds Notes 2021 2020 2 17016 68878 3 46 58 1500 1627 1806 21236 4a 93071 30489 964 3615 4b 127931 7819 5574 - __ _ £247908 £133722 5 12184 16512 120 2334 6 167737 100312 15 1014 (232) 7 13447 6636 7749 3720 202251 129282 45657 4440 (1634) (6074) __ _ £44023 £(1634) ___ |
|---|---|
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FEARON COMMUNITY ASSOCIATION LIMITED
BALANCE SHEET AS AT 31 MARCH 2021
FIXED ASSETS CURRENT ASSETS Debtors Cash Bank CREDITORS - Due within one period TOTAL NET ASSETS PROVISIONS FOR LIABILITIES AND CHARGES TOTAL ASSETS LESS CURRENT LIABILITIES UNRESTRICTED FUNDS Accumulated Fund |
Notes 2021 2020 10 11601 8 6757 9468 323 770 51242 34540 _ 58322 44778 9 9231 49091 34652 _ 60692 15 16669 £44023 _ 13 £44023 ___ |
7990 10126 _ 18116 19750 £(1634) __ £(1634) ______ |
|---|---|---|
For the year ending 31 March 2021 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Directors’ responsibilities:
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The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476;
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The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts;
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These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime of the Companies Act 2006.
These financial statements were approved by the Board on 10 June 2021 and signed on its behalf by
………………………………………
R E Thorpe (Trustee)
The information on pages 8 to 14 form an integral part of these financial statements.
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
1 ACCOUNTING POLICIES
a) Basis of Preparation of Financial Statements
These financial statements have been prepared in accordance with the Charities SORP (FRS102): “Accounting and Reporting by Charities, Statement of Recommended Practice applicable to Charities preparing their accounts in accordance with FRS102, the Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS102”) (effective 1 January 2015), FRS102 the Financial Reporting Standard applicable in the UK and Republic of Ireland (effective September 2015), The Charities Act 2011 and the Companies Act 2006. The disclosure requirements of section 1A of FRS102 have been applied other than where additional disclosure is required to show a true and fair view.
The Charity constitutes a public benefit under FRS102.
b) Company Status
The charity is a company limited by guarantee. The trustees of the company are named on page 1. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £10 per member of the charity.
c) Fund Accounting
General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.
Restricted funds are to be used for specific purposes as laid down by the donor and expenditure which meets these criteria is charged to the fund.
d) Incoming Resources
All incoming resources are included in the SOFA when the charity is legally entitled to the income and can be quantified with reasonable accuracy.
e) Resources Expended
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs to that category. Resources expended include attributable VAT which cannot be recovered.
f) Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at a rate calculated to write off the cost of each asset over its expected useful life as follows:
Fixtures, Fittings and Equipment - 3 Year Straight line
g) Stock
Stocks are valued at the lower of cost and net realisable value, after making due allowances for slow and obsolete moving items.
h) Pensions
The pension costs charged in the accounts represent the contributions payable by the charity during the year.
i) Foreign Currency
- Currencies are translated at the conversion rate on the balance sheet date.
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
| 2 3 4a 4b |
ACTIVITIES FOR GENERATING FUNDS Unrestricted Unrestricted Funds Funds Rents and Lease Income Comprise: 2021 2020 Room Rental Income 16883 66376 Photocopying 105 960 Classes and Groups 28 1542 _ £17016 £68878 _ INVESTMENT INCOME 2021 2020 Bank Interest £46 £58 COUNCIL GRANTS Unrestricted Unrestricted Funds Funds 2021 2020 CBC - Core Grant 30489 30489 CBC - Covid support Grants 28310 - CBC - Local Restriction Support Grant 12500 - LCC – Communities Fund Grant 11955 - LCC – Tackling Inequalities Fund 9817 - __ _ £93071 £30489 OTHER GRANTS 2021 2020 Lottery Grant 70000 - Kitchen Refurbishment 44784 - Activities Coordinator 2500 7500 Upcycle Your Life - 319 Furlough Claims 10647 - £127931 £7819 ___ |
ACTIVITIES FOR GENERATING FUNDS Unrestricted Unrestricted Funds Funds Rents and Lease Income Comprise: 2021 2020 Room Rental Income 16883 66376 Photocopying 105 960 Classes and Groups 28 1542 _ £17016 £68878 _ INVESTMENT INCOME 2021 2020 Bank Interest £46 £58 COUNCIL GRANTS Unrestricted Unrestricted Funds Funds 2021 2020 CBC - Core Grant 30489 30489 CBC - Covid support Grants 28310 - CBC - Local Restriction Support Grant 12500 - LCC – Communities Fund Grant 11955 - LCC – Tackling Inequalities Fund 9817 - __ _ £93071 £30489 OTHER GRANTS 2021 2020 Lottery Grant 70000 - Kitchen Refurbishment 44784 - Activities Coordinator 2500 7500 Upcycle Your Life - 319 Furlough Claims 10647 - £127931 £7819 ___ |
ACTIVITIES FOR GENERATING FUNDS Unrestricted Unrestricted Funds Funds Rents and Lease Income Comprise: 2021 2020 Room Rental Income 16883 66376 Photocopying 105 960 Classes and Groups 28 1542 _ £17016 £68878 _ INVESTMENT INCOME 2021 2020 Bank Interest £46 £58 COUNCIL GRANTS Unrestricted Unrestricted Funds Funds 2021 2020 CBC - Core Grant 30489 30489 CBC - Covid support Grants 28310 - CBC - Local Restriction Support Grant 12500 - LCC – Communities Fund Grant 11955 - LCC – Tackling Inequalities Fund 9817 - __ _ £93071 £30489 OTHER GRANTS 2021 2020 Lottery Grant 70000 - Kitchen Refurbishment 44784 - Activities Coordinator 2500 7500 Upcycle Your Life - 319 Furlough Claims 10647 - £127931 £7819 ___ |
|---|---|---|---|
| 2020 - - 7500 319 - __ £7819 ____ |
2020 |
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
| 5 6 7 |
CAFE COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Wages 9829 10892 Purchases & Cleaning 2355 5620 _ £12184 £16512 _ OPERATING COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Advertising & Marketing - 100 Repairs and Refurbishment 69182 15957 Cleaning Materials & Wages 15792 7692 Salaries 23088 16143 Staff Pension 1407 970 Licences 1566 2097 Light and Heat 8657 9914 Insurance 4562 5112 Water 1475 2136 Telephone 1272 950 Postage and Stationery 1731 1025 Photocopying 921 2602 Bank Charges - 248 Miscellaneous (canteen, volunteers’ lunches etc) 3290 4781 Rent 1 1 Loss on Exchange 190 (136) Depreciation 5115 1232 Bad Debt (Recovered 150 1506 Hall Management Fees 27500 24833 Training 75 224 Computer Expenses 1763 1598 Loss on Disposal of Assets - 1327 _ £167737 £100312 GOVERNANCE COSTS 2021 2020 Accountancy 1513 1813 Bookkeeping 4094 4203 Legal and Professional Fees 7840 620 _ £13447 £6636 __ |
CAFE COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Wages 9829 10892 Purchases & Cleaning 2355 5620 _ £12184 £16512 _ OPERATING COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Advertising & Marketing - 100 Repairs and Refurbishment 69182 15957 Cleaning Materials & Wages 15792 7692 Salaries 23088 16143 Staff Pension 1407 970 Licences 1566 2097 Light and Heat 8657 9914 Insurance 4562 5112 Water 1475 2136 Telephone 1272 950 Postage and Stationery 1731 1025 Photocopying 921 2602 Bank Charges - 248 Miscellaneous (canteen, volunteers’ lunches etc) 3290 4781 Rent 1 1 Loss on Exchange 190 (136) Depreciation 5115 1232 Bad Debt (Recovered 150 1506 Hall Management Fees 27500 24833 Training 75 224 Computer Expenses 1763 1598 Loss on Disposal of Assets - 1327 _ £167737 £100312 GOVERNANCE COSTS 2021 2020 Accountancy 1513 1813 Bookkeeping 4094 4203 Legal and Professional Fees 7840 620 _ £13447 £6636 __ |
CAFE COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Wages 9829 10892 Purchases & Cleaning 2355 5620 _ £12184 £16512 _ OPERATING COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Advertising & Marketing - 100 Repairs and Refurbishment 69182 15957 Cleaning Materials & Wages 15792 7692 Salaries 23088 16143 Staff Pension 1407 970 Licences 1566 2097 Light and Heat 8657 9914 Insurance 4562 5112 Water 1475 2136 Telephone 1272 950 Postage and Stationery 1731 1025 Photocopying 921 2602 Bank Charges - 248 Miscellaneous (canteen, volunteers’ lunches etc) 3290 4781 Rent 1 1 Loss on Exchange 190 (136) Depreciation 5115 1232 Bad Debt (Recovered 150 1506 Hall Management Fees 27500 24833 Training 75 224 Computer Expenses 1763 1598 Loss on Disposal of Assets - 1327 _ £167737 £100312 GOVERNANCE COSTS 2021 2020 Accountancy 1513 1813 Bookkeeping 4094 4203 Legal and Professional Fees 7840 620 _ £13447 £6636 __ |
CAFE COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Wages 9829 10892 Purchases & Cleaning 2355 5620 _ £12184 £16512 _ OPERATING COSTS Unrestricted Unrestricted Funds Funds 2021 2020 Advertising & Marketing - 100 Repairs and Refurbishment 69182 15957 Cleaning Materials & Wages 15792 7692 Salaries 23088 16143 Staff Pension 1407 970 Licences 1566 2097 Light and Heat 8657 9914 Insurance 4562 5112 Water 1475 2136 Telephone 1272 950 Postage and Stationery 1731 1025 Photocopying 921 2602 Bank Charges - 248 Miscellaneous (canteen, volunteers’ lunches etc) 3290 4781 Rent 1 1 Loss on Exchange 190 (136) Depreciation 5115 1232 Bad Debt (Recovered 150 1506 Hall Management Fees 27500 24833 Training 75 224 Computer Expenses 1763 1598 Loss on Disposal of Assets - 1327 _ £167737 £100312 GOVERNANCE COSTS 2021 2020 Accountancy 1513 1813 Bookkeeping 4094 4203 Legal and Professional Fees 7840 620 _ £13447 £6636 __ |
|---|---|---|---|---|
| 2020 1813 4203 620 _ £6636 ___ |
2020 |
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
| 8 9 |
DEBTORS Hiring of Hall Prepayments Other Debtors CREDITORS- Amounts falling due within one year Room Hire in Advance Accruals Suppliers Kitchen Refurbishment Costs Other Creditors |
2021 4437 1457 863 _ £6757 2020 1666 3075 2251 0 2239 __ £9231 _____ |
2020 7281 1310 877 _ £9468 2020 2480 3381 376 25050 3365 __ £34652 ______ |
2020 7281 1310 877 _ £9468 ___ |
|---|---|---|---|---|
10 FIXED ASSETS
a) Leasehold Property
Fearon Hall is owned by the PCC of All Saints with Holy Trinity with the Leicester Diocesan Board of Finance.
Under a lease agreement dated 29[th] March 2018 the hall is let to Fearon Community Association Ltd for a nominal rent of £1 for a period of three years.
Any property refurbishments are written off in full in the year.
| b) | Tangible Fixed Assets Cost at 1 April 2020 Additions in Year Disposals in Year At 31 March 2021 Depreciation At 1 April 2020 Charge for the Year Eliminated on disposal At 31 March 2021 Net Book Value At 31 March 2021 Net Book Value at 31 March 2020 |
Fixtures Fittings & Equipment Total 14552 14552 8726 8726 (0) 0 _ £23278 £23278 _ 6562 6562 5115 5115 (0) 0 £11667 £11667 _ £11601 £11601 __ _ £7990 £7990 ___ |
Total 14552 8726 0 _____ |
|---|---|---|---|
| £7990 |
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
11 TRUSTEES REMUNERATION & RELATED PARTY TRANSACTIONS
M L Welbourne is a director of Coalraven Ltd, which provided bookkeeping services to the charity. None of the other trustees received any fees or expense payments.
| 12 13 |
STAFF COSTS Salaries Pension Costs Average number of full time equivalent employees No member of staff earned over £60000 per annum STATEMENT OF FUNDS Unrestricted Funds |
At 31 March 2020 B/Fwd £(1634) _____ |
Income 247908 ______ |
Expenditure 202251 _ |
2021 71539 1407 _ £72946 5 __ - _ Transfers - _____ |
2020 51868 970 _ £52838 3 __ - _____ At 31 March 2021 C/Fwd |
2020 |
|---|---|---|---|---|---|---|---|
| 44022 ______ |
14 CONTROL
The Charity is controlled by its Members.
15 THE PENSIONS TRUST – THE GROWTH PLAN
The company participates in the scheme, a multi-employer scheme which provides benefits to some 950 nonassociated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme.
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.
The scheme is classified as a 'last-man standing arrangement'. Therefore the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.
A full actuarial valuation for the scheme was carried out at 30 September 2017. This valuation showed assets of £795m, liabilities of £926m and a deficit of £131m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
Deficit Contributions
From 1 April 2019 to 31 January 2025: £11,243,000 per annum (payable monthly and increasing by 3% each on 1[st] April)
Unless a concession has been agreed with the Trustee the term to 31 January 2025 applies. Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2014. This valuation showed assets of £793m, liabilities of £970m and a deficit of £177m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:
Deficit Contributions
From 1 April 2016 to 30 September 2025:
£12,945,440 per annum (payable monthly and increasing by 3% each on 1st April)
From 1 April 2016 to 30 September 2028:
£54,560 per annum
(payable monthly and increasing by 3% each on 1st April)
The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities.
Where the scheme is in deficit and where the company has agreed to a deficit funding arrangement the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.
PRESENT VALUES OF PROVISION
| 31 | March 2021 | 31 March 2020 | 31 March 2019 | |
|---|---|---|---|---|
| (£s) | (£s) | (£s) | ||
| Present value of provision | 16669 | 19,750 | 23,958 |
RECONCILIATION OF OPENING AND CLOSING PROVISIONS
| Period Ending | Period Ending | |
|---|---|---|
| 31 March 2021 | 31 March 2020 | |
| (£s) | (£s) | |
| Provision at start of period | 19750 | 23,958 |
| Unwinding of the discount factor (interest expense) | 444 | 304 |
| Deficit contribution paid | (4095) | (3,976) |
| Remeasurements - impact of any change in assumptions | 570 | (536) |
| Remeasurements - amendments to the contribution schedule | - | - |
| Provision at end of period | 16669 | 19750 |
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FEARON COMMUNITY ASSOCIATION LIMITED
NOTES TO THE ACCOUNTS – FOR THE YEAR ENDED 31 MARCH 2021
The following schedule details and deficit contributions agreed between the company and the scheme at each year end period:
| Year | ending | 31 | March | 2021 | 31 | March 2020 | 31 March 2019 |
|---|---|---|---|---|---|---|---|
| Year | 1 | 4218 | 4,095 | 3,976 | |||
| Year | 2 | 4345 | 4,218 | 4,095 | |||
| Year | 3 | 4475 | 4,345 | 3,218 | |||
| Year | 4 | 3841 | 4,475 | 4,345 | |||
| Year | 5 | 3,841 | 4,475 | ||||
| Year | 6 | 3,841 | |||||
| Year | 7 | ||||||
| Year | 8 | ||||||
| Year | 9 | ||||||
| Year | 10 |