**Charity Registration No. 1137686**
**Company Registration No. 07309173 (England and Wales)**
## **HOPE INTO ACTION UK**
## **ANNUAL REPORT AND FINANCIAL STATEMENTS**
**FOR THE YEAR ENDED 31 MARCH 2021**
## **HOPE INTO ACTION UK**
## **LEGAL AND ADMINISTRATIVE INFORMATION**
**Trustees** Mr I G Billage (Appointed 4 February 2021) Mrs Y A Emery Mr G Howard Mr H J Kettel Mrs D J Nash Mr M Oldaker Revd D Tidball (Appointed 15 May 2020) **Secretary** Mr E R Walker **Charity number** 1137686 **Company number** 07309173 **Registered office** 26 North Street Peterborough United Kingdom PE1 2RA **Auditor** Azets Audit Services Ruthlyn House 90 Lincoln Road Peterborough United Kingdom PE1 2SP **Bankers** Lloyds Bank plc 65 High Street Stamford Lincolnshire United Kingdom PE9 2AT The Co-operative Bank Business Customer Services P.O. Box 250 Skelmersdale Wigan United Kingdom WN8 6WT
CAF Bank 25 Kings Hill Avenue West Malling Kent United Kingdom ME19 4JQ
## **HOPE INTO ACTION UK**
## **CONTENTS**
||**Page**|
|---|---|
|Trustees' report|1 - 5|
|Statement of trustees' responsibilities|6|
|Independent auditor's report|7 - 9|
|Statement of financial activities|10 - 11|
|Balance sheet|12 - 13|
|Statement of cash flows|14|
|Notes to the financial statements|15 - 31|
## **HOPE INTO ACTION UK**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
The Trustees present their report and accounts for the year ended 31 March 2021.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006 and "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**
The charity's objects are to relieve poverty or financial hardship in England. Hope into Action works to enable churches, using their resources and matched with others raised by Hope into Action, to provide homes and support for the vulnerable and homeless in their community.
The charity aims to use investment resources to buy houses for 2-3 tenants. Each home is linked to a local church that provides a positive community, friendship, befriending/mentoring and support. Also included is a professional Empowerment Worker who provides expertise to the tenants in benefits, tenancies, jobs, liaising with other agencies and action plans.
Each house is run in conjunction with a local church who sign a five year partnership with us committing to build long-term, holistic relationships with the tenants who were formerly homeless.
Enabling church members to outwork their passions for the marginalised in a relational manner is a core part of our mission. The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
## **Achievements and performance**
We entered the new financial year in the early stages of the first Corona Virus lock down. We were worried about our tenants being at risk to the disease. We had to shut out offices, cancel our conference, radically change our operations and procedures, worried about whether our finances would hold up, all housing purchasing went into the sand. Mostly, however, we were really worried about our tenants recognizing, as we did, that the poor and vulnerable tend to be over-represented in any ‘disaster’ or public health crisis.
## **How did we respond?**
_Offices_ : We shut our offices and, like the rest of the country, worked from home.
_Tenant outreach_ : We adapted all our procedures, putting the safety of our tenants and staff first. We stayed in touch via whatsapp, walks, phone calls.
We increased our prayer for the tenants, praying every day for them and began new, regional prayer meetings which are continuing to this day. I am convinced this has been a significant gain for us. Not just spiritually but in bringing the network together for pyscho-social and professional support.
_House Inspections_ : We asked our tenants to do inspections on whatsapp. Now they were showing us round their home and many felt more empowered through the process.
_Church relationship and Meetings_ : We had to cancel our conference but we instigated monthly on-line meetings with church ‘friendship and support groups’. This covers a range of topics from shame to mental health, suicide prevention etc
_Appeal_ : We launched an appeal in early April. This lead to a very strong response and coupled with our Christmas match-funded appeal meant we have ended the financial year with a surplus when we worried we might lose income.
- 1 -
## **HOPE INTO ACTION UK**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
_Call to Alms_ : At the start of the pandemic we felt we should be speaking into it. We took time to discuss and pray what our messages should be. In the end we felt it should be the same as before but just more loudly and more confident. We launched a ‘call to alms’ campaign which we believe was successful. We were advocating on behalf of the homeless, arguing that with night shelters no longer safe, now was the time for churches to step-up and give the homeless a home. We were joined by people like: Jon Kurt who works for the rough sleepers unit in central Government and the Bishop of Kensington who was vice chair of the Archbishops Housing Commission. Over 200 people attended our call to alms zoom meetings.
Most excitingly this has lead to new franchisees: Corby and Dover have signed franchisee agreements; Rochester, Bristol, Newark have been offered and will also sign soon. Behind them: Leicester, Beverly, Canterbury, Blackburn and Ilfracombe are considering it. Additionally it has lead to interest from many churches in towns where we currently work. The fruits from that call to alms will be seen for years to come.
_Investors_ : The number of pledges we have had from investors has suddenly grown. We now have a spreadsheet of our investors with over £2,000,000 pledged. It has completely changed our dynamic and offering to churches because we can say to them: ‘If you want to partner with us we can probably find investors to buy the first house.’ Whereas before we were saying ‘If you want to partner with us we will work with you to raise the investment.’ We are more agile as an organization as a result.
_House Purchasing_ : Initially all house purchasing stalled and went into the sand. Viewings were not permitted. However since the initial few months we have moved much faster. We’ve opened 14 homes! Our capacity for tenants is now 277! Every one of them in partnership with a church.
_Staffing_ : I am delighted with how the staff have responded. They have been professional, adaptive, caring. We recruited an IT and systems manager. While a few caught covid, our actual sickness levels were down on the year before.
_Mini-Grants_ : We won some extraordinary funding from Homeless Link and, as such, were able to provide ‘mini-grants’ to our franchisees to support their growth.
_Finances_ : Our expenditure increased by 6% while our growth in houses was 15%. This we hope is an example of the economies of scale which comes with our approach.
- 2 -
## **HOPE INTO ACTION UK**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Growth update**
||_1 st April_
_2020_
_(Project start)_|
_1 st April 2021_|
_Comment_|
|---|---|---|---|
|_# of churches_|68|71|A number of our homes are run in partnership with
more than 1 church. We have agreed to include
those in a review, so this number will increase
over the next few months as we ‘re-count’|
|_# of homes_|76|87|We had 20 houses in the pipeline.|
|_#_
_of_
_tenants_
_being_
_housed/total capacity_|
211/226|231/277|This shows the growth in beds, we have capacity
for. Occupancy, as an overall % has dropped but
has picked up into the new financial year.|
|_# of full franchisees_
_towns_|
11|12|Dover has signed an agreement, with Rochester
and Bristol soon to follow.|
|_# of full franchisees_
_with homes open_|
8|10|Southampton
and
Bournemouth
have
both
opened their 1 st home. Southampton has gone on
to open a 2 nd .|
|_# of franchise lite towns_|10|13|Oakham, Ashford and Corby have signed.|
|_# of franchise lite with_
_homes open_|
10|11|House opened in Oakham. Ashford and Corby will
soon open.|
|_Total towns (including 4_
_line managed)_|
25|27|Dover and Corby have signed. Rochester, Bristol,
Newark have passed assessment.|
|_Total towns with homes_
_open_|
22|25|Oakham, Bournemouth, Southampton.|
## **Outcomes**
I am delighted to show you that, despite all the challenges, we are able to hold up strong outcomes this year.
## **Strategic Review**
Mark Kitson was also employed to help us think through our strategic review. We have a 2025 vision statement of getting to 200 churches by 2025, with 500 tenants and each of them loved by the church. Mark spent time with the teams, with individuals and trustees and we have now put together some key steps which will help us build the capacity to support such growth.
## **Other issues**
It is important to report we have had 4 difficult safeguarding issues:
- One was an accusation against a franchise lead from an ex tenant. This was investigated by an independent consultant and a report filed to the Charity Commission.
- A tenant died in one of our homes. He died of liver failure in the dignity of his own home. We completed an internal review, were confident we did all we could and reported it to the Charity Commission.
- Another tenant died of COVID, which he caught whilst in hospital for another illness. As this was in the care of our Eastbourne Franchise: Kingdom Way Trust they have dealt with the following up including organizing a funeral.
- An ex-tenant was convicted for rape. This was the first time we have ever faced such a situation. We asked Thirtyone:eight to conduct external review in response.
In all of these we have informed the Charity Commission.
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## **HOPE INTO ACTION UK**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Financial review**
The Trustees’ policy with regard to reserves is to seek to maintain unrestricted funds, other than those designated from time to time for specific purposes, at a level sufficient to provide the charity with enough working capital to carry on its existing activities successfully for two to four months. This will enable the trustees to ensure continuity of activities and honour contractual liabilities.
The Trustees have noted that the current level of free reserves is within that range and if you include the restricted funds which also cover core costs the total is closer to the three month level. We have created two new designated funds of £100,000 each which are to enable us to make a part repayment on the mortgage with Kingdom Bank in July 2021 and to invest in additional property in the future. In the unfortunate event of funding levels dropping to dangerous levels then the Trustees would have to consider the sale of one of our houses or re-mortgage a property.
The net income for 2021 is £457,431 (2020: £233,844) which includes donations of various restricted funds. The main movement on restricted funds was an additional donation of £178,219 (2020: £90,000) for the building of a property. This should be excluded for a better year on year comparative as this income does not relate to core operations; the adjusted surplus for 2021 would then be £279,212 (2020: £143,844). This income has been significantly boosted by an increase in individual giving which has enabled the charity to achieve a greater balance of income from different sources, a key objective of the trustees; income from individuals was 28% (2020: 23%), housing/franchise 30% (2020: 39%) and grants 37% (2020: 38%).
Our costs ("charitable activities”) have only grown by 7% which is a lower percentage than the growth in
number of homes (14%).
We believe that the current COVID-19 pandemic will make the fundraising environment more challenging and also restrict the opportunity to attend Christian festivals, which was a significant factor in our 2020 income. We also expect the turbulence in the financial markets to present challenges in the grant fundraising environment.
However, Hope Into Action UK has a strong support base and this has been recently demonstrated by two very successful campaigns during the pandemic. We own several properties and continue to innovate and develop.
The Trustees have assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
## **Structure, governance and management**
The charity is a company limited by guarantee and a registered charity governed by its articles and memorandum of association.
The Trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
|Mr I G Billage|(Appointed 4 February 2021)|
|---|---|
|Mrs Y A Emery||
|Mr G Howard||
|Mr H J Kettel||
|Revd D J Kinder|(Resigned 15 May 2020)|
|Mrs D J Nash||
|Mr M Oldaker||
|Revd D Tidball|(Appointed 15 May 2020)|
The existing Trustees have the power to appoint new trustees.
None of the Trustees has any beneficial interest in the company. All of the Trustees are members of the company and guarantee to contribute £1 in the event of a winding up.
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## **HOPE INTO ACTION UK**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
The trustees' r eport was approved by the Board of Trustees.
## **Mr G Howard**
Trustee Dated: 8 July 2021
- 5 -
## **HOPE INTO ACTION UK**
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
## _**FOR THE YEAR ENDED 31 MARCH 2021**_
The Trustees, who are also the directors of Hope Into Action UK for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK 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 inappropriate to presume that the charity will continue in operation.
The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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## **HOPE INTO ACTION UK**
## **INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF HOPE INTO ACTION UK**
## **Opinion**
We have audited the financial statements of Hope Into Action UK (the ‘charity’) for the year ended 31 March 2021 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
- give a true and fair view of the state of the charitable company's affairs as at 31 March 2021 and of its incoming resources and application of resources, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.
## **Other information**
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement 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 nothing to report in this regard.
- 7 -
## **HOPE INTO ACTION UK**
## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF HOPE INTO ACTION UK**
## **Matters on which we are required to report by exception**
We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:
- the information given in the financial statements is inconsistent in any material respect with the trustees' r eport; or
- sufficient accounting records have not been kept; or
- the financial statements are not in agreement with the accounting records; or
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of Trustees**
As explained more fully in the s tatement of trustees' r esponsibilities, the Trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the charity’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 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**
We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: http s :// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
- 8 -
## **HOPE INTO ACTION UK**
## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF HOPE INTO ACTION UK**
## **Extent to which the audit was considered capable of detecting irregularities, including fraud**
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
- Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
- Reviewing minutes of meetings of those charged with governance;
- Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
- Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of noncompliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
|**Mr Mark Jackson FCA DChA (Senior Statutory Auditor)**||
|---|---|
|**for and on behalf of Azets Audit Services**|27 July 2021|
|**Chartered Accountants**||
|**Statutory Auditor**|Ruthlyn House|
||90 Lincoln Road|
||Peterborough|
||United Kingdom|
||PE1 2SP|
Azets Audit Services is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under of section 1212 of the Companies Act 2006.
- 9 -
## **HOPE INTO ACTION UK**
## **STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT**
## _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**Unrestricted Designated**
**Restricted**
**funds**
**funds**
**funds**
**2021**
**2021**
**2021**
**Notes**
**£**
**£**
**£**
**Income from:**
Donations and legacies
**3**
762,225
-
447,664
Charitable activities
**4**
541,144
-
-
Investments
**5**
9,266
-
-
**Total income**
1,312,635
-
447,664
**Expenditure on:**
Raising funds
**6**
26,244
-
-
Charitable activities
**7**
922,318
27,510
326,796
**Total resources expended**
948,562
27,510
326,796
**Net incoming resources before transfers**
364,073
(27,510)
120,868|**Total**Unrestricted Designated
funds
funds
**2021**
2020
2020
**£**
**£**
**£**
1,209,889
574,713
-
541,144
528,832
-
9,266
9,303
-
1,760,299
1,112,848
-
26,244
29,407
-
1,276,624
838,323
22,695
1,302,868
867,730
22,695
457,431
245,118
(22,695)|Restricted
funds
2020
**£**
342,046
-
-
342,046
-
330,625
330,625
11,421|Total
2020
**£**
916,759
528,832
9,303
1,454,894
29,407
1,191,643
1,221,050
233,844|
|---|---|---|---|
- 10 -
## **HOPE INTO ACTION UK**
## **STATEMENT OF FINANCIAL ACTIVITIES (CONTINUED) INCLUDING INCOME AND EXPENDITURE ACCOUNT**
## _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**Unrestricted Designated**
**Restricted**
**funds**
**funds**
**funds**
**2021**
**2021**
**2021**
**Notes**
**£**
**£**
**£**
**Net incoming resources before transfers**
364,073
(27,510)
120,868
Gross transfers between funds
(244,606)
369,706
(125,100)
**Net income/(expenditure) for the year/**
**Net movement in funds**
119,467
342,196
(4,232)
Fund balances at 1 April 2020
310,479
1,171,967
550,809
**Fund balances at 31 March 2021**
429,946
1,514,163
546,577|**Total**Unrestricted Designated
funds
funds
**2021**
2020
2020
**£**
**£**
**£**
457,431
245,118
(22,695)
-
(41,464)
41,464
457,431
203,654
18,769
2,033,255
106,825
1,153,198
2,490,686
310,479
1,171,967|Restricted
funds
2020
**£**
11,421
-
11,421
539,388
550,809|Total
2020
**£**
233,844
-
233,844
1,799,411
2,033,255|
|---|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.
- 11 -
## **HOPE INTO ACTION UK**
## **BALANCE SHEET**
## _**AS AT 31 MARCH 2021**_
|**Notes**
**Fixed assets**
Tangible assets
**11**
**Current assets**
Stocks
**12**
Debtors
**13**
Cash at bank and in hand
**Creditors: amounts falling due within**
**one year**
**15**
Net current assets
**Total assets less current liabilities**
**Creditors: amounts falling due after**
**more than one year**
**16**
**Net assets**
**Income funds**
Restricted funds
Property
Specific projects
Other including core costs
**19**
Unrestricted funds-general
Designated funds
**20**
Other charitable funds|**2021**
**£**
**£**
1,781,670
-
93,818
1,092,353
1,186,171
(97,395)
1,088,776
2,870,446
(379,760)
2,490,686
77,046
460,362
9,169
546,577
1,514,163
429,946
2,490,686|**2020**
**£**
**£**
1,676,288
12,908
35,660
756,366
804,934
(55,998)
748,936
2,425,224
(391,969)
2,033,255
203,152
339,748
7,909
550,809
1,171,967
310,479
2,033,255|
|---|---|---|
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## **HOPE INTO ACTION UK**
## **BALANCE SHEET (CONTINUED)**
## _**AS AT 31 MARCH 2021**_
The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 March 2021, although an audit has been carried out under section 144 of the Charities Act 2011.
The directors acknowledge their responsibilities for ensuring that the charity keeps accounting records which comply with section 386 of the Act and for preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of the financial year and of its incoming resources and application of resources, including its income and expenditure, for the financial year in accordance with the requirements of sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 8 July 2021 and are signed on its behalf by:
Mr G Howard
## **Trustee**
## **Company Registration No. 07309173**
- 13 -
## **HOPE INTO ACTION UK**
## **STATEMENT OF CASH FLOWS** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**Notes**
**Cash flows from operating activities**
Cash generated from operations
**25**
**Investing activities**
Purchase of tangible fixed assets
Investment income received
**Net cash used in investing activities**
**Financing activities**
Repayment of bank loans
**Net cash used in financing activities**
**Net increase in cash and cash equivalents**
Cash and cash equivalents at beginning of year
**Cash and cash equivalents at end of year**|**2021**
**£**
**£**
472,928
(133,998)
9,266
(124,732)
(12,209)
(12,209)
335,987
756,366
1,092,353|**2020**
**£**
**£**
196,904
(10,063)
9,303
(760)
(11,401)
(11,401)
184,743
571,623
756,366|
|---|---|---|
- 14 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
## **Charity information**
Hope Into Action UK is a private company limited by guarantee incorporated in England and Wales. The registered office is 26 North Street, Peterborough, PE1 2RA, United Kingdom.
## **1.1 Accounting convention**
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006 and "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)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling , which is the functional currency of the charity. Monetary a mounts in these financial statements are rounded to the nearest £.
The accounts have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
## **1.2 Going concern**
At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements. In arriving at this conclusion, the Trustees have considered the impact of the Coronavirus pandemic on the charity. The Trustees are confident that there will be limited impact on income due to the pandemic and they have taken appropriate action to mitigate costs.
## **1.3 Charitable funds**
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the accounts.
## **1.4 Income**
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
- 15 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
**(Continued)**
## **1.5 Expenditure**
All resources expended are accounted for gross, and in the period in which they are incurred. VAT is not recoverable by the charity and as such is included in the relevant costs in the Statement of Financial Activities.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity.
All costs are allocated between the expenditure categories of the Statement of Financial Activities on a basis designed to reflect the use of the resource.
## **1.6 Tangible fixed assets**
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings 1% p.a. straight line on buildings Shared ownership properties 1% p.a. straight line Equipment 33% p.a. straight line Motor vehicles 33% p.a. straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in net income/(expenditure) for the year.
Shared ownership housing properties are included in fixed assets at the percentage of the charity's share in the ownership. Any payment for an increase in percentage of share is treated as an addition. Any payments received for a decrease in shares is treated similar to the sale of property.
## **1.7 Impairment of fixed assets**
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any ) .
## **1.8 Stocks**
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell . Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
- 16 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
**(Continued)**
## **1.9 Cash and cash equivalents**
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
## **1.10 Financial instruments**
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
## _**Basic financial assets**_
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
## _**Basic financial liabilities**_
Basic financial liabilities, including creditors and bank loans 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
## _**Derecognition of financial liabilities**_
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
## **1.11 Employee benefits**
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
## **1.12 Retirement benefits**
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
- 17 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **2 Critical accounting estimates and judgements**
In the application of the charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
## **3 Donations and legacies**
|**Unrestricted Restricted**
**funds**
**funds**
**2021**
**2021**
**£**
**£**
Donations and gifts
380,381
178,219
Grants receivable for core
activities
381,844
269,445
762,225
447,664
**Donations and gifts**
Donations individuals
310,505
178,219
Donations other
1,726
-
Churches
30,123
-
Gift aid reclaimed
34,395
-
Individuals - in memory
3,632
-
380,381
178,219|**Total**Unrestricted
funds
**2021**
2020
**£**
£
558,600
318,490
651,289
256,223
1,209,889
574,713
488,724
263,544
1,726
5,540
30,123
26,258
34,395
23,148
3,632
-
558,600
318,490|Restricted
funds
2020
£
90,000
252,046
342,046
90,000
-
-
-
-
90,000|Total
2020
£
408,490
508,269
916,759
353,544
5,540
26,258
23,148
-
408,490|
|---|---|---|---|
- 18 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**Donations and legacies**
**Unrestricted Restricted**
**funds**
**funds**
**2021**
**2021**
**£**
**£**
**Grants receivable for core activities**
All Churches Trust
-
9,258
Andrews Charitable Trust
5,375
-
Big Lottery Funding
-
40,908
Cambridge City Council
-
-
Cambridge Community Fund
-
3,850
Charities Trust
-
-
Charles Hayward Foundation
-
25,000
Churches Together
1,000
-
Daughters of Jesus
-
5,000
Didymus Charity
-
9,200
Dominic Beer Trust
-
1,100
F G Charitable Trust
4,000
-
Garfield Weston Foundation
50,000
-
Glasspool Charity Trust
-
300
Haberdashers
3,750
-
Henry Smith Foundation
-
-
Homeless Link
-
80,000
Hope Aid Charitable Trust
10,000
-
Hummingbird
10,000
-
Jerusalem Trust
40,000
-
Jessie Spencer Trust
-
-
LandAid
-
6,750
Langho Charitable Trust
1,000
-
Lankelly Chase
71,545
-
Legal & General Group
-
3,000
Lloyds Foundation
-
6,470
Maclellan Foundation
-
45,809
Maurice & Hilda Laing
Charitable Trust
25,000
-
Mirembe Charitable Trust
3,120
-
Norfolk Community Foundation
-
-
Nottingham Community Fund
-
1,900
Nottingham Community
Foundation
-
1,500
Paul Bassham Trust
-
2,000
PCC COVID-19
500
-
Pears Foundation
40,000
-
Police & Crime Commissioner
for Norfolk
4,324
-
Porticus Foundation
45,000
-
The Big Give
12,500
-
327,114
242,045|**(Continued)**
**Total**Unrestricted Restricted
Total
funds
funds
**2021**
2020
2020
2020
**£**
£
£
£
9,258
-
21,298
21,298
5,375
-
-
-
40,908
-
40,144
40,144
-
-
19,766
19,766
3,850
-
-
-
-
-
18,890
18,890
25,000
-
18,000
18,000
1,000
-
-
-
5,000
-
-
-
9,200
-
9,200
9,200
1,100
-
1,140
1,140
4,000
-
-
-
50,000
50,000
-
50,000
300
-
300
300
3,750
-
-
-
-
-
26,300
26,300
80,000
-
-
-
10,000
-
-
-
10,000
-
-
-
40,000
30,000
-
30,000
-
-
500
500
6,750
-
32,500
32,500
1,000
-
-
-
71,545
51,500
-
51,500
3,000
-
-
-
6,470
-
2,452
2,452
45,809
49,571
-
49,571
25,000
-
-
-
3,120
-
-
-
-
-
1,500
1,500
1,900
-
-
-
1,500
-
-
-
2,000
-
2,000
2,000
500
-
-
-
40,000
30,000
-
30,000
4,324
-
-
-
45,000
45,000
-
45,000
12,500
-
1,000
1,000
569,159
256,071
194,990
451,061|
|---|---|
## **3 Donations and legacies**
- 19 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**3**
**Donations and legacies**
**Unrestricted Restricted**
**funds**
**funds**
**general**
**2021**
**2021**
**£**
**£**
**Grants receivable for core activities continued**
The Ebyon Trust
-
1,500
The Mercers' Company
37,230
-
The Morrisons Foundation
-
900
The Orr Mackintosh Foundation
1,000
-
The Screwfix Foundation
5,000
-
Tudor Trust
1,500
22,000
Vardy Foundation
10,000
3,000
Other
-
-
381,844
269,445
**4**
**Charitable activities**
Book sales
Provision of housing
Franchise income
**5**
**Investments**
Rental income
Interest receivable|**Total**Unrestricted
funds
general
**2021**
2020
**£**
£
1,500
-
37,230
-
900
-
1,000
-
5,000
-
23,500
-
13,000
-
-
152
651,289
256,223|**(Continued)**
Restricted
Total
funds
2020
2020
£
£
2,166
2,166
-
-
-
-
-
-
-
-
20,000
20,000
-
-
11,000
11,152
252,046
508,269
**2021**
**2020**
**£**
**£**
3,212
80
510,650
497,915
27,282
30,837
541,144
528,832
**2021**
**2020**
**£**
**£**
8,954
8,615
312
688
9,266
9,303|
|---|---|---|
- 20 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **6 Raising funds**
|**7**|Fundraising and publicity
Costs of generating donations and legacies
**Charitable activities**
Staff costs
Depreciation and impairment
House rental and running costs
House maintenance and equipment
Franchising expenses
Volunteer expenses
Client support
Property refurbishment
General rates
Norwich support costs
Nottingham support costs
Bad debt provision
Peterborough support costs
Cambridge support costs
Books
Share of support costs (see note 8)
Share of governance costs (see note 8)
**Analysis by fund**
Unrestricted funds - general
Designated funds
Restricted funds|**2021**
**£**
26,244
26,244
**2021**
**£**
737,165
28,616
208,404
13,575
48,025
5,657
5,413
90,971
5,312
3,932
6,156
13,956
1,942
5,747
2,435
1,177,306
96,294
3,024
1,276,624
922,318
27,510
326,796
1,276,624|**2020**
**£**
29,407
29,407
**2020**
**£**
638,545
23,801
197,179
15,638
44,065
10,971
4,377
94,513
6,541
6,713
6,694
48,632
2,828
9,147
1,079
1,110,723
78,400
2,520
1,191,643
838,323
22,695
330,625
1,191,643|
|---|---|---|---|
- 21 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **8 Support costs**
|**Support**
**costs**
**Governance**
**costs**
**£**
**£**
Property costs
1,674
-
Loan interest
7,804
-
Marketing
897
-
Franchising expenses
3,227
-
Light and heat
1,072
-
Travel and subsistence
3,817
-
Printing, postage and
stationery
3,279
-
Telephone and fax
10,713
-
Computer and software
37,782
-
Insurance
7,057
-
Refreshments
45
-
Sundry expenses
4,073
-
Legal fees
13,482
-
Accountancy fees
1,372
-
Audit fees
-
3,024
96,294
3,024
Analysed between
Charitable activities
96,294
3,024|**2021**
Support
costs
Governance
costs
**£**
£
£
1,674
314
-
7,804
6,005
-
897
1,308
-
3,227
714
-
1,072
2,544
-
3,817
7,892
-
3,279
2,899
-
10,713
10,258
-
37,782
31,436
-
7,057
3,698
-
45
638
-
4,073
930
-
13,482
7,894
-
1,372
1,870
-
3,024
-
2,520
99,318
78,400
2,520
99,318
78,400
2,520|2020
£
314
6,005
1,308
714
2,544
7,892
2,899
10,258
31,436
3,698
638
930
7,894
1,870
2,520
80,920
80,920|
|---|---|---|
Governance costs includes payments to the auditors of £ 3,024 (2020- £ 2,520 ) for audit fees.
## **9 Trustees**
None of the Trustees (or any persons connected with them) received any remuneration during the year, but 1 (2020 - 1) of them w as reimbursed a total of £ 78 for travelling expenses (2020- £132 ).
- 22 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **10 Employees**
## **Number of employees**
The average monthly number of employees during the year was:
|Average number of employees
**Employment costs**
Wages and salaries
Social security costs
Other pension costs|**2021**
**Number**
38
**2021**
**£**
651,986
36,058
49,121
737,165|**2020**
**Number**
33
**2020**
**£**
568,950
28,838
40,757
638,545|
|---|---|---|
The average full time equivalent number of employees during the year was 26 (2020 - 23).
There were no employees whose annual remuneration was £60,000 or more.
## **11 Tangible fixed assets**
|**Cost**
At 1 April 2020
Additions
At 31 March 2021
**Depreciation and impairment**
At 1 April 2020
Depreciation charged in the year
At 31 March 2021
**Carrying amount**
At 31 March 2021
At 31 March 2020|**Land and**
**buildings**
**£**
1,771,866
100,000
1,871,866
102,875
18,726
121,601
1,750,265
1,668,991|**Shared**
**ownership**
**properties**
**£**
-
20,000
20,000
-
200
200
19,800
-|**Equipment Motor vehicles**
**£**
**£**
47,115
3,750
13,998
-
61,113
3,750
39,818
3,750
9,690
-
49,508
3,750
11,605
-
7,297
-|**Total**
**£**
1,822,731
133,998
1,956,729
146,443
28,616
175,059
1,781,670
1,676,288|
|---|---|---|---|---|
The long-term loans are secured by fixed charges over five of the properties owned by the charity.
- 23 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**12**
**Stocks**
**2021**
**£**
Finished goods and goods for resale
-
**13**
**Debtors**
**2021**
**Amounts falling due within one year:**
**£**
Tenant and franchise debt
22,650
Other debtors
66,833
Prepayments and accrued income
4,335
93,818
**14**
**Loans and overdrafts**
**2021**
**£**
Bank loans
390,460
Payable within one year
10,700
Payable after one year
379,760
The long-term loans are secured by fixed charges over five of the properties owned by the charity.
**15**
**Creditors: amounts falling due within one year**
**2021**
**Notes**
**£**
Bank loans
**14**
10,700
Other taxation and social security
12,353
Deferred income
**17**
19,188
Trade creditors
26,251
Other creditors
9,375
Accruals
19,528
97,395
**16**
**Creditors: amounts falling due after more than one year**
**2021**
**Notes**
**£**
Bank loans
**14**
379,760|**2020**
**£**
12,908
**2020**
**£**
16,836
14,087
4,737
35,660
**2020**
**£**
402,669
10,700
391,969
**2020**
**£**
10,700
8,830
-
30,061
3,889
2,518
55,998
**2020**
**£**
391,969|
|---|---|
- 24 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **17 Deferred income**
||**2021**|**2020**|
|---|---|---|
||**£**|**£**|
|Other deferred income|19,188|-|
## **18 Retirement benefit schemes**
## **Defined contribution schemes**
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The charge to profit and loss in respect of defined contribution schemes was £49,121 (2020 - £40,757).
- 25 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **19 Restricted funds**
The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes:
|||**Movement in funds**|**Movement in funds**|||
|---|---|---|---|---|---|
||**Balance at 1**|**Incoming**|**Resources**|**Transfers**|**Balance at 31**|
||**April 2020**|**resources**|**expended**||**March 2021**|
||**£**|**£**|**£**|**£**|**£**|
|**Special Projects**||||||
|All Churches Trust|26,232|9,258|(35,490)|-|-|
|Didymus Trust|3,419|9,200|(12,619)|-|-|
|Dominic Beer Trust|-|1,100|(1,100)|-|-|
|Glasspool Charity Trust|-|300|(300)|-|-|
|Henry Smith|10,184|-|(10,184)|-|-|
|LandAid|-|6,750|(6,750)|-|-|
|Lloyds Bank Foundation|14,413|6,470|(20,883)|-|-|
|The Ebyon Trust|-|1,500|(1,500)|-|-|
|Tudor Trust|8,000|22,000|(22,000)|-|8,000|
|Donation for property|277,500|178,219|(3,357)|-|452,362|
||339,748|234,797|(114,183)|-|460,362|
|**Other including core costs**||||||
|Big Lottery|7,909|40,908|(47,648)|-|1,169|
|Cambridge Community Fund|-|3,850|(3,750)|(100)|
-|
|Charles Hayward Foundation|-|25,000|(20,000)|-|5,000|
|Daughters of Jesus|-|5,000|(5,000)|-|-|
|Homeless Link|-|80,000|(80,000)|-|-|
|Legal & General Group|-|3,000|(3,000)|-|-|
|Maclellan Foundation|-|45,809|(45,809)|-|-|
|Nottingham Community fund|-|1,900|(1,900)|-|-|
|Nottinghamshire Community||||||
|Foundation|-|1,500|(1,500)|-|-|
|Paul Basham|-|2,000|(2,000)|-|-|
|The Morrisons Foundation|-|900|(900)|-|-|
|Vardy Foundation|-|3,000|-|-|3,000|
||7,909|212,867|(211,507)|(100)|
9,169|
|**Property**||||||
|Borrowdale Close|125,000|-|-|(125,000)|
-|
|SEIF|78,152|-|(1,106)|-|77,046|
||203,152|-|(1,106)|(125,000)|
77,046|
|||||||
|**Total**|550,809|447,664|(326,796)|(125,100)|
546,577|
- 26 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **19 Restricted funds**
**(Continued)**
There are a number of restricted funds as outlined above, some of which are for specific projects, some that cover specific elements of core costs. The three largest funds are as follows:
Donation for property - this relates to a donation received to enable the charity to invest in further property to be used to house tenants.
SEIF - the funds received were for the purchase of a property by the charity. A property was purchased in 2012 and this fund is now represented by fixed assets, but the fund remains a restricted fund as the funding is potentially repayable to SEIF if there is a future change to the use of the property or the property is sold.
Borrowdale Close - a donation to fund the acquisition of a property (further details are in note 22).
- 27 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **20 Designated funds**
The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:
|Fixed asset
fund
North Street
provision
Mortgage
repayment
provision
Additional
property
provision|**Balance at**
**1 April 2019**
**£**
1,073,198
80,000
-
-
1,153,198|**Resources**
**expended**
**£**
(22,695)
-
-
-
(22,695)|**Transfers**
**£**
21,464
20,000
-
-
41,464|**Balance at**
**1 April 2020**
**£**
1,071,967
100,000
-
-
1,171,967|**Resources**
**expended**
**£**
(27,510)
-
-
-
(27,510)|**Transfers**
**31**
**£**
269,706
(100,000)
100,000
100,000
369,706|**Balance at**
**March 2021**
**£**
1,314,163
-
100,000
100,000
1,514,163|
|---|---|---|---|---|---|---|---|
The fixed asset fund represents the net book value of the property and other fixed assets that is not represented by restricted funds.
The North Street provision was a fund to purchase the remainder of the North Street property.
The mortgage repayment provision is to fund part of the mortgage being repaid.
The additional property provision is to fund future investments in property.
- 28 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **21 Analysis of net assets between funds**
|**Unrestricted**
**funds**
**Designated**
**funds**
**Restricted**
**funds**
**2021**
**2021**
**2021**
**£**
**£**
**£**
Fund balances at 31 March 2021 are represented
by:
Tangible assets
-
1,704,624
77,046
Current assets/(liabilities)
432,946
186,299
469,531
Long term liabilities
(3,000)
(376,760)
-
429,946
1,514,163
546,577|**Total**Unrestricted
funds
Designated
funds
**2021**
2020
2020
**£**
£
£
1,781,670
-
1,473,136
1,088,776
310,479
90,800
(379,760)
-
(391,969)
2,490,686
310,479
1,171,967|Restricted
funds
2020
£
203,152
347,657
-
550,809|Total
2020
£
1,676,288
748,936
(391,969)
2,033,255|
|---|---|---|---|
- 29 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **22 Financial commitments, guarantees and contingent liabilities**
In 2018 the charity purchased a property. The purchase was financed by a donation and a loan of £125,000, secured on the property. The charity has covenanted with the lender to repay the loan, on the expiry of 6 months from service by the lender of notice to redeem the charge, although such notice will not be given by the lender whilst the property is being used for the charity’s charitable purpose of providing housing for vulnerable people including refugees and the homeless. Furthermore the loan will expire, and not be required to be repaid, on the earlier of the 25 yearly anniversary of the charge and the date of death of the lender.
On the basis that the charity intended to use the property for its charitable purposes for the foreseeable future and the accounts were prepared on the going concern purpose, the full amount of the finance for the property purchase was treated as a restricted donation. The balance of the donation that was subject to the charge remained as a balance carried forward on the restricted fund, rather than a liability.
In January 2021, the charge on the property was removed by the lender and therefore the restriction has been released and the potential liability is removed. This has been recorded as a transfer from restricted to designated funds within the year.
## **23 Operating lease commitments**
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
|Within one year
Between two and five years|**2021**
**£**
25,594
6,517
32,111|**2020**
**£**
31,966
1,000
32,966|
|---|---|---|
## **24 Related party transactions**
## **Remuneration of key management personnel**
The remuneration of key management personnel including pension contributions is as follows.
||**2021**|**2020**|
|---|---|---|
||**£**|**£**|
|Aggregate compensation|141,058|138,837|
Key management personnel represents 5 (2020 - 5) members of staff.
- 30 -
## **HOPE INTO ACTION UK**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **24 Related party transactions**
**(Continued)**
Mr G Howard previously owned 27.8% of the North Street property and charged the charity interest at 2% on the original investment. The charity had built up a reserve in order to buy-out this investment and has bought out Mr G Howard for £100,000 during the year. This value was based on an external professional valuation.
Included in expenditure are the following amounts in respect of rent paid on properties used for the charity's clients.
|Property rented from children of Mr G Howard
Property rented from Mr G Howard
Property rented from Mr and Mrs E Walker
Property rented from Mrs D Tidball
**25**
**Cash generated from operations**
Surplus for the year
Adjustments for:
Investment income recognised in statement of financial activities
Depreciation and impairment of tangible fixed assets
Movements in working capital:
Decrease/(increase) in stocks
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Increase/(decrease) in deferred income
**Cash generated from operations**
26
**Analysis of changes in net funds**
**At**
Cash at bank and in hand
Loans falling due within one year
Loans falling due after more than one year|**1 April 2020**
**£**
756,366
(10,700)
(391,969)
353,697|**2021**
**£**
8,091
2,263
6,112
1,920
**2021**
**£**
457,431
(9,266)
28,616
12,908
(58,158)
22,209
19,188
472,928
**Cash flows At 31**
**£**
335,987
-
12,209
348,196|**2020**
**£**
5,016
3,464
6,112
-
**2020**
**£**
233,844
(9,303)
23,801
(12,908)
14,617
(3,147)
(50,000)
196,904
**March 2021**
**£**
1,092,353
(10,700)
(379,760)
701,893|
|---|---|---|---|
- 31 -