2022-03-31-accounts

Mercers’ Company Housing Association

Trustees’ Annual Report & Financial Statements 2022

Charity Commission Number 1172263

Company Number 10255806

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Mercers’ Company Housing Association

Foreword

The Mercers’ Company Housing Association (the Charity) provides sheltered housing at Mercers’ House (28 units) and Priory House (20 units), both in Islington, London. Accommodation provided is one- and two-bedroom self-contained units with access to a communal lounge, garden, laundry, and hairdressers. Each site has a Scheme Manager. There are a total of 56 residents in 48 units across the two sites.

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CONTENTS

Foreword	2
Trustees’ Annual Report for theyear ended 31 March 2022	5
Objectives and activities for public benefit	5
Achievements, Impact and Future Plans	5
Financial Review	7
Reserves Policy	7
Fundraising Policy	7
Risk Management and internal control	7
Structure, governance and management	8
Our volunteers	9
Related Parties	9
Statement of Trustees’ responsibilities	9
Independent Auditor’s Report	11
Statement of Financial Activities for the year ended 31 March 2022	16
Statement of Financial Activities for the year ended 31 March 2021	17
Balance Sheet as at 31 March 2022	18
Statement of Cash Flows for the year ended 31 March 2022	19
Notes to the financial statements	20
1 Accounting Policies	20
2 Donations and Legacies	22
3 Charitable Activities	23
4 Expenditure	24

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5 Tangible Assets	25
6 Investment Properties	26
7 Debtors	26
8 Creditors: Amounts Falling Due Within One Year	26
9 Analysis of Funds	27
10 Reconciliation of Net Income To Net Cash Flow From Operating Activities	28
11 Contingent Liabilities and Contractual Commitments	28
12 Related Parties and Connected Charities	29
Legal & Administrative Information	30

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Trustees’ Annual Report for the year ended 31 March 2022

The Trustees of the Charity present their annual report together with the financial statements of the Charity for the year ended 31 March 2022. These also meet the requirements for a directors’ report and financial statements for Companies Act purposes.

The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

Objectives and activities for public benefit

The objects of the Charity are the provision of housing and any associated amenities for persons in necessitous circumstance upon terms appropriate to their means; and, the provision for aged persons in need thereof of housing and any associated amenities specially designed or adapted to meet the disabilities and requirements of such persons.

Achievements, Impact and Future Plans

Following the lifting of Covid-19 restrictions, the housing management team is supporting and encouraging the reintroduction of events and activities for residents at each of the two housing schemes. It has been a more challenging process than anticipated as some residents have been reluctant to join in, but gradually this is changing and they are once again enjoying being part of the community. As at 31 March 2022, there were 56 residents occupying 48 units across the two sites.

Even though all Covid restrictions have been removed, it was agreed to retain some of the good practices adopted during the pandemic, such as sanitizing stations, sign-in books and increased cleaning across the sites. Following the external reviews from EROSH on the ‘Code of Practice’ positive feedback was received stating that the Charity was an excellent housing provider within the sector. The review suggested some improvements and those are being actioned before the EROSH renewal process starts in September 2022.

The first Residents’ Consultation Forum was held in March 2022, where residents representing the two housing schemes and four almshouses managed by the Mercers’ Company met to discuss

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what is working well and what less well. The forum was a success and will be repeated in six months. The Health and Wellbeing programmes are also being reintroduced.

The Charity is one of three charities whose housing provision is managed by the Mercers’ Company. The future strategy for the almshouses and housing schemes managed by the Mercers’ Company is under review, including discussion of increasing the provision. The review is expected to be completed later in 2022.

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Financial Review

Income from rents amounted to £629,000 in 2022 (2021: £631,000). Expenditure amounted to £677,000 (2021: £488,000), including £308,000 of cyclical repairs. This resulted in net expenditure before investment gains for the year of £48,000 (2021: net income of £143,000). At the year end, two operating properties were re-classified as investment property and were valued at market value, resulting in an unrealised gain of £1.471m.

Reserves Policy

The free reserves of the Charity comprise the unrestricted funds not otherwise designated to the Cyclical Maintenance Fund or held as property. The Charity aims to retain six months of normal operating costs as a reserve in the event of a fall in income or other adverse occurrence. This target reserve amounts to £174,000, and the balance as at 31 March 2022 was £182,000, reaching the target reserve.

The Board of Trustees decided during the year to invest £700,000 of the designated reserves held by the Charity to meet future maintenance requirements and an investment fund will be established with Rathbones in 2022.

Fundraising Policy

The Charity does not participate in any fundraising.

Risk Management and internal control

The Board of Trustees acknowledges its responsibility for the management of risks faced by the Charity. A review is undertaken regularly by the Older People & Housing Committee of The Mercers’ Company to identify, assess and mitigate the associated risks. The Board of Trustees in considering the governance, management, operational, financial and environmental risks, is satisfied, at this stage, that there is no material exposure and that there are procedures in place to mitigate such risks.

The Board of Trustees has agreed clear lines of delegation and authority and both the Older People & Housing Committee and executive staff are involved in the recognition of risk in all their activities.

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Structure, governance and management

As set out in the Articles of Association, the Member of the Charity, the Mercers’ Company, appoints the Trustees. Each year one third, or the number nearest to one third of the Trustees, being those who have been longest in office since their last appointment or reappointment, must retire from office. Retiring Trustees may be reappointed. At the meeting in September 2021, Mrs Walsh-Waring retired by rotation and was reappointed for a further term.

The Board of Trustees is responsible for the business of the Charity and meets regularly.

The Board has delegated certain matters to a number of the sole Member’s specialist committees:

committees:
Function	Delegated Body
Oversight of housing operations/ operational property	Older People & Housing Committee
	Property Committee
Overview of risk management process and external audit process	Audit Committee
Oversight of cash and investments	Investment Sub Committee

The Board of Trustees is supported by the staff of the Mercers’ Company, who are appropriately trained and qualified. These administrative services are provided under a service agreement. The following members of the Mercers’ Company’s senior management are involved in the provision of services:

Mr RM Abernethy (Clerk to the Mercers’ Company)

Ms SMA Hedley-Dent (Deputy Clerk to The Mercers’ Company)

Mr JRA Christie (Finance Director)

The Board intends to apply the principles of the Charity Governance Code so far as is possible. The Board has undertaken a self-assessment against the Charity Governance Code in 2021 and has identified areas in which it can further improve its practice to reflect the Governance Code principles. In addition, the Board has completed the checklist for a charity working with a noncharity and has concluded that the relationship between the Charity and the sole Member is in the Charity’s best interests.

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Our volunteers

The Charity relies on members of The Mercers' Company volunteering their time to sit on committees, and attend events involving beneficiaries. In keeping with recommended practice, an estimate of the numbers of hours that Committee members give to the Charity free of charge during the year has been undertaken resulting in approximately 50 hours of voluntary time.

Related Parties

Details of related parties and connected charities are given in note 12 of the financial statements. The Charity works closely with The Mercers’ Company as well as with The Charity of Sir Richard Whittington and the Earl of Northampton’s Charity both of which also provide housing and associated services.

Statement of Trustees’ responsibilities

The Trustees (who are also directors of Mercers’ Company Housing Association for the purposes of company law) are responsible for preparing the Trustees’ Annual 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. Under that law the Trustees have prepared the financial statements in accordance with United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice). Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the Charitable Company and of 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 Accounting and Reporting by Charities: Statement of Recommended Practice for charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102);

• make judgments 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 Charitable Company will continue in operation.

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The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charitable Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Charitable Company and enable them to ensure that the financial statements comply with the Companies 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.

Each of the Trustees confirms that:

• so far as each trustee is aware, there is no relevant audit information of which the Charitable Company’s auditor is unaware; and

• each trustee has taken all the steps that he/she ought to have taken as a Trustee in order to make himself/herself aware of any relevant audit information and to establish that the Charitable Company’s auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

The Trustees are responsible for the maintenance and integrity of the Charity’s financial information included on the Charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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Mr John Roderick Graham Mrs Lucy Walsh Waring

Chairman Trustee Trustee

29 September 2022

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Independent Auditor’s Report

TO THE MEMBER OF MERCERS’ COMPANY HOUSING ASSOCIATION

Opinion

We have audited the financial statements of The Mercers’ Company Housing Association (the ‘Charitable Company’) for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the financial statements which include the principal 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 2022 and of its income and expenditure 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 Charitable Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Charitable Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

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Other information

The other information comprises the information included in the Trustees’ annual report and financial statements, other than the financial statements and our auditor’s report thereon. The Trustees are responsible for the other information contained within the Trustees’ annual report and financial statements. 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.

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.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the Trustees’ report, which is also the Directors’ report for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Trustees’ report, which is also the Directors’ report for the purposes of company law, has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Trustees’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• the Trustees were not entitled to take advantage of the small companies’ exemptions in preparing the Trustees’ report and from the requirement to prepare a strategic report.

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Responsibilities of Trustees

As explained more fully in the Statement of Trustees’ responsibilities, the Trustees (who are also the directors of the Charitable Company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the Charitable Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Charitable Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the Charitable Company through discussions with those charged with governance and management, and from our knowledge and experience of the sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Charitable Company, including the Companies Act 2006, the Charities Act 2011 and the financial reporting framework referred to above; and

• we understood how the Charitable Company is complying with those legal and regulatory frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of the minutes of meetings of those charged with governance.

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We assessed the susceptibility of the Charitable Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur. Audit procedures performed by the engagement team included:

• making enquiries of management as to their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected financial relationships;

• tested journal entries to identify unusual transactions;

• performed substantive testing of expenditure including testing the authorisation thereof; and

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• reading the minutes of meetings of those charged with governance; and

• enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the Trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

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Use of our report

This report is made solely to the Charitable Company’s member, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Charitable Company's member those matters we are required to state to it in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charitable Company and the Charitable Company's member as a body, for our audit work, for this report, or for the opinions we have formed.

Edward Finch (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

30 September 2022

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Statement of Financial Activities for the year ended 31 March 2022

(Incorporating an Income and Expenditure Account)

					Year ended
					31 March
		Year	ended 31 March	2022	2021
		Unrestricted	Designated
		Funds	Funds	Total Funds	Total Funds
	Note	£’000	£’000	£’000	£’000
Income
Charitable activities:
Rents	3	629	-	629	631
Total income		629	-	629	631
Expenditure
Raising funds	4	(2)	-	(2)	-
Charitable activities	3	(367)	(308)	(675)	(488)
Total expenditure		(369)	(308)	(677)	(488)
Gains on investments	6	1,471	-	1,471	-
Net income/(expenditure)		1,731	(308)	1,423	143
Transfers between funds	8	(215)	215	-	-
Net movement in funds		1,516	(93)	1,423	143
Fund balances brought
forward at 1 April		2,110	886	2,996	2,853
Fund balances carried
forward at 31 March		3,626	793	4,419	2,996

All of the Charity's activities are derived from continuing operations. There are no recognised gains or losses other than those disclosed above.

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Statement of Financial Activities for the year ended 31 March 2021

(Incorporating an Income and Expenditure Account)

		Year	ended 31 March	2021
		Unrestricted	Designated
		Funds	Funds	Total Funds
	Note	£’000	£’000	£’000
Income
Charitable activities:
Rents	3	631	-	631
Total income		631	-	631
Expenditure
Charitable activities	3	(396)	(92)	(488)
Total expenditure		(396)	(92)	(488)
Transfers between funds	8	(215)	215	-
Net income and net movement in funds		20	123	143
Fund balances brought forward at 1
April		2,090	763	2,853
Fund balances carried forward at 31
March		2,110	886	2,996

All of the Charity's activities are derived from continuing operations. There are no recognised gains or losses.

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Balance Sheet as at 31 March 2022

		31 March 2022	31 March 2022	31 March 2021	31 March 2021
	Note	£’000	£’000	£’000	£’000
Fixed Assets
Tangible assets	5	1,793		2,032
Investment property	6	1,650		-
			3,443		2,032
Current assets
Debtors	7	57		53
Cash at bank and in hand		987		982
Total current assets			1,044		1,035
Creditors: amounts falling due within one	8		(68)		(71)
year
Net current assets			976		964
Total net assets			4,419		2,996
The funds of the charity
Unrestricted funds:
General funds	9		183		78
Tangible fixed asset funds	9		3,443		2,032
Designated funds	9		793		886
Total Charity funds	9		4,419		2,996

The attached notes on pages 20 to 30 form an integral part of these financial statements. The financial statements on pages 16 to 30 were approved by the Trustees on 29 September 2022 and are signed on their behalf by:

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Mr John Roderick Graham Chairman

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Mrs Lucy Walsh Waring Trustee

The Company Number is 10255806. 29 September 2022

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Statement of Cash Flows for the year ended 31 March 2022

		2022	2021
	Note	£’000	£’000
Cash flows from operating activities:
Net cash provided by operating activities	10	5	195
Change in cash and cash equivalents in the financial year		5	195
Cash and cash equivalents at the beginning of the financial		982	787
year
Cash and cash equivalents at the end of the financial year	10	987	982

No separate statement of changes in net debt has been prepared as there is no difference between the movement in cash and cash equivalents and movements in net cash (debt).

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Notes to the financial statements

1 Accounting Policies

ACCOUNTING BASIS

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these financial statements.

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Companies Act 2006 and Accounting and Reporting by Charities: Statement of Recommended Practice for charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (‘SORP (FRS 102)’).

The Charity constitutes a public benefit entity as defined by FRS 102.

GOING CONCERN

The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern. The Trustees have considered the continuing impacts of the Coronavirus pandemic on the Charity’s operations, with a particular focus on its effect on its beneficiaries and suppliers and on the Charity’s income and expenditure. The Trustees do not consider this to be cause for material uncertainty in respect of the Charity’s ability to continue as a going concern. The Trustees consider that it has sufficient financial resources for the foreseeable future. Therefore, the financial statements have been prepared on a going concern basis.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances prevailing. The main estimates and judgements relate to the investment property valuations and the estimated useful lives of tangible fixed assets.

INCOME

All income, comprising rents and service charges from the housing operations, interest on bank accounts, and rents from investment properties, is stated gross and is included on an accruals basis when the Charity has entitlement, receipt is probable and the amount can be measured with sufficient reliability. Income relating to a subsequent financial year is carried forward as a creditor in the balance sheet and shown as deferred income.

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EXPENDITURE

All expenditure is included on an accruals basis and is recognised as soon as there is a legal or constructive obligation committing the Charity to it, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Irrecoverable VAT is included with the underlying expense and charged to the Statement of Financial Activities (SOFA) as incurred. Overhead costs are allocated from The Mercers’ Company under a service level agreement. This allocation has been estimated by The Mercers’ Company based on the proportion of time spent on the Charity by staff.

TAXATION

The Charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects. Accordingly, no provision is made for current or deferred taxation.

INVESTMENT GAINS AND LOSSES

Unrealised gains and losses for the period reflect the movement in market values. Realised gains and losses represent the difference between proceeds on disposal and the market value brought forward (or cost if acquired in the year). Unrealised and realised investment gains or losses are shown net on the SOFA.

INVESTMENTS

Investment properties are re-valued externally every five years and internally by the Trustee in intervening years. The Trustees are of the opinion that this valuation is appropriate for the purpose of these financial statements.

TANGIBLE FIXED ASSETS

All assets costing more than £10,000 are capitalised at cost and depreciated over their useful economic lives. Subsequent expenditure on a capitalised asset will also be capitalised where it is regarded that there has been an enhancement to the asset or a depreciated asset has been replaced.

DEPRECIATION

The Trustees consider the useful life of the property to be not less than 50 years. Accordingly, a depreciation rate of 2% has been applied to the historical cost (after eliminating the original cost of the land) over the expected economic useful life of the property. Land is not depreciated. The useful economic life and any impairment of the property is reviewed annually. Where there is impairment, the property is written down to the recoverable amount.

RESERVES

The Charity has the following types of unrestricted reserve:

• General funds – where the funds are not restricted as to use other than in furthering the objects of the Charity.

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• Designated reserve: cyclical maintenance reserve - where the reserve is for repairs of the properties. The surplus / (deficit), excluding depreciation, at the year end is transferred to / (from) this reserve.

• Fixed asset reserve - comprises the book value of tangible fixed assets and investment properties.

SHARE CAPITAL

The Company is limited by guarantee and has no share capital. The member of the Charitable Company, The Mercers’ Company, guarantees to undertake to contribute one pound in the event of the winding up of the Charitable Company.

FINANCIAL INSTRUMENTS

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

2 Donations and Legacies

During the year, the charity did not receive any donations (2021: nil).

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3 Charitable Activities

Income and expenditure is analysed as follows:

		2022				2021
	Mercers’ House £’000	Priory House £’000	Head Office £’000	Total £’000	Mercers’ House £’000	Priory House £’000	Head Office £’000	Total £’000
Rents & service charge	315	314	-	629	313	318	-	631
income
Property operating costs	(103)	(127)	-	(230)	(116)	(139)	-	(255)
Major repairs & projects	(147)	(161)	-	(308)	(23)	(69)	-	(92)
Depreciation	-	(59)	-	(59)	-	(58)	-	(58)
Bad debt	-	3	-	3	1	-	-	1
Administration &	(39)	(32)	(5)	(76)	(42)	(33)	(4)	(79)
governance
Auditor’s remuneration	-	-	(5)	(5)	-	-	(5)	(5)
Total expenditure	(289)	(376)	(10)	(675)	(180)	(299)	(9)	(488)
Net income / (expenditure)	26	(62)	(10)	(46)	133	19	(9)	143

Major repairs and projects are funded by the Cyclical Maintenance Fund.

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4 Expenditure

Analysis of total expenditure:

Analysis of total expenditure:
		Governance	Other
		& support	direct	Total	Total
	Further	costs	costs	2022	2021
	notes	£’000	£’000	£’000	£’000
Charitable activities
Housing for the elderly	3	10	665	675	488
Raising funds		-	2	2	-
		10	667	677	488

		Governance	Other
		& support	direct	Total
	Further	costs	costs	2021
	notes	£’000	£’000	£’000
Charitable activities
Housing for the elderly	3	9	479	488

The Charity has no employees (2021: nil). The Mercers’ Company, by way of a service agreement, provides housing management services to the Charity. The Trustees have not received any emoluments or reimbursements during the year for services as Trustees (2021: nil). Governance costs comprise audit fees of £4,225 (excluding irrecoverable VAT) (2021: £4,100).

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Mercers’ Company Housing Association

5 Tangible Assets

The operating properties are shown at their historical cost less depreciation.

	Land & Buildings £’000
	Cost Balance at 1 April 2021 3,340 Less transfers to investmentproperties(see note 6) (304)
	Balance at 31 March 2022 3,036
	Depreciation Balance brought forward at 1 April 2021 (1,308) Charge for the year (59) Less transfers to investmentproperties 124
	Balance carried forward 31 March 2022 (1,243)
	Net book value at 31 March 2022 1,793
	Net book value at 31 March 2021 2,032

Land and buildings comprise the freehold historical cost of Priory House. A further property, Mercers' House is a leasehold interest at nil historical cost and at a peppercorn rent. Mercers’ House is leased from The Mercers’ Charitable Foundation, a connected charity.

The net book values shown do not represent current open market valuations.

At the year end, two units at Priory House were reclassified as Investment Properties, as they are held for generating income for the Charity.

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6 Investment Properties

The movements in the Charity's investment properties in the year are as follows:

		Transfers	Revaluation
	1 April 2021	(note 5)	gains	31 March 2022
Freehold property	£’000	£’000	£’000	£’000
Market value	-	179	1,471	1,650
Historical cost	-			179

A full external valuation was done on 31 March 2022 by Cluttons LLP, which is an independent firm of qualified surveyors.

7 Debtors

Debtors are made up as follows:

Debtors are made up as follows:
	2022	2021
	£’000	£’000
Rent receivable	47	43
Prepayments and accrued income	10	10
	57	53

8 Creditors: Amounts Falling Due Within One Year

Creditors are amounts falling due within one year and are made up as follows:

	2022	2021
	£’000	£’000
Rent received in advance	18	20
Accruals	13	5
Amount due to The Mercers’ Company	6	18
Other creditors	31	28
	68	71

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9 Analysis of Funds

The designated funds comprise the Cyclical Maintenance Reserve which provides for repairs of the properties. £215,000 (2021: £215,000) was transferred into the fund from Unrestricted Funds during the year to provide for future repairs and maintenance of the sheltered housing properties. £308,000 (2021: £92,000) was used during the year for cyclical and extraordinary repairs at the properties.

The tangible fixed assets funds comprise the Charity’s operating properties and investment properties. These funds are not readily realisable to meet charitable expenditure.

The net assets by funds are as follows:

		Fixed		2022
		assets		Total
	General funds	funds	Designated	funds
	£000	£’000	fund £’000	£’000
Tangible assets	-	1,793	-	1,793
Investment properties	-	1,650	-	1,650
Net current assets	183	-	793	976
Total Funds	183	3,443	793	4,419
		Fixed		2021
		assets		Total
	General funds	funds	Designated	funds
	£000	£’000	fund £’000	£’000
Tangible assets	-	2,032	-	2,032
Net current assets	78	-	886	964
Total Funds	78	2,032	886	2,996

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10 Reconciliation of Net Income To Net Cash Flow From Operating Activities

	2022	2021
	£’000	£’000
Net income for the reporting year (as per statement of activities)	1,423	143
Adjustments for:
Gains on investments	(1,471)	-
Depreciation	59	58
Increase in debtors	(3)	(15)
(Decrease)/increase in creditors	(3)	9
Net cash provided by operating activities	5	195

ANALYSIS OF CASH AND CASH EQUIVALENTS

ANALYSIS OF CASH AND CASH EQUIVALENTS
	2022	2021
	£’000	£’000
Cash at bank and in hand	987	982

11 Contingent Liabilities and Contractual Commitments

The Charity has no contingent liabilities and no contractual commitments at the end of the year (2021: none).

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12 Related Parties and Connected Charities

The following related parties and charities have common management and are therefore regarded as connected:

Becket House Limited (dormant) Charter 600 Charity Earl of Northampton’s Charity Longacre Estates Limited (dormant) Longmartin Properties Limited Maiden Trading Limited (dormant) Mercers’ School Memorial Trust (incorporating The Merrett Bequest) St Paul's Schools Foundation The Charity of Sir Richard Whittington The Mercers' Charitable Foundation The Mercers' Company

The principal address of the above entities is:

The Mercers’ Company 6 Frederick’s Place London EC2R 8AB

The Mercers’ Company allocated costs amounting to £127,320 (2021: £135,644) in relation to the Service Agreement and directly attributable costs. £5,570 was outstanding at the year end (2021: £17,627). No emoluments or expenses were paid by the Charity to the Trustees during the year (2021: nil). Mercers’ House is leased from The Mercers’ Charitable Foundation at a peppercorn rent.

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Legal & Administrative Information

LEGAL STATUS

TRUSTEES

The Mercers’ Company Housing Association (“the Charity”) was originally formed in 1983 to develop housing for the elderly primarily in Inner London. The Charity is established as a charitable company limited by guarantee and registered with the Charity Commission. The Charity is governed by its Memorandum and Articles of Association dated 28 June 2016.

Its registered company number is 10255806 and its Charity Commission registration number is 1172263.

There is one member of the Charity, The Wardens and Commonalty of the Mystery of Mercers of the City of London (“The Mercers’ Company”). The directors of the Charity are its Trustees for the purpose of charity law.

Mr John Roderick Graham (Chairman) Mr Adam Sedgwick Mr Anthony Beverley Totton Mrs Lucy Walsh Waring

KEY STAFF OF THE MERCERS’ COMPANY

Mr Robert Abernethy (Clerk to The Mercers’ Company)

Ms Serena Hedley-Dent (Deputy Clerk to The Mercers’ Company)

Mr James Christie (Chief Financial Officer) Miss Sarah Oliver (Housing Manager)

BANKERS

Barclays Bank PLC, 1 Churchill Place, London E14 5HP

The Charity is not a registered Social Landlord.

PRINCIPAL ADDRESS 6 Frederick’s Place London EC2R 8AB

INDEPENDENT AUDITOR Buzzacott LLP 130 Wood Street, London, EC2V 6DL