**Charity Registration No. 1192660**
**Company Registration No. 03523786 (England and Wales)**
# **BRIGHTON & HOVE WOOD RECYCLING PROJECT ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS**
**FOR THE YEAR ENDED 31 MARCH 2021**
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **LEGAL AND ADMINISTRATIVE INFORMATION**
## **Trustees**
Mr P West D Nobbs P Smithson J McNulty
**Charity number** 1192660 **Company number** 03523786 **Registered office** 104 Westfield Crescent Brighton East Sussex BN1 8JA
## **Independent examiner**
Knill James LLP One Bell Lane Lewes East Sussex BN7 1JU
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **CONTENTS**
||**Page**|
|---|---|
|Trustees' report|1 - 6|
|Statement of trustees' responsibilities|7|
|Independent examiner's report|8|
|Statement of financial activities|9|
|Balance sheet|10 - 11|
|Notes to the financial statements|12 - 22|
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
The trustees have pleasure in announcing that the Charity Commission for England and Wales has granted Brighton & Hove Wood Recycling Project (“BHWRP” or “the project”) permission to register as a charity.
The trustees present their report and financial statements 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 charitable company's Memorandum and Articles of Association , 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**
BHWRP operates under the following objects:
To promote for the benefit of the public the conservation protection and improvement of the physical and natural environment by:
- Diverting re-usable timber away from landfill and incineration, and promoting recycling of waste wood in East and West Sussex, in line with national waste policy seeking to establish a circular economy
- R aising public awareness of environmental matters related to re-use and recycling of household and industrial waste and the place of wood recycling in the circular economy
The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charitable company should undertake.
## **Volunteering**
The project was disappointed to have to close the project to volunteers during 2020/21, especially after 2019/20 proved to be one of the best years for volunteer engagement due to the increase in one-to-one training and support offered to volunteers after improvements to the organisation of the workshop and the workshop team.
New premises have been found in central Brighton and historic volunteers have now been contacted and redeployed, if they are still available, and new volunteers have been joining the charity. These volunteers will be trainees within the project. The workshop has also re-opened and volunteers are once again able to produce many different types of furniture, unsupervised, once the necessary training has been delivered. The most popular items remain simple coffee tables, bookshelves and bespoke tables.
Volunteers will continue to be drawn from various backgrounds which includes people with autism/ Asperger’s syndrome, learning difficulties, long-term unemployment, recovery from drug and alcohol dependency and mental health conditions such as depression.
Volunteers work chiefly in the workshop, preparing timber and learning the skills for all aspects of furniture production going on to making the full range of items offered by the project. Some volunteers have worked on commercial construction jobs at the clients’ premises. Other volunteers choose to be involved in administration, retail or store management and are therefore customer facing.
BHWRP will be restarting its woodworking courses in both bench joinery and site work and this has been highly subscribed to by existing volunteers.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Achievements and performance**
## **Company activities**
During 2020-21, BHWRP operated from warehouse premises in Ringmer having lost its retail premises in March 2020 as the Covid pandemic was beginning. Negotiations on finding new retail premises were severely hampered by the pandemic but a new building was found early in the financial year 2021/22.
## **Public Benefit Reporting**
The directors of the company are trustees of the charitable company. They confirm that they have given due regard to the Charity Commission guidance on public benefit while setting objectives and activities of the project and these are in line with both the existing and future objects of the company, the latter which have been deemed charitable by the Charity Commission.
## **Environmental Benefit Reporting**
BHWRP has diverted 367 tonnes of timber from the waste stream during the accounting year. Of this, 146 tonnes have been re-used in DIY projects and manufactured furniture products and a further 221 tonnes have been sent for recycling as particle board, animal bedding and carbon neutral fuels. This has saved 183 tonnes of carbon dioxide from entering the atmosphere. This is substantially less than previous years due to the Covid-19 pandemic but early indications are that the year 2021/22 will be much improved.
## **Social Benefit Reporting**
The project continues to raise public awareness of re-use and recycling. During the accounting year, the project has created or sustained 10 paid jobs but was unable to train volunteers in collections, customer service, joinery and carpentry to the pandemic. This has restarted in 2021/22.
## **Operational Activities**
BHWRP is now registered as a charity and has undertaken the following operational activity in pursuit of its objects.
## **Works h op and Furniture Production**
During the year ended 31st March 2021, the workshop operated from the charity’s Ringmer site and from occasional hired premises due to the loss of the charity’s operational site in March 2020. The pandemic affected the production of furniture and other items and therefore sales have been significantly suppressed during this reporting year with the charitable business either closed or operating on minimal staff for much of the year.
However, the high quality furniture range was maintained and includes “live” edge timber designs and a larger range of finishes from various painting techniques to high quality waxed or polished finishes. Tables remained the most popular constructed retail item and a number of commercial jobs were undertaken. New clients include Lewes District Council as well as other high-profile local customers attracted to BHWRP by both the quality of the product and a desire to support the social and environmental outputs of the project.
## **Collections**
Commercial wood collections from construction sites remains the main income driver for the project providing raw materials for manufacturing products and for retail. Most collections come from large national construction companies (80%) and are brokered via the national Community Wood Recycling organisation of which BHWRP is a member but the project also enjoys good relations with smaller more local construction firms (20%). BHWRP staff hold CSCS certification in order to access these sites.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **The Yard**
Wood returning from collections goes directly to the yard where it is prepared and sorted prior to it being sent to the shop for sale when a retail unit is in place. During the financial year the materials were stored at the yard for selling directly to customers over the internet and to be made into new products, also sold on-line. The preparation of product involves de-nailing and sorting the timber into sizes and type.
The project also continues to develop good recycling options for wood that cannot be re-used and this is sold commercially for animal bedding, heat and power production, chipping and wood pulp.
## **Retail**
Shop retail activity involves selling reclaimed timber and generic product lines as well as organising the interface with the public. The shop takes orders for bespoke items to be constructed and covers the telephone for orders and other correspondence. During this reporting year, all retail was conducted over the internet, or via telephone, with customers either paying for their orders to be delivered or collecting from the premises as Covid regulations allowed. As with many charities and businesses, the pandemic has led to a sharp contraction in sales which has strongly impacted the charity.
## **Loss of Premises and New Premises**
BHWRP closed its retail premises at Elder Place at the end of March 2020 on the expiration of the lease. The world pandemic hampered the search for new premises both before and after the end of the lease and the project has had to operate exclusively from its Ringmer premises during 2020/21. This impacted on both earnings and staff numbers due to the lack of workshop facilities and an active retail environment. At the time of writing this report, new premises have been found and refurbished in the heart of Brighton. These are highly visible premises with large shop windows, a spacious retail environment and room for workshops. The project fully expects a substantially better year ahead.
## **Changes to Staffing**
Like many charities and businesses, the project had to close for a period of time due to Covid-19 regulations. The charity took advantage of the government’s furlough scheme and thereby lost only one member of staff to redundancy.
At the end of the March 2021, staffing stood at 1 1 people working across retail, collections, the workshop and wood preparation. It is hoped the staff team will grow again in the new premises as income expands post pandemic.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Financial review**
## **Financial Outturns**
These new developments aided the project in growing its income during 2019/20 and have significantly improved the morale amongst staff and volunteers who have responded with pride to the increasing success and relevance of the project as well as the opportunity to learn more about materials that are not often used.
However, income decreased dramatically due to the Covid-19 pandemic during the financial year 2020/21: £237,442 (2019: £425,108). Despite income from the government’s furlough scheme which supported salary payments, the charity registered a deficit of £45,009, which included a sum of approximately £19,000 for a redundancy payment.
## **Financial Policy and Financial Outlook**
It is the policy of the directors to cover all operational expenses with a combination of sales, grants, fees, investments and fundraising income. To these ends a budget for premises refurbishment and for operating during 2021/22 has been published which has undergone significant scrutiny at both a managerial and board level.
While the charity will have acceptable reserves at the beginning of the financial year 2021/22, much of the remaining funds will be spent on refurbishing the new premises and supporting employment as the government’s furlough scheme ends and while the business recovers from the pandemic.
It is hoped that these reserves will grow during the second part of the financial year as trading returns to normal levels and the project is able to reach a wider audience of potential customers. This will allow unrestricted reserves to be rebuilt.
## **Reserves policy**
The board of directors, understanding their obligations to the health of the business, their statutory duty to staff in the case of redundancies and their new responsibilities as trustees of a charitable company have put a policy in place relating to reserves and agreed to make the following designations of funds:
- New premises improvement fund: £50,000
- Partial deposit for the acquisition of new premises: £50,000
- A redundancy fund against the need to close the business: £30,000
- Business wind up costs: £5,000
- Replacement vehicle fund: £15,000
These designations total £150,000 leaving enough liquidity to ensure cashflow for on-going operational activities for a minimum period of a three months.
## **Investment policy and objectives**
The trustees are responsible for the financial stewardship of the charitable company. At present, the company holds all financial assets as liquid assets in bank accounts. To ensure the security of the funds, these are spread between different financial institutions and are held at levels equal to or below the current FSCS thresholds.
Trustees have agreed to open the new premises and refurbish it so that it operates as a highly effective retail and workshop environment. This will entail a substantial investment of reserve funding but will ensure a realistic future for the project. It is hoped that the project will be able to occupy this new location for several years to come where a surplus can be realised and ultimately used to buy a premises, safeguarding the project in perpetuity and allowing the new charity to maximise public benefit. In the interim, the trustee s will consider making longer term investments to safeguard the charity’s financial reserves against buying a suitable premises, once the company once again returns to making a surplus.
The trustees will continue to maintain bank accounts with sufficient funds in liquid form to meet any cashflow or other financial needs in an appropriate timeframe.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Risk Assessment and Management**
The trustees are aware of their responsibility to ensure that significant risks to which the company is exposed are identified and to establish systems to manage those risks. The trustee s review the major risks to which the Charity is exposed on a regular basis and systems are implemented wherever possible to mitigate these risks. The t rustees believe that there is a satisfactory system of internal controls, which are also reviewed on a regular basis. The highest risk at present is the need to address the on-going deficit and progress is being made to reduce this as explained elsewhere in the report, most importantly exiting from the effects of Covid-19 with the business intact and with a new premises in place and generating a surplus.
The directors are aware of their responsibility to ensure that significant risks to which the company is exposed are identified and to establish systems to manage those risks. The directors review the major risks to which the Charity is exposed on a regular basis and systems are implemented wherever possible to mitigate these risks. The Trustees believe that there is a satisfactory system of internal controls, which are also reviewed on a regular basis. The highest risk at present is the need to address the on-going deficit and progress is being made to reduce this as explained elsewhere in the report, most importantly exiting from the effects of Covid-19 with the business intact and with a new premises in place and generating a surplus.
## **Plans for the Future**
## **Improved Trading from New Premises**
The project was delighted to be registered as a charity in England and Wales during this reporting year. New premises were found in Edward Street, in central Brighton, during the year and a lease was signed early in accounting year 2021/22.
The new premises are highly visible and have an excellent area for both retail and a workshop. The project will conduct its operations from this location and seeks to expand the range of products sold, both the refurbished wood lengths themselves and products manufactured from waste wood. In addition, a larger range of fixings and decorative ironmongery will also be sold to support the charitable purposes of the organisation.
The project will seek to surpass the number of volunteers with which it has worked in previous years and expand its appeal to a wider audience with the express purpose of meeting both its charitable objects but improving its financial position since reserves have been significantly depleted due to the Covid-19 pandemic and through designation for refurbishing the new premises.
## **Structure, governance and management**
## **Governing document**
The company is controlled by its governing document and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.
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 P West
D Nobbs P Smithson J McNulty
## **Recruitment and Appointment of Directors**
BHWRP is administered by a Board of Directors. Directors are appointed by the Board. There is a set period of three years as a tenure of office. New Board members are provided with a pack of information containing details of the constitution of the Company, budgets, minutes of recent Board meetings and papers dealing with key current issues, which can then be discussed in detail with other Board members. Trustee s meet at least three times a year.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **Due Diligence**
The trustees regularly review the terms and conditions of external service providers. During the next accounts period the trustees will review the staffing structure and suppliers of services in a bid to ensure the project is as financially efficient as possible.
## **Organisational Structure**
Brighton & Hove Wood Recycling Project is operated by the board of trustees who employ a Managing Director who is also a trustee. This role is for one day a week and is under review now that the business has been registered successfully as a charity. The project also employs a General Manager who is responsible for the day to day operation of the charitable business. The charity also employs a Collections Manager who oversees the collection of waste wood, a Workshop Supervisor who is in charge of the workshop and organising the manufacture of product and a Retail Supervisor who oversee the shop. These managers and supervisors are highly operational and are supported by a team of operational staff who report directly to them.
## **Trustee induction and training**
The company is developing an induction programme for new directors and has regard to the ongoing need for director training as the organisation transitions to becoming a charity. This includes the provision of up to date information on charity governance together providing trustees with a copy of the Charity commission publication: “The Essential Trustee”.
The trustees' r eport was approved by the Board of Trustees.
..............................
## **Mr P West**
Trustee Dated: .........................
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
## _**FOR THE YEAR ENDED 31 MARCH 2021**_
The trustees, who are also the directors of Brighton & Hove Wood Recycling Project 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 charitable company 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 charitable company 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 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.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **INDEPENDENT EXAMINER'S REPORT**
## **TO THE TRUSTEES OF BRIGHTON & HOVE WOOD RECYCLING PROJECT**
I report to the trustees on my examination of the financial statements of Brighton & Hove Wood Recycling Project (the charitable company) for the year ended 31 March 2021.
## **Responsibilities and basis of report**
As the trustees of the charitable company (and also its directors for the purposes of company law) you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 2006 (the 2006 Act).
Having satisfied myself that the financial statements of the charitable company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charitable company’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act) . In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
## **Independent examiner's statement**
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
- 1 accounting records were not kept in respect of the charitable company as required by section 386 of the 2006 Act; or
- 2 the financial statements do not accord with those records; or
- 3 the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
- 4 the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
M A Filsell FCA, on behalf of Knill James LLP
One Bell Lane Lewes East Sussex BN7 1JU
Dated: .........................
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**Unrestricted Unrestricted**
**funds**
**funds**
**general d esignated**
**2021**
**2021**
**Notes**
**£**
**£**
**Income and endowments from:**
Charitable activities
**3**
178,857
-
Investments
**4**
760
-
Other income
**5**
57,825
-
**Total income**
237,442
-
**Expenditure on:**
Raising funds
**6**
3,945
-
Charitable activities
**7**
278,506
-
**Total resources expended**
282,451
-
**Net outgoing resources before transfers**
(45,009)
-
Gross transfers between funds
(150,000)
150,000
**Net expenditure for the year/**
**Net movement in funds**
(195,009)
150,000
Fund balances at 1 April 2020
234,659
-
**Fund balances at 31 March 2021**
39,650
150,000|**Total**Unrestricted
funds
general
**2021**
2020
**£**
**£**
178,857
420,527
760
1,100
57,825
3,481
237,442
425,108
3,945
3,492
278,506
443,439
282,451
446,931
(45,009)
(21,823)
-
-
(45,009)
(21,823)
234,659
256,482
189,650
234,659|
|---|---|
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.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **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**
**14**
Net current assets
**Total assets less current liabilities**
**Provisions for liabilities**
**15**
**Net assets**
**Income funds**
Unrestricted funds
Designated funds
**16**
General unrestricted funds|**2021**
**£**
13,278
35,455
142,752
191,485
(13,076)
150,000
39,650|**£**
11,241
178,409
189,650
-
189,650
189,650
189,650|**2020**
**£**
8,532
44,806
198,250
251,588
(29,552)
-
234,659|**£**
15,584
222,036
237,620
(2,961)
234,659
234,659
234,659|
|---|---|---|---|---|
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **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.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
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 Trustees on .........................
.............................. Mr P West **Trustee**
## **Company Registration No. 03523786**
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
## **Charity information**
Brighton & Hove Wood Recycling Project is a private company limited by guarantee incorporated in England and Wales. The registered office is 104 Westfield Crescent, Brighton, East Sussex, BN1 8JA.
## **1.1 Accounting convention**
The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, 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 charitable company is a Public Benefit Entity as defined by FRS 102.
The charitable company has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling , which is the functional currency of the charitable company. Monetary a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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 charitable company 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.
## **1.3 Charitable funds**
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
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 financial statements.
Endowment funds are subject to specific conditions by donors that the capital must be maintained by the charitable company.
## **1.4 Income**
Income is recognised when the charitable company 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 charitable company 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 charitable company 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.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
**(Continued)**
## **1.5 Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them, including allocated governance costs.
Governance costs includes those costs associated with meeting the constitutional and statutory requirements of the charity and include the audit fees and costs linked to the strategic management of the charity.
All costs are allocated between the expenditure categories of the SOFA on a basis designed to reflect the use of the resource. Costs relating to a particular activity are allocated directly; others are apportioned on estimated usage as a proportion of directly attributable expenditure.
## **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:
Plant and equipment 15% reducing balance basis Computers 20% straight line basis Motor vehicles 25% reducing balance basis
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.
## **1.7 Impairment of fixed assets**
At each reporting end date, the charitable company 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.
## **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.
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## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **1 Accounting policies**
## **(Continued)**
## **1.10 Financial instruments**
The charitable company 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 charitable company's balance sheet when the charitable company 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 p aymen ts 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 charitable company’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 charitable company 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.
## **1.13 Leases**
Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.
- 14 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **2 Critical accounting estimates and judgements**
In the application of the charitable company’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 Charitable activities**
|**Waste wood Workshop and**
**education**
**2021**
**2021**
**£**
**£**
Income from charitable
activities
153,385
16,168
Ancillary trading
income
9,304
-
162,689
16,168|**Total**
**2021**
**Waste wood Workshop and**
**education**
**2020**
**2020**
**£**
**£**
**£**
169,553
322,085
63,491
9,304
34,951
-
178,857
357,036
63,491|**Total**
**2020**
**£**
385,576
34,951
420,527|
|---|---|---|
## **4 Investments**
||**Unrestricted**|Unrestricted|
|---|---|---|
||**funds**|funds|
||**general**|general|
||**2021**|2020|
||**£**|£|
|Interest receivable|760|1,100|
- 15 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **5 Other income**
||**Unrestricted**|Unrestricted|
|---|---|---|
||**funds**|funds|
||**general**|general|
||**2021**|2020|
||**£**|£|
|Coronavirus job retention scheme|57,825|-|
|Other income|-|3,481|
||57,825|3,481|
## **6 Raising funds**
||**Unrestricted**|Unrestricted|
|---|---|---|
||**funds**|funds|
||**general**|general|
||**2021**|2020|
||**£**|£|
|Fundraising and publicity|||
|Staff costs|3,945|3,492|
||3,945|3,492|
- 16 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **7 Charitable activities**
|**Waste wood**
**& ancillary**
**trading**
**Workshop**
**and**
**education**
**2021**
**2021**
**£**
**£**
Staff costs
143,307
52,982
Depreciation and
impairment
1,926
-
Wood purchase
10,025
4,297
Firewood & coal
4,074
1,746
Chipping & disposal
10,533
4,514
Giftware & incidentals
770
330
Other direct costs
-
-
Couriers
1,190
510
Workshop expenses
-
2,248
171,825
66,627
Share of support costs
(see note 8)
22,888
10,667
Share of governance costs
(see note 8)
4,549
1,950
199,262
79,244|**Total**
**2021**
**Waste wood**
**& ancillary**
**trading**
**Workshop**
**and**
**education**
**2020**
**2020**
**£**
**£**
**£**
196,289
135,055
85,277
1,926
4,074
-
14,322
36,982
15,849
5,820
7,216
3,092
15,047
18,265
7,828
1,100
11,755
5,038
-
1,292
554
1,700
91
39
2,248
-
9,666
238,452
214,730
127,343
33,555
65,700
28,157
6,499
5,256
2,253
278,506
285,686
157,753|**Total**
**2020**
**£**
220,332
4,074
52,831
10,308
26,093
16,793
1,846
130
9,666
342,073
93,857
7,509
443,439|
|---|---|---|
- 17 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**8**
**Support costs**
**Support**
**costs**
**Governance**
**costs**
**£**
**£**
Temporary staff and
recruitment
28
-
Rates
(12,027)
-
Rent
3,853
-
Travel
1,082
-
Motor expenses
16,262
-
Staff training and welfare
492
-
Telephone and IT
1,285
-
Light and heat
1,487
-
Insurance
7,749
-
Repairs and
maintenance
1,819
-
Marketing
9,858
-
Printing, postage &
stationery
369
-
Subscriptions
140
-
Bank Charges
3,918
-
Sundry Expenses
(2,760)
-
Independent examiner/
accountancy fees
-
1,688
Legal and professional
-
2,901
Bookkeeping fees
-
1,910
Management fees
-
-
33,555
6,499
Analysed to
Charitable activities
33,555
6,499|**2021**
**£**
28
(12,027)
3,853
1,082
16,262
492
1,285
1,487
7,749
1,819
9,858
369
140
3,918
(2,760)
1,688
2,901
1,910
-
40,054
40,054|Support
costs
Governance
costs
£
£
1,573
-
28,961
-
6,478
-
2,459
-
22,408
-
3,248
-
2,011
-
3,389
-
6,900
-
5,035
-
3,309
-
1,309
-
73
-
4,518
-
2,186
-
-
1,083
-
3,749
-
2,609
-
68
93,857
7,509
93,857
7,509|2020
£
1,573
28,961
6,478
2,459
22,408
3,248
2,011
3,389
6,900
5,035
3,309
1,309
73
4,518
2,186
1,083
3,749
2,609
68
101,366
101,366|
|---|---|---|---|
Governance costs includes payments to the independent examiner of £ 1,500 (2020 - £nil ) for examination fees.
## **9 Trustees**
O ne of the trustees received remuneration of £10,525 f rom the charitable company during the year.
- 18 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **10 Employees**
The average monthly number of employees during the year was:
|Employees under contract
**Employment costs**
Wages and salaries
Social security costs
Other pension costs|**2021**
**Number**
12
**2021**
**£**
191,082
6,961
2,191
200,234|**2020**
**Number**
15
**2020**
**£**
211,017
9,398
3,409
223,824|
|---|---|---|
There were no employees whose annual remuneration was £60,000 or more.
## **11 Tangible fixed assets**
|**Plant and**
**equipment**
**Computers Motor vehicles**
**£**
**£**
**£**
**Cost**
At 1 April 2020
917
2,270
40,485
Disposals
-
-
(14,825)
At 31 March 2021
917
2,270
25,660
**Depreciation and impairment**
At 1 April 2020
316
1,045
26,727
Depreciation charged in the year
90
454
3,320
Eliminated in respect of disposals
-
-
(14,346)
At 31 March 2021
406
1,499
15,701
**Carrying amount**
At 31 March 2021
511
771
9,959
At 31 March 2020
601
1,225
13,758|**Total**
**£**
43,672
(14,825)
28,847
28,088
3,864
(14,346)
17,606
11,241
15,584|
|---|---|
- 19 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
|**12**
**Stocks**
Finished goods and goods for resale
**13**
**Debtors**
**Amounts falling due within one year:**
Trade debtors
Other debtors
Prepayments and accrued income
**14**
**Creditors: amounts falling due within one year**
Other taxation and social security
Trade creditors
Other creditors
Accruals and deferred income|**2021**
**£**
13,278
**2021**
**£**
20,796
4,500
10,159
35,455
**2021**
**£**
6,249
4,896
380
1,551
13,076|**2020**
**£**
8,532
**2020**
**£**
25,889
10,200
8,717
44,806
**2020**
**£**
18,583
8,022
580
2,367
29,552|
|---|---|---|
- 20 -
**BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **15 Deferred taxation**
Deferred tax assets and liabilities are offset where the charitable company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
||**Liabilities**|**Liabilities**|
|---|---|---|
||**2021**|**2020**|
|**Balances:**|**£**|**£**|
|Tax losses|-|2,961|
|||**2021**|
|**Movements in the year:**||**£**|
|Liability at 1 April 2020||2,961|
|Credit to profit or loss||(2,961)|
|Liability at 31 March 2021||-|
## **16 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:
|**Movement**
**in funds**
**Incoming**
**resources**
**Balance at**
**1 April 2020**
**£**
**£**
Premises improvement fund
-
-
Deposit for new premises
-
-
Redundancy fund
-
-
Replacement vehicle fund
-
-
Business wind-up fund
-
-
-
-|**Transfers**
**Balance at**
**31 March 2021**
**£**
**£**
50,000
50,000
50,000
50,000
30,000
30,000
15,000
15,000
5,000
5,000
150,000
150,000|
|---|---|
- 21 -
## **BRIGHTON & HOVE WOOD RECYCLING PROJECT**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_
## **17 Analysis of net assets between funds**
|**Unrestricted**
**funds**
**Designated**
**funds**
**2021**
**2021**
**£**
**£**
Fund balances at 31 March 2021 are
represented by:
Tangible assets
11,241
-
Current assets/(liabilities)
28,409
150,000
Provisions
-
-
39,650
150,000|**Total**Unrestricted
funds
**2021**
2020
**£**
£
11,241
15,584
178,409
222,036
-
(2,961)
189,650
234,659|
|---|---|
## **18 Related party transactions**
There were no disclosable related party transactions during the year (2020 - none).
- 22 -