REGISTERED COMPANY NUMBER: 00754694 (England and Wales) REGISTERED CHARITY NUMBER: 238168
REPORT OF THE TRUSTEES AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 FOR
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
Duncan & Toplis Audit Limited, Statutory Auditor 3 Princes Court Royal Way Loughborough Leicestershire LE11 5XR
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
| Page | |
|---|---|
| Reference and Administratve Details | 1 |
| Report of the Trustees | 2 to 6 |
| Report of the Independent Auditors | 7 to 9 |
| Statement of Comprehensive Income | 10 |
| Statement of Changes in Reserves | 11 |
| Statement of Financial Positon | 12 |
| Statement of Cash Flows | 13 |
| Notes to the Statement of Cash Flows | 14 |
| Notes to the Financial Statements | 15 to 24 |
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
REFERENCE AND ADMINISTRATIVE DETAILS FOR THE YEAR ENDED 31 MARCH 2023
| TRUSTEES | B R Bunn |
|---|---|
| F Fay - Treasurer | |
| Mrs R Johnson - Chairman | |
| Mrs J Stephens | |
| C Jennison | |
| A Wood | |
| D M Hastngs | |
| W G Holland | |
| COMPANY SECRETARY | Mrs J Stephens |
| REGISTERED OFFICE | 44 Westield Drive |
| Loughborough | |
| Leicestershire | |
| LE11 3QL | |
| REGISTERED COMPANY NUMBER | 00754694 (England and Wales) |
| REGISTERED CHARITY NUMBER | 238168 |
| SENIOR STATUTORY AUDITOR | Niall Kingsley FCA |
| AUDITORS | Duncan & Toplis Audit Limited, Statutory Auditor |
| 3 Princes Court | |
| Royal Way | |
| Loughborough | |
| Leicestershire | |
| LE11 5XR | |
| SOLICITORS | Moss Solicitors |
| 80-81 Woodgate | |
| Loughborough | |
| Leicestershire | |
| LE11 2XE | |
| BANKERS | Natonal Westminster Bank plc |
| Market Place | |
| Loughborough | |
| Leicestershire | |
| LE11 3NZ |
Page 1
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
REPORT OF THE TRUSTEES
FOR THE YEAR ENDED 31 MARCH 2023
The board of the trustees (who are also the directors of the Society for the purpose of company law) present their report, which incorporates the strategic report, and the financial statements for the year ended 31st March 2023.
STRATEGIC REPORT Achievement and performance
Principal activities
The Society's principal activity for the year under review has been that of providing care for elderly residents with dementia.
The residents with dementia are accommodated in Westfield House and, since October 2022, Ingleside House which are both registered for dementia care.
The Board employs an Activities Coordinator and provides a budget for activities. The Board regards this as an important aspect of the care that it provides because it wishes to provide an enjoyable and stimulating environment for the residents. Similarly great care is taken to ensure that residents at Westfield House and Ingleside House receive food and drink which is in accord with their dietary requirements.
Westfield House had consistently received a “Good” grading from CQC and had achieved the LCC’s “Gold Standard”. However, following on from a CQC visit in January, Westfield House and Ingleside were judged as “Requires Improvement” and during a subsequent visit in September both Houses were judged “Inadequate”. In order to maintain a high level of care and to ensure that both houses once again are judged “Good” the Society's employees receive regular training for which there is a budget allocation and the buildings are maintained to a high standard. The management and staff will be working hard to ensure that next time CQC makes a visit they will see significant improvements.
Financial review
Review of the business
The Trustees can report an operating deficit for the year of £232,091 compared to an operating deficit of £132,629 for the previous year. The Society also generated a total comprehensive loss of £412,134 after investment income and changes in the value of investments. Last year, total comprehensive income of £294,627 was generated after the inclusion of the surplus on the sale of May Mills House during the prior year. An operating deficit arose due to the post-covid high number of empty rooms at Westfield House and the 17-week delay in the opening of Ingleside during which time we were making interest payments to Charity Bank on the mortgage we had secured with them. This problem was exacerbated by the continuously rising interest rates and the high energy costs which affected the whole of the UK. A particular problem was the difficulty in recruiting suitable staff and the consequent significant increase in agency fees which were the highest in the Society’s history. However, the Trustees are pleased to report that, with the near full occupancy at both houses, the current management figures are showing both operating and total comprehensive surpluses which we anticipate to continue throughout the current year.
The reserves of the Society remain in a strong position with £3,522,554 in reserves, of which £328,216 is available in cash as indicated on the Statement of Cash Flows.
In order to fulfil its objective, the Society has two properties. Although these properties are unrestricted assets they cannot be realised without undermining the Society's work. The board of Trustees therefore consider it appropriate to reflect the net investment in properties, after allowing for the deferred capital grant, of £5,062,888 by means of a designated fund.
Housing property repair and maintenance expenditure is charged to the Income and Expenditure account in the period in which it is incurred. As part of the reserves of the Society there exists a designated reserve for future significant expenditure of this nature. The Board of Trustees considers it prudent to allocate funds in this way so that such costs do not threaten the Society's free reserves position. The level of the reserve is calculated as a reasonable estimate of the level of expenditure which may arise and at 31 March 2023 was £100,000.
A capital expenditure reserve has been created to fund future expenditure on fixtures, fittings and equipment. The amount set aside at the year end is £30,000 and is based on the Society's obligations to replace assets of this type as they wear out.
A designated general charitable reserve represents the accumulated charitable donations received by the Society unexpended at the financial reporting date. There are no restrictions on the allocation of those receipts and at the year end the balance was £74,098.
After taking account of the designated funds described above the unrestricted funds at 31 March 2023 are negative £1,744,432. The negative figure takes in to account the mortgage on Ingleside. This allows the Society to continue with its objective of providing for and enhancing the quality of care received by the residents.
Page 2
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2023
STRATEGIC REPORT
Review of the business (continued)
Given the straight forward nature of the business, the Society's Trustees are of the opinion that analysis using KPIs is not necessary for understanding of the development, performance or position of the business.
The Abbeyfield Loughborough Society is committed to providing affordable, caring and sustainable solutions for older people through a range of high quality services. Our strength lies in professionally catering for the needs, wants and aspirations of our residents with dignity and compassion in a warm friendly family environment.
Demand from an aging population for accommodation offered is likely to be steady given our previous reputation for total quality care at competitive prices, and reflected in, in normal times, low void levels and our previous positive inspection and assessment reports from CQC and LCC. However, in the medium term there is likely to be increased competition in dementia care and our most recent inspections and quality grades are likely to have an impact on our ability to attract residents.
Budgetary considerations will form part of the above and will be reflected in our annual business plans. We can demonstrate sound finances with adequate cash reserves of over £300,000 and investments of over £500,000 to ensure long term viability. We also have an effective committee and management structure to support and inform business decisions. Some of our reserves were used to finance the new facility on the Ingleside site and it was necessary to borrow a considerable amount of money to carry out this project. We secured a loan of £3million from Charity Bank but were able to reduce this by £400,000 following the sale of May Mills House thus reducing our overall debt and our monthly interest payments.
We are fortunate to have dedicated and committed staff who undergo on-going and extensive training and development programmes to provide a wide range of skills. The budget includes a substantial amount to support this training. However, recruitment and retention of good quality staff has become a serious issue for many in the care businesses and Abbeyfield is no exception.
It is the Society's policy to pay all of our staff the "Real Living Wage," as a minimum. This reflects the Board's view that caring for elderly residents with dementia is a skilled job and that all who work at Abbeyfield contribute to the high quality of care provided at both Westfield House and Ingleside. The Society will need to be mindful of the impact this will have on our fees, and consequently the ability of potential residents to fund their own care in the future, or to access appropriate financial support from the County Council.
Although there is an element of uncertainty with the longer-term future direction of care given concerns with funding reductions, declining assets held by residents and their families and the progress of medical science, we remain confident that there will be an on-going demand for care of the elderly and particularly for care of people with dementia.
Public benefit
The Society is run by a Board of Trustees comprised entirely of volunteers. It also relies on volunteers, who are recruited locally, throughout the Society to assist with activities and events.
The Society currently budgets for £24,000 of unrecoverable residents' fees per annum and is very sympathetic to residents who become unable to pay their fees due to a change in their circumstances and the refusal of Leicestershire County Council to pay the full fees of their funded residents.
The fees are currently maintained at a level that is considered to be affordable to all and is competitive in the current market.
The Board of Trustees has paid due regard to guidance issued by the Charity Commission in deciding which activities it should undertake.
Investment policy and objectives
Ad-hoc meetings and phone conversations take place with Barclays Wealth and they have assessed Abbeyfield's risk profile as being at the low end of medium. The basic mix of the portfolio is 67% stock market and 33% bank deposits. The Board is satisfied with the performance of its investments.
Page 3
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2023
STRATEGIC REPORT
Reserves policy
It is proposed that the retained deficit of £412,134 is deducted from reserves.
The level of reserves remains high in order for the Society to guarantee the level of care they can provide to residents in the future. The Society will continue to maintain a sufficient level of reserves to enable it to meet any unforeseen events.
As detailed in the report the Board of Trustees is aware of the changing needs of the people in society and recognises that these changes may require additional funding.
Principal risks and uncertainties
The Board of Trustees have assessed the major risks to which the charity is exposed, in particular those related to the operations and finances of the Society, and are satisfied that systems are in place to mitigate our exposure to the major risks. However, volatile energy prices and the continuing difficulty to recruit and retain good staff will have short to medium-term effects.
One of the main risks to the Society relates to the regulatory environment. Failure to meet regulatory requirements would impact both the operations and reputation of the Society. This risk is mitigated through the constant monitoring of regulatory requirements by management though the difficulties we experience in recruiting and retaining good staff, particularly at the higher level, have impacted on our ability to meet all regulatory requirements.
We take advice from Barclays Wealth in relation to our investments and the Board, advised by the Treasurer, has savings in recognised financial institutions all covered by the Financial Services Compensation Scheme (as per its Savings and Investment Policy).
Market value of land and buildings
The Board of Trustees is of the opinion that the market value for the existing use of the land and buildings is £8,995,668 (2022: £4,177,880). This is based upon insurance valuations and has not been incorporated in the financial statements.
Future developments
The objectives of the Society are to continue to provide a high level of care and support in both Westfield House and Ingleside and to that end a systematic programme of training has been introduced to ensure that all staff are familiar with and capable of carrying out the demanding roles of a “carer”.
Westfield House and Ingleside continue to develop their provision for the care of those diagnosed with dementia, ensuring that new methods and information through research are considered and implemented to ensure the best possible care for our residents. It is anticipated that dementia care will remain a key priority for the Society.
Demand from an ageing population for the accommodation offered by the Society is likely to be steady given our previous reputation for quality care at competitive prices.
As referred to in the section related to going concern in note 2 of the financial statements, a further inspection by the CQC was carried out in September 2023 which gave an “inadequate” rating. The impact of this is that we are unable to take in any more residents until a further inspection has been carried out which is expected in 5 months’ time. As trustees we were extremely disappointed to have received this rating and are committed to implementing the recommendations that the CQC, and our local authority has made. This is of the upmost importance and our highest priority in order to ensure that our residents receive the highest standards of care possible and ensure that we can support new residents in need of care. It was pleasing that during these inspections people within our care and their relatives who were spoken to were extremely positive about the care they or their family member receives. Similarly, our staff members spoke positively about their training and support received and about working with us in general. We cannot though and do not take these recommendations lightly as the implications are too significant. We need to ensure that we are able to continue to operate and provide quality care to those who need it and also to maintain the levels of occupancy required to ensure we are financially viable for the foreseeable future.
Value for money
The Society is charged with the responsibility for providing and demonstrating that it does offer value for money. The Society views value for money achievement as being the optimal balance between financial performance and the provision of a quality service that results in a high level of resident satisfaction. The Society monitors financial and operational performance monthly and benchmarks itself both within the National Abbeyfield Society but also externally.
Page 4
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2023
STRATEGIC REPORT
Value for money (continued)
Value for Money Metrics
In response to the Regulator of Social Housing Technical note of April 2018 the Society now reports on the Value for Money metrics. There are 3 metrics covered by this note.
Metric 1 – Gearing %
This metric assesses how much of the adjusted assets are made up of debt and the degree of dependence on debt finance. The gearing of the Society is 42.16% (2022 – 32.16%).
Metric 2 – Operatonal Margin %
The Operational Margin demonstrates the profitability of operating assets before exceptional expenses are taken into account. The operational margin of the Society is negative at -13.92% (2022 – negative at – 10.61%).
Metric 3 – Return on Capital Employed %
This metric compares the operating surplus to total assets less current liabilities. For the Society this is negative at – 3.47% (2022 – negative at -2.08%).
STRUCTURE, GOVERNANCE AND MANAGEMENT
Status
The Society is a company, registered in England and Wales limited by guarantee (Number 754694), having no share capital and with solely charitable purposes. It is also a registered charity (Number 238168) and with the Homes and Communities Agency as a housing association (Number H0595).
Members of the Board of Trustees
In accordance with the Articles of Association the members of the Board of Trustees as below, are members of the Society.
B R Bunn D Hastings F Fay - Vice Chairman and Hon. Treasurer W G Holland (appointed 28.06.2022)
C Jennison R Johnson - Chairman J Stephens - Hon. Secretary A Wood
Recruitment and appointment of new trustees
The Board of Trustees is typically comprised of between eight and twelve individuals with a cross section of management skills. Potential trustees are initially approached by existing board members and invited to attend two board meetings to gain an understanding of the operations of the Society. They are also shown around the Society's houses to see how they operate.
Following this process an invitation to join the board is made. The training needs of new board members are assessed based on their existing skills and experience and the need for future training is kept under constant review.
We are regularly looking to recruit other trustees but we currently have eight trustees appointed which is sufficient to our requirements.
Organisational structure and governance
The Society has a clear functional organisational structure with each house benefiting from professional care and catering staff. There is also a well-defined administration function within the Society and an active board of trustees who oversee all decision making.
Day-to-day management of the Society is delegated by the Board to the General Manager, Mrs Tess Atwall. The General Manager's salary is reviewed annually by the Chairman, discussed at the Staff sub-committee and a recommendation is made to the full Board. The salary of the Care Manager is reviewed by the General Manager and then follows the same procedure as that outlined for the General Manager. In both cases due attention is given to the local recruitment situation in determining the salaries. The remuneration of all other employees is reviewed annually by the Finance Committee.
Page 5
THE ABBEYFIEID LOUGH8O¥tOUGH SOCIM LIMITED REPORT OF ThE TRLISTEES FORTME YEAR ENDED 31 MARCH 2013 STRucfuRE, GOVERNANCE AND MANAGEMENT Corporate ¥overnance The Society has adopted a Code of Conduct for Board metnbers. This rode refletts the seven principle5 of public lrfe as adopted by the Nolan Committee. Thi5 k5 compliant with the National HousinE Federation5 Excellence in Govefnance code in all #reas except for On one relating to the adopllon of a Mernbership Policy wlth defined terrns of office for all 803rd members. This is conSered to be potentially detrimental to the organisamon's well-being in terms of CQC Inspethon5. the Society's currert development progr3mme, and the chèllenge5 the care sector is experiencing. The Board ha5 conducted an annual review of the effectiveness of the systems of internal £ontrol. No ir55tance5 have been idenfjfied of internal centrol weakne$5e5 resulting tn matÈri81 Fnisstatement or loss. STATEMENT OF TRUSTEES, RESPONS18ILmE5 The trustees (who are also the director5 of The Abbeyfield LoJ8hbtsrough Society Limited for the purposes tsf ci)rnpaTr¥ lawl are responsible for preparinE the Report of the Trustees and the financial statement5 in accordance with applicable law and United Kingdom Accounting Standard5 Iunited Kin8dem Generally Accepted Accounting PrattitÈl. Company law iequires the trustees to prepare financial statements for each financial VearWhh 8Die a true and fair view of the State of Hffjirs of the chafitèble corTIP3ny and of the incorning resources 8tid appllcaifon of resovrces, includinE the Incorne artd expenditure, of the ¢harit3ble companyfor that per+od. In preparin8 those linancizl statements, the tNstees 3rÈ rèquired to select suitable actounting policies and then apply them consistentty., ObSee the methods and winciples In the Charity SORP,. make jvdgements and estimat rhat are reasontble and prudent,. stètewhether2pplicable UK Accounn6 Standards and the staterTrÈntof Recommended Practice"Actounting by Registefed Sociè Housing Provider$ 2018" and FRS102 have been followed, Subject to any material depèrtures disclosed and explained in the Inancl81 statement5,' and prepare the linancial Statements on the 8oing concern basis unless it 15 inappropriate to presume that the charitable companv will continue in business. Thetrv5tees are responsiblefor keèping proper accountin8 recordswhich disclose with reasonable at¢ur#cy at any time theftnancial position of rhe chèritable cornpany and to enable them to ensure that the financièl statements complywith the Companies Act 2006 and the housing and Regeneration Act 2008 and the Accounting Directron for Registered Providers of Soci31 Housing 2022. They are hlso responsible for sèfÈguarding the a55ets of the charltable Company and hence for taking rea50n4ble Steps forthe prevention and detection of fraud and other iire8ularittes. In 50 far as the trustees are Bware.. there is no relevant audit informatson of which the charitable company's auditors are unaware.- and the tru5tee5 have taken all steps that they ou8ht to have taken to make themselve5 aware ef any relevant •udit information and to e5tsbli5h that the auditor5 are aware of that Information. AUDITORS The auditor5. Duncan & Toplis Audit Limited. Sratutory Auditor. will be proposed for re-appointrnent Jt the forthcomln8 Annual General MeÈfjn8. Report of the trustees. incorporanng a strategic reporL approved by order ot the board of trustees, as the cornpany directors, on nd signed on the board's behalf by.. Mrs R Johny)n- Chairman Page 6
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
Opinion
We have audited the financial statements of The Abbeyfield Loughborough Society Limited (the 'company') for the year ended 31 March 2023 which comprise the Statement of Comprehensive Income, the Statement of Changes in Reserves, the Statement of Financial Position, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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 2023 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, the Housing and Regeneration Act 2008 and the Accounting Direction for private registered providers of social housing in England 2022.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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.
Material uncertainty related to going concern
We draw attention to the section related to going concern in note 2 of the financial statements which indicates that in order to continue to operate, and operate at the occupancy levels that make that financially possible, the charitable company needs to implement improvements and recommendations arising from recent inspections and pass follow up inspections. As stated in note 2, these events or conditions, along with other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the charitable company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our Report of the Independent Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 Strategic Report and the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-
the Report of the Trustees has been prepared in accordance with applicable legal requirements.
Page 7
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
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 Strategic Report and the Report of the Trustees.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
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 directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
In addition, we have nothing to report in respect of the following matter where the Housing and Regeneration Act 2008 requires us to report to you if, in our opinion:
- a satisfactory system of control over transactions has not been maintained.
Responsibilities of directors
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 directors 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 directors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Our responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit.
The potential impact of different laws and regulations varies considerably. Firstly, the company is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws as part of our financial statements audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as depreciation of tangible fixed assets as well as the risk of inappropriate journal entries to manipulate reported profitability. Audit procedures performed by the engagement team included the identification and testing of unusual material journal entries and challenging management on key estimates, assumptions and judgements made in the preparation of the financial statements. We carried out detailed substantive tests on accounting estimates, including reviewing the methods and data used by management to make those estimates such as residual values and expected asset replacement cycles, reperforming the calculation, reviewing the outcome of prior year estimates, and reviewing the outcome of current year estimates since the financial reporting date.
Page 8
REPORT OFTHE INDEPENDENT AUDITORSTOTHE MEM8ERS OF THE AB8EYFIELD LOUGHBOROUGH SOCIETY LIMITED Our ft5pon%billtresftff the audlt of the fln•n¢i•l rt•tme•ts Icontinuedl Secondly, Ihe company (5 subjert to other laws and regulafjon5 where the tonsequence for rM)n-tomplk3nte covld have o material effect on the arTrount5 or disclosures in the financial ststemènts. We idènttfied the ftsllowlng areas Hs those rnost Ilkely to have such an effett." The Landlord and TerTrant Act, Health and Social Care Act. Food Safety regUlaonS, COVIL7-19 infECtion CDntrtsl and Employment laws. Auditing stèndards limitthe required audit procedures to identify non-compllance with these laws ènd regulations to enquiry of thÈ Olrecturs #nd other m3nogement and inspecfj¢n, This Included a review of inspettion reports lor any evidence of non-compliance. in addltion to a review cf statutory Meen6 mlnutes and soli£itor correspondence. Through these procedures, if we became aware of any non-compliaritè, we cDn5idered the irnpact on the procedures perfom)ed on the related h"nancial statement items. Owlng to the Inherent Ilmitattons of an audit, therè Is an ¥navoidab rlsk that we may not have detected some materlal mis5tOtement5 in the financial statement5, even though we hwe properly planned and performed our aijdit in atcordancÈ with auditing 5tsndards. The further removed non-compllance with laws and regulation5 is from the events and transactions reflected in the ftnancial statements, the less likÈly the inherently limited procedure5 required by auditing standards would Idenufy it. As wh any èudit, thefe is a greateT riskof non-detectron of ErguIarItieSaSthese may involve tollusion, intentional ornissions ofthe override of internal controls. We are not responsible for preventin8 non-wmpliance 3nd cannot be expected to detect non<ompliance with 11 laws and regulaon$. A further descriptton of our responslblli#es for the aodlt of the finan¢lal st•tements is located on the Financial Repothni Council's website at b.fr¢.0r8.Uvaudltor$p9nsFlItr5. Thi5 deScrIp0 fornis part of our Report of the IndependentAudltors. Us• olour report This report is made soletyto the compony'5 rnembers, as a body* In accordance wlth Chapter 3 of Part 16 of the Companies Art 2006 arid section 137 of the Housing and Regeneratron Act 2008. Our audit work has been undertakèn so that we might State to the company's members those matters we ère required to 5tste to them In on auditory, report and for no other purpose. To the fullest extent permitted by law, we do not accept ora55urne responsibility to anyone otherthan the company and the company's members 4$ è body, ft)r our audit work. forthis report, or for the opinlons we have formed. Nlall King51ey FCA (Senior Statutory Audltorl for and on behalf of Duncan & Toplis Audit Limit. Statutory Auditor 3 Princes Court Royal Wav Loughborou8h Lelcestershire LEII 5XR Date.. Page 9
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED STATEMENT OF COMPREHENSIVE INCOME IIMCORPORATING AN INCOME AND EXPENDITURE ACCOUNTI FOR THE YEAR ENDED 31 MARCH 2023 2023 2022 As restated Note5 Turnover 1.667.144 1,249.884 CTr5t of sales I 706 095 1 239 219 Gross surpluslldeficitl 138.9511 10.665 Administrative expenses 1238,3601 1236,4131 Other operating iricome 45,220 93,119 Operatln8 deflcfjl 1232,0911 1132,6291 Profitlllossl on disposal of fixed assèts 312.982 Inlerest pay3ble and other finance cost5 InvE5tfnent Income Other Income Movement in f3ir value of fiaancial instruments 1131,5911 119.8491 13,601 142,2041 120,6161 32.230 12,146 70,514 TOTAL COMPREHENSIVE INCOMEIILOSSI FOR THE YEAR 1412.1341 294,627 CONTINUING OPERATIONS All income and expenditure has arisen from continuing activiknes. The StatÈrnent of Comprehensive Income wa5 approved by the board on... F F?y- Trustee Mrs R johnson Trusite The notes form part of these financi31 st3temen15 Pège 10
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 MARCH 2023
| At 1 April 2022 Deficit for financial year Total comprehensive income At 31 March 2023 |
Income and expenditure reserve £ 3,934,688 (412,134) (412,134) 3,522,554 |
Total £ 3,934,688 (412,134) |
|---|---|---|
| (412,134) 3,522,554 |
The notes form part of these financial statements
Page 11
THE ABeEYFIELD LOUGHBOROVGH SOCIETY LIMITED IIiEGISTERED NUMbER-. I)01546941 STATEMENT OF FINANCIAL POSIT1014 31 MARCH 2023 2023 2022 As re51ated Notes FIXED ASSET5 Tangible assets Investments 5,996,061 576,567 4,657,576 1.268.356 12 6,572,628 5,925.932 CURRENT ASSErs Debtor5 Cash at bank and in hand 13 SS,228 326,9L3 30,933 1,077.551 382,141 1.108,484 CREDITORS Amounts falling due within one year 14 1268.3501 1643,5711 NETCURRENT ASSETS 113,791 464,913 TOTAL ASSETS LESS CURRENT LIABILITIES 6.686,419 6,390.845 CREDITORS Amounts falling due after more than one year 15 13,163,865> 12,456,157> NET AssErs 3,522,554 3,934.688 CAPITAL AND RESERVE5 Income and expenditure resÈrvÈ 27 3,522.554 3.934.688 3.522,554 3,934.688 The hnancial S4aremenis were approved by the Board of Trustees and avthorised for Issue on Signed on it5 behalf by.. and were F Fay- Trustee Mr5 R Johnson Trvsiee The notes form part of these financial staletnent5 Page 12
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023
| Notes Cash flows from operating activities Cash generated from operations 1 Net cash provided by operating activities Cash flows from investing activities Purchase of tangible fixed assets Sale of tangible fixed assets Sale of fixed asset investments Interest received and similar income Net cash (used in)/provided by investing activities Cash flows from financing activities New loans in year Interest paid Net cash provided by financing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period 2 Cash and cash equivalents at the end of the reporting period 2 |
2023 £ (575,125) (575,125) (1,421,402) - 600,970 40,814 (779,618) 734,143 (131,591) 602,552 (752,191) 1,080,407 328,216 |
2022 £ 336,811 336,811 (2,538,378) 705,572 4,191 44,196 (1,784,419) 1,865,635 (20,616) 1,845,019 397,411 682,996 1,080,407 |
|---|---|---|
The notes form part of these financial statements
Page 13
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023
1. RECONCILIATION OF NET (EXPENDITURE)/INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES
| Operatng defcit for the year Adjustments for: Depreciaton charges Movement on deferred capital grant Increase in debtors Increase/(decrease) in creditors Net cash (used in)/provided by operatons ANALYSIS OF CASH AND CASH EQUIVALENTS Cash in hand Notice deposits (less than 3 months) Cash deposit on Fixed Asset Investment Total cash and cash equivalents |
2023 £ (232,091) 82,917 (8,563) (24,295) (393,093) (575,125) 2023 £ 2,906 324,007 1,303 328,216 |
2022 £ (132,629) 53,939 (47,622) (8,674) 471,797 336,811 2022 £ 1,177 1,076,374 2,856 1,080,407 |
|
|---|---|---|---|
2. ANALYSIS OF CASH AND CASH EQUIVALENTS
3. ANALYSIS OF CHANGES IN NET DEBT
| Net cash Cash at bank and in hand Debt Debts falling due within 1 year Debts falling due afer 1 year Total |
At 1.4.22 £ 1,077,551 1,077,551 - (1,865,635) (1,865,635) (788,084) |
Cash fow £ (750,638) (750,638) (17,872) (716,271) (734,143) (1,484,781) |
At 31.3.23 £ 326,913 326,913 (17,872) (2,581,906) (2,599,778) (2,272,865) |
|---|---|---|---|
The notes form part of these financial statements
Page 14
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
1. GENERAL INFORMATION
The society is a company limited by guarantee, incorporated in England and Wales (Number 754694), having no share capital and with solely charitable purposes. It is also registered as a charity (Number 238168) and with the Housing Corporation as a housing association (Number HO595). The company is governed by the Landlord and Tenant Act 1985.
The registered office is 44 Westfield Drive, Loughborough, Leicestershire, LE11 3QL.
The financial statements are prepared in Sterling which is the functional currency of the society and rounded to the nearest £.
The financial statements cover the individual entity.
The society constitutes a public benefit entity as defined by FRS 102.
The significant accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
2. ACCOUNTING POLICIES
Basis of preparing the financial statements
The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the Statement of Recommended Practice for Social Housing Providers 2018, and with the Accounting Direction for private registered providers of social housing in England 2022. The financial statements are also prepared under the requirements of the Housing and Regeneration Act 2008 and the Companies Act 2006.
The financial statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.
Turnover
Turnover is measured at the fair value of the consideration received or receivable. The policies adopted for the recognition of turnover are as follows:
Turnover represents rental and service charges income receivable in the year net of rent and service charge losses from voids, revenue grants from the government (local authorities) and Homes England and the Regulator of Social Housing.
Tangible fixed assets and depreciation
Tangible fixed assets (including social housing properties) are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended such as the cost of acquiring land and buildings, developments costs, interest charges on loans during the development period and expenditure on improvements. Expenditure on improvements will only be capitalised when it results in incremental future benefits such as increasing rental income, reducing maintenance costs or resulting in a significant extension of the useful economic life of the property.
Depreciation is provided on all tangible fixed assets except freehold land which is not depreciated on account of its indefinite useful economic life, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:
Assets and their components are depreciated over their useful lives on the following basis:
| Descripton | Estmated useful life |
|---|---|
| Land & Buildings: | |
| Structure | 100 |
| Kitchen | 30 |
| Bathroom | 30 |
| White goods | 10 |
| Roofs | 50 |
| Lifs | 15 |
| Fixtures, ftngs & equipment | 7 |
continued...
Page 15
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
2. ACCOUNTING POLICIES - continued
Tangible fixed assets and depreciation
Housing properties under construction are not depreciated until they are in use.
Corporation tax and VAT
The society has charitable status and is exempt from Corporation Tax on the income it has received. The society is not registered for VAT. Accordingly no VAT is charged to residents and the expenditure in the statement of comprehensive income includes the relevant VAT.
Pension costs and other post-retirement benefits
The society operates a defined contribution pension scheme. Contributions payable to the society's pension scheme are charged to the Statement of Comprehensive Income in the period to which they relate.
Social housing grant
Where Social Housing Grants (SHG), are received in respect of developments these grants are recognised at the fair value of the asset received or receivable. Where the assets are accounted for using the cost model then the government grant is accounted for using the accruals model. The difference between the fair value of the asset and the consideration is recognised as a liability and amortised over the useful economic life of the asset. This amortisation is recognised within turnover.
Where disposal of government donated assets are required to be recycled, a liability is included to recognise this obligation.
Monetary Donations
Monetary donations to the society are credited in the financial statements on a receipts basis.
Debtors and creditors receivable / payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the statement of comprehensive income in other administrative expenses.
Provisions
Provisions are recognised when the society has an obligation at the financial reporting date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.
Provisions for cyclical maintenance or major works to existing stock are not made unless they represent commitments or obligations at the financial reporting date where there is no discretion to avoid or delay the expenditure.
Recycled Capital Grants Fund
Capital grants can be recycled under certain condition, if a property is sold, or if another relevant event takes place. Recycled grants can be used for projects approved by Homes England and the Regulator of Social Housing and they are credited to the Recycled Capital Grant Fund within liabilities.
In certain circumstances, such as the sale of housing properties, capital grants may be repayable, and, in that event, is subordinated to the repayment of other loans by agreement with Homes England and the Regulator of Social Housing. It is accounted for as soon as the liability arises within creditors: amounts falling due within one year. When any grant to be recycled or repaid is less than the grant relating to the disposal, the difference is treated as abated grant. Abated capital grants are treated as a component of the surplus or deficit on disposal.
Investments
Fixed asset investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently, they are measured at fair value through the statement of comprehensive income if the shares are publicly traded or their fair value can otherwise be measured reliably.
Loans, borrowings and short term deposits
These instruments are initially recorded at the transaction price less any transaction costs (historical cost). FRS102 requires that the basic financial instruments are subsequently measured at amortised costs, however the society has calculated that the difference between historical cost and amortised cost basis is not material and so these financial instruments are stated in the statement of financial position at historical cost. Loans and borrowings that are repayable or receivable within one year are not discounted.
continued...
Page 16
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
2. ACCOUNTING POLICIES - continued
Going concern
The society has made operating deficits in the last three years but still remains in a net current asset and net asset position. During this period the significant capital project was underway relating to the new specialist dementia care facility at Ingleside. The society’s forecasts and plans to return to an operating surplus were based on achieving sufficient occupancy at the new Ingleside property whilst retaining a low level of voids at its Westfield Drive Property. Since the Ingleside property was completed and opened in November 2022 the society has managed to fill 26 rooms which is higher than forecasted at this stage and combined with the low level of voids at Westfield Drive has returned the society to generating a monthly surplus post year end.
However, in September 2023 the society received an inspection by the Care Quality Commission (CQC) and was given an overall rating of inadequate. Separate inspections were carried out by Leicestershire County Council as part of their contract monitoring visits and they too identified contract compliance points to be actioned and are working with the society to ensure these are addressed.
Unfortunately following the CQC inspection the society has been suspended from accepting any more residents until their recommendations have been implemented and a further inspection has taken place. This further inspection is not scheduled until February/March 2024. This does not prevent the society from continuing to care for the residents already in its care. As stated above, occupancy levels are currently higher than the society had forecast and that were required for the society to operate at a surplus. It is acknowledged though that should any residents leave the societies care it is not able to replace them and this could impact on its current financial performance until it has successfully undertaken this future inspection.
More significantly if the society is unsuccessful it is possible, though not considered likely, that the CQC or the local authority could implement stronger actions against the society that could impact its ability to continue. Furthermore, should the society lose its CQC registration this is listed as a default event on the society’s loan with the Charity bank and therefore could result in the loan referred to in note 16 becoming repayable in addition to any future breaches of loan covenants that are not waived by the bank. The trustees are committed to implementing the recommendations and improvements required as their highest priority and believe they have the senior practice management team in place, after a turbulent year with team changes and recruitment, to ensure that these are being or will be addressed. For this reason, the financial statements have been prepared on a going concern basis as this is still considered appropriate by the trustees.
There are though as a result of the above material uncertainties related to events or conditions that may cast doubt on the entity’s ability to continue going concern for the foreseeable future and, therefore the society might be unable to realise its assets and discharge its liabilities in the normal course of business.
Judgements and key sources of estimation uncertainty
On transition to FRS102 the historical information to break down housing property assets into components was not available without undue cost or effort, and therefore has been included as structure within land and buildings and consequently depreciated over 100 years.
Housing property assets will in future be broken down into components based on management's assessment of the properties and useful economic lives will be assigned to these components.
3. TURNOVER
| Rents received Void losses Amortsed government grants Reversal of amortsed government grants due to repayment required Net income from residental charges |
2023 £ 2,274,598 (616,017) 8,563 - 1,667,144 |
2022 £ 1,532,056 (274,038) 9,254 (17,388) 1,249,884 |
|---|---|---|
The society disposed of one of their housing properties during the prior year. This resulted in historic grants from Homes England relating to the disposed housing property becoming repayable in the prior year.
continued...
Page 17
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
4. OTHER OPERATING INCOME
| OTHER OPERATING INCOME | ||
|---|---|---|
| 2023 | 2022 | |
| £ | £ | |
| Grants | 45,220 | 93,119 |
Other operating income relates to income received from the local council in relation to Infection Control, Rapid Testing and Workforce Capacity. Income is recognised on a systematic basis over the period in which the related costs for which the grant is intended to compensate are recognised.
5. INVESTMENT INCOME
| Income from listed investments Proft/(loss) on disposal of listed investments Bank interest |
2023 £ 25,461 (47,062) 1,752 (19,849) |
2022 £ 31,913 180 137 |
|---|---|---|
| 32,230 |
6. DISPOSALS OF HOUSING PROPERTIES HELD AS TANGIBLE FIXED ASSETS
| Proceeds from the disposal of housing properties Carrying value of housing properties Profit/(loss) on disposal of fixed assets |
2023 £ - - - |
2022 £ 705,572 (372,590) 332,982 |
|---|---|---|
The society disposed of their housing property on Forest Road in March 2022, generating a profit on disposal of £332,982 in the prior year.
7. MOVEMENT IN FAIR VALUE OF FINANCIAL INSTRUMENTS
| Movement in fair value of Fixed Asset investments 8. SURPLUS/(DEFICIT) ON ORDINARY ACTIVITIES Surplus/(defcit) is stated afer charging/(creditng): Depreciaton - owned assets Surplus on disposal of fxed assets Auditor's remuneraton for audit Grants released to income |
2023 £ (42,204) 2023 £ 82,917 - 10,680 (8,563) |
2022 £ 70,514 2022 £ 53,939 (332,982) 9,120 (9,254) |
|---|---|---|
continued...
Page 18
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
9. TRUSTEES' REMUNERATION AND BENEFITS
Key management personnel neither received or waived any remuneration during the year (2022: nil).
No remuneration was received by non-executive board members (2022: nil).
Trustees' expenses
There were £338 trustees' expenses paid for the year ended 31st March 2023 (2022: £14).
10. STAFF COSTS
| Wages and salaries Social security costs Other pension costs The average monthly number of employees during the year was as follows: Administraton Care staf |
2023 £ 1,010,848 65,751 15,453 1,092,052 2023 4 47 51 |
2022 £ 891,576 52,518 16,569 |
|
|---|---|---|---|
| 960,663 | |||
| 2022 4 48 52 |
No employees received emoluments in excess of £60,000.
11. TANGIBLE FIXED ASSETS
| COST At 1 April 2022 Additons At 31 March 2023 DEPRECIATION At 1 April 2022 Charge for year At 31 March 2023 NET BOOK VALUE At 31 March 2023 At 31 March 2022 |
Freehold property £ 5,075,939 1,096,571 6,172,510 493,283 38,610 531,893 5,640,617 4,582,656 |
Plant and machinery £ 8,124 - 8,124 3,732 162 3,894 4,230 4,392 |
Fixtures and ftngs £ 352,920 324,831 677,751 282,392 44,145 326,537 351,214 70,528 |
Totals £ 5,436,983 1,421,402 |
|---|---|---|---|---|
| 6,858,385 | ||||
| 779,407 82,917 |
||||
| 862,324 | ||||
| 5,996,061 | ||||
| 4,657,576 |
All freehold properties held for letting are completed properties and there are none under construction.
continued...
Page 19
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
12. FIXED ASSET INVESTMENTS
| MARKET VALUE At 1 April 2022 Disposals Revaluatons Cash movement At 31 March 2023 NET BOOK VALUE At 31 March 2023 At 31 March 2022 Cost or valuaton at 31 March 2023 is represented by: Valuaton in 2023 |
Listed investments £ 1,265,500 (648,032) (42,204) - 575,264 575,264 1,265,500 Listed investments £ 575,264 |
Cash and setlements pending £ 2,856 - - (1,553) 1,303 1,303 2,856 Cash and setlements pending £ 1,303 |
Totals £ 1,268,356 (648,032) (42,204) (1,553) |
Totals £ 1,268,356 (648,032) (42,204) (1,553) |
|---|---|---|---|---|
| 576,567 | ||||
| 576,567 | ||||
| 1,268,356 | ||||
| Totals £ 576,567 |
The historical cost of these investments is £466,876 (2022: £956,862).
The fair value of listed investments is determined by reference to the quoted price for identical assets in an active market at the financial reporting date.
13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
| DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR | ||
|---|---|---|
| Trade debtors Other debtors Prepayments |
2023 £ 37,576 1,405 16,247 55,228 |
2022 £ 11,495 2,118 17,320 |
| 30,933 |
continued...
Page 20
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
| CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR | ||
|---|---|---|
| Bank loans and overdrafs (see note 17) Trade creditors Payments received on account Social security and other taxes Other creditors Accruals and deferred income |
2023 £ 17,872 112,622 27,817 18,149 10,728 81,162 268,350 |
2022 £ - 469,384 8,597 - 65,079 100,511 |
| 643,571 |
The average number of days between receipt and payment of purchase invoices is 10 (2022: 50) days.
Government grant income of £Nil (2022: £26,898) is included within accruals and deferred income.
15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
| Bank loans (see note 17) Deferred capital grants LOANS An analysis of the maturity of loans is given below: Amounts falling due within one year on demand: Bank loans Amounts falling between one and two years: Bank loans - 1-2 years Amounts falling due between two and fve years: Bank loans - 2-5 years Amounts falling due in more than fve years: Repayable by instalments: Bank loans more 5 yr by instalments |
2023 £ 2,581,906 581,959 3,163,865 2023 £ 17,872 45,183 157,941 2,378,782 |
2022 £ 1,865,635 590,522 |
|---|---|---|
| 2,456,157 | ||
| 2022 £ - |
||
| 58,383 | ||
| 210,247 | ||
| 1,597,005 |
16. LOANS
The society has one bank loan outstanding at the year-end.
The society is only required to repay the loan by monthly instalments of interest only to October 2023. From November 2023, the society will be required to repay the capital and interest on the loan by monthly instalments up until the final repayment date.
Following the property completion in October 2022, the interest rate is set at 2.65% above the bank base rate.
Although the society breached two loan covenants being the debt service cover and capital expenditure threshold covenants in the year, the bank directly confirmed that they had waived these covenants this year. Therefore, it has not been deemed necessary to reclassify the bank loan as fully owing within one year. The society will be required to comply with the loan covenants going forward.
continued...
Page 21
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023
17. SECURED DEBTS
The following secured debts are included within creditors:
| 2023 | 2022 | |
|---|---|---|
| £ | £ | |
| Bank loans | 2,599,778 | 1,865,635 |
A fixed and floating charge dated 16 March 2021 is held over 190 Ashby Road and 44 Westfield Drive to secure the borrowings from the society bankers.
18. PENSION COMMITMENTS
The society operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the society in an independently administered fund. Contributions payable by the society amounted to £15,453 (2022: £16,569).
19. CAPITAL COMMITMENTS
| Contracted but not provided for in the fnancial statements 20. OTHER FINANCIAL COMMITMENTS The company has the following commitments due as follows: Due in less than one year Due between two and fve years Due in more than fve years |
2023 £ - 2023 £ 26,341 70,272 5,741 102,354 |
2022 £ 1,089,664 2022 £ 25,701 89,748 12,607 128,056 |
|
|---|---|---|---|
21. RELATED PARTY DISCLOSURES
There were no related party transactions for the year ended 31 March 2023.
continued...
Page 22
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
22. FINANCIAL INSTRUMENTS
The carrying amounts of The Abbeyfield Loughborough Society Limited's financial instruments are as follows:
| Financial assets Measured at fair value through the statement of comprehensive income: - Fixed asset investments (note 12) Income and expense Financial assets measured at fair value through comprehensive income |
2023 £ 575,264 575,264 2023 £ (42,204) |
2022 £ 1,265,500 1,265,500 2022 £ 70,514 |
|---|---|---|
The total interest income and interest expense for financial assets and financial liabilities that are not measured at fair value through profit or loss was £Nil (2022: £Nil) and £131,591 (2022: £20,616) respectively.
23. SOCIAL HOUSING GRANT
The society has received Social Housing grants, which were used to fund the acquisition and development of housing properties and their components. The society has a future obligation to recycle such grants once the properties are disposed of. At 31st March 2023, the value of grants received in respect of these properties that had not been disposed of was £858,142 (2022: £858,142).
The amount of recycled capital grant at 31st March 2023 is £36,673 (2022: £36,673).
24. ACCOMMODATION IN MANAGEMENT
At the year-end, the society owned two housing units for older people.
The number of rooms under management was 64 (2022: 31).
25. CONTROL
The society is controlled by the Board.
26. COMPARATIVE INFORMATION
Agency labour costs of £90,714 in the prior year were reclassified from administrative expenses to cost of sales to more accurately reflect the nature of the agency labour. This reduced the gross surplus to £10,665 in 2022 but had no impact on the total comprehensive income for the year.
continued...
Page 23
THE ABBEYFIELD LOUGHBOROUGH SOCIETY LIMITED
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2023
27. RESERVES
| Unrestricted funds Designated funds Capital expenditure reserve Housing property repair reserve General charitable reserve Property fxed asset reserve Unrestricted funds Designated funds Capital expenditure reserve Housing property repair reserve General charitable reserve Property fxed asset reserve |
Balance at 1 April 2022 £ (259,904) 30,000 100,000 68,066 3,996,526 3,934,688 Balance at 1 April 2021 £ 1,627,825 30,000 100,000 61,326 1,820,910 3,640,061 |
Income £ 259,118 324,831 - 13,601 1,066,362 1,663,912 Income £ (411,611) 14,724 - 12,146 2,175,616 1,790,875 |
Expenditure £ 1,743,646 324,831 - 7,569 - 2,076,046 Expenditure £ 1,476,118 14,724 - 5,406 - 1,496,248 |
Balance at 31 March 2023 £ (1,744,432) 30,000 100,000 74,098 5,062,888 3,522,554 Balance at 31 March 2022 £ (259,904) 30,000 100,000 68,066 3,996,526 3,934,688 |
|---|---|---|---|---|
Unrestricted funds relate to an income and expenditure reserve, representing cumulative surplus and deficits net of other adjustments for the below funds.
Designated funds are those unrestricted funds which have been set aside by the trustees for a specific purpose. The designated funds of the Society are noted below.
The capital expenditure reserve was set up to fund future expenditure on fixtures, fittings and equipment.
The housing property repair reserve was set up to ensure that funds are available for housing property repair and maintenance, without impacting the society's free reserves position.
The general charitable reserve represents the accumulated charitable donations received by the society unexpended at the year-end.
The property fixed asset reserve was set up to reflect the net investment in properties, after allowing for the deferred capital grant.
Page 24