Company registration number: 01828287 Charity registration number.. 516516 NECA (A charitable company limited by guarantee) Annual Report and Financial Statements for the Year Ended 31 March 2024
NECA Contents Referen and Administrative Details Trustees, Report 2to6 Chairman's Statement 7t08 Independent Auditors, Report 9t011 Statement of Financial Acts'vities 12 Statement of Financlal Acttvities 13 Balan Sheet 14 Statement of Cash Flows 15 Notes to the Financial Statements 16to28
NECA Reference and Administrative Details Patron Her Grace. The Duchess of Northumberland Prn81dent Mr B.N. Speker OBE DL Trustees Mr B.N. Speker OBE DL Mr N. Richardson, Chairman Mr R.1. Watson, Treasurer Dr P.B. Moore Company Secretary Mr R.1. Watson Remunerntion Committee Mr N. Richardson Mr R.1. Watson Mrs C AU(inson Key Nlanagement Personnol Mrs C. Atkinson, Chief Executive Ms E. Innes, Deputy Chief Executive Mrs C. Howarth, Finance Manager Mrs L. Strong. HRIDevelopment Manager Reglstered Offlce Derwent Point Clasper Way swa11 Newcastle upon Tyne NE16 3BE The charity is incorporated in England and Wales. Company Reglstratlon Number 01828287 Charity Registration Number 516516 Audltor Azets Audit Services Chartered Accountants & Statutory Auditors Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS Solicitors: Sintons LLP The Cube Barrack Road Newcast NE4 6DB Bankers Lloyds Bank PIC Newcastle 102 Grey Street Newcastle upon Tyne NE99 1SL
NECA Trustees. Report The trustees, who are directors for the purposes of company law, present the annual report together with the financial statements and auditors, report of the charitable company for the year ended 31 March 2024. Structurei govèrnance and management Nature of governing document The organisation is a charitsble company limited by guarantee, incorporated on 26th June 1984 and is governed by its Memorandum and Articles of Association, which were last amended on 11th May 2020. It was also registered as a charity with the Charity Commission on 20th June 1985. In the event of the charitable company being wound up members are required to contribute an amount not exceeding £1. Board of Dirnctorstrrustees The business of the charity is managed by an ExecutNe Committee of the trustees, the number of which shall not be less than 4 nor more than 30. who meet on a regular basis to decide overall strategic policies and financial matters. Trustees retire by rotstion and are able to stand for reelection. The trustees retiring by rotation 8t this yearfs Annual General Meeting are as follows: Mr N.Richardson Mr R.l.Watson The trustees meet, as a norm, on a monthly basis. They re1ve detailed management and financial infomiation as well as reports on operational activities for their meetings. Trustees unable to attend a meeting because of COVID-19 restrictions or other engagements are nevertheless provided with all the papers and information relevant for such meetings and are able to discuss issues arising with the Chairman or the Chief Executive. Trustees participate in the strategic planning process and have ultimate responsibility for the strategic plan. Recrultment and appolntment of trustees Any trustee vacancies which arise are filled by search with due gard to maintaining a proper balance of skills and experience within the Executive Committee. New trustees are appointed by the Executive Committee or by members of the charity in General Meetings. Inducts"on and training of trustees New trustees undergo an induction process to brief them on their legal obligations under charity and company law, the content of the Memorandurn and Articles of Association, the committee and decision making processes, the business plan and recent financial performance of the charity. Trustees are encouraged to attend appropriate external training events. Arrangements for settlng key management personnel remuneration We have identtfied Key Management Personnel in the Reference and Administration section. The remuneration of the key personnel is determined by the Board and the Chief ExecutNe, although the Chief Executive is excluded in relation to discussion of her remuneration. The Board is guided by a formal report from the Remuneration Committee wfiich sets out all available relevant information which includes legislative obligations, best available benchmark data in relation to salaries and settlement levels, internal differentials, recruitment difficulties, the recent settlement history at NECA, the proposed costs and ability to pay.
NECA Trustees, Report Day to day management Day to day management is vested in a professional team led by the Chief Executive of the charity, and who meet on a monthly basis. The Chref Executive meets regularly with the Chairman (in addition to the formal meetings) and appraises him of any signrficant issues as they May arise between meets'ngs. Objectlves and activities Objects and aims The objectives of the charity and the group are: To promote the prevention, recognition and treatment of problems related to, in particular but not exclusively. the use of alcohol, drugs, related substances, and gambling. To advance Education. promote Social Inclusion and Community Capacity, and provide relief from disadvantage, preserving and protecting Health and Wellbeing by providing free accessible services across the North of England. The mechanisms ft)r delivering the various seNices of the group are well established and the management team is stable, flexible and well experienced in driving and managing the critical activrtj'es of the organisation. All our charitsble activities focus on our objective8 and are undertaken to further our charitable purposes for the public benefit. We are an equal opportunity organis8tion and are committed to a working environment that is free from any form of discrimination on the grounds of colour, race, ethnicity, religion, sex, sexual orientation or disability. We will make reasonable adjustments to meet the diverse needs of all stsff or clients. Fundralslng dlsclosures The charty is required to report how it deals with fundraising from the public. The charity does not, as a nomi, fundraise from the public. The charity does not use a professional fundraiser or commercial participator to raise funds. Any monies received direct from the public follows all guidelines set out by the Charity Commission and UK law in every respect. We respect the privacy and contact preferences of all public donors. Public benefit We review our aims, objectives and activities each year. This review looks at what we achieved and the outcomes of our work in the previous 12 months. The review looks at the successlresuR of each acts'vity and the benefi'ts they have brought to those groups of people we are set up to help. The review also helps us ensure our aims, objectives and activiti'es remained focussed on our stated purposes. We have referred to the guidance contained in the Charity Commission's general guidance on public benefrt when reviewing our aims and objectives and in planning our future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives they have set. Achievements and performance Further details of the charities, Sctivities. achievements, performance and future plans are contained within the Chairman's Report on page 7 and includes a p)sitive confirmation of public benefrt.
NECA Trustees. Report Financial revlew The charity deficit for the year as shown in the Statement of Financial Activities, including donations of £5,283, amounts to £897,985. However, this includes a significant unrestricted deficit of £867,787 on the revaluation of a tangible fixed asset property which, because of the requirement in the Charities SORP, the charity must now treat as an investment property and be revalued to market value. As commercial property, it ha5 been valued using a particular method known as WAULT (weighted average unexpired lease term) where the length of tenant leases is a very significant factor especially those considered to be on shorter tes, as is the case of this propety. This corrtrasts greatly with the last revaluation transfer to investment properties in 2022, where one large propety had a major tenant on a long lease. Longer leases are generally now considered to be unattractive to prospective tenants in recent years and are therefore much harder to achieve, thus impacting on valuations. The result before the loss on investment was a deficit of £30,218. This result CoMpaS favourably with the budget that had been approved by the trustees for the year. There are currently no plans to dispose of the property and the trustees consider that its decent annual rental income will ensure that it continues to be a valuable asset for the charity. The resulting total deficit for the y8ar has been charged to Unrestricted and Restricted Funds as shown in the Statement of Financial Activities, with the revaluation deficit deducted from the existing Designated ReseNe. The year ended 31 March 2024 is therefore considered to be acceptable from a financial perspective, particularfy so given the continuing issues affecting all areas of the voluntary Sector. With regard to non-financial measures, a great deal has been achieved and is consistent with the objects of the charity. Pollcy on resoNas The results for the year leave NECA with an Unrestricted Revenue Reserve of £5.836,756. From note 21 to these financial statements it can be seen that of this sum £1,301.708 is held in net current assets that is, represented by cash and net creditors. This is a decreased position from the prior year which VRS a net current asset position of £1.327,364 and therefore a decrease of £25,656. The charitable company will continue to endeavour to make and retain a modest surplus over the next few years in keeping with the agreed Reserves Policy (as follows) 'The company should aim to hold readily expendable reserves of bethen three to six months average expenditure to ensure that the activities of the charity can be sustained through any period of financial difficulty,. This would equate to a free reserves target of between £500,000 to £1 million. The current level of free reserves as at the year end amounted to £1,301,708. The financial statements have been prepared on a going conrn basis. The charity meets its day to day working capital requirements through cash generated from operations. The charitable company's forecasts and projections for the next 1ve months show that the charity will be able to continue in operational existence for that period. The charity has strong positive cash balances and is forecasting for this to continue to be the case. Based on the factors set out above, the trustees believe that it remains appropriate to prepare the financial statements on a going concern basis.
NECA Trustees. Report Investment pollcy and objectlves The charity funds are controlled by the directors, who also act as trustees, who invest with a view to safely optimise investment income while maintaining capital growth in line with market trends. The trustees can invest any sums or investments received by them in investments in which they are by law authorised to invest money (including trading subsidiaries), with power from time to tirne to change for others of a like nature. Risk Management The trustees have continued to assess the major risks to which the charity is exposed, in particular those relating to the operations and finances of the charity but, also encompassing non-financial risks that may arise, and are satisfied that systems are in place to mitigate the exposure to the major risks to an acptable level. The financial statements which have been prepared in accordance with the Statement of Recommended Practice.. Accounting and Reporting by Charits"es (SORP FRS102) confomi to current statutory requirements and comply with the charitable company's governing document. Plans for future periods The charity has no plans at the present to radically alter the mix of ongoing activity, nor to change the frKus of the charity. It is envisaged that there may be some requirement to adapt to the continuing difficult economic conditions which have the potential to affect all aspects of the charity's work. An organisation wide cost control strategy continues to exist with close scrutiny of all discretionary spending. The trustees have approved a budget for the forthcoming year consistent with thes8 comments and the charitrfs overall strategic plan. The Board and Management are committed to the prOsS of continuous improvement to optimise both the financi81 performance and activities of the charity. Statement of trustees, responslbllFtles The trustee5 (who are also the directors of NECA for the purposes of company law) are responsible for preparing the trustees, report and the financial statements in accordance with applicable law and Untted Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting practi), induding FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" Company law requires the trustees to prepa financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming reSoUrS and application of resources, including its income and expenditure, of the charitable company for that period. In preparing these financial ststements, the trustees are required to: select suitable accounting policies and apply them consistently, observe the methods and principles in the Charities SORP., make judgements and estimates that are reasonable and prudent., state whether applicable accounting standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements,. and prepare the financial statements on the golng conrn basis unless it is inappropriate to presume that the charitable company will continue in business.
NECA Trustees. Report The trustees are responsible for keeping proper accounting records that can disclose with reasonab accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statsments comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitsble company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the corporate and financial Infonnation included on the charitable companvs webstte. Legislation goveming the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Olsclosure of informatlon to auditor Each trustee has taken steps that they ought to have tsken as a trustee in order to make themselves awa of any relevant audrt informats'on and to establish that the charity's auditor is aware of that infomation. The trustees confirm that there is no relevant informats'on that they know of and of which they know the auditor is unaware. Reappolntment of auditor In accordance viith section 485 of the Companies Act 2006, a resolution for the re-appointment of Azets Audit Services as auditors of the charity is to be proposed at the forthcoming Annual General Meeting. The annual report was approved by the trustees of the charity on 8 August 2024 and signed on its behalf by.. Mr N. Richardson Chairman
NECA Chaimian's Statement This year NECA celebrates rts 50th anniversary and in addition to my usual Chairman's Report I thought I would share a little bit of history with our mernbers, a tribute to our ft)under and first chair Dr Laetitia Telfer. The following is copied from an article in the 1987 Annual Report. 'The departure of Laetitia Telfer from Chaimanship of NECA towards the end of 1987 will mark the end of an era of leadership that has been quite outstarKling, both in its success and in the quality of dedication that she has brought to her task. Dr the Hon Mrs L.M. Telfer. daughter of Lord Balft)ur of Burleigh, qualified as a Doctor of Medicine in 1946. marrying Dr lan Telfer in 1955. From their very happy home Mrs Telfer has somehow found time to bring up a family, continue her medical career. be a magistrate. and tske an active part in any voluntary organisations. On 11th April 1974 she was unanimously elected as the first Chairman of the newly formed North East Council on Alcoholism. This body - whose only paid staff consisted of a Director and his secretary - was formed 'To promote the prevention and diagnosis of alcoholism. and the treatment of those suffering therefrom" Mrs Telfer, fully convinced of the need for the new body by the medical 8nd court evidence she had seen. vrf8s undaunted by the magnitude of the assignment. It is a tribute to Mrs Telferfs skilled leadership and wisdom that NECA has grown so majestically to meet an acute local need. She is selfless in the giving of time; only the staff (and her family) could tell of the long hours she spent in the offi, running meetings, discussing plans and aayS supporting staff and volunteers in their work. She will be greatly missed, for all value her personal kindness and friendship as well as the integrity that has characterised every decision, she has taken in order to promote an organisation that she feels is so necessary in our modem society. NECA hopes to see her often in the future and wishes her many happy years ahead.. Ivhilst Laetitia stepped down as Chair in 1987, she contlnued as a trustee and honorary President until 2006 when she retired. Unfortunately, Laetitia passed away in 2011 aged 91, but her legacy continues and despite the ups and downs of the last few years, NECA continues to provide the best seNices it can throughout the region. An example is the continued close cooperation with GambleAware whose funding has enabled NECA to expand its gambling service into yorkshi and Humberside. The Community Garden continues its excellent work providing activities for school children and free packed lunches for every child during the school holidays. NECA was also invited to take over a second community garden in Jarrow from a small charity that was disbanding. NECA is very aware that whatever it gets involved with must be of benefit to the community. To achieve this NECA works with other communty groups such as the Blaydon Shed who have been provided with nt free space in Clasper House and Akan Care Home Group to facilitate their staff training, also at Clasper House. Space has also been made available at a discount to srnall start-ups such as an arts & crafts business at Connect in Sunderland. These and the outstanding work carried out at the Community Garden are good examples of how seriously NECA takes its community responsibilities and delivers public benefiL Members will note that despite an increase in turnover and an improved trading position the audited accounts show a large deficit. This is due entirely to a revaluats'on of our Derwent Point property which has had to be reclassified as an investment property instead of a fixed asset. A further unexpected consequence of Covid and a weak commercial propety market. Details of the background to this are fully explained in the Trustees, Report and also the notes accompanying the accounts. Despite this NECA remains strong financially and cashflow remains steady and under control.
NECA Chairnian's Statement Looking back, I know that Laetitia was very proud of NECA'S achievements and looking forward I believe she would be equally as proud that 50 years later we still strive to continue the good work that she began. As always, l end with grateful thanks to the trustees, stsff, volunteers, and supporters who have worked tirelessly throughout the year to support the organisation as well as others who have made financial and other donations in kind to the charity. liir N. Richar(ison Chairman
NECA Independent Auditor's Report to the Members of NECA Opinion We have audited the financial statements of NECA (the 'charity') for the year ended 31 March 2024, which comprise the Statement of Financial Activikn'es, Balance Sheet, 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 United Kingdom Accounting Standards, comprising Charities SORP - FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and applicable law (United Kingdom Generally Accepted Accounting Practi). In our opinion the financial statements: give a true and fair view of the state of the charity's affairs as at 31 March 2024 and of its incoming resources and application of resources, including its income and expenditure for the year then ended: have been properly pPared in accordance wrth United Kingdom Generally Accepted Accounting practi., and have been prepared in accordance wlth the requirements of the Companies Act 2006. Basis for oplnlon We conducted our audit in accordaneR with Intemational Standards on Auditing (UK) (ISAS (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor reswnsibilities ft)r the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evideno we have obtained is sufficient and appropriate to provide a basrs for our opinion. Concluslons rnlating to going concern In auditing the financial ststements, we have concluded that the trustees use of the going concem basis of accounting in the preparation of the financial statements is appropriat8. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's abilty to continue as a going concern for a period of at least Iwelve months from when the financial statements were authorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report. Other infomiation The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditorfs report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly ststed in our report, we do not express any fo of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other inforrnats'on 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 there is a material misstatement in the financial ststements or a material misststement of the other Information. If, based on the work we have performed, we conclude that there is a material misstatement of this other infonnation. we are required to report that fact. We have nothing to report in this regard.
NECA Independent Auditor's Report to the Members of NECA Oplnlon on other matter prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the Trustees, Report for the financial year for which the financial statements are prepared is consistent with the financial statements,. and the Trustees, Report has been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of our knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees, Report. We have nothing to report in respect of the following matters %there the Companies Act 2006 requires us to report to you if, in our opinion- adequate accounting records have not been kep( or retums adequate for our audit have not been received from branches not visited by us" or the financial statements are not in agreement with the accounting records and returns. or certain disclosures of trustees remuneration specrfied by law are not made,. or we have not received all the information and explanations y require for our audit. Responsibilities of trustees As explained more fully in the Statement of trustees, responsibilities (set out on page 5 and 6). the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such intemal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatemenL whether due to fraud or error. In preparing the financial statements, the trustees are spOnsible for assessing the charity's ability to continue as a going concem, disclosing. as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to aSe operations, or have no realistic alternative but to do so. Auditor responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance at)out whether the financial statements as a whole a free from material misstatement, whether due to fraud or error, and to issue an auditorfs report that includes our opinion. Reasonable assurance is a high level of assuran, 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 rf, individually or in the aggregate, they could reasonably be expected to Influen the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance wth law5 and regulation5. We design procedures in line with our responsibilities, outlined above. to detect material misstatements in respect of irguIantr.eS, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detsiled below: 10
NECA Independent Auditor's Report to the Members of NECA Enqulries with management, about any known or suspected instances of non<ompliance with laws and regulations and fraud., Reviewing board minutes., Challenging assumptions and judgements made by management in their significant accounting estimates,. and Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness. Because of the field in which the client operates, V identified the following areas as those most likely to have a material impact on the financial statements.. Health and Safety" anti-bribery and corruption; and, compliance with both the UK Companies Act and UK Charities Act. Owing to the inherent limitations of an audi( there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAS {UK). For instsnce, the further removed non-compliance is from the events and tranStionS reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance. A further description of our responsibilities is available on the Financial Reporting Council's vRbsite at: www.frc.org.uklauditor8responsibilities. This description fomis part of our auditoff s reporL Use of our report This report is made solely to the charitable company's trustees, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditorfs report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charrtable company and its trustees as a body, for our audit work, for this report, or for the opinions we have formed. Graham Fitzgerald BA FCA DChA (Senior Statutory Auditor) For and on behalf of lets Audit SeNices Chartered Accountants Statutory Auditor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS Date.. Azets Audit servIs is a trading name of Azets Audit Services Limited 11
NECA ststement of Financial Activities for the Year Ended 31 March 2024 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Total 2024 Total 2023 Unrestricted Restricted Note Income and Endovmients from.. Donats'ons and legacies Charitable activities Investment income 3,783 1,459.445 41,791 1,500 246.315 5,283 1,705,760 41,791 16.901 1,165.649 6,892 Total Income 1.505,019 247,815 1,752,834 1,189,442 Expendlture on: Charitable activtties 1.553,589 {229,463) (1,783,052) (1,284,081) Total Expenditure Gainsllosses on investment assets (1,553,589) (229,463) (1,783,052) {1,284,081) {867.767) {867,767) Net {expenditure)Iincome (916.337) 18.352 (897.985) {94,639) Net movement in funds (916.337} 18.352 {897.985) (94.639) Reconciliation of funds Total funds brought forward Totsl funds carried forward 20 7,497.326 101,825 7,599,151 7,693,790 6.580,989 120,177 6,701,166 7,599,151 All of the charity's activities derive from continuing operations during the above tsvo periods. The funds breakdown for 2023 is shown in note 20. 12
NECA Comparative Statement of Financial Activities for the Year Ended 31 March 2023 (Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses) Total 2023 Unrestrlcted Restricted Note Income and Endowments from: Donations and legacies Charitable activities Investment income 16,901 481,003 6,892 16,901 1,165.649 6,892 684,646 Total income 504.796 684.646 1,189,442 Expendlture on: charitab activrties (632.801) (651,280) (1,284,081) Total expenditure 632.801 (651,280) (1,284,081) Net (expenditure)fincome Transfers between funds (128,005) 8.217 33,366 (8.217) (94.639) Net movement in funds (119,788) 25.149 (94.639) Reconciliatlon of funds Totsl funds brought forward Total funds carried forward 7,617,114 76,676 7.693,790 20 7,497,326 101,825 7,599,151 13
NECA (Registration number: 01828287) Balance Sheet as at 31 March 2024 2024 2023 Note Fixed assets Tangible assets Investments 13 14 1,344,277 3.935.004 2,984,958 3,185.004 5.279.281 6.169.962 Cuffent assets Debtors Cash at bank and in hand 15 16 384.016 1,545.632 378.663 1,468.252 1,929,648 (507,763) 1,421,885 6.701.166 1,846,915 {417,726) Credltors: Amounts falllng due wlthln one year 17 Net current assets 1,429,189 Net assets 7,599,151 Funds of the charlty: Restricted 120.177 101.825 Unrestricted income funds Designated funds Unrestricted funds 744,233 5,836,756 1,612,000 5,885,326 Total unrestricted funds 6,580,989 7.497.326 Total funds 20 6,701,166 7.599,151 The financial ststements on pages 12 to 28 were approved by the trustees, and authorised for issue on 8 August 2024 and signed on their behalf by: Mr N. Richardson Trustee Mr R.1. i•latson Trustee 14
NECA ststement of Cash Flows for the Year Ended 31 March 2024 2024 2023 Noto Cash flows from operating activities Net cash expenditure (897.985) (g4.639) Adjustments to cash flows from non-cash items Depreciation Investment income Revaluation of investrnents 26,197 {41,791) 867.767 (45,812) 55,241 {6,892) (46,290) Worklng capital adjustments Increase in debtors Increase in creditors 15 17 (5.353) 90.037 {295,936) 307,308 Net cash flows from operating activities Cash flows from investing activities Interest receivable and similar income Purchase of tangible red assets Net cash flows from investing activities 38,872 (34,918) 41,791 (3,283) 6,892 (9.867) 13 38,508 (2.975 Net increasel(decrease) in cash and cash equivalents Cash and cash equivalents at 1 April Cash and cash equivalents at 31 March 77,380 (37,893) 1,506,145 1,468,252 1,545,632 1,468,252 All of the cash flows are derived from continuing operations during the above two periods. 15
NECA Notes to the Flnancial Statements for the Year Ended 31 March 2024 1 Charlty status The charty is limited by guarantee, incorporated in England and Wales, and consequently does not have share capital. Each of the trustees is liable to contribute an amount not exceeding £1 towards the assets of the charity in the event of liquidation. The address of its registered office is.. Derwent Point, Clasper Way, Swalwell, Newcastl8 upon Tyne, NE16 3BE 2 Accountlng policles Summary of slgnlflcant accounting pollcles and koy accounting e8timate6 The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless othetwise stated. statnent of compliance The financial statements have been prepared in accordance with Accounting and Reporting by Charities.. Statement of Recommended Practica applicable to charities preparing their accounts in accordance with the Financlal Reporting St8ndard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) - (Charities SORP (FRS 102)). They also comply with the Companies Act 2006 and Charities Act 2011. Basis of preparatlon NECA meets the definition of a public benefit entty under FRS 102. Assets and liabilities are inits'ally recognised at historical cost or transactron value unless otherwise ststed In the relevant accounts'ng policy notes. Golng concern The financial statements have been prepared on a going concem basis. The charity meets its day to day working capital requirements through cash generated from operations. The charitsble company's forecasts and proiections for the next tsvelve months show that the charity will be able to continue in operational existence for that period. The charity has strong positive cash balances and is forecasting for this to continue to be the case. Based on the factors set out above, the twstees believe that it remains appropriate to prepare the financlal statements on a going conrn basis. Estlmation uncertainty and judgements The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. The judgements (apart from those involving estimations) that management has made in the process of applying the charitable company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Assessing indicators of impainnent - In assessing whether there have been indicators of Impainent of assets. the trustees have considered both extemal and internal sources of information such as market conditions. counterpaty credit ratings and experience of recoverability 16
NECA Notes to the Financial Ststements for the Year Ended 31 March 2024 Key sourcas of ostimation uncertalnty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include: Depreciats'on - depreciation is calculated so as to write off the cost of an asset, less its residual value, over the useful economic life of that asset. An estimate of the useful economic life of assets is detailed in the depreciation accounting policy. Income and endowments All income is recognised once the charity has entitlement to the income, it is probable that the income will be reiVed and the amount of the income re1vable can be measured reliably. Donations and legacies Donations are recognised when the charity has been notified in writing of both the amount and settlement date. In the event that a donation is subject to conditions that require a level of performance by the charity before the charty is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that these conditions will be fulfilled in the reporting period. Grants receivable Grants are recognised when the charity has an entitlement to the funds and any conditions linked to the grants have been met. Where performance conditions are attached to the grant and are yet to be met, the income is recognised as a liability and included on the balance sheet as deferred income to be released. Other trading activitles Income from commercial trading activities is recognised as eamed (as the related goods and serdices are provided). Investment Incoma Investment income is recognised on a re1vable basis. Intest CeiVable is recognised on a receivable basis, when the amount can be measured reliably - this is normally upon notification of the interest paid or payable by the bank. Charitable activitios Income from charitable activities includes income received under contract or Whe ents'tlement to grant funding is subject to specific performance conditions is recognised as earned (as the related goods or ServIS are provided). Grant income included in this category provides funding to support client Servi activities and is recognised where there is entitlement, probable receipt and the amount can be measured with sufficient reliability. Income is deferred when related grants are reiVed and the performance conditions relating to its entitlement are not met. Income from charitable activities includes rental income from investrnent properties, as a result of renting the properties to organisations with similar objectives. 17
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 Expndlturo All expenditure is recognised once there is a legal or constructive obligation to that expenditure. it is probable settlement is required and the amount can be measured reliably. All costs are allocated to the applicable expenditure heading that aggregate similar costs to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs. Charitable activities Charitable expenditu comprises those costs incurred by the charity in the delivery of its activities and ServIS for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them. Support costs Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back Offi costs, finance, personnel, payroll and governance costs which support the charity's activities. These costs. which have not been directly apportioned, have been allocated betrween cost of rarsing funds and expenditure on charitable activities. The basis on which support costs have been allocated are set out in the Support Cost note. Governance costs Govemance costs include those costs associated with meeting the constitutional and statutory requirements of the charity and include audit fees and costs linked to the strategic management of the charity. Taxatlon The charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains reiVed within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. Tangible fixed assets Individual fixed assets costing £1,000 or more are initially recorded at cost. Depreciation and amortisation Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows.. Asset class Freehold Propety Leasehold Propety Depreciation method and rate 2Yo Straight line Straight line over the period of the lease Equipment 12.50/0 Straight line, 25Q/o Straight line for computer equipment No depreciation is provided on land included within the category known as freehold proFerty. The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. 18
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 Investment proportie8 Investments include properties from which rental income is received and are shown at their most recent valuation. Any aggregate surplus or deficit artsing from changes in value are transferred to a designated revaluation reserve. As Investment properties, the value of the buildings are not normally depreciated, being Caled (after the initial formal valuation) at the board's valuation each year, with a formal valuation being undertaken at least every fifth year. The board continue to assess all factors which may impact the value of the investment properties and where an impairment is considered appropriate would charge the SOFA with that impairment (and release, as a transfer, from the designated reserve back to general reserves any amount which reversed the original uplift in valuation, which is being held as a designated resenie). Trade debtors Trade debtors are amounts due from customers for merchandise sold or services perfomed in the ordinary course of business. Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impaiment of trade debtors is established when there is objective evidence that the ch8rity will not be able to collect all amounts due according to the original temis of the receivables. Cash and cash equlvalents Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a knovm amount of cash and are subject to an insignificant risk of change in value. Trade credltors Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable a classified as current liabilities if the charity does not have an unconditional right, at the end of the reporting period, to defer settlement of the ¢ditOr for at least 1ve months after the reporting date. If there is an unconditional right to defer settlement for at least tsvelve months after the reporting date, they are presented as non-current Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective InteSt method. Fund structure Unrestricted income funds are general funds that are available for use at the trustees, discretion in furtherance of the objectives of the group. Designated funds are unrestricted funds set aside for specific purposes at the discretion of the trustees. These funds consist of the total revaluation surplus on the investment properties. Restricted income funds are those donated for use in a particular area or ft)r specific purposes, the use of which is restricted to that area or purpose. Penslons and other post retiremont obligations The group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the group. The annual contributs'ons payable are charged to the income and expenditure account. 19
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 Financial instruments classfficafy.on Financial assets and financial liabilities are recognised when the charity becomes a paty to the contractual provisions of the instrument. Financial liabilities and equity instruments are classifv'ed according to the Substan of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the charity after deducting all of its liabilities. 3 Income from donatlons and legacies Unrestricted funds General Restricted funds Total 2024 Total 2023 Donations and legacies; Donations 3,783 1,500 5,283 5,283 16.901 Total for 2024 3,783 1,500 16,901 Total for 2023 16,901 16,901 4 Income from charitable activities Unrestrlcted funds General Restrlcted funds Total 2024 Service contracts Rental income Grants receivable Other income Drink drive course income 1,131,975 295,860 1.131,975 295,860 246,315 1,182 30,428 246,315 1,182 30,428 1,459,445 246,315 1,705,760 Unrestricted funds General Restricted funds Total 2023 Service contracts Rental income Grants receivable Other income Drink drive course income 181,923 266,002 181,923 266,002 684,616 7,713 25,395 1,165,649 684,616 30 7,683 25.395 481.003 684,646 20
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 5 Investment Income Unrestricted funds General Restrictod funds Total 2024 Total 2023 Interest rttaivable and similar Interest re1vable on bank deposits 41.791 41,791 6,892 Total for 2023 6,892 6.892 6 Expenditure on charitable activities Unrestrfcted Total 2024 Total 2023 General Rostricted Staff costs Advertising and PR Transitional service delivery Resources Travel expenses other professional fees Support costs (note 7) Governance costs (note 7) Total 908,479 5,785 162,500 4,177 10,321 80,735 342,080 39,512 153,843 85 1,062,322 5,870 162,500 8,174 16,276 81,049 407.349 39,512 861,973 2.380 3,997 5,955 314 65,269 10.729 41,710 341,230 39,578 1,553,589 229,463 1,783.052 1,297,600 21
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 7 Analysls ol governance and support costs Support costs allocated to charltsble actlvltles other support costs Governance costs Total 2024 Total 2023 Bank charges Cleaning Depreciation Insurance Irrecoverable VAT Light and heat Printing, stationery and postsge Recharges Rent and rates Repairs and maintenance Staff training and welfare Sundry expenses Bad debts provision Audit and 8ccountsncy IT and communication costs Staff costs 793 13,066 26,197 33,670 43,251 57,409 5,482 8,180 35,339 97,861 3,358 7,624 1,576 793 13,066 26,197 33,670 43,251 57,409 5,482 8,180 35,339 97,861 3,358 7,624 1,576 11,050 73,543 28.462 980 13.091 55,241 29,627 27,864 58,242 6,843 6,921 15,377 50,317 2.853 9,072 1,325 12,340 63,477 27,238 380,808 11.050 73,543 28,462 39,512 407,349 446,861 8 Net incomingloutgolng resourcès Net outgoing resources for the year include.. 2024 2023 Audit fees Other non-audit services Depreciation of fixed assets 9,500 1,550 26,197 8.855 3,485 55,241 9 Trustees remuneratlon and expenses No trustees. nor any persons connected with them, have received any remuneration from the charity during the year. No trustees have received any reimbursed expenses or any other benefits from the charity during the year. 22
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 10 Staff costs The aggregate payroll costs were as follows: 2024 2023 Staff costs durlng the year were: Wages and salaries Social security costs Pension costs 962,018 80,556 48,208 780.171 69,337 39,703 889,211 1,090,782 The monthly average number of persons (including senior management I leadership team) employed by Ihe charity during the year expressed as full time equivalents was as foll0v. 2024 No 2023 No Administrative staff Support services Development 28 21 39 32 The number of employees whose emoluments fell within the following bands was.. 2024 No 2023 No £60,001- £70,000 The total employee benefits of the key management personnel of the charity were £217,156 (2023 - £2C6,745). 11 Auditors. remuneratlon 2024 2023 Audit of the financial statements 9.500 8.855 Other fees to audltors All other non-audit seNices 1,550 3.485 23
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 12 Taxatlon The charity is exempt from tsxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporatlon Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. 13 Tangible flxed assets Land and bulldlngs Furnltur? and •qulpment Leasehold property Total At 1 April 2023 Additions Transfers tofftom investment propety At 31 March 2024 3,784,613 3,283 59,497 15,697 3,859,807 3.283 (2,096,883) (2,096,683 1,691,213 59,497 15,697 1,766,407 Deprnclation At 1 April 2023 Charge for the year Transfers 810,630 24,532 (478,916) 48,522 1,665 15,697 874,849 26,197 478.916 At 31 March 2024 356,246 50,187 15,697 422,130 Net I0k value At 31 March 2024 1,334,967 9,310 1,344,277 At 31 March 2023 2,973,983 10,975 2,984,958 14 Flxed asset Investm•nts 2024 2023 Shares in group undertakings and participating interests Investsnent properties 3,935,000 3,935,004 3,185,000 3.185.004 24
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 Shares in group undertaklngs and participating int8ro8ts Subsldlary undertaklngs Total Cost At 1 April 2023 At 31 March 2024 Net book value At 31 March 2024 At 31 March 2023 Other investments Investsnent prop8rti88 Total Cost or Valuatlon At 1 April 2023 Additions Revaluation 3,185,000 3,185,000 1,617,767 1,617,767 (867,767 (867,767} At 31 March 2024 3,935.000 3,935,000 Net book value At 31 March 2024 3,935.000 3,935,000 At 31 March 2023 3,185,000 3,185,000 The fair value of Link House, Speculation House and Ellison House was revalued in the financial year to 31 March 2022 by Bradley Hall Chartered Surveyors. The cost of Deent Point was transferred from tsngible fixed assets to investments properties in the year. The fair value of Derwent Point was revalued in the financial year to 31 March 2024 by BNP Paribas Real Estate. Details of undertakings The principal activity of NECA Services Limited is the promotion of the prevention, recognition and treatment of addictive behaviour including substance dependency and gambling. NECA Seprfices ased trading in the year end to 31 March 2023 and is moving towards becoming dormant The profit for the financial period of NECA servi Limited was £Nil (2023 £12,449) and the aggregate amount of capital and reser4es at the end of the period was £Nil {2023 - £388). NECA Training Limited, NECA Recruitment Limited and NECA Housing Limited were all dormant throughout the current and prior year end. 25
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 15 Debtors 2024 2023 Trade debtors Due from group undertakings Prepayments and accrued income 304,925 259,397 45,799 73,467 378.663 79,091 384,016 16 Cash and cash equivalents 2024 2023 Cash on hand Cash at bank 3,195 1,542,437 1,545,632 2,352 1,465,900 1,468,252 17 Creditors: amounts falling due within one year 2024 2023 Trade creditors Due to group undertakings Other taxation and social security VAT grant repayable Accruals and deferred income 31,220 38.355 21,270 8,831 446,438 507,763 20,883 25,757 332,731 417,726 18 Obllgations under lea8e8 and hire purchase contracts Operating lease commltmonts Total future minimum lease payments under non-cancellable operating leases are as follows: 2024 2023 Other Within one year Between one and five years 1,260 2,205 761 761 3.465 1,522 26
NECA Notes to the Financial Statements for the Year Ended 31 March 2024 19 Pen$lon and other schemes Defined contrfbutlon penslon scheme The charty operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the charity to the scheme and amounted to £48,208 (2023 £39,703). 20 Fund6 Balance at l Aprll 2023 other Balance at Incoming Resources recognlsed 31 March resources expended gainslllosses) 2024 Unrestrlcted funds General General fund 5,885,326 1,505,019 (1,553,589) 5,836,756 Deslgnatsd Investment propety revaluation 1,612,000 (867,767 744.233 Total unrestrlcted funds 7,497,326 1,505,019 (1,553,589) (867,767) 6,580.989 Restrlctsd funds Gamcare Grants National Lottery National Lottery KYN STC HAF Karbon Homes National Lottery Caterpillar Kitchen Fund Total restricted funds 100,042 164,526 38,267 22.080 16,542 3,400 (158,236) (34,797) (12,720) (15,527) (3,400) 106,332 3,470 9,360 1,015 1,783 3,000 (4,783 101,825 247,815 (229.463) 120,177 Total funds 7,599,151 1,752,834 1.783,052 867,767 6,701,166 The specific purposes for which the funds are to be applied are as follows.. General funds comprise those funds which the trustees are free to use for any purpose in furtherance of the charitable objects. Restricted funds consist of the income reiVed for specffic charitable purposes and its related expenditure. Designated funds consist of the total revaluation surplus on the investment properties. 27
NECA Notes to the Financial Statements for the Yaar Ended 31 March 2024 21 Analysls of net assets betweon funds Unrestrfctsd General Deslgnated Restricted Total funds Tangible fixed assets Fixed asset investments Net current assetsl{liabilities) 1,344,277 3.190,771 1.301,708 1,344,277 3,935,004 1,421.885 744,233 120,177 Totsl net assets 5.836,756 744,233 120,177 6,701,166 Unrestricted Total funds at 31 March 2023 General Designated Restricted Tangible fixed assets Fixed asset investments Net current assetsl(liabilities) Total net assets 2.984,958 1.573,004 1,327,364 2.984,958 3.185.004 1.429,189 1,612,000 101,825 5,885,326 1,612,000 101,825 7,599,151 22 Analysls of net fund8 At 1 Aprll 2023 Flnancing cash flows At 31 March 2024 Cash at bank and in hand 1,468,252 77,380 1.545.632 Net funds 1,468,252 77,380 1,545.632 At 1 April 2022 Flnancing cash flows At 31 March 2023 Cash at bank and in hand 1,506,145 1,506,145 (37,893) (37.893) 1.468.252 Net funds 1,468,252 23 Related party transactions During the year the charity made the following related paty transactlons: NECA Servlces Llmlted There have been amounts received from NECA Services Limited in the year amounting to £Nil (2023.. £157,704) for recharges and other expenses incurred on behalf of NECA. At the balance sheet date the amount due tolfrom from NECA servIs Limited was £Nil (2023 - £45,799). 28