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 swa￿11 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 re￿1ve 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 te￿s, 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 CoMpa￿S 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 con￿rn 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 ac￿ptable 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 prO￿sS 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 reSoUr￿S 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 con￿rn 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 a￿ayS 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 p￿Pared 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 ir￿guIantr.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