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2021-03-31-accounts

Registered number: 02441319 Charity number: 702314

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee) TRUSTEES' REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

CONTENTS

Page
Reference and Administrative Details of the Company, its Trustees and Advisers 1
Trustees' Report 2 - 16
Trustees' Responsibilities Statement 17
Independent Auditors' Report on the Financial Statements 18 - 22
Consolidated Statement of Financial Activities 23
Consolidated Balance Sheet 24
Company Balance Sheet 25
Consolidated Statement of Cash Flows 26
Notes to the Financial Statements 27 - 57

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 MARCH 2021

Trustees Patricia Chambers, Chair
Vivienne Holmes, Vice Chair
Jamie Houlders
Ian Wright (resigned 31 December 2020)
Trevor Watson
Company registered
number
02441319
Charity registered
number
702314
Registered office
Eldon Street
Thornaby
Stockton on Tees
TS17 7DJ
Chief executive officer
Lisa Pickard
Independent auditors
Armstrong Watson Audit Limited
Chartered Accountants & Statutory Auditors
York House
Northallerton
North Yorkshire
DL6 2XQ
Bankers
Unity Trust Bank
4 Brindley Place
Birmingham
B1 2JB

Page 1

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT FOR THE YEAR ENDED 31 MARCH 2021

The Trustees are delighted to present their annual report providing an overview of the year past and plans for the future.

ACHIEVEMENTS AND PERFORMANCE

a) Financial Review

The total income for the year to 31 March 2021 was £4,225,694. This reflects a change to our prior year position of £2,899,857. The Statement of Financial Activities for the year, the Balance Sheet as at 31 March 2021 and associated notes are set out on pages 27 to 57.

It is the Board's intention to hold not less than £100k in accessible cash balances . This policy is monitored quarterly by the Trustees and seeks to ensure that the Charity can manage its activities in the event of a significant drop in funding. The current cash balances are in line with the policy.

STRUCTURE, GOVERNANCE AND MANAGEMENT

a) Organisational structure and decision making

The Trustees (the Board) present their report and the financial statements of the charitable company (the Charity) for the year ended 31 March 2021 and confirm that they comply with current statutory requirements, the company's governing documents and the provisions of the latest Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' issued in March 2005.

The legal and administrative information on page 1 forms part of this report.

b) Structure, Governance and Management

The Five Lamps Organisation (FLO) is a registered charity and company limited by guarantee. The company was registered under a Memorandum of Association which established the objects and powers of the charitable company and Its Articles of Association. In the event of the company being wound up members are required to contribute an amount not exceeding £1.

Five Lamps Trading Limited (FLT) is a wholly owned trading subsidiary of The Five Lamps Organisation. FLT is a Limited Company by Shares.

The Directors of the company (FLT) are also charity trustees for the purposes of charity law and under the company's articles are known as members of the Management Committee.

The impact of Covid 19 on the charity as a whole and in particular its trading entity FLT that delivers affordable personal loans through our Conduit Brand, has been significant and the business plan has been updated to reflect the significant change in operating environment as a result. To ensure the integrity and ongoing viability of the updated business plan and Conduit lending model the charity commissioned an independent review from JCCA which concluded in June 2021. The review concluded the trading model to be commercially viable, the lending model to be reliable and the bad debt provision prudent. The review provided Trustees and Social Investment Lenders (noteholders) with an independent assurance as to the on-going value of the charities social lending activities in meeting its charitable objectives and social purpose.

The Trustees continuously review governing documents. The most recent formal amendment approved by the Charity Commission was In December 2013 which provided for the extension of operations to the whole of England.

Since October 2017, FLO has been registered with the Office of the Scottish Charity Regulator, under reference SC047839.

c) Charitable Objects

Our charitable objects provide for operation 'within England and Scotland' to reflect the continued geographic

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

growth of the organisation and its services. Our objects promote for the benefit of the public of urban or rural regeneration in areas of social and economic deprivation, within England and Scotland, by all or any of the following means:

The Powers of the charity now state:

The charity has the power to do anything which is calculated to further its Object(s) or is conducive or incidental to doing so. In particular, the charity has the power to raise funds. In doing so, the charity must not undertake any taxable permanent trading activity and must comply with any relevant statutory regulations.

a. to buy, take on lease or in exchange, hire or otherwise acquire any property and to maintain and equip it for use.

b. to sell, lease or otherwise dispose of all or any part of the property belonging to the charity. In exercising this power, the charity must comply as appropriate with sections 36 and 37 of the Charities Act 1993, as amended by the Charities Act 2006.

c. to borrow money and to charge the whole or any part of the property belonging to the charity as security for repayment of the money borrowed or as security for a grant or the discharge of an obligation. The charity must comply as appropriate with sections 38 and 39 of the Charities Act 1993, as amended by the Charities Act 2006, if it wishes to mortgage land.

d. to co operate with other charities, voluntary bodies, and statutory authorities and to exchange information and advice with them.

e. to establish or support any charitable trusts, associations or institutions formed for any of the charitable purposes included in the Objects.

g. to set aside income as a reserve against future expenditure but only in accordance with written policy about reserves.

h. to employ and remunerate such staff as are necessary for carrying out the work of the charity. The charity may employ or remunerate a director only to the extent it is permitted to do so by article 7 and provided it complies with the conditions in that article.

i. to deposit or invest funds; employ a professional fund manager and arrange for the investments or other property of the charity to be held in the name of a nominee in the same manner and subject to the same conditions as the trustees of a trust are permitted to do by the Trustee Act 2000; and

jj. to provide indemnity insurance for the directors in accordance with, and subject to the conditions in, section 73F of the Charities Act 1993.

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

d) Governance

The Trustees of Five Lamps Organisation retained a focus in 2020/21 on the charitable business, whilst retaining overall oversight of the wholly owned Trading Company ’Five Lamps Trading Limited’.

Five Lamps Trading has its own Board of Directors, which includes Social Investment Lenders representatives appointed as non executive Directors. During the course of the independent review the trustees paused its lending activities in the trading entity. The positive outcome of the review has resulted in an updated lending model and structural changes to support the new mechanism. The changes made have the full support of Social Investment Lenders and provides for a more resilient business going forward. We continue to work with eight Social Investment Lenders under a Loan Note Instrument issued by FLT whereby we have secured a £5million investment fund.

The Charity and Trading Company structure enables the organisation to deliver unsecured affordable personal lending within the Limited Company and the Charity that responds to our financial inclusion charitable objectives. The asset lock is unchanged by the new lending model ensuring that 100% of any profit generated via investments in the Trading Company is reinvested back into the business, either through increased personal lending and/or gift aid direct to the Charity for deliverance of our charitable objectives specifically financial inclusion.

e) Board Purpose

The Five Lamps Organisation Board of Trustees, and the Five Lamps Trading Board of Directors' purpose is to ensure the delivery of its aims and objectives and business plans by providing leadership, strategic direction, and challenge, and at the same time ensuring effective control and oversight of the business and its operations whilst acting responsibly towards employees, stakeholders, and society.

f) Board Key Responsibilities

  1. Managing organisational performance and risk

To continuously develop and review the organisation's strategy, objectives, performance, statutory compliance, and risk, ensuring the measurement of impact on our customers and communities.

2. Leadership and strategy

To lead the development of the Five Lamps' Vision, Values and Strategic Direction.

3. Strategic planning and implementation

To create coherent, strategic plans and timetables, monitor performance and review outcomes and impact.

4. Leading and delivering change

To plan for strategic, transformational change and continuous service improvement proactively and positively in The Five Lamps Organisation’s service delivery.

5. Business Finance Opportunity

To assess and evaluate the key strategic, financial, and commercial opportunities and investment issues facing The Five Lamps Organisation, in the context of the complex political, economic, sociological, technical, and legal context in which it operates.

6. Communication

To promote the work of The Five Lamps Organisation to a variety of external partners, stakeholders, and audiences. To proactively promote the strategy and work of the Board internally.

7. Building Team and External Relationships

To develop, maintain and support productive external, Board and internal networks, partnerships and relationships that produce positive outcomes for the organisation.

8. Equality and Diversity

To proactively champion equality and diversity in everything that it and the organisation does, particularly in the

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

context of making people matter and working with some of the most disadvantaged people in society. This is inclusive of every aspect of equality race, ethnic origin, religion or belief, sex, gender identity and gender reassignment, sex orientation, disability, age, marriage or civil partnership, pregnancy, or maternity.

An Audit & Risk Committee is established to ensure there are effective controls and oversight of the business to further strengthen governance. Membership of the Audit & Risk Committee is made up of Trustees and Directors. They have delegated responsibility with the independent support of the external auditors, to receive, scrutinise and recommended the adoption and signing of the Accounts and Financial Statements to the Trustees and Directors. The Audit & Risk Committee have a delegated remit to monitor the Risk Register and Risk Management log. Both Boards consider risk as part of their ordinary agendas and specifically at the joint meetings. This reflects the significance the business places on managing risk and ensuring continued business viability.

A minimum of two Joint board meetings are held each year to:

1) receive the audit findings, management letter and annual statements and review audit performance and 2) to review financial strength and future forecasts and set budgets.

We continue to operate a joint Remuneration Committee which has delegated responsibility for oversight and decision making on Director’s remuneration although this has not met in the financial year as there has been no changes to remuneration.

g) Trustee & Director Training

Appointments to the Boards are based on a skills matrix and business needs analysis. Induction as well as ongoing training for new and existing Directors and Trustees is integrated into the business. Trustees and Directors are encouraged to be become familiar with the work or the organisation in several different ways. Induction mirrors our staff Induction process which is part of a range of Human Resource polices as well as bespoke induction depending on the skills analysis and competency framework. All Directors and Trustees also benefit from on an ongoing basis:

h) Organisational Structure

The Charity has a Board of Trustees who meet a minimum of four times a year, usually quarterly. Currently there are 5 members from a diverse range of professional backgrounds reflecting the ethos of the charity. A Chair and Vice Chair are appointed annually and have full voting rights. Plans for further recruitment of Trustees in 2021 were put on hold during the pandemic and is expected to resume later in the year. The organisation employs the services of a minute taker. Day to day responsibility for the provision of services and operation of the business rests with the Group Chief Executive. During the course of the year the executive team comprising of the Group Chief Executive and the Director of Corporate Services was increased to include an Executive Director of Finance.

i) Related party relationships

The Trustees have all filed nil returns confirming that there no related party transactions in the Charity. Northeast Enterprise Agencies limited, had a trading relationship with Group Chief Executive being on their Board. She has subsequently resigned from this Board in 2021.

Two Trading Board Directors can be appointed from the Social Investment Lenders, in line with the loan instrument, one has is in place and have a related party transaction in terms of the social investment loan their

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

companies has in the Trading Company. The security trustee of the loan instrument is a non executive director.

j) Risk Management

The Boards of Trustees and the Trading Company maintain a continuous review of the major risks to which each company and the charity is exposed to. Identified risks are included in a Risk Management Matrix that, where appropriate, includes details of systems, policies, procedures, or new management actions to control and mitigate the impact of risk if it materialises. The organisation seeks to manage some of these risks via transferring risk through a range of Insurance cover. The managed risk revolves around the short term and non recurring nature of some funding sources. Our strategic planning is targeted at winning contracts and building a broad project portfolio which has a range of funders, rather than being grant reliant. Internal controls are in place and are subject to annual audit using compliance and substantive testing.

Each Board has its own robust risk management matrix that is updated and reviewed at each Audit & Risk Committee, which meets at least four times per annum. Currently there are 26 specific risks in FLO and 22 in FLT, which are being monitored and management actions taken to mitigate.

We added a new risk for both the Charity and Trading Company ‘Failure to deal with the impact of COVID – 19’ in light of the Coronavirus pandemic. Covid19 has significantly impacted on Five Lamps and our customers. Financially, the Boards have agreed a comprehensive review of bad debt policy and provision resulting in significant additional bad debt provision added to the balance sheets on 31st March 2021 to mitigate for increased losses on personal loans. The approach to bad debt provisioning has been strengthened to plan for increased exposure to bad debts.

In Charity, all front facing services have been comprehensively risk assessed and subject to ongoing monitoring and due diligence. The Trustees have ensured a standalone risk map for our Home Care service, which has been subject to PPE and other infection control challenges. Our Conduit personal lending product was significantly impacted, and revenue income drastically reduced. Risk has been mitigated through the new lending model which has been subject to independent review and a restructuring of interest payments with the full support of Social Investment Lenders.

Covid19 has affected how we deliver products and services. Excepting home care, all of our services were temporarily moved to home working. New risk registers have been implemented for this.

Despite the pandemic, both the Five Lamps Board of Trustees and the Five Lamps Trading Board of Directors have maintained a high level of governance and oversight with Board meetings being held virtually.

An internal staff led Health & Safety Committee meets regularly to ensure statutory compliance across all of our buildings. All our sub contractors must satisfy a health and safety check. The nature of our services, which often work with the most disadvantaged and marginalised groups, or with young and older people, necessitate either of the two levels of disclosure. All our staff appointments are subject to satisfactory enhanced disclosure. Risks identified are reported to the Audit & Risk Committee via the risk register

Our insurance cover spans public and employer's liability, professional indemnity, directors and officer's liability, buildings and contents and specialist cover such as lift Installations and a climbing wall. These are all subject to review and market testing on a regular basis with the latest review taking place in February 2021 where further Increases in cover were agreed to Increase the Insurance and Indemnity for the business.

Audits on compliance with external legislation are completed each year and we have strengthened the role of our Quality Manager, adding more emphasis on Risk and Assurance across the business. Continuous improvement audits of our HR policies and procedures throughout the organisation are routinely completed with specialist support from Croner Assist ensuring we remain compliant and working according to good practice. Whilst our HR activities are underwritten by an employment indemnity, we also ensure we minimise the risk of any claims through regularly updates, training and briefings.

k) Quality Assurance & Statutory Regulators

Five Lamps has a strong focus on service quality and the associated investment ln the personal and professional

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

development of our workforce.

We are regulated as follows:

• Care Quality Commission (CQC) – Five Lamps is regulated by the Care Quality Commission for its domiciliary home care services. We are registered under Five Lamps Home Care (Eldon Street) and in July 2020 also became registered under Parkside Court Extra Care Scheme.

• Financial Conduct Authority (FCA) – Both FLO (FCA Reference 656112) and FLT (FCA Reference 791848) are authorised and regulated by the FCA.

During the year there have been no regulatory breaches or adverse regulatory issues to report.

Five Lamps participated in an FCA Forbearance survey including some on site assessment and verification of our processes and no areas of non or partial compliance were identified.

In March 2021, our Five Lamps Home Care Service was subject to an inspection and received a grade of ‘Good’ across all aspects of the inspection, an improvement on the initial CQC inspection undertaken in 2018 reflecting the significant progress and development we have made in this area.

PRINCIPAL ACTIVITIES

2020/21 was a challenged yet transformational year for the organisation with significant changes to its executive management team and a comprehensive review of our services and products against a review of our long term strategic goals. We are proud to have survived the pandemic and the financial and social impact this has had on our charity and still be in a position of strength as we move into a period of recovery.

With the arrival of a new finance director in February 2021, an in depth audit of our financial management systems and reporting was completed to improve the transparency of our management accounts and introduced a new approach to cash flow monitoring. All products, services or assets that were not making a return on investment have been evaluated and have plans in place, or now completed to manage the risk. Given the risks associated with affordability for our social lending client group in the light of the economic impact current and future we have robustly reviewed our bad debt provision and adopted a proactive and supporting approach to affordability checking and repayment plans.

The consolidated operating deficit of £456,894 includes an additional provision of £714,796 to reflect increased bad debt risk and uncertainty due to the Covid 19 pandemic.

Excluding this, the Group reported a £257,903 operating surplus compared to an operating loss of £699,035 in 2019/20. (The surplus was made up of £655,710 surplus from FLO less the £397,807 deficit FLT)

It should also be noted that the unity bank CDFI loan was discharged in full during the year.

A brief summary of our achievements during the year is included below. A separate social impact report covering all of the Group’s activities will be produced.

a) Five Lamps Organisation the charity

We are exceptionally proud of the resilience and strength of the charity during unprecedented times and recovery from two consecutive years of loss-making activities. This has been achieved due to the determination and success of our highly skilled and committed workforce. We make particular thanks to all of our colleagues including those who have been placed on Furlough Leave as it has been a one organisation approach and team effort to ensure Five Lamps remains stable and sustainable for the future.

Home Care

We could not be prouder of the dedication and professionalism of our care team maintaining critical services to our clients throughout the pandemic. Throughout the period they put others first and ensured critical personal care plans were in place and maintained for those in need. Our Home Care service has proven innovative and

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

resilient finding solutions to the various barriers and issues faced during this time, with one goal always in mind; providing excellent quality home care services and support for service users, who for many, we were their only contact during the lengthy lock downs.

• delivered over 2,000 hours of care per week to support individuals to live independently within their own homes.

• Maintained primary provider status on Stockton on Tees Borough Council’s Care at Home Framework through a competitive tendering process which began in March 2020. We now provide care across the South of Stockton on Tees via: Care at Home, Community care –primary provider and secondary provider status & Parkside Court Extra Care Scheme – became care provider in July 2020 and TUPE transferred 24 staff

• Hospital Discharge/ Rapid a rapid care service supporting people on their discharge from hospital for up to 14 days while their primary provider package is being established.

• End of Life Continuing Health Care provide end of life care to service users within their homes, working with a team of professionals to meet the care needs and wishes of service users and their families

PAMMS (Provider Assessment and Market Management Solution) Inspection completed in March 2021 confirmed that all of the 6 standards requiring improvement identified in October had all been addressed with an ongoing improvement plan and confirmed a positive outcome reflecting 10 standards as ‘good’.

Support for our care workers has been a priority. We recognise the invaluable and challenging role they have played during the pandemic. There has been extensive initiatives and support put in place including:

Youth Services

Our ability to deliver youth services through our bespoke youth services facility (The Youthy), were severely impacted during Covid as the centre was closed for the entire year. Colleagues were furloughed and kept in employment as we remained committed and positive about the future reopening of the centre.

Despite being unable to offer the usual quality in person youth support groups, we adapted our service offer increasing our digital reach and engagement with established young people and formed new relationships with other local people and their families who needed our support during difficult times.

During the pandemic, it was more important than ever that the young people and their families who we usually supported were continued to be supported. Five Lamps delivered alternative and innovative detached youth work with:

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

Employability & Enterprise

Our Employability and Enterprise Team deliver the Youth Employability Initiative which targets 15-29 year old’s who are not in employment, education or training. Our experienced Advisors work them to remove their barriers to employment and self-employment to prepare them for the world of work or business enterprise. To protect jobs, the majority of the team were on Furlough Leave throughout 2020/21 due to the inability to support people face to face and because the young people were limited in opportunities to overcome the barriers.

Despite this, with a reduced workforce and innovative ways of working we continued to deliver the project and supported 153 people into employment/self-employment.

We continued to deliver the New Enterprise Allowance project receiving referrals from Job Centre Plus for customers claiming Job Seekers Allowance needing support to move into self-employment. 145 local people received an individual assessment and tailored support with 37% (54 customers) setting up their own business and becoming self-employed.

Through the European Regional Development Fund (ERDF) contract, we have also supported 19 business startups in 20/21.

Helping Hands.

We are now approaching our 12th year of delivering 'Helping Hand' on behalf of Northeast local authorities. Since the scheme began, we have assisted 860 households with a loan, mainly to bring owner occupied properties up to a Decent Living Standard as well as to renovate empty homes, undertake disabled facilities adaptations and to support relocations due to compulsory purchase.

Empty properties

We currently have a portfolio of 39 lease and repair and 2 purchase and repair properties, ranging from 2- bedroom flats to 4-bedroom houses. These were among 48 long-term empty properties which we brought back into use through the Empty Homes Community Grants Programme in conjunction with Durham & Darlington Councils in 2013-15. Many of our properties are in socially challenging areas, however, through close partnership working we have been able to house a number of people with complex needs whilst still maintaining an occupancy rate of over 85%.

b) Five Lamps Trading – Conduit & Conduit Scotland

2020/21 was a challenging financial year delivering personal lending in our wholly owned Trading Company which like other CDFI’s was significantly impacted on by a downturn in lending and pressure on the economy. A separate detailed report from the Director of Five Lamps Trading to the Trustees and that forms part of the standalone FLT accounts is included below.

FLT Directors Report to Trustees and to accompany FLT accounts for filing

The principal activities of the company are responsible lending and property management.

We are pleased to present our 2020/21 Directors report included as part of the Five Lamps’ Group Financial Statements and to complement the Trustees report, which includes an overview of Five Lamps Trading Ltd and our Affordable Lending Brand Conduit and Conduit Scotland.

The Trustee Report is signed jointly by the Chair of Five Lamps Trustees, Pat Chambers and Vivienne Holmes, Vice Chair who is also a Trustee.

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

Business Activity 2020/21

Summary

2020/21 was an especially challenging year for the Group, delivering unsecured personal loans through Five Lamps Trading as a solely owned subsidiary of Five Lamps Organisation; to those in financial need during a global pandemic that has significantly impacted on jobs and the economy.

Maintaining extensive dialogue with our Social Investment Lenders, we have strived to maintain and secure a sustainable position that enables us to continue to deliver financial inclusion activities primarily through the delivery of affordable lending in keeping with our charitable objectives.

We are delighted to report that unlike many others, we have managed to sustain the unprecedented pressures and pleased to update that as a result of our resilience, risk management and support from Social Investment Lendors, we file our accounts in a stronger position for the future and remain resolute in our commitment to continue to grow our affordable lending and financial inclusion activities.

Millions of people are unable to access mainstream credit and are financially excluded, experience financial inequality ‘poverty premium’ and are vulnerable to high cost or unregulated lending. Access to ethical finance is even more important during periods of national and personal economic uncertainty. During this period of uncertainty, those who need it most have found the market less available as high street lending criteria has tightened and we have seen the demise of high-profile high-cost short term lenders.

Following the year end, the Trustees of the Charity commissioned a robust independent review of our updated lending model and associated assumptions. We are delighted to report this delivered significant assurance enabling our Social Investment Lenders to confirm their support for our updated business plan The Directors wish to acknowledge the unwavering determination of the charity to the highest standards of transparency and assurance to all Social Investment Lenders during this period of uncertainty. Also, to thank our Social Investment Lenders for their continued support and to take this opportunity to reiterate our optimism for the future, a future where we continue to deliver much needed affordable lending to those in need.

The following highlights are worthy of note.

Financially, the Directors of FLT report a year end loss of £ 1,112,604 ( £369,594 2020). Excluding exceptional items (one off bad debt provision)*, the loss would have been £602,192 ( £283,475 2020). These losses were supported by the Board of Trustees (Charity) in pursuant of the longer-term charitable objectives.

Partnerships & Social Investment Lenders

Five Lamps does not work in isolation. We know that the viability of our business and ability to deliver our goals is best achieved through partnerships and innovation.

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

Despite a pandemic, we did not stand still. As well as investing in existing partnerships, we sourced new partnerships and support in particular supported Five Lamps Organisation in securing a £500k grant from Scottish Government to raise awareness of and increase access to affordable lending across Scotland.

We have received additional grant and in-kind support from Fair4allFinance that has enabled us to complete an extensive treasury review and independent due diligence of our business model and operating assumptions.

At a time when others were pulling back from the unsecured personal lending market; we entered into new partnerships with cost comparison sites to respond to changing customer behaviours.

Despite a financial year with lockdowns and homeworking we have again made significant changes and improvements to systems, infrastructure investment into technology, new ways of working and creating a new norm as well as identifying and making new routes to market happen. In response to changing need, we worked with a number of partners to identify different loan products and as Directors agree the future strategy for financial inclusion.

In 2020/21 our commitment and approach to partnership working has been pivotal in strengthening our future. Specifically:

The Directors would like to thank our eight Social Investment Lenders and ten noteholders for their continued support. In 2020/21 a number of activities have been undertaken:

• £750k new loan notes were subscribed and drawn down in the year. These have been received thanks to additional support from Social Investment Scotland and the Affordable Loan Fund and Big Issue Invest.

• A total of £187,250 loan notes is now unsubscribed, and the Directors are considering options to bring in this funding plus future funding to support growth.

• Supported and approved a new financial model reflecting the current market and planning for future growth.

• Agreed to vary the loan instrument to move to bullet repayments for the capital by July 2024 and deferred interest payments due to future years to support cashflow; both decisions ensured improved outcomes in the financial model and improved liquidity.

• Extensive investment, both financial and leadership resource has been contributed into the social investment partnership to improve its effectiveness and as a result a positive relationship is now in place working together to find solutions, innovate for growth and importantly focus on the delivery of social impact

Covid-19

The Directors have welcomed the Government support packages made available to businesses including a CBILS loan of £500k secured in July 2020 and £110,400 via the furlough scheme grant during the period.

Throughout the financial year, Covid19 has significantly impact on our customers and our business.

• all FLT colleagues were mobilised to work remotely within several days of the lockdown announcement that has ensured the continued delivery of lending services throughout the pandemic.

• A new way of working is emerging from this as we support our colleagues and their families as well as future proof our business to adapt to operating with Covid.

• Front facing roles that could not be relocated into home working works were furloughed to protect jobs and businesses although in March 2021 we took the decision to exit shop based and face to face lending in Scotland resulting in the redundancy of 4 colleagues.

• The £500k Covid Business Interruption Loan was secured in July 2020 to partially bridge the lost and irrecoverable revenue from a collapse in the lending market during the 1st lockdown.

• The approach to bad debt provisioning was overhauled to manage the uncertain risk for future lending against a new economic backdrop volatile to the impact of Covid. This resulted in a policy change increasing our provision to between 12% and 15% of capital disbursed. The Directors expect this to be prudent but until the market recovers or resets it is the preference to manage risk in this area.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

• As well as increasing the provision method for new loans, the Directors agreed to an extraordinary provision of £714,796 to provide for increased risk of loan defaults for existing loans at 31.3.21. This considered the FCA requirement to offer customers payment holidays.

Leadership Team

During the year, we made further changes to our Executive team structure and capacity with the addition of a new Strategic Finance Director and a Head of Finance role. This reflected the importance on strategic planning, cash flow management, liquidity and to ready the company for future funding opportunities. In addition, the Directors secured the outsourced support from Ellison Ray for affordable lending and financial modelling expertise. Subsequent to the success of these changes and to complement the newly approved lending model and reinvigorated commitment to scaled up lending, it has been agreed to further strengthen the senior team and build capacity by creating a new Director of Conduit Operations for the group.

Future

Since the year end, the Directors have agreed with the Noteholders and approved by the Charity Trustees, that all lending will be delivered within the lending permissions held by the Charity as this enables the Group to deliver loans exceeding 100% APR which is critical to meet changing needs and increased risks. The Director of FLT will continue to remain the Issuers of the Loan Note Instrument that underpins the partnership we have with 8 Social Investment Lenders.

The Trustees remain committed to personal lending and its pivotal role in addressing financial exclusion and the poverty premium impacts having an inability to access mainstream credit has on the people and communities we support.

To this end, as well as the activity within FLT, the charity submitted a bit to the Scottish Governments Affordable Lending fund and received a grant of £500k to increase access to affordable credit in Scotland. Alongside this, Fair4allFinance supported FLT with a further £20k grant to invest into strategic finance director expertise which has been invaluable in managing the perfect storm associated with Covid19.

c) Social Impact Reporting

Five Lamps is passionate about its ability to deliver social impact and an 18-month social impact report is to be published for the Group detailing not only the social impact we have made but capturing the resilience and outcomes achieved during the pandemic. The Trustees could not be prouder of the impact that has been made and at a time when our services and support were needed the most, we have showcased our continued commitment to ‘Make People Matter and Change Lives’

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

PLANS FOR THE FUTURE

Strategic direction and future plans

Five Lamps has a 35-year history of delivering and forging partnership to promote and deliver social, financial, and economic inclusion and to invest in the local communities particularly across Stockton on Tees and Teesside and through our financial inclusion work we have a specific focus in Scotland and throughout the UK. We are committed to retaining and building on our heritage and using this experience to grow where our services and products can help change people's lives.

We have a proven track record of being versatile and able to respond to new initiatives and opportunities and have increasingly become well placed at influencing and helping to bring about change. Never has this been more apparent than in the last financial year. To weather the storm and deliver a surplus for the first time in 3 years is testament to the innovation, determination and resilience of the organisation and its workforce. Whilst we have always been positive about the future, this outcome, and the emerging reality of increasing need for our services and support due to social and economic changes, has reinvigorated the charity's passion to ensure we remain viable and successful delivering positive social impact and outcomes for a further 35 years.

To this end and as part of the Executive Team and both Boards keeping themselves abreast of developments at national, regional, and local level across a broad range of thematic and geographical issues the strategic priorities for 2021/22 and the future include:

1. Reset & refocus our financial inclusion work through:

a. innovating and growing the Conduit brand with different products and services to meet changing needs and circumstances. This will be to support us to reach more people experiencing financial hardship and exclusion to improve their financial health and eliminate the reliance on high-cost unaffordable short-term lending.

b. Working in partnership with existing and new local authorities and housing providers to raise awareness and increase access to affordable alternative credit products; in addition to being a deliverer, we want to collaborate and raise awareness through campaigning and supporting new initiatives.

c. Embarking on a journey of customer engagement and experience to build on our extensive consumer insight policy

2. Build on our Youth Inclusion focus.

a. With a new enhanced role of Youth Inclusion Manager, we plan to revitalise The Youthy and make this the hub of our youth inclusion and tackling child poverty. In 2022, our Youthy will be 20 years old; we plan to use this as a catalyst to reposition ourselves as a leading local charity delivering support and providing hope and aspirations for local young people.

3. Grow our Home Care service, both in numbers, brand, and geographical location

a. We plan to achieve great economies of scale and added value by doing more of what we do well and will be targeting grow across Teesside in the first instance, ensuring we remain a key partner for Stockton Borough Council as well as Continuing Health Care (CHC).

b. Intend to develop, brand and market our private home care services specifically for those who are not eligible for adult social services financial or other support and to link this to our focus on loneliness and isolation. c. Develop the best staff team possible; working within the social care sector financial constraints we want to our care staff are rewarded fairly and see us as the best care provider to work with.

d. We aspire to receiving excellence through both CQC and PAMSS assessments

e. We will be a greater voice championing investment and new ways of working for home care services and home from hospital support.

4. Refocus our Enterprise and Employability stream.

a. To take tough decisions to address legacy issues that do not make best use of the charities reserves and use this opportunity to start from a smaller base and discover / shape our niche role in the market, particularly in

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

terms of Youth employability and support for small or new businesses.

b. The Trustees have identified that all our future enterprise activities need to be self-funding or able to bring in charitable funds and support.

5. Recognised brand and purpose for our charity.

a. We know the services and products we provide are needed more now than ever. We plan to ensure our brand and activities are better marketed and well known. We will be recruiting a new Charity and Fundraising Manager to support this ambition.

b. Moving from charitable activities that are reliant on grant and other funding, we plan to build on and make our fundraising activities an integral part of what we do.

6. Ensure our assets and value

a. We will be consolidating our premises and assets to build on the Eldon Street head office being the hub of the charity with the Youthy being the hub for youth engagement and inclusion.

b. We will conclude plans to purchase the Eldon Street office and increase its value within the local community.

7. Our people : we want to be an employer who people enjoy working with and want to work for

a. A new cultural strategy is to be implemented with the values of the organisation being updated and future proofed.

b. We are reviewing our terms and conditions to ensure where we are able to, we support our colleagues to cope with increasing inflation, rising cost of living and increased tax and NI contributions.

c. Mental health and a healthy workforce are a priority for us to ensure that our staff are supported and happy in their work.

d. Continue to develop our agile working policy and support colleagues, where they can, to work flexibly and remotely, being trusted and accountable for their delivery and performance.

8. Governance

a. Recruit new Trustees with specific skills and experiences to help us deliver our vision, ensure the oversight and achievement of the future targets and to complement the existing Trustees.

b. Complete a Governance review started in April 2021 and deferred until the investment priorities and financial model were finalised. This will include:

i. A review of the FLT Governance structure and Board of Directors as their terms of office come to an end.

ii. A review of the governance structure across the Group to ensure the right balance of focus and challenge is centred in the areas to best manage risk and support new opportunities.

9. Financial Health & Resilience.

We have survived some of the biggest challenges Five Lamps has ever experienced. We want to build on this to ensure we have reserves in the tank for the future and as well as being able to survive future risks and challenges, we are best place to pursue new opportunities.

a. Complete a financial health check and independent support on future refinancing and funding opportunities

b. Ensure regular market and funding potential assessment to ensure Five Lamps accesses and benefits from relevant funds and grants that complement our priorities.

c. Undertake a value-added assessment of all of our functions and activities.

10. Carbon Neutral

a. We recognise the pressure and necessity to protect our planet and ensure its viable for future generations. As part of this, in 21/22 we embark on our first assessment of our carbon footprint and impact we have on the environment and publish our plans for reducing our impact. We have started this through electric bikes for our care staff but will be looking to take this further and at the same time explore initiatives that can

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

support the customers and communities we serve with improved affordability as result of carbon neutral activities.

11. Digital Transformation.

a. We plan to ensure our services and contracts are accessible via evolving digital channels and technology. We plan to develop a digital shift strategy to outline how we can become more effective through digital innovation and technology as well as improve the social, financial, and economic impact we make.

12. Social Impact

a. Everything we do is about delivering a positive social, financial, or economic impact and Making People Matter. This year we plan to showcase some of the brilliant work we have done and plan to do and use this as a foundation and catalyst to refocus and grow the Five Lamps Charity.

c) Strategic direction and future plans

Our Mission: To Transform Lives, Raise Aspirations and Remove Barriers to Social, Economic & Financial Inclusion

Our Business : A nationally recognised charitable business working with excluded individuals and families in the most disadvantaged communities.

Delivered Through:

Making People Matter

Performance Matters

Quality Matters

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

Making Communities Matter

Measuring Impact Matters

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are Trustees at the time when this Trustees' report is approved has confirmed that:

• so far as that Trustee is aware, there is no relevant audit information of which the charitable group's auditors are unaware, and

AUDITORS

The auditors, Armstrong Watson Audit Limited have indicated their willingness to continue in office. The Designated Trustees will propose a motion re appointing the auditors at a meeting of the Trustees.

This report was approved by the Trustees, on and signed on their behalf by:04 November 2021

P Chambers V Holmes Trustee Trustee

Page 16

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

STATEMENT OF TRUSTEES' RESPONSIBILITIES FOR THE YEAR ENDED 31 MARCH 2021

The Trustees (who are also the directors of the Company for the purposes of company law) are responsible for preparing the Trustees' Report including the Strategic Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial . 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 Group and the Company and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 17

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE FIVE LAMPS ORGANISATION

Opinion

We have audited the financial statements of The Five Lamps Organisation (the 'parent charitable company') and its subsidiaries (the 'group') for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows and the related notes, 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, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE FIVE LAMPS ORGANISATION (CONTINUED)

Other information

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 Auditors' Report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report including the Strategic Report.

We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:

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THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE FIVE LAMPS ORGANISATION (CONTINUED)

Responsibilities of trustees

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

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

Page 20

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE FIVE LAMPS ORGANISATION (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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

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

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector the company operates in;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

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

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

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

• tested journal entries to identify unusual transactions; and

• assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 were indicative of potential bias.

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

• agreeing financial statement disclosures to underlying supporting documentation; and

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Page 21

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE FIVE LAMPS ORGANISATION (CONTINUED)

Use of our report

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

Simon Turner (Senior Statutory Auditor)

for and on behalf of

Armstrong Watson Audit Limited

Chartered Accountants & Statutory Auditors

Northallerton

Date: 11 November 2021

Page 22

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 MARCH 2021

Note
Income from:
Donations and legacies
4
Charitable activities
5
Other trading activities
Investments
6
Other income
7
Total income
Expenditure on:
Raising funds
Charitable activities
8
Exceptional expenses
9
Total expenditure
Net (expenditure)/income
Transfers between funds
20
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2021
£
24,159
1,224,192
1,520,874
5,700
414,149
3,189,074
97,610
3,338,601
714,796
4,151,007
(961,933)
(436,496)
(1,398,429)
1,499,889
(1,398,429)
101,460		 Restricted
funds
2021
£
586,068
236,213
-
14,000
200,339
1,036,620
-
531,581
-
531,581
505,039
436,496
941,535
(427,868)
941,535
513,667		 Total
funds
2021
£
610,227
1,460,405
1,520,874
19,700
614,488
4,225,694
97,610
3,870,182
714,796
4,682,588
(456,894)
-
(456,894)
1,072,021
(456,894)
615,127		 Total
funds
2020
£
2,037
1,116,661
1,697,416
24,700
59,043
2,899,857
273,854
3,325,039
160,382
3,759,275
(859,418)
-
(859,418)
1,931,439
(859,418)
1,072,021

Page 23

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee) REGISTERED NUMBER: 02441319

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2021

Note
Fixed assets
Tangible assets
13
Investments
15
Investment property
14
Current assets
Debtors
16
Investments
17
Cash at bank and in hand
Creditors: amounts falling due within one
year
18
Net current assets / liabilities
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
19
Total net assets
Charity funds
Restricted funds
20
Unrestricted funds
20
Total funds		 178,382
80
1,917,916
2,096,378
(1,242,272)		 2021
£
686,877
4,185,950
32,500
4,905,327
854,106
5,759,433
(5,144,306)
615,127
513,667
101,460
615,127		 188,667
80
525,170
713,917
(1,112,727)		 2020
£
724,858
4,786,311
32,500
5,543,669
(398,810)
5,144,859
(4,072,838)
1,072,021
(427,868)
1,499,889
1,072,021

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees on _______04 November 2021 and signed on their behalf by: Patricia Chambers Vivienne Holmes Trustee Trustee

The notes on pages 27 to 57 form part of these financial statements.

Page 24

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee) REGISTERED NUMBER: 02441319

COMPANY BALANCE SHEET AS AT 31 MARCH 2021

Note
Fixed assets
Tangible assets
13
Investments
15
Current assets
Debtors
16
Investments
17
Cash at bank and in hand
Creditors: amounts falling due within one
year
18
Net current liabilities
Total assets less current liabilities
Total net assets
Charity funds
Restricted funds
20
Unrestricted funds
20
Total funds		 160,970
80
607,370
768,420
(1,515,738)		 2021
£
686,877
2,580,737
3,267,614
(747,318)
2,520,296
2,520,296
513,667
2,006,629
2,520,296		 185,770
80
102,316
288,166
(1,916,713)		 2020
£
724,858
2,767,776
3,492,634
(1,628,547)
1,864,087
1,864,087
(427,867)
2,291,954
1,864,087

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees on _______ and signed on their behalf by:

Patricia Chambers Vivienne Holmes Trustee Trustee

The notes on pages 27 to 57 form part of these financial statements.

Page 25

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2021

Cash flows from operating activities
Net cash used in operating activities
Cash flows from investing activities
Proceeds from the sale of tangible fixed assets
Purchase of tangible fixed assets
Net movement in loan book
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Cash inflows from new borrowing
Repayments of borrowings
Net cash provided by financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 2021
£
48,450
330
(7,676)
600,361
593,015
751,280
-
751,280
1,392,745
525,170
1,917,915		 2020
£
(859,417)
-
-
(517,454)
(517,454)
-
463,510
463,510
(913,361)
1,438,531
525,170

The notes on pages 27 to 57 form part of these financial statements

Page 26

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

1. General information

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Five Lamps Organisation meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The Consolidated Statement of Financial Activities (SOFA) and Consolidated Balance Sheet consolidate the financial statements of the Group and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis.

The Group has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Financial Activities in these financial statements.

2.2 Company status

The company is a registered charity and company limited by guarantee. The members of the company are the Trustees named on page . In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company.

The company is a charitable company domiciled in England and Wales, registration number 02441319 and charity number 702314.

The registered office is Eldon Street, Thornaby, Stockton-on-Tees, TS17 7DJ.

2.3 Going concern

The Trustees have prepared the financial statements on a going concern basis. This is having taken account of the historic losses of the group/company, covenant waivers in the year and the impact of the COVID 19 pandemic.

In reaching their conclusion, the Trustees have considered cash flow forecasts covering a period of at least 12 months from the date of sign off. These include sensitivities analysis that focus on the key uncertainties within the business model, namely receipt of capital and interest on funds previously disbursed and a renegotiated funding position.

Management forecasts show financial headroom and confidence that funding will be renegotiated with more favourable covenants, alongside strong cash recovery.

Whilst aware that a change in key assumptions could have a material impact on the future financial performance of the Group/company the Trustees/Directors feel that the model used to assess going concern is balanced and as such have prepared the accounts on a going concern basis accordingly

Page 27

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

2. Accounting policies (continued)

2.4 Taxation

The company 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 company is potentially exempt from taxation in respect of income or capital gains received 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.

2.5 Incoming resources

Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.

Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.

(i) Grants and Donations:

Income from grants and donations, including capital grants, is included in incoming resources when receivable, except as follows:

(a) When donors specify that donations and grants given to the Charity must be used in future accounting periods, the income is deferred until those periods.

(b) When donors impose conditions which have to be fulfilled before the Charity becomes entitled to use such income, the income is deferred and not included in incoming resources until the pre conditions for use have been met.

When donors specify that grants and donations, including capital grants are for particular restricted purposes, which do not amount to pre conditions regarding entitlement, this income is included in incoming resources of restricted funds when receivable.

(ii) Investment Income

Investment income is included when receivable by the Charity.

(iii) Fees and Similar Income

Fees receivable and charges for services provided and for the use of premises are accounted for in the period in which the service is provided.

(iv) Commercial Trading Operations

Income from commercial trading operations is included in the period in which the group is entitled to receipt, and comprises the turnover of the trading subsidiary including rental income from external sources.

2.6 Resources expended

Costs of generating funds are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds.

Charitable activities and governance costs are costs incurred on the company's educational

Page 28

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

2. Accounting policies (continued)

2.6 Resources expended (continued)

operations, including support costs and costs relating to the governance of the company apportioned to charitable activities.

Resources expended are accounted for on an accruals basis, inclusive of any VAT which cannot be recovered.

Expenditure on grants is recorded once there is an unconditional commitment to pay the grant or the grant has been paid, whichever is the earlier.

Certain expenditure is directly attributable to specific activities and has been apportioned to the costs of those activities as follows:

• Premises costs and office costs – by reference to the estimate floor space (and related room rental value) occupied by each project.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Group's objectives, as well as any associated support costs.

2.7 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the company for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements

2.8 Tangible fixed assets and depreciation

Tangible fixed assets costing £500 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of financial activities.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Page 29

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

2. Accounting policies (continued)

2.8 Tangible fixed assets and depreciation (continued)

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

2.9 Other investments

Fixed asset programme related investments (loan book) are accounted for on the basis of estimated net realisable values (i.e. capital amounts recoverable) at each balance sheet date. Interest receivable on these investments is recognised within the Statement of Financial Activities when earned.

Programme related investments are reviewed at least annually for impairment, an adjustment is made to provide for amounts considered to be irrecoverable, but only once normal recovery procedures have been followed and no further repayments have been made.

Other fixed asset investments are stated at cost.

Current asset investments are stated at market value at the balance sheet date. The Statement of Financial Activities includes the net gains and losses on revaluations and disposals throughout the year

(i) Associated undertakings

Investments in unlisted investments are stated at cost less impairment.

2.10 Investment properties

Investment properties whose fair value can be measured reliably without undue cost or effort shall be measured at fair value recognised in profit and loss

2.11 Operating leases

Rentals under operating leases are charged to the Statement of financial activities on a straight line basis over the lease term

2.12 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the Bank.

2.13 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

Page 30

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

2. Accounting policies (continued)

2.14 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

2.15 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated Statement of Financial Activities as a finance cost.

2.16 Financial instruments

The Group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

2.17 Significant judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The loan book is reviewed on an annual basis for impairment based on an expectation of recoverability of the outstanding balance.

2.18 Pensions

The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year.

2.19 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Group for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Page 31

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

3. Critical accounting estimates and areas of judgment

Management consider there to be an element of judgement and uncertainty in determining the carrying value of the loan debtor book. Accordingly management has assessed the performance of each debtor based on available financial and management information. Where that information shows a net realisable value less than carrying management recognise an impairment against said asset accordingly.

The management team routinely monitor and review loan debtors and investments on a monthly basis and present to the directors on a quarterly basis for consideration. Provision for identified recovery issues are made on a case by case basis with additional provision to reflect historic loss rate experience. In light of ongoing effects of COVID-19 these reviews are more detailed with regards to identifying concerns which may give rise to a bad and doubtful debt, with careful and thorough assessment reports provided to the directors.

Page 32

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

4. Income from donations and legacies

Unrestricted
funds
2021
£
Donations and other voluntary income
24,159
Unrestricted
funds
2020
£
Donations and other voluntary income
112
Income from charitable activities
Unrestricted
funds
2021
£
Health and communities
1,224,192
Finance and enterprise
-
Young people
-
Total 2021
1,224,192
Unrestricted
funds
2020
£
Health and communities
81
Finance and enterprise
-
Young people
-
Total 2020
81		 Restricted
funds
2021
£
586,068
Restricted
funds
2020
£
1,925
Restricted
funds
2021
£
-
191,602
44,611
236,213
Restricted
funds
2020
£
893,799
109,960
112,821
1,116,580		 Total
funds
2021
£
610,227
Total
funds
2020
£
2,037
Total
funds
2021
£
1,224,192
191,602
44,611
1,460,405
Total
funds
2020
£
893,880
109,960
112,821
1,116,661

5. Income from charitable activities

Page 33

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

6. Investment income

Unrestricted
funds
2021
£
Garage rental income
5,700
Cafe rental income
-
5,700
Unrestricted
funds
2020
£
Garage rental income
5,700
Cafe rental income
-
5,700		 Restricted
funds
2021
£
-
14,000
14,000
Restricted
funds
2020
£
-
19,000
19,000		 Total
funds
2021
£
5,700
14,000
19,700
Total
funds
2020
£
5,700
19,000
24,700

7. Other incoming resources

Unrestricted
funds
2021
£
Interest generated by programme related investment (loan
debtor book)
-
Grant income
267,119
Furlough income
146,655
Sundry income
375
414,149
Interest generated by programme related investment (loan debtor book)		 Restricted
funds
2021
£
36,839
96,786
66,502
212
200,339
Restricted
funds
2020
£
59,043		 Total
funds
2021
£
36,839
363,905
213,157
587
614,488
Total
funds
2020
£
59,043

Page 34

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

8. Analysis of expenditure on charitable activities

Summary by fund type

Unrestricted
funds
2021
£
Management and administration
2,236,647
Health and communities
654,358
Finance and enterprise
402,268
Young people
-
Depreciation re properties
45,328
3,338,601
Unrestricted
funds
2020
£
Management and administration
1,486,243
Health and communities
-
Finance and enterprise
-
Young people
-
Depreciation re properties
43,669
1,529,912		 Restricted
funds
2021
£
-
228,055
203,708
99,818
-
531,581
Restricted
funds
2020
£
-
860,044
770,898
164,185
-
1,795,127		 Total
funds
2021
£
2,236,647
882,413
605,976
99,818
45,328
3,870,182
Total
funds
2020
£
1,486,243
860,044
770,898
164,185
43,669
3,325,039
9. Exceptional items
Unrestricted Total
funds funds
2021 2021
£ £
Additional bad debt provision 714,796 714,796

The group for several years has taken a prudent view with regards to portfolio provisions, given the nature and inherent risks of the organisations in which it invests. With the emergence of COVID-19, the portfolio and related provisions have been closely reviewed and an additional provision of £714,796 has been raised in the current accounting year.

Page 35

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

9. Exceptional items (continued)

Unrestricted Restricted Total
funds funds funds
2020 2020 2020
£ £ £
Additional bad debt provision 68,619 91,763 160,382

10. Analysis of expenditure by activities

Management and administration
Health and communities
Finance and enterprises
Young people
Depreciation re properties		 Activities
undertaken
directly
2021
£
1,742,069
882,414
605,975
99,818
45,328
3,375,604		 Support
costs
2021
£
494,578
-
-
-
-
494,578		 Total
funds
2021
£
2,236,647
882,414
605,975
99,818
45,328
3,870,182
Management and administration
Health and communities
Finance and enterprises
Young people
Depreciation re properties		 Activities
undertaken
directly
2020
£
987,230
860,044
770,898
164,185
43,669
2,826,026		 Support
costs
2020
£
499,012
-
-
-
-
499,012		 Total
funds
2020
£
1,486,242
860,044
770,898
164,185
43,669
3,325,039

Page 36

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10. Analysis of expenditure by activities (continued)

Analysis of direct costs

Staff costs
Premises costs
General office costs
Trading company expenses
Grants payable to individuals to assist with
individuals
Finance income and expenses
Bad debts write off
Publicity and advertising
Training and activities
Activities costs
Cafe and vending costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Other costs
Consultancy/facilitators fees		 Mgmt and
admin
2021
£
299,785
28,477
26,850
623,064
-
742,277
-
31
1,186
-
-
-
1,155
5,100
11,968
2,176
1,742,069		 Health
2021
£
802,680
7,846
12,133
-
-
-
-
42
5,065
18,515
2
11,745
-
9,714
5,051
9,621
882,414		 Finance
2021
£
518,112
1,048
4,321
-
1,233
7,829
29,038
-
-
-
-
-
-
726
43,668
-
605,975		 Young
people
2021
£
75,221
17,888
2,618
-
2,732
-
-
290
-
410
-
194
-
465
-
-
99,818

Page 37

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10. Analysis of expenditure by activities (continued)

Analysis of direct costs (continued)

Staff costs
Premises costs
General office costs
Trading company expenses
Grants payable to individuals to assist with individuals
Finance income and expenses
Bad debts write off
Publicity and advertising
Depreciation
Training and activities
Activities costs
Cafe and vending costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Other costs
Consultancy/facilitators fees		 Dep'n
2021
£
-
-
-
-
-
-
-
-
45,328
-
-
-
-
-
-
-
-
45,328		 Total
funds
2021
£
1,695,798
55,259
45,922
623,064
3,965
750,106
29,038
363
45,328
6,251
18,925
2
11,939
1,155
16,005
60,687
11,797
3,375,604

Page 38

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10. Analysis of expenditure by activities (continued)

Analysis of direct costs (continued)

Staff costs
Premises costs
General office costs
Trading company expenses
Grants payable to individuals to assist with
individuals
Finance income and expenses
Bad and doubtful debts
Publicity and advertising
Training and accreditation costs
Activities costs
Cafe and vending costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Other costs
Consultancy/facilitators fees		 Mgmt and
admin
2020
£
13,920
(2,939)
52,509
633,682
-
280,871
-
-
-
-
-
8,143
1,044
-
-
-
987,230		 Health
2020
£
775,683
23,349
17,501
-
-
-
-
1,862
10,721
5,596
194
-
-
12,344
878
11,916
860,044		 Finance
2020
£
651,206
3,941
1,824
-
-
-
(3,528)
32
400
-
-
-
-
450
114,573
2,000
770,898		 Young
people
2020
£
107,562
12,785
15,556
-
10,603
-
-
895
9,414
7,059
-
-
-
311
-
-
164,185

Page 39

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10. Analysis of expenditure by activities (continued)

Analysis of direct costs (continued)

Staff costs
Premises costs
General office costs
Trading company expenses
Grant payable to individuals to assist with employment
Finance income and expenses
Bad and doubtful debts
Publicity and advertising
Depreciation
Training and accreditation costs
Activities costs
Cafe/vending costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Other costs
Consultancy/facilitators fees		 Dep'n
2020
£
-
-
-
-
-
-
-
-
43,669
-
-
-
-
-
-
-
-
43,669		 Total
funds
2020
£
1,548,371
37,136
87,390
633,682
10,603
280,871
(3,528)
2,789
43,669
20,535
12,655
194
8,143
1,044
13,105
115,451
13,916
2,826,026

Analysis of support costs

Staff costs
Premises costs
General office costs
Publicity and advertising
Bank charges re loan funds
Professional fees		 Mgmt and
admin
2021
£
426,098
4,283
22,197
229
6,109
35,662
494,578		 Total
funds
2021
£
426,098
4,283
22,197
229
6,109
35,662
494,578

Page 40

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10. Analysis of expenditure by activities (continued)

Analysis of support costs (continued)

Staff Costs
Publicity and advertising
Bank charges
Professional fees
Others		 Mgmt and
admin
2020
£
421,878
1,592
8,234
65,640
1,668
499,012		 Total
funds
2020
£
421,878
1,592
8,234
65,640
1,668
499,012

11. Auditors' remuneration

2021 2020
£ £
Fees payable to the Company's auditor for the audit of the Company's
annual accounts 16,000 15,000

12. Staff costs

In the current and previous accounting year, no trustees received any remuneration, benefits in kind or reimbursement of expenses. As part of the main insurance taken out by this company, insurance is taken out to protect the trustees against any loss arising from neglect or default of its trustees and officers.

One of the trustees was paid remuneration of £6,000 (2020: £6,000) in the year ended 31 March 2021 and this was paid by the subsidiary company,

Wages and salaries
Employer NI
Contribution to defined contribution pension
schemes		 Group
2021
£
1,903,415
126,838
45,569
2,075,822		 Group
2020
£
1,502,295
110,641
52,452
1,665,388		 Company
2021
£
1,502,295
96,129
37,032
1,635,456		 Company
2020
£
1,221,596
74,566
33,947
1,330,109

Page 41

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

. Staff costs (continued)

The average number of persons employed by the Group during the year was as follows:

Direct charitable work
Administration		 Group
2021
No.
92
38
130		 Group
2020
No.
91
37
128		 Company
2021
No.
92
10
102		 Company
2020
No.
80
11
91

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2021 2020
No. No.
In the band £60,001 - £70,000 1 -
In the band £70,001 - £80,000 - 1
In the band £80,001 - £90,000
1 -

Costs incurred in relation to key management personnel were £173,837 in total (2020: £213,175).

Page 42

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

13. Tangible fixed assets

Group

Cost or valuation
At 1 April 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
On disposals
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Freehold
property
£
884,277
-
-
884,277
297,777
17,748
-
315,525
568,752
586,500		 Long-term
leasehold
property
£
687,157
-
-
687,157
548,799
25,920
-
574,719
112,438
138,358		 Plant and
machinery
£
202,582
5,205
(348)
207,439
202,582
905
(19)
203,468
3,971
-		 Motor
vehicles
£
14,428
-
-
14,428
14,428
-
-
14,428
-
-		 Fixtures and
fittings
£
128,693
-
-
128,693
128,693
-
-
128,693
-
-		 Office
equipment
£
69,947
2,471
-
72,418
69,947
754
-
70,701
1,717
-		 Total
£
1,987,084
7,676
(348)
1,994,412
1,262,226
45,327
(19)
1,307,534
686,878
724,858

Page 43

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

13. Tangible fixed assets (continued)

Company

Cost or valuation
At 1 April 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
On disposals
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Freehold
property
£
884,277
-
-
884,277
297,777
17,748
-
315,525
568,752
586,500		 Long-term
leasehold
property
£
687,157
-
-
687,157
548,799
25,920
-
574,719
112,438
138,358		 Equipment
and
machinery
£
202,582
5,205
(348)
207,439
202,582
905
(19)
203,468
3,971
-		 Motor
vehicles
£
14,428
-
-
14,428
14,428
-
-
14,428
-
-		 Fixtures and
fittings
£
128,693
-
-
128,693
128,693
-
-
128,693
-
-		 Office
equipment
£
69,947
2,471
-
72,418
69,947
754
-
70,701
1,717
-		 Total
£
1,987,084
7,676
(348)
1,994,412
1,262,226
45,327
(19)
1,307,534
686,878
724,858

Page 44

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

13. Tangible fixed assets (continued)

Freehold Land and Buildings

This comprises the building known as The Youthy which was built primarily for the young people of Thornaby. Due to the unique design of The Youthy and the purpose for which it was built, there is no readily available method of arriving at a realistic market value. The unique nature of the building means that it is difficult to value it on a normal commercial basis. The Youthy was valued in November 2011 at £500,000 for the purposes of securing bank facilities but this figure is not considered to be appropriate to use as the carrying value in the financial statements. An alternative method is to measure its ‘value in use’ at an amount based upon expected future cash flows, but this alternative method is also considered not to be appropriate. One further alternative, which is more relevant to this property, is to use replacement cost which exceeds the carrying value at 31 March 2021 of £568,753 (2020: £586,501). All in all, it is considered unlikely that The Youthy will have suffered material permanent impairment in value since it was originally built and, in the opinion of the trustees, a carrying value based on original cost less depreciation continues to be appropriate for accounting purposes.

Investment property

Included in freehold land and buildings is an investment property valued at £37,500. In the opinion of the directors this is a reasonable estimate of the market value at 31 March 2021.

If investment properties had not been revalued they would have been included at the historical cost of £21,014 (2020: £21,014).

Leasehold Land and Buildings

These comprise two buildings from which the Charity runs its management/ administration and various projects. The terms of the leases on these properties, over which the expenditure is written off, are as follows:

(a) The Five Lamps Centre (Carrying value - £Nil)

There is no current lease in place for this property. Expenditure relates to extension work that was carried out in the years to 31 March 2000 and 31 March 2001 and had been fully written off for accounts purposes.

(b) South Thornaby Community Resource Centre (Carrying value - £112,436)

The current lease with Stockton Borough Council is for a period of 25 years from February 2000 and any expenditure is being written off over the remainder of that period.

Page 45

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

14. Investment property

Group

Valuation
At 1 April 2020
At 31 March 2021		 Freehold
investment
property
£
32,500
32,500

The investment property has been valued in the 2020 accounting year by Allied Surveyors & Valuers at £32,500 and the directors have reviewed these valuations and concur that it is based upon the key assumptions that relate to the investment portfolio and their experience of the property market at the current balance sheet date.

15. Fixed asset investments

Group
Cost or valuation
At 1 April 2020
Additions
Disposals
At 31 March 2021
Impairment
At 1 April 2020
Charge for the year
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Loan book
£
5,699,866
5,025,643
(4,507,402)
6,218,107
927,555
1,118,602
2,046,157
4,171,950
4,772,311		 Unlisted
investments
£
14,000
-
-
14,000
-
-
-
14,000
14,000		 Total
£
5,713,866
5,025,643
(4,507,402)
6,232,107
927,555
1,118,602
2,046,157
4,185,950
4,786,311

Page 46

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

15. Fixed asset investments (continued)

Company
Cost or valuation
At 1 April 2020
Disposals
At 31 March 2021
Impairment
At 1 April 2020
Charge for the year
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Investments
in
subsidiary
companies
£
850,002
-
850,002
-
-
-
850,002
850,002		 Loan book
£
2,413,852
(156,129)
2,257,723
496,078
30,910
526,988
1,730,735
1,917,774		 Total
£
3,263,854
(156,129)
3,107,725
496,078
30,910
526,988
2,580,737
2,767,776

Principal subsidiaries

The following was a subsidiary undertaking of the Company:

Name Company Registered office or principal Principal activity
number place of business
Five Lamps Trading Limited 08029251 Same as the The Five Lamps Lending and property
Organisation management
Class of Holding Included in
shares consolidation
Ordinary 100% Yes

Page 47

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

15. Fixed asset investments (continued)

The financial results of the subsidiary for the year were:

Name
Income
£
Expenditure
£
Profit/(Loss)
/ Surplus/
(Deficit) for
the year
£
Five Lamps Trading Limited
1,520,874
2,632,938
(1,112,064)
Debtors
Group
Group
Company
2021
2020
2021
£
£
£
Due within one year
Trade debtors
50,012
64,332
48,597
Other debtors
18,905
5,693
6,300
Prepayments and accrued income
34,496
80,973
31,104
Grants receivable
74,969
37,669
74,969
178,382
188,667
160,970
Current asset investments
Group
Group
Company
2021
2020
2021
£
£
£
Listed investments
80
80
80		 Net assets
£
(1,055,167)
Company
2020
£
64,330
5,694
78,077
37,669
185,770
Company
2020
£
80

16. Debtors

17. Current asset investments

Group listed investments

The market value of the listed investments at 31 March 2021 was £80 (2020 :£80). Company listed investments

The market value of the listed investments at 31 March 2021 was £80 (2020 :£80).

Page 48

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

18. Creditors: Amounts falling due within one year

Bank overdrafts
Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Pension fund loan payable
Other creditors
Accruals and deferred income		 Group
2021
£
-
99,269
-
50,208
1,689
637,733
453,373
1,242,272		 Group
2020
£
375,149
122,351
-
28,151
2,265
436,318
148,493
1,112,727		 Company
2021
£
-
85,749
852,276
43,057
-
433,326
101,330
1,515,738		 Company
2020
£
375,149
90,894
939,333
19,472
-
411,819
80,046
1,916,713

The following liabilities disclosed under creditors due within one year are secured by the company:

Bank loans £Nil (2020: £375,149)

The bank and other loans are secured by various fixed and floating charges including a first legal charge over 'The Youthy', Thornaby Road, Thornaby and the client loan portfolio.

Page 49

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

19. Creditors: Amounts falling due after more than one year

Other loans
Other creditors		 Group
2021
£
4,824,218
320,088
5,144,306		 Group
2020
£
4,072,838
-
4,072,838		 Company
2020
£
-
-
-

The following liabilities disclosed under creditors due after more than one year are secured by the company:

Other loans £4,824,818 (2020: £4,072,828)

The bank loans and other loans are secured by various fixed and floating charges including a first legal charge over 'The Youthy', Thornaby Road, Thornaby and the client loan portfolio.

None of the other loans outstanding are repayable over five years.

Page 50

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

20. Statement of funds

Statement of funds - current year

Unrestricted funds
Designated funds
Youth empowerment scheme
Growth fund
General funds
General Funds - all funds
Total Unrestricted funds
Restricted funds
Health and communities
Employability and training
Finance and enterprise
Young people
Total of funds		 Balance at 1
April 2020
£
556,293
1,108,536
1,664,829
(164,940)
1,499,889
57,201
(361,676)
(27,093)
(96,300)
(427,868)
1,072,021		 Income
£
-
-
-
3,189,074
3,189,074
170,854
-
744,468
121,298
1,036,620
4,225,694		 Expenditure
£
-
-
-
(4,151,007)
(4,151,007)
(228,055)
-
(203,708)
(99,818)
(531,581)
(4,682,588)		 Transfers
in/out
£
(556,293)
(1,108,536)
(1,664,829)
1,228,333
(436,496)
-
361,676
-
74,820
436,496
-		 Balance at
31 March
2021
£
-
-
-
101,460
101,460
-
-
513,667
-
513,667
615,127

Page 51

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

20. Statement of funds (continued)

Statement of funds - prior year

Unrestricted funds
Designated funds
Youth empowerment scheme
Growth fund
General funds
General Funds - all funds
Total Unrestricted funds
Restricted funds
Health and communities
Employability and training
Finance and enterprise
Young people
Total of funds		 Balance at
1 April 2019
£
556,293
1,108,536
1,664,829
4,136
1,668,965
21,773
(361,676)
648,551
(46,174)
262,474
1,931,439		 Income
£
-
-
-
1,703,309
1,703,309
893,799
-
189,928
112,821
1,196,548
2,899,857		 Expenditure
£
-
-
-
(1,872,385)
(1,872,385)
(858,371)
-
(865,572)
(162,947)
(1,886,890)
(3,759,275)		 Balance at
31 March
2020
£
556,293
1,108,536
1,664,829
(164,940)
1,499,889
57,201
(361,676)
(27,093)
(96,300)
(427,868)
1,072,021

Page 52

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

20. Statement of funds (continued)

Designated funds

In prior years, the Trustees designated funds for the following purposes:

  1. Youth Empowerment Scheme

  2. Growth Fund

The Trustees have decided to release the designated funds back to the general funds to enable maximum flexibility for the Charity to direct its resources to where the need is greatest. The Trustees will review this policy every year and designate funds when they see fit.

Restricted Funds

Health and Communities

The charity operates a Homecare service, the Parkside Court Extra Care Scheme and several other related care services with private clients, NHS and local authorities. During the year to 31 March 2021 the Charity has benefitted from a number of grants to enhance this service and provide greater support during the COVID pandemic.

Employability and Training

In prior years the charity has operated Employability and Training activities. These activities are now complete and the transfer on the fund from unrestricted funds is to clear a negative balance from an overspend on this activity in prior years.

Finance and Enterprise

The charity operates several Financial Inclusion and Enterprise Activities. The balance on the fund at 31 March 2021 includes £500k received from Social Investment Scotland.

Young People

The charity operates a variety of Youth Services from its youth club “The Youthy” and by outreach and community programmes. The transfer from general funds is to clear the negative balance brought forward on the fund which is due to overspends in prior years.

Page 53

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

21. Summary of funds

Summary of funds - current year

Designated funds
General funds
Restricted funds		 Balance at 1
April 2020
£
1,664,829
(164,940)
(427,868)
1,072,021		 Income
£
-
3,189,074
1,036,620
4,225,694
Balance at
1 April 2019
£
1,664,829
4,136
262,474
1,931,439		 Expenditure
£
-
(4,151,007)
(531,581)
(4,682,588)
Income
£
-
1,703,309
1,196,548
2,899,857		 Transfers
in/out
£
(1,664,829)
1,228,333
436,496
-
Expenditure
£
-
(1,872,385)
(1,886,890)
(3,759,275)		 Balance at
31 March
2021
£
-
101,460
513,667
615,127
Balance at
31 March
2020
£
1,664,829
(164,940)
(427,868)
1,072,021
Summary of funds - prior year
Designated funds
General funds
Restricted funds

22. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted
funds
2021
£
Tangible fixed assets
686,877
Fixed asset investments
4,185,950
Investment property
32,500
Current assets
1,582,711
Creditors due within one year
(1,242,272)
Creditors due in more than one year
(5,144,306)
Total
101,460		 Restricted
funds
2021
£
-
-
-
513,667
-
-
513,667		 Total
funds
2021
£
686,877
4,185,950
32,500
2,096,378
(1,242,272)
(5,144,306)
615,127

Page 54

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

22. Analysis of net assets between funds (continued)

Analysis of net assets between funds - prior year

Tangible fixed assets
Fixed asset investments
Investment property
Current assets
Creditors due within one year
Creditors due in more than one year
Total		 Unrestricted
funds
2020
£
724,858
5,214,179
32,500
713,916
(1,112,725)
(4,072,838)
1,499,890		 Restricted
funds
2020
£
-
(427,868)
-
-
-
-
(427,868)		 Total
funds
2020
£
724,858
4,786,311
32,500
713,916
(1,112,725)
(4,072,838)
1,072,022

23. Reconciliation of net movement in funds to net cash flow from operating activities

Net expenditure for the year (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Decrease in debtors
Increase/(decrease) in creditors
Revaluation of investment property
Net cash provided by/(used in) operating activities
24.
Analysis of cash and cash equivalents
Cash in hand
Total cash and cash equivalents		 Group
2021
£
(456,894)
45,327
10,283
449,734
-
48,450
Group
2021
£
1,917,915
1,917,915		 Group
2020
£
(859,418)
43,669
82,552
(121,319)
17,500
(837,016)
Group
2020
£
525,170
525,170

Page 55

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

25. Analysis of changes in net debt

Cash at bank and in hand
Bank overdrafts repayable on demand
Debt due within 1 year
Debt due after 1 year
Liquid investments		 At 1 April
2020
£
525,170
(375,149)
(2,265)
(4,072,838)
80
(3,925,002)		 Cash flows
£
1,392,745
375,149
575
(751,380)
-
1,017,089		 At 31 March
2021
£
1,917,915
-
(1,690)
(4,824,218)
80
(2,907,913)

26. Controlling party

Throughout the year the Charity was under the control of the board.

27. Related party transactions

Lisa Pickard was also a Director of North East Enterprise Agency Limited (NEEAL) during the year ended 31 March 2021.

Transactions between Five Lamps and NEEAL during the year were as follows:

Income from NEEAL is £41,348 (2020: £49,148) in the year ended 31 March 2021.

Included in Debtors at 31 March 2021 is £Nil (2020: £Nil) due from NEEAL to Five Lamps.

The charity owns 100% of the share capital of Five Lamps Trading Limited, company number 08029251.

Transactions between Five Lamps and Five Lamps Trading Ltd during the year were as follows:

During the year Five Lamps Trading gifted £NIL (2020: £Nil) as a donation to The Five Lamps Organisation.

Page 56

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

28. Assets and Liabilities held as an intermediary agent - group and charity

The Private Housing Financial Assistance Programme was created to help local authorities in the north east of England to provide loans to needy homeowners for the purpose of helping them to improve their housing conditions.

Five Lamps was appointed to manage the above Programme on behalf of 12 local authorities, using Sunderland City Council as the contracting authority.

Five Lamps holds the relevant funds on behalf of the local authorities in a designated client bank account. This asset and the associated liability to the local authorities are excluded from Five Lamps’ Balance Sheet. There is a debenture agreement dated 12 October 2010 in favour of Sunderland City Council solely in respect of these funds. This debenture does not apply to any other Five Lamps assets.

At 31 March 2021, the funds held on the above client bank account totalled £1,421,374 (2020: £1,274,969) and this is returnable to the local authorities.

The accounting for these assets and liabilities are presented in notes 15,18 and 19 within these financial statements.

Page 57