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2023-09-30-accounts

Registered number: 02441319 Charity number: 702314

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT AND FINANCIAL STATEMENTS FOR THE 18 MONTH PERIOD ENDED 30 SEPTEMBER 2023

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 - 19
Trustees' Responsibilities Statement 20
Independent Auditors' Report on the Financial Statements 21 - 25
Consolidated Statement of Financial Activities 26
Consolidated Balance Sheet 27
Company Balance Sheet 28
Consolidated Statement of Cash Flows 29
Notes to the Financial Statements 30 - 59

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Trustees Patricia Chambers, Chair
Vivienne Holmes, Vice Chair
Jamie Houlders (resigned 31 July 2023)
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

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT FOR THE PERIOD ENDED 30 SEPTEMBER 2023

1. TRUSTEES RESPONSIBILITIES STATEMENT

The Trustees are pleased to present their Annual Report providing an overview of the period ending 30th September 2023.

This report and financial statements cover an 18 month operating period from 1st April 2022 to 30th September 2023 (approved by Companies House) that amended our financial year end from 31st March to 30th September. This strategic decision was made to allow our subsidiary company, Five Lamps Trading Limited, to complete an options appraisal and for its directors to reach decisions on the future of the Limited Company by Shares and make recommendations to the Trustees, given The Five Lamps Organisation is the sole shareholder.

The Trustees are fully aware of their responsibilities and the importance of making strategic decisions that protect the Charity and support it to continue to deliver its Charitable aims and objectives.

FRP UK were appointed by the Trustees and Directors in June 2023. Following their independent specialist review, the decision was taken in September 2023, to pursue an orderly wind down of the Limited Company, Five Lamps Trading, through a negotiated agreement with its Creditors.

Until the wind down is concluded the Trustees continue to report for the consolidated group including both The Five Lamps Organisation (02441319) and Five Lamps Trading Limited (08029251).

Whilst the Trustees have concluded negotiations and are delivering against an agreement to divest itself of Five Lamps Trading and its non-profitable loan books; the legal documentation, agreed in principle by all parties, has not, at the time of signing these accounts, been formally entered into. This legal contract undertakes the secured creditors (loan note holders) will release any security held against the assets of the Charity and will not seek further repayment than any gains on divestment. Whilst the probability of the agreement not being formally entered into is exceptionally low, until it is, the Group technically holds material liabilities where the means of future settlement is materially uncertain. To this end, the Trustees must file accounts with material uncertainty.

The Trustee’s focus has been to protect the Charity, its beneficiaries, demonstrate a continued going concern into the future, simplify the company structure and launch a new standalone five year strategic plan.

As part of this the Trustees have approved budgets and cash forecasts to 31 December 2025 which illustrate a small but realistic operating cash surplus. This forecast does not include any cash inflows or growth arising from the sale of unutilised tangible fixed assets; new or additional care contracts that are in the process of being bid for in 2025; (the Trustees are confident that growth in one or more of these areas will be successful but do not wish to include this for purposes of going concern; any upside on collection of the (FLO owned) loan book or any other new opportunities. The Trustees resolved to ensure an operational going concern that did not rely on any factors other than those guaranteed so as to reduce the possibility of material uncertainty and keep this dependent only on the orderly wind down of FLT.

The Trustees also wish to recognise that these Financial Statements have been filed late. Whilst recognising this causes concerns for stakeholders the Trustees could not file accurate accounts without the future of its subsidiary being resolved. It had been anticipated that the secured creditor negotiations would be concluded, and the orderly wind down progressed before 30th September 2024. This was delayed.

The Trustees commenced the delivery of the wind down process and expected the legal contracts to be resolved by 31st December 2024. Whilst in their final form, the legal contracts were not formally signed by this date. The Trustees are therefore filing these Financial Statements late and with material uncertainty. There has been full transparency with our stakeholders, bankers, Companies House and the Charities Commission with statements issued on our website.

In making the decision to file the 2022/23 accounts with material uncertainty, the Trustees are committed to ensuring the next suite of Financial Statements for the period ending 30th September 2024 are concluded and filed in advance of the filing note to ensure the most up to date information is in the public domain. It is expected that the legal framework for the orderly wind down will be formally entered into in February 2025 therefore the 2023/24 reporting will be able to reflect this.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

2.1 ACHIEVEMENTS AND PERFORMANCE

Due to the complexities of the intercompany arrangements and the presentation of the consolidated Financial Statements, the Trustees have set out a summary position to reassure stakeholders on the reported position on 30th September 2023 and the expected future position.

The consolidated position opened with a positive net asset of £75,230 at 1st April 2022 which reduced to £1,020 at 30th September 2023. The Trustees note marginal positive net worth is not ideal however this is due to negative value of Five Lamps Trading, which remains included in the consolidated accounts. To achieve a positive balance sheet, albeit marginal, reflects the viability of the charity as well as evidences the appropriateness of the Trustees (and Directors’) decision to enter into an orderly wind down in advance of these Statements.

The reported net worth of £1,020 is the sum of the consolidation of the Five Lamps Organisation reported at £6,040,312 and Five Lamps Trading Limited at (£6,039,290. These are the balance sheet outcomes for the individual entities. This report, including the Five Lamps Trading Directors’ report, sets out the accounting treatments and adjustments.

The Trustees particularly highlight that at the point the 2021/22 were last filed in December 2022, these were on a Going Concern basis with a viable 12 month forward plan (to December 2023). These financial statements evidence that the 2021/22 forecast was not only successful but continued for an additional 13 months. With positive cash flow and going concern validated until at least 31st December 2025, the Five Lamps Organisation has demonstrated its resilience and viability .

2.1.1 Overview

In readiness for the disinvestment of Five Lamps Trading, the Trustees with support from our appointed auditors have approved adjustments to the Statements to reflect the reality of the consolidated position. This results in a significantly increased positive net asset for the Charity (£6,040,312) and a significantly increased negative net asset for Five Lamps Trading (£6,039,390). The consolidated position remains £1,020.

The Trustees wish to clarify that the Charity as a standalone entity does not have a net worth of £6,040,312. This sum includes the material value of a loan book securitised to the secured creditors. It is expected that its net value, after a collect out period and any subsequent debt sale, will be offset against the negative net asset in Five Lamps Trading, where the secured creditors’ liability is held and reported.

In 2021, an upstream loan was agreed to transfer funds from Five Lamps Trading to Five Lamps Organisation to deliver personal loans through the Conduit product. Both the Trustees and Directors approved the write off of this intercompany loan to reflect the strategy to wind the trading company up. The value of the intercompany loan was less than the netbook value ringfenced for Five Lamps Trading and its secured creditors.

The Trustees report that excluding the value of ringfenced net assets, the restated split of the £1,020 would be approximately:

This cannot be included in the Financial Statements until the legal documentation is entered into. The table below summarises the actual movement from 2021/22 to 2022/23 and illustrates what the approximate net worth of each entity would be with the ringfenced assets in FLO included in the FLT reports.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Net worth
31.3.2022		 Net worth
30.9.23		 Approx
adjusted
net worth
at 30.9.23
post
FLO £3,029,988 £6,040,312 £2,945k
FLO excluding share
investment in FLT.		 £2,179,988 n/a £2,945k
FLT (£2,104,758) (£6,039,290) (£2,944k)
Consolidated £75,230 £1,020 £1,020

It should also be noted that the reported net worth of the Five Lamps Trading company (£6,039,290) includes £383,357 of accrued investor interest. This interest has been waived however the decision was made after the end of the reporting period and cannot be reflected in the Statements. Had this been adjusted, the trading company’s net worth would be c (£5,655,933) and the consolidated position approximately £384k.

Highlighted below are key decisions that have been reflected in these consolidated accounts.

The Trustees resolved that:

o The provision for the charity funded loan book would be sufficient at 28%, reflecting the two different types of loan books. The Trustees approved a £126kincrease to achieve this.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Trading Company, effectively reducing the provision in charity (and increasing its net worth) and increasing the provision in the trading company (and increasing its negative net value).

3.0 FINANCIAL REVIEW

The Statement of Financial Activities for the period, the Balance Sheet as of 30th September 2023 and associated notes are set out on pages 27 to 57. These financial statements are for an 18 month operating period therefore caution should be exercised in comparing 22/23 to 21/22. Where the movement is material, a note is included. The 23/24 accounts will include a movement summary from 2020 to 2024.

The total income for the 18 month period year ending 30th September was £5,884,365 (21/22 £3,129,545). A 12 month average is £3,922,910 is £793k greater than the previous reporting period, equivalent to 25.3% growth since 2021/22.

Expenditure totalled £5,986,073 compared to £3,909,488 in 2021/22. Similarly, 12 months comparable would be £3,990,715, reflecting a 2.08% increase (c£81k.) since the last filed accounts. A 2.08% increase in expenditure to deliver a 25.3% increase in income, during a period of economic uncertainty and widely reported high inflation rates is a notable success.

As reported above, Group net assets dropped from £75,229 to £1,002.

The Trustees report that an accrual of investor interest remains on the Five Lamps Trading account totalling £384,377, due to confirmation of the decisions being received outside of the accounting period, once removed this will reduce the negative net asset value of the Trading Company and improve its consolidated position. The Trustees and Directors thank our social investment funders for their support in delivering applicable changes in the financial statements.

The Trustees’ intention is to hold cash balances not less than £100,000 at any point in time in accessible and unrestricted cash to ensure the Charity can manage its activities and discharge its operating liabilities in the event of a significant drop in funding. Cash balances throughout 2022/23 and in the intervening period between filing these accounts have remained above £100,000. This policy is monitored by the Trustees and has been considered as part of the Charity’s 12 month cash flow forecast for going concern.

The Trustees have approved a 2025 budget (for the Charity entity) that forecasts a c£67k surplus in the 2024/25 operating period and ensures the cash balances remain above £100k throughout. Overseeing the wind down of its subsidiary, Five Lamps Trading, the Trustees’ priority is to ensure a positive consolidated net worth and in parallel ensure the improved net worth of the Charity to be resilient to future risks and also secure new opportunities.

4.0 ACHIEVEMENTS & PERFORMANCE.

The Trustees decided that, given the 2023/24 Financial Statements will be filed by June 2025, this section of our 22/23 report should include only a high level summary of key achievements between April 2022 and September 2023. A comprehensive report will accompany our 23/24 report and statements along with a Social Impact statement and an updated strategy and five year plan. In accordance with our Charitable Articles, our achievements are split across our 3 main activities for the benefit of local people.

4.1 Health & Social Care

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Since 2017, the provision of health and social care for local people has been a priority. Our primary focus has been the efficient delivery of care at home services provided under a contract with Stockton Borough Council. This was originally a 5 year contract extended for several years including a final extension through to 2024.

In July 2022, the Council independently inspected our services and awarded a ‘Good’ through their Provider Assessment and Market Management Solution (PAMMS) inspection regime. The improvement action plans for this inspection were all signed off within 6 months further demonstrating the quality service to our service users.

Throughout 22/23 we supported more than 130 local people with care at home to enable them to stay independent as well as delivering end of life support meeting the wishes of local people to remain at home. On average we delivered 2000 hours of care each week including home care delivered in an extra care scheme based in Thornaby. The Trustees are keen that we employ local people and as a result of bespoke recruitment strategies, 96% of all of our care staff lived and / or were born and bred in the area. Our service users told us this was important to them, and this influenced the 98% overall satisfaction with the quality of service being provided.

In November 2022, our Home Care team won the NE Care Awards for ‘Team of the Year’ following a rigorous assessment. They selected Five Lamps homecare due to our commitment to social care and local people. This award also reflected our decision to rescue a small private care company that had chosen to exit the sector. Five Lamps stepped in, employed the care colleagues, and provided continuity of care to its service users.

The Trustees remain very concerned about the state of adult social care and the impact under investment and increasing demand is having on the care at home services. We wish to support local communities as well as local health providers and the NHS to enable people to live independently at home for longer as well as stay in hospital for the shortest amount of time. In 2022/23 we continued to deliver our Home from Hosiptal scheme with funding from Stockton Borough Council. This supported 116 individuals to return to their own homes from hospital with an 88% success rate of no readmissions. The funding for this ceased, however the Trustees are committed to Five Lamps sourcing new funds and campaigning for greater integration and partnership working between Health and social care providers.

4.2 Youth & Community

We remain exceptionally proud that The Youthy, our bespoke facility owned by the Charity, remained viable and able to continue its recovery and rebuild following the Covid 19 pandemic. This is a focal point of the local community and has been rebranded as The Youthy and Community hub. This recognises the importance our service and building has not just for local young people, but their families, our locally based colleagues and wider community. Throughout the year we have continued to grow our Youth Inclusion services, with an increased focus on tackling child poverty, specifically holiday hunger. Supporting local people and making the building more accessible has been a priority including developing a new service specifically for young people and young adults with disabilities.

We also have:

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

4.3 Financial Inclusion.

From April 2022 to 30th September 2023, we supported 8,865 individuals and families disbursing affordable personal loans totalling £5,661,071. At an average of £639 per loan over an average loan period of 10 months, our personal loans help individuals who cannot access mainstream credit. This scale returned us to and exceeded pre-covid lending levels.

With more than 400 customers helped every month, we estimate social impact throughout the reporting period of c£1.7million (based on the interest savings made obtaining a Conduit Loan rather than a high cost short term or an illegal money lender loan). Aside from the financial savings we know that our loans help people when they need them the most and with 45% of our customers in receipt of some form of benefit; and more than 60% supporting households with children, we know that these products change lives.

In 2025, we will be publishing a social impact report specifically focused on our Conduit products and our financial inclusion activities. This will serve two main purposes a) to provide our social investment funders with a summary as to how their investment has delivered social impact and change and b) to support a business case to secure new financial support to continue lending within the Charity but with a revised focus of becoming a locality based CDFI (Community development finance institution.)

Since 2017 Five Lamps has offered loans on a UK wide basis; however, with increasing risks, the Trustees have decided to refocus and return to our roots of supporting communities within the Northeast and specifically Teesside. In addition, the Trustees have pledged to continue to support Scottish communities should this be required.

During 2022/23, 48% of all loan applications were made direct to Five Lamps. With almost £2.8m disbursed through this pathway, we are mindful of the impact our strategy will have on people living outside our primary area of operation. The Trustees are delighted to report that a) personal lending continued throughout 2023/24 and in 2024/25 a ground breaking partnership backed by innovative technology will automatically protect these customers interest and divert them to a similar reputable provider of their choice; with the aim to ensure these customers do not fall out of the system and fall back into the markets we have been successful disrupting.

We also:

4.4 Governance & Support

Throughout 2022/23 The Trustees focused on the survival, continued recovery and future resilience of the Charity and procured independent opinion, advice, and support to strengthen governance and decision making. This mitigated governance risks whilst we remain below the number of Trustees we aspire to achieve.

No new Trustees have been appointed since Jamie Houlders resigned in July 2023. Several adverts and recruitment campaigns delivered no suitable candidates to complement the skills gap identified by the Boards. Whilst this situation is not ideal, we recognise that it is unfair to bring Trustees onto the Board whilst there

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

remains uncertainty with the Limited Company and the consolidated accounts present a chronological worsening position. Once the 2023/24 accounts are signed off, plans are in place to reinvigorate and strengthen the Charity Board as it moves into a new era of being a standlone Charity organisation with no limited company subsidiaries. During this operating period, we have:

All of these partnerships as well as others has enabled the Trustees to maintain oversight and good governance and overcome the challenges of not being able to recruit new Trustees. Having independent oversight has been a real benefit and built assurance and enabled effective decision making with clear evidence to support this and demonstrate the Trustees have discharged their responsibilities.

5.0 STRUCTURE, GOVERNANCE AND MANAGEMENT

Organisational structure and decision making

In presenting the Trustee report and financial statements of the charitable company (the Charity) for the year ended 30th September 2023, the Trustees hereby 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.

Structure, Governance and Management

The Five Lamps Organisation (FLO) is a Registered Charity (702314) and Company Limited by Guarantee (2441319) 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) (08029251) is a wholly owned trading subsidiary of The Five Lamps Organisation. FLT is a Limited Company by Guarantee. The Directors of the FLT company 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 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, The Five Lamps Organisation has also been registered with the Office of the

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Scottish Charity Regulator, under reference SC047839.

6.0 CHARITABLE OBJECTS

Our charitable objects provide for operations and charitable activities 'within England and Scotland' to reflect the geographic growth and diversity 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 also state:

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

7.0 GOVERNANCE

The Trustees of the Five Lamps Organisation retain overall oversight of the strategy and operations across the whole organisation. Whilst FLT has its own Board of Directors, the Trustees retain an oversight of its activities and outturn. During 2022/23, the Trustees approved the appointment of FRP to undertake an independent options appraisal for the future of Five Lamps Trading and the management of its secured creditors. Following this report, the Trustees and Directors resolved that FLT should be subject to an orderly wind down. Five Lamps Trading (FLT) has its own Board of Directors and presents a director’s report to accompany the financial statements. The report is included within the Trustees Statement.

The Governance structure no longer includes an Audit & Risk Committee due to the resignation of its Chair, reported in the FLT statement. As new Trustees have not been recruited, the responsibility for the Charities Risk Register and matrix; as well as ensuring the delivery of the Organisation’s audited accounts and financial statements has returned to the respective Boards, with the Trustees receiving and signing off the consolidated group statements. The Trustees will review the Governance structure once FLT is resolved, and Five Lamps organisation returns to a single entity. .

As part of the post audit review and ensuring both entities reflect the current position and adequately manage the risks, adjustments were made to the upstream (intercompany) loan, £850k share investment and bad debts with the provision in FLT increasing by c£292,151 playing a material part in its increased operating loss. The Charity reduced its bad debt provision by £625,746 to reflect the loan book owned by the Charity. Both provisions continue to fulfil the bad debt provision assumptions independently verified by FRP and previously Johnson Carmichael in 2021.

The Trustees would have preferred to have included the orderly wind down outcomes in these Statements. As the legal contracts were not in place 15 months post the year end of 30th September 2023, taking into account the increasing risk associated with late filing, including financial penalties, partnership and reputational risk, both the Trustees and Directors concluded to present the best case financial statements moving towards to deconsolidation whilst only including decisions within the governance remit, or entered into during the reporting period and / or satisfying the audit guidelines and accounting practices. As reported, this has resulted in low consolidated net asset (£1,020) but robust governance and oversight has assured the Trustees, and our auditors, that Five Lamps remains a going concern. As a standalone charity, we are satisfied we have a positive cash flow for a minimum of 12 months, and we have assets and opportunities which risk mitigation and opportunities. Whilst we recognise that the probability of the orderly wind down not proceeding is low, given we are informally entered into this, our Trustees’ obligations and responsibilities require us to demonstrate this risk. This is why the financial statements are presented as a Going Concern with a material risk. The Trustees are aware that two in ten businesses are filing with this status and recognise that many third sector and voluntary sector organisations face similar challenges we face particularly with changes to the employer’s national insurance contributions.

The Charity’s governance structure enables effective decision making, scrutiny and risk management at the right level in the business. The Trustees have highlighted concerns about the low number of Trustees and inability to recruit whilst there is a period of material uncertainty; however the Trustees are satisfied, following its internal self-assessment, that the structure is fit for purpose to deliver against the Charity Commissions Trustees Responsibilities as well as to discharge Companies House expectations. The plans to deliver the 2023/24 financial statements then recruit new Trustees will ensure more robust compliance.

7.1 Board Purpose

The Board of Trustees of the Five Lamps Organisation 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

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

operations whilst acting responsibly towards employees, stakeholders, and society.

7.2 Board Key Responsibilities

• Managing organisational performance and risk.

To develop and review continually. the organisation's strategy, objectives, performance,

statutory compliance, and risk, ensuring the measurement of impact on our customers and communities.

• Leadership and strategy

• Strategic planning and implementation

• 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.

• 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.

• Communication

To promote the work of The Five Lamps Organisation to a variety of external partners, stakeholders, and other parties and raise awareness of its Charitable purpose and impact.

7.3 Operations

Day to day responsibility for the provision of services and operation of the business rests with the Group Chief Executive who leads the Executive function and team. During the course of 2022/23 the Executive team comprised of the Group Chief Executive, a Director of Strategic Finance, and the Director of Charity Operations. Following the resignation of the Director of Conduit Operations, the role was not replaced due to uncertainty relating to FLT and future lending.

Throughout 2022/23, the Trustees have reviewed their approach to financial management and have, as many charities have, struggled to appoint and retain a high calibre of finance director. For more than 12 months, this role was outsourced to a consultant Finance Director. In May 2023, the Trustees appointed RSM UK to oversee the production and delivery of the Management Accounts. The Charity no longer employs a Finance Director and retains a small in house Accounts and Payroll function.

The Board employs the services of a minute taker to ensure a segregation of duty from the Executive Officers and Board.

7.4 Related party relationships

The Trustees and Directors have all filed nil returns confirming that there were no related party transactions in the Charity.

Two non-executive Directors can be appointed to the Five Lamps Trading Board from the Social Investment Funders in line with the loan instrument. One is in place and has a related party transaction in terms of the social investment loan and relevant loan note their Company, Big Issue Invest has in the Trading Company.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

During 22/23 it was agreed that a representative from the Tranche A social investment funders could observe the Trading Board with this having the ability to rotate. Since the signing of these accounts, the Directors have agreed that this observer role can continue to oversee but not assume director responsibility of the wind down process and collect out of the remaining loan book.

8. RISK MANAGEMENT

The Trustees ensure risk identification and risk management are a key priority. External events of the last few years have highlighted the exposure to significant risks outside the Trustees’ direct control. To ensure the Charity is best placed to mitigate ongoing and future such risks, the Trustees have strengthened risk management to ensure tighter control and reporting on risks we can influence to provide confidence and a cushion to deal with unexpected risks materialising.

The Board of Trustees and the Directors of the Trading Company maintain a continuous review of the major risks which each company, each service area and cost centre and the charity is exposed to. Identified risks are included in a Risk Register and 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.

During 2022/23 the Scheme of Delegations and Internal Financial Controls were reviewed and updated and are now subject to annual reviews as well as spot checks and internal testing.

The Charity seeks to manage some of these risks through a range of Insurance cover. 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 subjects to review and market testing on a regular basis with the latest review taking place in January 2025. Our insurance cover includes the following: -

Cover Amount Insured
Public/Products Liability £10m
Professional liability £2m
Management Liability £1m
Entity Defence £250K
Employers Liability £10m
Employment Law Protection £500,000

Our insurance policies include cover for Directors’ responsibility, crime, and cybercrime. The 2025 annual insurance premium is £32,289 and includes combined excesses across all of the policies of £18k.

Each Board identifies and approves its own risk management matrix that, until December 2022, was delegated to the group’s Audit & Risk Committee. This committee ceased when the Chair, a Director of the Trading board, resigned and the review and monitoring reverted back to the respective Board, with the Trustees maintaining oversight across the whole charity and its subsidiary.

Currently there 43 specific risks being monitored with management actions in place to mitigate. The Executive Team reviews these monthly and cascade them into operational risk management plans to ensure three lines of defence approach to risk management and governance. Risks identified across the business are reported to the Boards via the risk register.

.

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Due to the specialist risks associated with Health and Care, a specific risk map is in place for our Home Care service. As well as PPE and other infection control challenges, this service is exposed to greater risks due to the beneficiaries ‘clients’ we provide services to and care for and bespoke issues such as safeguarding and CQC and commissioning bodies regulatory and local requirements. Continued delays to reform Adult Social Care is a significant risk to Five Lamps Organisation. Whilst we continue to prioritise meeting need and supporting local people, the Trustees recognise that the threats to the direct payment and local authority care entitlement are a major risk.

An internal staff led by the Health & Safety Committee meets quarterly, or when there is a specific issue to ensure statutory compliance across all of our buildings. All Five Lamps sub-contractors must satisfy a health and safety check as part of a 12-month due diligence check and updating of all of their relevant policies and insurance schedules.

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.

8.1 Emerging Risks

The Trustees file this Financial Statement with material uncertainty. Until the orderly wind down is formally entered into with Five Lamps Trading’s’ secured creditors, the Trustees recognise that there remains a risk, albeit low, that the liability for Five Lamps Trading could be pursued through the Charity. Whilst all parties agree that protecting the charity is a primary outcome, until this is ratified through a legal agreement, the Trustees need to highlight and manage this risk. As identified in our Statements, the Five Lamps Organisation does not have the financial ability to meet the Trading Company’s liabilities as set out in the debenture held over the Charity.

Other new risks being monitored by the Trustees include:

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THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

risk that the regulatory requirements are not cost effective, and the future of lending will need reviewed.

8.2 Quality Assurance & Statutory Regulators

Five Lamps has a strong focus on service quality and compliance and has invested significantly as part of our risk management strategy and commitment to customer experience and social impact.

In 2022/23 the role of Head of Business Development and Assurance was uplifted to Director of Charity operations and retained the lead ensuring a robust focus on regulatory and statutory compliance embedded with a focus on quality. We are regulated by the:

During the 22/23 accounting year there have been no regulatory breaches or adverse regulatory issues to report with either body, and none have been raised in the period from 30th September 2023 to signing these accounts. The Domiciliary home care service is currently recorded as ‘Good’ following a CQC inspection in June 2021.

9.0 PARTNERSHIPS

Five Lamps does not and cannot work in isolation. The ongoing viability of the charity and our ability to deliver our charitable objectives is best achieved through partnerships and innovation.

Our thanks go to our eight social investment lenders who have been supportive in reaching an in principle agreement relating to Five Lamps Trading and the secured creditors.

The decisions around our future strategy could not have been achieved without the enormous support of Third Sector Solutions and FRP UK. We also note our thanks to Fair 4 all Finance for their grant support towards the appointment of FRP UK and we thank Nat West plc for their grant support to explore how we better support loan applicants that are declined and also to explore the future options of a locality based CDFI. We express our thanks to Responsible Finance who supported access to this funding and have continued to act on behalf of all CDFI’s with negotiations with the FCA, the Financial Ombudsman and raising awareness of the need for affordable credit.

As well as our financial and national partnerships, our local partnerships are essential. We particularly express our thanks and appreciation to Stockton Borough Council, Catalyst and with other voluntary sector or charity groups such as Little Sprouts, Cornerhouse, and Cultivate Tees Valley who work with us to deliver Youth Services across the Borough. We were involved and committed to the embryonic development of the Youth

Page 14

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

United Stockton Alliance partnership, which is a collective of key partners who have come together to form an alliance to support the sustainability of high-quality open access youth provision across Stockton-on-Tees.

Our strong partnership with Catalyst enabled us to access Holiday Activity Programmes to deliver first class activities to our young people attending both HAF and HEP in the schools holidays, including healthy food options, dance and climbing wall to name but a few.

Our commitment to grow our Home Care service has included the development of partnership working with Middlesbrough Council and Continuing Health Care (CHC).

Our reinvigorated commitment to the local community has involved us creating new partnerships with Tesco, Coop and utilising our previous connections with the Asda Community Champion. This has made a significant difference to our ability to deliver our charitable objects for the benefit of local people.

Our supplier partnerships have included outsourced IT provision to High Tide and various new contracts to reduce costs and save on efficiencies such as internet supplier and utilities. Throughout the year we have developed our partnership and received invaluable HR, Contractual and company law support from Endeavour Law. Ellison Ray consultancy have continued to play a pivotal role in our viability and success, providing specialist financial modelling and affordable lending advice.

In yet another challenging year, partnerships have been pivotal and there are too many to specifically mention but the Trustees recognise the added value of each individual and organisation.

The Trustees do, however, wish to express thanks to Armstrong Watson for supporting us in delivering our most complex and challenging financial statements and to position ourselves for the future.

The Trustee Report is signed jointly by Patricia Chambers (Chair of Five Lamps Trustees) and Vivienne Holmes (Vice Chair).

10. FIVE LAMPS TRADING: DIRECTORS REPORT TO THE TRUSTEES AND TO ACCOMPANY THE STANDLAONE ACCOUNTS.

The principal activities of Five Lamps Trading Company (FLT) is affordable personal loans for those unable to access mainstream funding and to alleviate the impact of financial hardship (charitable object).

Our 2022/23 Directors report complements the report produced by the Trustees of The Five Lamps Organisation and is included in the Five Lamps' Group (Consolidated Company) Financial Statements. The Directors report provides an overview of business activity and accompanies the financial statements related to FLT registered with Companies House number 08029251.

The 2022/23 Financial Statements and this accompanying report relate to an extraordinary 18 month trading period from 1st April 2022 to 30th September 2023. This one off period was to allow the completion of a viability review into the trading company and options for secured creditors.

The Directors appointed FRP UK Limited to provide an independent review which was undertaken from June to August 2023 and reported on before the end of the 22/23 financial year. The Directors approved the 18 month accounting period and change to the financial year end to enable strategic decisions to be made and to accurately reflect on these with an overriding priority to protect the parent company, The Five Lamps Organisation, a registered charity.

The Directors are aware these Financial Statements and Director reports are filed late. This was due to a number of factors including unfortunate delays in reaching agreement from secured creditors to implement the independent report findings. With the support of the parent charity Trustees, the Directors further delayed the filing in anticipation that the legal agreement underpinning the agreement reached in principle with the secured creditors for the orderly wind down would be signed in 2024. This is now expected after the end of January 2025. To this end, the Directors concluded to file the accounts noting the intention but accepting the legal contracts have not been entered into. This has resulted in increased losses in FLT and the consolidated accounts has resulted in a material uncertainty due to the residual risk that plans are not agreed in the parent Charity financial

Page 15

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

statements.

The Directors have agreed to pursue an orderly wind down of the Trading Company. It was expected this would be concluded by 30th September 2024 but extenuating circumstances outside the control of the Directors and Company have led to a minimum 6 month delay.

The Directors report and sign off these Financial Statements in full knowledge the company is not a going concern and will be subject to an orderly wind down. This winddown is expected to be completed before 30th September 2025. A further set of Financial Statements will be produced for the 2023/24 accounting period ending 30th September 2024 which will also confirm the company as not being a going concern. The Directors have observed and acted in accordance with their Director Responsibilities to in line with the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice),

Five Lamps Trading is a separate company that sits as a subsidiary within The Five Lamps Organisation (Charity). Whilst it is a separate Limited Company with Shares, it is owned 100% by the charity as the sole shareholder. Its activities are therefore included in the Charities consolidated Financial Statements and Trustees report alongside more detailed explanation and narrative relating to the Financial Statements and losses. The Trustees are fully supportive of the decision to wind down the Five Lamps Trading Company.

This Directors report serves both purposes. For those accessing the FLT accounts via Companies House please refer to the full Trustees report at www.fivelamps.org.uk or the Charities Commission.

Business Activity 2022/23 (18 months) Summary

As reported in our 2021/22 Financial Statements, the primary activity within the Five Lamps Trading Company is the provision of low cost affordable loans underpinned through a c£4.8m social investment fund, included as secured creditors in the company’s balance sheet.

Business activity within FLT is limited with no material income reported for the 22/23 period because from August 2021, all affordable loans were disbursed through the parent company utilising an upstream loan of funds held in FLT to the parent, FLO. The administrative costs remained in FLT with the Trustees undertaking to ensure the trading company had sufficient liquidity to meet its obligations and ongoing liabilities.

This has the net impact of worsening the losses in FLT from £1,049,500 in 21/22 to £3,934,533. Noting this is an 18 month loss, the comparable annual figure of £2,623,022 is an increase of c150%. The loss is greater due to the significantly reduced income of £64,219 compared to £480,554 in the previous year. This is as reported due to the new activity being held in Five Lamps Organisation.

The activity generated from the upstream intercompany loan is ringfenced and securitised to the Trading Companies’ creditors (social investment funders) and cannot be used for any other activity. This includes the cash held in a ringfenced bank account, which receives income from loan disbursals, capital repayments and also recycles capital for continued lending as well as transferring cash to the trading company to meet its liabilities. The secured creditors hold a charge over this bank account. In addition, the gross value of the loan book generated using the upstream funds totalled £3,186,233 at 30th September. This is also held on charge to the secured creditors and the collect out from these loans will be transferred into FLT towards the repayment of secured creditors.

A summary of the key responsibilities and split resulting from the upstream loan is below.

Five Lamps Trading:

o Collects and manages the existing loan book up to 31.3.21.

The Five Lamps Organisation:

Page 16

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Given that part of the assets (required to repay the secured creditors) sit within the charity and forms part of the orderly wind down calculations that all parties have agreed in principle, the Directors resolved to write off the upstream loan. This has no bearing on the consolidated accounts and was taken to simplify the accounts and prepare both companies for the orderly wind down. This decision presents no risk to the trading company or the secured creditors as the assets are secured and ringfenced from all other charity activities. It should be noted that the value of the secured loan book held in FLO is greater than the upstream loan.

In presenting these statements, the Directors are aware that the Trading Company in isolation is reporting a negative net asset of £ 6,039,290 however due to Accounting policies and for the purpose of the entity Financial Statements, the assets held in the parent (£3,095k after provision) will effectively be offset against the negative net asset improving the position as at 30.9.23 to £2,944k .

It would reduce the net assets in FLO as an entity to c£2,945k and deliver the consolidated net value of £1,020.

For the 18 month period ending 30th September 2023, the FLT Board of Directors report a loss of £ 3,934,533 compared to £1,049,590 for the period ending 31.3.22. This is an 18 month loss, so it is not comparable to the previously reported 12 month losses. This loss is materially affected by the Directors’ decision to write off the upstream loan into the Five Lamps Organisation and increase the bad debt provision to £292,151.

The Directors also report that the Tranche B Social Investment funders have waived all of their interest owing since 31.3.22 although noted one minority B note holder did not confirm within the audit period however a reasonable assumption was made to exclude this as it would be subject to a majority B noteholder vote, as previously achieved in 2021/22. Following the conclusion of the independent FRP UK report, Tranche A investors have also agreed to a similar treatment to the accrued and pending interest.

At the year end, there was investor interest owing of £254,208 which is in accruals in creditors over one year.

At the year end, the net liability position of FLT was £6,039,290 compared to the previously reported £2,104,758. In reality this is a negative net asset of c£2,944k when the secured loan book held in FLO is taken into consideration.

The Board of Trustees (Charity) and 100% shareholders have approved these decisions, and accounting treatments, to ensure the continued delivery of its charitable objects and to mitigate potential risk of the Social Investment funders’ debenture or security being enacted in the future. At the time of signing these accounts, it is anticipated that all trading using investor funds will cease after 31st March 2025 at a date to be agreed, with the orderly wind down and release of all security being concluded before 30th September 2025.

Other points to report:

Page 17

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

impact, lending activity continued until 30th September 2024. In this period the business has implemented a redundancy programme and is now operating with the number of staff required to effectively deliver correct out of the loan book ahead of an orderly wind down.

11. PLANS FOR THE FUTURE

Due to the timeliness of these statements and recognising that the plans for the future are already being delivered in the 16 months since the accounting period end, the Trustees agreed that it would not add value to our beneficiaries, partners, stakeholders, funders or anyone reading this report, to include retrospective and in many cases, already ongoing and delivered plans.

The Trustees have already commenced work on the 2023/24 financial statements to the period ending 30th September 2024 and as reported, we plan to publish these in Spring 2025 and at the same time, publish a two to three year social impact report and present the five year strategy from 2025 to 2030. The future plans depend on the delivery of an effective orderly wind down of Five Lamps Trading. With the legal agreements entered into, the material uncertainty will be satisfied, and the Trustees will be able to present their plans for the future.

The Trustees have already resolved that the future plans include:

To deliver these and our emerging five year strategy our plans must include:

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.

Page 18

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Our values are:

DISCLOSURE OF INFORMATION TO AUDITORS

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

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, and signed on their behalf by:

P Chambers V Holmes Trustee Trustee

30/01/2025 30/01/2025

Page 19

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

STATEMENT OF TRUSTEES' RESPONSIBILITIES FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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 20

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 30 September 2023 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.

Material uncertainty related to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

We draw attention to note 2.3 in the financial statements. The note details key assumptions adopted by management including the on-going renegotiation of debt and uncertainty in the receipt of capital repayments from service users. These assumptions indicate a material uncertainty over the ability of the Group to remain a going concern. Our opinion is not modified in respect of this matter.

Page 21

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:

Page 22

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 23

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.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

Page 24

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

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

Auditors' Report.

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: 30/01/2025

Page 25

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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
Total expenditure
Net movement in funds before other
recognised gains
Other recognised gains:
Gains on revaluation of fixed assets
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2023
£
99,953
3,134,652
64,219
19,293
2,332,501
5,650,618
366,227
5,560,182
5,926,409
(275,791)
27,500
(248,291)
(261,600)
(248,291)
(509,891)		 Restricted
funds
2023
£
-
-
-
-
233,747
233,747
-
59,664
59,664
174,083
-
174,083
336,828
174,083
510,911		 Total
funds
2023
£
99,953
3,134,652
64,219
19,293
2,566,248
5,884,365
366,227
5,619,846
5,986,073
(101,708)
27,500
(74,208)
75,228
(74,208)
1,020		 Total
funds
2022
£
258,942
1,587,877
480,564
25,736
776,470
3,129,589
77,282
3,832,206
3,909,488
(779,899)
240,000
(539,899)
615,127
(539,899)
75,228

Page 26

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

CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2023

Note
Fixed assets
Tangible assets
12
Investments
14
Investment property
13
Current assets
Debtors
15
Investments
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current assets / liabilities
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
18
Total net assets
Charity funds
Restricted funds
19
Unrestricted funds
19
Total funds		 685,867
80
372,469
1,058,416
(962,133)		 30
September
2023
£
786,759
4,624,686
60,000
5,471,445
96,283
5,567,728
(5,566,708)
1,020
510,911
(509,891)
1,020		 229,295
80
1,959,925
2,189,300
(845,511)		 31 March
2022
£
900,665
3,739,329
32,500
4,672,494
1,343,789
6,016,283
(5,941,055)
75,228
336,828
(261,600)
75,228

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 and30 January 2025 signed on their behalf by:

P Chambers V Holmes

The notes on pages 30 to 59 form part of these financial statements.

Page 27

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

COMPANY BALANCE SHEET AS AT 30 SEPTEMBER 2023

Note
Fixed assets
Tangible assets
12
Investments
14
Current assets
Debtors
15
Investments
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current assets / liabilites
Total assets less current liabilities
Total net assets
Charity funds
Restricted funds
19
Unrestricted funds
19
Total funds		 660,842
80
335,041
995,963
(172,230)		 30
September
2023
£
786,759
4,429,820
5,216,579
823,733
6,040,312
6,040,312
510,911
5,529,401
6,040,312		 212,356
80
1,708,313
1,920,749
(3,522,885)		 31 March
2022
£
900,665
3,731,459
4,632,124
(1,602,136)
3,029,988
3,029,988
336,829
2,693,159
3,029,988

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 and30 January 2025 signed on their behalf by:

V Holmes

P Chambers

The notes on pages 30 to 59 form part of these financial statements.

Page 28

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Cash flows from operating activities
Net cash used in operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Net movement in loan book
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Net cash provided by financing activities
Change in cash and cash equivalents in the period
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
The notes on pages 30 to 59 form part of these financial statements		 2023
£
(679,582)
(8,516)
(899,357)
(907,873)
-
(1,587,455)
1,959,924
372,469		 2022
£
(382,128)
(22,484)
446,621
424,137
-
42,009
1,917,915
1,959,924

Page 29

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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

Trustees have prepared budgets and cash forecasts to 31 December 2025 which show a small operating cash suprlus. This model does not include any cash inflows from the sale of unutilised tangible fixed assets, additional care contracts that are being bid for in 2025; the Trustees are confident that these tenders will be successful; nor any upside on collection of the loan book.

However, the trading of legacy loan books and contracts has not been as anticipated. Accordingly the Trustees have commenced negotiations to divest itself of certain non profitable loan books through orderly wind up. This negotiations have not yet been fully approved by loan note holders. In doing so it is anticipated that at that event, current loan note holders will release any security held against the assets of the Charity and will not seek further repayment than any gains on divestment. If this were not to occur then the Group holds material liabilities where the means of future settlement is materially uncertain.

Page 30

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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 31

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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 32

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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 33

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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 period.

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.

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 34

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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.

The Trustees have undertaken sensitivity analysis on Groups net assets and its ability to withstand further macro-economic impacts. An increase in the provision equivalent to 5% of the gross loan book (c£353k) would not prevent the Charity from retaining its going concern and continued viability.

4. Income from donations and legacies

Unrestricted
funds
2023
£
Donations and other voluntary income
99,953
Unrestricted
funds
2022
£
Donations and other voluntary income
258,942
Income from charitable activities
Unrestricted
funds
2023
£
Health and communities
3,049,522
Finance and enterprise
85,130
Total 2023
3,134,652		 Total
funds
2023
£
99,953
Total
funds
2022
£
258,942
Total
funds
2023
£
3,049,522
85,130
3,134,652

5. Income from charitable activities

Page 35

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

5. Income from charitable activities (continued)

Health and communities
Finance and enterprise
Total 2022		 Unrestricted
funds
2022
£
1,460,339
100,310
1,560,649		 Restricted
funds
2022
£
-
27,228
27,228		 Total
funds
2022
£
1,460,339
127,538
1,587,877

6. Investment income

Garage rental income
Other sundry income
Interest income
Garage rental income
Cafe rental income
Investment income - subsidiaries, associates and connected
companies
Investment income - other foreign investments		 Unrestricted
funds
2023
£
9,225
10,065
3
19,293
Unrestricted
funds
2022
Restricted
funds
2022
£
£
5,225
-
13,533
-
6,934
-
4
40
25,696
40		 Total
funds
2023
£
9,225
10,065
3
19,293
Total
funds
2022
£
5,225
13,533
6,934
44
25,736

Page 36

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

7. Other incoming resources

Unrestricted
funds
2023
£
Interest generated by programme related investment (loan
debtor book)
2,277,174
Grant income
55,327
2,332,501
Unrestricted
funds
2022
£
Other operating income
79,536
Interest generated by programme related investment (loan
debtor book)
430,484
Grant income
207,296
Furlough income
2,272
719,588
8.
Analysis of expenditure on charitable activities
Summary by fund type
Unrestricted
funds
2023
£
Management and administration
5,429,317
Finance and enterprise
-
Depreciation re properties
130,865
5,560,182		 Restricted
funds
2023
£
161,455
72,292
233,747
Restricted
funds
2022
£
-
13,176
43,706
-
56,882
Restricted
funds
2023
£
-
59,664
-
59,664		 Total
funds
2023
£
2,438,629
127,619
2,566,248
Total
funds
2022
£
79,536
443,660
251,002
2,272
776,470
Total
funds
2023
£
5,429,317
59,664
130,865
5,619,846

Page 37

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

8. Analysis of expenditure on charitable activities (continued)

Summary by fund type (continued)

Management and administration
Finance and enterprise
Depreciation re properties		 Unrestricted
funds
2022
£
3,522,355
222
48,641
3,571,218		 Restricted
funds
2022
£
5,160
255,828
-
260,988		 Total
funds
2022
£
3,527,515
256,050
48,641
3,832,206

9. Analysis of expenditure by activities

Management and administration
Finance and enterprises
Depreciation re properties
Management and administration
Finance and enterprises
Depreciation re properties		 Activities
undertaken
directly
2023
£
4,947,074
59,664
130,865
5,137,603
Activities
undertaken
directly
2022
£
2,977,936
256,049
48,641
3,282,626		 Support
costs
2023
£
482,243
-
-
482,243
Support
costs
2022
£
549,579
-
-
549,579		 Total
funds
2023
£
5,429,317
59,664
130,865
5,619,846
Total
funds
2022
£
3,527,515
256,049
48,641
3,832,206

Page 38

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

9. Analysis of expenditure by activities (continued)

Analysis of direct costs

Staff costs
Premises costs
General office costs
Trading company expenses
Bad debts write off
Publicity and advertising
Training and activities
Activities costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Consultancy/facilitators fees
Staff costs
Premises costs
General office costs
Trading company expenses
Bad debts write off
Publicity and advertising
Depreciation
Training and activities
Activities costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Consultancy/facilitators fees		 Mgmt and
admin
2023
£
3,442,656
78,307
128,417
1,178,925
-
5,097
(3,552)
27,549
12,553
13,434
24,116
39,572
4,947,074		 Employabili
ty
2023
£
-
-
-
-
-
-
-
-
-
-
-
-
-
Dep'n
2023
£
-
-
-
-
-
-
130,865
-
-
-
-
-
-
130,865		 Finance
2023
£
-
-
-
-
59,664
-
-
-
-
-
-
-
59,664
Total
funds
2023
£
3,442,656
78,307
128,417
1,178,925
59,664
5,097
130,865
(3,552)
27,549
12,553
13,434
24,116
39,572
5,137,603

Page 39

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

9. 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
Publicity and advertising
Activities costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Consultancy/facilitators fees
Staff costs
Premises costs
General office costs
Trading company expenses
Grant payable to individuals to assist with employment
Publicity and advertising
Depreciation
Activities costs
Subscriptions/affiliations
Motor expenses
Mobile phones
Consultancy/facilitators fees		 Mgmt and
admin
2022
Employability
2022
£
£
2,015,771
252,854
70,900
222
59,401
-
769,223
-
878
2,519
6,417
48
9,746
-
13,559
-
558
-
15,944
407
15,539
-
2,977,936
256,050
Dep'n
2022
£
-
-
-
-
-
-
48,641
-
-
-
-
-
48,641		 Finance
2022
£
-
-
-
-
-
-
-
-
-
-
-
-
Total
funds
2022
£
2,268,625
71,122
59,401
769,223
3,397
6,465
48,641
9,746
13,559
558
16,351
15,539
3,282,627

Page 40

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

9. Analysis of expenditure by activities (continued)

Analysis of support costs

Staff costs
General office costs
Publicity and advertising
Bank charges re loan funds
Professional fees
Staff Costs
Premises costs
General costs
Publicity and advertising
Bank charges
Professional fees
10.
Auditors' remuneration
Fees payable to the Company's auditor for the audit of the Company's
annual accounts		 Mgmt and
admin
2023
£
76,336
42,681
158
47,553
315,515
482,243
Mgmt and
admin
2022
£
406,416
5,295
1,588
85
12,621
123,574
549,579
2023
£
25,000		 Total
funds
2023
£
76,336
42,681
158
47,553
315,515
482,243
Total
funds
2022
£
406,416
5,295
1,588
85
12,621
123,574
549,579
2022
£
16,000

Page 41

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

11. Staff costs

Wages and salaries
Employer NI
Contribution to defined contribution pension
schemes		 Group
30
September
2023
£
3,523,700
255,420
63,183
3,842,303		 Group
31 March
2022
£
1,856,170
150,309
44,718
2,051,197		 Company
30
September
2023
£
3,080,727
217,626
54,300
3,352,653		 Company
31 March
2022
£
1,509,220
121,306
37,597
1,668,123

The average number of persons employed by the Company during the period was as follows:

Direct charitable work
Administration		 Group
2023
No.
129
15
144		 Group
2022
No.
112
18
130		 Company
2023
No.
129
-
129		 Company
2022
No.
112
-
112

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 £7,818 (2022: £6,000 in year ended 31 March 2022) in the eighteen months ended 30 September 2023 and this was paid by the subsidiary company. The remuneration paid was due to to a trustee being a director of the subsidiary company, Five Lamps Trading Limited.

Costs incurred in relation to key management personnel were £375,722 in total for the 18 month period ended 30 September 2023 (2022: £228,900 for 12 months ended 31 March 2022) and £29,070 (2022: £64,417) of the total related to the Five Lamps Trading Limited.

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

Group Group
2023 2022
No. No.
In the band £60,001 - £70,000 - 1
In the band £70,001 - £80,000 1 -
In the band £90,001 - £100,000 - 1
In the band £130,001 - £140,000 1 -

Page 42

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

12. Tangible fixed assets

Group

Cost or valuation
At 1 April 2022
Additions
Disposals
At 30 September 2023
Depreciation
At 1 April 2022
Charge for the period
On disposals
At 30 September 2023
Net book value
At 30 September 2023
At 31 March 2022		 Freehold
property
£
1,138,366
-
4,487
1,142,853
333,273
34,182
(4,288)
363,167
779,686
805,093		 Long-term
leasehold
property
£
687,157
-
(424,316)
262,841
600,639
86,518
(424,316)
262,841
-
86,518		 Plant and
machinery
£
208,109
-
-
208,109
205,311
2,628
-
207,939
170
2,798		 Motor
vehicles
£
14,428
-
-
14,428
14,428
-
-
14,428
-
-		 Fixtures and
fittings
£
133,947
700
-
134,647
129,565
2,300
-
131,865
2,782
4,382		 Office
equipment
£
74,889
7,816
-
82,705
73,015
5,569
-
78,584
4,121
1,874		 Total
£
2,256,896
8,516
(419,829)
1,845,583
1,356,231
131,197
(428,604)
1,058,824
786,759
900,665

Page 43

(A Company Limited by Guarantee)

THE FIVE LAMPS ORGANISATION

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

12. Tangible fixed assets (continued)

Company

Cost or valuation
At 1 April 2022
Additions
Disposals
At 30 September 2023
Depreciation
At 1 April 2022
Charge for the period
On disposals
At 30 September 2023
Net book value
At 30 September 2023
At 31 March 2022		 Freehold
property
£
1,138,366
-
4,487
1,142,853
333,273
34,182
(4,288)
363,167
779,686
805,093		 Long-term
leasehold
property
£
687,157
-
(424,316)
262,841
600,639
86,518
(424,316)
262,841
-
86,518		 Equipment
and
machinery
£
208,109
-
-
208,109
205,311
2,628
-
207,939
170
2,798		 Motor
vehicles
£
14,428
-
-
14,428
14,428
-
-
14,428
-
-		 Fixtures and
fittings
£
133,947
700
-
134,647
129,565
2,300
-
131,865
2,782
4,382		 Office
equipment
£
74,889
7,816
-
82,705
73,015
5,569
-
78,584
4,121
1,874		 Total
£
2,256,896
8,516
(419,829)
1,845,583
1,356,231
131,197
(428,604)
1,058,824
786,759
900,665

Page 44

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

12. 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 30 September 2023 of £524,383 (2022: £551,005). 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.

At the end of the previous financial year the charity purchased the property known as The Five Lamps Centre which had been leased from Stockton Borough Council for a total cost of £14,089. The property was revalued on purchase giving rise to a revaluation surplus of £240,000. This property will continue to be use for it management and administration and the operation of various projects.

Investment property

Included in freehold land and buildings is an investment property valued at £60,000. In the opinion of the directors this is a reasonable estimate of the market value at 30 September 2023.

If investment properties had not been revalued they would have been included at the historical cost of £21,014 (2022: £21,014).

Leasehold Land and Buildings

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

South Thornaby Community Resource Centre (Carrying value - £Nil)

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 PERIOD ENDED 30 SEPTEMBER 2023

13. Investment property

Group

Valuation
At 1 April 2022
Revaluation
At 30 September 2023		 Freehold
investment
property
£
32,500
27,500
60,000

The investment property has been valued in the 2023 accounting period by Allied Surveyors & Valuers at £60,000 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.

Page 46

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

14. Fixed asset investments

Group
Cost or valuation
At 1 April 2022
Additions
Settlements
Transfers
At 30 September 2023
Impairment
At 1 April 2022
Charge for the year
Transfers
At 30 September 2023
Net book value
At 30 September 2023
At 31 March 2022		 Loan book
£
5,867,475
8,521,721
(7,111,445)
(209,540)
7,068,211
2,142,146
510,919
(209,540)
2,443,525
4,624,686
3,725,329		 Unlisted
investments
£
14,000
-
-
-
14,000
-
14,000
-
14,000
-
14,000		 Total
£
5,881,475
8,521,721
(7,111,445)
(209,540)
7,082,211
2,142,146
524,919
(209,540)
2,457,525
4,624,686
3,739,329

Page 47

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

14. Fixed asset investments (continued)

Company
Cost or valuation
At 1 April 2022
Additions
Settlements
Transfers
At 30 September 2023
Impairment
At 1 April 2022
Charge for the period
Transfers
At 30 September 2023
Net book value
At 30 September 2023
At 31 March 2022		 Investments
in
subsidiary
companies
£
850,002
-
-
-
850,002
-
850,000
-
850,000
2
850,002		 Loan book
£
3,607,100
8,521,721
(6,926,440)
(89,090)
5,113,291
725,644
46,919
(89,090)
683,473
4,429,818
2,881,456		 Total
£
4,457,102
8,521,721
(6,926,440)
(89,090)
5,963,293
725,644
896,919
(89,090)
1,533,473
4,429,820
3,731,458

Following the commencement of processes to restructure the trade and related activities of Five Lamps Trading Limited there was no residual value in subsidiary undertakings. As such management have recognised an impairnent against this asset. However, in line with the upstream inter company arrangements any losses incurred in Five Lamps Organisation due to activities with Five Lamps Trading Limited these losses have been recharged in full to the subsidiary undertaking. This means that there has been no movement in net assets in either the Charity only or consolidated financial statement.

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

Page 48

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

14. Fixed asset investments (continued)

Class of Holding Included in shares consolidation

Ordinary 100% Yes

Page 49

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

14. Fixed asset investments (continued)

The financial results of the subsidiary for the period were:

Name
Income
£
Expenditure
£
Profit/(Loss)
/ Surplus/
(Deficit) for
the period
£
Five Lamps Trading Limited
64,219
(3,998,752)
(3,934,533)
Debtors
Group
30
September
Group
31 March
Company
30
September
2023
2022
2023
£
£
£
Due within one year
Trade debtors
480,058
67,695
458,050
Other debtors
35,341
120,126
35,341
Prepayments and accrued income
161,404
16,920
158,387
Grants receivable
9,064
24,554
9,064
685,867
229,295
660,842
Current asset investments
Group
30
September
Group
31 March
Company
30
September
2023
2022
2023
£
£
£
Listed investments
80
80
80		 Net assets
£
(6,039,290)
Company
31 March
2022
£
67,695
104,867
15,240
24,554
212,356
Company
31 March
2022
£
80

15. Debtors

16. Current asset investments

Group listed investments

The market value of the listed investments at 30 September 2023 was £80 (2022 :£80).

Company listed investments

The market value of the listed investments at 30 September 2023 was £80 (2022 :£80).

Page 50

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

17. Creditors: Amounts falling due within one year

Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Pension fund loan payable
Other creditors
Accruals and deferred income		 Group
30
September
2023
£
409,250
-
57,209
5,063
400,000
90,611
962,133		 Group
31 March
2022
£
224,338
-
62,123
1,517
488,368
69,165
845,511		 Company
30
September
2023
£
43,711
-
50,848
-
-
77,671
172,230		 Company
31 March
2022
£
96,159
3,050,000
53,464
-
263,871
59,391
3,522,885

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

The 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.

Following the restructuring of activity in subsidiary undertakings the Trustees of the Charity and the Directors of the subsidiary undertaking reached an agreement to waive inter company balances. The impact of this is eliminated on consolidation.

Page 51

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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

Bank loans
Other loans
Accruals and deferred income		 Group
30
September
2023
£
500,000
4,812,500
254,208
5,566,708		 Group
31 March
2022
£
500,000
4,812,500
628,555
5,941,055

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

Other loans £4,812,500 (2022: £4,812,500) and are split between Tranche A Noteholders = £1,937,500 (capital) and Tranche B Noteholders = £2,875,000 (capital).

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.

Loan notes with a capital value of £171,849 agreed to the waiving of related interest at 30 September 2023. Negotiations are in place for further interest to be waived. This had not been fully approved at the date of approval of these financial statements.

Page 52

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

19. Statement of funds Statement of funds - current period

Unrestricted funds
General Funds
Restricted funds
Finance and enterprise
Total of funds		 Balance at 1
April 2022
£
(261,600)
336,828
75,228		 Income
£
5,650,618
233,747
5,884,365		 Expenditure
£
(5,926,409)
(59,664)
(5,986,073)		 Gains/
(Losses)
£
27,500
-
27,500		 Balance at
30
September
2023
£
(509,891)
510,911
1,020

Page 53

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

19. Statement of funds (continued)

Statement of funds - prior period

Unrestricted funds
General Funds
Restricted funds
Finance and enterprise
Total of funds		 Balance at
1 April 2021
£
101,460
513,667
615,127		 Income
£
3,045,436
84,109
3,129,545		 Expenditure
£
(3,648,500)
(260,988)
(3,909,488)		 Gains/
(Losses)
£
240,004
40
240,044		 Balance at
31 March
2022
£
(261,600)
336,828
75,228

Page 54

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

19. 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 55

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

20. Summary of funds

Summary of funds - current period

Balance at
30
Balance at 1 Gains/ September
April 2022 Income Expenditure (Losses) 2023
£ £ £ £ £
General funds (261,600) 5,650,618 (5,926,409) 27,500 (509,891)
Restricted funds 336,828 233,747 (59,664) - 510,911
75,228 5,884,365 (5,986,073) 27,500 1,020
Summary of funds - prior period
Balance at
Balance at Gains/ 31 March
1 April 2021 Income Expenditure (Losses) 2022
£ £ £ £ £
General funds 101,460 3,045,436 (3,648,500) 240,004 (261,600)
Restricted funds 513,667 84,109 (260,988) 40 336,828
615,127 3,129,545 (3,909,488) 240,044 75,228

21. Analysis of net assets between funds Analysis of net assets between funds - current period

Unrestricted
funds
30
September
2023
£
Tangible fixed assets
786,759
Fixed asset investments
4,624,686
Investment property
60,000
Current assets
547,507
Creditors due within one year
(962,135)
Creditors due in more than one year
(5,566,708)
Total
(509,891)		 Restricted
funds
30
September
2023
£
-
-
-
510,911
-
-
510,911		 Total
funds
30
September
2023
£
786,759
4,624,686
60,000
1,058,418
(962,135)
(5,566,708)
1,020

Page 56

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

21. Analysis of net assets between funds (continued)

Analysis of net assets between funds - prior period

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
31 March
2022
£
900,665
3,739,329
32,500
1,852,471
(845,510)
(5,941,055)
(261,600)		 Restricted
funds
31 March
2022
£
-
-
-
336,829
-
-
336,829		 Total
funds
31 March
2022
£
900,665
3,739,329
32,500
2,189,300
(845,510)
(5,941,055)
75,229

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

Net expenditure for the period (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Loss/(profit) on the sale of fixed assets
Write off of investment
Increase in debtors
Increase/(decrease) in creditors
Net cash used in operating activities		 Group
30
September
2023
£
(101,708)
131,197
(8,774)
14,000
(456,572)
(257,725)
(679,582)		 Group
31 March
2022
£
(779,899)
48,696
-
-
(35,117)
384,192
(382,128)

Page 57

THE FIVE LAMPS ORGANISATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

23. Analysis of cash and cash equivalents

Cash in hand
Total cash and cash equivalents		 Group
30
September
2023
£
372,469
372,469		 Group
31 March
2022
£
1,959,924
1,959,924

24. Analysis of changes in net debt

Cash at bank and in hand
Debt due within 1 year
Debt due after 1 year
Liquid investments		 At 1 April
2022
£
1,959,925
(1,517)
(5,312,500)
80
(3,354,012)		 Cash flows
£
(1,587,456)
(3,546)
-
-
(1,591,002)		 At 30
September
2023
£
372,469
(5,063)
(5,312,500)
80
(4,945,014)

25. Operating lease commitments

At 30 September 2023 the Group and the Company had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

Not later than 1 year
Later than 1 year and not later than 5 years		 Group
30
September
2023
£
3,320
8,225
11,545		 Group
31 March
2022
£
9,793
13,088
22,881		 Company
30
September
2023
£
3,320
8,225
11,545		 Company
31 March
2022
£
9,793
13,088
22,881

26. Controlling party

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

Page 58

THE FIVE LAMPS ORGANISATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023

27. Related party transactions

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 period Five Lamps Trading gifted £NIL (2022: £Nil) as a donation to The Five Lamps Organisation.

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 30 September 2023, the funds held on the above client bank account totalled £1,391,969 (2022: £1,391,969) 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 59