The Directors have the pleasure of presenting the trustees report for Brighton & Hove Wood Recycling Project (“BHWRP” or “the project”), a charity (as registered in England and Wales) for the year ended 31 March 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charitable company's governing document, the Companies Act 2006 and "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).
BHWRP operates under the following objects:
To promote for the benefit of the public the conservation protection and improvement of the physical and natural environment by:
Diverting reusable timber away from landfill and incineration and promoting recycling of waste wood in East and West Sussex in line with national waste policy seeking to establish a circular economy
Raising public awareness of environmental matters related to re-use and recycling of household and industrial waste and the place of wood recycling in the circular economy
Company activities
During 2023/2024 BHWRP continued to operate from its main premises on the Ground floor of Oakley House in Edward St Brighton BN2 0BA and has been doing so since May 2021. This is now known as "The Wood Store Brighton".
BHWRP has a second site at Ringmer which operates non-retail storage and yard, as well as retail, known as “The Wood Store Lewes”.
Public Benefit Reporting
The directors of the company are trustees of the charitable company they confirm they have given due regard to the Charity Commission guidance on public benefits while setting objectives and activities of the projects and these are in line with both existing and future objects of the company the latter of which has been deemed charitable by the Charity Commission.
Environmental Benefit Reporting
BHWRP has diverted 805.3 (2022/23: 720.0) tonnes of timber from the waste stream during the accounting year, a small increase on the 2022/23. Of this 521.9 (2022/23: 320.8) tonnes has been re-used in DIY projects and manufactured furniture products and a further 283.4 (2022/23: 399.2) tonnes has been sent for recycling as particle board, animal bedding and carbon neutral fuels. This has saved 401 tonnes of carbon dioxide from entering the atmosphere. This should continue to grow in 2024/25 should trading increase across both Brighton and Lewes premises.
Social Benefit Reporting
The project continues to raise public awareness of re-use and recycling. During the accounting year, the project has created or sustained 16 (2022/23: 15) full time equivalent paid jobs, and has worked with 98 (2022/23 90) volunteers/trainees. These numbers are expected to continue to grow in 2024/25.
The project provides social benefit by making timber available at excellent prices both to the trade (a maximum of thee quarters of the cost of virgin timber) and to the public for DIY and other projects. Most notable, however, is the work undertaken with volunteers and trainees, most of whom are both socially and financially exclude before starting work at the project.
During 2023/24, income was £459,054 (2022/23: £444,743)
Expenditure was £474,011 (2022/23: £443,886)
This generated a loss of £14,957
Current Assets
As a charity the amount of funds held as stock decreased to £22,250 (2022/23: £45,228)
Fixed Assets
Fixed assets decreased to £46,164 (2022/23: £54,112)
Cash and bank and in hand
The charity held cash of £86,065 (2022/23 £48,344) which is sufficient to cashflow the charitable company but not sufficient to make strategic investments, therefore continued funding will be sought from charitable trusts and other grant making bodies. The charity will continue to work to improve the situation during 2024/25.
Financial policy and financial outlook
It is the policy of the directors to cover all operational expenses with a combination of sales grants fees investments and fund-raising income to this end a budget for operating during 2023-2024 has been published which is undergone significant scrutiny both managerial and board level.
Financial reserves remain significantly depleted as of March 2024 and trustees will be seeking to grow unrestricted reserves to ensure the ongoing viability of the project and ultimately to buy a premises or mortgage where BHW RP and other projects can operate present this remains an aspiration.
Going Concern Statement
The director trustees have assessed the company’s ability to continue as a going concern, taking into account the company’s financial position, cash flows, and the current business environment. Based on this assessment, the directors believe that the company has sufficient resources to continue in operational existence for the foreseeable future. As a result, the financial statements have been prepared on a going concern basis. However, the ongoing economic conditions and any unforeseen financial difficulties may affect the company's ability to continue as a going concern in the future.
Reserves policy
Director's understanding their obligations to the health of the business their statutory duty to staff in the case of redundancies have continued with a policy established in 2022/23 accounting year, relating to reserves and agreed to continue to make the following designation of funds:
A redundancy fund against the need to close the business
Business wind up costs
Replacement vehicle funds
In total these designations total £87,452. There is enough liquidity to ensure cashflow for ongoing activities for a minimum period of three months.
The company is controlled by its governing document and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Organisational Structure
Brighton and Hove Wood Recycling Project is operated by the board of trustees who employ a managing director who is also a trustee.
How decisions are made by the board of trustees
The board make decisions in line with the memorandum and articles of association through regular board meetings with a simple majority of votes deciding outcomes. This is based on attendees at each board meeting (subject to a Quorum being present) or via written board resolution.
Risk Assessment and Management
The director's or aware of their responsibility to ensure that significant risks to which the company is exposed on a regular basis and to establish systems to manage those risks. The director's review the major risk to the charity is exposed on a regular basis and systems are implemented wherever possible to mitigate these risks. The trustees believe that there is a satisfactory system of internal controls which are also reviewed on a regular basis the highest risk at present is the need to continue to address the ongoing financial situation.
Due Diligence
The director's regularly review the terms and conditions of external service providers during the next accounts. The directors will ensure that significant fund raising is undertaken to allow the project to grow.
Recruitment and Appointment of Directors
BHWRP is administered by a board of directors, directors are appointed by the board there is a set period of three years as tenure of office. New board members are provided with a pack of information containing details of the constitution of the company budgets minutes of recent board meetings and papers dealing with key current issues which can then be discussed in detail with other board members. Directors meet at least three times per year. It was agreed during the accounting year 23/24 the projects would seek to recruit several trustees and expand the board considerably ensuring that trustees are drawn from diverse backgrounds and bring skills and competences needed to be a successful local charity. These new board members are due to join the Board throughout 2024/25 accounting year.
Trustee induction and training
As reported in 2022/23 accounts, the induction programme for new directors has been developed and newly recruited director/trustees will be provided with this upon joining.
The trustees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Brighton & Hove Wood Recycling Project (the charitable company) for the year ended 31 March 2024.
Having satisfied myself that the financial statements of the charitable company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charitable company’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act). In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
Since the charitable company’s gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of ICAEW, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charitable company as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Investments
Raising funds
Investments
Raising funds
Brighton & Hove Wood Recycling Project is a private company limited by guarantee incorporated in England and Wales. The registered office is Ground Floor Oakley House, Edward Street, Brighton, BN2 0BA.
The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "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 charitable company is a Public Benefit Entity as defined by FRS 102.
The charitable company has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Material funds are income funds of the charity which have been set aside out of general unrestricted funds by the trustees for specific purposes.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them, including allocated governance costs.
Governance costs includes those costs associated with meeting the constitutional and statutory requirements of the charity and include the audit fees and costs linked to the strategic management of the charity.
All costs are allocated between the expenditure categories of the SOFA on a basis designed to reflect the use of the resource. Costs relating to a particular activity are allocated directly; others are apportioned on estimated usage as a proportion of directly attributable expenditure.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Waste wood
Workshop and education
Waste wood
Workshop and education
Income from charitable activities
Raising funds
Waste wood & ancillary trading
Workshop and education
Waste wood & ancillary trading
Workshop and education
Wood purchase
Firewood
Chipping & disposal
Other direct costs
Couriers
Workshop expenses
Rates
Rent
Travel
Motor expenses
Staff training and welfare
Telephone and IT
Light and heat
Insurance
Repairs and maintenance
Bookkeeping fees
Governance costs includes payments to the independent examiner of £2,805 (2023 - £2,625) for examination fees.
One of the trustees received remuneration of £20,453 (2023 - £36,245) from the charitable company during the year for the role of Chief Executive Officer.
The average monthly number of employees during the year was:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charitable company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charitable company in an independently administered fund.
The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
Chalk Cliff Trust fund was for tooling for the Lewes premises.
The Sussex Community Foundation fund was provided to support the charity expanding into Lewes.
The van fund relates to crowd fund donations and a grant received from Lewes Town Council for the purchase of a new van.
The Lewes premises fund relates to a grant from the Allington Trust to be spent on Lewes premises costs.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Designated funds are held for redundancy fund (business closure), replacement vehicle fund and business wind up costs.
Apart from those detailed in note 10, there were no additional disclosable related party transactions during the year (2023 - none).