moelyci environmental centre ltd€¦ · the principal and registered office of the society moelyci...

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Moelyci Environmental Centre Ltd Industrial & Provident Society

The Annual Report for the year 2015-2016 Amended 15th July 2016 ahead of AGM of 16th July 2016

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The Trustees present their report with the financial statements of the

Moelyci Environmental Centre Ltd An Industrial and Provident Society

for the year 1st February 2015 to 31st January 2016.

July 16th 2016

Moelyci Farm, Lôn Felin Hen, Tregarth, Bangor, Gwynedd LL57 4BB

+44 0 1248 602793

http://www.moelyci.org

Contents Constitution ..................................................................................... 3

Trustees .......................................................................................... 3

Objects of the Society ....................................................................... 3

Registered addresses and appointments .............................................. 4

The Principal and Registered Office of the Society 4 The Accountants 4 The Solicitors 4 Bankers 4 The IPS Administration: 4 Honorary Appointments 4

Restrictions imposed by the governing document. ................................ 4

Investment Powers ........................................................................... 4

Organisational Structure and Decision Making ...................................... 4

Trustees Report ............................................................................... 5

Saving Moelyci farm for the community 5

Operations update 5

Financial Report ............................................................................... 7

Statement of risk analysis ................................................................. 8

Statement of Compliance .................................................................. 8

Chair’s Report .................................................................................. 9

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The Trustees report with the financial statements of the Moelyci Environmental Centre Ltd

for the year ended 31st January 2016

Constitution The Moelyci Environmental Centre Limited (The Society) is registered under the Industrial and Provident Societies Act 1965.

The registration number is 29369R on the Mutual Societies Register of the Financial Services Authority (FSA).

Date of Registration: 25th March 2002.

The Industrial and Provident Society (IPS) is constituted under the rules for a Fair Trade Organisation (incorporated under the Industrial and Provident Societies Act 1965).

The society is recognised by Her Majesty's Revenue and Customs as a charitable organisation for tax purposes (reference XR71090).

Trustees The trustees are elected annually at the Annual General Meeting. The directors may appoint as a director, to fill a vacancy or as an additional director, a member who has not been a candidate for election during the preceding twelve months.

The names of all trustees who are also Directors of the IPS on the date of this report or who have served during the year are:-

Mrs Pauline Egan Chair and Secretary Mr Derek Schofield Mrs Anne McKiernan Robins Finance

Objects of the Society These consist of:

(1) the protection of and promotion of the environment generally;

(2) the advancement of education generally and in particular the provision of educational opportunities for the unemployed and the disadvantaged;

(3) the provision of recreational facilities in the interests of social welfare;

(4) the relief of unemployment; and

(5) the provision of opportunities for Rural Community Regeneration by engaging members of the community (mainly the villages of Tregarth, Rhiwlas and Mynydd Llandegai and the surrounding areas) in the management of the natural and other resources of the Centre to provide for :

a) the advancement of education, training or retraining, particularly among unemployed people, and providing unemployed people with work experience in the workshops and activities programme;

b) the provision of financial and technical assistance and business advice or consultancy to provide training and employment opportunities for unemployed people. In cases of financial or other charitable need help will be given in setting up new cooperative businesses, or expanding existing small businesses;

c) the creation of training and employment opportunities by the provision of workspace, buildings, and/or land for use on favourable terms:

i) in the refurbishment, repair and re-use of the farm buildings;

ii) for development of alternative uses of farm land that continue to promote the conservation and other environmental policies of the IPS.

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Registered addresses and appointments

The Principal and Registered Office of the Society Moelyci Environmental Centre, Moelyci Farm

Lôn Felin Hen, Tregarth, Bangor, Gwynedd. Wales. LL57 4BB

The Accountants W J Matthews & Son Chartered Accountants 11-15 Bridge Street Caernarfon Gwynedd LL55 1AB

The Solicitors Wrigleys Solicitors LLP 19 Cookridge Street, Leeds LS2 3AG

Bankers Current account and facilities The Co-operative Bank plc, PO Box 101, 1 Balloon Street, Manchester M60 4EP

Mortgage National Westminster Bank Plc, 135 Bishopsgate, London, EC2M 3UR

The IPS Administration: Mrs Pat Thomas* Finance office (Remains employed by Cwm Harry Land Trust and on secondment to Moelyci IPS)

Honorary Appointments During the year the following honorary positions were held:

Mr Chris Haskey The Honorary Management Accountant

Restrictions imposed by the governing document. The governing document of the IPS imposes various restrictions on the way the Society can operate as noted in the Society’s rules which are available upon request from the directors.

Investment Powers The Society shall have the power to invest its funds by the authority of the directors in accordance with the Industrial and Provident Societies Act 1965.

Organisational Structure and Decision Making Governance is the responsibility of the Board of Directors (the Trustees) who are appointed at the Annual General Meeting. Three Directors served during the full year 2015-16. They had overall responsibility for ensuring that the Society meets its constitutional commitments and developing the organisational strategy. Directors may not receive any financial or material gain from holding office in the IPS.

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Trustees Report

Saving Moelyci Farm for the Community As reported last year the conclusion reached at the end of the financial year of 2013 was that Moelyci IPS was facing a very serious cash flow crisis and a significant deficit in funds, both of which had to be dealt with. In June 2014 the results of the Special General Meeting gave the Moelyci Board a clear mandate to accept and act upon the agreements contained in Cwm Harry’s Proposal, as recommended to the members by the Board, to financially secure Moelyci as a viable farm, to adhere to our values and to seek to return it to community management as soon as realistically possible.

As reported last year during the period between July 2014 and March 2015 Moelyci IPS remained in a financially precarious position in relation to our overall running costs as we worked to secure the right legal and financial relationship with Cwm Harry. As part of this we took a series of intermediate steps including:

Initially sub-contracting the day-to-day management of the farm to Cwm Harry;

Supervising the establishment of a Steering Group; Managing our various debts; Securing the legal framework by which the farm could be run via the

Farm Business Tenancy signed by Cwm Harry on 6th March.

Signing of that lease secured, as much as was possible within the ongoing management and development structure for Moelyci’s future, our original aims and objectives.

The other legal document agreed at the time was the Option. This enables Cwm Harry to purchase Moelyci Farm and binds them to the ten ethical objectives.

Much of the last financial year has been dedicated to overseeing Cwm Harry as our tenants and supporting them in their endeavours to find the finance necessary to purchase the farm and thus secure its future. Cwm Harry report elsewhere that 2015 was a difficult year as they began to turn around the fortunes of our farm. We were pleased to support their investments onto the farm in the form of the café and shop space and in completing the conversion of the barn by installing a community kitchen.

Also reported elsewhere is the difficulty they have found, because of the nature of the farm and its financial legacy, in securing the necessary funds to purchase the farm. The Society has been actively engaged in monitoring this process and is supportive of the renewed plan being brought forward by Cwm Harry that is intended to see the farm purchased by them during 2016. Our bank (NatWest) has remained supportive of this process throughout.

From June 2014 – when Members voted to accept the Proposal from Cwm Harry - the Moelyci IPS Board has taken its obligation to protect its Members investments very seriously. We remain conscientious of our duties and meet weekly with Cwm Harry to stay abreast of progress and regularly with our bank (NatWest) to keep them informed. Where necessary we have taken advice from our appointed Solicitors and accountants.

Operations During the 2015-16 financial year there has been no ‘operations’ undertaken by the Society itself. We now hold the position of ‘landlord’ over Cwm Harry and it is from this position that we have monitored and supported them in turning the farm around. We can report on the work we have witnessed as it relates to our farm and our ambitions.

Market garden growing space plus shop and café.

About to be rebranded as Blas Lôn Las. We were pleased to see £85,000 of investment take place on refurbishing and fitting out the shop and café space – including inserting a steel frame to correct to 5% lean! Staffing levels have once again been doubled (welcome to Carol Williams as shop manager who joins Coryn Bye who remains manager of The Growing Space). The fruit field has received much needed care and attention and we welcome the arrival of AGRO (Anglesey and Gwynedd Rehabilitation Organisation) as the new tenants who will drive this activity forward.

Barn and kitchen and other premises

Whilst still to be fully utilised we are witnessing a growing number of community groups renting venues on the farm and developing activities.

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2016 has seen our farm host Wales’ One Planet Council, the vibrant Llais y Goedwig conference and most recently a week of outdoor activities for children.

Much of this has become easier since the £70,000 investment was made by Cwm Harry in completing the refurbishment of the barn as they installed a commercial grade teaching kitchen. You will also have seen incidental work going on to make the red barn yard space usable and to make the old compost area safe and usable. What you may not have seen is work on creating the volunteer bothy, adding loads of storage space to the market garden and shifting water storage tanks on to the allotments.

All of this is just a small part of a long-term programme by Cwm Harry to tackle the backlog of property jobs on the farm.

There are new tenants taking up office space in the farmhouse and this should see the work to repair the farmhouse prioritised this summer. Cwm Harry have been approached by other organisations wanting to establish their headquarters / workshops on the farm and as a result of this (and other matters) they are being asked to update the Master Plan for the farm which was published back in late 2014. This is due to be done openly with all Members later in 2016.

Events and activities

These have almost ceased on the farm in part because of other priorities and in part because of the concerns regarding health and safety of larger events being held on the farm which Members will have witnessed coming to the fore in the run up to the Christmas Fair last year.

The use of the farm for medium sized and non-public events (such as the conferences we see being run) look like a good foundation to build from and we are informed that Cwm Harry are through to the final round of a grant fund that might see £60,000 invested in creating a safe and more all-year-round events venue (whilst also fully repairing the red barn).

Land management – farm and forestry

The farm continues to be managed through a series of grazing licenses but we have, as part of the Farm Business Tenancy given to

Cwm Harry, leased them the rights to manage the land. This includes the rights to claim and Basic payment Scheme payments and the responsibility for the Glastir contract. Cwm Harry now holds active farmer status on the farm and has now begun the consultation over how the farming enterprise could be run – environmentally and with community ownership – in to the future. Higher level Glastir is being contemplated for 2017.

The farms woodlands are also being brought in to active and planned management. Whilst scattered in to 13 blocks there are in fact 30 acres of woodland and the new approach from Cwm Harry is seeing the newly energised Woodlands Group take on their management alongside drawing up a woodland management plan for approval.

Other activity

This update about the operations of the farm can of course only be a taste of what is going on. Any Member interested in any aspect of the farms future should join in with one of the many working groups or talk to Cwm Harry about your interests. The following snippets may help inspire you to get involved in your community farm:

Allotments – a new committee has overseen a new approach to shared management, pricing and has recently installed sustainable water supplies.

Pigs – there are well developed plans for keeping some pigs on the farm. Initially as a pilot they will be owned a small ‘club’ and who will each share in the meat produced. If successful the it may be repeated and become more permanent.

Heritage – plenty of opportunity to explore the heritage of the farm from iron age to railway heritage.

Wildlife – currently surveying and mapping the farms wildlife and looking at h it is interpreted and visitors made aware of it.

Kitchen - now fully fitted it is available to rent commercially but more excitingly it has the potential to host a Saturday Morning Baking Club or be the pizzeria for a Friday Night Film Club.

Weather station – there are now many years of records on the weather at Moelyci and all credit to the small gang of volunteers who measure and record it daily.

Events – largely dormant at present but is being looked at

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afresh, especially if the red barn space can be developed.

Composting – small team looking at how the site can be used for community biomass production, or even a little bit of composting once again.

Green burial – an idea from some years ago is once again being explored by a group from the community.

Other groups on the farm include:

Bee keeping group Orchard group

And we should continue to thank the Pub Quiz group who throughout have asked many questions and raised many funds.

Volunteering at Moelyci

We were always proud that the farm provided plenty of opportunities for people to get involved, to learn new skills and make new friends. This remains the case and there are currently 55 volunteers helping make the farm run alongside Cwm Harry. There are specific opportunities in:

Shop and Café Market Garden Woodlands and conservation Property maintenance

Cwm Harry plan a new post shortly which is intended to support volunteering on the farm and to then develop and opportunities for work placements and for apprenticeships etc. This builds on the ethical principles we have set for the farms future.

Management of the farm

When leasing the farm to Cwm Harry we were conscious that our Members were losing some control but we felt that to overcome the crises on the farm we needed the management experience and investment Cwm Harry were offering.

The monthly Steering Group has always been the place for getting updates and quizzing each other and whilst 2015 was a year of hard work and transition 2016 is a year in which our community can once again step up and

play their part in managing the farm. Any Member wanting to get involved or to know more simply has to ask.

Financial update This Annual Report – including this financial update – is being published without the inclusion of our finalised accounts for the year. These will be available at the AGM and copies made available in advance to those requesting them.

Whilst the finances of the Society are more straightforward it has taken time to prepare the accounts as detaching ourselves from the day-to-day management of a large and complex farm has taken longer than planned. The Board apologises for this and will have the accounts ready for Members ahead of the AGM.

However we can provide this update covering the principle issues.

The financial activity of The Society has become much simpler during the last year. As we no longer operate the farm on a day-to-day basis our biggest expenditure is servicing the £500,000 loan we hold for the property and our biggest income to cover this is rental income from Cwm Harry.

Whilst we received – belatedly – the Basic Payment Scheme income for 2014 the 2015 payment along with the Glastir agri-environment scheme payment will be due to Cwm Harry as they now manage the farm.

We continue to receive some donations which help us run and administer the Society.

We continue to carry forward from the 2014-15 financial year substantial trade creditors. These are in large part bills (£77,600) outstanding from the initial conversion of the barn. An agreement is in place via Cwm Harry that will see these removed from our accounts at the point at which the farm is sold to Cwm Harry.

At the start of the year around £48,000 was owed to Cwm Harry for mortgage interest payments covered during the previous year, for work undertaken on managing the farm on our behalf and for some investments made on to the farm. During this financial year we have been able to charge rent and for some utilities (whilst waiting for accounts to be moved to Cwm Harry) but we have also taken in on behalf of Cwm Harry most of the income from the shop for the year. At the close of the financial year the balance remaining owing to Cwm Harry is around £31,000 but this is not being claimed until the farm is sold.

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It remains the case that a Welsh Government body continues to assert that £97,400 of grant funding provided to Moelyci IPS in relation to the initial barn conversion on the farm should be repaid. An agreement that would have seen the claim withdrawn was negotiated by Cwm Harry and is currently being reviewed. Moelyci IPS continues to dispute the claim and as such the amount is not shown within the Moelyci IPS accounts.

Plans approved by Moelyci IPS at our 2014 SGM allowed for up to £109,000 of shares to be allocated to Cwm Harry in return for them taking on our outstanding debts (see above). Following agreement with Cwm Harry that these liabilities will be taken on by them these shares will be issued.

During the financial year Cwm Harry have, by using grant funding secured by them and as detailed in the 2014 Proposal, invested £150,000 in to the physical infrastructure of the farm (café and shop and completing the refurbishment of the barn by installing a commercial kitchen) and this WILL BE reflected in our Balance Sheet(subject to valuation and the assets and evidence of spend). As agreed at the 2014 SGM - and only if future plans to purchase do not proceed - Moelyci IPS will indemnify Cwm Harry against any potential claw back of these public funds.

All-in-all our improved assets outweigh our liabilities and our annual income exceeds our annual expenditure. Achieving such a situation has been a mammoth undertaking, done in partnership with our bank and with Cwm Harry. However we remain cash poor and with no financial resources available to us other than those described above. We can sustain this position for a little time to come but our only solution – which solves our financial difficulties and secures the farm as a community asset – is to see the farm sold to Cwm Harry.

Statement of risk analysis Whilst the Society has assets which can be realised to meet all its liabilities, this could only be done in the short term by a sale at full market value, unencumbered by any restrictions on future use apart from those provided under the SSSI/SAC status of the Moelyci mountain. In the long term the members mandate has allowed the Board to reduce its overheads by leasing Moelyci to Cwm Harry. This in turn has enabled Cwm Harry to secure both immediate and ongoing investments that help save and secure Moelyci. The operational costs are now undertaken as

part of the tenancy but so too is income earned from allotment and grazing rents, market garden and shop, farm subsidies etc. Moelyci member/shareholders can be assured that Cwm Harry income derived on site is ring fenced for reinvestment, maintenance and running costs of Moelyci, with Cwm Harry establishing a separate bank account and accountancy system to allow transparency of this. The Board would like to restate the following paragraphs from the 2014 report that are still applicable as forming the basis on which the execution of the Mandate has been exercised. “The options open to the society have been assessed and a proposal drawn up and submitted to the members. In essence, this allows for the operational activities on the Society’s premises to be undertaken by a tenant on a lease but under a set of particularly restrictive conditions. These conditions allow the tenant to develop a suite of commercial activities on the premises but whilst maintaining the core principles of the Moelyci IPS objects, and continued community access where safe and appropriate to do so. It also allows for the tenant to have an exclusive option to purchase the freehold during the first three years of the tenancy In return, the tenant will ensure that the short term liabilities of Moelyci IPS are underwritten through a mixture of rental payments . . . such as to allow the society to continue as a going concern until either the option to purchase is exercised or the tenancy is terminated under any of the provisions of the lease. These conditions are ones which an ordinary commercial tenant would be unlikely to accept. The board of trustees, having taken due consideration of the independent professional advice available to it, considers this to be the best course of action to both protect the interests of the Society and its members and to repair the reputation of the organisation”.

Statement of Compliance The accounts of 2015-16 comply with statutory requirements of the governing document and the Financial Reporting Standard for Smaller Entities published on 16 July 2014, the Financial Reporting Standard for Smaller Entities (effective January 2015).

Signed on behalf of the Board or Trustees

Chairperson June 20th 2016

Chair’s Report

Dear Members,

This last year has seen many tangible changes that are very encouraging and much progress has been made in laying down the foundations for future development and community involvement. Both of these have required a heightening of some aspects of the Boards responsibilities as it exercises its role as Landlord working together with its Tennant to fulfil the agreed aims and objectives of a joint Social Project. The outcome to date is looking good.

The Boards activities and focus has been, and will continue to be, on the working relationship between our Society and Cwm Harry as the Members mandate of 2014 moves forward. Protecting the best interests of the Society and its Members remains critical to us. Since the signing of the lease with Cwm Harry both the tangible changes and foundations for the future have remained firmly in line with the Mandate agreed in 2014 and the ethical principles has become ingredient in all relevant documentation and daily operations.

In order to be able to report this the Board has made it part of its responsibility to maintain a coherent overview of activities taking place at Moelyci and to be at forefront of discussions leading to decision making as much as is possible. This has worked productively and well over this time. The cooperation and working practices of Cwm Harry has been supportive in helping us maintain this objective and it is noticeable that the active involvement of the members has been both helpful and encouraging; adding to a growing exchange and sharing of knowledge, ideas and skills that enhances decision making and is a vital part of the renewed Ffarm Moelyci and its future success.

As has been stated our financial viability remains precarious and will only be resolved by Cwm Harry purchasing the farm. This remains a prime objective for both parties who have remained pro-active in their attempts to bring this to completion. A renewed effort is underway for 2016.

There is much to be optimistic about as much has been accomplished and upheld. We recognise and appreciate that this has only been made possible through Cwm Harrys support, skills and good practice. However we are acutely aware that the farm is not yet wholly secure and we remain vigilant of this and Members areminded that their involvement and ongoing support is as vital as refinancing is.

This last year has seen many tangible changes that are very encouraging and progress has been made in laying down the foundations for future

development and community involvement. Both of these have required a heightening of some aspects of the Boards responsibilities as it exercises its role as Landlord working together with its Tennant to fulfil the agreed aims and

al Project. The outcome to date is looking good.

The Boards activities and focus has been, and will continue to be, on the working relationship between our Society and Cwm Harry as the Members mandate of

f the Society and its Members remains critical to us. Since the signing of the lease with Cwm Harry both the tangible changes and foundations for the future have remained firmly in line with the Mandate agreed in 2014 and the ethical principles has become an active ingredient in all relevant documentation and daily operations.

In order to be able to report this the Board has made it part of its responsibility to maintain a coherent overview of activities taking place at Moelyci and to be at forefront of discussions leading to decision making as much as is possible. This

ed productively and well over this time. The cooperation and working practices of Cwm Harry has been supportive in helping us maintain this objective and it is noticeable that the active involvement of the members has been both

ing to a growing exchange and sharing of knowledge, ideas and skills that enhances decision making and is a vital part of

As has been stated our financial viability remains precarious and will only be ved by Cwm Harry purchasing the farm. This remains a prime objective for

active in their attempts to bring this to

ccomplished and upheld. We recognise and appreciate that this has only been made possible through Cwm

However we are acutely aware that the farm is not yet wholly secure and we remain vigilant of this and Members are reminded that their involvement and ongoing support is as vital as refinancing is.

The Trustees would like to take this opportunity to thank you all for your support and contributions that are building towards a bright future for Ffarm Moelyci. Stay active and stay involved and together we will see our farm flourish.

Yours Sincerely,

Pauline Egan.

Chair of Moelyci Environmental Centre Ltd

Moelyci, Lôn Felin Hen, Tregarth, Bangor,

Gwynedd LL57 4BB+44 0 1248 602793


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The Trustees would like to take this opportunity to thank you all for your support and contributions that are building towards a bright future for

tive and stay involved and together we will see our

Chair of Moelyci Environmental Centre Ltd

Moelyci, Lôn Felin Hen, Tregarth, Bangor, Gwynedd LL57 4BB +44 0 1248 602793


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Accountants’ report to the members on the unaudited accounts of Moelyci Environmental Centre Limited

We report on the accounts for the year ended 31 January 2016 set out on pages 11 to 20.

Respective responsibilities of officers and reporting accountant

The society’s officers are responsible for the preparation of the accounts, and they consider that the society is entitled to opt out of an audit. It is our responsibility to carry out procedures designed to enable us to report our opinion.

Basis of opinion

Our work was conducted in accordance with the Statement of Standards for Reporting Accountants, and so our procedures consisted of comparing the accounts with the accounting records kept by the society, and making such limited enquiries of the officers of the society as we considered necessary for the purposes of this report. These procedures provide the only assurance expressed in our opinion.

Going Concern

The accounts have been prepared under the going concern basis. The entity is experiencing financial difficulties as noted in the accounting policies note and explained more fully in the Trustee’s Report in the risk analysis.

Opinion

In our opinion:

(a) the accounts are in agreement with the accounting records kept by the society under s1 of the Friendly and Industrial and Provident Societies Act 1968

(b) having regard only to, and on the basis of, the information contained in those accounting records the accounts have been drawn up in a manner consistent with the accounting requirements of the Friendly and Provident Societies Act 1968 and the Industrial and Provident Societies Act 1965; and

(c) the society satisfied the conditions for exemption from an audit of the accounts for the year specified in s4A(1) of the Act and did not, at any time within that year, fall within any of the categories of societies not entitled to the exemption specified in s4A(3).

W J Matthews & Son

Chartered Accountants and Registered Auditors

11-15 Bridge Street

Caernarfon

Gwynedd

LL55 1AB

Date

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Moelyci Environmental Centre Ltd Limited Statement of Financial Activities (incorporating the income and expenditure account) for the year ended 31 January 2016 Unrestricted Restricted Total FundsTotal Funds Notes funds funds 31 January31 January 2016 2016 2016 2015 £ £ £ £ Income Donations 2 5,947 - 4,714 5,947 Activities for generating funds 3 8,253 - 34,381 8,253 Income from charitable activities 4 28,951 - 7,203 28,951 Bank interest - - - - _______ _______ _______ _______ Total Income £43,151 £ - £46,298 £43,151 ________ _______ _______ _______ Expenditure Operation of the Environmental Centre 5 46,509 - 46,509 99,457 _______ _______ _______ _______ Total Expenditure £46,509 £ - £46,509 £99,457 _______ _______ _______ _______ Net expenditure and net movement in funds for the year (211) - (211) (56,306) Reconciliation of funds Additional share capital 267 - 267 446 Total funds brought forward 335,853 - 335,853 391,713 _______ ________ _______ _______ Total funds carried forward £335,909 £ - £335,909 £335,853 ======= ======= ======= ======= The statement of financial activities includes all gains and losses in the year. All incoming resources and resources expended derive from continuing activities.

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Moelyci Environmental Centre Ltd Balance Sheet at 31 January 2016 Notes 2016 2016 2015 2015 £ £ £ £ Fixed Assets Intangible fixed assets 9 15,255 15,255 Tangible fixed assets 10 945,016 950,065 _______ _______ 960,271 965,320 Current assets Stock - 1,200 Debtors 11 242 5,589 Cash at bank and in hand 1,194 521 _______ _______ 1,436 7,310 Creditors: amounts falling due within one year 12 (127,079) (147,693) _______ _______ Net Current Liabilities (125,643) (140,383) _______ _______ Total Assets Less Current Liabilities 834,628 824,937 Creditors: amounts falling due After more than one year 13 (498,719) (489,084) _______ _______ Net Assets £335,909 £335,853 ======= ======= Funds Share capital 99,304 99,037 Restricted funds 15 - - Unrestricted funds 15 236,605 236,816 _______ _______ £335,909 £335,853 ======= ======= In the trustees’ opinion the company was entitled under section 477(1) of the Companies Act 2006 to exemption from the audit of its accounts for the year ended 31 January 2016. No member of the company has deposited a notice under Section 476 requiring an audit of these accounts.

The directors are responsible for ensuring that the company keeps proper accounting records which comply with Section 386 of the Companies Act 2006 and for preparing accounts which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each year in accordance with the requirements of Section 394 and Section 395 of the Companies Act 2006, and which otherwise comply with the requirements of that Act relating to accounts, so far as applicable to the company.

The accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and have been prepared in accordance with the Financial Reporting Standards for Smaller Entities (effective January 2015).

…………………………………… Trustee Mrs. Pauline Egan

16th July 2016

……………………………….. Date

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Industrial and Provident Society Company registration number IP29369R

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Moelyci Environmental Centre Ltd Limited

Notes to the financial statements for the year ended 31 January 2016

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

a) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for Smaller Entities published on 16 July 2014, the Financial Reporting Standard for Smaller Entities (effective January 2015) and the Charities Act 2011. Assets and liabilities are initially recognised at historic cost or transaction value unless otherwise stated in the relevant accounting policy note.

The financial statements have been prepared on the going concern basis. The deficit in income has arisen from the reduction of funded employment related projects and a lack of unrestricted grant funding. The income from agricultural payments will be affected by the impending reform of the Common Agricultural Policy as will a revision of agri-environmental schemes available. At a Special General Meeting during the year, the majority of shareholders supported a proposal whereby a fellow social enterprise will take over the commercial activities under a lease agreement whereby the core principles of the Moelyci IPS will be maintained. The lease agreement began in March 2015. Income and expenditure are shown gross in the financial statements and are recognised on an accruals basis.

b) Company status The entity is a company is a company incorporated under the Industrial and Provident Societies Act.

c) Fund accounting

Unrestricted funds comprise accumulated surpluses and deficits on the general funds that are available for use at the discretion of the trustees in furtherance of the general objects of the entity and have not been designated for other purposes. Restricted funds are funds that are to be used in accordance with specific restrictions imposed by donors or which have been raised by the entity for particular purposes.

d) Income All income is included in the SOFA when the entity is legally entitled to the income and the amount can be quantified with reasonable accuracy. Income from charitable activities includes income received under contract or where entitlement to grant funding is related to performance and specific deliverables is accounted for as the entity earns the right to consideration by performance. Grant income included in this category provides funding to support performance activities and is recognised where there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability. Where income is received in advance of performance, its recognition is deferred and included in creditors. Where entitlement occurs before income is received the income is accrued.

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1. Accounting Policies (continued)

e) Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

f) Tangible fixed assets and depreciation Fixed assets are stated at cost or at a valuation. The cost of minor additions or those costing below £500 are not capitalised. Depreciation is provided on all assets with the exception of freehold land in order to write down the cost or valuation of fixed assets to their expected residual value in equal instalments over their expected useful lives as follows: Freehold land NIL Freehold property NIL Polytunnels 20% on a reducing balance basis Equipment 15-20% on a reducing balance basis Plant and machinery 15-25% on a reducing balance basis

g) Debtors

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

h) Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term deposits.

i) Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts.

j) Financial instruments

The charity only has financial assets and financial li8abilities of a kind that qualify as a basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

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2. Voluntary income

2016 2015

Total Total

£ £

Donations 4,714 5,779

Cub 100 - 168

_______ _______

£4,714 £5,947

_______ _______

3. Income from Activities for Generating Funds

2016 2015

Total Total

£ £

Rentals receivable 34,381 5,778

Grazing - 2,475

Miscellaneous income - -

_______ _______

£34,381 £8,253

_______ _______

4. Incomes from Charitable Activities

2016 2015

Total Total

£ £

Agricultural Support 6,475 15,867

Environmental Activity Days 20 1,018

Market Garden 531 10,953

Recycling/composting 177 21

Course fees - 1,092

_______ _______

£7,203 £28,951

_______ _______

Page | 17



5. Expenditure

Total fundsTotal funds

2016 2015

£ £

Opening stock 1,200 1,200

Horticultural costs - 2,707

Closing stock - (1,200)

Wages and salaries 1,458 17,553

Management support - 13,422

Rates and water 86 803

Light and heat 429 1,064

Repairs and renewals - 321

Insurance 626 3,104

Computer expenses - 2,317

Motor/travel costs - 150

Accountancy, legal and professional 6,529 16,825

Telephone fax and internet 40 1,993

Printing, postage and stationery 514 3,565

Depreciation 5,049 6,183

Bank loan interest and charges 26,798 22,166

Subscription and sundry expenses 408 210

Consultancy and professional fees 3,372 6,988

Training/ Conference costs - 86

_______ _______

£46,509 £99,457

======= =======

Page | 18



6. Net Expenditure for the Year

2016 2015

This is stated after charging: £ £


Independent Examination 600 600

=============

2016 2015

7. Staff Costs £ £

Wages and salaries 1,458 17,500

Social security costs - 53

Other pension costs - -

_______ _______

£1,458 £17,553

======= =======

The average number of employees during the year on a full time working basis was as follows:

2016 2015

Number Number

1 2

==== ====

No employees received emoluments of more than £60,000 (2015 – Nil).

8. Trustee remuneration & Related Party Transactions

No remuneration was received or waived by the directors/ trustees. No directors/ trustees were reimbursed for travelling expenses (2015- NIL).

No trustee or other person related to the charity had any personal interest in any contract or transaction entered into by the charity during the year. (2015 - NIL)

Page | 19



9. Intangible fixed assets

Single Farm

Payment

Entitlement

£

Cost/Valuation

At 1 February 2015 and at 31 January 2016 £15,255

_______

Depreciation

At 1 February 2015 and at 31 January 2016 -

_______

Net book value

At 31 January 2016 £15,255

=======

At 31 January 2015 £15,255

=======

10. Tangible fixed assets

Freehold Plant & Fixtures Total

Property Machinery & Fittings

£ £ £ £

Cost/Valuation

At 1 February 2015 and as at

31 January 2016 1,003,184 59,344 22,442 1,084,970

_______ _______ _______ _______

Depreciation

At 1 February 2015 68,051 51,504 15,350 134,905

Charge for the year 2,653 1,332 1,064 5,049

_______ _______ _______ _______

At 31 January 2016 70,704 52,836 16,414 139,954

_______ _______ _______ _______

Page | 20

Net book value

At 31 January 2016 £932,480 £6,508 £6,028 £945,016

======= ======= ======= =======

At 31 January 2015 £935,133 £7,840 £7,092 £950,065

======= ======= ======= =======

Page | 21



11. Debtors 2016 2015

£ £

Other debtors £242 £5,589

======= =======

12. Creditors amounts falling due within one year

2016 2015

£ £

Loans and overdrafts 24 11,947

Trade creditors 116,470 114,298

Taxation and social security - 1,758

Accruals 10,585 19,690

_______ _______

£127,079 £147,693

======= =======

1. We continue to carry forward from the 2014-15 financial year substantial trade creditors. These are in large

part bills (£77,600) outstanding from the initial conversion of the barn. An agreement is in place via Cwm

Harry that will see these removed from our accounts at the point at which the farm is sold to Cwm Harry.

2. At the start of the year £47,939 was owed to Cwm Harry for mortgage interest payments covered during the

previous year, for work undertaken on managing the farm on our behalf and for some investments made on

to the farm. During this financial year we have been able to charge rent and for some utilities (whilst waiting

for accounts to be moved to Cwm Harry) but we have also taken in on behalf of Cwm Harry most of the

income from the shop for the year. At the close of the financial year the balance remaining owing to Cwm

Harry is £31,898

3. As part of our trade creditors we owe £5,000 to our solicitors, Wrigley’s, for work undertaken on preparing the

Farm Business Tenancy etc. They have agreed not to take payment for this until such time as the farm is

sold.

13. Creditors amounts falling due after more than one year

2016 2015

£ £

Bank loans £498,719 £489,084

======= =======

Page | 22



14. Provisions and Contingent Liabilities

It remains the case that a Welsh Government body continues to assert that £97,400 of grant funding provided to Moelyci IPS in relation to the initial barn conversion on the farm should be repaid. An agreement that would have seen the claim withdrawn was negotiated by Cwm Harry and is currently being reviewed. Moelyci IPS continues to dispute the claim and as such the amount is not shown within the Moelyci IPS accounts.

Plans approved by Moelyci IPS at our 2014 SGM allowed for up to £109,000 of shares to be allocated to Cwm Harry in return for them taking on our outstanding debts. Following agreement with Cwm Harry that these liabilities will transfer to them these shares will now be issued.

15. Funds

Balance Balance

31 January Incoming Outgoing 31January

2015 Resources Resources Transfers 2016

£ £ £ £ £

Restricted funds - - -

Share capital 99,037 267 - - 99,304

Unrestricted income funds 236,816 46,298 46,509 - 236,605

_______ _______ ______ ______ _______

£335,853 £46,565 £46,509 £ - £335,909

_______ _______ ______ ______ _______

16. Analysis of fund balances between net assets as at 31 January 2016

Unrestricted Restricted Total

funds funds funds Grant aided

projects

£ £ £

Fixed assets 960,271 - 960,271

Net current liabilities (125,643) - (125,643)

Loans (498,719) - (498,719)

_______ _______ _______

Page | 23

Total £335,909 £ - £335,909

======= ======= =======

17. Related Party Transactions

Plans approved by Moelyci IPS at our 2014 SGM, and outlined in the 2014 Proposal from Cwm Harry, state that it is our intention to allow the farm to be bought by Cwm Harry in order to secure its future. During this financial year Cwm Harry have, by using finance secured by them and as detailed in the 2014 Proposal, invested £150,000 in to our farms physical infrastructure. This was in addition to the £100,000 of investment used to sustain and build activity and deliver our vision. As agreed at the 2014 SGM - and if future plans to purchase do not proceed - Moelyci IPS will indemnify Cwm Harry against any potential claw back of the £150,000 which was secured from public funds for the sole benefit of the community of Moelyci..

Page | 24


Detailed statement of income and expenditure for the year ended 31 January 2016

Income

2016 2015

£ £

Donations

Donations 4,714 5,779

Club 100 - 168

_______ _______

4,714 5,947

_______ _______

Activities for generating funds

Rentals receivable 34,381 5,778

Grazing - 2,475

Miscellaneous income -

_______ _______

34,381 8,253 _______ _______

Investment income

Bank interest - -

_______ _______

Income from charitable activities

Grants - 7,133

NAW – Single Farm Funding 6,475 8,734

Environmental Activity days 20 1,018

Market garden 531 10,953

Recycling/ Composting 177 21

Course fees - 1,092

_______ _______

7,203 28,951

_______ _______

_______ _______

Total Income £46,298 £43,151

_______ _______

Page | 25


Detailed statement of income and expenditure for the year ended 31 January 2016

Expenditure

2016 2015

£ £

Cost of sales -Opening stock 1,200 1,200

Cost of sales -Horticultural costs - 2,707

Cost of sales-Closing stock - (1,200)

Staff costs-Wages and salaries 1,458 17,553

Management support - 13,422

Establishment-Rates and water 86 803

Establishment-Light and heat 429 1,064

Establishment- Repairs and maintenance - 321

Establishment- Insurance 626 3,104

Establishment-Other - 2,317

Motor and travel costs – other - 150

Professional- accountancy fees 1,520 1,625

Legal expenses 5,009 15,200

Office expenses-telephone 40 1,993

Office expenses-other 514 3,565


Bank loan interest and charges 26,798 22,166

Subscription and sundry expenses 408 210

Consultancy/Professional fees 3,372 6,988

Training/ Conference costs - 86

_______ _______

£46,509 £99,457

Total Expenditure _______ _______

Net expenditure for the year (£211) (£56,306)

_______ _______

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