(Public Pack)Supplement Agenda To
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Public Document Pack General Purposes & Audit Committee Supplementary Agenda 4. Brick by Brick Audit Report (Pages 3 - 30) The draft Brick by Brick Director’s Report and Financial Statements 2018-19 are attached at Appendix 1. 5. Financial Performance Report (Pages 31 - 72) This report presents to the Committee progress on the delivery of the Council’s Financial Strategy. 6. Audit Findings Report (Pages 73 - 266) The reports include the Council’s management responses to the recommendations. 7. Annual Governance Statement (Pages 267 - 296) This report details the Annual Governance Statement (AGS), for 2018/19 at Appendix 1. JACQUELINE HARRIS BAKER Michelle Gerning Council Solicitor and Monitoring Officer 020 8726 6000 x84246 London Borough of Croydon [email protected] Bernard Weatherill House www.croydon.gov.uk/meetings 8 Mint Walk, Croydon CR0 1EA This page is intentionally left blank Agenda Item 4 REPORT TO: GENERAL PURPOSES & AUDIT COMMITTEE 23 JULY 2019 SUBJECT: AUDIT REPORT FOR BRICK BY BRICK CROYDON LTD 2018-19 ACCOUNTS LEAD OFFICER: JACQUELINE HARRIS-BAKER EXECUTIVE DIRECTOR OF RESOURCES CABINET MEMBER: COUNCILLOR ALISON BUTLER CABINET MEMBER FOR HOMES AND GATEWAY SERVICES AND DEPUTY LEADER (STATUTORY) COUNCILLOR SIMON HALL CABINET MEMBER FOR FINANCE AND RESOURCES WARDS: ALL CORPORATE PRIORITY/POLICY CONTEXT/AMBITIOUS FOR CROYDON: The preparation and publication of the Brick by Brick Croydon Ltd (BBB) final accounts provides assurance that the company’s overall financial position is sound. This underpins the delivery of the company’s business plan and the achievement of its key corporate objectives. Strong financial governance and stewardship ensures that the company’s resources are allocated in an effective and responsible way that enables it to deliver multi-tenure housing across the borough in a manner that is commercially efficient, and thereby maximizes the return to the company’s sole shareholder, the London Borough of Croydon. FINANCIAL IMPACT: There are no direct financial implications arising from this report. FORWARD PLAN KEY DECISION REFERENCE NO.: Not a key decision 1 RECOMMENDATIONS The Committee is asked to: 1.1 Note the draft Brick by Brick Croydon Ltd Director’s Report and Financial Statements for the period ended 31st March 2019 (Appendix 1). .1 2 EXECUTIVE SUMMARY 2.1 The draft Brick by Brick Director’s Report and Financial Statements 2018-19 are attached at Appendix 1. GPAC BBB Audit Findings Report Page 3 2.2 The audit of the financial statements has recently been concluded, with the final sign-off of the accounts to be issued before the end of July. This should confirm that the statements: . give a true and fair view of the state of the company’s affairs as at 31st March 2019; . have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; . have been prepared in accordance with the requirements of the Companies Act 2006. 3 INDEPENDENT AUDITOR’S REPORT 3.1 This independent auditor’s report is made solely to the company’s members, as a body, and provides assurance that the financial statements are free from material misstatement. 3.2 Grant Thornton completed their audit of the 2018-19 accounts for BBB at the end of June 2019. The principal responsibilities of the auditor are to: . obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error; . execute their responsibilities in accordance with the International Standards on Auditing (UK) and applicable law in providing their opinion on the company’s financial statements. 4 CONSULTATION 4.1 The company’s accounts will be filed at Companies House in accordance with requirements. The director’s report and financial statements are therefore publicly available. 5 FINANCIAL AND RISK ASSESSMENT CONSIDERATIONS 5.1 There are no direct financial considerations arising from this report. 5.2 There are no implications arising from this report of new policy or spending decisions. Approved by Lisa Taylor –Director of Finance, Investment and Risk and Interim S151 Officer 6 LEGAL CONSIDERATIONS 6.1 The Director of Law and Governance comments that there are no direct legal implications arising from the recommendations within this report. GPAC BBB Audit Findings Report Page 4 (Approved by Sean Murphy, Director of Law and Governance and Deputy Monitoring Officer) 7 HUMAN RESOURCES IMPACT 7.1 There are no immediate Human Resources considerations that arise from the recommendations of this report for London Borough of Croydon staff. Approved by Sue Moorman – Director of Human Resources 8 EQUALITIES IMPACT 8.1 An Equalities Impact Assessment has not been carried out as this report does not require a new policy or spending decision. The contents of this report do not have any equalities implications. 9 ENVIRONMENTAL IMPACT 9.1 There are no implications arising from this report. 10 CRIME AND DISORDER REDUCTION IMPACT 10.1 There are no implications arising from this report. 11 REASONS FOR RECOMMENDATIONS/PROPOSED DECISION 11.1 None. 12 OPTIONS CONSIDERED AND REJECTED 12.1 None. CONTACT OFFICER: Jacqueline Harris-Baker, Executive Director of Resources BACKGROUND PAPERS None GPAC BBB Audit Findings Report Page 5 This page is intentionally left blank Directors’ Report & Financial Statements For the 15 month period ended 31 March 2019 Issued 15.07.19 revision: DRAFT Brick by Brick Croydon Limited Registered Number: 09578014 Brick by Brick Croydon Limited page 1 Page 7 Company Information Directors Colm Lacey (appointed 26 January 2016) Martyn Evans (appointed 29 January 2019) Shifa Mustafa (appointed 29 January 2019) Registered number 09578014 Registered office 62 George Street Croydon CR0 1PD Brick by Brick Croydon Limited page 2 Page 8 Contents Company Information ............................................................................................................................................2 Directors' Report....................................................................................................................................................4 Independent auditor's report to the members of Brick By Brick Croydon Limited .........................................9 Statement of Comprehensive Income................................................................................................................12 Statement of Financial Position..........................................................................................................................13 Statement of Changes in Equity .........................................................................................................................14 Notes to the Financial Statements .....................................................................................................................15 Brick by Brick Croydon Limited page 3 Page 9 Directors' Report For the year ended 31 March 2019 The Directors present their report and the financial statements for the 15 month period ended 31 March 2019. Results and Dividends The loss for the period, after taxation, amounted to £774,952. Directors The following directors served during 2018/19: Colm Lacey (appointed 26 January 2016) Martyn Evans (appointed 29 January 2019) Shifa Mustafa (appointed 29 January 2019) Jayne McGivern (appointed 26 January 2016, resigned 29 January 2019) Lisa Taylor (appointed 26 January 2016, resigned 29 January 2019) Jeremy Titchen (appointed 26 January 2016, resigned 31 December 2018) Annual Report Throughout 2018/19, Brick by Brick Croydon Ltd (BBB) has continued to progress its significant programme of residential development. The company continues to play a key role in increasing the supply of new homes across the wider borough of Croydon, and remains committed to its core principles of combining high quality design with the delivery of high levels of affordable housing (with 47% of units in the existing programme due to be affordable). In this period, a significant number of schemes which had achieved planning consent by the end of 2017 have started on site and are making strong progress towards completion. The company now has 20 schemes on site, of which 9 are forecast to deliver completed units by the end of 2019. In total, BBB now has 39 schemes with planning consent, delivering c.1,250 units (of which 47% are affordable). In tandem with this construction progress, BBB was delighted to open its marketing suite at 62 George Street to launch its first units for sale in March 2019. A combination of private and shared ownership units were made available on the Auckland Rise and Ravensdale Gardens developments (comprising apartments and houses). Since then, further shared ownership homes at Flora Court, in Thornton Heath, have also been put on the market. Interest in BBB homes has been encouraging and the company is pleased to report a healthy number of reservations to date. The company’s development model continues to operate on the basis of identifying land with development potential onto which viable schemes can be developed by BBB upon acquisition from LB Croydon. The terms of the purchase of these sites are designed to ensure that the Council secures best consideration in terms of the value of the land, including the capture of land value from favourable future market conditions via overage arrangements that guarantee that the Council gets 100% of any increase. Brick by Brick Croydon Limited page 4 Page 10 The Council provides development finance to BBB at market rates