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2024-07-31-accounts

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Company registration number: 02896700 Charity registration number: 1034808

NCFE

(A company limited by guarantee)

Annual Report and Financial Statements

for the Year Ended 31 July 2024

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NCFE

Contents

Reference and Administrative Details 1 to 2
Trustees' Report 3 to 13
Independent Auditors' Report 14 to 17
Consolidated Statement of Financial Activities 18
Consolidated Balance Sheet 19
Balance Sheet 20
Consolidated Statement of Cash Flows 21
Notes to the Financial Statements 22 to 44
Comparative Consolidated Statement of Financial Activities 45

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NCFE

Reference and Administrative Details

Trustees

Ms D M Jenkins MBE DL, Chair Ms B H Ashton (resigned 31 March 2024) Mrs J Whitfield Mr M A Smith Mr R Ghurbhurun Mr D. Wilson Mr C Hoggert (resigned 12 September 2023) Mrs A E Bromley (appointed 19 March 2024) Mr M Love (appointed 19 March 2024)

Secretary

E J Hoare

Key Management Personnel

D Gallagher, Chief Executive Officer K Todd, Chief Financial Officer S Foster, Chief Regulatory Officer P Le Feuvre, Chief Operating Officer H Ketteringham, Chief People Officer

Registered Office Q6 Quorum Park Benton Lane Newcastle upon Tyne NE12 8BT The charity is incorporated in Wales.

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NCFE

Reference and Administrative Details

Company Registration Number 02896700
Charity Registration Number 1034808
Solicitors Womble Bond Dickinson
The Spark
Draymans Way
Helix
Newcastle upon Tyne
NE4 5DE
Bates Wells
10 Queen Street Place
London
EC4R 1BE
Bankers Barclays Bank
Percy Street
Newcastle upon Tyne
NE1 4QL
Lloyds Bank PLC
King Street
Manchester
M2 4LQ
Auditor Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
Investment Managers Brewin Dolphin Ltd
Time Central
Gallowgate
Newcastle Upon Tyne
NE1 4SR
Barclays Private Bank
Level 27
1 Churchill Place
London
E14 5HP

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NCFE

Trustees' Report

The Trustees present their annual directors’ report and the audited financial statements of the charity for the year ending 31 July 2024.

The financial statements comply with current statutory requirements, the Articles of Association and the Charities Statement of Recommended Practice (“Charities SORP”) applicable to charities preparing their accounts in accordance with FRS 102.

OBJECTIVES AND ACTIVITIES

Purpose and aims

NCFE is the most historic technical and vocational awarding organisation in the UK, originally established in 1848, forged in the furnace of innovation and progress of the first industrial revolution. Whilst much has changed since this time, some things have not. We are still a charity, centred on our purpose of ‘promoting and advancing learning’, helping ‘to create a fairer, more inclusive society’. We continue to be synonymous with technical and vocational education, awarding and assessment, and this is where our core business activities are still focused today. Our role spans from tapping the ‘source code’ of what employers need to build productive and sustainable workforces for the future, from designing and developing qualifications that meet the diverse needs of all learners, to quality assuring and supporting our centres to deliver transformational learning experiences. Finally, our most important role is to recognise outcomes for learners, providing robust, reliable and valid assessments, and certifying their achievements - essentially providing learners with a ‘passport to progression’ and hopefully future success.

Strategy 2030

In recent years we have sought to look beyond the bounds of a traditional awarding organisation to seek out opportunities that deliver greater impact for our beneficiaries. We have done this through investing in innovation, strategic partnerships and initiatives, developing new products and services, and finding new and better ways to set up our centres, educators and learners for success.

This increasingly holistic, innovative and collaborative outlook has had a significant influence on our new strategy which we launched in 2024 and expect to run to 2030. While our charitable purpose ‘to promote and advance learning’ endures, our vision for this strategy is ‘everyone has the opportunity, means and motivation to access the highest quality learning experiences.’ We aim to achieve this through the following strategic goals:

• Greater reach and impact

We will reach more learners each year and enable them to experience transformational learning experiences that will equip them to flourish in their careers and lives. We’ll hold ourselves to account for delivering positive impacts for learners by measuring the difference we make to their choices, experiences and outcomes. We will continuously seek better ways to create inclusive, fair and high-quality learning and assessment for all. To do this, we’ll focus on finding creative ways to engage with those who are most under-served and have the greatest needs.

• Specialised and Expert

We will increasingly specialise in aspects and areas of learning where we know we can deliver the maximum value to learners. We’ll do this by developing and maintaining deep expertise and sector networks and focusing on meeting sector specific needs. Our specialisms will enable us to concentrate our resources on supporting learners over their career and a lifetime of learning through delivering coherent and high-quality progression pathways. We’ll build upon existing areas of deep domain specialism and strengthen NCFE’s position as experts in assessment. We’ll also continue to support our customers and learners with existing high-quality products and services outside of our specialisms.

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NCFE

Trustees' Report

• Diversified

We will continue to strive to find new, different and better ways to support learners to experience transformational learning experiences and achieve best possible outcomes. This will be achieved, in part, through diversification of our products and services to create new opportunities outside of our core qualification and end-point assessment services. Through achieving this objective we’ll also reduce our dependency on government funded, regulated qualifications, providing us with a healthier mix and balance of income that will enable the charity to have a more stable, secure and sustainable future.

• Centred on people

We will place the people we serve at the heart of our decision-making. We’ll continue to draw on the parallels between wanting every NCFE learner and colleague to flourish throughout their working career, enabled by our high-quality learning and development opportunities and solutions. We will continue to build rich and deep design into what is needed to enable people and businesses to prosper and fulfil their potential, and we’ll utilise this insight to inform the development of products and services that will deliver maximum value for all customers and beneficiaries within our reach.

• An influential voice for skills

We will leverage our position as one of the largest vocational and technical awarding organisations, advocating for what is best for learners through using our vast experience, heritage, deep expertise, and rich sources of data and insight. We’ll build an even stronger understanding of employers, respond to their needs and support them to create healthy vibrant and productive workplaces. Our approach will be evidence-based to ‘what works’, whilst also challenging current practices through research and innovation. We’ll collaborate with like-spirited organisations and people, seeking to harness the collective intelligence and resources from our sector and beyond, helping to shape a system that is a fair, inclusive, high-quality and fit for the future.

We are hugely excited to launch our new strategy to 2030 and incredibly grateful to all those colleagues and partners who have invested their time in helping shape our path to the future. The collaborative effort, the clear connection to our purpose and the commitment to the success of the millions of learners that we’ll support over the coming years, has been both humbling and inspiring.

STRATEGIC REPORT

Achievements and performance

As we enter a new academic year, it is important for us to reflect on what we have achieved over the past 12 months and review our impact on learners, institutions and educators, the education system and wider society. We are proud to have recently published our second Impact Report, designed to assess whether NCFE’s activities are having the intended outcomes, from delivering learning and progression opportunities to tackling disadvantaged and influencing wider educational policy. A copy of our Impact Report can be found at https://www.ncfe.org.uk/social-impact-report-2024 and we have included some of our key achievements in this report.

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NCFE Trustees' Report

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NCFE

Trustees' Report

Energy and Carbon Report

We report under the UK energy and carbon reporting requirements (‘SECR’) and have set out in the table below our direct emissions.

GHG emission and energy data

Quantification and reporting methodology

We have followed the 2024 HM Government Environmental Guidelines. We have also used the GHG Reporting Protocol - Corporate Standard and have used the 2023 UK Government’s Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e.

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NCFE

Trustees' Report

Measures taken to improve energy efficiency

NCFE has continued to utilise a range of energy efficient measures including.

• Changed Hot Water Tanks from domestic to commercial tanks for improved efficiency and consumption reduction.

NCFE purchases 100% renewable electricity and natural gas for our Q6 Office and recognised by the REGOs and GOOs certification schemes which validate that the energy is from appropriately accredited renewable sources.

Additional voluntary reporting activities

The majority of NCFE’s carbon footprint comprises Scope 3 emissions from business travel i.e. fuel associated with transport (personal cars on business use) where the organisation does not operate the vehicle / service. Although this data is outside the mandatory requirements of the ‘Energy and Carbon Report, the organisation voluntarily reports a full carbon emissions data set (including all Scope 3emissions from business travel) on an annual basis.

FINANCIAL REVIEW

During the last two years, NCFE has navigated challenging financial conditions: cost of living pressures, developing and delivering large and demanding qualifications such as T Levels, responding to the Level 2 and Level 3 qualification reforms and continuing to invest in and strengthen our Awarding Organisation. After reporting two consecutive years of deficits, we embarked on a multi-year financial recovery plan that would see us return to generating a positive surplus without compromising on our ambition or the investments we plan to make.

We are delighted that to report that we have made significant progress against this plan, with a reported net surplus of £0.2m (2023: £7.9m deficit) in 2024.

During the year, our income grew £5.4m (12.7%) to £48.1m. This was, in part, due to the inclusion of a full-year’s results of our subsidiary company Active IQ which was acquired in November 2022 and 12% growth in our Awarding Organisation.

Despite the growth in income, our total expenditure during the year was down £0.7m to £50.1m (2023: £50.8m). This is the result of hard work, a restructure and realignment of some of our teams and resources early in the year and focused cost control. This cost control has not compromised the investments we continue to make in our Awarding Organisation in key areas such as: Leadership and Management, Governance, Dedicated Expertise and Capacity and a series of Transformation Programmes that will see us replace our core Finance, Customer Management and Assessment and Awarding platforms.

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NCFE

Trustees' Report

Investment policy, objectives and performance

Under its Articles of Association, the Trustees have the authority to invest as they see fit in order to meet the charity’s purpose. We invest our long-term reserves through a ‘managed funds’ approach and during the year, we appointed Barclays Private Bank as an additional fund manager to Brewin Dolphin.

The headline objective of our investment portfolios is to protect its capital value in real terms and maximise the return on investment for the acceptable and agreed level of risk. To achieve this, our fund mangers are permitted to invest in the following assets and allocations:

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NCFE

Trustees' Report

The performance of the portfolios is monitored by the Board of Trustees and the Audit, Risk and Investment Committee. Having experienced a few years of volatility, the Trustees are pleased with the performance during 2024, with the portfolio having recovered its initial losses and are satisfied that given the long-term investment horizons, our investment portfolios should generate a better level of return than would have been achieved had the monies been held as cash.

PRINCIPAL RISKS AND UNCERTAINTIES

Our principal risks are recorded on the Strategic Risk Register and updated and reviewed regularly by the Executive and the Audit, Risk and Investment Committee. The register captures risk ratings and controls in place to mitigate risks where possible.

• Impact of changes in Government policy

NCFE relies on indirect government funding via colleagues, independent training providers and schools and therefore is exposed to changes in government policy direction and funding for education. A recent example of this is the Department for Education’s reform of Level 2 and Level 3 qualifications and the removal of funding for some of our qualifications. This is mitigated to some extent with NCFE winning tenders for the development and delivery of T-Level qualifications which grants NCFE an exclusive licence to deliver the T Levels awarded. NCFE continues to work closely with government bodies, regulators, stakeholders and customers to ensure influence in decision making and be as proactive as possible in relation to changes to policy and regulatory direction.

• Financial pressure within the education sector

The disruption and volatility caused by high levels of inflation and interest rates have placed considerable financial pressures on our sector. Our centres are having to carefully manage their finances and without support, some may struggle to continue to trade. This in turn presents a risk to NCFE either through loss of income and surplus or by monies due from customers becoming uncollectable. We manage this exposure through credit monitoring and regular credit control meetings to identify customers that may present a risk.

Furthermore, our market for qualifications and assessments is changing with a shift towards larger, more complicated, and costly qualifications which is impacting on gross margins. We manage this through robust business planning, budget setting, performance monitoring and cash-flow forecasting processes, ensuring our cost base is aligned to our income levels and our businesses are sustainable.

An increasing reliance on data

Due to changes in the regulatory frameworks, and a need for data sharing between the different aspects of the educational system to be improved, there has been a focus from educational regulators on the collection of significant volumes of often complex data sets. In response to this we have invested in a dedicated regulatory data team, which oversees the management of timely submission of data returns and leads on improving the data that is collected to ensure appropriate support and management is maintained.

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NCFE

Trustees' Report

Delivery of Transformation Projects within NCFE

The Transformation programme comprises several projects, designed to elevate NCFE’s position within the education sector, align different parts of the NCFE organisation, improve the quality and efficiency of underlying business processes and develop innovative ways to address educational challenges. The programme requires significant investment from NCFE, with the projects being at various stages of discovery or implementation and there is a risk that the intended benefits of the programme are not delivered. In order to mitigate this, a number of controls have been put in place, including; a programme management structure including boards at workstream, project, programme and executive level, named accountable owners and leads for each of the projects and the requirement for investment to be business cased and approved by the board of Trustees.

RESERVES POLICY AND GOING CONCERN

The Trustees have reviewed the Charity’s needs for reserves in line with guidance issued by the Charity Commission. At 31 July 2024, the Group had reserves of £31.9m (2023: £31.8m). All reserves are unrestricted funds.

The Reserves policy sets out a minimum level of reserves of £24.3m to satisfy the Group’s commitments and protect it from any significant financial shocks. The remaining reserves will be available for the delivery of the strategic plan aimed at maximising our social impact and ensuring a sustainable future for the Group.

Going Concern

The Trustees have considered the company’s current and future prospects and its availability of financing and are satisfied that the company can continue to pay its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements. For this reason, the Trustees continue to adopt the going concern basis of preparation for these financial statements.

STRUCTURE, GOVERNANCE AND MANAGEMENT

NCFE is a company limited by guarantee, governed by its Articles of Association dated 10 February 1994 and last amended on 19 August 2020. It is a registered charity with the Charity Commission. Anyone over the age of 18 can become a member of the company and there are currently 6 members (2023: 6), each of whom agrees to contribute £1 in the event of the Charity winding up.

The members of the Board of Trustees, who are directors for the purposes of company law, are listed on page 1.

Method of appointment or election of Trustees

The management of the company and the group is the responsibility of the Trustees who are elected and co-opted under the terms of the Articles of Association.

The Chair and Deputy Chair of the Trustees is nominated in line with the Articles of Association by Trustees.

Individual Trustees are sought when a vacancy arises on the Board. The Board seeks to maintain a reasonable balance of gender, ethnicity, skills and work backgrounds. They will target individuals who have the requisite mix for any specific vacancy. The Board makes a positive effort to remove, reduce or prevent obstacles to people being trustees, allocating budgets, where necessary, to achieve this within the charity’s available resources.

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NCFE

Trustees' Report

Trustees serve a 3 year term, at the end of which they may seek re-election. There is no outside party who can appoint trustees.

In accordance with the Articles of Association (14.2) no Director shall serve in office for more than nine consecutive years provided that a Director may be reappointed annually thereafter by the Board if there are exceptional circumstances.

Trustee induction and training

All new Trustees undergo a detailed induction at which members of the Executive brief them on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the committee and decision-making processes, the business plan and the recent financial performance of the charity. During the induction they are also introduced to numerous key members of staff.

The Trustees undertake an annual self-assessment of performance which will either take the form of a one-to-one meeting with the Chair or Deputy Chair (for the Chair of Trustees) or a survey. A skills assessment will be undertaken at junctures where it is required for succession planning purposes or new members of the board join.

Organisational structure and decision making

The Board of Trustees, which can have up to 12 members, administers the charity.

The Board meets at least 4 times a year, at least one meeting of which is extended to enable members to give greater consideration to the future strategic direction of the organisation, as well as ensuring that the organisation’s charitable purposes, and its external environment in which it works, continue to be relevant and valid.

Members also meet with the Executive between quarterly formal meetings to exchange views and receive updates on the organisation’s progress. As stated above, none of the Trustees are directly involved in the operational activity of the Group. Where there are any conflicts, these are carefully reported, recorded and managed.

A Chief Executive is appointed by the Trustees to manage the day-to-day operations of the charity. To facilitate effective operations, the Chief Executive has delegated authority, within terms of delegation approved by the Trustees, for operational matters including finance, employment and education-related activity.

The Chief Executive manages the Executive who have Directorate level responsibility. Within each Directorate there are a number of teams each of which has a manager who sits as part of the Management team group with responsibility for operational activity.

Charity Governance Code

The Board applies the Charity Governance Code as an internal framework to review and monitor its own performance and governance. Compliance against the Code is scrutinised by the Audit, Risk and Investment Committee and reported to the main Board on an annual basis. The charity can demonstrate it has adopted the Code with an action plan in place for 2025 which will ensure there is continuous improvements.

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NCFE

Trustees' Report

Related parties

The links between Board members and the organisations in which they hold senior positions are disclosed in note 24.

Pay policy for senior staff

The company’s approach for determining salaries is set out in its Pay and Reward policy, which is published on the charity’s website aligning to the requirements of the Charity Governance Code. All salaries are set and approved as follows:

• Salaries for other colleagues are guided by external benchmarking and proposed by Leaders in line with the Pay and Reward Policy and within the confines of departmental budgets agreed by the Board of Trustees each year.

Colleague involvement and employment of disabled people

The company conducts a colleague engagement survey quarterly in order to give colleagues the opportunity to provide feedback and suggestions. All line managers further engage colleagues in engagement plans, to promote continuous improvement. There are numerous communication channels used across the business, including the People Committee and the Equality, Diversity and Inclusion (ED&I) Committee. There is a regular internal newsletter to communicate key messages and colleagues are offered an exit interview upon leaving the organisation.

In accordance with the company’s Equality, Diversity and Inclusion policy, there are long established fair employment practices in place regarding the recruitment, selection, retention and training of disabled colleagues. The company has become a Disability Confident Employer, guaranteeing interviews to all disabled candidates, subject to meeting the essential requirements of a vacant role. This data is monitored to ensure fairness and positive impact. All colleagues complete mandatory training in relation to employment matters and adhere to company policies in that regard. Full details of these policies are available from the company.

Disclosure of information to auditor

Each of the persons who are Trustees at the time when the Report of the Board of Trustees is approved has confirmed that:

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NCFE

Trustees' Report

Statement of Responsibilities (within Trustees Report)

The trustees (who are also the directors of NCFE for the purposes of company law) are responsible for preparing the trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

Company law requires the trustees to prepare financial statements for each financial year. 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 parent charitable company and the group and of the incoming resources and application of resources, including its income and expenditure, of the charitable group for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that can disclose with reasonable accuracy at any time the financial position of the parent charitable company and the group 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 parent charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Approved by the trustees of the charity on ....................18 December 2024and signed on its behalf by:

Deborah Jenkins 18 Dec 2024 13:44:10 GMT (UTC +0)

......................................... Ms D M Jenkins MBE DL Trustee

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NCFE

Independent Auditor's Report to the Members of NCFE

Opinion

We have audited the financial statements of NCFE (the 'charitable parent company') and its subsidiary (the 'group') for the year ended 31 July 2024, which comprise the Consolidated Statement of Financial Activities, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is United Kingdom Accounting Standards, comprising Charities SORP - FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and applicable law (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 auditor 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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the financial statements were authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

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 auditor’s 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.

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NCFE

Independent Auditor's Report to the Members of NCFE

Opinion on other matter prescribed by the Companies Act 2006

Matters on which we are required to report by exception

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

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

Responsibilities of trustees

As explained more fully in the Statement of Responsibilities (within Trustees Report) (set out on page 13), the trustees 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 charity'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 charity or to cease operations, or have no realistic alternative but to do so.

Auditor 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 auditor’s 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:

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NCFE

Independent Auditor's Report to the Members of NCFE

Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Qualifications and examinations regulations, and compliance with the UK Companies Act and Charities Act.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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NCFE

Independent Auditor's Report to the Members of NCFE

Use of our report

This report is made solely to the charitable parent company's trustees, 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 group's trustees those matters we are required to state to them in an auditor’s 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 parent company and its trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Simon Brown 20 Dec 2024 11:16:15 GMT (UTC +0)

...................................... Simon Brown BA ACA DChA (Senior Statutory Auditor) For and on behalf of Azets Audit Services Chartered Accountants Statutory Auditor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS

20 December 2024 Date:.............................

Azets Audit Services is a trading name of Azets Audit Services Limited..

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NCFE

Consolidated Statement of Financial Activities for the Year Ended 31 July 2024 (Including Consolidated Income and Expenditure Account and Statement of Total Recognised Gains and Losses)

Note
Income and Endowments from:
Charitable activities
3
Investment income
4
Total Income
Expenditure on:
Raising funds
5
Charitable activities
6
Total Expenditure
Gains/losses on investment assets
Net income/(expenditure)
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward
21		 Total
2024
£ 000
48,003
593
48,596
(68)
(50,164)
(50,232)
1,789
153
153
31,782
31,935		 Total
2023
£ 000
42,480
554
43,034
(74)
(50,777)
(50,851)
(93)
(7,910)
(7,910)
39,692
31,782

All of the group's activities derive from continuing operations during the above two periods. The funds in both years are unrestricted funds only.

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NCFE

(Registration number: 02896700) Consolidated Balance Sheet as at 31 July 2024

2024 2023
Note £ 000 £ 000
Fixed assets
Intangible assets 12 4,842 4,461
Tangible assets 13 1,974 2,188
Investments 14 15,431 19,108
22,247 25,757
Current assets
Stocks 15 49 258
Debtors 16 5,877 6,177
Cash at bank and in hand 17 9,456 5,635
15,382 12,070
Creditors:Amounts falling due within one year 18 (5,694) (6,045)
Net current assets 9,688 6,025
Net assets 31,935 31,782
Funds of the group:
Unrestricted income funds
Designated funds 24,300 19,500
General funds 7,635 12,282
Total unrestricted funds 31,935 31,782
Total funds 21 31,935 31,782

The financial statements on pages 18 to 45 were approved by the trustees, and authorised for issue on ....................18 December 2024and signed on their behalf by:

Deborah Jenkins 18 Dec 2024 13:44:10 GMT (UTC +0)

.........................................

Ms D M Jenkins MBE DL Trustee

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NCFE

(Registration number: 02896700) Balance Sheet as at 31 July 2024

2024 2023
Note £ 000 £ 000
Fixed assets
Intangible assets 12 2,621 1,611
Tangible assets 13 1,970 2,177
Investments 14 18,975 22,652
23,566 26,440
Current assets
Stocks 15 4 212
Debtors 16 5,419 6,150
Cash at bank and in hand 17 9,161 5,230
14,584 11,592
Creditors:Amounts falling due within one year 18 (5,341) (5,605)
Net current assets 9,243 5,987
Net assets 32,809 32,427
Funds of the charity:
Unrestricted income funds
Designated funds 24,300 19,500
Unrestricted funds 8,509 12,927
Total unrestricted funds 32,809 32,427
Total funds 21 32,809 32,427

The financial statements on pages 18 to 45 were approved by the trustees, and authorised for issue on ....................18 December 2024and signed on their behalf by:

Deborah Jenkins 18 Dec 2024 13:44:10 GMT (UTC +0)

.........................................

Ms D M Jenkins MBE DL Trustee

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NCFE

Consolidated Statement of Cash Flows for the Year Ended 31 July 2024

Note
Cash flows from operating activities
Net cash income/(expenditure)
Adjustments to cash flows from non-cash items
Depreciation
13
Amortisation
12
Investment income
4
Loss on disposal of intangible fixed assets
Revaluation of investments
FA inv - UK unlisted other shs provision charge
Working capital adjustments
Decrease in stocks
15
Decrease/(increase) in debtors
16
(Decrease)/increase in creditors
18
Increase in deferred income
18
Net cash flows from operating activities
Cash flows from investing activities
Interest receivable and similar income
4
Purchase of intangible fixed assets
12
Purchase of tangible fixed assets
13
Purchase of investments
14
Sale of investments
14
Net cash flows from investing activities
14
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 August
Cash and cash equivalents at 31 July		 2024
£ 000
153
343
1,138
(593)
180
-
118
1,339
209
300
(418)
67
1,497
593
(1,700)
(129)
(200)
3,760
2,324
3,821
5,635
9,456		 2023
£ 000
(7,910)
452
2,790
(554)
2,556
99
-
(2,567)
142
(252)
744
7
(1,926)
554
(5,803)
(139)
(1,608)
3,904
(3,092)
(5,018)
10,653
5,635

All of the cash flows are derived from continuing operations during the above two periods.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

1 Charity status

The charity is limited by guarantee, incorporated in Wales, and consequently does not have share capital. Each of the trustees is liable to contribute an amount not exceeding £1 towards the assets of the charity in the event of liquidation.

The address of its registered office is: Q6 Quorum Park, Benton Lane, Newcastle upon Tyne, NE12 8BT

2 Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

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 applicable in the UK and Republic of Ireland (FRS 102)) (issued in January 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The financial statements are prepared in sterling which is the functional currency of the charity and rounded to the nearest £1,000.

Basis of preparation

NCFE 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 notes.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the charity and its subsidiary undertakings drawn up to 31 July 2024.

No statement of financial activities is presented for the charity as permitted by section 408 of the Companies Act 2006. The charity made a surplus after tax for the financial year of £382k (2023 - deficit of £6,850k).

On 22 November 2022, Active IQ limited became part of the group and the trading period 23 November to 31 July 2023 was consolidated in the prior year. The full year of results to the year to 31 July 2024 is included in the current year financial statements.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

A subsidiary is an entity controlled by the charity. Control is achieved where the charity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the statement of financial activities from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the charity and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Going concern

The trustees consider that there are no material uncertainties about the group's ability to continue as a going concern nor any significant areas of uncertainty that affect the carrying value of assets held by the group.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Estimation uncertainty and judgements

Estimates and judgements 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.

Key sources of estimation uncertainty

Estimates included within these financial statements include depreciation and amortisation charges based upon the useful economic lives of both tangible and intangible assets, and provisions against debtors. None of the estimates made in the preparation of these financial statements are considered to carry significant estimation uncertainty, nor to bear significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Critical areas of judgement

Judgement is also required in the assessment of the carrying values of fixed assets and investments, in the performing impairment tests. The impairment test calculations make assumptions around future trading performance, customer retention, cost rationalisation and external factors such as government funding. No material uncertainty is considered to exist in relation to this key area of judgement.

Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment. Grants are of a revenue nature, and as such are credited to income to match them with the expenditure to which they relate.

Deferred income

Deferred income represents amounts received for future periods and is released to incoming resources in the period for which, it has been received. Such income is only deferred when:

Investment income

Interest receivable is included when receivable by the company.

Charitable activities

Income

Income from charitable activities represents the values of fees for the provision of examinations and assessments and related services.

Registration income is included within income resources in the period in which the relevant registration is made as all performance obligations have been met.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Other income

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.

Expenditure

All expenditure is recognised once there is a legal or constructive obligation to that expenditure, it is probable settlement is required and the amount can be measured reliably. All expenditure is accounted for on an accruals basis. All expenses, including support costs are allocated to the applicable expenditure heading on a basis consistent with the use of resources.

Raising funds

These are costs incurred in attracting voluntary income, the management of investments and those incurred in trading activities that raise funds.

Charitable activities

Charitable expenditure include expenditure relating to the provision of examination and assessment services and include both the direct costs and support costs relating to these activities.

Grant expenditure

Grants payable are payments made to third parties in the furtherance of the charity’s objects. Grants are accounted for when either the recipient has a reasonable expectation that they will receive a grant and the Trustees have agreed to pay the grant without condition, or the recipient has a reasonable expectation that they will receive a grant and that any condition attaching to the grant is outside of the control of the Charity.

Support costs

Support costs are those costs incurred directly in support of expenditure on the objects of the group and include project management carried out at the head office.

Governance costs

These include the costs attributable to the charity’s compliance with constitutional and statutory requirements, including audit, strategic management and trustees meetings and reimbursed expenses.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Taxation

The charity 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 charity 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.

Goodwill

Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Intangible assets are stated in the Balance Sheet at cost less accumulated amortisation and impairment. They are amortised on a straight line basis over their estimated useful lives.

Software development costs are recognised as an intangible asset when all of the following criteria are demonstrated:

Brands acquired are valued as the difference between the identifiable net assets of the purchase, and the consideration paid.

Product development costs are recognised as intangible assets measured at cost.

Intellectual property is capitalised at cost on acquisition and amortised over their estimated useful lives using an amortisation method that reflects the pattern of their consumption.

Intangible assets are reviewed for impairment where market conditions or other factors indicate a reduction in future economic benefits. Impairment losses are recognised in the statement of financial activities where an asset’s realisable amount exceeds its carrying value.

Amortisation

Amortisation is provided on intangible fixed assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:

Asset class Amortisation method and rate Brands 5 Years straight line Software and Intellectual property 2- 5 Years straight line Product development 4 Years straight line

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Tangible fixed assets

Individual fixed assets costing £1,000.00 or more are initially recorded at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Costs include the original purchase price plus any further costs directly attributable to bringing the asset to its working condition for its intended use.

Depreciation and amortisation

Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:

Asset class Depreciation method and rate Long Term Leasehold Over Term of Lease Fixtures and Fittings 5-15 years straight line Office and Computeer Equipment 3-5 years straight line

Impairment of fixed assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the statement of financial activities.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the statement of financial activities.

Investments

Investments in subsidiaries and associates are measured at cost paid less impairment. For investments in subsidiaries acquired for consideration including the issue of shares qualifying for merger relief, cost is measured by reference to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored.

Fixed asset investments

Listed investments, which have been classified as fixed asset investments, are measured initially at cost and subsequently at fair value. The statement of financial activities includes the net gains and losses arising on revaluations and disposals throughout the year.

Fixed asset investments in unquoted companies are stated at cost less impairment.

Stock

Stock is valued at the lower of cost and estimated selling price less costs to complete and sell, after due regard for obsolete and slow moving stocks.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the charity will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the charity does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Provisions

Other liabilities and provisions 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 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. Theunwinding of the iscount is recognised within interest payable and similar charges.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Fund structure

Unrestricted income funds are general funds that are available for use at the trustees discretion in furtherance of the objectives of the group.

The aim and use of each designated fund, is set out in the notes to the financial statements.

Investment income, gains and losses are allocated to the appropriate fund

Pensions and other post retirement obligations

The group operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the balance sheet.

NCFE makes an employer’s contribution on pensionable pay, provided that the employee makes a minimum contribution. These amounts are paid over to the fund on a monthly basis.

Employee benefits

Short term benefits

Short-term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense in the period in which the employee’s entitlement to the benefit accrues.

Financial instruments

Classification

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Recognition and measurement

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the group transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the group, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Fair value measurement

The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If the market is not active and recent transactions of an identical asset on their own are not a good estimate of fair value, the fair value is estimated by using a valuation technique.

3 Income from charitable activities

Educational resources
Educational resources		 Unrestricted
funds
General
£ 000
48,003
Unrestricted
funds
General
£ 000
42,480		 Total
2024
£ 000
48,003
Total
2023
£ 000
42,480

4 Investment income

Interest receivable on bank deposits
Other income from fixed asset investments
Income from rents		 Unrestricted
funds
General
£ 000
79
385
129
593		 Total
2024
£ 000
79
385
129
593		 Total
2023
£ 000
75
346
133
554

5 Expenditure on raising funds

a) Investment management costs

Other investment management costs;
Administration of the investments		 Unrestricted
funds
General
£ 000
68
68		 Total
2024
£ 000
68
68		 Total
2023
£ 000
74
74

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

6 Expenditure on charitable activities

Examination and assessment activities
Examination and assessment activities		 Activity
undertaken
directly
£ 000
43,394
Activity
undertaken
directly
£ 000
44,463		 Activity
support
costs
£ 000
6,770
Activity
support
costs
£ 000
6,314		 2024
£ 000
50,164
2023
£ 000
50,777

In addition to the expenditure analysed above, there are also governance costs of £281,000 (2023 - £193,000) which relate directly to charitable activities. See note 7 for further details.

7 Analysis of governance and support costs

Support costs allocated to charitable activities
Governance
costs
£ 000
Board Meetings
33
Audit Fees - Governance
31
Subsidary Audit- Governance
13
Other Fees
204
Salaries
-
Employers NI
-
Pension Costs
-
281		 Staff costs
£ 000
-
-
-
-
5,490
514
485
6,489		 Total
2024
£ 000
33
31
13
204
5,490
514
485
6,770		 Total
2023
£ 000
40
28
14
111
5,139
512
470
6,314

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

8 Net incoming/outgoing resources

Net outgoing resources for the year include:

Operating leases - other assets
Audit fees
Other non-audit services
Loss on disposal of intangible fixed assets
Depreciation of fixed assets
Amortisation of intangibles and goodwill		 2024
£ 000
51
44
2
180
343
1,138		 2023
£ 000
73
40
2
2,556
898
2,460

9 Trustees remuneration and expenses

During the year 5 (2023: 5) trustees were reimbursed travelling expenses amounting to £2,248 (2023: £1,705). The amount owed at the year end amounted to £10 (2023: £49).

No trustees, nor any persons connected with them, have received any remuneration from the group during the year.

No trustees have received any other benefits from the charity during the year.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

10 Staff costs

The aggregate payroll costs were as follows:

The aggregate payroll costs were as follows:
Staff costs during the year were:
Wages and salaries
Social security costs
Pension costs		 2024
£ 000
30,432
2,865
2,732
36,029		 2023
£ 000
28,477
2,724
2,521
33,722

During the year, redundancy payments totalling £408,586 (2023: £189,000) were paid as part of the continuing restructuring of the business. These are included within staff costs.

The monthly average number of persons (including senior management / leadership team) employed by the group during the year was as follows:

Employees 2024
No
1,438		 2023
No
1,014

The number of employees whose emoluments fell within the following bands was:

£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£120,001 - £130,000
£130,001 - £140,000
£150,001 - £160,000
£160,001 - £170,000
£170,001 - £180,000
£190,001 - £200,000
Over £200,000		 2024
No
19
12
3
6
4
1
1
-
1
1
-
-
1		 2023
No
18
9
2
4
3
1
2
1
-
-
1
1
-

The total employee benefits of the Key Management Personnel of the group were £1,335,505 (2023 - £1,116,886).

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

11 Auditors' remuneration

Audit of the financial statements
Other fees to auditors
Taxation compliance services
12 Intangible fixed assets
Group
Cost
At 1 August 2023
Additions
Disposals
At 31 July 2024
Amortisation
At 1 August 2023
Charge for the year
Eliminated on disposals
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023		 Goodwill and
brands
£ 000
7,814
-
-
7,814
5,311
578
-
5,889
1,925
2,503		 Software and
Intellectual
Property
£ 000
1,909
5
-
1,914
1,246
226
-
1,472
442
663		 2024
£ 000
44
2
Research
and
development
£ 000
1,895
1,695
(510)
3,080
601
334
(330)
605
2,475
1,294		 2023
£ 000
40
2
Total
£ 000
11,618
1,700
(510)
12,808
7,158
1,138
(330)
7,966
4,842
4,460

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Charity

Charity
Cost
At 1 August 2023
Additions
Disposals
At 31 July 2024
Amortisation
At 1 August 2023
Charge for the year
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023		 Goodwill and
brands
£ 000
4,926
-
-
4,926
4,926
-
4,926
-
-		 Software and
Intellectual
Property
£ 000
1,371
5
-
1,376
839
226
1,065
311
532		 Research
and
development
£ 000
1,349
1,579
(172)
2,756
270
176
446
2,310
1,079		 Total
£ 000
7,646
1,584
(172)
9,058
6,035
402
6,437
2,621
1,611

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

13 Tangible fixed assets

Group

Cost
At 1 August 2023
Additions
At 31 July 2024
Depreciation
At 1 August 2023
Charge for the year
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023
Charity
Cost
At 1 August 2023
Additions
At 31 July 2024
Depreciation
At 1 August 2023
Charge for the year
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023		 Leasehold
Land and
buildings
£ 000
1,419
-
1,419
295
29
324
1,095
1,124
Leasehold
Land and
buildings
£ 000
1,419
-
1,419
294
29
323
1,096
1,125		 Furniture and
equipment
£ 000
2,806
17
2,823
1,913
216
2,129
694
893
Furniture and
equipment
£ 000
2,718
17
2,735
1,838
209
2,047
688
880		 Computer
equipment
£ 000
1,811
112
1,923
1,640
98
1,738
185
171
Computer
equipment
£ 000
1,801
112
1,913
1,629
98
1,727
186
172		 Total
£ 000
6,036
129
6,165
3,848
343
4,191
1,974
2,188
Total
£ 000
5,938
129
6,067
3,761
336
4,097
1,970
2,177

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

14 Fixed asset investments
Group
Other investments
Shares in group undertakings and participating interests
Other investments
Listed
investments
£ 000
Cost or Valuation
At 1 August 2023
18,990
Additions
-
Disposals
(3,759)
At 31 July 2024
15,231
Provision for impairment
Charge for year
-
At 31 July 2024
-
Net book value
At 31 July 2024
15,231
At 31 July 2023
18,990		 2024
£ 000
15,431
Other
investments
£ 000
118
200
-		 2023
£ 000
19,108
Total
£ 000
19,108
200
(3,759)
15,549
118
118
15,431
19,108
318
118
118
200
118

The historical cost of the portfolio is £14,339,788 (2023: £20,612,000).

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Significant holdings

There was no holding in the portfolio greater than 5%

Type 2024 2023
UK Bonds 1,012 1,230
Overseas Bonds 649 2,712
UK Equities 1,616 2,733
Overseas Equities 10,935 7,708
Pooled Funds 1,019 4,607
Total 15,231 18,990

All listed investments are held in funds managed by Brewin Dolphin Investment Management and Barclays Private Bank on behalf of the company.

Charity
Shares in group undertakings and participating interests
Other investments		 2024
£ 000
3,544
15,431
18,975		 2023
£ 000
3,544
19,108
22,652

Shares in group undertakings and participating interests

Shares in group undertakings and participating interests
Cost
At 1 August 2023
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023		 Subsidiary
undertakings
£ 000
3,544
3,544
3,544
3,544		 Total
£ 000
3,544
3,544
3,544
3,544

38

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Details of undertakings

Details of the investments in which the group holds 20% or more of the nominal value of any class of share capital are as follows:

Country of Proportion of voting Proportion of voting Principal
Undertaking incorporation Holding rights and shares held activity
2024 2023
Subsidiary undertakings
Developing
Active IQ Limited England and
Wales		 Ordinary
share capital		 100% 100% and
providing
fitness
qualifications

Subsidiaries

The profit for the financial period of Active IQ Limited was £350,894 (2023 - £264,320) and the aggregate amount of capital and reserves at the end of the period was £742,585 (2023 - £391,701). The company was purchased on 22 November 2022. The consideration was £3,544,000 which includes goodwil of £2,888,000.

Other investments

Cost or Valuation
At 1 August 2023
Additions
Disposals
At 31 July 2024
Provision for impairment
Charge for year
At 31 July 2024
Net book value
At 31 July 2024
At 31 July 2023		 Listed
investments
£ 000
18,990
-
(3,759)
15,231
-
-
15,231
18,990		 Other
investments
£ 000
118
200
-
318
118
118
200
118		 Total
£ 000
19,108
200
(3,759)
15,549
118
118
15,431
19,108

The market value of the listed investments at 31 July 2024 was £15,231,000 (2023 - £18,990,000).

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

15 Stock

Stocks
16 Debtors
Trade debtors
Due from group undertakings
Prepayments
Other debtors		 Group
2024
£ 000
2023
£ 000
49
258
Group
2024
£ 000
2023
£ 000
4,951
5,168
-
-
887
982
39
27
5,877
6,177		 Charity
2024
£ 000
2023
£ 000
4
212
Charity
2024
£ 000
2023
£ 000
4,349
4,397
282
814
776
912
12
27
5,419
6,150		 Charity
2024
£ 000
2023
£ 000
4
212
Charity
2024
£ 000
2023
£ 000
4,349
4,397
282
814
776
912
12
27
5,419
6,150
6,150

Included within trade debtors above is a group bad debt provision of £724,000 (2023: £876,000) and a charity only bad debt provision of £547,000 (2023: £777,000).

17 Cash and cash equivalents

Group
2024
£ 000
2023
£ 000
Cash at bank
9,456
5,635
18 Creditors: amounts falling due within one year
Group
2024
£ 000
2023
£ 000
Trade creditors
1,187
1,315
Other taxation and social
security
799
801
VAT
152
192
Other creditors
520
278
Accruals
2,938
3,428
Deferred income
98
31
5,694
6,045		 Charity
2024
£ 000
2023
£ 000
9,161
5,230
Charity
2024
£ 000
2023
£ 000
1,089
1,245
749
752
148
147
520
241
2,746
3,199
89
21
5,341
5,605		 Charity
2024
£ 000
2023
£ 000
9,161
5,230
Charity
2024
£ 000
2023
£ 000
1,089
1,245
749
752
148
147
520
241
2,746
3,199
89
21
5,341
5,605
5,605

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

Deferred income

Group

Deferred income at 1 August 2023
Resources deferred in the period
Amounts released from previous periods
Deferred income at year end
Charity
Deferred income at 1 August 2023
Resources deferred in the period
Amounts released from previous periods
Deferred income at year end		 2024
£ 000
31
98
(31)
98
2024
£ 000
21
89
(21)
89		 2023
£ 000
24
31
(24)
31
2023
£ 000
24
21
(24)
21

19 Obligations under leases and hire purchase contracts

Operating lease commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

Land and buildings
Within one year
Between one and five years
Other
Within one year
Between one and five years		 Group
2024
£ 000
2023
£ 000
23
28
96
25
119
53
43
48
44
28
87
76		 Charity
2024
£ 000
2023
£ 000
23
28
96
25
119
53
22
30
33
7
55
37		 Charity
2024
£ 000
2023
£ 000
23
28
96
25
119
53
22
30
33
7
55
37
53
30
7
37

20 Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £2,732,000 (2023 : £2,004,000).

Contributions totalling £255,000 (2023 : £277,810) were payable to the scheme at the end of the year and are included in creditors.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

21 Funds

Group

Unrestricted
General
Designated
Total funds
Charity
Unrestricted funds
General
Designated
Total funds		 Balance at
1 August
2023
£ 000
12,282
19,500
31,782
Balance at
1 August
2023
£ 000
12,927
19,500
32,427		 Incoming
resources
£ 000
Resources
expended
and Net
investment
gains/losses
£ 000
48,596
(48,443)
-
-
48,596
(48,443)
Incoming
resources
£ 000
Resources
expended
and Net
investment
gains/losses
£ 000
44,252
(43,870)
-
-
44,252
(43,870)		 Transfers
£ 000
(4,800)
4,800
-
Transfers
£ 000
(4,800)
4,800
-		 Balance at
31 July
2024
£ 000
7,635
24,300
31,935
Balance at
31 July
2024
£ 000
8,509
24,300
32,809

The total funds of the charitable company include the following designated fund which has been set aside out of unrestricted funds by the Trustees to ensure that the Charity remains financially sound in the case of any significant changes to the market.

On 1 December 2021 the assets and liabilities of the subsidiary undertaking Skills Forward Limited were transferred to NCFE at net book value. On transfer the investment cost was recognised as a merger reserve. The Trustees made the decision to eliminate the merger reserve by means of a transfer in the 31 July 2023 year end.

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

22 Analysis of net assets between funds

Group

Group
Intangible fixed assets
Tangible fixed assets
Fixed asset investments
Net current assets/(liabilities)
Total net assets
Intangible fixed assets
Tangible fixed assets
Fixed asset investments
Net current assets/(liabilities)
Total net assets
Charity
Intangible fixed assets
Tangible fixed assets
Fixed asset investments
Net current assets/(liabilities)
Total net assets
Intangible fixed assets
Tangible fixed assets
Fixed asset investments
Net current assets/(liabilities)
Total net assets		 Unrestricted
General
£ 000
4,842
1,974
15,431
9,688
31,935
Unrestricted
General
£ 000
4,461
2,188
19,108
6,025
31,782
Unrestricted
General
£ 000
2,621
1,970
18,975
9,243
32,809
Unrestricted
General
£ 000
1,611
2,177
22,652
5,987
32,427		 Total funds
£ 000
4,842
1,974
15,431
9,688
31,935
Total funds
at 31 July
2023
£ 000
4,461
2,188
19,108
6,025
31,782
Total funds
£ 000
2,621
1,970
18,975
9,243
32,809
Total funds
at 31 July
2023
£ 000
1,611
2,177
22,652
5,987
32,427

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NCFE

Notes to the Financial Statements for the Year Ended 31 July 2024

23 Analysis of net funds

Group

Group
Cash at bank and in hand
Net debt
Cash at bank and in hand
Net funds		 At 1 August
2023
£ 000
5,635
5,635
At 1 August
2022
£ 000
10,653
10,653		 Financing
cash flows
£ 000
3,821
3,821
Financing
cash flows
£ 000
(5,018)
(5,018)		 At 31 July
2024
£ 000
9,456
9,456
At 31 July
2023
£ 000
5,635
5,635

24 Related party transactions

Group

During the year the group made the following related party transactions:

Active IQ Limited

(This is a 100% Subsidiary)

The charity charged Active IQ Limited £120,000 (2023: £80,000) for administration support.. At the balance sheet date the amount due to Active IQ Limited was £282,035 (2023 - £813,529).

Charity

During the year the charity made the following related party transactions:

Kindling Limited

(Ms D M Jenkins MBE DL, a Trustee is also a Director of Kindling Limited which invoiced NCFE for Chair’s remuneration.)

The entity was invoiced £18,040 (2023: £20,347) for chair remuneration. At the balance sheet date the amount due to/from Kindling Limited was £Nil (2023 - £Nil).

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NCFE

Comparative Consolidated Statement of Financial Activities for the Year Ended 31 July 2023 (Including Consolidated Income and Expenditure Account and Statement of Total Recognised Gains and Losses)

Note
Income and Endowments from:
Charitable activities
3
Investment income
4
Total income
Expenditure on:
Raising funds
5
Charitable activities
6
Total expenditure
(Gain)/loss on programme related investments
Net expenditure
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward
21		 Unrestricted
£ 000
42,480
554
43,034
(74)
(50,777)
(50,851)
(93)
(7,910)
(7,910)
39,692
31,782		 Total
2023
£ 000
42,480
554
43,034
(74)
(50,777)
(50,851)
(93)
(7,910)
(7,910)
39,692
31,782

45