Ealing Educational Resources Trust Report and Financial Statements
31 Dec 2020
Charity number: 1057707
Ealing Educational Resources Trust Report and Financial Statements Contents
| Page | |
|---|---|
| Legal and administrative information | 1 |
| Report of the Trustees | 2 - 4 |
| Report of the Independent Auditor | 5 - 7 |
| Group Statement of Financial Activities | 8 |
| Charity Statement of Financial Activities | 9 |
| Group and Charity balance sheets | 10 |
| Group Cash Flow statement | 11 |
| Charity Cash Flow Statement | 12 |
| Notes forming part of the financial statements | 13 - 23 |
Ealing Educational Resources Trust Legal and administrative information
Trustees
Mr B F Abernethie (appointed 14 January 2021) Mr S P Barnes[ 1] (resigned 14 January 2021) Mr A Greenfield (appointed 14 January 2021) Mr S Hill[1 2] Mr C J Ker[1 2] (resigned 6 March 2020) Mr C D Parsons[1 2 ] Mr H B Robertson[1 ] (resigned 14 January 2021) Mr H Tennent (appointed 14 January 2021) Mr C A White[1 2]
1 Trustee holding title to freehold land and buildings at 401 Old Whitley Wood Lane, RG2 8QA 2 Trustee holding title to freehold land and buildings at Cadmore End, HP14 3PQ
Chief Executive Officer
Mr C A White (from 14 January 2021) Mr H B Robertson (until 14 January 2021)
Principal address
Amberley Wantage Road Harwell Oxfordshire OX11 0LL
Auditor
Dr J R Ayling BSc FCA 8 Troutbeck Avenue Leamington Spa CV32 6NE
Bankers
Bank of Scotland Barclays Bank Plc 38 St Andrew Square Wembley and Park Royal Edinburgh Acorn House EH2 2YR 36-38 Park Royal Road London NW10 7JA
1
Ealing Educational Resources Trust Report of the Trustees for the year ended 31 Dec 2020
The Trustees of Ealing Educational Resources Trust present their annual report and audited accounts for the year ended 31 December 2020 and confirm they comply with the requirements of the Charities Act 2011, the Trust Deed, FRS102, and the Charities SORP (FRS 102).
OBJECTIVES AND ACTIVITIES
The charitable objects of the Trust are the advancement of the education of children and young people. The objects also include any other charitable purpose for the benefit of the worldwide Christian fellowship known as the Plymouth Brethren Christian Church.
In furtherance of its objects, the Trust provides two premises, at a nominal charge, for an independent school based in Reading (the “School”), which has been run by OneSchool Global UK ("OSG") from 1 November 2019 and previously by Fulmer Education Trust ("FET"). One of these is a freehold premises for primary pupils, and the other is a leased premises for secondary pupils which is classified as a programme related investment.
The Charity also provides grant funding and other financial support to OSG / FET in order to enable it to provide a well balanced education at primary and secondary levels, for young people whose parents appreciate the Christian ethos.
The immediate aim of the Trust is to maintain its two premises in Reading, with the longer term aim being to provide new premises which are better suited to the needs of the School.
Success is measured in terms of the provision of appropriate facilities to OSG / FET whilst minimising expenditure. This, in turn, frees up funds for raising standards of education for all concerned and for the improvement of facilities for staff and pupils alike.
The Trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit and have had regard to it when reviewing their aims and objectives, and in planning their future activities. In particular they consider how planned activities will contribute to the educational aims and objectives they have set. During the year these activities included the provision of £81,000 (2019: £nil) of grant funding to OSG, £79,575 of grant funding having been provided to FET in 2019.
Volunteers are an integral part of the community ethos and values of the charity and there is a strong and willing group of volunteers who assist in charitable events and support the charity throughout the year.
ACHIEVEMENTS AND PERFORMANCE
Throughout the year the charity has continued to provide and maintain educational premises in Reading for use by OSG whilst continuing to seek better suited alternative premises.
The Charity has a wholly owned subsidiary company, Zest Trading UK Ltd ("Zest"), which undertakes trading activities. All profits chargeable to corporation tax are gifted to the Trust under a Deed of Covenant. During the current year, investment income from Zest has reduced as it undertook a program of reinvestment in its trading premises.
2
Ealing Educational Resources Trust Report of the Trustees for the year ended 31 Dec 2020
FINANCIAL REVIEW
In the year ended 31 December 2020 the Charity reported a net deficit of £112,704 (2019: surplus of £20,649), leaving the total funds of the Charity at £6,330,148 (2019: £6,442,852). The Group reported a net deficit of £88,137 for the year ended 31 December 2020 (2019: surplus of £20,649), leaving the total funds of the Group at £6,354,715 (2019: £6,442,852). All funds are unrestricted.
The Charity reporting a net deficit for 2020 is principally due to reduced donations from Zest combined with ongoing significant costs associated with the leased site for secondary pupils.
The Trust is supported and financed principally by profits from its trading subsidiary, Zest, plus other ad hoc donations and those raised by fundraising events. The profitability of Zest and the size and frequency of fundraising events are the factors most likely to influence the financial performance and position of the Trust. The Trustees believe that the Charity's funds are sufficient to mitigate any short to medium term risk of reduced funding.
The Trust's fundraising events principally operate within the Brethren community and professional fundraisers are not used. Neither the Charity nor any person acting on behalf of the Charity was subject to an undertaking to be bound by any voluntary scheme for regulating fund-raising, or voluntary standard for fund-raising in respect of activities on behalf of the Charity. The Trustees monitored the activities of those acting on behalf of the charity via the close community nature of the Plymouth Brethren Christian Church. No complaints were received about the Charity's fundraising activities and all participants were made aware of the requirement to protect vulnerable people and other members of the public.
The Trustees' policy is to maintain minimum free reserves at a level which equates to six months' unrestricted expenditure. This is approximately £200,000. At 31 December 2020 the free reserves of the Charity were £3,587,928 (31 December 2019: £3,629,323) which far exceeds this target.
PLANS FOR FUTURE PERIODS
The Trustees plan to continue to maintain the Reading primary and secondary premises, and to seek expert QC's and planning consultants' advice regarding potential for the Cadmore End site. Other, more appropriate sites continue to be searched for.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Ealing Educational Resources Trust is constituted by a Deed of Trust dated 13 August 1996, amended 4 March 1997, and is registered with the Charity Commission for England and Wales.
The Trustees who have served during the year and since the year end are set out on page 1. None of the Trustees, nor any person connected with them, received any remuneration from the Charity in the year ended 31 December 2020 (year ended 31 December 2019: none). The power to appoint trustees is vested in the existing Trustees subject to the Trust Deed requirement. Trustees are selected according to their own specialism in a particular field, and are expected to pursue that specialism. New trustees are instructed in the need to completely adhere to the ethos of the Trust and the School.
Since the Government imposed a general lockdown in response to the global COVID-19 pandemic on 23 March 2020, virtual meetings have been held via Zoom. The Charity has no employees.
The Trustees have examined the major strategic, business and operational risks which the Charity faces. Through the risk management processes established for the School, the Trustees are satisfied that the major risks identified have been adequately mitigated where necessary. It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed.
3
Ealing Educational Resources Trust Report of the Trustees for the year ended 31 Dec 2020
STATEMENT OF TRUSTEES' RESPONSIBILITIES
The Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Group and the Charity and of the incoming resources and application of resources of the Group and the Charity for that period. In preparing these financial statements, the Trustees are required to:
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charities SORP 2019 (FRS 102);
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group or Charity will continue in operation.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the Group and the Charity 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 Group and the Charity and financial information included on websites belonging to the Charity or Subsidiary. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Approved by the Trustees and signed on their behalf by:
26th October 2021
____ ______
Mr A Greenfield, Trustee Date
4
Report of the Independent Auditor To the Trustees of Ealing Educational Resources Trust
Opinion
I have audited the financial statements of Ealing Educational Resources Trust (the "Parent Charity") and its subsidiary (the "Group") for the year ended 31 December 2020, which comprise the Group and Charity Statements of Financial Activities, the Group and Charity Balance Sheets, the Group and Charity Cash Flow Statements and Group and Charity Notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’’ (United Kingdom Generally Accepted Accounting Practice).
In my opinion, the financial statements:
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l give a true and fair view of the state of the Group's and Parent Charity's affairs as at 31 December 2020 and of the Group's and Charity's incoming resources and application of resources, including its income and expenditure, for the year then ended;
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l have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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l have been prepared in accordance with the requirements of the Charities Act 2011.
Basis for opinion
I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. My responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of my report. I am independent of the Group and Parent Charity in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK, including the FRC's Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Other matter
I draw attention to the fact that the Group financial statements for the year ended 31 December 2019 are unaudited. My opinion is not modified in respect of this matter.
Conclusions relating to going concern
In auditing the financial statements, I 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 I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or Parent Charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
My responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Trustees’ annual report, other than the financial statements and my auditor’s report thereon. The Trustees are responsible for the other information contained within the annual report. My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my report, I do not express any form of assurance conclusion thereon. My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.
I have nothing to report in this regard.
5
Report of the Independent Auditor To the Trustees of Ealing Educational Resources Trust (continued)
Matters on which I am required to report by exception
I have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require me to report to you if, in my opinion:
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l the information given in the financial statements is inconsistent in any material respect with the Trustees’ Report; or
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l sufficient accounting records have not been kept; or l the financial statements are not in agreement with the accounting records; or l I have not received all the information and explanations I require for my audit.
Responsibilities of Trustees
As explained more fully in the Trustees’ responsibilities statement set out on page 4, 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 Group's and the Parent Charity’s abilities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the Group or the Parent Charity or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
I have been appointed as auditor under section 151 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act.
My 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 my 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. I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which my procedures are capable of detecting irregularities, including fraud is detailed below:
Because of the inherent limitations of an audit, there is a risk that I will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as I will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report.
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Report of the Independent Auditor To the Trustees of Ealing Educational Resources Trust (continued)
Use of my report
This report is made solely to the Charity’s Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. My audit work has been undertaken so that I might state to the Charity’s Trustees those matters I am required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the Charity and the Charity’s Trustees as a body, for my audit work, for this report, or for the opinions I have formed.
26 October 2021
Dr J R Ayling BSc FCA, Statutory Auditor Date Dr J R Ayling BSc FCA 8 Troutbeck Avenue Leamington Spa Warwickshire CV32 6NE
Dr J R Ayling FCA is eligible for appointment as auditor of the Group and the Charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006 itself.
7
Ealing Educational Resources Trust Group Statement of Financial Activities for the year ended 31 Dec 2020
| Notes £ Income and endowments from: Donations and legacies 3 - Charitable activities 4 164,000 Other trading activities 5 987,275 Investment income 6 5,886 Other 1,535 Total 1,158,696 Expenditure on: Raising funds 7 746,998 Charitable activities 8 619,779 Other 56 Total 1,366,833 Net income / (expenditure) (208,137) Transfers between funds 18 120,000 (88,137) Total funds brought forward 18 6,442,852 Total funds carried forward 18 6,354,715 Net movement in funds Unrestricted Funds |
Group | Group | |
|---|---|---|---|
| Restricted Funds £ - 120,000 - - - 120,000 - - - - 120,000 (120,000) - - - |
Total Total £ £ - 6,322 284,000 130,000 987,275 831,845 5,886 23,463 1,535 544 1,278,696 992,174 746,998 494,144 619,779 476,869 56 512 1,366,833 971,525 (88,137) 20,649 - - (88,137) 20,649 6,442,852 6,422,203 6,354,715 6,442,852 Year ended 31 Dec 2019 Year ended 31 Dec 2020 |
There were no recognised gains and losses for the Group for the current or prior periods other than those included in the Statement of Financial Activities.
8
Ealing Educational Resources Trust Charity Statement of Financial Activities for the year ended 31 Dec 2020
| Notes £ Income and endowments from: Donations and legacies 3 - Charitable activities 4 164,000 Other trading activities 5 - Investment income 6 111,762 Other 1,535 Total 277,297 Expenditure on: Charitable activities 8 509,945 Other 56 Total 510,001 Net income / (expenditure) (232,704) Transfers between funds 18 120,000 (112,704) Total funds brought forward 18 6,442,852 Total funds carried forward 18 6,330,148 Net movement in funds Unrestricted Funds |
Charity | Charity | |
|---|---|---|---|
| Restricted Funds £ - 120,000 - - - 120,000 - - - 120,000 (120,000) - - - |
Total Total £ £ - 6,322 284,000 130,000 - - 111,762 275,924 1,535 544 397,297 412,790 509,945 391,629 56 512 510,001 392,141 (112,704) 20,649 - - (112,704) 20,649 6,442,852 6,422,203 6,330,148 6,442,852 Year ended 31 Dec 2020 Year ended 31 Dec 2019 |
There were no recognised gains and losses for the Charity for the current or prior periods other than those included in the Statement of Financial Activities.
9
Ealing Educational Resources Trust Group and Charity Balance Sheets as at 31 Dec 2020
| Notes Fixed assets Tangible assets 12 Investments 13 Current assets Stocks 14 Debtors 15 Cash at bank and in hand Liabilities Creditors: amounts falling due within one year 16 Net current assets Total assets less current liabilities being total net assets Funds Restricted 18 Unrestricted 18 |
31 Dec 2020 31 Dec 2019 £ £ 2,357,143 2,406,280 436,292 476,379 2,793,435 2,882,659 110,397 87,798 66,613 51,661 3,606,863 3,580,812 3,783,873 3,720,271 (222,593) (160,078) 3,561,280 3,560,193 6,354,715 6,442,852 - - 6,354,715 6,442,852 6,354,715 6,442,852 Group |
Charity |
|---|---|---|
| 31 Dec 2020 £ 2,357,143 436,292 2,793,435 110,397 66,613 3,606,863 3,783,873 (222,593) 3,561,280 6,354,715 - 6,354,715 6,354,715 |
31 Dec 2020 31 Dec 2019 £ £ 2,305,926 2,337,148 436,294 476,381 2,742,220 2,813,529 - - 98,743 155,832 3,518,935 3,539,097 3,617,678 3,694,929 (29,750) (65,606) 3,587,928 3,629,323 6,330,148 6,442,852 - - 6,330,148 6,442,852 6,330,148 6,442,852 |
Approved by the trustees and signed on their behalf by:
26th October 2021
Mr A Greenfield, Trustee Date
10
Ealing Educational Resources Trust Group cash flow statement for the year ended 31 December 2020
| Net (expenditure) / income Adjustments for: Depreciation charges Impairment of program related investment Loss on disposal of fixed assets Interest income shown in investing activities Increase in stocks Increase in debtors Increase / (decrease) in creditors Net cash provided by / (used in) operating activities Cash flows from investing activities Interest and dividends Purchase of fixed assets Program related investment additions Net cash used in investing activities Cash flows from financing activities Cash inflows from new borrowing Net cash provided by financing activities Change in cash and cash equivalents in the period Cash and cash equivalents brought forward Cash and cash equivalents carried forward Analysis of cash and cash equivalents Cash in hand Three month notice Treasury Deposits Analysis of changes in net debt Cash Three month notice Treasury Deposits Loans falling due within one year Total Cash flows from operating activities |
At start of year £ 1,080,812 2,500,000 (50,000) 3,530,812 |
Year ended Year ended £ £ (88,137) 20,649 61,674 40,938 118,989 34,027 - 1,264 (5,886) (23,463) (22,599) (52,494) (14,952) (18,383) 12,515 (24,677) 61,604 (22,139) 5,886 23,463 (12,537) (1,687,161) (78,902) (510,406) (85,553) (2,174,104) 50,000 50,000 50,000 50,000 26,051 (2,146,243) 3,580,812 5,702,131 3,606,863 3,555,888 3,606,863 1,080,812 - 2,500,000 3,606,863 3,580,812 Cash flows At end of year £ £ 2,526,051 3,606,863 (2,500,000) - (50,000) (100,000) (23,949) 3,506,863 31 Dec 2019 31 Dec 2020 |
|---|---|---|
11
Ealing Educational Resources Trust Charity cash flow statement for the year ended 31 December 2020
| Net (expenditure) / income Adjustments for: Depreciation charges Impairment of program related investment Loss on disposal of fixed assets Interest income shown in investing activities Decrease / (increase) in debtors (Decrease) / increase in creditors Net cash provided by / (used in) operating activities Cash flows from investing activities Interest and dividends Purchase of fixed assets Program related investment additions Net cash used in investing activities Change in cash and cash equivalents in the period Cash and cash equivalents brought forward Cash and cash equivalents carried forward Analysis of cash and cash equivalents Cash in hand Three month notice Treasury Deposits Analysis of changes in net debt Cash in hand Three month notice Treasury Deposits Cash flows from operating activities |
At start of year £ 1,039,097 2,500,000 3,539,097 |
Year ended Year ended £ £ (112,704) 20,649 31,222 34,546 118,989 34,027 - 13,290 (5,886) (23,463) 57,089 (80,130) (35,856) 856 52,854 (225) 5,886 23,463 - (1,614,841) (78,902) (510,406) (73,016) (2,101,784) (20,162) (2,102,009) 3,539,097 5,641,106 3,518,935 3,539,097 3,518,935 1,039,097 - 2,500,000 3,518,935 3,539,097 Cash flows At end of year £ £ 2,479,838 3,518,935 (2,500,000) - (20,162) 3,518,935 31 Dec 2020 31 Dec 2019 |
|---|---|---|
12
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
1 Accounting policies
{a} Basis of preparation
Ealing Educational Resources Trust is a charity registered in England & Wales. The address of the registered office is given in the charity information on page 1 of these financial statements. The charitable objects of the Trust are the advancement of the education of children and young people. The objects also include any other charitable purpose for the benefit of the worldwide Christian fellowship known as the Plymouth Brethren Christian Church. In furtherance of its objects, the Trust provides premises, at a peppercorn rental, for an independent school based in Reading (the “School”), which has been run by OneSchool Global UK ("OSG") from 1 November 2019 and previously by Fulmer Education Trust ("FET"). Both OSG and FET are registered charities (registered charity numbers 1181301 and 1065512 respectively).
The Charity constitutes a public benefit entity as defined by FRS 102. The financial statements and consolidated 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 October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), and UK Generally Accepted Practice.
The financial statements are prepared on a going concern basis under the historical cost convention.
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
{b} Method of consolidation
The results of Ealing Educational Resources Trust and its wholly owned subsidiary, Zest Trading UK Limited, have been consolidated to produce group accounts using the acquisition method.
{c} Funds
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charity, or the Group, and which have not been designated for other purposes.
Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Charity, or the Group, for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
{d} Income recognition
All incoming resources are included in the Statement of Financial Activities (SoFA) when the Charity or the Group is legally entitled to the income after any performance conditions have been met, the amount can be measured reliably and it is probable that the income will be received.
For donations to be recognised, the Charity will have been notified of the amounts and the settlement date in writing. If there are conditions attached to the donation and this requires a level of performance before entitlement can be obtained then income is deferred until those conditions are fully met or the fulfilment of those conditions is within the control of the charity and it is probable that they will be fulfilled.
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Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
1 Accounting policies (continued)
{d} Income recognition (continued)
Donated facilities and donated professional services are recognised in income at their fair value when their economic benefit is probable, it can be measured reliably and the Charity, or the Group, has control over the item. Fair value is determined on the basis of the value of the gift to the Charity, or the Group. For example the amount the Charity, or the Group, would be willing to pay in the open market for such facilities and services. A corresponding amount is recognised in expenditure.
Income from trading activities comprises income earned from trading activities to raise funds for the Charity, or the Group. Income is received in exchange for supplying goods and services in order to raise funds and is recognised when entitlement has occurred.
Investment income is earned through trading activities undertaken by the trading subsidiaries, the profits from whom are donated to the Parent Charity.
All income arises in the United Kingdom.
{e} Expenditure recognition
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably. It is categorised under the following headings:
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Costs of raising funds comprise the cost of trading activities
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Expenditure on charitable activities comprises the costs of provision of school premises, grant payments, and associated support costs.
Grants payable to third parties are within the charitable objectives.
Irrecoverable VAT is charged as an expense against the activity for which expenditure arose.
{f} Support costs allocation
Support costs are those that assist the work of the Charity, or the Group, but do not directly represent charitable activities and include non educational premises' costs, administrative, professional and finance charges, and governance costs. Where support costs cannot be directly attributed to particular headings they have been allocated to expenditure on charitable activities as raising funds is undertaken on a wholly voluntary basis. The analysis of these costs is included in note 9.
{g} Tangible fixed assets
Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.
Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:
| Freehold land | No depreciation |
|---|---|
| Freehold buildings | 2% straight line |
| Freehold improvements | 2% straight line |
| Leasehold improvements | 50% straight line |
| Fixtures, fittings & equipment | 20% reducing balance |
Assets costing less than £500 are written off to the SoFA in the year of purchase.
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Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
1 Accounting policies (continued)
{h} Investments
Fixed asset investments in subsidiaries are measured at cost less impairment. Social investments are those held to further charitable purposes and are also measured at cost less impairment.
{i} Stocks
Stocks comprise finished goods and are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, firstout formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate.
{j} Debtors and creditors receivable / payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in expenditure.
{k} Concessionary loans
Concessionary loans include those payable to third parties which are interest free or below market interest rates and are made to advance charitable purposes.
{l} Impairment
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset’s cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.
{m} Provisions
Provisions are recognised when the Charity, or the Group, has an obligation at the balance sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.
{n} Leases
Rentals payable and receivable under operating leases are charged to the SoFA on a straight line basis over the period of the lease.
{o} Tax
The charity is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charity for UK corporation tax purposes.
{p} Going concern
The financial statements have been prepared on a going concern basis as the Trustees believe that no material uncertainties exist. The Trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements and believe that the budgeted income and expenditure is sufficient with the level of reserves for the Charity, and the Group, to be able to continue as a going concern.
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Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
2 COVID-19 and going concern
The Trustees do not consider that the COVID-19 pandemic will have any significant adverse financial effect on the Group or Charity, or their ability to operate as going concerns, but an accurate estimate of the impact cannot be made.
| 3 Gifts and donations Donations and legacies |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ - 6,322 Group |
Charity |
|---|---|---|
| Year ended 31 Dec 2020 £ - |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ - 6,322 |
| 4 Income from charitable activities Rental income Grant income |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 164,000 130,000 120,000 - 284,000 130,000 Group |
Charity |
|---|---|---|
| Year ended 31 Dec 2020 £ 164,000 120,000 284,000 |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 164,000 130,000 120,000 - 284,000 130,000 |
The Charity allows OSG (formerly FET) to occupy its premises for a nominal charge. Rental income comprises the Trustees' estimate of the amount it would receive if OSG / FET was charged rent for these premises at the full market rate. Donations made (see note 8) include an amount which equals the excess of the full market rate over the amount actually charged.
All grant income is restricted, see note 18.
| 5 Other trading income Other trading activities |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 987,275 831,845 Group |
Charity |
|---|---|---|
| Year ended 31 Dec 2020 £ 987,275 |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ - - |
16
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
| 6 Income from subsidiaries Bank interest Investment income |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ - - 5,886 23,463 5,886 23,463 Group |
Charity |
|---|---|---|
| Year ended 31 Dec 2020 £ - 5,886 5,886 |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 105,876 252,461 5,886 23,463 111,762 275,924 |
Bank interest for the Charity and the Group includes £nil (2019: £1,097) in respect of a restricted fund.
| 7 Raising funds Trading costs |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 746,998 494,144 Group |
Charity |
|---|---|---|
| Year ended 31 Dec 2020 £ 746,998 |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ - - |
| 8 Provision of school premises Grants payable Donations made Total direct costs Support costs Expenditure on charitable activities |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 243,537 124,793 81,000 79,575 154,000 157,521 478,537 361,889 141,242 114,980 619,779 476,869 Group |
Year ended Year ended 31 Dec 2020 31 Dec 2019 _ re-stated_ £ £ 243,537 124,793 81,000 79,575 154,000 157,521 478,537 361,889 31,408 29,740 509,945 391,629 Charity* |
|---|---|---|
| Year ended 31 Dec 2020 £ 243,537 81,000 154,000 478,537 141,242 619,779 |
Provision of school premises costs for the Charity for the year ended 31 December 2019 were previously reported within support costs. These costs have been reclassified to better reflect the activities of the Trust.
Grants payable for the year ended 31 December 2020 comprise amounts payable to OSG. Grants payable for the year ended 31 December 2019 comprise amounts payable to FET. The activities of both FET and OSG are in accordance with the charitable objects of Ealing Educational Resources Trust, being the advancement of the education of children and young people.
Donations made by the Charity include £154,000 (2019: £130,000) in respect of the waiver of full market rate rental charges for premises occupied by OSG / FET, see note 4.
17
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
9 Allocation of support costs
All support costs are allocated to the provision of educational premises for the advancement of education of children and young people from the ages of eight to eighteen.
| Non educational premises' costs Non educational premises' depreciation and loss on disposals Administrative costs Professional charges Finance charges Governance costs Support cost |
Group Charity £ £ 67,323 1,999 53,365 22,913 4,562 - 5,226 668 4,938 - 5,828 5,828 141,242 31,408 |
|---|---|
10 Trustees’ expenses and remuneration
The trustees all give freely their time and expertise without any form of remuneration or other benefit in cash or kind (2019: £nil). Expenses paid to the trustees in the period totalled £nil (2019: £nil). No donations (2019: £nil) were made to the charity by the Trustees. Further related party transactions are disclosed in note 21.
11 Net movement in funds for the year
The net movement in funds for the year is stated after charging:
| Group | Group | Charity | Charity | |||
|---|---|---|---|---|---|---|
| Year ended | Year ended | Year ended | Year ended | |||
| 31 Dec 2020 | 31 | Dec 2019 | 31 Dec 2020 | 31 | Dec 2019 | |
| £ | £ | £ | £ | |||
| Depreciation of tangible fixed assets | 61,674 | 52,572 | 31,222 | 34,546 | ||
| Impairment of prog. related investment | 118,989 | 34,027 | 118,989 | 34,027 | ||
| Loss on disposal of fixed assets | - | 14,554 | - | 13,290 | ||
| Operating lease rentals | 133,960 | 77,108 | 111,400 | 58,808 | ||
| Audit fees | 5,750 | 4,750 | 5,750 | 4,750 |
No other fees were paid to the auditor (2019: £nil).
18
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
12 Tangible fixed assets
| At 1 Jan 2020 Additions At 31 Dec 2020 Depreciation At 1 Jan 2020 Charge for year At 31 Dec 2020 Net book value At 31 Dec 2020 At 31 Dec 2019 Cost |
Group | |
|---|---|---|
| Freehold land & buildings £ £ £ 2,308,444 118,061 32,805 - - 3,979 2,308,444 118,061 36,784 78,926 10,431 10,745 28,861 2,361 16,728 107,787 12,792 27,473 2,200,657 105,269 9,311 2,229,518 107,630 22,060 Leasehold improvements Freehold improvements |
Fixtures, fittings & equipment Total £ £ 64,669 2,523,979 8,558 12,537 73,227 2,536,516 17,597 117,699 13,724 61,674 31,321 179,373 41,906 2,357,143 47,072 2,406,280 |
| At 1 Jan 2020 Additions At 31 Dec 2020 Depreciation At 1 Jan 2020 Charge for year At 31 Dec 2020 Net book value At 31 Dec 2020 At 31 Dec 2019 Cost |
Charity | |
|---|---|---|
| Freehold land & buildings £ £ £ 2,308,444 118,061 - - - - 2,308,444 118,061 - 78,926 10,431 - 28,861 2,361 - 107,787 12,792 - 2,200,657 105,269 - 2,229,518 107,630 - Freehold improvements Leasehold improvements |
Fixtures, fittings & equipment Total £ £ - 2,426,505 - - - 2,426,505 - 89,357 - 31,222 - 120,579 - 2,305,926 - 2,337,148 |
Included within freehold land and buildings for the Charity and the Group is land of £865,354 (2019: £865,354) which has not been depreciated.
19
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
| 13 Investments Investment in Zest Trading UK Ltd Programme related investment |
31 Dec 2020 31 Dec 2019 £ £ - - 436,292 476,379 436,292 476,379 Group |
Charity |
|---|---|---|
| 31 Dec 2020 £ - 436,292 436,292 |
31 Dec 2020 31 Dec 2019 £ £ 2 2 436,292 476,379 436,294 476,381 |
The Charity owns 100% of the share capital of Zest Trading UK Ltd, a company registered in England and Wales (Reg No 06357796). Zest Trading UK Ltd undertakes general trading in order to raise funds for the Charity which are then gifted under a binding Deed of Covenant. The following results for Zest Trading UK Ltd have been included in the consolidated financial statements of Ealing Educational Resources Trust.
| Trading income Trading costs Other costs Operating profit Donation to Ealing Educational Resources Trust (note 6) Profit for the financial year Assets Liabilities Capital and reserves |
Year ended Year ended 31 Dec 2020 31 Dec 2019 £ £ 987,275 831,845 (746,998) (494,144) (109,834) (85,240) 130,443 252,461 (105,876) (252,461) 24,567 - 31 Dec 2020 31 Dec 2019 £ £ 289,149 220,645 (264,580) (220,643) (2) (2) 24,567 - |
|---|---|
The programme related investment comprises the refurbishment and repurposing costs of a leased site in Reading. The costs are being impaired over the lease period of five years. In accordance with its charitable objects, the Charity has sublet the premises to OSG for a nominal rental for the purposes of running a secondary school. Movements on the balance are as follows:
| At 1 Jan 2020 Additions At 31 Dec 2020 Impairment At 1 Jan 2020 Charge for year At 31 Dec 2020 Carrying amount At 31 Dec 2020 At 31 Dec 2019 Cost |
£ 510,406 78,902 |
|---|---|
| 589,308 | |
| 34,027 118,989 |
|
| 153,016 | |
| 436,292 | |
| 476,379 |
20
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
| 14 Stocks Finished goods for resale 15 Debtors Trade debtors Amounts due from subsidiary co. Prepayments and accrued income Other debtors |
31 Dec 2020 31 Dec 2019 £ £ 110,397 87,798 31 Dec 2020 31 Dec 2019 £ £ 36,105 22,000 - - 24,519 24,315 5,989 5,346 66,613 51,661 Group Group |
Charity |
|---|---|---|
| 31 Dec 2020 31 Dec 2019 £ £ - - Charity |
||
| 31 Dec 2020 £ 36,105 - 24,519 5,989 66,613 |
31 Dec 2020 31 Dec 2019 £ £ - - 71,737 126,171 24,519 24,315 2,487 5,346 98,743 155,832 |
No debtors are due after more than one year.
| 16 Creditors: amounts falling due Concessionary loans Payments received on account Trade creditors Accruals and deferred income Taxation & social security Other creditors within one year |
31 Dec 2020 31 Dec 2019 £ £ 100,000 50,000 21,456 9,080 48,971 89,171 40,150 8,931 1,296 458 10,720 2,438 222,593 160,078 Group |
Charity |
|---|---|---|
| 31 Dec 2020 £ 100,000 21,456 48,971 40,150 1,296 10,720 222,593 |
31 Dec 2020 31 Dec 2019 £ £ - - - - - 56,854 29,750 8,752 - - - - 29,750 65,606 |
Payments received on account comprise payments received from customers for contracts that were not complete at the year end and so not recognised as income until the following year. Accruals and deferred income at 31 December 2020 includes £10,400 received for an advertising campaign which did not take place until the year ending 31 December 2021.
| 17 Concessionary loans At 1 January 2020 Loans advanced At 31 December 2020 |
Group Charity £ £ 50,000 - 50,000 - 100,000 - |
|---|---|
Concessionary loans comprise borrowing which has been made on an interest free basis or at below commercially available interest rates. All loans are unsecured.
21
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
18 Summary of fund movements
| Unrestricted funds General fund Restricted funds The Quad Total funds Unrestricted funds General fund Restricted funds The Quad Total funds |
Group | |||
|---|---|---|---|---|
| £ 6,442,852 - 6,442,852 Fund balance b/f |
Income £ 1,158,696 120,000 1,278,696 |
£ (1,366,833) - (1,366,833) Expenditure Charity |
Transfers Fund balance c/f £ £ 120,000 6,354,715 (120,000) - - 6,354,715 |
|
| Fund balance b/f £ 6,442,852 - 6,442,852 |
Income £ 277,297 120,000 397,297 |
£ (510,001) - (510,001) Expenditure |
Transfers Fund balance c/f £ £ 120,000 6,330,148 (120,000) - - 6,330,148 |
The Quad fund income comprises a grant received in the year ended 31 December 2020 towards the refurbishment and repurposing costs of the leased premises in Reading incurred during the years ended 31 December 2019 and 31 December 2020. The fund transfer is in respect of programme related investment additions which have been purchased from this fund, but are held for general use.
| Analysis of net assets by fund Fixed assets Current assets Current liabilities Fund balance Fixed assets Current assets Current liabilities Fund balance |
Group | |
|---|---|---|
| Unrestricted Funds £ 2,793,435 3,783,873 (222,593) 6,354,715 |
Restricted Funds Total £ £ - 2,793,435 - 3,783,873 - (222,593) - 6,354,715 Charity |
|
| Unrestricted Funds £ 2,742,220 3,617,678 (29,750) 6,330,148 |
Restricted Funds Total £ £ - 2,742,220 - 3,617,678 - (29,750) - 6,330,148 |
19 Analysis of net assets by fund
22
Ealing Educational Resources Trust Notes forming part of the financial statements for the year ended 31 Dec 2020
20 Operating leases
At 31 December there were outstanding commitments for future minimum lease payments under noncancellable operating leases on premises as follows:
| Not later than one year Later than one year and not later than five years Not later than one year Later than one year and not later than five years |
Group |
|---|---|
| 31 Dec 2020 31 Dec 2019 £ £ 82,460 102,460 21,580 101,540 104,040 204,000 Charity |
|
| 31 Dec 2020 31 Dec 2019 £ £ 70,000 90,000 - 70,000 70,000 160,000 |
21 Related party transactions
The programme related investment (see note 13) is in respect of a building owned by a group of companies of which Mr C Ker (Trustee until 6 March 2020) was a Director until 30 January 2020.
Grants, included within charitable expenditure for the year ended 31 December 2020, comprise amounts payable to OSG, a related party by virtue of the following: Mr W Burgess is a Director and Trustee of OSG and also a Director of Zest Trading UK Ltd, the wholly owned subsidiary of Ealing Educational Resources Trust. Mr W Burgess also has multiple family connections to the Trustees of Ealing Education Resources Trust. Mr C Parsons (Ealing Educational Resources Trust Trustee) is the brother-in-law of Mr J Rich, A Director and Trustee of OSG. Grants, included within charitable expenditure for the year ended 31 December 2019, comprise amounts payable to FET, a related party by virtue of the following: Mr T Parsons (FET Trustee) and Mr C Ker (Ealing Educational Resources Trust Trustee until 6 March 2020) are fellow directors of a company; Mr C D Parsons is a CA Team member of FET and also a Trustee of Ealing Educational Resources Trust.
During the years ended 31 December 2019 and 31 December 2020, unsecured concessionary loans were made to Zest Trading UK Ltd by Mrs Helen Brunsdon. These loans qualify as related party transactions as they were made by Mr J Silcock (Director of Zest Trading UK Ltd), on Mrs Brunsdon's behalf, under the authority granted to him by a Lasting Power of Attorney for Property and Financial Affairs. At 31 December 2020, the loan balance was £100,000 (31 December 2019: £50,000).
22 Controlling party and ultimate controlling party
The controlling party and ultimate controlling party of the Charity and the Group is the Board of Trustees of Ealing Educational Resources Trust.
23