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WJEC CBAC LIMITED

Registered Number: 03150875

Charity Number: 1073332

A Company Limited by Guarantee ANNUAL REPORT OF DIRECTORS AND TRUSTEES

AND

GROUP ACCOUNTS

For the Year Ended 30 September 2021

WJEC CBAC LIMITED CONTENTS

	PAGE
Officers and Professional Advisers	1
Legal and Administrative Information	2-3
Report of Directors and Trustees	4-15
Independent Auditor’s Report	16-18
Group Statement of Financial Activities	19
Group Statement of Comprehensive Income	19
Balance Sheets	20
Group Cash Flow Statement	21
Notes to the Accounts	22-44

WJEC CBAC LIMITED OFFICERS AND PROFESSIONAL ADVISERS

TRUSTEES AND OFFICERS

Ms J P Moonan (Chair) Ms B Downes (Vice Chair) Ms J Leigh Jones (Vice Chair) Dr M L James Cllr. A R Lockyer Mr R J Pendlebury Cllr. E Thomas Cllr. C R Williams

COMPANY SECRETARY

Mr I Morgan

PRINCIPAL OFFICERS – KEY MANAGEMENT PERSONNEL

Ian Morgan – Chief Executive Elaine Carlile – Director of Assessment Delivery & Responsible Officer Ian Edwards – Director of Operations Beverley Green – Head of Human Resources Ben Newby – Chief Digital Officer Catherine Roberts-Straw – Assistant Director of Strategy Abigail Williams – Director of Finance

BANKERS

Barclays Bank PLC 5 Callaghan Square Cardiff CF10 5BT

SOLICITORS

Geldards LLP Mills & Reeve LLP Dumfries House 78 – 84 Colmore Row Dumfries Place Birmingham Cardiff B3 2AB CF10 3ZF

AUDITOR

Deloitte LLP 5 Callaghan Square Cardiff CF10 5BT United Kingdom

INVESTMENT CONSULTANT

Jagger and Associates Ground Floor 14 Exchange Quay Manchester M5 3EQ

FUND MANAGER

Ruffer Legal & General PO Box 6080 London Wolverhampton SW1E 5JL WV1 9RB

Barings Ruffer 155 Bishopsgate 80 Victoria Street London London EC2M 3XY SW1E 5JL

REGISTERED OFFICE AND PRINCIPAL OFFICE

245 Western Avenue Llandaff Cardiff CF5 2YX

WJEC CBAC LIMITED LEGAL AND ADMINISTRATIVE INFORMATION

REGISTERED NAME: WJEC CBAC LIMITED

REGISTERED CHARITY NUMBER: 1073332 REGISTERED COMPANY NUMBER: 03150875

STATUS

WJEC CBAC Limited is a registered charity and a company limited by guarantee and is governed by its memorandum and articles. The guarantors are the 22 local authorities in Wales and the guarantee of each member is limited to £1. The Charity is controlled by the 22 local authorities in Wales.

The company assumed the responsibilities and activities of the former Welsh Joint Education Committee in relation to qualifications, educational resources and National Youth Arts and inherited the assets and liabilities of that former organisation on 1 April 1996. The company became a registered charity on 15 January 1999. On 1 October 2017, WJEC CBAC Limited transferred its National Youth Arts activity to a new and unconnected company, National Youth Arts Wales Limited. WJEC CBAC Limited retains a residual interest in this area through the management of the Neil and Mary Ellen Webber Bursaries Fund to provide bursaries and support developmental initiatives.

GROUP STRUCTURE

The Charity has one subsidiary, WJEC CBAC (Services) Limited ("the subsidiary"), registered office 245 Western Avenue, Llandaff, Cardiff, CF5 2YX.

WJEC CBAC (Services) Limited

The subsidiary was established in 1996, prior to the registration of WJEC CBAC Limited as a charity, to provide specialist printing and publication services to support the Charity’s core functions.

At the end of the previous reporting period, three of the Charity Directors were also Directors of the subsidiary. However, these Directors resigned during the period, and three members of WJEC’s Executive Leadership Team were appointed as Directors of the subsidiary. The financial performance of the subsidiary will be kept under review with the objective of returning to a profitable operating performance.

BOARD OF DIRECTORS AND TRUSTEES

The trustees of the Charity are also the directors of the company for the purposes of the Companies Act.

At the end of the reporting period and at the date of signing the accounts, the Board of Directors comprises three Directors appointed on behalf of the local authorities along with five non-Executive Directors who are appointed through an open public route.

Chair of Board -

Ms J P Moonan

Vice-Chair of Board -

Company Secretary -

Ms B Downes Ms J Leigh Jones Mr I Morgan

WJEC CBAC LIMITED

LEGAL AND ADMINISTRATIVE INFORMATION - Continued

BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP

This table shows the Board of Directors and Trustees during the year and up to the date of signing these accounts. Current members of the Board of Directors are shown in bold type.

	Board of directors for WJEC CBAC Limited	Audit Committee	Remuneration Committee	Nominations Committee	Board of Directors for WJEC CBAC (Services) Limited (see note (b))
Ms B Downes	VC		C	
Mr N A Du Cros (resigned 12 February 2021) see note (a)					
Dr M L James		
Ms J Leigh Jonessee note (b)	VC				C
Cllr A R Lockyer		C
Ms J P Moonan	C			C
Mr R J Pendlebury			
Cllr E Thomas			
CllrC R Williams seenote (b)					
C = Chair at date of signing the accounts = Member VC = Vice Chair at date of signing the accounts

Notes:

a) On 12 February 2021 Mr N A Du Cros resigned from the Board of Directors for WJEC CBAC Limited. Prior to his resignation, Mr N A Du Cros was a member of the Audit Committee and a director of WJEC CBAC (Services) Limited.
b) On 1 April 2021 Ms J Leigh Jones and Cllr C R Williams resigned from the Board of Directors for WJEC CBAC (Services) Limited. Prior to her registration, Ms J Leigh Jones was the Chair of the WJEC CBAC (Services) Limited Board of Directors. On the same date, three members of WJEC CBAC Limited’s Executive Leadership Team were appointed directors of WJEC CBAC (Services) Limited, being Mr I Morgan, Mr I Edwards and Ms A S Williams, and Mr I Morgan was appointed Chair of the WJEC CBAC (Services) Limited Board.
c) During the reporting period, Mr G Briscoe served as a co-opted member of the Audit and Assurance Committee.

EXECUTIVE LEADERSHIP TEAM (ELT)

WJEC CBAC Limited and its subsidiary are executively managed by a senior leadership team. ELT are also the key management personnel, as detailed on page 1. The table shows the persons active during the reporting period.

Designation	Name
Chief Executive	Ian Morgan
Director of Assessment Delivery & Responsible Officer	Elaine Carlile
Director of Operations	Ian Edwards
Head of Human Resources	Beverley Green
Head of Welsh Language Service (role forming part of ELT until 15 September 2021)	Sian Llewelyn
Chief Digital Officer	Ben Newby (from 4 May 2021)
Assistant Director of Strategy	Catherine Roberts-Straw
Director of Finance	Abigail Williams

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021

The Trustees, who are also directors of the charitable company, present their annual report (including the Strategic Report) on the affairs of the Charity and the group, together with the financial statements and auditor's report for the year ended 30 September 2021.

CORPORATE GOVERNANCE AND MANAGEMENT

Board of Directors and Committee Structure, Purpose and Attendance

At the start of the reporting period, the Board of Directors and Trustees comprised three Directors appointed by the Welsh Local Government Association to represent the Local Authorities and six independent directors appointed through an open public route. Following Charity Commission approval of revised Articles of Association on 6 July 2016 and their formal adoption on 4 November 2016, resulting from special resolution at the Annual General Meeting (AGM), WJEC CBAC Limited may appoint up to nine directors through an open public route.

The Board is responsible for the administration of the Charity, setting the strategic direction, determining the risk appetite, overseeing the delivery of its charitable objects and influencing the culture and operational management of the organisation. The Board regularly reviews its terms of reference and those of its committees, to ensure that they accurately reflect their purpose, duties and responsibilities and continue to meet the needs of the Charity. The Board met six times during the year ended 30 September 2021.

The Audit Committee is responsible for providing independent oversight and scrutiny of the strategic and operational management of the Charity. One of its key duties is to review the annual accounts and financial statements before their submission to Board for approval. It is also charged with planning and monitoring the work of internal audit, considering the appointment of the internal and external auditors and reviewing the findings of internal and external audit. At the date of signing these accounts, the Committee comprises four trustees and also has one co-opted member. Both the external and internal auditors have the right to attend Committee meetings at the invitation of the Committee Chair. The Committee met five times during the reporting period.

The Nominations Committee oversees the recruitment, selection and appointment of all Directors and senior management. The Committee comprises three Directors, which are the Chair and Vice Chairs of the Board of Directors. The Committee met four times during the reporting period.

The Remuneration Committee is responsible for the development, appraisal, oversight and implementation of the remuneration strategy and policy. The Remuneration Committee is also responsible for overseeing the implementation of the remuneration policy for the Executive Leadership Team (ELT). The aggregated emoluments for ELT, who are the key management personnel, is outlined in note 11. The Committee currently comprises four trustees. The Committee met once during the reporting period.

During the period ended 30 September 2021, the Board of Directors and Committee membership is as noted on page 3.

Director Recruitment, Appointment and Induction

The Board has delegated the responsibility for overseeing the process of recruiting and appointing Directors through an open public route to the Nominations Committee. The nature of each appointment is determined with reference to an agreed job description, with consideration given to the diversity of the current Board membership and any emerging future requirements. Appointments are subject to a rigorous interview process with recommendations made to the Board for approval.

On appointment, each Director is required to undertake a mandatory formal induction and is provided with an induction pack. The pack includes key information such as the Memorandum and Articles of Association of the company, a summary of their legal obligations as a Director and Trustee, most recent annual report and financial statements and the most recent financial plan. They are also required to meet the statutory obligations that relate to taking office as a Director of a Company and as a Charity Trustee.

The Company Secretary is responsible for registering the new Directors with both Companies House and the Charity Commission. The Company Secretary also maintains a Register of Interests and all Directors upon appointment and annually whilst holding office are required to disclose any conflict of interests and sign up to the Conflict of Interest policy.

The Nominations Committee also oversees Director nominations to Committees. A number of factors is considered by the panel when making committee nomination recommendations to the Board, including Board attendance, contribution made at meetings, the register of interests, gender balance, equality and diversity, and the skills and experience each member can bring to the work of the committee.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Risk Management and Assurance

In discharging its charitable and company responsibilities, the Board of Directors annually reviews the Charity’s approach to risk management and assurance, including its Risk Policy. Additionally, the Audit Committee regularly receives and reviews the Corporate Risk Register, which highlights the cause and potential effect of major risks to which the Charity is exposed, together with any controls or contingency to ensure risk is managed appropriately. Risk is reviewed and managed at various levels throughout the organisation, including at project, programme and ELT level, with the organisation possessing the necessary control framework to effectively appraise and respond to the internal and external environment.

The principal risks and uncertainties, as identified by Charity Trustees, include the demands of the regulatory environment and the risk of a cyber-attack. The strategies for managing these risks are based on sustained engagement with regulators in Wales and England on current and forward-looking issues and detailed tracking of compliance and continuous monitoring processes and malware defences technical measures.

In addition, the risks associated with operational delivery as a result of the Covid-19 pandemic have been identified. The strategies for managing this risk include engagement with regulators, government departments, teachers and other stakeholders and clear communications to centres and appointees.

Risks that directly link to the development of the organisation’s strategy are also closely managed and monitored.

Financial Risk Management

WJEC CBAC Limited manages its financial risk in accordance with the strategic direction set by the Board of Directors and in relation to its financial regulations and procedures, risk policy, reserves policy and an approach to fund management agreed by the Board.

WJEC CBAC Limited's exposure to price risk (the risk of decline in the value of a security) has been considered and limited by investing a proportion of its reserves as appropriate in low risk and ethical investments. This, together with the appraisal of investment performance, which include regular independent market updates by an investment specialist, provide the Charity with an acceptable level of assurance.

Credit risk is closely monitored and controlled by virtue of a structured credit control routine, with established procedures for escalation, set against standard payment terms and monthly review of aged debt. WJEC CBAC Limited has a customer base of schools, colleges and educational centres that are predominantly government funded, which also affords the Charity inherently less risk of bad and doubtful debt.

A strong reserve position coupled with a predictable cyclical cash flow pattern and unrestricted access to managed funds means that WJEC CBAC Limited can meet its financial obligations, including those that arise in the short term. Working capital management is incorporated into the Charity's financial planning, monitoring and forecasting activity and this activity allows the Charity to manage working capital requirements. Liquidity and cash flow risk are, therefore, minimised.

Welsh Language

In the context of the Welsh Government's policy emphasis on increasing the number of speakers of the Welsh language to 1 million by the year 2050, WJEC CBAC Limited has a strategic role to play in several developmental and delivery contexts. We are involved with Qualifications Wales in exploratory work relating to the concept of developing a "continuum" of language skills learning spanning what are currently separately labelled as "Welsh” and "Welsh Second Language" routes at GCSE.

WJEC CBAC Limited is also funded by the Welsh Government as a provider of Welsh for Adults qualifications, this suite of provision being aligned with the principles that are championed by the Association of Language Testers in Europe (ALTE), of which WJEC CBAC Limited is a member.

Through a partnership with Coleg Cymraeg Cenedlaethol, WJEC CBAC Limited provides a Welsh language skills certificate for students within the higher education sector, "Tystysgrif Sgiliau Iaith", complementing the qualification that used to be known for a number of years as "Yr Iaith ar Waith", but has recently been revised and changed to “Llwybrau Cymraeg Gwaith” that is taken mainly by post-16 learners in vocational settings.

There is a substantial contextual emphasis on the Welsh language in the workplace in relation to the Health & Social Care and Child Care vocational qualifications that have been developed in partnership with City & Guilds. This provides further opportunities for WJEC CBAC Limited to undertake leading work, alongside the strategic partners in this development (Social Care Wales and NHS Wales) and key stakeholders that also place a strong emphasis on the Welsh language, especially Mudiad Meithrin and Colegau Cymru.

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

WJEC CBAC Limited is committed to promoting and supporting a bilingual education system, including working with Canolfan Bedwyr, Bangor University’s Centre for Welsh Language Services, Research and Technology, to consistently use standardised terminology across Welsh medium assessments and resources. We are also continuously looking to improve methods of working with publishers of resources and securing sufficient bilingual skills in all teams. This is also demonstrated through working with the Welsh Language Commissioner in relation to the Welsh Language Scheme and delivering bilingual services.

OBJECTIVES OF THE CHARITY

Mission Statement

The Charity’s purpose is to support our education communities by providing trusted qualifications and specialist support, to allow our learners the opportunity to reach their full potential.

Corporate Objectives

The Company is established for the following objects:

to maintain, develop and deliver appropriate systems for the assessment and examination of students of all ages and of all disciplines at schools, colleges and other institutions in Wales and elsewhere;
to provide training and curriculum and management support for local authorities, schools, colleges and other charitable institutions in Wales and elsewhere;
to promote, support and advance the development of the Welsh language and culture in Wales and elsewhere, including through the provision of educational resources and professional development activities for teachers and lecturers;
to promote, support and advance the development of Youth Arts in Wales; and
the advancement of education and training in Wales and elsewhere.

STRATEGIC REPORT - REVIEW OF ACTIVITIES AND FUTURE DEVELOPMENTS

In planning the activities for the year and in setting the objectives for the future, the Trustees have considered the Charity Commission’s guidance on public benefit, including the guidance on public benefit and fee charging, as per Section 4 of the Charities Act 2011.

The impact of Covid-19 continued to challenge WJEC CBAC Limited during the reporting period, with the summer 2021 examinations being cancelled following the cancellation of the summer 2020 examinations in the previous reporting period.

During the pandemic, WJEC CBAC Limited remained committed to the continued delivery of its charitable objectives and focused on ensuring the wellbeing and safety of staff. WJEC CBAC Limited has successfully operated and delivered its services during the lockdown periods.

Although the examinations were cancelled, the majority of students entered for qualifications received a calculated grade. WJEC CBAC Limited awarded approximately 83,690 A Levels (2020 – 78,522), an increase of 6.58%; AS awards were approximately 49,419 (2020 – 53,366), a decrease of 7.40%; GCSE subject awards decreased by 0.90% on the previous year with a total award of approximately 601,250 GCSEs (2020 – 606,708).

In respect of the Welsh Baccalaureate qualifications, 12,892 learners completed the Advanced Welsh Baccalaureate in 2021, an increase of 7.38% from 2020 (12,006). At Key Stage 4, 26,705 learners completed the qualification, down from 28,412 in 2020.

WJEC CBAC Limited will continue to place emphasis on the accessibility of advice and resources which support our qualifications, working in accordance with the general "conditions of recognition” that were introduced by regulators in 2012 and which have subsequently been updated. During the reporting period, in addition to continuing to invest in the production of educational resources to support qualifications, WJEC CBAC Limited also received funding from the Welsh Government to develop a suite of resources. The Charity’s commitment to supporting schools and colleges is underpinned by an extensive range of Professional Learning courses for practitioners. Before the Covid-19 pandemic, approximately 400 face-to-face events were held in the Autumn and early Spring term. These face-to-face events were supplemented by online events. During the pandemic, the focus has been on supporting teachers through online events. Approximately 7,000 delegates are reached annually through the professional learning programme.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

The productive commissioning partnership with the Welsh Government in the context of the Welsh-language Teaching and Learning Resources Scheme has evolved to an arrangement to support the production of Welshmedium resources which WJEC CBAC Limited is uniquely placed to develop. The agreement supports WJEC CBAC Limited’s commitment to commissioning and delivering a wide programme of curriculum resources supported by appropriate professional development provision.

WJEC CBAC Limited offers a strong portfolio of qualifications in both Wales and England. In Wales, WJEC CBAC Limited is the sole provider of the reformed GCSE (A*-G grades) and GCE (AS/A2 coupled) subject specifications. In relation to vocational qualifications in Wales, WJEC CBAC Limited is actively involved in the process whereby Qualifications Wales seeks to appoint awarding bodies to deliver reformed provision in specific sectors. In conjunction with our consortium partner City and Guilds, the delivery of the suite of new Health and Social Care and Childcare qualifications continued, with the qualifications in the first phase of reform being offered to learners in September 2019. In addition, WJEC CBAC Limited has recently been contracted by Qualifications Wales to develop, deliver and award a new qualification called the “Advanced Skills Baccalaureate Wales” qualification. This is a level 3 qualification which will replace the Advanced Skills Challenge Certificate (Welsh Baccalaureate) and will be available from September 2023.

Recognising the challenges ahead, WJEC CBAC Limited remains focussed on ensuring that its operating model, through a range of corporate priorities, is adapted to meet the needs of these challenges. There is significant focus on organisational agility, linked to the provision of customer centric, high quality services that is underpinned by a programme of operational, digital and people development. Significant stakeholder engagement provides the evidence base to support this key aspect of our work.

The extended and improved use of technology to support the organisation continues to be a priority which is recognised by the continued investment in the transformation of key business systems. Whilst the initial focus has been on technical developments, many underlying business processes have benefited from increased innovation supported by a culture of continuous improvement. We have also refined our strategic digital plan aligned to our priorities.

The work around managing our relationships with examiners and our external customers (schools, colleges, teachers and learners) can be further evidenced through continued development of the Appointees Management Portal (AMP), building additional functionality to support an increased range of interactions and processes across the business. We have also launched a new tool to allow ‘remote invigilation’ providing a more flexible examination landscape and have progressed a number of projects such as the replacement to our centre facing secure website. This work has been complemented by continued development and support of existing systems to ensure that WJEC CBAC Limited is able to meet its awarding obligations as well as utilising existing technologies in more cost-effective ways.

During the Covid-19 pandemic, WJEC has implemented new ways of working which, in addition to supporting home-working, benefitting from ‘cloud based’ services making WJEC more resilient, has introduced process efficiencies and environmental benefits. Other key areas of activity relate to Cyber Security and ensuring that the organisation has an appropriate level of security, monitoring and reactive processes in place to mitigate the wider risks to the organisation. WJEC CBAC Limited holds the Cyber Essentials Plus accreditation, the industry certification standard for this area and have deployed new tools and services to underpin our security stance.

In February 2020 the Trefforest site was affected by flooding. However, through the implementation of the organisation’s established Disaster Recovery and Business Continuity plans, there was no disruption to services. Remedial works to the building have completed and the leased copiers and owned furniture, fixtures and fittings and certain computer equipment which were damaged have been replaced.

Section 172(1) statement

Section 172 of the Companies Act requires that a director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. In performing their duties under section 172, the directors of WJEC CBAC Limited have had regard to the matters set out in section 172(1) as follows:

The directors’ approach

When making decisions, in addition to the factors set out under section 172, the Charity also has regard to other factors which are deemed to be relevant, including regulatory requirements and its relationship with Qualifications Wales and Ofqual and Government policies.

The authority for day-to day management of the Company has been delegated to the ELT, with the Board of Directors, including the committees of the Board overseeing the operations of management and the execution of business strategy. Board and Committee meetings are held regularly, and as part of those meetings, directors

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

receive information from ELT on a range of matters. Through these reports, the Board monitors that ELT is acting in accordance with its agreed strategy and the long-term interests of key stakeholders.

The Board has a clear framework for determining the matters within its remit and has approved Terms of Reference for the matters delegated to its Committees. In addition, the company’s Financial Regulations set out the financial thresholds that have been determined to identify matters of a financial nature requiring Board approval.

The ELT provides executive and operational management for the organisation, delivering the strategic objectives set by the Board of Directors in pursuing the mission and charitable purpose. ELT generally meets for an extended meeting once per month, with supplementary meetings weekly as required. The membership of ELT is as noted on page 4.

WJEC CBAC Limited manages and reviews qualifications related activity via three main groups, being the Qualifications Development Management Group, Assessment Management Group and the Products Management Group. These groups, which report to ELT, along with supporting sub-groups, ensure that WJEC CBAC Limited remains on target to meet its objectives in relation to providing qualifications, assessments and educational resources for the future.

Maintaining our licence to operate

Directors ensure that the organisation continues to maintain its licence to operate with reference to the following matters set out in section 172 (1)(a) to (f):

a) the likely consequences of any decision in the long term

Through the consideration and discussion of regular reports which are distributed in advance of Board and committee meetings and through the presentations made by ELT at these meetings, the Board monitors that ELT is acting in accordance with its agreed strategy and the long-term interests of key stakeholders.

b) the interests of the company's employees

Consultation with employees and their representatives is undertaken through various means, including:

formal and informal meetings with Unison, as the recognised trade union;
engagement with Unison on remuneration matters and annual pay awards;
undertaking an annual staff survey; and
the engagement with Employee Voice 24/7, which provides employees with an opportunity to provide anonymous feedback.

In addition, the company invests in an annual training plan which, coupled with WJEC’s Performance Management Review process, provides opportunities for employees to develop and improve. Further details can be found within the “Employee Involvement and Equal Opportunities” section of this report.

c) the need to foster the company's business relationships with suppliers, customers and others

WJEC interacts with a variety of external stakeholders. Engagement with key stakeholders includes regular meetings of its Wales Advisory Group and England Advisory Group which provide a direct means for stakeholders to advise on qualification and resource development and to provide feedback and gain insights in relation to our range of services. WJEC CBAC Limited also engages with other stakeholders, including through a Head Teachers Reference Group and with CYDAG.

During the reporting period WJEC used the results and feedback from the teacher and stakeholder research undertaken in 2020 to further refine its strategy in particular relating to resource development and how we communicate with our stakeholders.

d) the impact of the company's operations on the community and the environment

The impact of WJEC’s operations on the environment is managed through WJEC’s Environmental, Health and Safety (EHS) governance structure, and the EHS systems in operation are audited against the BS8555 Environmental system. Further information can be found under the “Health and Safety” section of this report.

WJEC is committed to supporting its learners, and has a section on its public facing website dedicated to this. In addition to signposting learners to a range of useful information directly linked to WJEC’s operations, the pages also include tips for learners, practical advice and wellbeing support. An Instagram account was also launched in 2020 specifically aimed at supporting learners.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

e) the desirability of the company maintaining a reputation for high standards of business conduct

WJEC operates with reference to five core values, which demonstrate the behaviours that are vitally important to the company, defines expectation for day-to-day employee behaviour, and provides a framework for decision-making. WJEC’s values are:

Commitment to the Customer
Innovation
Fairness
Valuing People
Team Working.

WJEC CBAC Limited, in discharging its awarding organisation responsibility to regulators in Wales, England and Northern Ireland, provides an annual statement of compliance to each regulator. Due to the exceptional nature of assessment in 2021 as a result of the Covid-19 pandemic, the nature of the returns in 2021 was different. Only one statement of compliance was required across all three regulators and in addition to submitting the Statement of Compliance declaration, further responses were required by the regulators in respect of key lines of enquiries around organisational stability and IT risk management.

f) the need to act fairly as between members of the company

The directors recognise that acting fairly in the interests of stakeholders is vitally important in maintaining stakeholder confidence, whilst also being conscious that it does not necessarily follow that every decision will result in a positive outcome for all stakeholders. The Charity’s purpose, its charitable objects, vision and values are therefore key considerations when making decisions to ensure that these decisions are made in line with the strategic priorities of WJEC, and provide the best overall outcome for WJEC and its stakeholders as a collective.

Key decisions in the year

WJEC operates as an awarding organisation with reference to its regulators – Qualifications Wales, Ofqual and CCEA, and in accordance with policy set by governments.

Some examples of how WJEC has had regard to the matters set out in section 172 (1)(a) - (f) when discharging section 172 duties are as follows:

During the reporting period, the Board decided to reduce entry fees for the Summer 2021 series due to the cancellation of the summer examinations, providing a reduction of 42% to centres. In making this decision, the Board considered a range of factors impacting WJEC, including its long-term viability, its expected cash flow, expenditure which would be saved as a result of the cancellation, additional adverse financial impact linked to the pandemic, the nature of entry fees and the fact that fees cover more than the costs associated with running and delivering qualifications. In addition, the Board considered the position of centres and the challenges faced by them in terms of teaching and learning during the pandemic and the additional burden placed on teachers as a result of the cancellation of summer exams.

Also, during the reporting period, WJEC made key decisions around the availability of its two sites. In making these decisions, the company considered foremost the health, safety and wellbeing of its employees, the ability to operate and deliver its services to customers and stakeholders as well as government guidelines in place.

Measuring Performance

WJEC CBAC Limited considers its key measures of performance in relation to its key objectives of: maintaining regulatory relationships and continuing to be able to offer a breadth of high quality accredited qualifications to the public; building sufficient reserves to maintain investment in qualification development, educational resources and systems and to buffer uncertainty associated with a changing qualifications market; continuing to be able to deliver a quality service to educational centres and learners through the effective delivery of assessments, educational materials and learning tools and the provision of continuing professional development for teachers.

In evaluating performance indicators relating to the reporting period, WJEC CBAC Limited has complied with the reduced number of regulations that required to be reported against this year and at the date of signing these accounts has had no "special conditions" imposed by the regulator. In addition to the standard five-year budget planning and monthly budget monitoring, WJEC CBAC Limited has scrutinised, reviewed and amended its inyear budget in line with forecast change and evaluated its performance to effectively manage the annual surplus contribution to reserves. In addition, appropriate opportunities within the risk appetite of the Board have been taken to maximise investment growth, with a view to enhancing the future reserves position. WJEC CBAC

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Limited regularly reviews data relating to the quality and delivery of assessments and, as the activities above indicate, measures outputs relating to educational support and continuing professional development.

STRATEGIC REPORT – FINANCIAL REVIEW

Financial Performance

The group statement of financial activities for the year is set out on page 19. The Charity’s income has decreased from £36.5m to £31.4m, a decrease of 14%. This reduction in largely driven by the discount on entry fees given to centres following the cancellation of the 2021 Summer Series. The net increase in funds for the year, prior to adjusting for the effect of the defined benefit pension scheme, is £1.36m, compared to last year's increase of £2.04m. A favourable actuarial adjustment of £15.75m, relating to market changes affecting the current value of pensions, results in a net increase in funds of £17.11m.

The Charity contributes to the Rhondda Cynon Taf Local Government pension scheme, which is a defined benefit scheme. As with many organisations, the application of accounting principles in relation to defined benefit schemes has resulted in the disclosure of a pension liability for the Charity. The Board is fully aware of the position and additional employer contributions are being paid to reverse this liability over future years. WJEC CBAC Limited monitors pension activity through its Remuneration Committee and this, together with a five-year budget planning process focused around maintaining a strong reserves position, ensures that the pension liability is managed.

The subsidiary, WJEC CBAC (Services) Limited, made a loss for the year before Gift Aid and taxation of £871k (2020 – loss of £392k). As a result of the difficult trading conditions experienced throughout 2020 and 2021 as a result of the Covid-19 pandemic, no Gift Aid payments will be made to the parent company in respect of the financial years ended 30 September 2019, 2020 nor 2021.

Reserves

The Charity’s policy on restricted reserves is to separately record income, including through grants, agreements and donations, where restrictions are imposed that are narrower than the Charity’s overall objectives. The majority of these incoming resources have been utilised in the year for their intended purpose.

The Directors have a policy whereby the unrestricted funds (“the free reserves”) held by the Charity are established with reference to the following assessment of needs: (i) to ensure capacity for investment in products and services in a competitive market where changes in requirements can occur quickly; (ii) to fulfil a social obligation to ensure that it will have available sufficient financial resources and facilities to enable it to develop, deliver and award qualifications in accordance with its conditions of recognition until at least the time by which every learner for a qualification it makes available has had the opportunity to complete that qualification, including in situations in which the flow of income from centres is delayed.

Total funds were £56.1m at 30 September 2021, of which £1.0m were restricted, resulting in unrestricted funds of £55.1m. Whilst the defined benefit pension scheme liability remains a significant balance sheet item, the Trustees are satisfied that WJEC CBAC Limited has sufficient reserves and a robust financial plan in place to ensure resources remain available for general application in the foreseeable future.

Investments

The investments of the Charity are managed according to the powers defined within its constitution and within parameters set by the Board of Directors. To support the Board of Directors in managing the investments of the Charity, an Investment Committee was established during the reporting period. The Committee members are the Chief Executive, the Director of Finance and the Head of Management Accounting, and the Committee has delegated responsibility for developing and managing all aspects of Investment Strategy and Policy within the strategy and risk framework established by the Board.

A proportion of the Charity reserves is invested on a medium-term basis under fund management, with a low risk and ethical profile. During the reporting period, funds were held with two fund managers, which were appointed as a result of a rigorous selection process undertaken by the Investment Committee at the time, and following Board of Director approval. Following a review of future investment strategy in 2018, a £5m investment in shortterm bonds was made in November 2018.

Following approval by the Board, the short-term investment was redeemed during the previous reporting period in order to support working capital requirements. During the reporting period, WJEC CBAC Limited was required to redeem one of the medium term investments as the fund itself was closing.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Since the end of the reporting period, WJEC CBAC Limited’s Investment Committee has undertaken a review of working capital requirements and possible investment options, supported by WJEC CBAC Limited's independent investment consultant. Following approval by the Board of Directors, WJEC CBAC Limited has re-invested funds in the short-term bond and has selected another medium-term fund for investment.

During the reporting period, the combined funds generated a net gain on investment amounting to £982k (2020 - £91k).

The independent investment consultant appraises the quarterly report of each fund manager and provides guidance and support to the Investment Committee as required.

Changes in Fixed Assets

The movements in fixed assets during the year are set out in notes 13 and 14. Although there was investment in fixed assets during the year, the Fixed Assets net book value continues to fall due to the depreciation in respect of the significant capital investment in recent years.

Going Concern

The Trustees have assessed the appropriateness of the going concern basis through an updated budget and five-year plan covering the period to September 2027 and are satisfied that it continues to be appropriate to use the going concern basis of preparation for the financial statements for the year ended 30 September 2021 (see note 1).

STRATEGIC REPORT - PRINCIPAL CHANGES AND UNCERTAINTIES

WJEC CBAC Limited continues to be the major provider of GCSE and GCE qualifications in Wales, where the reformed qualifications are based on distinctive design principles as required by the Welsh Government and Qualifications Wales. This reform has been phased on a subject-by-subject basis across a three-year period such that the last of the new qualifications were introduced for teaching in September 2017. Over the same time period, WJEC CBAC Limited has delivered, under its Eduqas brand, its reformed GCSEs and GCEs for England, building on a successful decade of activity in that country.

As a result of the pandemic, certain January 2021 examinations in Wales were cancelled as were summer 2020 and summer 2021 examinations in Wales, England, and Northern Ireland. Whilst alternative provision was being provided by WJEC CBAC Limited to meet Government and Regulatory policies on awarding qualifications, the continued impact of the pandemic on education, teaching and learning, and assessments continue to be an uncertainty.

From September 2022, Welsh Government is introducing a new curriculum for Wales for all learners aged 3 to 16. In this context, led by Qualifications Wales, there will be a redevelopment of qualifications for learners aged 14- 16 to meet the needs of the new curriculum, with new qualifications being taught for the first time in September 2025.

WJEC CBAC Limited is working closely with a range of stakeholders, including Qualifications Wales, in defining the parameters for the new qualifications and will continue to be actively engaged in their development in line with current timelines.

DIRECTORS AND THEIR INTERESTS

The Director roles for WJEC CBAC Limited and WJEC CBAC (Services) Limited for the reporting period have been un-remunerated and there have been no reimbursed travel and subsistence expenses.

All WJEC CBAC Limited and WJEC CBAC (Services) Limited Directors are indemnified in accordance with the group insurance for group Directors’ and Officers’ liability.

RELATED PARTIES

The guarantors of WJEC CBAC Limited are the 22 local authorities in Wales, which also nominate six of the directors and trustees in office. These authorities were historically charged directly for services in respect of the Shared Services Agreement which relates to Educational Resources (the Welsh-language Teaching and Learning Resources Scheme) and Youth Arts (see note 25 to the accounts), and one debt remains outstanding.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

HEALTH AND SAFETY

Since the Charity is committed to excellence in all its services, it follows that minimising risk to people and its assets is inseparable from all other Charity objectives.

The Charity is committed to pursuing progressive improvements in health and safety requirements, with legal requirements defining the minimum level of achievement. It is therefore the Charity’s objective, so far as is reasonably practicable, to ensure that responsibilities for health and safety are properly defined, assigned, accepted and fulfilled at all levels of the organisation and that all practicable steps are taken to safeguard the health, safety and welfare of all employees, visitors and contractors to the Charity and of all operations under the Charity’s control.

Arrangements are in place to manage the Environmental, Health and Safety (EHS) commitments and requirements of the organisation through local EHS meetings and an EHS Committee. Governance arrangements for Board level review of EHS performance is also in place. The health and safety ‘status’ of the organisation is monitored through a number of proactive and reactive key performance indicators that are reviewed throughout the meeting structures.

During the reporting period, the Environmental Health and Safety systems applied by WJEC CBAC Limited and WJEC CBAC (Services) Limited have been externally audited against the BS8555 Environmental system. The Trefforest site successfully implemented and reaccredited against the level 4 criteria, whilst the Western Avenue site was reaccredited at level 3.

During the reporting period minimising risks associated with the Covid-19 pandemic has been of utmost importance in conjunction with supporting colleagues whilst working from home. The health, safety and welfare of staff has been considered at the forefront of all decision making, and this has resulted in the two WJEC sites being closed for the majority of employees, and the establishment of working from home practices. Furthermore, the monitoring of the welfare of staff whilst working from home has been undertaken through a homeworking survey and follow up actions and through risk assessments as appropriate as well as providing the necessary equipment, advice, training and guidance to reduce the risks associated with homeworking. During the period of site closure, WJEC has maintained the two sites in line with legislative duties, including the provision of Covid-19 risk assessment in line with all Government regulations.

ENERGY AND EMISSIONS

WJEC CBAC Limited and WJEC CBAC (Services) Limited’s energy and emissions for the reporting period are as follows:

	Year ended 30 September 2021	Year ended 30 September 2020
UK Energy Use (kWh)	610,872	845,615
Greenhouse GasEmissions (tonnes CO2equivalent)	133	303
Intensity ratio-Emissions per gross internal area (m2)	0.0121	0.0277

The UK energy use covers all activities of WJEC CBAC Limited and its subsidiary at the Western Avenue and Trefforest sites, and the information above also includes fuel in vehicles operated by individuals contracted to provide examination-related services.

Associated greenhouse gas emissions have been calculated in line with the ‘GHG Reporting Line Protocol – Corporate Standard’.

Both the Western Avenue and Trefforest sites work within an accredited framework for Environmental Management (BS 8555:2016), which is independently audited each year. During this inspection, environmental targets are reviewed where continuous improvement is assessed. As part of the approach to decarbonisation, WJEC CBAC Limited is in the process of developing a 10 year plan to reduce the Charity’s carbon footprint alongside an updated set of metrics for measuring progress against targets to be defined within the plan

WJEC CBAC Limited continues to review and seek improvements to energy usage and efficiency on an ongoing basis.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

EMPLOYEE INVOLVEMENT AND EQUAL OPPORTUNITIES

Consultation with employees or their representatives has continued with the aim of ensuring that their views are taken into account when decisions are made that are likely to affect their interests. Senior management and the recognised trade union discuss matters of policy through regular formal and informal meetings. There is engagement with UNISON on contractual issues and remuneration matters including the annual pay award, which have been specific to WJEC CBAC Limited and locally negotiated since 2010. In addition, WJEC CBAC Limited has worked closely with UNISON to develop new and innovative ways of working, post pandemic.

Communications with employees continue through staff workshops, focus groups, staff bulletins and briefing groups; internal communication processes include regular Chief Executive Briefings for staff and internal news bulletins and a monthly Core Brief providing regular updates from ELT. In addition, there are subgroups established with specific briefs e.g. Wellbeing to communicate on specific issues.

An annual Staff Survey is undertaken in order to measure staff engagement levels which can help identify where to take action to improve engagement and enhance performance. Staff Focus Groups have been held to communicate the outcomes of the survey and test the themes with an Employee Engagement Action Plan developed and shared with staff.

During the reporting period, WJEC CBAC Limited successfully achieved the ‘We Invest in People – Standard Accreditation’. The Investors in People framework allows organisations to assess, understand and recognise their performance at leading, supporting and improving their people. The framework supports organisations to measure performance and compare against other companies within the same industry.

WJEC CBAC Limited has developed a vision for a wellbeing strategy that is aligned with the overall HR mission and core values. The strategy includes a wellbeing plan under which all wellbeing initiatives are delivered. The plan provides a focus for targeting behaviours that present health risks and supporting lifestyle changes among employees. The wellbeing strategy makes provision for measuring whether or not its goals are achieved and evaluating the success of wellbeing programmes. Following evaluation, the organisation is committed to make changes to wellbeing initiatives to meet employees' changing needs and to help achieve a return on investment.

WJEC CBAC Limited's wellbeing policy enables the organisation to put in place wellbeing initiatives and outline wellbeing aspects that the organisation intends to address, including stress, lifestyle and exercise.

As part of WJEC’s commitment to promoting staff health and wellbeing, the organisation has put in place a team of mental health first-aiders. The role of the mental health first-aiders is to be a first point of contact for employees who are experiencing a mental health issue or emotional distress

During the Covid-19 pandemic, policies have been temporarily updated where appropriate in order to help facilitate staff to be able to work from home efficiently, and additional guidance, FAQs, training opportunities, focus groups and communications have been introduced to support staff during this challenging period. A New Ways of Working Project Group has been established to consider and develop a hybrid model of working. A pilot was launched on 31 January 2022 with staff working in a hybrid manner whilst still delivering key business objectives.

WJEC CBAC Limited is fully committed to the elimination of unlawful and unfair discrimination and values the benefits that a diverse workforce brings to the organisation. The organisation will not discriminate because of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race (which includes colour, nationality and ethnic or national origins), religion or belief, sex or sexual orientation. It will not discriminate because of any other irrelevant factor and will build a culture that values openness, fairness and transparency.

WJEC CBAC Limited's diversity policy enables the organisation to send out a strong message of commitment, both internally and externally. All employees are responsible for the promotion and advancement of this policy. Behaviour, actions or words that transgress the policy will not be tolerated and will be dealt with in line with the organisation's disciplinary policy. WJEC CBAC Limited is committed to an active equal opportunities approach from recruitment and selection, through training, development, performance management reviews and promotion to retirement for all employees including those with a disability.

Employees will be recruited solely on the basis of work criteria and the applicant's abilities and individual merit. A disability will not of itself justify the non-recruitment of an applicant. Reasonable adjustments to the recruitment process will be made as required to ensure that no applicant is disadvantaged because of his / her disability.

All employees will have equal access to training and opportunities for promotion and other aspects of career development based solely on their abilities. In particular, each element of the recruitment and training process will be made accessible to disabled employees by such adjustments as are reasonable.

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

As part of its commitment to equal opportunities for disabled people, WJEC CBAC Limited will ensure that all reasonable measures are taken to retain disabled employees in employment, including situations where individuals become disabled during their employment.

WJEC CBAC Limited will make such adjustments as are reasonable to enable a disabled employee to carry out his / her duties. These may include, but are not limited to, provision of specialist equipment and training, job redesign, retraining, flexible hours, remote working and / or redeployment to a suitable alternative vacancy.

WJEC CBAC Limited recognises the importance of taking proactive measures to remove barriers from the working environment for disabled people. These measures will ensure that WJEC CBAC Limited is able to recruit and retain the best employees on the basis of their abilities and individual merit.

WJEC CBAC Limited's Performance Management Review process provides individuals with the opportunity to improve personal and organisational effectiveness. The day-to-day management of individual and team performance should run alongside a formal framework, under which performance is assessed and improved. Formal performance reviews take place annually and are linked to training and development needs. Collectively, WJEC CBAC Limited is committed to providing mechanisms to ensure that the workforce performs at high levels which will help the organisation survive and prosper in a competitive marketplace.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also directors of WJEC CBAC Limited for the purposes of company law) are responsible for preparing the Report of Directors and Trustees and the financial statements in accordance with applicable law and regulations.

Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare 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". 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 charitable company and of the surplus or deficit of the charitable company for that period. In preparing these financial statements, the trustees are required to:

select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities SORP;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company 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 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 in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

DISCLOSURE OF INFORMATION TO AUDITOR

In so far as the trustees are aware:

there is no relevant audit information of which the charitable company’s auditor is unaware; and
the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

AUDITOR

Deloitte LLP have indicated their willingness to continue in office as the company’s auditor and a resolution for their reappointment will be proposed at the forthcoming Annual General Meeting.

The Report of Directors and Trustees, including the Strategic Report, was approved by order of the Board on 31 March 2022.

Ms J P Moonan

Chair of the Board of Directors

WJEC CBAC LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED

Report on the audit of the financial statements

Opinion

In our opinion the financial statements of WJEC CBAC Limited (the ‘charitable company’) and its subsidiary (the ‘group’):

give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 30 September 2021 and of the group's incoming resources and application of resources, including the group’s income and expenditure, for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and
have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

the group statement of financial activities;
the group statement of comprehensive income;
the group and parent charitable company balance sheets;
the group cash flow statement; and
the related notes 1 to 27.

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).

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's responsibilities for the audit of the financial statements section of our report.

We are independent of the group and of the parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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 and parent charitable company’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.

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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. 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.

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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

WJEC CBAC LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED - Continued

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purpose of company law) 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 charitable company’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 group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s 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.

A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

We considered the nature of the group’s industry and its control environment, and reviewed the group’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and internal audit about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory frameworks that the group operates in, and identified the key laws and regulations that:

had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Charities Act, UK Companies Act, pensions legislation, and tax legislation; and
do not have a direct effect on the financial statements but compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud in the following area, and our specific procedures performed to address are described below:

Cut-off of examination entry fee income: we selected a sample of examination entry fees covering periods before and after the year end, and tested whether they have been recognised in the correct period.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

WJEC CBAC LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED - Continued

enquiring of management, internal audit and external legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance.

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the trustees’ report, which includes the strategic report and the directors’ report prepared for the purposes of company law for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report included within the trustees’ report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report included within the trustees’ report.

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:

adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent charitable company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

We have nothing to report in respect of these matters.

Use of our report

This report is made solely to the charitable company’s members, 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 charitable company’s members 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 company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Hedditch (Senior statutory auditor) For and on behalf of Deloitte LLP Statutory Auditor Cardiff, United Kingdom

31 March 2022

WJEC CBAC LIMITED

GROUP STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 30 SEPTEMBER 2021 (including consolidated income and expenditure account)

Notes Unrestricted Restricted Total funds Total funds funds funds Year ended Year ended 30 Sept 2021 30 Sept 2020 INCOME FROM: £’000 £’000 £’000 £’000 Donations and legacies 3 - 283 283 669 Charitable activities 4 27,576 3,399 30,975 35,290 Other trading activities 5 - - - 13 Investments 6 - - - 40 Other income 7 126 1 127 483 TOTAL INCOME 27,702 3,683 31,385 36,495 EXPENDITURE ON: Raising funds 8 6 - 6 39 Charitable activities 8 27,299 3,699 30,998 34,549 TOTAL EXPENDITURE 8 27,305 3,699 31,004 34,588 Net income before investment gains 397 (16) 381 1,907 Net gains on investments 15 982 - 982 91 Net income before tax 1,379 (16) 1,363 1,998 Taxation 12 - - - 39 Net income for the year 10 1,379 (16) 1,363 2,037 GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2021 Net income for the year 1,379 (16) 1,363 2,037 Actuarial gains on defined benefit schemes 23 15,750 - 15,750 450 NET MOVEMENT IN FUNDS 17,129 (16) 17,113 2,487 RECONCILIATION OF FUNDS: Total funds brought forward 37,965 999 38,964 36,477 Net movement in funds for the year 17,129 (16) 17,113 2,487 Total funds carried forward 55,094 983 56,077 38,964 HISTORICAL COST SURPLUSES AND DEFICITS Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 Net income for the year 1,363 2,037 Difference between the historical cost depreciation and the actual depreciation charge of the period calculated on the revalued amount 7 7 HISTORICAL COST NET INCOME FOR THE YEAR 1,370 2,044	Notes Unrestricted Restricted Total funds Total funds funds funds Year ended Year ended 30 Sept 2021 30 Sept 2020 INCOME FROM: £’000 £’000 £’000 £’000 Donations and legacies 3 - 283 283 669 Charitable activities 4 27,576 3,399 30,975 35,290 Other trading activities 5 - - - 13 Investments 6 - - - 40 Other income 7 126 1 127 483 TOTAL INCOME 27,702 3,683 31,385 36,495 EXPENDITURE ON: Raising funds 8 6 - 6 39 Charitable activities 8 27,299 3,699 30,998 34,549 TOTAL EXPENDITURE 8 27,305 3,699 31,004 34,588 Net income before investment gains 397 (16) 381 1,907 Net gains on investments 15 982 - 982 91 Net income before tax 1,379 (16) 1,363 1,998 Taxation 12 - - - 39 Net income for the year 10 1,379 (16) 1,363 2,037 GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2021 Net income for the year 1,379 (16) 1,363 2,037 Actuarial gains on defined benefit schemes 23 15,750 - 15,750 450 NET MOVEMENT IN FUNDS 17,129 (16) 17,113 2,487 RECONCILIATION OF FUNDS: Total funds brought forward 37,965 999 38,964 36,477 Net movement in funds for the year 17,129 (16) 17,113 2,487 Total funds carried forward 55,094 983 56,077 38,964 HISTORICAL COST SURPLUSES AND DEFICITS Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 Net income for the year 1,363 2,037 Difference between the historical cost depreciation and the actual depreciation charge of the period calculated on the revalued amount 7 7 HISTORICAL COST NET INCOME FOR THE YEAR 1,370 2,044	Notes Unrestricted Restricted Total funds Total funds funds funds Year ended Year ended 30 Sept 2021 30 Sept 2020 INCOME FROM: £’000 £’000 £’000 £’000 Donations and legacies 3 - 283 283 669 Charitable activities 4 27,576 3,399 30,975 35,290 Other trading activities 5 - - - 13 Investments 6 - - - 40 Other income 7 126 1 127 483 TOTAL INCOME 27,702 3,683 31,385 36,495 EXPENDITURE ON: Raising funds 8 6 - 6 39 Charitable activities 8 27,299 3,699 30,998 34,549 TOTAL EXPENDITURE 8 27,305 3,699 31,004 34,588 Net income before investment gains 397 (16) 381 1,907 Net gains on investments 15 982 - 982 91 Net income before tax 1,379 (16) 1,363 1,998 Taxation 12 - - - 39 Net income for the year 10 1,379 (16) 1,363 2,037 GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2021 Net income for the year 1,379 (16) 1,363 2,037 Actuarial gains on defined benefit schemes 23 15,750 - 15,750 450 NET MOVEMENT IN FUNDS 17,129 (16) 17,113 2,487 RECONCILIATION OF FUNDS: Total funds brought forward 37,965 999 38,964 36,477 Net movement in funds for the year 17,129 (16) 17,113 2,487 Total funds carried forward 55,094 983 56,077 38,964 HISTORICAL COST SURPLUSES AND DEFICITS Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 Net income for the year 1,363 2,037 Difference between the historical cost depreciation and the actual depreciation charge of the period calculated on the revalued amount 7 7 HISTORICAL COST NET INCOME FOR THE YEAR 1,370 2,044	Total funds Year ended 30 Sept 2020 £’000 669 35,290 13 40 483	Total funds Year ended 30 Sept 2020 £’000 669 35,290 13 40 483
				36,495
				39 34,549
				34,588
				1,907 91
				1,998 39
				2,037
				2021 2,037 450
				2,487
				36,477 2,487
				38,964
				Year ended 30 Sept 2020 £’000 2,037 7
		1,370		2,044

There were no other recognised gains or losses other than those listed above and the net income for the year. All income and expenditure derives from continuing activities.

As permitted by Section 408 of the Companies Act 2006, no separate Statement of Financial Activities is presented in respect of the parent charity.

See note 20 for comparative Consolidated Statement of Financial Activities analysed by funds.

WJEC CBAC LIMITED (Company Registration Number 03150875) BALANCE SHEETS AS AT 30 SEPTEMBER 2021

Note FIXED ASSETS Intangible assets 13 Tangible assets 14 Investments 15 CURRENT ASSETS Stocks 16 Debtors 17 Cash at bank and in hand Creditors:amounts falling due within one year 18 NET CURRENT ASSETS Provision for liabilities 19 Defined benefit pension scheme liability 23 NET ASSETS FUNDS Restricted funds 21 Unrestricted funds: Charitable funds 21 Non-charitable trading fund 21 Revaluation reserve 21 Unrestricted funds excluding pension liability Pension reserve 21 Total unrestricted funds TOTAL FUNDS	Group Charity As at As at As at As at 30 Sept 2021 30 Sept 2020 30 Sept 2021 30 Sept 2020 £'000 £'000 £'000 £'000 952 1,364 950 1,364 15,505 15,973 15,432 15,876 4,489 7,991 4,489 7,991 20,946 25,328 20,871 25,231 1,464 950 911 613 5,183 6,950 7,317 7,781 35,590 27,050 35,580 27,040 42,237 34,950 43,808 35,434 (4,176) (4,244) (4,283) (4,232) 38,061 30,706 39,525 31,202 - - - - (2,930) (17,070) (2,930) (17,070) 56,077 38,964 57,466 39,363 983 999 983 999 57,377 53,510 57,735 53,749 (1,031) (160) - - 1,678 1,685 1,678 1,685 58,024 55,035 59,413 55,434 (2,930) (17,070) (2,930) (17,070) 55,094 37,965 56,483 38,364 56,077 38,964 57,466 39,363	Group Charity As at As at As at As at 30 Sept 2021 30 Sept 2020 30 Sept 2021 30 Sept 2020 £'000 £'000 £'000 £'000 952 1,364 950 1,364 15,505 15,973 15,432 15,876 4,489 7,991 4,489 7,991 20,946 25,328 20,871 25,231 1,464 950 911 613 5,183 6,950 7,317 7,781 35,590 27,050 35,580 27,040 42,237 34,950 43,808 35,434 (4,176) (4,244) (4,283) (4,232) 38,061 30,706 39,525 31,202 - - - - (2,930) (17,070) (2,930) (17,070) 56,077 38,964 57,466 39,363 983 999 983 999 57,377 53,510 57,735 53,749 (1,031) (160) - - 1,678 1,685 1,678 1,685 58,024 55,035 59,413 55,434 (2,930) (17,070) (2,930) (17,070) 55,094 37,965 56,483 38,364 56,077 38,964 57,466 39,363
		25,231 613 7,781 27,040
		35,434 (4,232)
		31,202
		- (17,070)
		39,363
		999 53,749 - 1,685
		55,434 (17,070)
		38,364
		39,363

The net income for the year of the parent charity for Companies Act purposes is £2.353m (2020: surplus £2.629m) and the net movement in funds after actuarial adjustments is £18.103m (2020: £3.079m).

The financial statements of WJEC CBAC Limited, registered number 03150875, were approved by the Board of Trustees and authorised for issue on 31 March 2022. They were signed on its behalf by:

Ms J P Moonan Chair of Trustees

WJEC CBAC LIMITED

GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2021

Note Net cash flows from operating activities 27 Cash flows from investing activities: Purchases of tangible assets Purchases of intangible assets Proceeds from sale of investments Interest received Net cash flows from investing activities Net cash flows from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 October Cash and cash equivalents at 30 September	Unrestricted funds £'000 4,261 (213) (227) 4,484 - 4,044 - 8,305 25,923 34,228	Restricted funds £'000 235 - - - - - - 235 1,127 1,362	Total funds Year ended 30 Sept 2021 £'000 4,496 (213) (227) 4,484 - 4,044 - 8,540 27,050 35,590	Total funds Year ended 30 Sept 2020 £'000 3,755
				(243) (239) 5,205 40
				4,763
				-
				8,518 18,532
				27,050

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

1 ACCOUNTING POLICIES

Company and charitable status

WJEC CBAC Limited, a public benefit entity, is incorporated in England and Wales as a company limited by guarantee not having a share capital. There are currently 8 Trustees. WJEC CBAC Limited is governed by its memorandum and articles, the guarantors are the 22 local authorities in Wales and the guarantee of each member is limited to £1. The Charity is a registered charity. The registered office is given on page 1.

Basis of accounting

The financial statements are prepared under the historical cost convention, subject to the treatment of tangible assets on transition to FRS 102 as detailed below, in accordance with the Statement of Recommended Practice “Accounting and Reporting by Charities (SORP 2015)” applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), effective 1 January 2015, and the Companies Act 2006.

The principal accounting policies are set out below.

Going concern

The organisation’s activities and future plans are set out in the Report of Directors and Trustees. The Trustees have assessed the charity’s ability to continue as a going concern, taking into account the financial impacts of Covid-19. The Trustees have considered several factors in forming their conclusions as to whether the use of the going concern basis is appropriate in preparing these financial statements, including cash resources, liquidity and demand for services.

The organisation has considerable financial resources together with certain agreed government funding. As a consequence, the Trustees believe that the organisation is well placed to manage its business risks successfully despite the current uncertain economic outlook.

The Trustees have a reasonable expectation that the organisation has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Basis of consolidation

Group financial statements have been prepared in respect of the Charity and its wholly-owned subsidiary undertaking WJEC CBAC (Services) Limited. These financial statements have been consolidated on a line-byline basis and the results of the subsidiary undertaking are disclosed in note 15.

In accordance with Section 403(3) of the Companies Act 2006 the Charity has adapted the Companies Act formats to prepare its consolidated accounts. No separate Statement of Financial Activities has been presented for the Charity alone as permitted by Section 408(3) of the Companies Act 2006 and paragraph 423 of the SORP. The amount of the surplus for the year dealt with in the Charity’s own accounts is disclosed on page 20.

Income

Income is recognised when the Group and Charity has entitlement to the funds, any performance conditions attached to the items of income have been met, it is probable that the income will be received and the amount can be measured reliably.

Income is classified as a general grant when receipt is not conditional on delivering certain levels or volumes of a service or supply of charitable goods.

Income is classified as a performance-related grant when a grant funding agreement contains conditions that specify the services to be performed by the Charity in receipt of the grant. Income is recognised to the extent that the Charity has provided the specified output. Any unspent elements of restricted funds are carried forward as restricted funds reserves.

Other Examination Income represents fees receivable for the provision of examination, testing and contract services.

All income is credited as income in the year in which it is receivable.

Incoming resources received but relating to future activities are treated as deferred income and recognised in the applicable financial year.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

1 ACCOUNTING POLICIES - Continued

Expenditure

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:

Expenditure on raising funds includes investment advice received. The prior year figures also include the costs incurred in the operation and management of the Charity's staff restaurant, although this has been closed in the current year due to the ongoing impact of Covid-19.

Expenditure on charitable activities includes direct costs of delivering Examination and Educational Resources activities.

Support costs are those functions that assist the work of the Charity but do not directly undertake charitable activities. Support costs include governance costs, accommodation and facilities, information technology, finance, marketing, human resources and corporate costs which support the Trust's programmes and activities. These costs have been allocated between cost of raising funds and expenditure on charitable activities. The bases on which support costs have been allocated are set out in note 9.

Expenditure is included in the statement of financial activities on an accrual basis, inclusive of VAT which cannot be recovered.

Fund accounting

Unrestricted funds, which include the charitable funds, are expendable at the discretion of the Trustees in furtherance of the objectives of the Charity. They comprise surpluses and deficits after transfers to and from restricted funds.

The group non-charitable trading fund relates to the activities of its subsidiary WJEC CBAC (Services) Limited, as outlined in note 15.

The revaluation reserve was established upon the revaluation of land and buildings at 1 April 1996 as set out in note 14.

The Charity holds certain restricted funds which are subject to specific restrictions imposed by the funding authorities and donors. These funds are not available for the Trustees to apply at their discretion. The purpose and use of the restricted funds is set out in note 21 to the financial statements.

Taxation

The parent company is a registered charity and has no liability to corporation tax on its charitable activities under the Corporation Tax Act 2010 (chapters 2 and 3 of part ii, section 466 onwards) or Section 256 of the Taxation for Chargeable Gains Act 1992, to the extent surpluses are applied to its charitable purposes.

Current tax for the subsidiary company, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of the timing difference. Deferred tax is measured on a non-discounted basis.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

1 ACCOUNTING POLICIES - Continued

Intangible assets and amortisation

Intangible assets are stated at cost, net of amortisation and any provision for impairment. Amortisation is provided on all intangible assets, other than software in development, at rates calculated to write off the cost, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Software 3 - 5 years

The charge of amortisation of intangible assets in included within the charitable activities expenditure line of the Statement of Financial Activities.

Software development costs have been capitalised in accordance with FRS 102 Section 18 Intangible Assets other than Goodwill and are therefore not treated, for dividend purposes, as a realised loss. Development costs are recognised as an intangible asset when all of the following criteria are demonstrated:

The technical feasibility of completing the software so that it will be available for use.
The intention to complete the software and use it.
The ability to use the software.
How the software will generate probable future economic benefits.
The availability of adequate technical, financial and other resources to complete the development and to use the software.
The ability to measure reliably the expenditure attributable to the software during its development.

Tangible assets and depreciation

Land and Buildings and items of Equipment were valued at 1 April 1996. On transition to FRS 102 the Charity has elected to use these previous UK GAAP revaluations as their deemed cost at the revaluation date. Accordingly the valuation of these assets has not been updated.

Other tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than freehold land and assets under construction, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line basis over its expected useful life, as follows:

Furniture and equipment 3 - 7 years Freehold buildings 50 years

Group policy is to capitalise equipment costing greater than £250. Assets are considered for impairment on an annual basis.

Investments

Fixed asset investments are measured at market value through the statement of financial activities.

In the parent Charity balance sheet, investments in subsidiary undertakings are recorded at cost less any provision for impairment. Impairment reviews are performed by the Trustees when there has been an indication of potential impairment.

Stocks and work in progress.

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate.

Work in progress and finished goods include the cost of materials and labour plus an appropriate proportion of overheads.

Operating leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

1 ACCOUNTING POLICIES - Continued

Financial Instruments

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. Cash at bank and cash in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Creditors and provisions are recognised where the Charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

The only financial instruments measured at fair value, based on the market rate, are investments (£4.489m at 30 September 2021, £7.991m at 30 September 2020). Intangible assets are measured at amortised cost (£0.952m at 30 September 2021, £1.364m at 30 September 2020).

Pension costs

The Charity operates defined benefit pension schemes for the benefit of its employees. The Charity makes contributions to the Rhondda Cynon Taff Local Government Pension Scheme (LGPS) and The Teachers' Pension Agency (TPA). Both are defined benefit schemes, but the TPA scheme is accounted for as a defined contribution scheme (see note 23).

The amounts charged to the statement of financial activities in respect of the LGPS are the costs arising from employee services rendered during the period and the cost of plan introductions, benefit changes, settlements and curtailments. The net interest cost on the net defined benefit liability is also charged to the statement of financial activities. Remeasurement comprising actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised in the statement of comprehensive income. Actuarial gains and losses are stated net of any tax effects.

The LGPS is funded, with the assets of the scheme held separately from those of the Group, in separate trusteeadministered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method. The valuations are obtained triennially and are updated at each balance sheet date.

2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 1, the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The financial consequences of the Covid-19 pandemic have been considered. Future cash flow forecasts have been prepared and the Board of Trustees considers that there are sufficient cash resources for at least the next twelve months from the date of signature of the financial statements to manage any foreseeable downturn in the UK and global economy.

The Trustees do not consider there are any critical judgements or sources of estimation uncertainty requiring disclosure, except for the following:

Pension costs – the cost of defined benefit pension plans is determined using actuarial valuations, which are dependent on assumptions in respect of discount rates, future salary increases, future pension increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and the long-term nature of these plans, such estimates are subject to significant uncertainty. The assumptions used in establishing the amounts recognised in these financial statements are outlined in note 23. The approximate impact of changing the key assumptions on the present value of the funded defined benefit obligation as at 30 September 2021 is set out on the following page.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY - continued

Assumption	Sensitivity	Increase / (decrease) in liability £m
Discount rate	+ 0.1%	(2.430)
Discount rate	- 0.1%	2.430
Future salary increases	+ 0.1%	0.330
Future salary increases	- 0.1%	(0.330)
Future pension increases	+ 0.1%	2.100
Future pension increases	- 0.1%	(2.100)
Mortality age *	+ 1 year	(3.980)
Mortality age *	- 1 year	3.980

A rating of +1 year means that members are assumed to follow the mortality pattern of the base table for an individual that is 1 year older than them.

3 ANALYSIS OF INCOME FROM DONATIONS AND LEGACIES

General grants Donations	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 283 669 - - 283 669	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 283 669 - - 283 669
		669

The general grants income represents UK Government Job Retention Scheme funding in respect of furloughed employees and appointees.

4 ANALYSIS OF INCOME FROM CHARITABLE ACTIVITIES

Performance-related grants and other funding Other Examinations income Other Educational Resources income ANALYSIS OF INCOME FROM OTHER TRADING ACTIVITIES Staff restaurant Sponsorships Room hire	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 5,423 1,400 25,481 33,854 71 36 30,975 35,290 Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 - 10 - 2 - 1 - 13	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 5,423 1,400 25,481 33,854 71 36 30,975 35,290 Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 - 10 - 2 - 1 - 13
		13

5 ANALYSIS OF INCOME FROM OTHER TRADING ACTIVITIES

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

6 ANALYSIS OF INCOME FROM INVESTMENTS

Bank interest 7 ANALYSIS OF OTHER INCOME Insurance Paper waste Royalties 8 ANALYSIS OF EXPENDITURE Raising funds Charitable activities – Examinations Charitable activities – Educational Resources Total expenditure 9 ANALYSIS OF SUPPORT COSTS Year ended 30 September 2021 Governance Finance Information Technology Marketing Accommodation and Facilities Human Resources Corporate costs Total Expenditure	Activities Support undertaken costs directly £'000 £'000 6 - 19,130 9,320 2,004 544 21,140 9,864 Raising Examinations Funds £'000 £'000 - 353 - 1,099 - 4,465 - 752 - 1,412 - 713 - 526 - 9,320	Year ended 30 Sept 2021 £’000 - Year ended 30 Sept 2021 £’000 117 - 10 127 Total Year ended 30 Sept 2021 £'000 6 28,450 2,548 31,004 Educational Resources £'000 32 129 143 11 104 64 61 544	Year ended 30 Sept 2020 £’000 40
			Year ended 30 Sept 2020 £’000 478 3 2
			483
			Total Year ended 30 Sept 2020 £'000 39 33,397 1,152 34,588 Total £'000 385 1,228 4,608 763 1,516 777 587 9,864

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

9 ANALYSIS OF SUPPORT COSTS - continued

Year ended 30 September 2020 Governance Finance Information Technology Marketing Accommodation and Facilities Human Resources Corporate costs Total Expenditure	Raising Examinations Funds £'000 £'000 - 375 1 1,107 2 5,219 - 604 5 1,634 1 677 2 519 11 10,135	Educational Resources £'000 13 44 75 3 61 23 16 235	Total £'000 388 1,152 5,296 607 1,700 701 537
			10,381

Basis of Allocation

Support costs are apportioned between the Charity’s Direct Activities on the following basis:

Cost element	Basis of apportionment
Governance	Number of full-time equivalent posts
Finance	Departmental expenditure
Information Technology	Resource usage
Marketing	Resource usage
Accommodation and Facilities	Floor area of offices occupied
Human Resources	Number of full-time equivalent posts
Corporate costs	Number of full-time equivalent posts

10 NET INCOME FOR THE YEAR

	Year ended	Year ended
	30 Sept 2021	30 Sept 2020
	£’000	£’000
Net income is stated after charging / (crediting):
Auditor's remuneration:
Fees payable to the Charity's auditor for the audit of the Charity's annual
financial statements	26	29
Fees payable to the Charity's auditor for other services to the group:
- Audit-related assurance services	3	3
- Tax compliance services	8	5
- Tax advisory services	-	11
- Fees payable for the audit of the Charity's subsidiary	11	10
Other professional fees	117	113
Government grants	(5,688)	(2,065)
Depreciation of owned tangible fixed assets	681	674
Amortisation of owned intangible fixed assets	517	791
Loss on disposal of fixed assets	122	74
Operating lease charges	226	220

Details of restricted government grant income are outlined in note 21, representing part or all of the income in respect of the Publications Programme, Welsh Medium Assessment, Welsh for Adults, Blended Learning, Modern Foreign Languages, support for the delivery of Centre Determined Grades and the Job Retention Scheme.

There are no unfulfilled conditions or other contingencies attached to the grants that have been recognised in income.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

11 ANALYSIS OF STAFF COSTS, TRUSTEE REMUNERATION AND EXPENSES, AND THE COST OF KEY MANAGEMENT PERSONNEL

The average monthly number of employees was:

Group and Charity Raising funds Examinations Educational Resources Support Governance Their aggregate remuneration comprised: Group and Charity Wages and salaries Social security costs Other pension costs	Year ended 30 Sept 2021 Number 3 278 26 99 2 408 Year ended 30 Sept 2021 £’000 14,069 1,463 6,187 21,719	Year ended 30 Sept 2020 Number 3 277 10 100 2
		392
		Year ended 30 Sept 2020 £’000 13,444 1,336 5,205
		19,985

The number of employees whose emoluments (excluding employer pension contributions but including benefits in kind) exceeded £60,000 was:

Salary band	Year ended	Year ended
	30 Sept 2021	30 Sept 2020
	Number	Number
£60,001 - £70,000	14	12
£70,001 - £80,000	13	12
£90,001 - £100,000	1	1
£130,001 - £140,000	1	1

The key management personnel of the Group and parent Charity, also known as the ELT, are listed on page 1. The total remuneration (including pension contributions) of the key management personnel of the Group and Charity for the year totalled £874k (2020: £761k).

Payments made to individuals contracted to provide examination-related services are not included in the employee information above.

Trustees' Remuneration

No Trustees received remuneration during the current or prior year. No travel and subsistence expenses were paid in 2021 (2020: £3k to 10 Trustees).

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

12 TAX ON LOSS OF TRADING SUBSIDIARY

The credit for taxation is made up as follows: Current tax Adjustment in respect of previous periods Total current tax Deferred tax Origination and reversal of timing differences Effect of changes in tax rates Total deferred tax Total tax on loss	Year ended 30 Sept 2021 £’000 - - 2 (2) - -	Year ended 30 Sept 2020 £’000 (29)
		(29)
		(11) 1
		(10)
		(39)

The standard rate of tax for the year, based on the UK standard rate of corporation tax, is 19% (2020: 19%). The actual tax charge for the year differs from the standard rate for the following reasons:

Loss before taxation Tax on loss at the standard rate Deferred tax not recognised Tax rate changes Total tax credit for the year	Year ended 30 Sept 2021 £’000 (871) (165) 165 - -	Year ended 30 Sept 2020 £’000 (392)
		(75) 35 1
		(39)

At the March 2021 budget, the government announced that the main rate of corporation tax will increase from April 2023 to 25% on profits above £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

13 INTANGIBLE ASSETS

Group Cost At 1 October 2020 Additions Disposals Transfers At 30 September 2021 Accumulated amortisation At 1 October 2020 Charge for the year At 30 September 2021 Net book amount At 30 September 2021 At 30 September 2020 Charity Cost At 1 October 2020 Additions Disposals Transfers At 30 September 2021 Accumulated amortisation At 1 October 2020 Charge for the year At 30 September 2021 Net book amount At 30 September 2021 At 30 September 2020	Computer Software £’000 4,209 107 - 101 4,417 3,014 517 3,531 886 1,195 Computer Software £’000 4,098 103 - 101 4,302 2,903 515 3,418 884 1,195	Software under Development £’000 169 120 (122) (101) 66 - - - 66 169 Software under Development £’000 169 120 (122) (101) 66 - - - 66 169	Total £’000 4,378 227 (122) -
			4,483
			3,014 517
			3,531
			952
			1,364
			Total £’000 4,267 223 (122) -
			4,368
			2,903 515
			3,418
			950
			1,364

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

14 TANGIBLE FIXED ASSETS

Group Cost / valuation At 1 October 2020 Additions Disposals At 30 September 2021 Represented by: - Valuation at 1 April 1996 - Cost Accumulated depreciation At 1 October 2020 Charge for the year Disposals At 30 September 2021 Net book amount At 30 September 2021 At 30 September 2020	Freehold Land and Buildings £’000 21,424 59 - 21,483 2,131 19,352 6,067 365 - 6,432 15,051 15,357	Furniture and Equipment £’000 3,310 154 (21) 3,443 2 3,441 2,694 316 (21) 2,989 454 616	Total £’000 24,734 213 (21)
			24,926
			2,133 22,793
			8,761 681 (21)
			9,421
			15,505
			15,973

If freehold land and buildings and furniture and equipment had not been revalued they would have been included at the following amounts:

Cost Aggregated depreciation Net book amount	Land and Buildings As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 19,352 19,293 (5,979) (5,621) 13,373 13,672	Furniture and As at 30 Sept 2021 £’000 3,441 (2,987) 454	Equipment As at 30 Sept 2020 £’000 3,308 (2,692)
			616

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

14 TANGIBLE FIXED ASSETS - Continued

Charity Cost / valuation At 1 October 2020 Additions At 30 September 2021 Represented by: - Valuation at 1 April 1996 - Cost Accumulated depreciation At 1 October 2020 Charge for the year At 30 September 2021 Net book amount At 30 September 2021 At 30 September 2020	Freehold Land and Buildings £’000 21,424 59 21,483 2,131 19,352 6,067 365 6,432 15,051 15,357	Furniture and Equipment £’000 2,400 140 2,540 2 2,358 1,881 278 2,159 381 519	Total £’000 23,824 199
			24,023
			2,133 21,890
			7,948 643
			8,591
			15,432
			15,876

If freehold land and buildings and furniture and equipment had not been revalued they would have been included at the following amounts:

Cost Aggregated depreciation Net book amount	Land and Buildings As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 19,352 19,293 (5,979) (5,621) 13,373 13,672	Furniture and Equipment As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 2,538 2,398 (2,157) (1,879) 381 519	Furniture and Equipment As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 2,538 2,398 (2,157) (1,879) 381 519
			519

All of the Charity’s assets are utilised for charitable purposes.

Bases of valuations

Land and Buildings were valued at 1 April 1996 by the Property Services department of Rhondda Cynon Taff County Borough Council on an existing use, open market, basis.

Equipment was valued at 1 April 1996 by the management of WJEC CBAC Limited on a depreciated replacement cost basis.

On transition to FRS 102 the Charity elected to use these previous UK GAAP revaluations as their deemed cost at the revaluation date. Accordingly the valuation of these assets has not been updated.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

15 INVESTMENTS

Investment funds Subsidiary undertakings Investment funds – Group & Charity Market value at 1 October Disposal proceeds Net realised investment gains Net unrealised investment gains Market value at 30 September Cost at 30 September Market value analysed between: Investments Cash held by investment managers Subsidiary undertakings - Charity At 1 October 2020 and 30 September 2021	Group As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 4,489 7,991 - - 4,489 7,991 Group As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 7,991 13,105 (4,484) (5,205) 371 20 611 71 4,489 7,991 3,500 7,000 4,489 7,991 - - 4,489 7,991	Charity As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 4,489 7,991 - - 4,489 7,991 Charity As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 7,991 13,105 (4,484) (5,205) 371 20 611 71 4,489 7,991 3,500 7,000 4,489 7,991 - - 4,489 7,991 £ 1	Charity As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 4,489 7,991 - - 4,489 7,991 Charity As at As at 30 Sept 2021 30 Sept 2020 £'000 £'000 7,991 13,105 (4,484) (5,205) 371 20 611 71 4,489 7,991 3,500 7,000 4,489 7,991 - - 4,489 7,991 £ 1
			7,991
			7,000
			7,991 -
			7,991
			£ 1

At 1 October 2020 and 30 September 2021

The Charity owns the entire issued ordinary share capital of WJEC CBAC (Services) Limited, incorporated and registered in Wales (registration number 3261485). The principal activity of the subsidiary company is the provision of printing, publishing and distribution services to the parent company.

The result of the Charity's trading activities through its subsidiary undertaking is detailed below. WJEC CBAC (Services) Limited's taxable profits are generally donated to the Charity annually.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

15 INVESTMENTS - Continued

Turnover Cost of sales Gross (loss) / profit Other income Administrative and other expenses Operating loss Interest payable Loss on ordinary activities before taxation Tax on loss Loss for the year The aggregate of the assets and liabilities was: Fixed assets Current assets Current liabilities Net liabilities	Year ended 30 Sept 2021 £’000 686 (796) (110) 24 (731) (817) (54) (871) - (871) As at 30 Sept 2021 £’000 75 1,142 (2,248) (1,031)	Year ended 30 Sept 2020 £’000 1,884 (1,427)
		457 478 (1,298)
		(363) (29)
		(392) 39
		(353)
		As at 30 Sept 2020 £’000 96 878 (1,134)
		(160)

WJEC CBAC Limited is one of 33 full members of ALTE, a Charitable Incorporate Organisation (CIO), based in England, registered charity number 1184799. Its aim is to promote transitional recognition of the certification of the languages of the European Community through the establishment of a common system of levels of proficiency throughout the European Community and the adoption of agreed standards of professional practices in language testing throughout the European Community. ALTE transitioned from its previous legal status, an EEIG (European Economic Interest Grouping), to a CIO in 2019.

16 STOCKS

Stocks of finished goods and materials Work in progress	Group As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 313 219 1,151 731 1,464 950	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 257 155 654 458 911 613	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 257 155 654 458 911 613
			613

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

17 DEBTORS

Trade debtors Prepayments and accrued income Amounts owed by subsidiary undertaking VAT recoverable Corporation tax Other debtors 18 CREDITORS	Group As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 2,297 4,789 2,857 2,124 - - - 7 29 29 - 1 5,183 6,950	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 2,274 4,782 2,830 1,932 2,213 1,066 - - - - - 1 7,317 7,781	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 2,274 4,782 2,830 1,932 2,213 1,066 - - - - - 1 7,317 7,781
			7,781

Amounts falling due within one year Trade creditors Accruals and deferred income Taxation and social security Other creditors Deferred income Brought forward Released in the year Deferred in the year Carried forward	Group As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 655 844 3,058 3,042 386 340 77 18 4,176 4,244 496 (496) 567 567	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 639 819 3,039 2,999 528 396 77 18 4,283 4,232 496 (496) 567 567	Charity As at As at 30 Sept 30 Sept 2021 2020 £’000 £’000 639 819 3,039 2,999 528 396 77 18 4,283 4,232 496 (496) 567 567
			4,232

19 PROVISION FOR LIABILITIES

Deferred tax Group At 1 October Charge / (credit) for the year At 30 September	As at 30 Sept 2021 £’000 - - -	As at 30 Sept 2020 £’000 10 (10)
		-

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

19 PROVISION FOR LIABILITIES - Continued

Deferred taxation provided in the financial statements is as follows:

Amount provided Capital allowances in excess of depreciation Losses	As at 30 Sept 2021 £’000 7 (7) -	As at 30 Sept 2020 £’000 9 (9)
		-

£6k of the £7k deferred tax liability at 30 September 2021 is expected to reverse in the next 12 months (2020: £5k of £9k). This is based on the expected difference between the projected depreciation / amortisation charge and capital allowances to be claimed in respect of assets held at 30 September 2021.

£6k of the £7k deferred tax asset at 30 September 2021 is also expected to reverse in the next 12 months (2020: £9k of £9k).

A deferred tax asset of £264k in respect of corporation tax losses has not been recognised at 30 September 2021 (2020: £27k).

20 COMPARATIVE CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

INCOME FROM: Donations and legacies Charitable activities Other trading activities Investments Other income TOTAL INCOME EXPENDITURE ON: Raising funds Charitable activities TOTAL EXPENDITURE Net income before investment gains Net gains on investments Net income before tax Taxation Net income for the year GROUP STATEMENT OF COMPREHENSIVE INCOME Net income for the year Actuarial gains on defined benefit schemes NET MOVEMENT IN FUNDS RECONCILIATION OF FUNDS: Total funds brought forward Net movement in funds for the year Total funds carried forward	Unrestricted funds £’000 - 33,882 13 40 482 34,417 39 32,474 32,513 1,904 91 1,995 39 2,034 2,034 450 2,484 35,481 2,484 37,965	Restricted Total funds funds Year ended 30 Sept 2020 £’000 £’000 669 669 1,408 35,290 - 13 - 40 1 483 2,078 36,495 - 39 2,075 34,549 2,075 34,588 3 1,907 - 91 3 1,998 - 39 3 2,037 3 2,037 - 450 3 2,487 996 36,477 3 2,487 999 38,964	Restricted Total funds funds Year ended 30 Sept 2020 £’000 £’000 669 669 1,408 35,290 - 13 - 40 1 483 2,078 36,495 - 39 2,075 34,549 2,075 34,588 3 1,907 - 91 3 1,998 - 39 3 2,037 3 2,037 - 450 3 2,487 996 36,477 3 2,487 999 38,964
			36,495
			39 34,549
			34,588
			1,907 91
			1,998 39
			2,037
			2,037 450
			2,487
			36,477 2,487
			38,964

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

21 MOVEMENT ON FUNDS

Group Non-charitable Revaluation Charitable Restricted Trading Fund Reserve Funds Fund £’000 £’000 £’000 £’000 At 1 October 2020 (160) 1,685 53,510 999 Surplus for the year (871) - 3,860 (16) Actuarial gain - - - - Transfer - (7) 7 - At 30 September 2021 (1,031) 1,678 57,377 983 Charity Revaluation Charitable Restricted Reserve Funds Fund £’000 £’000 £’000 At 1 October 2020 1,685 53,749 999 Surplus for the year - 3,979 (16) Actuarial gain - - - Transfer (7) 7 - At 30 September 2021 1,678 57,735 983	Pension Reserve £’000 (17,070) (1,610) 15,750 - (2,930) Pension Reserve £’000 (17,070) (1,610) 15,750 - (2,930)	Total £’000 38,964 1,363 15,750 - 56,077 Total £’000 39,363 2,353 15,750 - 57,466

Restricted Funds

The Charity has identified certain funds that have been classed as restricted as follows:

Welsh Language & Resource – Ancillary Income – income utilised to further support the services provided through the historical Service Level Agreement with the 22 local authorities in Wales.
Publications Programme – Welsh Government funded publication of Welsh language and bilingual versions of classroom materials.
NYOW prize fund – cash held from the redemption of 3½% War Bonds. The annual income from the War Bonds funded a prize for the National Youth Orchestra of Wales (NYOW).
Neil and Mary Ellen Webber Bursaries Fund – a fund to support participation in instrumental music ensembles and programmes of Wales (performing or composing) by young people in Wales.
Welsh Medium Assessment – funding to support the provision of assessment through the medium of Welsh.
Welsh for Adults – funding received for the delivery of examinations and resources designed specifically for adult learners.
Welsh Language Support Grant – funding for the translation and printing of Welsh medium specifications, Specimen Assessment Materials, Delivery Guides and Administrative Guides.
Blended Learning – funding to develop a suite of GCSE and A Level resources to support learners as they prepared for their Summer 2021 assessments.
Delivery of Centre Determined Grades – two separate Welsh Government grants to support the delivery of Centre Determined Grades for General Qualifications in Summer 2021. Some elements of these grants were awarded to compensate WJEC CBAC Limited for lost income. As there were no spending obligations attached to these elements, the income has been treated as unrestricted. The table on page 39 includes the restricted fund elements only, relating to the recovery of costs incurred.
Modern Foreign Languages – funding to support the development and implementation of measures to ensure the future sustainability of AS and A Level Modern Foreign Languages qualifications.
Job Retention Scheme grant income in respect of furloughed employees and appointees.

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

21 MOVEMENT ON FUNDS - Continued

1 Welsh Language & Resource – Ancillary Income Publications Programme NYOW Prize Fund Neil and Mary Ellen Webber Bursaries Fund Welsh Medium Assessment Welsh for Adults Welsh Language Support Grant Blended Learning Delivery of Centre Determined Grades 1 Delivery of Centre Determined Grades 2 Modern Foreign Languages Job Retention Scheme	Balance at October 2020 £’000 - - 3 470 - 526 - - - - - - 999	Movement in Funds Balance at Income Expenditure 30 Sept 2021 £’000 £’000 £’000 3 3 - 635 635 - - - 3 - - 470 261 261 - 209 225 510 18 18 - 1,816 1,816 - 326 326 - 130 130 - 2 2 - 283 283 - 3,683 3,699 983	Movement in Funds Balance at Income Expenditure 30 Sept 2021 £’000 £’000 £’000 3 3 - 635 635 - - - 3 - - 470 261 261 - 209 225 510 18 18 - 1,816 1,816 - 326 326 - 130 130 - 2 2 - 283 283 - 3,683 3,699 983
			983

22 ANALYSIS OF ASSETS AND LIABILITIES BETWEEN FUNDS

Group Fixed assets Current assets Current liabilities Defined benefit pension scheme liability At 30 September 2021 At 30 September 2020 Charity Fixed assets Current assets Current liabilities Defined benefit pension scheme liability At 30 September 2021 At 30 September 2020	Unrestricted Funds £’000 20,946 40,267 (3,189) - 58,024 55,035 Unrestricted Funds £’000 20,871 41,838 (3,296) - 59,413 55,434	Restricted Funds £’000 - 1,970 (987) - 983 999 Restricted Funds £’000 - 1,970 (987) - 983 999	Pension Reserve £’000 - - - (2,930) (2,930) (17,070) Pension Reserve £’000 - - - (2,930) (2,930) (17,070)	Total £’000 20,946 42,237 (4,176) (2,930)
				56,077

				38,964
				Total £’000 20,871 43,808 (4,283) (2,930)
				57,466

				39,363

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

23 EMPLOYEE RETIREMENT BENEFITS

Defined benefit schemes

The Charity’s employees belong to two principal pension schemes, the Teachers’ Pension Scheme and the Rhondda Cynon Taff Borough Council Local Government Pension Scheme (“LGPS” or “the Fund”). The assets of both schemes are held separately from those of the Charity in independently administered funds.

Local Government Pension Scheme

FRS 102 requires disclosures in respect of the assets and liabilities of the scheme attributable to the Charity, the actuarial assumptions used in valuing the scheme and the performance of the pension fund. This information is provided below.

The most recent valuation, as at 31 March 2019, has been updated by Aon Solutions UK Limited, to take account of the requirements of FRS 102 in order to assess the liabilities of the fund as at 30 September 2021. The liabilities are valued on an actuarial basis using the projected unit method which assesses the future liabilities at their discounted present value.

The employer contribution rates certified for the group at the 2019 valuation are as follows:

WJEC CBAC Limited

April 2020 to March 2021 April 2021 to March 2022 April 2022 to March 2023

35.2% of pensionable salary 35.2% of pensionable salary 35.2% of pensionable salary

These figures include the past service element of contribution rate.

In addition to the above contribution rates the Charity is to make an annual Capital Contribution to the scheme which is intended to eliminate the scheme deficit over 25 years. This contribution is currently set at £143k, £264k and £393k for the years commencing April 2020, 2021 and 2022 respectively.

Key assumptions used: Discount rate Expected rate of salary increases Future pension increases Pension accounts revaluation rate CPI inflation	Valuation as at
	30 Sept 30 Sept 2021 2020 2.10% 1.60% 4.05% 3.55% 2.80% 2.30% 2.80% 2.30% 2.30% 2.30%

Mortality assumptions

The post-retirement mortality assumptions are based on the recent mortality experience of members within the Fund and allow for expected future mortality improvements. The assumed life expectations on retirement at age 65 are:

Retiring today: Males Females Retiring in 20 years: Males Females	Valuation as at
	30 Sept 30 Sept 2021 years 2020 years 21.8 21.7 24.1 24.0 22.8 22.7 25.6 25.5

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

23 EMPLOYEE RETIREMENT BENEFITS - Continued

Guaranteed Minimum Pension (GMP) Indexation and Equalisation

The actuary’s standard approach is to value full CPI inflation pension increases on GMPs of members whose state pension age is on or after 6 April 2016. This is an approximate method of recognising the cost of the Government’s commitment to compensate public service scheme members from the removal of the Additional Pension element of the state pension from this date, and for the outcome of the Lloyds judgement which found GMPs to be illegally sex discriminatory. Government has consulted on its approach to compensating affected members and announced on 23 March 2021 that it would adopt a long term policy of uprating GMPs in line with CPI inflation for members whose state pension age is on or after 6 April 2016. The consultation response recognised that this solution will not address all sex inequalities for a minority of members and further guidance is expected from MHCLG on how they propose to deal with this. Any remaining sex inequalities are expected to be small and the actuary believes that their approach, in line with current government policy, is a reasonable estimate.

In October 2020 a second ruling in the Lloyds bank case clarified that compensation would be required to members who transferred benefits out since May 1990. Government has not yet acknowledged a liability in public service schemes nor indicated an approach to rectifying this. There would be a significant time and cost involved in estimating a potential liability and therefore no allowance for a potential liability resulting from this ruling has been included this year.

McCloud Judgement

In December 2018 the Court of Appeal ruled in the ‘McCloud / Sargeant’ judgement that the transitional protection arrangements put in place when the Firefighters’ and Judges’ pension schemes were reformed were age discriminatory. The Government applied to the Supreme Court for permission to appeal this judgement, however the Supreme Court rejected the Government’s request on 27 June 2019. In a Ministerial Statement dated 15 July 2019, the Government committed to extending a remedy across all public sector schemes which included similar transitional protection arrangements. MHCLG published its McCloud consultation for the LGPS on 16 July 2020, setting out proposed changes aimed at removing the unlawful age discrimination in the LGPS. The consultation closed on 8 October 2020. In a written ministerial statement on 13 May 2021 MHCLG confirmed they would be proceeding with the key principles as laid out in that consultation, with a full Government response to follow later.

The 2020 actuarial figures included a McCloud ‘underpin’ liability within the current service cost, together with an allowance within the balance sheet reflecting service since the scheme reforms. For the 30 September 2021 year-end, the same approach as last year has been adopted, using a roll-forward method based on last year’s results. This remedy is closely aligned with the method proposed by MHCLG in its consultation issued in July 2020 and assumes that the underpin liability applies to:

All members in service on 1 April 2012
Members’ benefits on reaching retirement (normal or ill health), or on prior withdrawal, and
Spouse’s benefits on death after retirement.

Goodwin Ruling

In June 2020 an employment tribunal ruled, in relation to the Teachers’ Pension scheme, that provisions for survivor’s benefits of a female member in an opposite sex marriage are less favourable than for a female in a same sex marriage or civil partnership, and that treatment amounts to direct discrimination on grounds of sexual orientation. The chief secretary to the Treasury announced in a written ministerial statement on 20 July 2020 that he believed that changes would be required to other public service pension schemes with similar arrangements. Those changes are yet to be reflected in the LGPS Regulations, nor in the data received from the Administering Authority and therefore no allowance for this ruling is made in this year’s calculations.

Amounts recognised in the statement of financial activities in respect of the defined benefit scheme are as follows:

Current service cost Net interest cost Total cost relating to defined benefit scheme recognised in the statement of financial activities	Year ended 30 Sept 2021 £'000 5,510 220 5,730	Year ended 30 Sept 2020 £'000 4,550 240
		4,790

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

23 EMPLOYEE RETIREMENT BENEFITS – Continued

Amounts recognised in the statement of comprehensive income in respect of the defined benefit scheme and unfunded obligations are as follows:

unfunded obligations are as follows:
	Year ended	Year ended
	30 Sept	30 Sept
	2021	2020
	£'000	£'000
Actuarial gains	15,750	450

The amount included in the balance sheet arising from the Group's obligations in respect of its defined benefit scheme and unfunded obligations are as follows:

Present value of defined benefit obligations Fair value of scheme assets Net liability recognised in the balance sheet in respect of funded scheme Present value of unfunded pension obligations Total net liability recognised in the balance sheet	As at 30 Sept 2021 £'000 (110,600) 109,030 (1,570) (1,360) (2,930)	As at 30 Sept 2020 £'000 (104,540) 88,950
		(15,590) (1,480)
		(17,070)

Movements in the present value of defined benefit obligations were as follows:

At 1 October Current service cost Interest cost Actuarial (gains) / losses Contributions from scheme participants Benefits paid Past service cost At 30 September Movements in the fair value of scheme assets were as follows: At 1 October Actuarial gains Actual return on plan assets (excluding amounts included in net interest cost) Contributions from the employer Contributions from scheme participants Benefits paid At 30 September	Year ended 30 Sept 2021 £'000 104,540 5,510 1,680 (1,420) 780 (490) - 110,600 Year ended 30 Sept 2021 £'000 88,950 14,300 1,460 4,030 780 (490) 109,030	Year ended 30 Sept 2020 £'000 92,740 4,550 1,660 6,830 700 (1,940) -
		104,540
		Year ended 30 Sept 2020 £'000 77,920 7,340 1,420 3,510 700 (1,194)
		88,950

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

23 EMPLOYEE RETIREMENT BENEFITS – Continued

The analysis of the scheme assets at the balance sheet date was as follows:

Equity instruments Debt instruments Property Cash	As at 30 Sept 2021 68.7% 24.3% 6.6% 0.4% 100.0%	As at 30 Sept 2020 68.8% 23.6% 6.8% 0.8%
		100.0%

Teachers’ Pension Scheme

Members of the scheme are employed by WJEC CBAC Limited. The scheme provides specific benefits upon their retirement, and the Charity contributes towards the costs by making contributions as a percentage of members’ salaries.

Under the definitions set out in FRS 102 the TPS is a multi-employer, defined benefit pension scheme administered by the Department for Education. However, a notional fund is used as a basis for calculating the employer's contributions as paid by the Charity. The Charity is not able to identify its share of the underlying financial position and performance of the scheme and, therefore, for these financial statements it is accounted for as if it were a defined contribution scheme. Contributions are charged to the statement of financial activities in the year to which they relate.

Employer’s contribution Employees’ contribution Agreed future employer contribution rate Agreed future employee contribution rate	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 643 639 288 287 23.68% 23.68% 7.4 – 11.7% 7.4 – 11.7%	Year ended Year ended 30 Sept 2021 30 Sept 2020 £’000 £’000 643 639 288 287 23.68% 23.68% 7.4 – 11.7% 7.4 – 11.7%
		23.68% 7.4 – 11.7%

24 FINANCIAL COMMITMENTS

Operating Lease Commitments

The total future minimum payments under non-cancellable operating leases:

Group Plant and equipment - within 1 year - between 1 and 5 years Charity Plant and equipment - within 1 year - between 1 and 5 years	As at 30 Sept 2021 £’000 205 324 529 As at 30 Sept 2021 £’000 15 2 17	As at 30 Sept 2020 £’000 219 509
		728
		As at 30 Sept 2020 £’000 26 17
		43

WJEC CBAC LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

24 FINANCIAL COMMITMENTS – Continued

Capital Commitments

The Charity has capital commitments as at 30 September 2021 of £nil (30 September 2020: £nil).

25 RELATED PARTIES

All transactions between the Charity and subsidiary, WJEC CBAC (Services) Limited, are eliminated on consolidation.

No Trustee received payment for professional or other services supplied to the Charity during the year (2020: £nil).

Some of the directors are nominated by the 22 local authorities in Wales. Until March 2018, these authorities were charged directly for services in respect of educational resources and Youth Arts activities. At 30 September 2021 the amounts owed to WJEC CBAC Limited from the local authorities was £20k (2020: £20k) and this remains outstanding at the date of signing these accounts. At 30 September 2021 the amounts owed by WJEC CBAC Limited to the local authorities was £24k (2020: £35k), with no outstanding balances at the date of signing these accounts.

At 30 September 2021 the amounts owing to Rhondda Cynon Taff County Borough Council Local Government Pension Scheme and the Teachers’ Pension Scheme were £413k (2020: £366k) and £81k (2020: £77k) respectively. These relate to the amounts payable for the September payroll.

All outstanding balances are unsecured and cash settlement is due within 30 days of invoice. No guarantees are given or received.

26 MEMBERS’ LIABILITY

The Company was incorporated as being limited by guarantee and therefore has no share capital. The liability of the members is limited to £1 each.

27 CASH FLOW STATEMENT

Reconciliation of net income to cash generated by operations:

Group Net income before tax for the year Adjustments for: Interest receivable Taxation Amortisation charges Depreciation charges Loss on sale of tangible fixed assets Increase in value of investments Operating cash flow before movement in working capital Decrease / (Increase) in debtors (Decrease) / increase in creditors Difference between pension charge and cash contributions Increase in stock Cash generated by operating activities	Year ended 30 Sept 2021 £’000 1,363 - - 517 681 122 (982) 1,701 1,767 (68) 1,610 (514) 4,496	Year ended 30 Sept 2020 £’000 1,998 (40) (29) 791 674 74 (91)
		3,377 (410) 4 1,190 (406)
		3,755

2021-09-30-accounts

WJEC CBAC LIMITED

Registered Number: 03150875

AND

TRUSTEES AND OFFICERS

COMPANY SECRETARY

PRINCIPAL OFFICERS – KEY MANAGEMENT PERSONNEL

BANKERS

SOLICITORS

AUDITOR

INVESTMENT CONSULTANT

FUND MANAGER

REGISTERED OFFICE AND PRINCIPAL OFFICE

REGISTERED NAME: WJEC CBAC LIMITED

STATUS

GROUP STRUCTURE

WJEC CBAC (Services) Limited

BOARD OF DIRECTORS AND TRUSTEES

LEGAL AND ADMINISTRATIVE INFORMATION - Continued

BOARD OF DIRECTORS AND COMMITTEE MEMBERSHIP

Notes:

EXECUTIVE LEADERSHIP TEAM (ELT)

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021

CORPORATE GOVERNANCE AND MANAGEMENT

Board of Directors and Committee Structure, Purpose and Attendance

Director Recruitment, Appointment and Induction

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Risk Management and Assurance

Financial Risk Management

Welsh Language

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

OBJECTIVES OF THE CHARITY

Mission Statement

Corporate Objectives

STRATEGIC REPORT - REVIEW OF ACTIVITIES AND FUTURE DEVELOPMENTS

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Section 172(1) statement

The directors’ approach

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Maintaining our licence to operate

f) the need to act fairly as between members of the company

Key decisions in the year

Measuring Performance

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

STRATEGIC REPORT – FINANCIAL REVIEW

Financial Performance

Reserves

Investments

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

Changes in Fixed Assets

Going Concern

STRATEGIC REPORT - PRINCIPAL CHANGES AND UNCERTAINTIES

DIRECTORS AND THEIR INTERESTS

RELATED PARTIES

HEALTH AND SAFETY

ENERGY AND EMISSIONS

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

EMPLOYEE INVOLVEMENT AND EQUAL OPPORTUNITIES

WJEC CBAC LIMITED REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

STATEMENT OF TRUSTEES' RESPONSIBILITIES

DISCLOSURE OF INFORMATION TO AUDITOR

WJEC CBAC LIMITED

REPORT OF DIRECTORS AND TRUSTEES FOR THE YEAR ENDED 30 SEPTEMBER 2021 - Continued

AUDITOR

WJEC CBAC LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED

Report on the audit of the financial statements

Opinion

Basis for opinion

Conclusions relating to going concern

Other information

WJEC CBAC LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED - Continued

Responsibilities of trustees

Auditor’s responsibilities for the audit of the financial statements

Extent to which the audit was considered capable of detecting irregularities, including fraud

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF WJEC CBAC LIMITED - Continued

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006