2021-03-31-accounts - Arc Community Trustees

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ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Report and Financial Statements for the year ended 31 March 2021

Charity number 1130383 Company number 06777508

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

Reference and Administrative Information ..................................................................................................... 2

Annual Report of the Board ........................................................................................................................... 3 Independent Auditors’ Report ....................................................................................................................... 8 Statement of Financial Activities .................................................................................................................. 12 Balance Sheet .............................................................................................................................................. 13 Cash Flow Statement ................................................................................................................................... 14 Notes to the Financial Statements ............................................................................................................... 15

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

Administrative information

Trustees

Susanne Traudt (Chariman) - (appointed 18 November 2020) James Rickard (Deputy-Chairman) (treasurer February 2020 to August 2021) Elinor Wilkes (Treasurer) (appointed 16 August 2021) Thomas Wood (appointed 30 August 2021) Gillian Walley (appointed 22 April 2021) Holly Marshall (appointed 7 January 2021) Peter Ames (resigned 2 September 2021) Emilie Schmidlechner (resigned 25 January 2021) Susan McGuinness (resigned 14 September 2020) Anna Nicol (resigned 14 July 2020) Marie Gaffuri (resigned 29 July 2020) Karen O’ Connor (resigned 1 May 2020)

Company registration number

06777508

Charity registration number (England and Wales)

1130383

Company Secretary

Nathan Maknight Company Secretarial Limited

Bankers

C. Hoare & Co.

Auditors

Lubbock Fine LLP Paternoster House 65 St Paul’s Churchyard London EC4M 8AB

Registered Office

39 Crosby Row, London, SE1 3YD

Trustees Annual Report ARC COMMUNITY TRUSTEES

for the year ended 31 March 2021

(Limited by Guarantee)

The Trustees present their report and the audited financial statements for the year ended 31 March 2021.

The financial statements have been prepared in accordance with the accounting policies set out on pages 15 and 16 and comply with the Memorandum and Articles of Association, applicable laws and the requirements of the Financial Reporting Standard applicable in the UK and Republic of Ireland (The FRS 102 Charities SORP), the Charities Act 2011 and the Companies Act 2006.

Structure, Governance and Management

Governing document

The organisation is a charitable company limited by guarantee, incorporated on 19[th] December 2008 and registered as a Charity on 26[th] June 2009. The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association. In the event of the company being wound up, members are each required to contribute an amount not exceeding £10.

Recruitment and appointment of directors

The directors of the company are also Charity Trustees for the purposes of Charity law. Under the requirements of the Memorandum and Articles of Association, directors are elected to serve for a period of three years after which they must be re-elected at the next Annual General Meeting. All directors give their time voluntarily and receive no benefits from the Charity. Due to the nature of the Charity’s work, there is particular focus upon the welfare of young children. The directors seek to ensure that the best interests of the charity and ultimately the children served by the charity are appropriately reflected through the diversity of the Trustee body. The more traditional business skills are well represented on the Board. In an effort to maintain this broad skill mix, members of the Board are requested to provide a list of their skills (and update it each year) and in the event of particular skills being lost due to retirement, individuals are approached to offer themselves for election to the Board. In the event that a new member joins the Board there is no formal induction process. The training requirements of Board members are assessed periodically on a case by case basis.

Organisational structure

The Charity has a Board of Directors which meets periodically throughout the year and is responsible for the strategic direction and policy of the Charity, including the approval of budgets and the exercising of financial controls. At present, the Board has six members from a variety of professional backgrounds.

A scheme of delegation is in place and day to day responsibility for the provision of the services rests with the Nursery Manager. The finance function is externally contracted to a firm of accountants. The Nursery Manager is responsible for ensuring that the Charity delivers the services specified and that key performance indicators are met. The Nursery Manager has responsibility for the day to day operational management of the nursery, individual supervision of the staff team and also ensuring that the team continue to develop their skills and working practices in line with good practice. The performance and remuneration of the Nursery Manager is reviewed in the context of certain mutually agreed metrics each year by a sub-committee of the Board.

Risk Management

The Board reviews on an annual basis the major risks to which the Charity is exposed. Where appropriate, systems or procedures have been established to mitigate the risks the Charity faces. Internal control risks are minimised by the implementation of procedures for authorisation of all transactions and projects. Procedures are in place to ensure compliance with Health and Safety of staff, volunteers, clients and visitors to the nursery. These procedures are periodically reviewed to ensure that they continue to meet the needs of the Charity.

The impact of COVID-19 as the pandemic developed, was monitored by the Board and potential risk identified relating to provision of pre-school childcare, financial and health and safety for staff and families. Contingency plans were then developed to model a number of scenarios to ensure the Charity was able to survive in challenging conditions if lockdowns were brought in place as were seen in other parts of the world, while maintaining a basic level of continued support for the children and families served by the Charity.

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

Mission, Purpose and Objectives

We review our aims, objectives and activities each year. This review looks at what we achieved and the outcomes of our work in the prior period. The review looks at the success of each key activity and the benefits they have brought to those groups of people we are set up to help. The review also helps us ensure our aims, objectives and activities remained focused on our stated purposes.

Our Mission

To provide accessible, responsive childcare and related services to the local community (predominantly London, SE1). This aim is incorporated in a motto, namely, “Families working together for their own and each other’s children”.

Our Charitable Purpose

We aim to provide childcare of the highest standard, including affordable and vulnerable places, to families living and working in the local community.

Our Objectives

The Charity’s objectives are:

To enhance the development and education of children, principally below statutory school age, by providing childcare and early learning for children and families;
To provide activities to enhance parental skills and child development; and
To provide advice and assistance to families in relation to the costs of childcare.

The Charity recognises that its financial position must be sound and secure and that its activities should be managed with a view to at least breaking even each year.

Public benefit

The Trustees have referred to the Charity Commission guidance on public benefit in setting the aims and objectives of the Charity and its future plans.

Measuring our achievements against the Charity’s objectives

The Charity has discharged its objectives by pursuing two complementary activities in the year to 31 March 2021. Firstly, the core activity of the Charity is to provide excellent early pre-school education and care through the provision of services at the Arc Nursery. In addition, as a core component of this service provision the Charity provides places to children on a substantially subsidised basis. These places are not fixed in number and their allocation to children is determined by the Trustees on the basis of need. The Trustees are satisfied that the Charity performed adequately well during the period under review considering each of their objectives, with a view to focusing on the two core objectives of the charity.

Review of the year

This year has shown a decrease in incoming resources for the Charity. Revenue from restricted and unrestricted sources decreased by some £56,604 (2020: £76,827). The balance of restricted reserves of the Charity increased by £42 (2020: £nil) whereas unrestricted reserves decreased by £68,061 (2020: £87,104). Our unrestricted reserves at the end of the financial year were £78,507 (2020: £146,568).

Overall review of the Charity’s performance

The Trustees are reasonably satisfied with the Charity’s overall performance during the year under review. Income from charitable activities decreased slightly however occupancy levels achieved were broadly consistent with the Charity’s operating targets and the Charity was also able to provide an increased number of subsidised places to children with particular needs. In addition, the charity supported the childcare setting operated at St Hugh’s Church (London SE1) until July 2019 (at which time the St Hugh’s venture was suspended).

The impact of COVID-19 as the pandemic developed was monitored by the Board and contingency plans developed to model a number of scenarios to ensure the Charity is able to survive in challenging conditions if lockdowns were reinstated including temporary closure of the nursery.

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

Financial Review

The Trustees are satisfied that the underlying financial performance of the Charity remains robust. Overall average occupancy decreased to 61% (2020: 75%). The fee rates were increased modestly with effect from 1 September 2019. The fee structure is currently undergoing a review, taking into account local comparators to ensure competitiveness, but to reflect a two year period of no increases. The Charity’s financial performance will continue to be largely determined by the mix of the relevant age groups of children attending the Nursery and, crucially, overall occupancy levels throughout the year.

In-year impact from COVID-19 was minimal, however the Board had modelled various scenarios to be satisfied that the nursery would be able to survive a period of reduced revenues if it was forced to close through a combination of a reduction in operating costs and managing use of the cash reserves.

Work is ongoing to bring the nursery back to pre-covid occupancy levels and this is anticipated to take around two years as the number of families living in the ARC’s catchment area come back up to pre-covid levels.

Fundraising activities

The Charity received the following grants during the year. All restricted grants have been or will be used for the purposes for which they were given.

Southwark Council – Restricted grant
For ‘Deprivation funding’	£5,742	(2020: £6,224)
Southwark Council – Restricted grant
Early Years Pupil Premium	£nil	(2020: £286)
Southwark Council – Restricted grant
Early Years SEND Inclusion Fund	£198	(2020: £nil)
Southwark Council – Restricted grant
COVID-19 Community Fund	£1,000	(2020: £nil)

Reserves policy

It is the policy of the Charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to at least six month’s budgeted expenditure. The Trustees consider that reserves at this level will ensure that, in the event of a significant decline in attendances and therefore fee income, they will be able to continue the Charity’s current activities while consideration is given to ways in which additional funds may be raised. Under this policy, the year-end free reserves target should be no less than £340,201 (2020: £436,798). For the year ended 31 March 2021, the Charity’s free reserves stood at £78,507 (2020: £146,568). The Trustees acknowledge that the level of free reserves available to the Charity have significantly declined in the period and must be rebuilt as a matter of priority. For the year ended 31 March 2021, the Charity’s restricted funds stood at £42 (2020: £nil). The COVID-19 pandemic and government measures to control the outbreak will have a short term negative impact on the reserves of the nursery due to temporary restrictions on the number of places open for children of key workers and vulnerable children, while also supporting staff placed on furlough leave.

Investment policy

The Charity maintains its banking facilities with C. Hoare & Co., 37 Fleet Street, London, EC4P 4DQ. All surplus funds are maintained in short and long term deposits held with its main bankers.

Future plans

Following inspection by OFSTED in July and December 2018, at which the rating of the nursery was held to be ‘inadequate’, a robust plan of improvement was implemented, duly led by a new management team at the nursery. The new management team has been supported by the Trustees and the Local Authority throughout this improvement plan and the necessary changes to practice and procedure were acknowledged by OFSTED at the review meeting in May 2019, at which time the nursery’s rating was amended from ‘inadequate’ to ‘good’. The nursery management team and Trustees remain committed to maintaining the current ‘good’ rating while aiming to be ‘outstanding’ at the next OFSTED review meeting, and have a plan for delivering this outcome.

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

COVID-19 impact on charitable activities March 2020 onwards and risk mitigation

Initially during the government-imposed closure of the nursery, the Charity was unable to provide early years education and care in the nursery setting with the exception of keyworkers’ children. However, staff continued to maintain contact with the guardians of affected children throughout the period to provide support.

Keyworkers’ children places were maintained throughout to support the country in making best efforts to minimise the impact of the COVID-19 pandemic in the UK.

The Board modelled the loss of revenues, reduction in cost base from the significantly reduced activity and took full advantage of all government financial support available. The remaining shortfall was covered by voluntary payments from parents, despite the fact that their children were not attending the nursery. This resulted in a small residual operating loss over the period late March to early July 2020.

Mitigation during initial lockdown period:

Request freeze of rent costs
Furlough of staff surplus to operational requirements
Reduction in all variable costs
Requesting voluntary contributions from parents equal to 25% of their normal monthly fee to bring the nursery to a near breakeven position

The Trustees and management team will continue to further develop the nursery’s operating plan to keep pace with the evolving landscape to deliver safe pre-school education in line with changing government guidance on operating a Covid secure environment.

Once stability and understanding of the new operating conditions in the peri-Covid environment are better understood, a revision in the current fee structure is planned to support the nursery to remain sustainable for the future.

Auditors

Lubbock Fine have indicated their willingness to continue in office. They are deemed to be reappointed in accordance with section 487(2) of the Companies Act 2006.

Trustees’ Responsibilities Statement

The Trustees (who are also directors of ARC Community Trustees Limited for the purposes of company law) are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, 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 judgments and accounting estimates that are reasonable and prudent;
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.

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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Trustees Annual Report ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

Disclosure of Information to Auditors

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

So far as that Trustee is aware, there is no relevant audit information of which the charitable company's auditors are unaware, and
That Trustee has taken all the steps that ought to have been taken as a Trustee in order to be aware of any relevant audit information and to establish that the charitable company's auditors are aware of that information.

The financial statements and this report have been prepared in accordance with current legislation and the statement of recommended practice "Accounting and Reporting by Charities" (January 2019).

These financial statements have been prepared in accordance with the special provisions available to small companies under Part 15 of the Companies Act 2006 and the Financial Reporting Standard 102.

Dec 17, 2021

These accounts were approved by the Board on........................... and signed on their behalf by:

James Rickard

James Rickard (Dec 17, 2021 12:26 GMT)

.............................................................. James Rickard - Deputy Chairman Treasurer (for the period this report covers)

COMPANY NUMBER: 06777508

Independent Auditors' Report to the members of ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

OPINION

We have audited the financial statements of Arc Community Trustees (the 'Charitable Company’) for the year ended 31 March 2021 which comprise the Statement of financial activities, the Balance sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the Charitable Company's affairs as at 31 March 2021 and of its incoming resources and application of resources, including its income and expenditure for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 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 Trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Independent Auditors' Report to the members of ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

OPINION 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 for the financial year for which the financial statements are prepared is consistent with the financial statements.
the Trustees' Report has been prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

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

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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; or
the Trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' Report and from the requirement to prepare a Strategic Report.

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 purposes 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 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 charitable company or to cease operations, or have no realistic alternative but to do so.

AUDITORS' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

Independent Auditors' Report to the members of ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, we considered the following:

The nature of the sector and the impact of Covid 19 on financial and operating performance and policies;
Enquiries of management, including obtaining and reviewing supporting documentation, concerning the charity’s policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
the internal controls established to mitigate risks related to fraud or non-compliance of laws and regulations.
Discussions among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. The engagement team includes audit partners and staff who have extensive experience of working with charities in similar sectors and this experience was relevant to the discussion about where fraud risks might arise.

We also obtained an understanding of the legal and regulatory framework that the charity operates in, focusing on provisions of those laws and regulations that had direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Charities SORP 2019, FRS 102 and Ofsted regulations.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the charity's ability to operate or to avoid a material penalty.

As a result of these procedures, we considered the particular areas that were susceptible to misstatement due to irregularity, including fraud were in respect of income recognition, management override, going concern and non-compliance with Ofsted regulations. Our procedures to respond to risks identified included the following:

Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Enquiring of management concerning actual and potential litigation and claims;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Reading minutes of meetings of those charged with governance;
Reviewing income recognition on a sample basis to identify any cut off errors or the incorrect recognition and classification of grant income;
In addressing the risk of fraud through management override of controls; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the rationale of any significant transactions that are unusual or outside the normal course of the charity’s operations;
Detailed reviews and challenge of cash forecasts prepared by management covering a period of at least one year from the signing of the audit report;
Enquiring of management regarding noncompliance with Ofsted regulations and corroborating with Ofsted register filings.

There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report

Independent Auditors' Report to the members of ARC COMMUNITY TRUSTEES

(Limited by Guarantee)

for the year ended 31 March 2021

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 Auditors' 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 its members, as a body, for our audit work, for this report, or for the opinions we have formed.

David Chandra (Senior Statutory Auditor) for and on behalf of Lubbock Fine LLP Chartered Accountants & Statutory Auditors Paternoster House 65 St Paul's Churchyard London EC4M 8AB

Date:[17 December 2021]

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Statement of Financial Activities (Incorporating an Income and Expenditure Account) for the year ended 31 March 2021

2021 Restricted Notes £ Income from: Donations - Charitable activities - Grants 6,940 Other trading activities - Total income 2 6,940 Expenditure on: Charitable activities 6,898 Total charitable expenditure 3 6,898 Transfers between funds 12 - 42 - Funds at the end of the year 12 42 Total funds brought forward Net (expenditure) / income for the year	2021 Unrestricted £ 200 597,389 67,960 1,059	2020 Restricted £ - - 12,467 -	2020 Unrestricted £ - 717,685 - -	2020 Total £ - 717,685 12,467 -
6,940	666,608	12,467	717,685	730,152
6,898	734,669	12,467	804,789	817,256
6,898	734,669	12,467	804,789	817,256
-	-	-	-	-
42 -	(68,061) 146,568	- -	(87,104) 233,672	(87,104) 233,672
42	78,507	-	146,568	146,568

There were no recognised gains or losses other than the surplus reported for the financial year.

The net movements in funds for the year derived from the charity's continuing activities.

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Balance Sheet As at 31 March 2021

Notes £ Fixed assets Tangible fixed assets 7 Current assets Debtors 8 36,470 Cash at bank and in hand 152,832 189,302 Creditors: amounts falling due within one year 9 111,898 Net current assets / (liabilities) Net assets 12 Funds 12 - Restricted funds Unrestricted funds Total funds	2021 £ 1,145 77,404 78,549 42 78,507 78,549	2020 £ 2,985
		51,414 248,320
		299,734 156,151
		143,583
		146,568
		- 146,568
		146,568

The notes on pages 15 to 22 form a part of these financial statements.

These accounts have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and in accordance with the Financial Reporting Standard 102 (FRS 102).

Dec 17, 2021

The financial statements were approved by the Board and authorised for distribution on ....................... and signed on its behalf by:

Elinor Wilkes

Elinor Wilkes (Dec 17, 2021 12:25 GMT)

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

Elinor Wilkes Treasurer

Company number 06777508

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Cash Flow Statement for the year ended 31 March 2021

Notes Net cash used by operating activities 13 Cash flows from investing activities: Cost of purchasing tangible fixed assets Bank interest receivable Net cash used by investing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period	2021 £ (1,082) 1,059	2021 £ (95,465) (23) (95,488) 248,320 152,832	2020 £ (566)	2020 £ (51,588)
				(566) (52,154)
				300,474
				248,320

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

1. Accounting policies

a) These financial statements have been prepared on a going concern basis, under the historical cost convention and in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The Charitable Company is a public benefit company for the purposes of FRS 102 and therefore the Charity also prepared its financial statements in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of lreland (The FRS 102 Charities SORP), the Companies Act 2006 and the Charities Act 2011.

The Trustees have assessed whether the use of the going concern basis is appropriate and have considered possible events or conditions that might cast significant doubt on the ability of the charity to continue as a going concern. The Trustees have made this assessment for a period of at least one year from the date of approval of the audit report in the financial statements. In particular the Trustees have considered the charity's forecasts and projections. After making enquiries the Trustees have concluded that there is a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. It is important to note that future developments around the ongoing Covid-19 pandemic such as restrictions requiring the part closure of the nursery and level of available government support schemes, may impact the forecasts and cannot be fully predicted. However the Trustees believe that the Charity has sufficient reserves to continue operating as a going concern for a period of at least one year from the signing of the audit report. The charity therefore continues to adopt the going concern basis in preparing its financial statements.

The following principal accounting policies have been adopted in preparing the financial statements.

b) Incoming resources include the total amount of grants, voluntary income and nursery fees receivable and are recognised when there is entitlement to the funds, the receipt is probable and the amount can be measured reliably. Revenue and capital grants are accounted for gross when notification is received. Where the grants specify the time period they relate to, they are recognised as income in that period. Other grants are recognised as income when received.
c) Resources expended are recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefit will be required in settlement and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. The Charity is not registered for VAT and its expenses are therefore inclusive of VAT which cannot be recovered.
d) Resources expended are allocated to the particular activity where the cost relates directly to that activity. However, the cost of overall direction and administration of each activity, comprising the salary and overhead costs of the central function, is apportioned on the following basis which is an estimate, based on staff time, of the amount attributable to each activity.

Incoming resources from charitable activities	90.0%
Governance and support	10.0%

e) Governance and support costs include the management of the Charity's assets, organisation and management, and compliance with constitutional and statutory requirements. The only governance costs included in the accounts relate to audit fees as disclosed in note 4.

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

f) Individual fixed assets costing £100 or more are capitalised at cost and are depreciated over their estimated useful economic life. The depreciation rates in use are as follows:
Office equipment 25% straight line Fixtures and fittings 25% straight line Leasehold improvements Over the lease term Leasehold improvements (additional) Over 3 years
g) Unrestricted funds comprise accumulated surpluses of general funds and these are available for use at the discretion of the Trustees in the furtherance of the general charitable objectives of the Charity.
h) Restricted funds are those that can only be used for restricted purposes within the objects of the Charity. Restrictions arise when specified by donors or when funds are raised for particular restricted purposes.
i) Trade and other debtors are recognised at the settlement amount due after any discount offered. Prepayments are valued at the amount prepaid net of any discounts due.
j) Cash at bank and cash in hand include funds available to the Charity immediately in current and deposit accounts and petty cash.
k) 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 discounts due.
l) The Charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their amortised cost.
m) ARC Community Trustees provides all employees access to a designated stakeholder pension scheme. Contributions made by the employee are matched by the company up to a maximum of 6% of the employee's annual salary.
n) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

2. Total income Donations Parent donation Charitable activities Nursery school fees Grants Southwark Council deprivation funding Southwark Council Early Years Pupil Premium Southwark Council Early Years SENDIF funding Southwark Council COVID-19 Community Fund COVID-19 Furlough grant Other trading activities Bank interest receivable Total income	2021 Unrestricted £	2021 Restricted £	2021 Total £	2020 Unrestricted £	2020 Restricted £	2020 Total £
	200 597,389 - - - - 67,960 1,059	- - 5,742 - 198 1,000 - -	200 597,389 5,742 - 198 1,000 67,960 1,059	- 717,685 - - - - -	- - 6,224 286 - - 5,957 -	- 717,685 6,224 286 - - 5,957 -
	666,608	6,940	673,548	717,685	12,467	730,152

During the year, the nursery received 'Deprivation funding' in respect of children aged under five years of age, who on the relevant headcount day, were eligible to receive free nursery education at the charity's main nursery setting. The eligibility criteria are set by Southwark Council and the grant is based on information submitted to the Council. The charity provided free early years education to all such eligible pupils.

3. Total charitable expenditure

Expenditure on charitable activities

Unrestricted Restricted £ £	Unrestricted Restricted £ £	Support and governance £	2021 Total £	2020 Total £
135,099 403,779 125,389 26,240 2,922	6,898 - - - -	- 6,685 - 34,555 -	141,997 410,464 125,389 60,795 2,922	97,399 498,272 146,098 67,237 8,250

693,429 6,898		41,240	741,567	817,256

Total resources expended

Expenditure on charitable activities

Unrestricted Restricted £ £	Unrestricted Restricted £ £	Support and governance £	2020 Total £
90,889 484,255 146,098 24,314 8,250	6,510 5,957 - - -	- 8,060 - 42,923 -	97,399 498,272 146,098 67,237 8,250

753,806 12,467		50,983	817,256

Total resources expended

Notes to the financial statements for the year ended 31 March 2021

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

4. Net outgoing resources for the year

This is stated after charging:

Depreciation Auditors' remuneration: Current year Operating lease payments	2021 £ 2,922 6,000 100,000	2020 £ 8,250 5,400 107,575

5. Staff costs and numbers

Staff costs were as follows:

Staff costs were as follows:
Salaries and wages Social security costs Pension contributions	2021 £ 380,940 21,010 8,514	2020 £ 459,131 27,796 11,345
	410,464	498,272

None of the employees earned over £60,000 during the year.

The average weekly number of employees analysed by activity was as follows:

Teaching staff Governance and support	Headcount method 2021 No. 24 4	Full-time equivalent 2021 No. 18 3	Full-time equivalent 2020 No. 19 4
	28	21	23

A number of volunteers assist with the activities of the Charity. As these volunteers are not employed by the charity, they are not included in the above note.

Key management personnel and Trustees

No trustee received any remuneration in the current year or the previous year. Key management personnel received remuneration of £47,184 (2020: £46,741) including employers national insurance contributions (NIC) and pension.

During the year Trustees received reimbursement of expenses amounting to £nil (2020: £nil)

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

6. Taxation

The Charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

7. Tangible fixed assets

Leasehold Improvements £ 248,297 - -	Leasehold Improvements Additional £ 13,632 - -	Fixtures & Fittings £ 40,229 157 -	Office Equipment £ 18,604 925 -	Total £ 320,762 1,082 -
248,297	13,632	40,386	19,529	321,844
248,297 - -	13,632 - -	38,756 1,512 -	17,092 1,410 -	317,777 2,922 -
248,297	13,632	40,268	18,502	320,699
-	-	118	1,027	1,145
-	-	1,473	1,512	2,985

All tangible fixed assets are used for direct charitable purposes.

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

8. Debtors

Trade debtors Creditors : amounts falling due within one year Trade creditors Accruals Other creditors including taxation and social security Other debtors Prepayments and accrued income	2021 £ 4,773 30,359 1,338	2020 £ 6,595 38,655 6,164
	36,470	51,414
	2021 £ 14,072 85,900 11,926	2020 £ 49,963 96,432 9,756
	111,898	156,151

9. Creditors : amounts falling due within one year

10. Analysis of net assets between funds - current year

10. Analysis of net assets between funds - current year
Restricted funds Unrestricted funds (General & Designated) £ £ Tangible fixed assets - 1,145 Net current assets 42 77,362 42 78,507 Analysis of net assets between funds - prior year Restricted funds Unrestricted funds (General & Designated) £ £ Tangible fixed assets - 2,985 Net current assets - 143,583 - 146,568 11. Financial instruments 2021 £ Financial Assets measured at amortised cost 7,680 Financial Liabilities measured at amortised cost 106,554 Financial Assets measured at amortised cost comprise of trade debtors, other debtors and accrued income. Financial Liabilities measured at amortised cost comprise of trade creditors, other creditors and accruals. Net assets at 31 March 2021 Net assets at 31 March 2020	Unrestricted funds (General & Designated) £ 1,145 77,362	Total funds £ 1,145 77,404
	78,507	78,549
	Unrestricted funds (General & Designated) £ 2,985 143,583	Total funds £ 2,985 143,583
	146,568	146,568
	2021 £ 7,680	2020 £ 12,979
	106,554	143,431

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

12. Movements in funds

Movements in funds
Restricted funds Southwark Council - Deprivation funding 1 Southwark Council - Early Years SENDIF funding 2 Southwark Council - EYPP funding 3 Southwark Council COVID-19 - Community Fund 4 Total restricted funds Total unrestricted funds Total funds Restricted funds Southwark Council - Deprivation funding 1 Southwark Council - Early Years SENDIF funding 2 Southwark Council - EYPP funding 3 COVID-19 Furlough grant 5 Total restricted funds Total unrestricted funds Total funds General fund General fund	At 1 April 2020 £ - - - -	Incoming resources £ 5,742 198 - 1,000	Resources expended (including losses) £ (5,742) (156) - (1,000)	Transfer between funds £ - - - -	At 31 March 2021 £ - 42 - -
	-	6,940	(6,898)	-	42

	146,568	666,608	(734,669)	-	78,507
	146,568	666,608	(734,669)	-	78,507


	146,568	673,548	(741,567)	-	78,549
	At 1 April 2019 £ - - - -	Incoming resources £ 6,224 - 286 5,957	Resources expended (including losses) £ (6,224) - (286) (5,957)	Transfer between funds £ - - - -	At 31 March 2020 £ - - -
	-	12,467	(12,467)	-	-
	233,672	717,685	(804,789)	-	146,568
	233,672	717,685	(804,789)	-	146,568


	233,672	730,152	(817,256)	-	146,568

*1. Additional funding provided by Southwark Council to support children from deprived families.
*2. Funding provided by Southwark Council to support children with special educational needs.
*3. Funding provided by Southwark Council to support educational development of 3-4 years old children from deprived backgrounds.
*4. Funding provided by Southwark Council to support children with special educational needs during COVID-19 first lockdown.
*5. Funding provided by UK Government under COVID-19 Job Retention Scheme (Furlough).

13. Reconciliation of net expenditure to net cash provided by operating activities Net expenditure Depreciation of tangible assets Decrease/(Increase) in debtors (Decrease)/Increase in creditors Bank interest receivable Net cash (Outflow)/inflow from operating activities	2021 £ (68,019) 2,922 14,944 (44,253) (1,059)	2020 £ (87,104) 8,250 (2,958) 30,224 -
	(95,465)	(51,588)

ARC COMMUNITY TRUSTEES

(Company limited by guarantee)

Notes to the financial statements for the year ended 31 March 2021

14. Operating lease commitments

At 31 March 2021, the charity had total minimum lease payments under non-cancellable operating leases as set out below:

Expiring: Within 1 year Between 2 to 5 years	2021 2020 £ £ 100,000 100,000 200,000 300,000 Land and buildings

15. Related parties

During the year, nursery fees paid by the Trustees totalled £49,349 (2020: £87,874).

16. Company limited by guarantee

Every trustee promises, if the Charity is dissolved while he or she is a member, or within twelve months after he or she ceases to be a member, to contribute such sum (not exceeding £10) as may be demanded of him or her towards the payment of the debts and liabilities of the Charity incurred before he or she ceases to be a member, and of the costs, charges and expenses of winding up, and the adjustment of the rights of the contributories among themselves.