REGISTERED COlVtPANY NUMBER,. 00971293 (England alld Wal¢s) REGISTERED CHARITY NUMBEIL. 307299 IIEPORT OF THi TRUSTEES Af4D FJNANCIAL STATEMENTS FOR THE YEAR EfiDED 31 AUGUST 2021 FOR SOUTHAMMN ENGif4EERING TRA[N￿G ASSOCIATION LIMITFD TRADING AS SETA H￿per Williams & Bell Limited Sithtory Auditor Highland H￿se Mayfiower Close Chandlerfs Ford Eastleigh Hampshire S053 4AR SOUTHAMpfoN ENGINEERING TRAINING ASSOCtATION Lll￿r[ED TRADING AS SETA CONTENTS OF THE ThYANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUCUST 2021 Page Report of the TTustses I to 7 Report of the Ind¢p¢thdent AMdi¢oT8 8 to JI ststemeD¢ ofMnallel#l Acti￿lIeS 12 Balan¢e Shee¢ 13 Cash Flow StateJneu¢ 14 Notss to the Cash FIDW Ststtment 15 Nots¥ to tb¢ Flnallcial Statew¢Lts 16 to 26 Dttxlled StatèfA¢llt of Flnaneial Artlvltl&s 27 to 29 SOUTHALIUYON ENGINEERING TRAINllYG ASSOCIATION LIMITED TRADING AS SETA REPORT OF TH£ TRUSTEES FOR THE YEAR ENDED 31 A15GUST 21121 The trustees are also dir¢i*orn of the Charity ts the Frtwpose5 of the Companie8 Aet 2006, present their report with the finan¢ial statsments of the ¢lMTity for lkne year ¢nded 31 AuwJst 2021. The truste¢s have adopted the proviglons ofAwuDting and Rep¢Jrtkng by Charities.. Stst¢ment of Re¢onJmethd pra¢t1￿ opplicable to ¢hariti¢3 prcparing their 4¢couttts in aceoydan¢¢ WAth tho FI￿8￿CIal Reporting Standard appIl￿ble in tbe UK and Republic of Ir¢land (FRS 102) (¢ifertive l January2019). OBJEcfivES AND AcfiviTIES ObJe¢tive$ alms lkn aim 18 to be the first choice for local etnplO￿S requiring training servtces for the development oe their engitteering staff. By offerin% a cornbinatioTh of workthop and t¢a¢hing facilitie4 mat¢hing thc requir¢ments of Ii)cal industy togettLer with excellent CUslom6r sorvi¢e we have established a loyal ruslom¢r base alld a higEL level of repEut orders. R¢ferr8ls by satisfied customer& frequenlly introduce now ¢u8tomtts an4 C(￿equentIy. inc(xne is not d¢pelldant on a Jarg¢ exp¢nditure on sales and marketing. SETA ts positiODed to provide SPE¢iaii8t trainin8 servlces to the en8in¢eriJkg and ronstrudion Servi￿ 5eGtors and Striv(% to offeT a ¢omprchensive te¢hni¢al training 8¢rviee. New courses aro introduced and existing ccAwses 4 T¢Vi5￿ in T￿OnSt to employeTT¢que8ts. We Jre ¢om7nittEd to thliyering appr¢nI1￿hipS and support￿￿ youttg pe(yb to enter engineeTing. Vacancir5 are advertised on behalf of employers and appIication8 are r¢gularly ov¢r8ubsaibed by a &ctor of 5. Advlc¢ and guidan¢e is offered lo stsdents applying for positiony and throughout their training prwRmll)¢s. Maititainin8 the safegu￿￿ti8 and weItbEing ¢)f all learners and Jtsff is p&rti¢tdarly imiknant attd is Ulld¢r ¢￿Sta￿t review. We alln to provide a 8UPPOrtive working enviroDment wh￿* the contribuiion of our employees is valuel creativity fJi¢ourag¢d. equa]ity and diversity is rospectedand equal opportunity is promoted. Publle b¢ll¢fit Tho obiectivea and acttvities undertaken by ibe charity are c(¥thed to be fr public ben¢fit alld the Trustees have omplied with the duty in section 4 of the Charities Act 2011 to have due regwd ts) public benofjt 8uidanct published by the CommLssioD. Durin8 the year 2021.. 225 (2020.. 202) apprenticeships were provided and. of these. 127 (2020.. 107) were agad b¢tsve¢n 16 and 18 years of wgc. 67 (2020. 67) WCTe betwe¢n 19 and 23 years of 8g¢ ond 3 1 (2020.28) were aged ov¢r 24 years. Overall 33 (2020.. 53) candidatrs 3urcessfully CO￿pIet¢d their aNYentlcGthips with 66/ 12020.. 55%) achieviD8 withtn Ihe planTh¢d liJn&4cale. These r&eg hro higb¢r than average national achievetnent levels for the engine¢rin8 ￿CtI￿3. STRATEGIC REPORT Achiev¢m¢nt And perhrm8n¢¢ FutsdrAl$luR 4¢llvilies Th¢ charity does nut participats in ally d￿¢t or fuThdd ￿nd￿lis1ng. However, donotions are ntrd* by employws and S￿pplierS., the3e are mostly plant and ¢quipm¢nt. Finallelal reyle Principal funding sources The prin¢ipo1 soutte OF fiuiditig arises from apprenticfships fimded ty the Education and Skills Funding Agency (ESFA) repr¢seniin8 51P/4 {2020.. 52 /•) of inGoJne. Th6 rnuiority of the (ther illcotne is m8de from ¢otnmucipI irtcome from employers. Page I SOtrrHAMPTON ENGINEER￿G TIL4INING ASSOCIATTON LIMITED TRADING AS SETA REPORT OF THE TRUSTEES FOR YEAR Ef4DXD 31 AUGUST 2021 STRATEGIC REPORT Flnanelal review Rejervw polity The current level of unrestrlcted reservE9 (ex¢ludin8 the fair vaille reserve) i5 valued at £209576 (2020.. £134.344) whith represents 9% (2020: 60/0) of ￿nual costs. the objective setby t&e ly)ard is for this to Ee increasedto £i,000,000 rwAenting 51Yh of annual costs. The Boord of Trust¢¢s has coll&idered the a(kqua¢y of tot￿ r¢serYes held lry the c(xnpony and 18 of the opinv)n that they are adequate tr th¢ fltherattce of the d)aritys abiectives. The reserve$ policy is to,. Protectthe charity frcqn the rlgk of insolvellcy or serious di¥niption to its ch8rit&bkwork. Provide sufficient thrLds to iov¢st in ¢quiptnent serTrices for tbg beDefit ofyoung pyle and adults uothrtakng trainiti8. Perfor￿&￿et The r¢sults fcf they¢pr 3tLd th¢ fin8nGi41 position of th¢ assoclatlon are sllown in tbe 8onexed llccounts. Th￿C show $UTplll5 for th¢ fLll8ncial Ye￿ which the Trustees rem2Jmend IR add¢d to r¥serv¢, ID accordart¢e wlth the rcqulrenLents of the Charlty ComElli5sioll a ￿ValuatIon w&8 carrled out on the leasehold premiw u5¢das an apprentice trainitig ¢eDtr6 in 2016. Th¢ butldin8 was ereded in 1969 and has a floor llrea of 1950 Sq m. Jt is occupied under an 84 year leN3e which expires 28103r2054 leaving aft un¢xpired terni of 33 years. The estimated fair voluo ofthe le4se is still illcluded at a valuation of £335,OLM). less depTeciation. Ihe fatr valuele8¢￿e of £93,234 (2020: £96,094) call onty be r¢le95Ed by dib'pusal of th¢ apprentice traitting ¢e]￿e. Overnll sales revenuos increased by £185.407 (9•A) c(Anpared with the prevAI)us ye8tr. This is due to inu¢as¢d cve. 2) Current arraugem6nts wilh the ESFA Ère dependent ott ￿hloving a consistent satisfactory fwancial health assess[lle￿t and tbis will require achieving break-e￿￿ finaD¢ial perforJllallc¢ as a minimurn in the 2020121 fmaD¢ial 3) ComTneTcial ¢ourse8 represent 450/fy of the total Income and are vitsl to 8UPPOrting the apprentIC￿￿1p programmes. Bngincerlng apprenticesb¥s are typicalty four years in duration and iD¢ome Is released on a monthly ba3iy by tho Eduration and Skills Funding Agen¢y (LSFA) wtth 200/ts being rct&ined until completion. 4) CLmpktioll of an 4)pr¢nti¢eship is achieved by SUccessfi￿ as5essm¢nt orc0￿peteucY by an approved Independent End Point Ass¢¥sm¢nt Organ[s￿i0ll (EPAO). The pandemi¢ h#s caused d¢lays to these &wessrnents. wiib mally beillg switched to a virtual assessment. Delays in ¢ompletLOnS of appr¢nti[￿knLPS ￿￿se5 a rt¢gative impact on fLftan¢ial perforniance and OFSTBD assessment latin& 5} Ci)mmer¢ial col￿e5 are fijuybookd, rlsk to delivery 18 hlgh tf in$tru¢tors are unavailable which pos￿ a potential risk to income. Pag¢ 3 soirThAMFTON ENGINEERING TRA]fqiNG SSOCIATION L]MITED TRADING AS SETA REPORT OF THE TRUSTEES FOR THE YEAR EP4DED 31 AUGUSI 2021 rnTEGIC REPORT Future plan5 SETA has a w¢ll-establi$hed reputatim for delivering high q￿ty, value for molley engine￿Ing apwenti¢¢sbip training services. Th¢ ¢reation of apprenticeship service teams encompasslng recruitmenL tschnic￿. fi￿dIn& p>oral ernd eud ass¢ssment wer• fjjudamental to h¢lp eMplo￿r$ ￿derStand the refi)rms gttd extract maximum vftlue frLE their Levy in￿&[￿¢nt. SETA Iw ¢5t&blished 4 package whith pr￿e$ & comp¢titive edge find will help secure preDtic#sbip cotttracts with employers far &Dd wid¢. W¢ must ensure rovetwe generated through apprenticeship training 18 SUStainable Ivhi18t ¢llsuring omploy¢rs ￿ a returtt on their levy thvestment. Nearly 8Ji Dew appretttic¢8bws in 2020 were provided at LLvel 3. In our sector, ther¢ ts fillther indI￿tiOn of l)rovt8XOtt 8lkift' away from level 2 (intermedi8te) tOWArds level 3 attd th¢ n¢w Igvel 4 (advanced) apprenticeships. SETA were one of frjur providers nationally ￿credIted to deliver lev¢1 4 apprenticcships in our S￿r. Forging links with Universities and Profrsslottal E4¥in¢ering IllstitLttious will b¢ crucial to trarLsitioDID8 appr¢ntiwhip8 in our se¢tor. SETA has a commeTcial facility whicb provid05 el￿ point asye5snent servi¢eB for alectro-ts¢bnl¢al qualificailons and a wsde rang¢ of ¢leCtri￿, mechanical and hazardous Brea trainitEg coutses. The incorne e8rngd fro￿ these s￿ViCeS represEuÉ5 50Yo of (￿r inc(ttne Cruci￿ to fundihg the appreniiccship training seNiceg we Provide. We must c(mtinue to add to owportfolio of services to ￿&ble thi5 provision tO8rowto rneet ony futur¢ appr￿tic&hIp rtfonns. STRUCTURE, GOVERNANCE AND MANAGEMENT Governlng document Th¢ ¢hority ts ¢ontrolled by its governing docllment, a deed of trust. and constitutw a limited ¢ompany. limited by guarante4 as defmed bythe Companie5 2006. Th¢ g¢)v¢rDins a￿ullIe￿I is the m￿Ora￿dUt￿ aThd Artt¢les of A&sc￿lation, dated 28th J8nuary 1970. This dOcurn￿t is CU￿ve. 2) Current arraugem6nts wilh the ESFA Ère dependent ott ￿hloving a consistent satisfactory fwancial health assess[lle￿t and tbis will require achieving break-e￿￿ finaD¢ial perforJllallc¢ as a minimurn in the 2020121 fmaD¢ial 3) ComTneTcial ¢ourse8 represent 450/fy of the total Income and are vitsl to 8UPPOrting the apprentIC￿￿1p programmes. Bngincerlng apprenticesb¥s are typicalty four years in duration and iD¢ome Is released on a monthly ba3iy by tho Eduration and Skills Funding Agen¢y (LSFA) wtth 200/ts being rct&ined until completion. 4) CLmpktioll of an 4)pr¢nti¢eship is achieved by SUccessfi￿ as5essm¢nt orc0￿peteucY by an approved Independent End Point Ass¢¥sm¢nt Organ[s￿i0ll (EPAO). The pandemi¢ h#s caused d¢lays to these &wessrnents. wiib mally beillg switched to a virtual assessment. Delays in ¢ompletLOnS of appr¢nti[￿knLPS ￿￿se5 a rt¢gative impact on fLftan¢ial perforniance and OFSTBD assessment latin& 5} Ci)mmer¢ial col￿e5 are fijuybookd, rlsk to delivery 18 hlgh tf in$tru¢tors are unavailable which pos￿ a potential risk to income. Pag¢ 3 soirThAMFTON ENGINEERING TRA]fqiNG SSOCIATION L]MITED TRADING AS SETA REPORT OF THE TRUSTEES FOR THE YEAR EP4DED 31 AUGUSI 2021 rnTEGIC REPORT Future plan5 SETA has a w¢ll-establi$hed reputatim for delivering high q￿ty, value for molley engine￿Ing apwenti¢¢sbip training services. Th¢ ¢reation of apprenticeship service teams encompasslng recruitmenL tschnic￿. fi￿dIn& p>oral ernd eud ass¢ssment wer• fjjudamental to h¢lp eMplo￿r$ ￿derStand the refi)rms gttd extract maximum vftlue frLE their Levy in￿&[￿¢nt. SETA Iw ¢5t&blished 4 package whith pr￿e$ & comp¢titive edge find will help secure preDtic#sbip cotttracts with employers far &Dd wid¢. W¢ must ensure rovetwe generated through apprenticeship training 18 SUStainable Ivhi18t ¢llsuring omploy¢rs ￿ a returtt on their levy thvestment. Nearly 8Ji Dew appretttic¢8bws in 2020 were provided at LLvel 3. In our sector, ther¢ ts fillther indI￿tiOn of l)rovt8XOtt 8lkift' away from level 2 (intermedi8te) tOWArds level 3 attd th¢ n¢w Igvel 4 (advanced) apprenticeships. SETA were one of frjur providers nationally ￿credIted to deliver lev¢1 4 apprenticcships in our S￿r. Forging links with Universities and Profrsslottal E4¥in¢ering IllstitLttious will b¢ crucial to trarLsitioDID8 appr¢ntiwhip8 in our se¢tor. SETA has a commeTcial facility whicb provid05 el￿ point asye5snent servi¢eB for alectro-ts¢bnl¢al qualificailons and a wsde rang¢ of ¢leCtri￿, mechanical and hazardous Brea trainitEg coutses. The incorne e8rngd fro￿ these s￿ViCeS represEuÉ5 50Yo of (￿r inc(ttne Cruci￿ to fundihg the appreniiccship training seNiceg we Provide. We must c(mtinue to add to owportfolio of services to ￿&ble thi5 provision tO8rowto rneet ony futur¢ appr￿tic&hIp rtfonns. STRUCTURE, GOVERNANCE AND MANAGEMENT Governlng document Th¢ ¢hority ts ¢ontrolled by its governing docllment, a deed of trust. and constitutw a limited ¢ompany. limited by guarante4 as defmed bythe Companie5 2006. Th¢ g¢)v¢rDins a￿ullIe￿I is the m￿Ora￿dUt￿ aThd Artt¢les of A&sc￿lation, dated 28th J8nuary 1970. This dOcurn￿t is CU￿ Issue (including financial Implication/ Risk
Recommendation Management response Timescale
impact) Consequence H/M/L
1 The short leasehold The asset was depreciated L Once net book value reaches Miscommunication and a N/a.
premises have a negative net after its useful life elapsed. zero, ensure the depreciation presumption that we were
book value once worked Management figures stops. going to go back into lease
through on the fixed asset presented would be immediately. This has been
register. This was due to the inaccurate. delayed to due to COVID-19
asset being over-depreciated and a hold up with the
by £7,216. landlords.
2 A fixed asset register is not Fixed assets could be L Ensure a fixed asset register The previous accountant’s Going
maintained. misstated in the financial is maintained and updated on advised us that our asset forward.
statements. a monthly basis. The register register was incorrect. This
should also be agreed to the was adjusted in 2020 however
trial balance every month. we required guidance to
HWB can supply you with the maintain this register going
register we have set up and forward. Training to be
the required training. provided.
3 Fixed asset additions have Depreciation is understated L Ensure fixed assets are Same response as point 2. Going
not been depreciated in the in the financial statements. depreciated from the point at forward.
year. Depreciation for which they are available for
additions total £4,827. use.
4 Accruals were not adjusted Accruals were overstated in L Ensure accruals are updated Schedule to be completed Going
for in the year resulting in the financial statements. on a monthly basis and going forward. Additional forward.
accruals being overstated by reconciled to the trial training to be provided.
£18,160. balance.
5 Deferred income was not Deferred income was L Ensure deferred income is Same response as point 4. Going
adjusted for in the year overstated in the financial updated on a monthly basis forward.
resulting in deferred income statements. and reconciled to the trial
being overstated by £18,787. balance.
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2 ## Section 2: Adjusted misstatements ## Audit materiality of £58,500 **----- Start of picture text -----**
Balance
Description Nominal SOFA Total
sheet
£ £ £
Surplus/(deficit) per trial balance - 26,928 26,928
Audit adjustments:
1 To reallocate ESFA’s accrued income Prepayments 63,878 - -
Trade debtors (63,878) - -
2 To release prior year accrued income Welding courses - (6,759) (6,759)
Auditors remuneration - (250) (250)
Wages - 20,677 20,677
Social security - 1,721 1,721
Bank charges - 55 55
3 To adjust for year-end accruals Light and heat - (1,154) (1,154)
Cleaning, laundry and refuse - (23) (23)
Sundries - 135 135
Other operating leases - (3,000) (3,000)
AM2 testing income - 17,001 17,001
4 To release prior year deferred income Commercial courses income - 27,076 27,076
Plant and machinery additions 3,275 - -
5 To correct depreciation charge Plant and machinery depreciation (3,275) - -
6 To reverse depreciation for second avenue Depreciation for short leasehold - 7,217 7,217
7 To provide depreciation for additions in the Depreciation for plant and machinery - (4,827) (4,827)
year
8 To correct VAT charge Sundries - 14,281 14,281
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3 **----- Start of picture text -----**
Balance
Description Nominal SOFA Total
sheet
£ £ £
9 To dispose of assets Loss on disposal - (4,735) (4,735)
10 To release government grant Government grants - 3,319 3,319
To defer income invoiced in August 21 AM2 testing income - (4,730) (4,730)
11
relating to September 21. Commercial courses income - (20,560) (20,560)
Surplus per final accounts - 72,372 72,372
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4 ## Section 3: Unadjusted misstatements Schedule of unadjusted misstatements above audit triviality of £2,000. **----- Start of picture text -----**
SOFA Balance Sheet
Description Nominal Dr Cr Dr Cr
£ £ £
1 To defer income relating to work Commercial courses 11,314 - - -
completed in September 2021, invoiced Income in advance - - - 11,314
in August 2021.
2 To accrue for costs relating to work Course costs and accommodation 2,474 - - -
completed in August 2021, invoiced in Accruals - - - 2,474
September 2021.
Total 13,788 - - 13,788
Reduction on surplus (13,788)
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5 ## Section 4: Going Concern ## Trustees’ assessment After making appropriate enquiries, the Board of Trustees has a reasonable expectation that the charity has sufficient resources to continue in operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Statement of Accounting Policies. ## Work performed by HWB - Review latest budgets to ascertain whether going concern has been correctly addressed. - Enquire into whether there have been any material new commitments, borrowings or guarantees post year end. - Enquire into whether there have been disposals or acquisition of material assets or any appropriation or destruction of assets. - Consideration of any financial uncertainties regarding the charity’s financial sustainability as a result of Covid-19. ## Conclusion The charity has made a surplus of £72,372 for the year ended 31 August 2021 and the balance of funds at that date is £209,576 (excluding the Fair Value reserve). The charity is projecting to make a surplus of £31,553 in the year ending 31 August 2021. Funds at that date are therefore forecast to be £241,129. Based on this, our assessment is that the charity continues to be a going concern and our audit report is not modified in this respect. 6 ## Section 5: Assignment Director Contact Details Michaela Johns (FCCA) Audit Director T: 023 8046 1256 M: 07769 730189 E: michaela.johns@hwb-accountants.com ## Address HWB Chartered Accountants Highland House, Mayflower Close, Chandlers Ford Eastleigh, Hampshire, SO53 4AR HWB Chartered Accountants HWB Chartered Accountants @HWB_Accountants HWB Accountants Stay in touch with your finances by downloading our free app from the Apple or Google Play app stores.