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2023-08-31-accounts

REGISTERED COMPANY NUMBER: 00971293 (England and Wales) REGISTERED CHARITY NUMBER: 307299

REPORT OF THE TRUSTEES AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

FOR

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

Hopper Williams & Bell Limited Statutory Auditor Highland House Mayflower Close Chandler's Ford Eastleigh Hampshire SO53 4AR

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2023

Page
Report of the Trustees 1 to 7
Report of the Independent Auditors 8 to 11
Statement of Financial Activities 12
Balance Sheet 13
Cash Flow Statement 14
Notes to the Cash Flow Statement 15
Notes to the Financial Statements 16 to 26

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 August 2023. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OBJECTIVES AND ACTIVITIES

Objectives and aims

Our aim is to be the first choice for local employers requiring training services for the development of their engineering staff. By offering a combination of workshop training and teaching facilities, matching the requirements of local industry together with excellent customer service we have established a loyal customer base and a high level of repeat orders. Referrals by satisfied customers frequently introduce new customers and, consequently, income is not dependant on a large expenditure on sales and marketing.

SETA is positioned to provide specialist training services to the engineering, building services and construction industry sectors and strives to offer a comprehensive technical training service. New courses are continually introduced and existing courses revised in response to employer requests and market trends.

SETA is committed to delivering high quality, value for money apprenticeships and supporting young people to enter engineering. Vacancies are advertised on behalf of employers and applications are regularly oversubscribed by a factor of 4. Career information, advice and guidance is provided to candidates who have applied for vacancies and continually throughout their training programmes. SETA work closely with Professional Engineering Institutions (PEI's) and local Universities enabling seamless and continual professional development for apprentices who complete and progress through their career pathways.

The legal requirement to maintain safeguarding, safety and wellbeing arrangements for all learners and our staff is paramount and particularly important and is under constant review through rigorous internal self-assessment. We aim to provide a supportive working environment where the contribution of our employees is valued, creativity encouraged, equity, diversity and inclusion is respected and the equality of opportunity is promoted.

Public benefit

The objectives and activities undertaken by the charity are confirmed to be for public benefit and the Trustees have complied with the duty in section 4 of the Charities Act 2011 to have due regard to public benefit guidance published by the Commission.

During the academic year 2022/23: 260 (2021/22: 250) apprentices were in learning and, of these, 80 (2021/22: 73) completed. Overall, 44 (2021/22: 49) candidates successfully completed their apprenticeships giving an overall success rate of 55% (2021/22: 67%). Our achievement rates for 2023 were predictably lower than in 2022 due to the impact of the coronavirus pandemic and continuous delays with end point assessment. Achievement rates remain broadly in line with national trends.

Of the 94 (2021/22: 70) new enrolments in the year 35 (2021/22: 45) were aged between 16 and 18, 47 (2021/22: 18) were aged between 19 and 24 and 12 (2021/22: 7) were aged over 25.

STRATEGIC REPORT

Achievement and performance

Fundraising activities

The charity does not participate in any direct or funded fundraising. However, donations are made by employers and suppliers; these are mostly plant and equipment.

Page 1

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

STRATEGIC REPORT

Financial review

Principal funding sources

The principal source of funding arises from apprenticeships funded by the Education and Skills Funding Agency (ESFA) representing 45% (2022: 47%) of income. The remaining 55% of income arises from commercial course delivery and consultancy.

Reserves policy

The current level of unrestricted reserves (excluding the fair value reserve) is valued at £214,692 (2022: £246,892) which represents 8% (2022: 10%) of annual costs; the objective set by the board is for this to be increased to £1,000,000 representing 35% of annual costs.

The Board of Trustees has considered the adequacy of total reserves held by the company and is of the opinion that they are adequate for the furtherance of the charity's objectives.

The reserves policy is to:

Performance

The results for the year and the financial position of the association are shown in the annexed accounts. These show a deficit for the financial year which the Trustees recommend be deducted from the reserve.

In accordance with the requirements of the Charity Commission a revaluation was carried out on the leasehold premises used as an apprentice training centre in 2016. The building was erected in 1969 and has a floor area of 1950 sq m. It is occupied under an 83 year lease which expires 28/03/2054 leaving an unexpired term of 31 years. The estimated fair value of the lease is still included at a valuation of £335,000, less depreciation. The fair value reserve of £87,514 (2022: £90,374) can only be released by disposal of the apprentice training centre.

Overall sales revenues increased by £255,901 (10%) compared with the previous year. This is due to increased commercial sales and more apprentices on programme.

Safeguarding has continued to be an area of review. Since the pandemic there has been a significant increase in mental health issues with 1:4 apprentices and a similar ratio of staff affected. SETA formed a dedicated Pastoral Services Team to support students and staff. Another post-pandemic statistic has been the number of students requiring learning support. This has increased year on year so a Learning Support Tutor (Student Welfare & Development) and a dedicated Functional Skills Teacher have been introduced to support students with their studies.

Fixed assets

The principal fixed asset is the long lease for the premises at 1st Avenue and the market value was re-assessed in 2016.

Page 2

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

STRATEGIC REPORT

Principal risks and uncertainties

In 2017, a major Government reform of apprenticeships and funding ensued. Previous legislation enabled employers to be invoiced by providers for 'off the job training' traditionally delivered 'in Centre' during the first year and this provided a substantial cash flow benefit. Reforms mean funding is now calculated against negotiated parameters; the duration of apprenticeship (typically three years), candidate prior attainment levels and end assessment costs. Consequently, funds are 'drip fed' to SETA monthly, thus reducing cash flow. Our plan identified it would take three years to re-establish income levels but the Pandemic thwarted this plan leading to a reduction in apprenticeship starts during 2020/21 and apprentices withdrawing. In November 2022, The Institute for Apprenticeships and Technical Education (IFATE) announced an exceptional review of apprenticeship funding bands due to the significant rise in delivery costs, the outcome of which was due to be announced in January 2023. Twenty apprenticeships were initially in scope for funding uplifts including those in the Engineering sector but in March 2023 it was revealed that ten of the twenty were opted out of the review by their employer-led trailblazer groups, including those in the engineering sector instead wanting a full review including content, funding and assessment. Figures released show that since Apprenticeship funding bands were set in 2017, inflation has increased by 27.71%. There has been no inflation related rise in apprenticeship funding to keep up with this increase which puts further pressure on apprenticeship training delivery.

A reduced value overdraft facility has been retained with the bank as a contingency.

The 'cost of living crisis' saw a huge increase in utility and energy bills and unprecedented increases in costs of materials and consumables. Wage increases to keep up with the cost of living have pushed operational costs to an all-time high all of which has had a negative impact. Procurement is continually under review and we continue to work with all suppliers and our contractors to secure the best possible outcomes.

Procedures and systems have been put in place to ensure that critical IT data is backed-up and stored to facilitate reinstatement including Cyber Essentials Plus certification. These procedures are compliant with the General Data Protection Requirements (GDPR) legislation and the system for recording student details is audited by the Provider Financial Assurance Team operating on behalf of the Education and Skills Funding Agency (ESFA).

Further risks include:

Page 3

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

STRATEGIC REPORT

Future plans

SETA has a well-established reputation for delivering high quality, value for money engineering apprenticeship training services. The creation of apprenticeship service teams encompassing recruitment, technical, funding, pastoral and end assessment were fundamental to help employers understand the reforms and extract maximum value from their Levy investment. SETA has established a package providing a competitive edge against competitors and will continue to help secure apprenticeship contracts with employers far and wide.

SETA is the largest provider of engineering training services in the South; we must continue to review funding viability on schemes and ensure apprenticeship training is sustainable to deliver whilst ensuring employers see a return on their levy investment. Nearly all new apprenticeships are provided at Level 3 or 4 and attract the highest funding band available; very few apprenticeships are provided at Level 2 which are not sustainable or popular with employers and offer candidates limited progression opportunities. We must continue with engagement services with local Schools, FE Colleges, Partners, Institutions, Award Organisations, Stakeholders and local community to promote career opportunities within our Sector as this will ensure a sustainable feeder system of potential new apprenticeship applicants. Forging links with Universities and Professional Engineering Institutions will be crucial to facilitate progression pathways and higher retention levels of the skilled employee workforce.

SETA has a commercial facility which provides end point assessment services for electro-technical qualifications and a wide range of electrical, mechanical and hazardous area training courses.The income earned from these services represents 50% of our income and is crucial to funding the apprenticeship training services we provide. We must continue to add to our portfolio of services to enable this provision to grow to meet any future apprenticeship reforms.

SETA has been delivering apprenticeships at the centre in First Avenue since 1969, and the building is becoming increasingly difficult to maintain and meet the requirements of new, sustainability aspirations. The commercial delivery and assessment is delivered from a smaller building in Second Avenue which can cause operational challenges. The long-term objective is to move to a larger, modern facility to encompass operations in one place.

STRUCTURE, GOVERNANCE AND MANAGEMENT Governing document

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

The governing document is the Memorandum and Articles of Association, dated 28th January 1970. This document was reviewed and updated in 2021 in line with changes to the charity operating procedures.

Recruitment and appointment to the Council of Trustees

Invitations are extended to the user members of the charity to nominate one person as a member and Director of the charity. The charity, having no share capital, is run by the Council of Trustees and no individual is able to exercise control of the charity.

Page 4

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

STRUCTURE, GOVERNANCE AND MANAGEMENT

Organisational structure

Day to day management of the charity is under control of the CEO, Julie Gough, who acts in accordance with the instructions of the Council of Trustees / Board of Directors.

There are thee principal areas of operation:

All activities including support services, finance, personnel, IT, marketing, compliance, health & safety and membership are managed through the key management team. Consultants are retained on annual contracts to provide specialist support in the areas of IT and Personnel Management.

Remuneration for key management personnel is governed by limits set by the Trustees. Performance is assessed by the Trustees.

The charity operates a defined contribution pension scheme open to all staff. The charity contributes 10% of gross salary to the scheme for each staff member employed prior to August 2021, and a minimum of 3% for staff recruited after this date. Staff will contribute a minimum of 5% to reach the 8% Government requirement.

Induction and training of new trustees

Potential trustees are invited to apply to become involved with the charity and learn more about the contribution they can make. A formal application must be made to the Directors for their approval. A formal explanation of responsibilities is provided before an appointment is confirmed.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

00971293 (England and Wales)

Registered Charity number

307299

Registered office

First Avenue Millbrook Southampton Hampshire SO15 0LJ

Trustees

Ms J E Freemantle G E Mason T J Millard C J Savage Ms A Lancashire Appointed 1 February 2023

Company Secretary

R W Heighington

Page 5

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

REFERENCE AND ADMINISTRATIVE DETAILS Auditors

Hopper Williams & Bell Limited Statutory Auditor Highland House Mayflower Close Chandler's Ford Eastleigh Hampshire SO53 4AR

Key Management: M D Driscoll COO Mrs J D Gough CEO

Bankers

National Westminster Bank plc 12 High Street Southampton Hampshire SO14 2NX

GOING CONCERN

The association operates on a daily basis using a combination of bank facilities, credit card borrowing and credit from suppliers.

The trustees have a reasonable expectation that the charity has adequate reserves to continue in operation for the foreseeable future and continue to adopt the going concern basis of accounting in preparing the annual financial statements.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Southampton Engineering Training Association Limited for the purposes of company law) are responsible for preparing the Report of the Trustees 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 which 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 those financial statements, the trustees are required to

Page 6

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2023

STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to 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.

In so far as the trustees are aware:

AUDITORS

The auditors, Hopper Williams & Bell Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on ............................................. and signed on the board's behalf by: 26 Feb 2024

Richard W Heighington

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

R W Heighington - Secretary

Page 7

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED

Opinion

We have audited the financial statements of Southampton Engineering Training Association Limited (the 'charitable company') for the year ended 31 August 2023 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 Report of the Independent Auditors 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

Page 8

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED

Matters on which we are required to report by exception

In the light of the 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 Report of the Trustees.

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

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, 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.

Page 9

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED

Our 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 a Report of the Independent Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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 Report of the Independent Auditors.

Page 10

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED

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 the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Michaela Johns FCCA (Senior Statutory Auditor) for and on behalf of Hopper Williams & Bell Limited Statutory Auditor Highland House Mayflower Close Chandler's Ford Eastleigh Hampshire SO53 4AR 28 Feb 2024 Date: .............................................

Page 11

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 AUGUST 2023

Notes
INCOME AND ENDOWMENTS FROM
Donations and legacies
2
Charitable activities
4
Courses and training
Investment income
3
Total
EXPENDITURE ON
Raising funds
5
Charitable activities
6
Courses and training
Staff costs
Establishment
Plant material and equipment
General expenses
Total
NET INCOME/(EXPENDITURE)
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 2023
Unrestricted
funds
£
13,181
2,786,636
579
2,800,396
648
439,167
1,966,038
174,981
59,819
194,803
2,835,456
(35,060)
337,266
302,206		 2022
Total
funds
£
611
2,530,735
31
2,531,377
648
441,797
1,651,152
163,426
74,642
165,256
2,496,921
34,456
302,811
337,267

The notes form part of these financial statements

Page 12

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED (REGISTERED NUMBER: 00971293) TRADING AS SETA

BALANCE SHEET 31 AUGUST 2023

2023
Unrestricted
funds
Notes
£
FIXED ASSETS
Tangible assets
12
360,912
CURRENT ASSETS
Debtors
13
284,171
Cash at bank and in hand
40,931
325,102
CREDITORS
Amounts falling due within one year
14
(346,472)
NET CURRENT ASSETS
(21,370)
TOTAL ASSETS LESS CURRENT
LIABILITIES
339,542
CREDITORS
Amounts falling due after more than one year
15
(37,336)
NET ASSETS
302,206
FUNDS
18
Unrestricted funds
302,206
TOTAL FUNDS
302,206		 2022
Total
funds
£
364,374
230,760
41,779
272,539
(271,955)
584
364,958
(27,691)
337,267
337,267
337,267

The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by: 28 Feb 2024

T J Millard

............................................. T J Millard - Trustee

The notes form part of these financial statements

Page 13

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2023

Notes
Cash flows from operating activities
Cash generated from operations
1
Interest paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash used in investing activities
Cash flows from financing activities
Loan repayments in year
Net cash used in financing 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		 2023
£
42,552
(648)
41,904
(33,331)
579
(32,752)
(10,000)
(10,000)
(848)
41,779
40,931		 2022
£
55,444
(648)
54,796
(33,615)
31
(33,584)
(10,000)
(10,000)
11,212
30,567
41,779

The notes form part of these financial statements

Page 14

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2023

1. RECONCILIATION OF NET (EXPENDITURE)/INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net (expenditure)/income for the reporting period (as per the
Statement of Financial Activities)
Adjustments for:
Depreciation charges
Loss on disposal of fixed assets
Interest received
Interest paid
Increase in debtors
Increase in creditors
Net cash provided by operations		 2023
£
(35,060)
36,792
-
(579)
648
(53,411)
94,162
42,552		 2022
£
34,456
38,006
1,667
(31)
648
(31,786)
12,484
55,444

2.

ANALYSIS OF CHANGES IN NET FUNDS

At 1.9.22
Cash flow
At
£
£
Net cash
Cash at bank and in hand
41,779
(848)
41,779
(848)
Debt
Debts falling due within 1 year
(9,809)
(247)
Debts falling due after 1 year
(27,691)
10,247
(37,500)
10,000
Total
4,279
9,152		 31.8.23
£
40,931
40,931
(10,056)
(17,444)
(27,500)
13,431

The notes form part of these financial statements

Page 15

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2023

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Leasehold premises (1st Avenue - building) Over the remaining period of the 83 year lease
Short leasehold premises (2nd Avenue - land) Over 10 years straight line
Plant and equipment 20% - 33.33% reducing balance

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Pension costs and other post-retirement benefits

The association continues to contribute to three defined contribution schemes. Contributions are charged to the income and expenditure account as they become payable.

Government grants

The following government grants were received in the prior year:

Page 16

continued...

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

1. ACCOUNTING POLICIES - continued

Government grants

Business Interruption Payment (BIP) under the Bounce Back Loan scheme: The BIP is payable in respect of the loan interest for the first 12 months, together with any related fees. The accrual model has been used to recognise the income on a systematic basis over the periods in which the related finance costs are incurred. The company has also benefited from the UK government's provision of security for 100% of the loan.

Leased assets

Amounts paid under operating leases are charged to the income and expenditure account as incurred.

Grants

Grants receivable in respect of fixed assets are treated as deferred income which are credited to the income and expenditure account over the estimated economic lives of the related assets.

2. DONATIONS AND LEGACIES

Donations
3.
INVESTMENT INCOME
Deposit account interest
4.
INCOME FROM CHARITABLE ACTIVITIES
Employer contributions
Training
Welding courses
ESFA funding
Miscellaneous income
Canteen sales and sundry
Commercial courses
AM2 testing
Travel recovered		 2023
£
13,181
2023
£
579
2023
Courses
and
training
£
40,753
195,047
46,018
1,273,864
1,116
1,686
927,487
292,989
7,676
2,786,636		 2022
£
611
2022
£
31
2022
Total
activities
£
34,326
149,465
101,055
1,181,842
2,079
248
826,584
227,699
7,437
2,530,735

continued...

Page 17

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

5. RAISING FUNDS

Other trading activities

Other trading activities
Interest payable and similar charges
6.
CHARITABLE ACTIVITIES COSTS
Courses and training
Staff costs
Establishment
Plant material and equipment
General expenses
7.
SUPPORT COSTS
Staff costs
General expenses
8.
NET INCOME/(EXPENDITURE)
Net income/(expenditure) is stated after charging/(crediting):
Auditors' remuneration
Auditors' remuneration for non audit work
Depreciation - owned assets
Other operating leases
Deficit on disposal of fixed assets		 Direct
Costs
£
439,167
1,962,023
174,981
59,819
184,353
2,820,343
Management
£
4,015
-
4,015		 2023
£
648
Support
costs (see
note 7)
£
-
4,015
-
-
10,450
14,465
Governance
costs
£
-
10,450
10,450
2023
£
6,510
3,940
36,793
94,527
-		 2022
£
648
Totals
£
439,167
1,966,038
174,981
59,819
194,803
2,834,808
Totals
£
4,015
10,450
14,465
2022
£
6,200
3,904
38,006
99,022
1,667

continued...

Page 18

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

9. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 August 2023 nor for the year ended 31 August 2022.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 August 2023 nor for the year ended 31 August 2022.

10. STAFF COSTS

Wages and salaries
Social security costs
Other pension costs		 2023
£
1,641,846
172,641
144,924
1,959,411		 2022
£
1,348,488
143,122
136,717
1,628,327

The average monthly number of employees during the year was as follows:

2023 2022
Employees 47 43

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

£60,001 - £70,000
£70,001 - £80,000		 2023
1
2
3		 2022
2
1
3

Contributions were made into the Pension Schemes for the higher paid employees of £19,320 (2022: £18,173).

The total key management remuneration including pension and benefits as noted above is £174,393 (2022: £154,207).

continued...

Page 19

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

11. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

INCOME AND ENDOWMENTS FROM
Donations and legacies
Charitable activities
Courses and training
Investment income
Total
EXPENDITURE ON
Raising funds
Charitable activities
Courses and training
Staff costs
Establishment
Plant material and equipment
General expenses
Total
NET INCOME
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
funds
£
611
2,530,735
31
2,531,377
648
441,797
1,651,152
163,426
74,642
165,256
2,496,921
34,456
302,811
337,267

continued...

Page 20

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

12. TANGIBLE FIXED ASSETS

COST
At 1 September 2022
Additions
At 31 August 2023
DEPRECIATION
At 1 September 2022
Charge for year
At 31 August 2023
NET BOOK VALUE
At 31 August 2023
At 31 August 2022		 Short
leasehold
£
74,370
-
74,370
74,370
-
74,370
-
-		 Long
leasehold
£
335,000
-
335,000
53,497
8,917
62,414
272,586
281,503		 Plant and
machinery
Totals
£
£
858,868
1,268,238
33,331
33,331
892,199
1,301,569
775,997
903,864
27,876
36,793
803,873
940,657
88,326
360,912
82,871
364,374		 Plant and
machinery
Totals
£
£
858,868
1,268,238
33,331
33,331
892,199
1,301,569
775,997
903,864
27,876
36,793
803,873
940,657
88,326
360,912
82,871
364,374
903,864
36,793
940,657
360,912
364,374

The long term leasehold premises were re-valued to £335,000 on 9 November 2016 by Hughes Ellard Limited.

If the buildings had been included at valuation, they would have been included under the historical cost convention as follows:

2023 2022
£ £
Cost 383,307 383,307
Accumulated depreciation (197,781) (191,383)
185,526 191,924

There were no capital commitments outstanding at 31 August 2023 (2022: £nil).

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade debtors
Prepayments		 2023
£
152,531
131,640
284,171		 2022
£
105,744
125,016
230,760

continued...

Page 21

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank loans and overdrafts (see note 16)
Trade creditors
Social security and other taxes
VAT
Other creditors
Accruals and deferred income
Income in advance		 2023
£
10,056
46,347
99,192
41,397
872
102,573
46,035
346,472		 2022
£
9,809
40,582
36,079
29,117
2,431
101,253
52,684
271,955

The bank overdraft is secured on all the assets of the company.

Deferred income relates to course deposits and fees, which have been invoiced, but not performed by the year end. Deferred income is included in other creditors above.

The amount of this income is as follows:

The amount of this income is as follows:
2023 2022
£ £
Deferred at 31 August 2022 52,684 25,290
Release during the year (52,684) (25,290)
Deferred during the year 46,035 52,684
Deferred at 31 August 2023 46,035 52,684

continued...

Page 22

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Bank loans (see note 16)
Social security and other taxes
LOANS
An analysis of the maturity of loans is given below:
Amounts falling due within one year on demand:
Bank loans
Amounts falling between one and two years:
Bank loans - 1-2 years
Amounts falling due between two and five years:
Bank loans - 2-5 years		 2023
£
17,444
19,892
37,336
2023
£
10,056
10,331
7,113		 2022
£
27,691
-
27,691
2022
£
9,809
10,056
17,635

16. LOANS

17. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

Within one year
Between one and five years
In more than five years		 2023
£
61,387
221,491
1,023,600
1,306,478		 2022
£
60,849
178,066
1,063,600
1,302,515

continued...

Page 23

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

18. MOVEMENT IN FUNDS

Unrestricted funds
General fund
Fair value reserve
TOTAL FUNDS
Net movement in funds, included in the above are
Unrestricted funds
General fund
TOTAL FUNDS
Comparatives for movement in funds
Unrestricted funds
General fund
Fair value reserve
TOTAL FUNDS		 At 1.9.22
£
246,892
90,374
337,266
337,266
as follows:
At 1.9.21
£
209,577
93,234
302,811
302,811		 Net
movement
in funds
£
(35,060)
-
(35,060)
(35,060)
Incoming
resources
£
2,800,396
2,800,396
Net
movement
in funds
£
34,456
-
34,456
34,456		 Transfers
between
funds
£
2,860
(2,860)
-
-
Resources
expended
£
(2,835,456)
(2,835,456)
Transfers
between
funds
£
2,860
(2,860)
-
-		 At
31.8.23
£
214,692
87,514
302,206
302,206
Movement
in funds
£
(35,060)
(35,060)
At
31.8.22
£
246,893
90,374
337,267
337,267

continued...

Page 24

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

18. MOVEMENT IN FUNDS - continued

Comparative net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
TOTAL FUNDS		 Incoming
resources
£
2,531,377
2,531,377		 Resources
expended
£
(2,496,921)
(2,496,921)		 Movement
in funds
£
34,456
34,456

A current year 12 months and prior year 12 months combined position is as follows:

Unrestricted funds
General fund
Fair value reserve
TOTAL FUNDS		 At 1.9.21
£
209,577
93,234
302,811
302,811		 Net
movement
in funds
£
(604)
-
(604)
(604)		 Transfers
between
funds
£
5,720
(5,720)
-
-		 At
31.8.23
£
214,693
87,514
302,207
302,207

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
TOTAL FUNDS		 Incoming
resources
£
5,331,773
5,331,773		 Resources
expended
£
(5,332,377)
(5,332,377)		 Movement
in funds
£
(604)
(604)

Page 25

continued...

SOUTHAMPTON ENGINEERING TRAINING ASSOCIATION LIMITED TRADING AS SETA

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 AUGUST 2023

19. RELATED PARTY DISCLOSURES

There were no related party transactions for the year ended 31 August 2023 nor for the year ended 31 August 2022.

20. COMPANY STATUS

The Association is limited by guarantee of the members, each of whom is due to contribute a maximum of £10 whilst a member or, within one year of ceasing to be member. The number of members, who are the trustees, in 2023 was 5 (2022: 4).

21. TAXATION

The association has charitable status and exemption from taxation has been granted under the Corporation Taxes Act 2010.

Page 26