**REGISTERED COMPANY NUMBER: 00918178 REGISTERED CHARITY NUMBER: 518211**
**S. W. Durham Training Limited**
**Report of the Trustees and**
**Financial Statements**
**for the Year Ended 31 July 2020**
## **S. W. Durham Training Limited**
**Contents of the Financial Statements for the Year Ended 31 July 2020**
|||**Page**||
|---|---|---|---|
|**Report of the Trustees**|1|to|6|
|**Report of the Independent Auditors**|7|to|8|
|**Statement of Financial Activities**||9||
|**Balance Sheet**||10||
|**Notes to the Financial Statements**|11|to|20|
|**Detailed Statement of Financial Activities**||21||
## **S. W. Durham Training Limited**
**Report of the Trustees for the Year Ended 31 July 2020**
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 July 2020. 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**
## **Charitable objectives**
It is the objective of S W Durham Training Limited to provide a high quality training service and promote a lifetime of learning culture to meet the ongoing needs of individuals and the business community, to maximise potential, to secure jobs and create wealth for the region.
## **ACHIEVEMENT AND PERFORMANCE**
The charitable company continues to develop and deliver full time training for young people and adults in the engineering sector, apprentice frameworks and bespoke/commercial training programmes to local and regional organisations, providing lifelong learning opportunities within manufacturing, engineering and commercial sectors.
## **FINANCIAL REVIEW**
## **Personnel**
The average number of employees throughout the period 2019/20 was 19 (2018/19: 21).
## **Reserves policy**
The Council of Management consider the charitable company requires reserves to:
- ensure that the current activities of the charitable company would be able to continue in the event of a change or significant drop in the level of funding;
- allow the Council to react quickly to the training needs of the manufacturing and service industries in our area;
- enable the charitable company to continue to invest in fixed assets and maintain the freehold property in a high state of repair.
In order to be prepared for these eventualities target reserves equating to 6 months of cash expenditure, excluding Group recharges, are deemed appropriate; £500k. The Reserves Policy will be reviewed and approved annually by the Council.
The Council has reviewed the level of free reserves held, which currently stand at £813,520 (2019: £758,413), and considers this is adequate to ensure the continued operation of the charitable company.
Monthly management accounts are prepared to enable the Council to monitor the level of reserves on a timely basis.
Page 1
## **S. W. Durham Training Limited**
## **Report of the Trustees for the Year Ended 31 July 2020**
## **FINANCIAL REVIEW Going concern**
It is considered appropriate to adopt the going concern basis of accounting in preparing these financial statements, on the basis that the company has the ability to continue to operate for a significantly longer period than the statutory twelve months from the date of approval.
During 2020 the world was hit by a global pandemic and at the time of preparing these financial statements, the world remains in the grips of the global pandemic. As a result, there is much about the future that is uncertain. There is general agreement that the country will suffer a recession the likes of which has not been seen since the Second World War. It is also generally accepted that in periods of financial pressure the training budget is one of the first things to be cut by businesses. Consequently, it is anticipated that apprenticeship recruitment will be severely impacted by the recession.
The 19/20 financial statements see the company move into a loss position, where previously a surplus was projected although the final position is improved from the forecast prepared during the most significant period of lockdown. Government schemes have been accessed where possible for the year 19/20, but the impact of the global pandemic has been unprecedented and has affected some in year income streams significantly, it remains to be seen what the ongoing impact will be. The 19/20 year was manageable but the greater impact is expected to be on the 20/21 year.
A cautious approach has been taken to the preparation of the 20/21 financial plan showing reduction in income streams that will certainly be affected by the impact of Covid-19, particularly apprenticeship income and commercial income. 2020/21 apprenticeship income assumptions are based on the following factor; The value of 'carry in' funding (funding for apprentices already in learning) for the company is calculated at £500k. Also, a detailed assessment has been made of the current apprentices to calculate the risk of their being made redundant. A cautious approach has been taken to predicting the number of new apprenticeship enrolments in 2020/21, taking into account the current employer base that the College and SWDT work with. There has been careful planning of staffing and non pay budget, taking account of the additional costs likely to be incurred by the measure required to fulfil the government requirements on social distancing and getting learners back into the education. The 20/21 plan shows SWDT to be in a deficit position, work will continue to reduce the deficit position and bring the organisation back to a surplus position for the year 21/22. The quarter 2 reforecast prepared in Jan-21 shows a small reduction in income, with an increase in apprenticeship income countered by a reduction in commercial income. Apprentices remain on target and a number of additional sign ups have been made in year between lock down periods. SWDT remain in a deficit position but this has improved from budget (-£66k) to quarter 2 (-£27k).
Detailed cash flow forecasts have been prepared which show that SWDT is expected to have a positive cash position for at least 12 months from the date of signing these financial statements
## **Financial Year**
Early in 2020 the world was hit by a global pandemic which escalated to the point that was unimagined. At the time of preparing the financial statements, the threat of Covid-19 remained. Whilst the focus of S W Durham Training remains the same, the impact of Covid-19 led the company to reassess some of the income assumptions in year. The impact of Covid_19 is reflected in the financial performance for the charitable company over the last year. The company finished the year in a deficit position; this was predominantly due to a shortfall in Apprenticeship and commercial income as a result of Covid-19. Staffing came in higher than forecast.
The Council of Management are proposing for approval at the annual general meeting that the fee structure for the training period commencing 1 August 2020 be as follows:
(a) that a company sending a learner to the centre and having that learner with S W Durham Training Limited will, providing the learner is eligible for full funding, not be charged whilst full funding is still available for that learner and they are aged 16-18 at the start of their framework. If the learner is not eligible for full funding, the sponsoring company will pay the difference between full funding and that received;
(b) that companies will pay fees for their learner to attend work based learning and further education subsequent to completion of apprenticeships framework.
## **COUNCIL OF MANAGEMENT**
No fees have been paid to any Member of the Council of Management nor does any such member have any beneficial interest in, or a contract with, the charitable company.
Page 2
## **S. W. Durham Training Limited**
**Report of the Trustees for the Year Ended 31 July 2020**
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing document**
S W Durham Training Limited is a company limited by guarantee, incorporated in the United Kingdom and a registered charity. The charitable company is governed by its Memorandum and Articles of Association, as amended at the extraordinary general meeting of 17 October 2014.
## **Recruitment and appointment of new council members**
Council members, who are also trustees and directors of the charitable company, can appoint any nominated member to act until the next Annual General Meeting at which time they are eligible for re-election.
## **Organisational structure**
The council members can meet as many times as they see fit, but generally they meet every three months. Decisions will be made by a majority vote with the Chairman having the casting vote. Day to day management of the charitable company is delegated to the Chief Executive.
## **Induction and training of new council members**
New council members are briefed on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the committee and decision making processes, recent financial performance and future plans. They are introduced to key employees and other council members. Council members are encouraged to attend appropriate external training events where these will facilitate the undertaking of their role.
## **Key management remuneration**
Details of key management remuneration, which is set by the council having regard to the recommendations of the remuneration committee of the parent Bishop Auckland College, are set out in note 9 to the financial statements.
## **Investment powers**
The council members may invest any monies in any manner authorised by law for the investment of such funds.
## **Restrictions imposed**
No paid employee or person in receipt of fees or any other remuneration from the charitable company may be a council member. However, any council member engaged by the charitable company in any profession will be entitled to be paid for any work done for the charitable company.
## **Public benefit**
The charitable company's aims and achievements are set out within this report. The activities set out in this report have been undertaken to further the charitable company's charitable purposes for the public benefit. The council members have complied with the duty under Section 4 of the Charities Act 2011 to have due regard to public benefit guidance published by the Charity Commission and the trustees have paid due regard to this guidance in deciding what activities the Trust should undertake.
The charitable company's activities in providing training for young people benefit the learners themselves as well as employers and the wider community, providing opportunities to learners and contributing to the creation of jobs and wealth for the North East.
## **REFERENCE AND ADMINISTRATIVE DETAILS**
## **Registered Company number**
00918178 (Not specified/Other)
## **Registered Charity number**
518211
## **Registered office**
Durham Way South Aycliffe Business Park NEWTON AYCLIFFE Co Durham DL5 6AT
Page 3
## **S. W. Durham Training Limited**
## **Report of the Trustees for the Year Ended 31 July 2020**
## **Trustees**
Andrew Dunn (Chair) Andrew Scott Natalie Davison Pamela Petty Paul Aither Benjamin Gilhespy Geoffrey Willis (appointed 8 October 2019)
The trustees, who constitute the Council of Management, are also the directors of the company for the purposes of the Companies Act 2006.
## **Chief Executive Officer**
Stuart Johnson
**Company Secretary** Lynn Heighton
## **Auditors**
RSM UK Audit LLP 1 St James' Gate NEWCASTLE UPON TYNE Tyne and Wear NE1 4AD
## **Solicitors**
Muckle LLP Time Central 32 Gallowgate NEWCASTLE UPON TYNE NE1 4BF
## **Bankers**
Barclays Bank Plc PO Box 378 71 Grey Street NEWCASTLE UPON TYNE NE99 1JP
Page 4
## **S. W. Durham Training Limited**
**Report of the Trustees for the Year Ended 31 July 2020**
## **CHAIRMAN'S STATEMENT**
On behalf of the Council of Management, may I take this opportunity to thank all members of staff of S W Durham Training Limited for their continued support and dedication to the success of the charitable company. I would also like to take this opportunity to thank all our Member Companies for their high level of support during the year. This has been a challenging year for S W Durham Training with the impact of COVID-19; despite the challenges we have seen, maintenance of study programme learners. The organisation and the country face an uncertain future. But study programme numbers continue to increase, apprenticeship numbers continue to grow and the introduction of the new HNC
Changes to the current curriculum have proved beneficial as study programme numbers are in line with current funding values and in some areas are slightly above target. HE numbers are encouraging and are in above target this year with new companies requesting to take up this provision with SWDT. Apprenticeship numbers are very encouraging and are bucking the current trend seen across other parts of the country. New and existing employers are increasing their investment in training and have selected SWDT as their provider of choice. Work carried out during lockdown by the BD and SMT at SWDT has resulted in new and innovative ways of delivery via online platforms, this has allowed us to develop new route ways and establish working partnerships countrywide.
Signed on behalf of Andrew Dunn, Natalie Davison-Terranova
Date 31[st] March 2021
Page 5
## **S. W. Durham Training Limited**
**Report of the Trustees for the Year Ended 31 July 2020**
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
The trustees (who are also the directors of S. W. Durham Training 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 :
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charity SORP;
- make judgements and 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 business.
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:
- there is no relevant audit information of which the charitable company's auditors are unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
## **AUDITORS**
The auditors, RSM UK Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Approved by order of the board of trustees on 31[st] March 2021 and signed on its behalf by: Natalie Davison-Terranova
Trustee
Page 6
## **Report of the Independent Auditors to the Members of S. W. Durham Training Limited**
## **Opinion**
We have audited the financial statements of S W Durham Training Limited (the 'charitable company') for the year ended 31 July 2020 which comprise the Statement of Financial Activities, the Balance Sheet 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, including FRS 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 July 2020 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 Auditor's 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**
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
- the trustees' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
- the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
## **Other information**
The trustees are responsible for the other information. The other information comprises the information included in the Report of the Trustees other than the financial statements and our auditor's 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.
## **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 Trustee's Report which includes the directors report prepared for the purposes of company law for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the directors report included within 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 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 Trustees' Report.
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:
- 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
Page 7
Report of ¢h¢ lthdepeDdent Auditors to the metLr$ or
W. Training Limit*d
- certain disclosurts of trusttts, remun¢rntioll spe¢ified by law are not made. or
- we hav¢ not re1ved all the Infom)l0D and explanations we r4uire for (w audit" or
- the Trusiees were noi entitled to prepare the FnCIal statements in a¢wdance with the small companies regime and
take advaThtage of the small companies exemption from the requirement to prepare a Strategic Report or in preparing the
Trusi¢es' Report.
Responsibilitie$ of truslees
As exp]ained more fully in the Statement of Trnsttts. r¢sw)nsibiliiies sei out on page 6. the trnstees (who ar¢ also th¢
directors of the ¢h8ritsble cornpany for the purpos of company law) are responsible for the pr¢paration of the
financial statements and for b¢ing satisfied that they give a ttNe and fair view, and for such inlernal control as the
trustees deiemiirte is necessary to enable the wtpaNion of funti&l stat¢m¢nts are tree trom material
misstatem¢nL whether due io fraud or error.
In preparlng the financial staiements, the trnstees are respon$ible for &sse55ing the charitsble comkmny's ability to
continue &8 a going ¢onc¢m, dis¢105ing. as applicable, matters telated io gotng ¢on¢ern and using the going concern
basis of accounting unless the tTh$S either intend to liqutdate the choritsble compazry or to cease operntiorts. or hav¢
no realistic alternative but to do so.
Auditor's respon.$ibilities for the audit of Ibe fin•D¢i81 s¢•ttments
Our objectives are to obtain reasonable as>urance aboui wheiher the fLian¢ial Statements as a whole are free from
material mLS51atement, whoth¢r due to frwd or error. and io issue an auditorfs report thai include$ our opinion.
Reasonable as8ufdnce is a high level of awrat)ce. but 1$ not a guarantee that an audit ¢ondu¢ied in accordance with
ISAS (UK) will always deieci a mat¢iial mi551atemenl whrn it exists. Mi%statemeni$ Can arise from fraud or error dnd
are considered Maleri if, individually or in the aggregat¢, they could renablY be expthl to influen¢e the economic
de¢i%ions of users taken on the b&8is of these finan¢ial sfalements.
A further description of our resrA)nsibililies for the audit of the fuw¥ial sthiements 15 IIKated oi th¢ Financial
Reporting Council's websiie at http.'Ilwwv.frc.org.uk/audilorsresponsibilitie5. This description foMs part of our
auditors report.
Use of our report
This report is made solely to the charimble company's members, as a br, in accordance with Chapt¢r 3 of l)art 16 of
th¢ Companie3 Act 2006. Our audit work h&$ been undenaken so that we might stste to thc charithble Comny'S
members thos¢ mailers we are required to #Ale io them in an auditovs rq)ort and for no oih¢r purpose. .1 o the fvllest
extent pennitted by law, we do not acceN or &$5um¢ responsibility to anyone other thon the charitable company and th¢
charitsbl¢ ¢ompany's members as a body, for our audit work. for this repoiL or for the opinions we have formed.
CLAIRE LEECE (Scnior SulOry Auditor)
for and on behalfof RSM UK AUDIT LLP, Statytory Auditor
Chartered Accountonts
I St James, G&e
NEWCASTLE UPON TYNE
Tyne and Wvdr
NEI 4AD
Ihte:
Page 8
## **S. W. Durham Training Limited**
## **Statement of Financial Activities (Incorporating an Income and Expenditure Account) for the Year Ended 31 July 2020**
|Notes
**INCOME AND ENDOWMENTS FROM**
**Charitable activities**
3
Income from activities and services
Investment income
2
**Total**
**EXPENDITURE ON**
**Charitable activities**
4
Charitable expenditure
**NET INCOME/(EXPENDITURE)**
**RECONCILIATION OF FUNDS**
**Total funds brought forward**
**TOTAL FUNDS CARRIED FORWARD**|Unrestricted
fund
£
1,220,960
12
1,220,972
1,289,444
(68,472)
1,476,190
1,407,718|Restricted
funds
£
-
-
-
126,603
(126,603)
1,848,679
1,722,076|2020
Total
funds
£
1,220,960
12
1,220,972
1,416,047
(195,075)
3,324,869
3,129,794|2019
Total
funds
£
1,372,101
175
1,372,276
1,476,867
(104,591)
3,429,461
3,324,870|
|---|---|---|---|---|
The notes form part of these financial statements
Page 9
## **S. W. Durham Training Limited**
## **Balance Sheet 31 July 2020**
|Notes
**FIXED ASSETS**
Tangible assets
10
**CURRENT ASSETS**
Debtors
11
Cash at bank
**CREDITORS**
Amounts falling due within one year
12
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS CURRENT**
**LIABILITIES**
**NET ASSETS**
**FUNDS**
14
Unrestricted funds
Restricted funds
**TOTAL FUNDS**|Unrestricted
fund
£
594,198
124,286
818,754
943,040
(129,520)
813,520
1,407,718
1,407,718|Restricted
funds
£
1,722,076
-
-
-
-
-
1,722,076
1,722,076|2020
Total
funds
£
2,316,274
124,286
818,754
943,040
(129,520)
813,520
3,129,794
3,129,794
1,407,718
1,722,076
3,129,794|2019
Total
funds
£
2,566,456
260,449
668,362
928,811
(170,397)
758,414
3,324,870
3,324,870
1,476,191
1,848,679
3,324,870|
|---|---|---|---|---|
These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime.
The financial statements were approved by the Board of Trustees and authorised for issue on 31[st] March 2021. and were signed on its behalf by: Natalie Davison- Terranova
Trustee
The notes form part of these financial statements
Page 10
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements for the Year Ended 31 July 2020**
## **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.
The charitable company has availed itself of Paragraph 3(3) of Schedule 4 of the Companies Act and adapted the Companies Act formats to reflect the special nature of the charitable company's activities.
The financial statements are prepared on the going concern basis which assumes that the charitable company will continue to operate. Further detail on going concern is given on page 2 of the Trustees’ report.
The financial statements are prepared in sterling (£).
## **Going Concern**
The financial statements are prepared on the going concern basis which assumes that the charitable company will continue to operate.
The charity had total funds of £3,129,794 as at 31 July 2020 (decrease of £195,076 from 31 July 2019). As a result of the Covid-19 pandemic, the budgets and cash flow forecasts have been updated to factor in the expected reduction in income and a worst case scenario has been used to confirm that the charity has sufficient cash for the organisation to continue for at least 12 months from the date these financial statements are signed. At the time of approving the financial statements, the trustees have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and there are no material uncertainties. Thus, the trustees continue to adopt the going concern basis of accounting in preparing the financial statements
## **Financial reporting standard 102 - reduced disclosure exemptions**
The charitable company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland':
- the requirements of Section 7 Statement of Cash Flows.
## **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 costs 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.
## **Allocation and apportionment of costs**
Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.
continued...
Page 11
## **S. W. Durham Training Limited**
**Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **1. ACCOUNTING POLICIES – continued**
## **Tangible fixed assets**
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Freehold land & buildings - 4% on cost and 2% on cost - Plant, machinery, fixtures & equipment 20% on cost, 16.67% on cost, 10% on cost and 4% on cost Motor vehicles - 25% on reducing balance Computer equipment - 50% on cost and 33%-50% on cost
## **Related party exemption**
The charitable company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions group entities.
## **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.
## **Foreign currencies**
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.
## **Pension costs and other post-retirement benefits**
The charitable company operates a funded group pension plan arrangement, whereby it makes contributions directly to each individual employees' pension plan. Contributions paid are included in the period to which they relate.
## **Irrecoverable vat**
The charity was partially exempt for VAT purposes for the period ended 31 July 2020. Irrecoverable VAT has been included in the Statement of Financial Activities during the period within support costs.
## **Investments**
Listed investments are included in the financial statements at market value at the balance sheet date.
## **Financial Instruments**
The charitable company 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 settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
continued...
Page 12
## **S. W. Durham Training Limited**
**Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **1. ACCOUNTING POLICIES - continued**
## **Critical accounting estimates and areas of judgement**
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
## Critical accounting estimates and assumptions:
The charitable company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
## Critical areas of judgement
Depreciation - Depreciation is calculated so as to write off the cost of an asset, less its residual value, over the economic life of that asset. An estimate of the useful life of assets is detailed in the depreciation policy. The value of the depreciation charge during the year was £250,181.
continued...
Page 13
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **2. INVESTMENT INCOME**
|Unrestricted
Restricted
funds
funds
£
£
Bank interest
12
-
**3.**
**INCOME FROM CHARITABLE ACTIVITIES**
Activity
Apprentices & youth/adult
training
Income from activities and services
Course fees
Income from activities and services
**4.**
**CHARITABLE ACTIVITIES COSTS**
Direct
Costs
£
Charitable expenditure
785,314
**5.**
**SUPPORT COSTS**
Management
£
Charitable expenditure
616,890
Support costs, included in the above, are as follows:
**Management**
Wages & salaries
Social security
Pensions
Advertising & publicity
General expenses
Irrecoverable VAT
Operating and maintenance costs
College recharges
Depreciation of tangible and heritage assets
Gain/loss on sale of tangible fixed assets|Unrestricted
Restricted
funds
funds
£
£
Bank interest
12
-
**3.**
**INCOME FROM CHARITABLE ACTIVITIES**
Activity
Apprentices & youth/adult
training
Income from activities and services
Course fees
Income from activities and services
**4.**
**CHARITABLE ACTIVITIES COSTS**
Direct
Costs
£
Charitable expenditure
785,314
**5.**
**SUPPORT COSTS**
Management
£
Charitable expenditure
616,890
Support costs, included in the above, are as follows:
**Management**
Wages & salaries
Social security
Pensions
Advertising & publicity
General expenses
Irrecoverable VAT
Operating and maintenance costs
College recharges
Depreciation of tangible and heritage assets
Gain/loss on sale of tangible fixed assets|Unrestricted
Restricted
funds
funds
£
£
Bank interest
12
-
**3.**
**INCOME FROM CHARITABLE ACTIVITIES**
Activity
Apprentices & youth/adult
training
Income from activities and services
Course fees
Income from activities and services
**4.**
**CHARITABLE ACTIVITIES COSTS**
Direct
Costs
£
Charitable expenditure
785,314
**5.**
**SUPPORT COSTS**
Management
£
Charitable expenditure
616,890
Support costs, included in the above, are as follows:
**Management**
Wages & salaries
Social security
Pensions
Advertising & publicity
General expenses
Irrecoverable VAT
Operating and maintenance costs
College recharges
Depreciation of tangible and heritage assets
Gain/loss on sale of tangible fixed assets|2020
Total
funds
£
12
2020
£
1,010,335
210,625
1,220,960|2019
Total
funds
£
175
2019
£
1,065,405
306,696
1,372,101
Totals
£
1,416,047
Totals
£
630,733
2019
Total
activities
£
17,935
1,997
986
5,410
13,095
36,406
70,727
249,000
255,528
(31,250)
619,834|
|---|---|---|---|---|
||||Support
costs (see
note 5)
£
630,733||
||Management
£
616,890||Governance
costs
£
13,843||
||||2020
Charitable
expenditure
£
15,750
1,814
1,338
1,673
6,580
27,068
63,990
249,996
250,181
(1,500)
616,890||
continued...
Page 14
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **5. SUPPORT COSTS - continued Governance costs**
|**SUPPORT COSTS - continued**
**Governance costs**|||
|---|---|---|
||2020|2019|
||Charitable|Total|
||expenditure|activities|
||£|£|
|Auditors' remuneration|11,410|7,200|
|Accountancy and legal fees|2,433|12,270|
||13,843|19,470|
## **6. NET INCOME/(EXPENDITURE)**
Net income/(expenditure) is stated after charging/(crediting):
|Auditors' remuneration
Depreciation - owned assets
Surplus on disposal of fixed assets
Operating Leases|2020
£
11,410
250,182
(1,500)
8,438|2019
£
7,200
255,528
(31,250)
52,679|
|---|---|---|
## **7. TRUSTEES' REMUNERATION AND BENEFITS**
The trustees receive no emoluments for their services to the charitable company (2019:£Nil).
## **Trustees' expenses**
Trustees' expenses totalling £Nil were reimbursed during the year (2019: £Nil).
## **8. STAFF COSTS**
|Wages and salaries
Social security costs
Other pension costs|2020
£
529,964
46,450
90,844
667,258|2019
£
514,820
44,063
60,460
619,343|
|---|---|---|
The average monthly number of employees during the year was as follows:
|Training
Administration|2020
14
5
19|2019
14
7|
|---|---|---|
|||21|
Key management comprise the Chief Executive. Remuneration of key management during the year was £63,010 including £4,463 pension contributions (2019: £28,128 including pension contributions of £1,324)
No employees received emoluments in excess of £60,000 (2019: Nil).
continued...
Page 15
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
|**9.**
**COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES**
Unrestricted
Restricted
fund
funds
£
£
**INCOME AND ENDOWMENTS FROM**
**Charitable activities**
Income from activities and services
1,372,101
-
Investment income
175
-
**Total**
1,372,276
-
**EXPENDITURE ON**
**Charitable activities**
Charitable expenditure
1,350,264
126,603
**NET INCOME/(EXPENDITURE)**
22,012
(126,603)
**RECONCILIATION OF FUNDS**
**Total funds brought forward**
1,454,179
1,975,282
**TOTAL FUNDS CARRIED FORWARD**
1,476,191
1,848,679
**10.**
**TANGIBLE FIXED ASSETS**
Plant,
Freehold
machinery,
land &
fixtures
Motor
Computer
buildings
& equipment
vehicles
equipment
£
£
£
£
**COST**
At 1 August 2019 and
31 July 2020
4,804,380
3,335,864
42,984
713,397
**DEPRECIATION**
At 1 August 2019
2,952,682
2,621,106
42,984
713,397
Charge for year
145,375
104,807
-
-
At 31 July 2020
3,098,057
2,725,913
42,984
713,397
**NET BOOK VALUE**
At 31 July 2020
1,706,323
609,951
-
-
At 31 July 2019
1,851,698
714,758
-
-||Total
funds
£
1,372,101
175
1,372,276
1,476,867
(104,591)
3,429,461
3,324,870
Totals
£
8,896,625
6,330,169
250,182
6,580,351
2,316,274
2,566,456|
|---|---|---|
||||
||||
||||
||||
Included in cost or valuation of land and buildings is freehold land of £300,000 (2019 - £300,000) which is not depreciated.
Freehold land was revalued as at 31 July 2014 by the trustees supported by an independent valuation. On transition to FRS102 the freehold land is held at deemed cost.
continued...
Page 16
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
|2020
2019
£
£
Trade debtors
4,840
30,448
Amounts owed by group undertakings
-
103,120
Prepayments and accrued income
119,446
126,881
124,286
260,449
**12.**
**CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
2020
2019
£
£
Trade creditors
2,258
17,267
Amounts owed to group undertakings
23,973
-
Social security and other taxes
42,284
25,499
Deferred income
33,093
56,512
Accruals
27,912
71,119
129,520
170,397
**Deferred Income**
Balance at 1 August 2019
56,512
Amount received and accrued in the year
1,198,733
Balance at 31 July 2020
(33,093
Amount released to incoming resources
1,222,152
Deferred income relates to Adult learner loans income received and not earned. This
funding will be subject to clawback.
**13.**
**LEASING AGREEMENTS**|2020
£
4,840
-
119,446
124,286|2020
£
4,840
-
119,446
124,286|2019
£
30,448
103,120
126,881|
|---|---|---|---|
||||260,449|
||||2019
£
17,267
-
25,499
56,512
71,119|
||||170,397|
|||1,222,152||
|||||
Minimum lease payments under non-cancellable operating leases fall due as follows:
|Within one year
Between one and five years
**14.**
**MOVEMENT IN FUNDS**
**Unrestricted funds**
General fund
**Restricted funds**
The Core
**TOTAL FUNDS**|At 1.8.19
£
1,476,190
1,848,679
3,324,869|2020
£
8,439
8,439
16,878
Net
movement
in funds
£
(68,472)
(126,603)
(195,075)|2020
£
8,439
8,439
16,878||2019
£
8,484
8,484|
|---|---|---|---|---|---|
||||||16,968|
|||||At
31.7.20
£
1,407,718
1,722,076||
|||||3,129,794||
continued...
Page 17
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **14. MOVEMENT IN FUNDS - continued**
Net movement in funds, included in the above are as follows:
|**Unrestricted funds**
General fund
**Restricted funds**
The Core
**TOTAL FUNDS**
**Comparatives for movement in funds**
**Unrestricted funds**
General fund
**Restricted funds**
The Core
**TOTAL FUNDS**
Comparative net movement in funds, included in the above are a
**Unrestricted funds**
General fund
**Restricted funds**
The Core
**TOTAL FUNDS**|Incoming
resources
£
1,220,972
-
1,220,972
At 1.8.18
£
1,454,179
1,975,282
3,429,461
s follows:
Incoming
resources
£
1,372,276
-
1,372,276|Resources
expended
£
(1,289,444)
(126,603)
(1,416,047)
Net
movement
in funds
£
22,012
(126,603)
(104,591)
Resources
expended
£
(1,350,264)
(126,603)
(1,476,867)|Movement
in funds
£
(68,472)
(126,603)
(195,075)
At
31.7.19
£
1,476,191
1,848,679
3,324,870
Movement
in funds
£
22,012
(126,603)
(104,591)|
|---|---|---|---|
continued...
Page 18
## **S. W. Durham Training Limited**
## **Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **14. MOVEMENT IN FUNDS - continued**
A current year 12 months and prior year 12 months combined position is as follows:
|**Unrestricted funds**
General fund
**Restricted funds**
The Core
**TOTAL FUNDS**|At 1.8.18
£
1,454,179
1,975,282
3,429,461|Net
movement
in funds
£
(46,460)
(253,206)
(299,666)|At
31.7.20
£
1,407,719
1,722,076|
|---|---|---|---|
||||3,129,795|
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
**Restricted funds**
The Core
**TOTAL FUNDS**|Incoming
resources
£
2,593,248
-
2,593,248|Resources
expended
£
(2,639,708)
(253,206)
(2,892,914)|Movemen
in funds
£
(46,460)
(253,206)|
|---|---|---|---|
||||(299,666)|
Unrestricted funds: These funds represent unrestricted resources available for the general work of the charitable company.
## The Core:
This is funds from Durham County Council for the creation of the advanced manufacturing facility known as The Core (Creating Opportunities, Realising Excellence).
## **15. ULTIMATE PARENT COMPANY**
The ultimate parent company is Bishop Auckland College, a college of further education incorporated in the United Kingdom, which is the sole member of the charity. The consolidated accounts can be obtained from the college at Woodhouse Lane, Bishop Auckland, County Durham, DL14 6JZ.
continued...
Page 19
## **S. W. Durham Training Limited**
**Notes to the Financial Statements - continued for the Year Ended 31 July 2020**
## **16. CAPITAL COMMITMENTS**
There were no capital commitments at 31 July 2020 or 2019.
## **17. RELATED PARTY DISCLOSURES**
There were no related party transactions for the year ended 31 July 2020.
## **18. MEMBERS**
The liability of the members of the charitable company is limited by guarantee and such liability does not exceed £10 per member.
Page 20