OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2021-07-31-accounts

REGISTERED COMPANY NUMBER: 02171777 (England and Wales) REGISTERED CHARITY NUMBER: 800614

REPORT OF THE TRUSTEES AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST JULY 2021

FOR

FIRST RUNG LIMITED

Sproull & Co. Chartered Accountants Statutory Auditors First Floor, Jebsen House 53-61 High Street

Ruislip Middlesex HA4 7BD

FIRST RUNG LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST JULY 2021

Page
Reference and Administrative Details 1
Report of the Trustees 2 to 6
Statement of Trustees' Responsibilities 7
Report of the Independent Auditors 8 to 10
Statement of Financial Activities 11
Balance Sheet 12
Cash Flow Statement 13
Notes to the Cash Flow Statement 14
Notes to the Financial Statements 15 to 24
Detailed Statement of Financial Activities 25 to 26

FIRST RUNG LIMITED

REFERENCE AND ADMINISTRATIVE DETAILS FOR THE YEAR ENDED 31ST JULY 2021

TRUSTEES O Ahmed
S Chessum
J Dodhia
P Lindsay-Greenidge
F E Longsworth (Chair)
S Riley
J L Szabo-Merridew
W A Warner (Treasurer)
N S Jervis
C S Pike
R S Essien
S J Stott
COMPANY SECRETARY C A Horton
REGISTERED OFFICE 197-205 High Street
Ponders End
Enfield
Middlesex
EN3 4DZ
REGISTERED COMPANY 02171777 (England and Wales)
NUMBER
REGISTERED CHARITY 800614
NUMBER
AUDITORS Sproull & Co.
Chartered Accountants
Statutory Auditors
First Floor, Jebsen House
53-61 High Street
Ruislip
Middlesex
HA4 7BD
BANKERS HSBC Bank plc
1 The Town
Enfield
EN2 6LD
Scottish Widows Bank plc
PO Box 12757
67 Morrison Street
Edinburgh
EH3 8YJ

Page 1

FIRST RUNG LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31ST JULY 2021

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 31st July 2021. 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

  1. To advance education for the public benefit, particularly but not exclusively, by the provision of vocational training.

  2. The relief of unemployment for the public benefit, particularly, but not exclusively, by the provision of training, retraining and periods of work experience through the programmes of the Education and Skills Agency (ESFA), or similar programmes funded by the Government, public agencies, corporations and the European Social Fund.

  3. To deliver training and development to young people so that their employment prospects are significantly improved. This can be through classroom or digital delivery.

  4. To provide learning, training, and work experience opportunities for young people to prepare them for the world of work. This is tailored to the individual needs of the young person and is supported by a comprehensive pastoral care programme.

Public benefit

Trustees of a charity have a duty to report on their charity's public benefit. The Trustees of First Rung Limited have considered the guidance issued by the Charity Commission. The Trustees have concluded that:-

  1. The aims and activities of the organization continue to be charitable;

  2. The aims and the work done give identifiable benefits in the charitable sector and both directly and indirectly to young people in need;

  3. The benefits are for the public, are not unreasonably restrictive in any way and certainly not by ability to pay; 4. There is no detriment or harm arising from the aims and activities.

The trustees can confirm that they are complying with the Charity Commission's guidance on public benefit. First Rung is a registered charity; its only activity is the provision of learning, training and preparing young people for work. Prior to joining us many of our learners struggle to identify the next stage in their education or work. The charity, by providing tailor made courses combined with excellent pastoral care, nurtures the young people, enabling them to make the next step in their journey for the benefit of society, local employers and the economy.

Activities

ESFA Study Programme

First Rung continues to develop the 16-18 Study programme, which is tailored to each student's prior attainment and career goal; it includes preparation for employment. The aim is to provide young people with the skills and qualifications to progress to an apprenticeship, employment or further education.

Learners have the opportunity to achieve a level 1 vocational qualification in either business administration, customer service or childcare. They develop their skills in English, Mathematics and ICT by undertaking the functional skills qualification at the appropriate level. First Rung continues to offer GCSE English and Mathematics provision to learners who did not previously achieve at least a grade 3 (grade D) in these subjects.

All learners on the programme attend preparation for life and work sessions to support them to develop the necessary skills and attributes to sustain employment and be a good citizen. All learners are also expected to undertake a work placement as part of the programme.

Page 2

FIRST RUNG LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31ST JULY 2021

OBJECTIVES AND ACTIVITIES

ESFA Traineeships

Many of First Rung's younger learners lack work readiness to progress on to an apprenticeship. Traineeships provide an intermediate stage between the Study Programme and a full apprenticeship. During the programme the learner acquires the essential skills and experience for the next stage of their journey, whether to an apprenticeship or work.

Following a period of employability and preparation for work, learners undertake a work placement for up to 4 days a week. They receive a high level of support from First Rung staff and attend one of the centres one day per week to study.

Apprenticeships

Companies with a turnover of over £3 million have to pay an apprenticeship levy of 3% of their annual pay bill. They can use this fund to provide training, including apprenticeships, to their staff. The funds are accessed through the National Apprenticeship Service digital system. Apprenticeship standards provide a structure of industry relevant to both on and off the job training. Off the job training is delivered by First Rung either in centre or on-line. On the job training is delivered in work by the employer. Apprenticeships are both level 2 and 3 and are delivered in a range of vocational areas.

Smaller employers who are not required to pay the apprenticeship levy can also employ and train apprentices. Funding for the training delivered by First Rung is drawn down from the National Apprenticeship Service, which pays for 95% of the training, the employer contributing 5%. Training for apprentices aged 16-18 is funded at 100%.

Kick Start

The Kickstart Scheme is run by the Department for Work and Pensions and provides funding to create new jobs for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment. Employers of all sizes can apply for the fund, which was created in response to rising youth unemployment due to the Covid pandemic. First Rung delivers placements for employer partners and internally.

Reed in Partnership; ESF SEND Youth Unemployment Project

First Rung is a partner of Reed to deliver employability training and mentoring to young people with Special Educational Needs (SEND). This flexible programme is tailored to the needs of each young person and supports them into work, including apprenticeships or further training. The programme is funded by the European Social Fund. The contract is held by Reed in Partnership and First Rung delivers in North London as a subcontractor.

Independent School

The Trustees have decided to de-register as an Independent School due to low occupancy. However, part time alternative education is still being offered to local schools.

ACHIEVEMENT AND PERFORMANCE

Achievements

Delivery of Learning

First Rung supported 218 Trainees and Study Programme learners during the year and 37 apprentices.

A major achievement of the organization was, during the Covid Pandemic, to switch all learning on-line, using Microsoft Teams and existing e-portfolio and learning systems. Learners continued to progress on their courses. Vulnerable learners were continually supported in both centres, which stayed open for this purpose.

Quality of Provision

The Charity's aim is continuously to improve the quality of the learning that it provides. To achieve this aim, each year a critical self-assessment is undertaken, the findings from which are used to produce a Quality Improvement Plan (QIP) which identifies the areas requiring attention, the person tasked with the work and the deadline of completion.

During the year the Charity has pro-actively recruited trustees with an educational background with the aim of further improving the quality of learning.

Page 3

FIRST RUNG LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31ST JULY 2021

The Apprenticeship, Traineeship and Study Programme provision is subject to inspection by Ofsted. The organisation was last inspected in November 2016 and was graded as "Good".

Fundraising activities

During this financial year, the Trustees decided that the environment and circumstances were still not conducive to active fundraising. In the future, we will return to active fundraising when the time is right and opportunities arise.

FINANCIAL REVIEW

Results for the Financial Year and Long Term Strategy

This financial year proved to be highly challenging and resulted in a deficit on normal operations of £103,715. This was mainly due to the Covid pandemic which had a significant impact on First Rung. As employers ceased to recruit new staff, particularly young inexperienced people, the volumes of apprenticeships fell significantly which had a detrimental effect on income. Some staff were furloughed through the Government's job protection scheme and costs were closely managed. Most training and mentoring moved on-line with only the most vulnerable learners attending the centres. Staff adapted well to digital delivery and this was enhanced during the year with new laptops and improved use of on-line systems.

During the year, following the appointment of our new CEO, there has been a comprehensive and fundamental review of strategy. A new three year plan has been produced which lays the foundation for the continued success of First Rung. This strategy starts with a year of investment, particularly in staff development, marketing and IT, with a view to achieving a break even situation in 2022/23 and a significant surplus in 2023/24.

Risks attached to achievement of objectives

The trustees operate a formal risk management process from which appropriate strategies are formulated to mitigate the risks. During the year a comprehensive review was undertaken and new actions agreed.

First Rung faces risks from changes in Government priorities in employment and skills provision; to mitigate this risk the Charity is pro-actively looking to diversify into alternative income streams, so that we are less dependent on the ESFA contract which at present constitutes the majority of First Rung's income.

The safety of our learners, many of whom are vulnerable, is of paramount importance to First Rung. To mitigate the risks, all staff and trustees are DBS (Disclosure and Barring Service) checked and have regular training in safeguarding, 'Prevent' and bullying awareness. Safeguarding is included as a topic for discussion at every board meeting.

Investment policy and objectives

It is the policy of the Trustees to invest surplus cash in short-term bank deposits. From time to time the Trustees, via the Finance & Premises Working Party, look at the overall resources of the organisation and its future needs in order to establish whether there might be scope for extending the appropriate range of investments.

Reserves policy

The Trustees have agreed that, in the long term, free reserves should be maintained at a level equal to between 3 to 6 months of operating costs, in order to provide cover in the event of any interruption of income and to enable opportunities to invest in the organization as they arise. The free reserves at 31 July 2021 were £289k (£413K as at 31 July 2020) which represents between 2 and 3 months average operating costs. This has been caused by our investment in the Colindale Centre and the recent impact of the Covid Pandemic. The long term strategy mentioned above is designed to move to a level that consistently exceeds 3 months over the long term.

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.

Day to day decisions regarding the charity are made by the senior management team, led by the CEO. There are three Board working parties covering finance and property, quality and personnel and strategy.

Page 4

FIRST RUNG LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31ST JULY 2021

STRUCTURE, GOVERNANCE AND MANAGEMENT Appointment of new Chief Executive

During this financial year, Diane Betts resigned as CEO and, after a rigorous selection process, Steve Woolcock was appointed to this position in January 2021. Steve has had much relevant experience in the charity sector and has already played a leading role in developing the long term strategy mentioned above.

Remuneration of Senior Management

All staff at First Rung are remunerated through the annual pay review process. Salary bandings are based on experience, skills, behaviours and performance, split into two areas; increase in responsibility and major achievements. Managers' salaries are set by the Senior Remuneration Committee. All salary reviews go to the Quality and Personnel and the Finance and Premises working parties for approval with final review and confirmation at the main Board.

Board of Trustees

After a long period of stability, significant changes have taken place in Board membership. A number of Trustees decided to resign in accordance with the Charity Commission recommendation that terms of service do not exceed nine years. Eight new Trustees from a range of different backgrounds have been appointed during 2021 to add to the strength and diversity of the Board in its development of the new strategic plan. On appointment there is a one day induction programme followed by regular on line training on specific relevant subjects eg safeguarding, health and safety.

The following list includes all Trustees and key management who served during the financial year.

Chair Frank Longsworth
Treasurer Alan Warner
Other Trustees Joseph Mintz Resigned 9.9.2020
Ade Shokunbi Appointed 4.8.2020 Resigned 17.5.2021
Jitesh Dodhia Appointed 4.8.2020
Juliet Szabo-Merridew Appointed 4.8.2020
Paulette
Lindsay-Greenridge Appointed 4.8.2020
Sally Chessum Appointed 4.8.2020
Sonal Riley Appointed 4.8.2020
Naysoe Naing Resigned 10.5.2021
Omar Ahmed
Nicholas Sean Jervis Appointed 22.7.2021
Denis Dillon Appointed 10.5.2021 Resigned 6.10.2021
Company Secretary Michelle Keady Resigned 26.3.2021
Charlotte Anne Horton Appointed 26.3.2021
Senior Staff
Chief Executive Diane Betts Resigned 20.10.2020
Steve Woolcock Appointed 11.1.2021
Deputy CEO/Operations Manager Denis Dillon
Head of Centres Francesca Muratori

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the trustees are aware, there is no relevant information (as defined by Section 418 of the Companies Act 2006) of which the charitable company's auditors are unaware, and each trustee has taken all the steps that they ought to have taken as a trustee in order to make them aware of any audit information and to establish that the charitable company's auditors are aware of that information.

Page 5

FIRST RUNG LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31ST JULY 2021

AUDITORS

The Board has decided to appoint new auditors after working with Fisher & Co for the last twelve years. After an appropriate selection process, it was decided at the July 2021 Board Meeting to appoint Sproull & Co, Chartered Accountants as new auditors, to be effective immediately, including responsibility for the audit of the accounts for financial year 2020/21.

The auditors, Sproull & Co., will be proposed for re-appointment at the forthcoming Annual General Meeting.

Approved by order of the board of trustees on ............................................. and signed on its behalf by:

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

F E Longsworth - Trustee

Page 6

FIRST RUNG LIMITED

STATEMENT OF TRUSTEES' RESPONSIBILITIES FOR THE YEAR ENDED 31ST JULY 2021

The trustees (who are also the directors of First Rung 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

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.

Page 7

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF FIRST RUNG LIMITED

Opinion

We have audited the financial statements of First Rung Limited (the 'charitable company') for the year ended 31st July 2021 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 FIRST RUNG 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.

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:

Based on our understanding of the company and the sector in which it operates, we identified the principle risks of non-compliance with laws and regulations related to charitable companies and the application of charitable funds. We also considered those laws and regulations which have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and the Charities SORP (FRS 102).

Through enquiry of management we gained an understanding of their relevant laws and regulations; the entity's policies and procedures regarding compliance; and how they identify, evaluate and account for litigation claims. We understand that the company complies with the framework through having in place robust procedures and policies and by outsourcing and taking external professional legal, tax and accounting advice on relevant specialist functions and areas.

The senior statutory auditor led a discussion with all members of the engagement team regarding the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:

Page 9

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF FIRST RUNG LIMITED

The procedures we carried out to gain sufficient appropriate audit evidence in the above areas included:

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.

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.

Michelle Wickwar A.C.A., F.C.C.A. (Senior Statutory Auditor) for and on behalf of Sproull & Co. Chartered Accountants Statutory Auditors First Floor, Jebsen House 53-61 High Street Ruislip Middlesex HA4 7BD Date: .............................................

Page 10

FIRST RUNG LIMITED

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31ST JULY 2021

Notes
INCOME AND ENDOWMENTS FROM
Donations and legacies
3
Charitable activities
5
Main charitable activities
Investment income
4
Other income
6
Total
EXPENDITURE ON
Charitable activities
7
Main charitable activities
Support costs
Other
10
Total
NET INCOME/(EXPENDITURE)
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
fund
£
-
1,388,617
101
28,855
1,417,573
917,719
603,569
54,631
1,575,919
(158,346)
593,367
435,021		 Restricted
fund
£
-
-
-
-
-
-
-
-
-
-
-
-		 2021
Total
funds
£
-
1,388,617
101
28,855
1,417,573
917,719
603,569
54,631
1,575,919
(158,346)
593,367
435,021		 2020
Total
funds
£
211
1,574,146
769
82,684
1,657,810
1,032,902
581,260
-
1,614,162
43,648
549,719
593,367

CONTINUING OPERATIONS

All income and expenditure has arisen from continuing activities.

The statement of financial activities includes all gains and losses recognised in the year.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

The notes form part of these financial statements

Page 11

FIRST RUNG LIMITED

BALANCE SHEET 31ST JULY 2021

Notes
FIXED ASSETS
Tangible assets
15
CURRENT ASSETS
Debtors
16
Cash at bank and in hand
CREDITORS
Amounts falling due within one year
17
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
NET ASSETS
FUNDS
20
Unrestricted funds
TOTAL FUNDS		 2021
£
145,527
110,146
489,268
599,414
(309,920)
289,494
435,021
435,021
435,021
435,021		 2020
£
179,876
127,799
653,168
780,967
(367,476)
413,491
593,367
593,367
593,367
593,367

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 ............................................. and were signed on its behalf by:

............................................. F E Longsworth - Trustee

The notes form part of these financial statements

Page 12

FIRST RUNG LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST JULY 2021

Notes
Cash flows from operating activities
Cash generated from operations
1
Net cash (used in)/provided by operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash used in investing activities
Change in cash and cash equivalents in
the reporting period
Cash and cash equivalents at the
beginning of the reporting period
Cash and cash equivalents at the end of
the reporting period		 2021
£
(155,281)
(155,281)
(8,720)
101
(8,619)
(163,900)
653,168
489,268		 2020
£
236,195
236,195
(19,872)
769
(19,103)
217,092
436,076
653,168

The notes form part of these financial statements

Page 13

FIRST RUNG LIMITED

NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST JULY 2021

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

OPERATING ACTIVITIES
Net (expenditure)/income for the reporting period (as per the
Statement of Financial Activities)
Adjustments for:
Depreciation charges
Interest received
Decrease in debtors
(Decrease)/increase in creditors
Net cash (used in)/provided by operations		 2021
£
(158,346)
43,069
(101)
17,653
(57,556)
(155,281)		 2020
£
43,648
39,060
(769)
54,934
99,322
236,195

2. ANALYSIS OF CHANGES IN NET FUNDS

At 1.8.20 Cash flow At 31.7.21
£ £ £
Net cash
Cash at bank and in hand 653,168 (163,900) 489,268
653,168 (163,900) 489,268
Total 653,168 (163,900) 489,268

The notes form part of these financial statements

Page 14

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST JULY 2021

1. GENERAL INFORMATION

First Rung Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is 197 – 205 High Street, Ponders End, Enfield, EN3 4DZ. First Rung Limited is also a registered charity in England and Wales. Charity number is 800614.

2. 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.

Critical accounting judgements and key sources of estimation uncertainty

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. There were no critical accounting estimates and judgements made in preparing these financial statements.

Going concern

At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. This view has been reinforced by First Rung's ability to maintain a strong cash position during a year when Coronavirus continued to have an adverse impact on its operations. This position is strengthened by the agreement of a new ESFA funding contract until July 2022 and contracts with several new funders which will have a positive impact on income in the new financial year.

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.

Government grants

The company recognises income arising from government grants using the performance model.

Tangible fixed assets and impairment of fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Page 15

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

2. ACCOUNTING POLICIES - continued

Tangible fixed assets and impairment of fixed assets

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements Over the term of the lease
Plant and machinery 33.33% Straight line
Fixtures, fittings and equipment 20% Straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and carrying value of the asset, and is recognized in net income/(expenditure) for the year.

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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.

Pension costs and other post-retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Payments in respect of other post-retirement benefits are charged to the Statement of Financial Activities in the period to which they relate.

Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity’s balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Page 16

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

2. ACCOUNTING POLICIES - continued

Financial instruments

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors are initially recognized at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognized initially at transaction price and subsequently measured at amortised cost using the effective interest method.

3. DONATIONS AND LEGACIES

4.

DONATIONS AND LEGACIES
2021 2020
£ £
Donations - 211
INVESTMENT INCOME
2021 2020
£ £
Interest receivable 101 769

Page 17

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

5. INCOME FROM CHARITABLE ACTIVITIES

Activity
ESFA Study programme and
traineeships
Main charitable activities
Apprenticeships
Main charitable activities
Other
Main charitable activities
6.
OTHER INCOME
Coronavirus Job Retention Scheme
7.
CHARITABLE ACTIVITIES COSTS
Main charitable activities
Support costs
8.
DIRECT COSTS OF CHARITABLE ACTIVITIES
Staff costs
Sundries
Learner support costs
Training costs and materials
Staff expenses
Registration fees		 Direct
Costs (see
note 8)
£
917,719
-
917,719		 2021
£
969,566
195,549
223,502
1,388,617
2021
£
28,855
Support
costs (see
note 9)
£
-
603,569
603,569
2021
£
822,766
-
5,138
29,629
28,581
31,605
917,719		 2020
£
1,030,840
268,493
274,813		 2020
£
1,030,840
268,493
274,813
1,574,146
2020
£
82,684
Totals
£
917,719
603,569		 2020
£
82,684
1,521,288
2020
£
925,329
2,138
13,310
17,766
52,052
22,307
1,032,902

Page 18

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

9. SUPPORT COSTS

9.
SUPPORT COSTS
Governance
Management
costs
£
£
Support costs
502,199
101,370
Support costs, included in the above, are as follows:
2021
Support
costs
£
Staff costs (support)
169,152
Social security (support)
9,045
Pensions (support)
2,065
Sundries
148
Premises costs
175,137
Office costs
59,125
Legal and professional
12,232
Bank charges
1,165
Bad debt provision
430
Unrecoverable VAT
40,080
Depreciation of tangible and heritage assets
33,620
Staff costs (governance)
81,508
Social security (governance)
9,046
Pensions (governance)
2,066
Auditors' remuneration
8,750
603,569
10.
OTHER
2021
£
Exceptional items
54,631		 Totals
£
603,569
2020
Total
activities
£
145,154
6,805
2,424
-
184,664
57,925
33,257
574
8,305
15,480
39,060
70,594
6,804
2,424
7,790
581,260
2020
£
-

Exceptional items represent additional service charges levied at the Colindale centre of £15,630 in relation to the financial year ended 30th June 2019 and £29,552 in relation to the financial year ended 30th June 2020, together with £9,449 of depreciation charges arising as a result of the Trustees reassessing the estimated useful economic life of its tangible fixed assets.

Page 19

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

11. NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

2021 2020
£ £
Audit fees 8,750 7,790
Depreciation - owned assets 43,069 39,060

12. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31st July 2021 nor for the year ended 31st July 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31st July 2021 nor for the year ended 31st July 2020.

13. STAFF COSTS

Wages and salaries
Social security costs
Other pension costs		 2021
£
994,269
76,174
25,205
1,095,648		 2020
£
1,030,206
98,824
30,504
1,159,534

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

Direct charitable services
Support services
Governance services		 2021
20
10
5
35		 2020
22
12
6
40

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

2021 2020
£90,001 - £100,000 - 1

Of the employees whose emoluments exceed £60,000, none (2020: none) have retirement benefits accruing under defined benefit scheme.

The senior management team described in the trustees' report received total remuneration of £169,735 (2020: £232,219).

Page 20

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

14.
COMPARATIVES FOR THE STATEMENT OF FINANCIAL
INCOME AND ENDOWMENTS FROM
Donations and legacies
Charitable activities
Main charitable activities
Investment income
Other income
Total
EXPENDITURE ON
Charitable activities
Main charitable activities
Support costs
Total
NET INCOME
Transfers between funds
Net movement in funds
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 ACTIVITIES (2020)
Unrestricted
Restricted
fund
fund
£
£
-
211
1,574,146
-
769
-
82,684
-
1,657,599
211
1,032,902
-
581,260
-
1,614,162
-
43,437
211
15,493
(15,493)
58,930
(15,282)
534,437
15,282
593,367
-		 Total
funds
£
211
1,574,146
769
82,684
1,657,810
1,032,902
581,260
1,614,162
43,648
-
43,648
549,719
593,367

Page 21

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

15. TANGIBLE FIXED ASSETS

Leasehold
Plant and
improvements
machinery
£
£
COST
At 1st August 2020
236,190
169,778
Additions
-
8,720
At 31st July 2021
236,190
178,498
DEPRECIATION
At 1st August 2020
71,189
160,261
Charge for year
33,074
8,686
At 31st July 2021
104,263
168,947
NET BOOK VALUE
At 31st July 2021
131,927
9,551
At 31st July 2020
165,001
9,517
16.
DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade debtors
Other debtors
Prepayments and accrued income
17.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade creditors
Social security and other taxes
Other creditors
Accrued expenses		 Fixtures
and
fittings
£
39,300
-
39,300
33,942
1,309
35,251
4,049
5,358
2021
£
17,778
58,748
33,620
110,146
2021
£
56,913
22,667
171,526
58,814
309,920		 Totals
£
445,268
8,720
453,988
265,392
43,069
308,461
145,527
179,876
2020
£
50,838
44,019
32,942
127,799
2020
£
22,067
21,475
263,488
60,446
367,476

Page 22

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

18. LEASING AGREEMENTS

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

Within one year
Between one and five years
19.
ANALYSIS OF NET ASSETS BETWEEN FUNDS
Unrestricted
fund
£
Fixed assets
145,527
Current assets
599,414
Current liabilities
(309,920)
435,021
20.
MOVEMENT IN FUNDS
Unrestricted funds
General fund
TOTAL FUNDS
Net movement in funds, included in the above are as follows:
Unrestricted funds
General fund
TOTAL FUNDS		 Restricted
fund
£
-
-
-
-
At 1.8.20
£
593,367
593,367
Incoming
resources
£
1,417,573
1,417,573		 2021
£
121,703
185,346
307,049
2021
Total
funds
£
145,527
599,414
(309,920)
435,021
Net
movement
in funds
£
(158,346)
(158,346)
Resources
expended
£
(1,575,919 )
(1,575,919 )		 2020
£
119,150
300,592
419,742
2020
Total
funds
£
179,876
780,967
(367,476)
593,367
At
31.7.21
£
435,021
435,021
Movement
in funds
£
(158,346)
(158,346)

Page 23

FIRST RUNG LIMITED

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31ST JULY 2021

20. MOVEMENT IN FUNDS - continued

Comparatives for movement in funds

Net
movement
At 1.8.19
in funds
£
£
Unrestricted funds
General fund
534,437
43,437
Restricted funds
Restricted fund
15,282
211
TOTAL FUNDS
549,719
43,648
Comparative net movement in funds, included in the above are as follows:
Incoming
resources
£
Unrestricted funds
General fund
1,657,599
Restricted funds
Restricted fund
211
TOTAL FUNDS
1,657,810		 Transfers
between
funds
£
15,493
(15,493)
-
Resources
expended
£
(1,614,162 )
-
(1,614,162 )		 At
31.7.20
£
593,367
-
593,367
Movement
in funds
£
43,437
211
43,648

21. RELATED PARTY DISCLOSURES

During the year, First Rung Ltd paid Deltacom up to October 2020 £1,315 (2020: £11,070) for IT support, facility services, building and maintenance and refurbishment. Deltacom is owned by director Peter Betts, the husband of Diane Betts, First Rung's Chief Executive. Diane Betts left First Rung in October 2020.

The son of Denis Dillon, the Deputy CEO, was employed as temporary tutor for first Rung and received fees of £nil (2020: £817).

Page 24

FIRST RUNG LIMITED

DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31ST JULY 2021

INCOME AND ENDOWMENTS
Donations and legacies
Donations
Investment income
Interest receivable
Charitable activities
ESFA Study programme and traineeships
Apprenticeships
Other
Other income
Coronavirus Job Retention Scheme
Total incoming resources
EXPENDITURE
Charitable activities
Wages
Social security
Pensions
Sundries
Learner support costs
Training costs and materials
Staff expenses
Registration fees
Other
Exceptional items
Support costs
Management
Staff costs (support)
Social security (support)
Pensions (support)
Sundries
Premises costs
Office costs
Carried forward		 2021
£
-
101
969,566
195,549
223,502
1,388,617
28,855
1,417,573
743,609
58,083
21,074
-
5,138
29,629
28,581
31,605
917,719
54,631
169,152
9,045
2,065
148
175,137
59,125
414,672		 2020
£
211
769
1,030,840
268,493
274,813
1,574,146
82,684
1,657,810
814,458
85,215
25,656
2,138
13,310
17,766
52,052
22,307
1,032,902
-
145,154
6,805
2,424
-
184,664
57,925
396,972

This page does not form part of the statutory financial statements

Page 25

FIRST RUNG LIMITED

DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31ST JULY 2021

Management
Brought forward
Legal and professional
Bank charges
Bad debt provision
Unrecoverable VAT
Depn of leasehold improvements
Plant and machinery
Fixtures and fittings
Governance costs
Staff costs (governance)
Social security (governance)
Pensions (governance)
Auditors' remuneration
Total resources expended
Net (expenditure)/income		 2021
£
414,672
12,232
1,165
430
40,080
24,887
5,661
3,072
502,199
81,508
9,046
2,066
8,750
101,370
1,575,919
(158,346)		 2020
£
396,972
33,257
574
8,305
15,480
27,483
7,212
4,365
493,648
70,594
6,804
2,424
7,790
87,612
1,614,162
43,648

This page does not form part of the statutory financial statements

Page 26