The directors and trustees present their report and financial statements for the year ended 31 March 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the Trust's Trust Deed, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "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).
The principal activity of Berwickshire Recreation Education Sports Trust (the Trust) is the provision of swimming facilities.
The Trust's purposes are:
a) The advancement of education;
b) The advancement of health (including the prevention or relief of sickness or disease or human suffering);
c) The saving of lives;
d) The advancement of public participation in sport (and 'sport' means sport which involves physical skill and
exertion); and
e) The provision of recreational facilities, or the organisation of recreational activities, with the object of
improving the conditions of life for the persons for whom the facilities are primarily intended and only in
relation to recreational facilities or activities which are:
i) Primarily intended for persons who have need of them by reason of their age, ill health or disability,
financial hardship or other disadvantage; or
ii) Available to members of the public at large or to male or female members of the public at large.
The directors and trustees have paid due regard to guidance issued by the Office of the Scottish Charity Regulator in deciding what activities the Trust should undertake.
The progress of the Trust towards achieving its objectives has been satisfactory. The usage of the pool by members and by the general public continues to be encouraging. The Trust continues to provide a valuable service to the local community of Duns and the surrounding district.
Investment Policy and Performance
Any surplus made by the Trust is retained as cash. No longer term investments are considered appropriate at this time.
Reserves
The directors have established a policy whereby the unrestricted reserves held by the Trust should be at least three months of resources expected to be required, which they estimate equates to approximately £90,000. This would allow the directors and trustees to continue operations in the event of a significant drop in funding or income until they could investigate other sources of funding. At 31 March 2024 the unrestricted fund stood at just £8,190. However, the annual grant from Scottish Borders Council was received in April 2024 so the Trust was again in line with this policy. The directors have taken significant steps to reduce energy costs and these are expected to be much lower in the current year. As the solar panel and heat pump projects have been funded this should allow the directors and trustees to focus on rebuilding the Unrestricted fund.
The use of the pool has continued to be satisfactory with steady income from memberships and lessons during the period.
The Trust has recorded a deficit for the year on the General Fund of £134,388 (2023: £45,628 deficit). The balance on the General Fund at 31 March 2024 was £8,190 (2023: £142,579). No transfers between the General Fund and Restricted Fund were considered necessary this year.
The directors and trustees record their appreciation of the continued support of Scottish Borders Council for their contribution of £90,000 (2023: £96,000) towards the running costs of the pool. The annual grant from Scottish Borders Council is restricted to spending on wages and the running costs of the pool.
The installation of solar panels and two air source heat pumps should start to benefit the Trust in reducing energy costs.
Risk Management
The directors and trustees have assessed the major risks to which the Trust is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
Future Plans
To continue fulfilling the charitable purpose.
Employees and Volunteers
The Trust is fortunate in having a very dedicated team of paid workers and volunteers and the directors and trustees would like to record their appreciation. Details of the paid employees are shown in note 12 to the accounts. The cost of volunteers is not recorded in these accounts.
The Trust is a company limited by guarantee, having no share capital, and is governed by a board of directors and trustees under a Trust Deed.
The directors and trustees who served during the year were:
Directors and Trustees
Directors and trustees are appointed on the recommendation of existing directors and trustees. They serve for a period of three years, one third retiring annually at the Annual General Meeting. Retiring directors and trustees are eligible for re-election.
None of the directors and trustees have any beneficial interest in the company. All of the directors and trustees are members of the company and guarantee to contribute £1 in the event of a winding up.
Directors and Trustees Induction and Training
New directors and trustees undergo an orientation day to brief them on their legal obligations under charity and company law, the content of the Memorandum and Articles of Association, the committee and decision making processes, the business plan and recent financial performance of the Trust. During the induction day they meet key employees and other directors and trustees.
Structure and Management Reporting
The Trust Board manages the Trust and sets the strategy for its operations. There are paid staff who operate the pool and who report to the directors and trustees. The directors and trustees meet regularly.
Working with Other Organisations
The Trust works closely with Scottish Borders Council and SportScotland, who have partly funded some of the activities of the Trust in recent years. The Trust has also developed links with the Scottish Borders Sports Development Unit and has been actively working with various other disabled groups.
Statement of Directors' Responsibilities
The trustees, who are also the directors of Berwickshire Recreation Education Sports Trust for the purpose of company law, are responsible for preparing the Directors And Trustees Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the directors and trustees to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Trust and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these accounts, the directors and trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts; and
- prepare the accounts on the going concern basis unless it is inappropriate to presume that the Trust will continue in operation.
The directors and trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Trust and enable them to ensure that the accounts comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Public Benefit
In considering the operation, achievements and performance and finances of the Trust, the directors and trustees are satisfied that public benefit has been provided in accordance with the Charities and Trustee Investment (Scotland) Act 2005 and guidance provided by the Office of the Scottish Charity Regulator.
Exemptions
This report is prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.
On behalf of the board of directors and trustees
I report on the accounts of the Trust for the year ended 31 March 2024, which are set out on pages 6 to 19.
The directors and trustees are responsible for the preparation of the accounts in accordance with the terms of the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). The directors and trustees consider that the audit requirement of Regulation 10(1) (a) to (c) of the Accounts Regulations does not apply. It is my responsibility to examine the accounts as required under section 44(1) (c) of the Act and to state whether particular matters have come to my attention. As the Trust's gross income exceeded £250,000 and I am qualified to undertake the examination being a member of the Institute of Chartered Accountants in England and Wales.
My examination is carried out in accordance with Regulation 11 of the 2006 Accounts Regulations. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeks explanations from the directors/trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently I do not express an audit opinion on the view given by the accounts.
In the course of my examination, no matter has come to my attention:
to keep accounting records in accordance with section 44(1) (a) of the 2005 Act and Regulation 4 of the 2006 Accounts Regulations; and
to prepare accounts which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations;
have not been met; or
to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Berwickshire Recreation Education Sports Trust is a private company limited by guarantee incorporated in Scotland. The registered office is Duns Swimming Pool, Langtongate, Duns, Berwickshire, TD11 3QQ.
The financial statements have been prepared in accordance with the Trust's Trust Deed, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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). The Trust is a Public Benefit Entity as defined by FRS 102.
The Trust has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the Trust. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the directors and trustees have a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. Thus the directors and trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the Trust has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
All expenditure is accounted for on an accruals basis. Costs are allocated to appropriate headings, based on the activities to which they are attributable.
Cost of other trading activities represents the costs of goods for resale, vending machine expenses and the costs of fundraising events.
Governance costs are those incurred in connection with administration and compliance with constitutional and statutory requirements.
The allocation of income and expenditure within the Statement of Financial Activities is shown in notes 3 to 12 of the financial statements.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
It is the Trust's policy to capitalise items costing more than £50. Donated assets are capitalised at their estimated value at the time of receipt of the gift.
At each reporting end date, the Trust 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).
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The Trust 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 Trust's balance sheet when the Trust 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.
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, including creditors and bank loans are initially recognised 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 recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the Trust’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Pension contributions are paid into defined contribution pension schemes on behalf of all qualifying employees.
Taxation
The Trust is a registered charity and has exemption from UK direct taxation. Accordingly there are no taxation effects to be illustrated in respect of gains or losses arising.
Fund accounting
The unrestricted income fund represents the free funds of the Trust available for use at the discretion of the trustees in furtherance of the general objectives of the Trust.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Trust for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
Accounting treatment of grants
In the year ended 31 March 2011 the Trust received grant income of £723,416 in relation to the refurbishment of the swimming pool. As a registered charitable Trust the financial statements are prepared in accordance with charity law requiring that this £723,416 was recognised in full in the year of receipt.
The corresponding expenditure was capitalised at cost and is being depreciated over its useful economic life of 15 years, with a charge of £59,247 being recognised in the year ended 31 March 2024.
In the application of the Trust’s accounting policies, the directors and 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.
Scottish Borders Council
Sale of goods
Sale of goods
Sale of swimming sundries
Advertising
Raising funds
Costs of other trading activities
Swimming pool purchases
Vending machine lease
Costs of other trading activities
Heat and light
Water rates and sewerage charges
Insurances
Licences and subscriptions
Chemicals and cleaning
Repairs and renewals
Staff training
Activities costs
Postage, stationery, advertising and telephone
Professional fees
Independent examination and accountancy charges
Bank charges
Governance costs includes payments to the independent examiner of £2,800 for independent examination fees (2023: £2,890) and £4,822 for bookkeeping/payroll fees (2023: £2,232).
None of the directors and trustees (or any persons connected with them) received remuneration or were reimbursed any travelling expenses (2023: None).
The average monthly number of employees during the year was:
There were no employees whose annual remuneration was £60,000 or more.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The Trust operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Trust in an independently administered fund.
The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used.
The unrestricted general fund represents the free funds available to meet the day to day running costs of the Trust.
The restricted funds have been established to show the balance of restricted grants for various expenditure on the swimming pool.
There were no disclosable related party transactions during the year (2023: None).