Our on-going vision for Young Enterprise Scotland, (YES), is to be the leading enterprise education charity in Scotland, helping young people achieve a rewarding future in work and life, regardless of where their journey started. This is testimony to the Board, Leadership Team and every member of the organisation. The passion for what we do runs deep and is evident in every individual.
This is my first statement as Chair and I wish to extend the organisations gratitude to Bill Macdonald as outgoing chair. Bill’s work has left the organisation in a much stronger position than 6 years ago and his work with the team is greatly appreciated. I very much look forward to working with the team at YES and I am delighted to have been appointed.
Emma Soanes has completed her first full year as CEO and the Board is delighted with the vision and leadership Emma has brought to the role. With a new CEO in place we have taken the opportunity to review and update our strategic plan, ‘Enterprise for All’, ensuring it remains current and fit for purpose.. We have further strengthened the Board of Directors ensuring that we hold an appropriate blend of entrepreneurial, sectoral and functional skills which has been enabled and supported by a strong values-based recruitment process. The Board composition also reflects our ongoing commitment to diversity. I am very grateful to all my fellow directors, both current and those who have stepped down in the last year, for their support and effort in providing strong governance for this wonderful organisation. I am more confident than ever that we have a Board that can take this organisation forward and lead us through the opportunities and challenges it faces over the next number of years.
Young Enterprise Scotlands focus on alliances and partnerships continues and we remain open to opportunities that create further benefits for the young people of Scotland. The value of such acquisitions is evident in the growth in the number of financial education programmes offered and the throughput of students since acquiring SIFET in October 2021.
Financial performance has been broadly positive against a backdrop of economic uncertainty and rising costs. This has created a challenging environment for both fundraising and cost management and I commend the entire team for all the work done to ensure we have minimised the impact on delivery, whilst ensuring the best possible outcome in terms of financial sustainability. This has allowed the organisation to continue to invest further in front line delivery facilitating growth in the volume of young people accessing our programmes.
Our strong relationship with the Scottish Government continues. We continue to work in partnership, reflecting our position as a key partner in delivering on national strategy as it applies to enterprise, education and entrepreneurship in Scotland.
Our investment in our people is reflected in the appointment of a Head of People and Business support. This will ensure that we have a people strategy to attract, retain and develop the talent within the organisation and to drive our commitment as an Investor In People.
We rely heavily on our considerable volunteer network, without which we could not achieve such significant impact and are extremely grateful for the time and energy that they expend supporting our activities. This resource ensures our ongoing growth across existing regions but importantly is allowing us to expand both into new regions and new schools and colleges. This being an integral component of our strategy.
Looking forward to the year ahead, we recognise ongoing challenges from economic uncertainty. Similarly, we expect all sources of funding to remain competitive and from a smaller pool. The team at Young Enterprise Scotland remain highly motivated and will do their utmost to navigate these challenges to ensure the continued success of the organisation.
Growth remains a key priority within our strategy and the year ahead will see further growth and development of our programmes and capacity ensuring we can deliver in line with demand. Delivery will continue through a hybrid of digital and physical mediums dependent on the most appropriate for that audience. Our library of digital resources and digital capability will ensure a far wider reach going forward.
I am therefore pleased to be signing these accounts and look forward to continued success in the next 12 months.
The trustees present their annual report and financial statements for the year ended 31 July 2023.
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 charitable company's Memorandum and Articles of Association, 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).
Young Enterprise - Scotland’s mission is to ‘inspire and equip young people, irrespective of their background, to learn, develop and reach their full potential through enterprise education.’
Our Vision is for Scotland to be a place where all young people are given the opportunity to have a rewarding future in work and life – no matter where they start their journey.
We have appreciated the opportunity to increase the degree to which we deliver programmes in person, reflecting on an initial covid-induced online offer, followed by a period of hybrid working.
We continue to maximise the benefits of a hybrid approach where appropriate, but in person delivery has now returned to being the default position and has supported increased engagement across schools and colleges.
This has also afforded us the opportunity to bring people together (alumni, volunteers, mentors, staff and other stakeholders). The impact of sharing and showcasing this work and the direct benefit to young people of all ages cannot be underestimated.
We have continued to maximise the use of our site at Rouken Glen Park, with a particular focus on volunteering opportunities and collaboration with community groups. We have significant plans to further develop the site with a key focus on energy efficiency and sustainability and increased access to the space for schools and groups.
The year has been characteristically busy, followed by a period of reflection, designing and planning, which is always welcome.
The Key Programme achievements are as follows:
Bridge 2 Business
Thanks to a further year of continuity funding from The Scottish Government, the Bridge 2 Business programme has continued at pace. The programme continues to be a valued element of the college offer in campuses across Scotland; inspiring, connecting and supporting students into business, awarding small grants to test the market, enabling networking through events organised with partners, providing practical experience experience with trade stands and platform events and providing high quality support via mentors from the wider business community.
Further though, the programme has also served as the ideal vehicle to deliver on the vision of the Entrepreneurial Campus report. With colleges being increasingly recognised as a key driver of these recommendations, we have been a pivotal partner in designing ways to encompass this approach across the Tertiary Education Enterprise Landscape.
Despite a welcome return to in person delivery and support, we have, however, continued to make use of our virtual learning environment via Moodle to support learning in a range of flexible ways. This has supported us to be more inclusive and flexible in our approach.
We delivered a series of roadshows across all our colleges to showcase the programme, celebrate a return to in person delivery and to kick start our increased visibility after such a lengthy period of virtual learning and support.
We have been delighted to once again deliver two key initiatives - # FemaleBoss and Social Innovators Challenge, with support – both financial and in kind – from private sector partners. Both initiatives have seen growth and increased engagement, with # FemaleBoss in particular, directly reflecting some of the recommendations from the Pathways Report.
These initiatives see participants from across Scotland, with most colleges in Scotland being represented. During the # FemaleBoss campaign, we have once again inspired increasing numbers of young female founders, awarding small start-up grants and connecting participants to ongoing sources of support, expertise and follow on funding. Most will continue in their entrepreneurial journey and many are already trading with increasing success.
The Social Innovators Challenge, delivered as ever in collaboration with FirstPort and Scottish Enterprise, enjoyed a third successful year. The £10,000 award encourages Scottish college students to students to think creatively to create a sustainable, purpose-led business that will actively reduce the carbon footprint of Scotland. Of the many innovative ideas generated throughout the campaign, many are subsequently supported to continue in their enterprise journey and develop their vision to make it a reality.
School Programmes
The Company Programme
The Company Programme continues to be central to our enterprise education offer and has continued to deliver the best possible business experience for S5 and S6 pupils. This programme is an inspiring early stage enterprise education delivery that offers young people the opportunity – often for the first time – to explore and think about enterprise as they plan for their futures beyond secondary education.
Young people set up and run their own company and develop a wide range of skills throughout this year long entrepreneurial experience. This is a fully immersive and engaging programme delivered over the academic year. This full year has seen a complete return to previous delivery models and numbers of schools and young people participating has also seen a return to pre-pandemic levels.
We have continued to work in proud partnership with Glasgow Kelvin College in order to offer students undertaking the Company Programme to gain a SCQF Level 6 qualification, equivalent to 26-30 Credit Points. This collaboration has involved a huge amount of joint working to refine processes and respond to changing needs. We have used feedback from the previous year to inform improvements and will continue in this spirit going forward.
We continue to deliver programmes in schools where requested by the Local Authority and/or individual schools when funding is available - either from schools and/or specific Trusts and Foundations income.
Through our schools programmes at Young Enterprise Scotland, we offer the “TenX” and “Fiver” Challenge programmes. These are enterprise challenges run in the months of March and May respectively. Each individual or team is given £10 or £5 to be more entrepreneurial. TenX is aimed at young people from the ages of 11 to 19 and Fiver is for young people under the age of 11.
Through the alignment of the TenX Challenge to appropriate SQA qualifications we ensure that young people have an opportunity to gain accreditation for their efforts. This reflects our ‘learning by doing’ ethos.
The Team Programme
This year has seen a third cohort of young people participate in the Team Programme which continues to offer the option of gaining accreditation at SCQF Level 3.
The Team Programme is an enterprise journey, like our Company Programme, but designed specifically for students with mild to moderate learning difficulties.
The programme was created to aid young people’s transition from education into independent living and employment, developing confidence and life skills through working as a team to set up and run an enterprise.
Ensuring the accessibility of Enterprise Education for all young people is a strategic priority for us, with Team Programme being a key part of that. We are exploring ways to increase access and work collaboratively with other partners to support this aim.
Scotland’s Enterprising Schools (SES)
This year has seen a huge amount of engagement and participation in sessions for educators across Scotland.
The SES mission is to support and challenge education practitioners to cultivate an innovative, flexible and creative approach to learning, teaching and enterprise education that motivates and equips young people with the skills they need to flourish.
Membership continues to grow, with a focus this year on collaboration to offer educators enhanced access to additional information and resources as part of their engagement with us. A good example of this is joint delivery with Scotland’s Financial Schools, which has supported teachers to understand the benefits and content of good quality financial education alongside the enterprise offer.
This has supported an increase in engagement overall in terms of the number of educators and schools, but has also seen some engagement with trainee teachers within the university space, which we hope to build on.
Pathway to Enterprise Programme
The Pathways to Enterprise Programme is a 10-week enterprise course for young people aged 12-21 who have experienced barriers to accessing formal education. We are flexible in designing delivery models for this programme to also meet the needs of young people facing other barriers or challenges that may be impacting on attendance and engagement in schools, those facing language barriers and young people who are neurodiverse.
The programme is flexible to allow 1, 2 and 3 days per week for the duration of the course and can be adapted to meet the needs of the school and its participants.
For the first time, we have engaged with community groups and support organisations in addition to the traditional school route to increase awareness of the programme and encourage participation. We will be monitoring engagement to reflect on this approach in the coming year.
This year the programme has offered an opportunity for smaller groups to be supported more intensively and benefit from a more bespoke enterprise experience. In addition to those supported via the Pathways Programme this year, many others have benefitted from support on site via other events and volunteering opportunities. .
This work has been funded by a variety of small and medium trusts and foundations in addition to some schools contributing to costs through their Person Equity Fund (PEF) monies.
The programme continues to deliver strong outcomes for the young people involved and is likely to see significant growth after this year.
Rouken Glen Centre
Whilst the centre continues to serve as our Head Office and afford us the opportunity to collaborate with other organisations and community groups, it has also seen the launch of our Community Start Up Hub – ‘Square Go’.
As planned, this has provided a safe, supportive start up space for a number of people who are either on their own entrepreneurship journey, or need an environment in which to explore if this is the right path for them .
Following the launch we have welcomed young people and community groups from both the local community and beyond and we anticipate further growth in the use of this space. This has been an important development in widening our impact.
We have continued to work with East Renfrewshire Council to plan for the future of the site and those who use it.
Festival of Youth Enterprise
We delivered our annual ‘Festival of Youth Enterprise’ in person at the iconic Hampden Park in Glasgow. We were delighted to welcome young people and educators from the primary, secondary and tertiary education space.
This was a two day, in person event with the first day offering a focus on those who have participated and supported our primary education programmes, or those more closely linked with the lower end of secondary.
Day 2 reflected the achievements of senior students, those involved in college programmes and recognition of the educators and mentors that have supported the impact for young people over the year.
The event ended with a wonderful evening reception, including the all important award ceremony, culminating in the prestigious award of ‘Scottish Company of the Year’ which was won by a school from the Highland and Moray region who went on to represent Scotland at the UK finals later on the year.
This is hugely significant event in our calendar and allows us to share the incredible achievements of young people with others, including those who have supported their efforts.
The charitable company's objectives are to build reserves to at least 6 months expenditure, to provide comfort to the Trustees that the organisation has adequate ability to manage the peaks and troughs of charitable donations and fundraising.
Restricted funds comprise £723,260 of the total reserves of £1,176,795. These reserves are dedicated future delivery in line with the conditions of the grant or donation. Of the remaining reserves, £76,552 been designated to the Local Area Teams of Young Enterprise Scotland to support their activities (see further below as part of the charity structure).
Unrestricted general reserves, total £376,985 which are comprised of £147,498 of fixed assets and investments and £229,487 of current assets.
We continue to ensure that we build and manage unrestricted general reserves to ensure the target level of 6 months expenditure is maintained.
As previously indicated in prior years, the directors continue to ensure that the administration and finance structure of the organisation is relative to size and scale and is streamlined where possible. This is continuously under review to ensure best value across the organisational structure. This supports the wider aim of ensuring that Young Enterprise Scotland continues to generate surpluses and deliver a sustainable level of unrestricted reserves.
Young Enterprise Scotland has again retuned an overall surplus across all funds of the charity in the year resulting in a net asset position of £1,176,797 as at 31 July 2023. This position provides Young Enterprise Scotland with a stable financial position to support its charitable activities in the forthcoming years ahead.
Investment powers
The board has the power to invest any surplus funds of the charity not immediately required for its purposes as it sees fit.
Overall financial position and consideration of Going Concern
Post covid, Young Enterprise Scotland worked tirelessly to build our reserves, in particular our unrestricted reserves, to ensure the most financially resilient position. This meant that the first full year following the pandemic was strong and supported a healthy return to in person and hybrid programmes, plus the full re-opening of the site.
Since then, subsequent operations have remained stable and income remained steady.
We have continued to prepare regular cash flow forecasts based on our confirmed income and current cost base. This provides high-level oversight to the Audit and Risk sub-group so that they may consider our cash runway and make decisions on any actions that need to be taken.
Whilst the organisation has remained in good financial health, we remain constantly vigilant to any changes in the funding landscape. We receive a significant proportion of our income from Trusts and Foundations and from corporate donations. This is managed via an ongoing pipeline of applications for relevant impactful programmes and developments and sits with a fundraising team that we have recently expanded.
We anticipate that there will always be increasing competition for funding and that availability may drop due to prevailing economic conditions of the time.
We continue to work with Scottish Government, which we view as a key relationship and a significant source of funding for us as we continue to deliver enterprise education in schools and colleges. It is clear that that enterprise education and entrepreneurship continues to be reflected in national strategic priorities for Scotland and we are an important partner in achieving these aims. The mechanism for Scotish Government funding awards has, however, changed and recently we submitted bids for service delivery as part of a Scottish-wide procurement process.
As outlined in note 1.3 to these accounts, the competitive tender process results in a degree of uncertainty around our current year funding award however, the trustees remain confident that Young Enterprise Scotland will continue to receive funding to support delivery in schools and colleges.
At the date of this report, the trustees do not have certainty about the level of award and therefore the organisation has sought to examine financial scenarios and build robust plans to ensure that Young Enterprise Scotland can continue to deliver enterprise education to young people in Scotland. The trustees are satisfied that the organisation has sufficient reserves at its disposal to continue enterprise education delivery under different funding scenarios. Inevitably, the scenarios involve a degree of delivery reduction in terms of scope and reach and this will likely require streamlining our operations and unfortunately our team. The trustees remain confident however, that the organisation will continue as a going concern even in the worst case scenario planning and therefore these financial statements are prepared on a going concern basis.
We continue to make use of digital platforms that were created during the pandemic in order that we have the most flexible and responsive options for delivery.
Having previously developed a new Virtual Learning Environment (VLE) via the Moodle platform, we have continued to use this to best effect and ensure that we can share content directly to schools wherever possible.
Young Enterprise Scotland is a company limited by guarantee and has received HM Revenue and Customs approval as a charity. It is an independent organisation, operating within the framework for the programme licensed from Young Enterprise, whose national office is at The Coram Campus, 41 Brunswick Square, London, WC1N 1AZ.
The board of directors approve the appointment of any new directors by consensus or a vote at board meetings. Prospective directors are initially interviewed by the Chair or Vice Chair together with the Chief Executive and briefed on the role of being a director and the scope of operations of Young Enterprise Scotland. Once appointed by the Board they are then taken through a formal induction process which includes a series of briefings and receipt of an Induction Pack which includes various materials including copies of recent minutes of Board meetings.
The board of directors are responsible for setting a strategy and overseeing the overall operation of the organisation. The Chief Operating Officer, Mark Armstrong, is responsible for the day-to-day operational matters and the Chief Executive Officer, Emma Soanes assumes overall responsibility for the organisation and all its activity.
Structurally, we continue with a core team of experienced staff who are geographically dispersed to reflect the national reach of our delivery portfolio.
Recognising that the team is small relative to the scale of programme delivery and national reach, we also support a wide network of volunteers. We work in partnership with 17 Local Area Teams who mainly deliver the Company Programme Activities within their local area, ensuring cost effective delivery of service. We currently have over 500 volunteers associated with Young Enterprise Scotland and have recruited a Volunteer and Alumni Executive this year to service and support this vital framework.
Local Area Teams are not independent legal entities; they operate through a yearly refreshed Memorandum of Understanding (MoU) with nominated Chairs, Vice Chairs and Treasurers. They also have their own individual financial arrangements which are under a common banking structure within the Charity’s banking facilities with the Royal Bank of Scotland. Specific people from each Local Area Team are linked to schools who nominate Centre Leads and with the aid of a volunteer Business Advisor, support students participating in the Company Programme. Local Area Teams host local training events to support all the volunteers operating in their area, they also host a Trade Fair and an end of year Local Area final.
The board of directors approves the appointment of each new director by consensus or a vote at the first available board meeting. The relevant forms are completed and submitted to Companies House as soon as possible thereafter. The appointment is endorsed at the next Annual General meeting. The term of office is normally 3 years which can be extended by agreement to a maximum of 2 additional terms.
The charitable company is a registered charity governed by its Memorandum and Articles of Association.
The board of directors meet on a quarterly basis and are responsible for driving and supporting the strategy for the organisation. The Strategic Plan was updated by the Board and implemented from 1 February 2020, with a review due towards the end of 2023. The Chief Executive and their team is tasked with controlling the operation of the business within the parameters of that Strategic Plan.
To ensure ethical standards are maintained, the guiding principles of the best practice in corporate governance have been adopted and these apply equally to the central operation and the Area Boards. In addition, the Board has approved a Code of Practice of financial procedures and delegated authority. This code is kept under review in the light of changing circumstances and procedures.
Young Enterprise Scotland’s Audit & Risk Group at present comprises a minimum of 2 directors and one other non-executive member, supported by the Chief Executive and the Head of Finance who meet on a quarterly basis in order ensure robust financial management is maintained. The Chair of the Audit & Risk Group then reports to the board of directors at the subsequent board meetings.
Management
Young Enterprise Scotland operates with a Strategic Leadership Team (SLT) of three: Chief Executive, Chief Operating Officer and Head of People & Business Support. The SLT is supported by the Financial Leadership Group led by Head of Finance and Operational Leadership Group led by the COO.
Related parties
YES Works Limited (YES Works) is a wholly owned subsidiary of Young Enterprise Scotland. The subsidiary did not trade in the year. Emma Soanes, Chief Executive Officer of Young Enterprise Scotland is the sole director of YES Works Limited.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
The trustees, who are also the directors of Young Enterprise - Scotland for the purpose of company law, are responsible for preparing the Trustees Report 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 year.
In preparing these financial statements, the 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 financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and 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 accordance with the company's articles, a resolution proposing that MHA be reappointed as auditor of the company will be put at a General Meeting.
The trustees report was approved by the Board of Trustees.
Opinion
We have audited the financial statements of Young Enterprise - Scotland (the ‘charitable company’) for the year ended 31 July 2023 which comprise the statement of financial activities including income and expenditure account, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:
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.
Material uncertainty relating to going concern
We draw attention to Note 1.3 in the financial statements, which indicates that the charitable company is awaiting confirmation of future Scottish Government funding to continue its existing operations. As stated in Note 1.3, this event or condition, along with the other matters set forth in Note 1.3, indicate a material uncertainty that may cast significant doubt on the charitable company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
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 other information comprises the information included in the trustees report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the trustees report. 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. 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 course of 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 our audit:
the information given in the trustees' report, which includes the directors' report 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.
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 directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:
adequate and proper 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
certain disclosures of trustees remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees report and from the requirement to prepare a strategic report.
As explained more fully in the statement of trustees responsibilities, the trustees, who are also the directors of the charitable company for the purpose 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.
We have been appointed as auditor under the Companies Act 2006 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
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 an auditor's report 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.
Irregularities, including fraud, are instances, of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the charitable company, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include FRS 102, the Charities SORP (FRS 102), the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended).
We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and the trustees. We corroborated these enquiries through our review of submitted regulatory returns and board meeting minutes.
We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including how fraud might occur, through discussions with the trustees, discussions within our audit team planning meetings, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements.
We reviewed minutes of meetings of those charged with governance;
We reviewed the level and reasoning behind the charitable company’s procurement of any legal and professional fees;
We performed audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, and reviewing judgements made by management in their calculation of accounting estimates for potential management bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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 and to the charitable company's trustees', as a body, in accordance with regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members and trustees those matters we are required to state to them in an auditor's 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, the charitable company’s members as a body,and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Investments
Raising funds
The statement of financial activities includes all gains and losses recognised in the year.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Investments
Raising funds
Young Enterprise - Scotland is a private company limited by guarantee incorporated in Scotland. The registered office is Rouken Glen Park, Thornliebank, Glasgow, G46 7UG.
During the previous period, the charitable company extended its year end from 31 January to 31 July in order to be consistent with the activities of the Scottish education system. These financial statements cover the 12 months to 31 July 2023 whereas the comparative figures reported represent the results for the 18 month period from 1 Feb 2021 to 31 July 2022.
The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, 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 charitable company is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charitable company. 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.
In accordance with paragraph 24.13A of the Charities SORP, consolidated accounts have not been prepared as the charity's subsidiary did not trade in the year and so is not material to Young Enterprise - Scotland. As a result, the directors have determined that preparation of consolidated accounts is not required.
A major part of Young Enterprise Scotland core programme delivery has traditionally been funded by Scottish Government and whilst we expect this funding to continue the mechanism by which funding is decided and awarded has recently changed. In 2024 the Scottish Government changed the funding mechanism from an application process to a competitive tender for service delivery.
Young Enterprise Scotland has submitted tenders for the delivery of enterprise education in Scottish schools and colleges in Scotland, which would offer not only continuity of our core delivery but also extend our reach and scope. The trustees remain confident that Young Enterprise Scotland will be awarded contracts to deliver enterprise education in Scotland and are hopeful that the tender process will present opportunities for the organisation to expand its delivery. The tender process is expected to conclude in September 2024 and whilst the trustees await the award of funding the organisation continues to deliver its core programmes in schools and colleges.
The trustees have built financial scenarios to ensure that Young Enterprise Scotland can continue its delivery programmes in the event that the organisation is not successful in the competitive tender process. These scenarios include scaling back delivery to established and funded programmes.This scaling back of our operations would necessitate considerable restructuring of our team and regrettably this will involve redundancies.
The organisation has an established fundraising team, which has been successful in recent years of securing funding from both Trust & Foundations and from the private sector. The demonstrable impact of our delivery programmes under the ethos of Enterprise for All, resonates strongly with funders. We continue our fundraising activity, and our pipeline of funding opportunities is building. The trustees are confident the organization will secure funding from sources outside of our core Scottish Government funding to build on our strong track record in the delivery of enterprise education.
These scenarios indicate that Young Enterprise Scotland currently has sufficient funds available to enable us to reshape our delivery should we be unsuccessful in the ongoing tender process. This reserves position, combined with our plans to downsize delivery, should enables the organisation to continue its work, albeit in a much different shape to our current delivery.
The Trustees have considered scenarios of restructuring our delivery and this combined with our current reserves position, and future plans provides sufficient comfort that Young Enterprise Scotland can continue as a going concern for a period of no less than 12 months from date of approval of these financial statements. Whilst there is a material uncertainty related to these events or conditions that may cast significant doubt on the charitable company’s ability to continue as a going concern and, therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business the trustees consider that the going concern basis of accounting is appropriate in preparing these financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Designated funds are set aside by the directors to be used for particular designated purposes.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Income, including other income, is recognised when the charitable company is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Donations and patron support are usually recognised when receivable, unless performance conditions satisfy early recognition or deferral of income.
Donated services and facilities are brought into the financial statements as income at their expected costs, or a reasonable estimate thereof, with an equivalent amount reflected under expenditure.
Income from grants, where related to performance and specific deliverables, are accounted for as the charity earns the right to consideration by its performance.
Income from charitable trading activities is accounted for when earned, it is probable that the income will be received, and the amount can be measured reliably.
Event and programme trading income is recognised in the year to which it relates.
Expenditure is recognised on an accruals basis when there is a present legal or constructive obligation as a result of a past event, a transfer economic benefits is probable, and the amount of the obligation can be measured reliably.
Expenditure includes VAT which cannot be fully recovered and is reported as part of expenditure to which it relates. All costs are allocated between the expenditure categories of the SOFA on a basis designed to reflect the use of resources. Costs relating to a particular activity are allocated directly, others are apportioned on an appropriate basis.
Raising funds expenditure comprises costs incurred with attracting donations income.
Charitable expenditure comprises those costs incurred by the company in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Other expenditure comprises those costs incurred by the charitable company that are not related to its activities.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
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. At each reporting date, the charitable company reviews the carrying amount of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.
A subsidiary is an entity controlled by the charitable company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Cash and cash equivalents include cash in hand and deposits held at call with banks.
The charitable company 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 charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.
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.
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charitable company transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price and are subsequently carried at amortised cost, using the effective interest rate method. Financial liabilities classified as payable within one year are not amortised.
Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.
The charity is considered to pass the tests set out in paragraph 1 Schedule 6 of Finance Act 2010 and therefore it meets the definition of a charity for UK tax corporation tax purposes. It is therefore potentially exempt from taxation in respect of income or capital gains to the extent that such income or gains are applied for charitable purposes. It is recognised by HMRC as a charity.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.
In the application of the charitable company’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.
The depreciation of tangible fixed assets is a key area of estimation. The useful life and residual value of fixed assets is considered, and a depreciation rate applied accordingly. Details of the depreciation policies applied can be found in the accounting policies section of the notes to the financial statements. The depreciation charge in the statement of financial activities for the year amounts to £22,360 (2022: £28,869). The carrying value of fixed assets in the balance sheet at the year end amounts to £147,398 (2022: £24,114).
Donations in kind
Core
School delivery
Pathways
Bridge 2 Business
Area Boards
YPG
Square Go
Income from charitable activities
Core
School delivery
Pathways
Bridge 2 Business
Area Boards
YPG
Income from charitable activities
School delivery
Bridge 2 Business
The above income is included as income from donations and legacies and income from charitable activities in the Statement of Financial Activities.
Event income
Rental income
The company received £544,944 (2022: £571,909) in government grants during the year which have been recognised in income from charitable activities.
Investments
Raising funds
Core
School delivery
Pathways
Bridge 2 Business
Area Board
Square Go
YPG
Travel and subsistence
Rent, rates and service charge
Premises and office costs
Programme costs
Licence fees
Motor vehicle costs
Materials
Bank charges and interest
IT and equipment costs
Irrecoverable VAT
Professional fees
Grant awards
Professional fees included audit fees of £6,960 (2022 - £10,440) and accountancy fees of £21,200 (2022 - £30,975).
Core
School delivery
Pathways
Bridge 2 Business
Area Board
Square Go
Travel and subsistence
Rent, rates and service charge
Premises and office costs
Programme costs
Licence fees
Motor vehicle costs
Materials
Bank charges and interest
IT and equipment costs
Irrecoverable VAT
Professional fees
Grant awards
None of the trustees (or any persons connected with them) received any remuneration or reimbursement of expenses, or had expenses paid on their behalf during the year.
The average monthly number of employees during the year was:
Contributions totalling £1,654 (2022: £2,170) were made to defined contribution pension schemes on behalf of employees whose emoluments exceed £60,000.
The remuneration of key management personnel was as follows:
Aggregate compensation includes gross wages and salaries, employer national insurance contributions and employer pension contributions.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
Deferred income is included in the financial statements as follows:
The deferred income relates to income received in the year for programmes whereby delivery was for the school year 23/24 or the conditions of grant delivery had not yet been met.
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.
Income
Expenditure
Income
Expenditure
School Delivery relates to various programmes run in primary and secondary schools.
Pathways is comprised of various programmes run to re-engage young people back into mainstream education or work.
Bridge 2 Business is a business style programme designed to encourage FE college students to build careers and become entrepreneurs.
Square Go is a unique and highly-supportive enterprise village which provides young entrepreneurs with their own space to start up a business.1-2-1 mentoring and wellbeing support are also offered to help young people develop their practical and personal skills in order to successfully navigate the challenges of the first year in business. We secured the capital funding to complete the Square Go build in 2022.
Other reserves relate to grants received in respect of a classroom build.
Edinburgh YPG funding supported us to run the Bridge 2 Business programme in Edinburgh College. East Renfrewshire YPG funding allowed us to support 2 young volunteers at our Rouken Glen Training Centre and to run a practical enterprise programme for school leavers in East Renfrewshire.
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. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Designated funds consist of funds made available to the Local Area Teams, which are not independent legal entities, but which operate under Memorandum of Understanding with Young Enterprise Scotland and have their own nominated Chairs, Vice-chairs and Treasurers.
At the reporting end date the charitable company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the charitable company entered into the following transactions with related parties:
During the period, purchases of £7,500 (2022: £13,500) were made from Indigo PR Limited, where E Lambley, director, holds directorship status. At the period end there was no amount outstanding. Indigo PR Limited also provided the charitable company with public relations and media advice to the value of £13,500 (2022:£13,500) during the period free of charge and this is reflected in the Statement of Financial Activities.
Avlo HR Limited, where C Gurevitz, director, holds directorship status, provided the charitable company with advice to the value of £16,000 (2022:£15,000) during the period free of charge and this is reflected in the Statement of Financial Activities.
Alston Law, where G McCluskey, director, holds directorship status, provided the charitable company with advice to the value of £3,000 (2022: £4,000) during the period free of charge and this is reflected in the Statement of Financial Activities.
Details of the charitable company's subsidiaries at 31 July 2023 are as follows:
The registered office of YES Works Limited (SC258809) is Rouken Glen Park, Thornliebank, Glasgow, G46 7UG. The subsidiary did not trade during the current or previous year.
The charitable company had no material debt during the year.