The trustees present their annual 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 charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)".
The charity's objectives and principle activity is the provision of quality education to infants and children through the provision of day-care, after school, and holiday club services.
The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
Our significant activities include:
Nursery day-care services.
Afterschool services
Holiday club services
In setting our objectives and planning our activities the trustees have also considered the Charity Commission's general guidance on public benefit.
As a not for profit organisation, all profits is invested back into the provision to ensure that it is fully resourced and fit for purpose.
Kelton Nursery and After School is open to everyone within the community and beyond. It provides government funded places, and offers bursarial assistance to ensure equality of access to the provision. The provision of bursary assisted places ensures the needs of families with low income or other additional needs are catered for.
The nursery fees are determined by running costs, not profit. We are committed to keeping our fees competitive, and fee increases are only considered to ensure the continuation of the service.
Being a Charity with a Board of Trustees that is made up from parents, means that families not only benefit from excellent childcare, but can develop their own skills and knowledge by becoming part of the governance of the provision. Parents and families involved in Kelton can feel they are contributing to the wider community by becoming involved in supporting a charitable cause.
We have had a productive year at Kelton and made progress in a number of areas to enrich the setting notably:-
Reduced attrition levels by working collaboratively with staff to enhance the culture
Implemented staff reward and recognition initiatives
Room leads meet on a regular basis to share best practice and insight to enhance quality of childcare
Support from parents via slush fund continues to be positive
New website development
External phonics lead attending nursery each week to support pre school children which will aid transition to school
Increased volume f social events with parents, staff and children which has enhanced our relationship with parents as our partners
Stabilised the management team structure which has had a positive impact on the culture within Kelton
Developed, communicated and tested a lockdown policy
Recruitment
Earlier in the year we faced significant challenges (as have the rest of the country in a variety of sectors) around recruitment of staff which put additional pressure on the leadership team to cover rooms to maintain ration. We focussed on developing a positive culture internally through a variety of initiatives which reduced our attrition levels towards the end of the financial year. The committee have been supporting the management team with initiatives to retain staff and attract the right calibre of employees. We carried out a review of salaries and adjusted accordingly to ensure we are competitive locally which enabled us to attract new talent.
Inflation
The impact of inflation effected the operating margins within the setting which resulted in us increasing the childcare fees in April 2024 to ensure we could cover the overheads of the business. We will be reviewing fees again in April 20245 to ensure that they are both fair and competitive.
The charity has reported a deficit of £10,726 for the year to 31 March 2024 (2023: £40,087).
The impact of this deficit has resulted in a net current asset position of £(23,155) at the year end (2023: £2,007). Overall the charity has net assets of £715,371 (2023: £726,097). Free reserves (total reserves less fixed assets) amounted to a negative of £23,155 (2022 £23,674)
The trustees acknowledge the need for continued strong working capital management, together with regular review and monitoring of the number of children registered for its services on a month by month basis.
It is the policy of the charity to try to build up modest unrestricted reserves, which are the free reserves of the charity, to a level which will provide assistance for the future operating costs. The trustees continue to work towards building reserves to an optimum range of between £65,000 and £195,000. At this level there would be sufficient free reserves to cover overhead costs for 1-3 months running costs.
The charity's primary source of income is generated from nursery fees. Fees are received in return for the provision of daycare, afterschool and holiday club services. Investment policy and objectives. The charity’s funds are currently fully utilised for working capital with no surplus at this time for investment. At such a time this position changes the trustees will develop a suitable policy and set of objectives for investment.
The charity’s funds are currently fully utilised for working capital with no surplus at this time for investment.
At such a time this position changes the trustees will develop a suitable policy and set of objectives for investment.
All existing policies and procedures are periodically reviewed by the senior management team to ensure that they continue to meet the changing needs of the charity and childcare business.
To support the management team, we have engaged a firm of Health and Safety consultants, who work with the staff to ensure all matters are dealt with appropriately.
The board have also engaged an HR consultant who is supporting develop a robust performance framework going forward.
All existing policies and procedures are periodically reviewed by the senior management team to ensure that they continue to meet the changing needs of the charity and childcare business.
The Board of Trustees began the process of creating a risk register last year, this continues in its development and will be reviewed during the year.
Our key priorities for the coming year are as follows:
Ongoing staff support and development
Review our financial controls within the nursery, reviewing ways to increase the nursery reserve
Continue to increase the number of parent trustees, and explore the potential for more external trustees to develop the skills pool within the board
Stabilise the board of trustees and recruit new trustees as these are vital to the continued running of the nursery
Continue to strengthen the parents as partner relationship
Implement new parent app and further develop our website
Consider funding options for fundamental changes required to the building Structure, governance and management
The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.
The organisation is a charitable company limited by guarantee, incorporated on 15 October 2004 and registered as a charity on 7 January 2005. The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association. In the event of the company being wound up the members are required to contribute an amount not exceeding £10.
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 directors of the company are also charity trustees for the purposes of charity law. Under the requirements of the Memorandum and Articles of Association, one third of directors must retire at annual general meeting. The trustees of the charity are appointed by the members at each Annual General Meeting.
We are in the process of recruiting new trustees and see this as a valuable development to ensure the structure of an effective committee.
The trustees meet on a regular basis and are responsible for the strategic direction and policy of the charity. Fee increases, wage awards and an annual budget are set by the trustees and performance against an agreed budget is reviewed monthly. The day to day operational management of the charity is carried out by the senior management team, supported by external financial and HR support.
None of our trustees receive remuneration or other benefit from their work with the charity. Any relationship between a trustee or manager of the charity with a related party must be disclosed to the full board of trustees on appointment, a declaration of conflict of interest is also a standing agenda item at the bi-monthly trustee meetings. In the current year no such related party transactions were reported.
The trsutees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Kelton Nursery (the charity) for the year ended 31 March 2024.
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the Companies Act 2006 and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011. In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the Charities Act 2011.
Since the charity’s gross income exceeded £250,000, the independent examiner must be a member of a body listed in section 145 of the Charities Act 2011. I confirm that I am qualified to undertake the examination because I am a member of The Association of Chartered Certified Accountants, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the Companies Act 2006.
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the Companies Act 2006 other than any requirement that the financial statements give a true and fair view, which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report 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.
Kelton Nursery is a private company limited by guarantee incorporated in England and Wales. The registered office is Kelton House, Park Avenue Mossley Hill, Liverpool, Merseyside, L18 8BT.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. 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 trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
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.
Cash donations are recognised on receipt. Other donations are recognised once the charity 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.
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.
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 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).
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 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.
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 charity’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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
The average monthly number of employees during the year was:
The remuneration of key management personnel amounted to £86,106 (2023 £73,589)
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The bank loan represents a bounce back loan which is repayable over 6 years. Interest is charged at 2 %
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
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.
There were no disclosable related party transactions during the year (2023 - none).