The trustees present their annual report and financial statements for the year ended 31 August 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 company was established as a Registered Charity with the objective of benefiting the public by providing education and training for persons engaged in, or intending to be engaged in the engineering, manufacturing, process, and related industries.
Sunderland Engineering Training Association Limited (Seta) is a long-established Group Training Association, operating from its own Training Centre in Washington, Tyne and Wear. It has been a major Apprentice Training Organisation in the region for more than 50 years.
The main activities over the year have been the delivery of a range of Institute for Apprenticeships and Technical Education (IfATE) approved apprenticeship programmes. These have been selected and delivered in response to the requirements of apprentice employers. Apprenticeship Standards require the delivery of off-the-job training, which is carried out in the Seta workshops in year one of the programme. This is followed by further development training at employers’ premises. The principal source of funding for this is through the apprenticeship levy, via the Education and Skills Funding Agency (ESFA), with which Seta is a primary contract holder.
Seta assists employers with the Apprentice recruitment process by receiving applications, providing an aptitude testing service, screening for suitable applicants and subsequently by providing short lists of potential Apprentices.
In addition to apprenticeship training delivery, Seta provides a wide range of short courses for employers and the public wishing to up-skill or cross-skill their staff. Some of these courses lead to the achievement of nationally recognised qualifications. These courses are mostly funded by employers.
Up to 31st December 2023 Seta was a partner in the ESF funded “North East Workforce Skills” programme in collaboration with Sunderland University and a number of other independent training providers. This project delivers upskilling and cross skilling training to workers currently in employment. From 1st April 2024 Seta was a partner in the follow-on UKSPF Skills and Inclusion programme, providing training to eligible businesses in the Sunderland region.
Fundraising
The charity does not raise any funds from the general public.
Public benefit
The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the Charity should undertake in order to further the charitable purposes for the public benefit. These activities are summarised below.
During the year Seta performed well in the delivery of training and learners enjoyed a good level of success which is consistently higher than national averages.
Seta has been audited by a number of external organisations, including its customers, and qualification awarding bodies. All have been completed to the satisfaction of the organisations concerned. Seta operates an ISO9001:2015 accredited quality management system.
Seta last had an Ofsted inspection on 23rd to 26th May 2023. Seta received a ‘Good’ rating in all categories.
Overall, the Association is showing revenue from charitable activities of £2,127,855 compared to revenue of £2,049,657 in the previous financial year, an increase of 3.8%. Net income for the year was £196,057 compared to a net income of £186,195 in 2023 an increase of £9,862.
The growth strategy put in place during previous financial years to increase employer involvement and apprentice numbers, is continuing to deliver positive results, with the highest number ever of apprentice learners on programme.
Seta’s investments increased in value overall during the year to £317,289 from £281,994. The market value of retained investments increased by £35,295.
Reserves policy
The trustees aim to maintain minimum accessible reserves in unrestricted funds at a level which equates to approximately three months of unrestricted charitable expenditure.
The total funds held as at 31 August 2024 amounted to £1,603,456 (2023 : £1,407,399) , of which £51,399 (2023 : £Nil) are restricted funds and £1,552,057 (2023 : £1,407,399) are unrestricted funds. Free reserves after allowing for funds tied up in tangible fixed assets are £853,002 (2023 : £645,928) There are no restricted reserves. Actual 3 month cash payments totalled £513,000.
The Trustees considers that reserves at this level will ensure that, in the event of a significant drop in revenue, they will be able to continue the Charity’s current activities while consideration is given to ways in which additional funds may be raised. In addition, the Charity is preparing for continued growth, where larger or additional training facilities will be required, at significant cost to the organisation. This level of reserves has been maintained throughout the year.
Investment powers and policy
During the 23/24 financial year the investment portfolio was managed by Brewin Dolphin. The portfolio value is noted above. An annual review of this investment portfolio and performance is carried out by Seta trustees.
The Trustees have the power to invest in such assets as they see fit. Seta’s investment advisors have been instructed to invest to maximise the total return on investment funds within the constraints of a medium risk portfolio. An investment policy is in place. Whilst the investment brief is broadly defined, Seta trustees are happy that the nature of investments is appropriate from an ethical standpoint
Risk management strategy
The Trustees have assessed the major risks to which the Charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
Seta trustees regularly review risks and uncertainties, and these are classified as part of the SWOT / PESTLE analysis which remains part of Seta business improvement plan. To ensure early mitigation of risks Seta trustees continually monitor and review financial status and forward forecasts on a quarterly basis. The principal risks faced by the Trust lie in both the performance of investments, and the issue of securing the continuity of funding from the education and skills funding agency (ESFA) for delivery of apprentice training.
Other risks which remain under regular review are Changes to Ofsted Education Inspection Framework (EIF); Changes to DfE/ESFA funding levels; competition from local colleges and technical training providers; political influences.
The level of trading surplus is an indication that management strategies are paying off. It is expected that the new financial year (24/25) will show further growth. Apprentice recruitment numbers for September ’24 were once again good with, the organisation’s highest ever intake, increasing the total number of learners on programme to over 350, and therefore generating increased revenue.
Commercial training sales have improved, in part, thanks to the ESF funded “Northeast Workforce Skills” programme and the follow-on government funded UKSPF programme. This allows Seta and other partners to deliver up-skilling and cross-skilling courses to eligible companies at no cost to them. The Workforce Skills programme ran until December 2023 and the EKSPF programme commenced April 2024, and is ongoing.
Seta continues to respond to market needs both in the delivery of apprenticeship programmes and commercial training courses. We review new apprenticeship “standards” published by IfATE, for suitability and, where there is a good fit, develop capacity and capability to deliver these to apprentices and employers.
Although Seta primarily delivers training in the engineering and manufacturing sector, it looks for opportunities to enter the market in complementary sectors, for example it currently delivers a number of business and administration related programmes.
Seta will continue to make investment in training facilities as required to allow high quality training to be delivered.
The charity has more than sufficient funds to fund its activities for at least 12 months from the date of signing the accounts.
The Charity is a company limited by guarantee and is governed by a memorandum and articles of association. The Directors of the Company are also Trustees of the Charity. Eligibility for membership of the Charity and membership of the Board of Trustees is governed by the memorandum and articles of association. There are no restrictions in the governing document on the operation of the charity or on its investment powers other that those imposed by Charity law.
The organisation is governed by a Board of Directors, which consists of nominated members. The Board is responsible for the management and control of the Charity and overall direction of its work.
Directors are mostly officers from member companies. The Directors have the power to co-opt new Directors up to the maximum of 7 board members as set out in the Memorandum and Articles of Association.
Trustees are appointed via invite request to apprentice employer organisations or specific board nominations. Seta trustees have expressed an aim to expand the board to its maximum of 7 board members and that process continues through open invites to apprentice employer companies and board invites to nominated individuals.
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 day-to-day management of the Charity has been delegated to Mr Robin Lockwood as the Chief Executive Officer.
Induction and Training of Trustees
The induction process follows the ICSA good practice Charity Trustees’ Guide with an induction programme for any newly appointed trustee, which includes an initial meeting with the Chair and the trustees, followed by a series of short meetings with the Chief Executive to further discuss roles and responsibilities and clarify charity policy matters. Further training will be provided as required and in keeping with the Good Practice Guide.
Pay Policy for senior staff
Seta trustees review the salary of all staff on an annual basis including individual rewards packages of senior managers. To ensure retention of all staff, Seta trustees aim to ensure that the organisation is competitive with commensurate organisations with all its salary and reward packages.
Trustees
None of the trustees received remuneration or other benefit from their work with the charity. Any connection with the charity must be disclosed to the full board of trustees in the same way as any other contractual relationship with a related party. In the current year no such related party transactions were reported.
None of the Trustees has any beneficial interest in the company. All of the Trustees are members of the company and guarantee to contribute £10 in the event of a winding up.
The trustees, who are also the directors of Sunderland Engineering Training Association Ltd 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 charity 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 charity 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 charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity 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 Robson Laidler Accountants Limited 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 Sunderland Engineering Training Association Ltd (the ‘charity’) for the year ended 31 August 2024 which comprise the statement of financial activities, 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 charity 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.
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual 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 for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, 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 charity 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 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
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 charity 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 charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Our 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The risk of material misstatement due to error or fraud has been assessed in conjunction with how internal controls may mitigate any such risk. These controls are reviewed as part of the audit by performing systems walkthroughs to ensure they are operating effectively. Analytical review and substantive testing is also performed on all material balances and therefore any instances of non-compliance should be identified or considered as insignificant. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team;
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework, in which the charity operates and how the charity complies with that legal and regulatory framework
inquired with management and those charged with governance about their own identification and assessment of the risks of irregularities, including any know actual, suspected or alleged instances of fraud
discussed with management and those charged with governance any non-compliance with laws and regulations and how fraud might occur including assessments of how and where the financial statements may be susceptible to fraud.
The risk of management override of controls was also considered an area of potential misstatement due to fraud. Audit procedures performed included testing of manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an 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 and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
The notes on pages 12 to 22 form part of these financial statements.
Sunderland Engineering Training Association Ltd is a private company limited by guarantee incorporated in England and Wales. The registered office is 17 Sedling Road, Wear Industrial Estate, Washington, Tyne & Wear, NE38 9BZ.
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.
Income from trading activities is used to raise funds for the charity. Income is received in exchange for supply of goods and services and is recognised on delivery of such activities.
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.
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.
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 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 was as follows:
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 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 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.
Capital grant fund
Funding received towards the cost of fixed assets. The fund is being released in line with the associated depreciation on an annual basis.
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.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
There were no disclosable related party transactions during the year (2023 - none).
The charity had no material debt during the year.