MORAY_FIRTH_TRAINING_GROU - Accounts

The trustees present their annual report and financial statements for the year ended 31 July 2021.

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 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).

The charity's objects are to:

• Provide further and assist in the provision of industrial training and education.

• Encourage and develop group training schemes in the transport, garage, engineering and other industries.

• Provide advisory and other such services as may be determined by the Board.

• Co-operate with the appropriate education authorities and further education centres for the provision of educational facilities.

The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.

The group continues to provide various training courses and hire out rooms and facilities to businesses requiring premises to stage meetings and courses. The recruitment of apprentices is yet again exceeding targets with many local companies choosing Moray Firth as a training provider for their apprentices as well as continued Off The Job trainees from Train Shetland, Moray College and Remit. During the year, ten Level 3 LV MA's and one Level 3 HV MA received their Modern Apprenticeship certificates and final qualifications. The group completed the year with one hundred and two students under training, of these, fifteen were Train Shetland apprentices, nine from Moray College and fourteen from Remit.

The year ending 31 July 2021 shows a deficit of £11,726, which, with the current worldwide health crisis is an outcome which was anticipated. However, due to the global pandemic starting to show signs of recovery, the loss is a lot less severe than the previous year (£55,378).

The Group managed to trade for the full twelve months of the trading year unlike the previous year where no trading was allowed for almost five months. The Job Retention Scheme was utilised up until April 2021 which has helped boost the bank balance. On a whole, the income and expenditure for the year is very similar to 2020 other than receiving a grant of £13,850 from Skillseekers. However, it should be noted that no income was received from membership subscriptions due to the global pandemic

The board are encouraged by the improvement from the previous year to the current and look forward to continued improvement.

The Trustees consider that, despite the current situation the Group remains a going concern and will be able to continue its activities as and when restrictions allow.

The company’s policy is to retain sufficient funds to cover its financial and legal obligations and allow it to develop its existing services. The sum required is re-assessed each year according to the circumstances of the company. This approach is necessary because the company has significant financial commitments which extend beyond the period for which funding has been secured. The trustees consider that the level of reserves at 31 July 2021 is adequate for the current operational needs of the company.

The organisation is a charitable company limited by guarantee, incorporated on 13 May 1987 and recognised as a charity on 19 February 1991. 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 members are required to contribute among themselves the sum of £500 or such higher amount as an individual member agrees to contribute so that the total of all members contributions aggregated together will not be less than £10,000.

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 of the charity are also company directors for the purposes of company law. Under the requirements of the memorandum and articles of association, the board shall consist of no less than four trustees. Nominations are encouraged from businesses and individuals who use the company’s training facilities. Any change in trustees usually takes place at the Annual General Meeting where new appointments are proposed and approved by the board. Should a trustee resign during the year their replacement, if required, is also appointed at the AGM, the number of trustees on the board mean it is not necessary to immediately replace anyone resigning during the year.

None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up.

The charitable company has a board of trustees who meet annually. Day to day responsibility for the provision of services rests with the training manager who reports to the board. The training manager has operational responsibility for developing new services and for ensuring that the existing services are delivered in accordance with quality assurance standards set by the training scheme awarding bodies and by Highlands and Islands Enterprise.

Most trustees are recruited from member firms actively involved in training. Consequently they are familiar with the practical work of the charitable company. New trustees meet with the managing director who provides them with a briefing covering the obligations of board members, the financial position of the charity as brought out in the latest management accounts, the constitutional framework of the company and the future plans and objectives.

Risk Management

The board of trustees regularly review the major risks to which the charity is exposed. Where appropriate, systems or procedures have been developed to mitigate those risks. The company had addressed the risks to its funding from the motor trade by diversifying into other forms of training. Internal control risks are minimised by the implementation of procedures for the authorisation of all transactions. Procedures are in place to ensure compliance with health and safety of staff and trainees.

The trustees' report was approved by the Board of Trustees.

I report on the financial statements of the charity for the year ended 31 July 2021, which are set out on pages 5 to 17.

The charity’s trustees, who are also the directors of Moray Firth Training Group for the purposes of company law, are responsible for the preparation of the financial statements in accordance with the terms of the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The trustees consider that the audit requirement of Regulation 10(1)(a) to (c) of the 2006 Accounts Regulations does not apply. It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Act and to state whether particular matters have come to my attention.

My examination is carried out in accordance with Regulation 11 of the 2006 Accounts Regulations. An examination includes a review of the accounting records kept by the charity and a comparison of the financial statements presented with those records. It also includes consideration of any unusual items or disclosures in the financial statements, and seeks explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently I do not express an audit opinion on the view given by the financial statements.

In connection with my examination, no matter has come to my attention:

to keep accounting records in accordance with section 44(1) (a) of the 2005 Act and Regulation 4 of the 2006 Accounts Regulations; and

to prepare financial statements which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations;

to which, in my opinion, attention should be drawn in order to enable a proper understanding of the financial statements to be reached.

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

All income and expenditure derive from continuing activities.

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 July 2021.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Moray Firth Training Group is a private company limited by guarantee incorporated in Scotland. The registered office is 32 Harbour Road, Inverness, IV1 1UF.

The financial statements have been prepared in accordance with the charity's [governing document], 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 charity is a Public Benefit Entity as defined by FRS 102.

The charity has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

At the date on which the financial statements were approved, the financial implications arising from the Coronavirus (Covid-19) outbreak which has affected the UK are still uncertain. The Trustees have taken appropriate action in response to government advice. The trustees will continue to take all reasonable steps to minimise costs to the company during periods of curtailment. The trustees will continue to review the impact of coronavirus on its activities and to assess the company's position as a going concern. Accordingly, the Trustees will continue to adopt the going concern basis in preparing the annual report and accounts.

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 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).

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The 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.

Training and education

Training and education

Course fees

Training fees

"Off the Job" training

Grants received

Employment allowance

LEC - milestones, travel etc.

Room hire

Feed in tariff

Training and education

Training and education

Skillseekers expenses

Course fees expenses

Workshop expenses

Bank charges

Interest paid

Irrecoverable VAT

Heat and light

Telephone

Stationery, printing and postage

Advertising and marketing

Motor and travel

Repairs, maintenance and consumables

General expenses

Book-keeping fees

Independent examination

Trustees' remuneration was as follows:

The average monthly number of employees during the year was:

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. During the year the Company paid £5,682 (£6,563 - 2020) into the scheme. At the balance sheet date there was £1,463 accrued.

Any bank borrowing which may arise from time to time is secured by standard security over 32 Harbour Road, Inverness and by a bond floating charge over the whole assets of the company.

Fixed Asset Fund

Fixed Asset Fund represents grants received in respect of capital expenditure. The fund is released to unrestricted funds over the estimated useful life of the assets to which they relate.

Fund Transfers

£994 as transferred from the restricted fund in favour of the unrestricted fund to cover the depreciation charge on the assets purchased from the restricted fund.

At 31 July 2021 the charity had annual commitments under non-cancellable operating leases as set out below.

During the year there were no related party transactions (2020 - £286 in sales to Mr N Adie).

Moray Firth Training Group is a company limited by guarantee and does not have a share capital. Every member of the company undertakes to contribute among themselves the sum of £500 or such higher amount as an individual member agrees to contribute so that the total of all members contributions aggregated together will not be less than £10,000 to the assets of the charitable company in the event of its being wound up while he is a member, or within one year after he ceases to be a member.