CareTech Foundation Trustees’ Report 2019 >> Notes to the Financial Statements for the Period Ended 30 September 2019
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1. Accounting policies
Charity information
CareTech Charitable Foundation is a private company limited by guarantee incorporated in England and Wales. The registered office is 7th Floor, Metropolitan House, 3 Darkes Lane, Potters Bar, Hertfordshire, EN6 1AG.
1.1 Accounting polices
The financial statements have been prepared in accordance with the charity’s Memorandum and Articles of Association, the Companies
Act 2006 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)” (as amended for accounting periods commencing from 1 January 2016). 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 applying FRS 102 Update Bulletin 1 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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2 Going concern
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.
1.3 Charitable funds
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.
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.
1.4 Incoming resources
Income is recognised when the charity 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.
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.
Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
1.5 Resources expended
Expenditure is recognised in the statement of financial activities on an accrual basis as a liability is incurred. Expenditure includes any VAT which can not be fully recovered.
Costs of generating funds comprise the costs associated with attracting voluntary income.
Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity and include the independent examination fees and costs linked to the strategic management of the charity.
1.6 Cash and cash equivalents
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.
1.7 Financial instruments
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
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
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
1.8 Employee benefits
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.
1.9 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2. Donations and legacies
| Unrestricted funds 2019 £ | Restricted Funds 2019 £ | Total 2019 £ |
|
|---|---|---|---|
| Donations and gifts | 335,412 | 12,235 | 347,647 |
3. Other income
Other income represents the transfer at fair value of the assets and liabilities of CareTech Charitable Foundation, registered charity number 1173154, upon its merger with the charity on 3 April 2019 as follows:
| Unrestricted funds 2019 £ | Restricted Funds 2019 £ | Total 2019 £ |
|
|---|---|---|---|
| Cash at bank and in hand | 55,184 | 18,250 | 73,434 |
| Debtors | 959 | - | 959 |
| Creditors | (3,886) | - | (3,886) |
| 52,257 | 18,250 | 70,507 |
4. Charitable activities
| 2019 £ |
|
|---|---|
| Staff costs | 72,131 |
| Management fees | 6,240 |
| Bank charges | 206 |
| General expenses | 1,830 |
| Insurance | 719 |
| Printing and stationery | 505 |
| Website costs | 150 |
| Staff training | 360 |
| Travel | 2,451 |
| PR costs | 7,200 |
| Advertising and marketing | 246 |
| 92,038 | |
| Great funding of activities (see note 5) | 229,301 |
| Governance costs (see note 6) | 24,845 |
| 346,184 | |
| Analysis by fund | |
| Unrestricted funds | 315,699 |
| Restricted funds | 30,485 |
| 346,184 |
5. Grants payable
| 2019 £ |
|
|---|---|
| Grants to institutions: Barnado’s | 50,000 |
| British Asian Trust | 50,000 |
| Birkbeck College | 41,670 |
| Hemraj Goyal Foundation | 12,500 |
| Care Workers Charity | 10,000 |
| EY Foundation | 9,840 |
| Skills for Care | 9,780 |
| Other | 19,211 |
| 203,001 | |
| Grants to individuals | 26,300 |
| 229,301 |
6. Support and governance costs
| Support costs | Governance costs | 2019 | |
|---|---|---|---|
| £ | £ | £ | |
| Legal and professional | - | 20,990 | 20,990 |
| Independent examiner fees | - | 3,282 | 3,282 |
| Other accountancy services | - | 573 | 573 |
| - | 24,845 | 24,845 | |
| Analysed between Charitable activities | - | 24,845 | 24,845 |
7. Trustees
None of the trustees (or any persons connected with them) received any remuneration during the period, but one of them was reimbursed a total of £59 of travelling expenses.
8. Employee
Number of employees
The average monthly number of employees during the period was:
| 2019 Number |
|
|---|---|
| Management and administrative staff | 3 |
| Employment costs 2019 | 2019 £ |
|---|---|
| Wages and salaries | 65,368 |
| Social security costs | 3,285 |
| Other pension costs | 3,478 |
| 72,131 |
There were no employees whose annual remuneration was £60,000 or more.
9. Debtors
| Amounts falling due within one year: | 2019 £ |
|---|---|
| Prepayments and accrued income | 37,243 |
10. Creditors: amounts falling due within one year
| 2019 £ |
|
|---|---|
| Other taxation and social security | 3,820 |
| Accruals and deferred income | 67,835 |
| 71,655 |
11. Restricted funds
The income funds of the charity include restricted funds comprising the following donations and grants held on trust for specific purposes:
| Movement in funds | |||
|---|---|---|---|
| Incoming resources £ | Resources expended £ | Balance at 30 September 2019 £ |
|
| Gifts in kind | 12,600 | (12,600) | - |
| Staff hardship fund | 18,250 | (18,250) | - |
| 30,850 | (30,580) | - |
Gifts in kind
The gifts in kind comprise the rentable value of property and the apportioned salary costs of workers for services provided free of charge.
Staff Hardship Fund
The Foundation receives a restricted donation from CareTech Holdings plc to enable us to provide small grants to CareTech Holdings plc staff and those who may recently have left the company who find themselves in significant financial hardship or at serious risk of becoming in significant financial hardship.
12. Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
| 2019 £ |
|
|---|---|
| Aggregate compensation | 37,637 |