The trustees present their report and financial statements for the year ended 31 December 2018.
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 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's objects are to engage young people who are in need by reason of their social, health, or economic circumstances by providing opportunity and support to achieve through a progressive programme of informal educational activity, thus providing a positive and constructive alternative to crime and anti-social behaviour and to help develop responsible and useful members of society and improve the quality of their lives.
The charity’s activities are listed in its strategic plan and include:
1. Providing the opportunity and space for young people to achieve
2. Providing initial engagement for referred young people
3. Providing an ongoing programme of activity and support to maintain engagement post the “challenge group”
4. Providing programmes to support post 16 engagement in education, training and employment
5. Providing 1-2-1 opportunities to support re-engagement with Isle of Wight based education
6. Providing access, support and activities to enable opportunity of participating in and gaining local or national accreditations e.g. the Duke of Edinburgh’s Award)
7. Providing opportunities for young people to learn about and engage in their local, national and international communities.
As a result of changes to funding, the Trustees resolved to close the Charity in the summer of 2019.
The trustees have paid due regard to guidance issued by the Charity Commission and public benefit in deciding what activities the charity should undertake.
Challenge and Adventure worked with HTP (Hospitality Training Partnership) throughout the year in running the Challenge Programme which gave the Charity the chance to deliver a wider range of educational opportunities for young people. We also continued to offer the more diverse activities using our facilities in Parkhurst Forest. The Charity were also able to make use of opportunities to us such as a chance for young people to spend time on other adventurous activities, such as the opportunity to be able be part of a sailing expedition working with local Yacht Clubs on the Island. These opportunities enable young people to have experiences that might not otherwise be available to them.
The Challenge group continued to work on their Duke of Edinburgh Award programme and one to one support was provided to the young people as well as them being able to take part in Challenge and Adventure activities as a group. The educational input was provided by HTP .
During the year the government changed the parameters nationally around provision of education and this has resulted in HTP no longer being able to partner with the Charity on funding projects . These changes became effective in September 2018. The Charity has been looking at alternative delivery methods, however, the reality is that the fundraising income alone was not sufficient for the Charity to be able to continue with the Challenge programme in it’s current form, and in July 2019, it was decided that the Charity would close.
As a result the of this the Challenge and Adventure operational staff have been transferred to HTP and will be continuing to deliver a similar Challenge programme to young people on the Isle of Wight. The Charity leased a building in Parkhurst Forest for the use of Challenge and Adventure and negotiations are currently being held with the Forestry Commission for the lease to be transferred to HTP to enable them to continue using the facility for the benefit of young people. There have also been discussions with HTP around the local Duke of Edinburgh Award team using the forest office for their meetings. This will further embed the working relationship with the HTP Challenge programme and the Duke of Edinburgh Award scheme.
The Charity’s decision to close means that the Charity is no longer going concern and decisions need to be taken on donation of the assets of the charity to other charitable causes, which fit with the objects of Challenge and Adventure.
The formal closure of services will continue in 2019, and the Trustees hope that this process will be completed by 31 st December 2019.
During the year income from educational and challenge programs reduced to £ 69,877 (201 7 - £ 123,891 ). This included one-to-one support funding which has now ceased. In addition, fundraising income decreased to £ 28,401 (201 7 - £ 67,559 ) with the closure of the charity shop, and a simplification of the activities undertaken .
The Charity’s policy was to hold sufficient fund to complete one academic year , but with the decision taken to close the charity whilst the charity is able to wind down its activities, this policy is no longer necessary. Current funds are required to deal with the ongoing programme in 2019, and to close the charity in the summer/autumn of 2019. The Charity is grateful for the management support provided by HTP, and in helping the Charity evaluate out options to continue, and who have provided operational management in this period of significant changes in the funding available to the Charity.
It is planned that, once the obligations of the charity have been fully met, along with the loss incurred on activities in completing the 2019 academic year, any surplus assets can be transferred to other youth based charities within the Isle of Wight area, and any surplus funds would be provided to local charity Wight Aid.
The major risks to the project, as identified by the trustees are: 1) That the charity does not raise sufficient funds to continue - has been covered in the decision to close the Charity as mentioned above. At the point of approving these accounts, the Charity has utilised its funds during the final period of trading, and to meet commitments to staff, and third parties.
2) Injury or death of a participant in its work; the management of this is the embedded Health & Safety policy and subsequent procedures including risk management, and insurance cover against legal action. |
3) In closing the charity, that the Charity meets its obligations to transfer surplus assets to similar charities and close the charity registration. |
The charity's governing document is its Articles and Memorandum of Association.
The organisation is a charitable company limited by guarantee, incorporated and registered as a charity on 25th October 2004. 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 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:
Under the requirements of the Articles, the Board must elect officers to the positions of Chair, Vice-Chair and Treasurer. Officers serve for a period of one year after which they must be re-elected at the next Annual General Meeting. Training for trustees is available.
In 2015 a strategic partnership was formed between Hospitality Training Partnership (IW) Ltd (known as HTP) and Challenge and Adventure, and this came to a close subsequent to the year end. HTP have been recognised as high achieving organisation enabling all trainees, including young people, to achieve their educational objectives and the arrangement enabled the charity to continue in the work that we do until the current time. The Board of Challenge and Adventure meets quarterly and is responsible for the strategic direction and policies of the charity.
In carrying out our work, the Trustees have taken regard to the Charity Commission's guidance on public benefit.
The law applicable to charities in England and Wales requires the trustees to prepare financial statements for each financial year which give a true and fair view of the charity's financial activities during the year and of its financial position at the end of the year. In preparing financial statements giving a true and fair view, the trustees should follow best practice and:
- select suitable accounting policies and apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in operation.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy the financial position of the charity and which enable them to ascertain the financial position of the charity and to ensure that the financial statements comply with the Companies Act 2006 and the Charities Act 1993. 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.
The trustees' r eport was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Challenge & Adventure Ltd (the charity) for the year ended 31 December 2018.
As the trustees of the charity (and also its directors for the purposes of company law) you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 2006 (the 2006 Act).
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the 2006 Act 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 (the 2011 Act) . In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
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 2006 Act; or
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 2006 Act other than any requirement that the accounts 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 accounts 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 activities which ceased in the subsequent period.
Challenge & Adventure Ltd is a private company limited by guarantee incorporated in England and Wales. The registered office is 9 St Johns Place, Newport, Isle of Wight, PO30 1LH.
The financial statements have been prepared in accordance with the charity's Memorandum and Articles, 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 a mounts 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.
The Trustees have resolved to close the activities of the charitable company and as such cannot continue to adopt the going concern basis in the preparation of these accounts. Therefore the fixed assets have been reclassified as current assets. The charity ceased to operate services to young people at the end of July 2019.
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.
Expenditure for Charitable activities is recognised when incurred and allocated to the Youth Work of the Charity, Expenditure for fundraising costs are recognised when incurred. Staff costs are charged to Youth Work or fundraising depending on the employee and role. Support costs are then allocated pro-rata to Youth Work and Fundraising as appropriate, using actual allocations where possible.
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 net income/(expenditure) for the year.
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 p aymen ts 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.
Unrestricted Funds
Unrestricted Funds
Sales within charitable activities - contracts for training provision
General activities
Transport and travel costs
Actual
Insurance
Actual
Telephone/internet
Actual
Repairs
Actual
Printing and stationery
Actual
Rent and utilities
Actual
Training costs
Actual
Sundry expenses
Actual
Legal and professional
Actual
Computer expenses
Actual
Consultancy
Governance costs includes payments for the independent examination of £ 1,200 (201 7 - £ 2,040 ) .
The average monthly number of employees during the year was:
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 charge to profit or loss in respect of defined contribution schemes was £820 (2017 - £380).
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases in respect of the Parkhurst Forest property, which fall due as follows:
There were no disclosable related party transactions during the year (2017 - none).