The Trustees present their annual report and financial statements for the year ended 31 March 2022.
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 constitution, 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 objective of the charity is the advancement of community development, promotion of the voluntary sector and the effectiveness/efficiency of charities, and advance education. It provides opportunities for social enterprises to better manage and grow their businesses through exchange of information and facilitating joint trading.
DSEN is a partner in Dundee's Third Sector Interface (TSI) alongside Dundee Volunteer and Voluntary Action. The TSI supports and is a source of advice for the third sector across the city.
The last year has been a unique and challenging one for Dundee Social Enterprise Network (DSEN) and our members. A global pandemic, worries about many organisations being able to survive, and Government funding and support which was also hard to follow at times, all contributed to a point when we feel DSEN supported the massive recovery that is now going on in Dundee.
In the last year our membership has grown by some 15% and this in part, was due to a change of direction for us as well, going out to support members on a one to one basis, running regular members' meetings and training events throughout the pandemic on virtual platforms like Zoom and Teams, and also supporting many of our members to work in partnership. Members gained invaluable training in funding, in digital, attended national events in partnership with Senscot, and also received a bespoke service in developing bids to national Government Funds such as the Resilience Fund, the Wellbeing Fund and more recently Adapt and Thrive and the Community Recovery Fund. Members have also gained support in applying for business support grants, and many have seen their workforces grow and develop as we now enter the recovery period with new roles created in business development, funding and strategy; all vital elements for many of the volunteers who support these organisations as board members.
The year has been on of the most interesting and challenging for Dundee Social Enterprise Network since we started over ten years ago. A year that saw a reduction in staff posts, a need for more focus towards our members and their needs and a realisation that our new structure required an approach that was sustainable and in the long term will be more geared towards our members.
Rather than recruit for a new employed CEO, it was decided to deliver the responsibilities of this role through one fixed term consultancy, namely Fergus Storrier, who took on roles in strategy and policy, finance and staff, funding and member related events and engaging with partnerships at a strategic level locally and nationally. Fergus stepped down as director on the 1st September 2020.
Beverley Gibb stepped down as a director as of 24th May 2021 and William David Cook will be stepping down as director as of 14th June 2021.
DSEN's future focus
Within DSEN we also recognised the need to reduce our own outgoings as we needed to match annual revenue streams. We have been fortunate to now attract our own TSI share of Government funding, but we also attracted new investment from the Northwood Charitable Trust who we would like to note our thanks to for their three-year support. The appointment of a new CEO and the continued support of an Admin/Finance post have continued but we would also like to note our thanks to our Development Officer, Angus Greenshield who has now moved on to a new role in Social Care, and of course the continued support of our volunteer board who give so much of their time every year.
The challenge for DSEN and our members however is only just beginning. The pandemic will leave a legacy where areas of poverty have become more detached from normal life; and with unemployment growing and wider problems around children's education, mental health and other health inequalities, we all need to be mindful that the work of DSEN and our members is even more important than ever before.
No changes are presently envisaged in the Charity's policies as outlined above.
At the year end the charity holds £50,464 (2021 - £39,473) in reserves of which all are unrestricted for use as the Charity sees fit.
Reserves policy
The Charity has no official reserves policy but aims to hold a minimum of 6 months expenditure in unrestricted reserves at any time.
Risk management
The directors assess the major risks to which the Charity is exposed on an ongoing basis, and in particular those related to the operations and finances of the Charity. The principle risks faced by the Charity include loss of income, loss of funding and removal of charitable status. To mitigate these risks, systems are in place to ensure that the financial records are accurate, up tp date and suitable for reporting to funders and to the board of Directors.
The Charity is a company limited by guarantee and is governed by its Memorandum and Articles of Association.
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 minimum number of Trustees who must sit on the board is three, with a maximum of seven. The appointment, resignation and re-election of the directors is considered at each AGM.
Key management personnel
The board of Trustees are considered to be the key management personnel of the Charity, some of whom direct and control day-to-day operations. All Trustees give their time freely and no Trustee received remuneration or expenses during the year, as disclosed within the notes to these financial statements.
Directors are required to disclose all relevant interests and in accordance with the Charity's policy, must withdraw from any decisions where a conflict of interest may arise.
Trustee induction and training
Prospective Trustees must have an awareness of Trustee responsibilities, the governing documents, administrative procedures, and the history and philosophical approach of the Charity prior to being offered an invitation to join the board. New Trustees receive copies of the previous year's financial statements, board minutes and a copy of the OSCR leaflet 'Guidance for Charity Trustees - acting with care and diligence'. If appropriate, training is offered to current Trustees as and when required.
The Trustees' r eport was approved by the Board of Trustees.
The Trustees, who are also the directors of Dundee Social Enterprise Network 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 Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and 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.
I report on the financial statements of the Charity for the year ended 31 March 2022, which are set out on pages 6 to 15.
The Charity’s Trustees, who are also the directors of Dundee Social Enterprise Network 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.
Dundee Social Enterprise Network is a private company limited by guarantee incorporated in Scotland. The registered office is 15 Balunie Drive, Dundee, DD4 8PS.
The financial statements have been prepared in accordance with the Charity's constitution , 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 a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. 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 .
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 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.
Grants
Membership income
Events, training & conferences
Postage, stationery & advertising
Independent exam
Bank charges
Consultancy
Memberships & subscriptions
Sundry expenses
Bad debts
Insurance
Legal and professional
IT costs
Rent
Telecommunications
Travel expenses
During the year, no Trustees received any remuneration or benefits from the Charity except for those outlined within Note 14 - Related Party disclosures (2021 - £NIL).
During the year, Trustee Derek Marshall was reimbursed for miscellaneous expenses totalling £215 (2021 - £NIL).
The average monthly number of employees during the year was:
Key management personnel
No remuneration or expenses were paid to the Directors or any connected persons during the year.
During the year the Charity entered into the following transactions with related parties:
During the year, The Factory Skatepark, a company in which Derek Marshall is a director, charged Dundee Social Enterprise Network for consultancy services of £3,600 (2021 - £4,875 ) .
During the year, The Factory II Ltd, a company in which Derek Marshall is a director, charged Dundee Social Enterprise Network for rent of £2,000 (2021 - £6,430 ) .
During the year, The Factory III Ltd, a company in which Derek Marshall is a director, charged Dundee Social Enterprise Network for payroll and pension services of £NIL (2021 - £456 ) .
During the year, Community Warehouse Ltd, a company in which Fergus Storrier is a director, charged Dundee Social Enterprise Network for consultancy fees of £26,000 (2021 - £17,125 ) .
During the year, Praesidium Vos Limited, a company in which Roy O'Kane is a director, charged Dundee Social Enterprise Network for consultancy fees of £4,200 (2021 - £nil ) .