Registered number: 03174040 Charity number: 1053946 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) TRUSTEES. REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Feltons Chartered Accountants Blrmingham B13JR KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmlted by guarantee) CONTENTS Page Reference and admlnlstrative details of the charitable Company, its Trustees and advisers Chalrman's statement Trustees. report Independent auditors. report on the financial statements Statement of financial activities 3-13 14-17 18 Balance sheet 19 Statement of cash flows 20 Notes to the financial statements 21-33 The following pages do not fomi part of the statutory financial statements: Appendix l - List of Trusts and Donalions 34 KAPELLA (FORMERLY RELATE BIRMINGHAM} (A company limited by guarantee) REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITABLE COMPANY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 MARCH 2025 Trustees Malcolm Pearson, Chair Elizabeth Wyatt Andy Lee Pam Dhanda Matthew Booton (resigned 3 September 2025) Ayola Beckford Christopher Price Ebony Findley Parminder Goray Company registered number 03174040 Charity registered number 1053946 Registered office 111 Bishopsgate Street BinTJingham B15 1ET Company secretary Ruth Levesley Key management personnel Ruth Levesley (Chief Executive) Lisa Hale (Service Manager) Independent auditors Feltons 8 Sovereign Court 8 Graham Street Birmingham B13JR Bankers CAF Cash Ltd 25 Kings Hill Avenue West Malling Kent ME19 4JQ Co-operative Bank pl¢ PO Box 82 1181120 Colmore Row Birmingham B3 3BA Solicltors Tyndallwoods 29 Woodbourne Road Edgbaston Birmingham B178BY Patron The Lord Mayor of Birmingham Page 1 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 In recent years, my reports have reflected a conslstenl message of steady progress and excellent commitment from both the Management and staff in maintalning Kapella's (formerly Relate Bimilngham's) posltive and sustainable route forwards. This year. however, has brought significant change to the organisation, most notably our new name and branding, which FS referenced Ihroughout this report. In summary, 2025 began with a major development when Relate National and the Relate Brand were acquired by Family Action, effectively bringlng the existing Relate Federation to an end. This did not immediately affect Relate Birmingham. as we remained financially Independent. and we took time to evaluate the changing 51tualion. In March 2025. we made the pivotal decision not to enter into a new arrangement with Family Action, but instead to remain Independent and move foTward under a new Identity of Kapella. Whilst recognising that creating and establishing a new brand would require considerable effort, It also gave us the opportunity to build somethlng more flexible that will grow wlth us as we expand our Service offer and reach. Inspired by Capella, one of the brightest stars in the night sky, our new name symbolise5 guidance. support. and clarity. It also nods to a cappella-a form of collective. harmonious expiession-echoing our belief in togetherness and shared voices. Like a guiding star, Kapella is here to help individuals, couples and families navigate life's challenges. whether they involve relationships, family changes, or emotional wellbeing. The Board fully 5UPPOrts this step fo￿ard and has been Impressed by the leadership and ability shown by the Management team and particularly in the successful implementation of the new brand and marketing approach. Thanks to the strong financial foundation built by the Management team, we are well-positioned to be9in this exciting and dynamic phase of development and withstand the changes as we navigate our way ahead. As a Board, we continue to monitor both our expenditure and business (ievelopment strategy to ensure continued progress. With the addition of new Board members last year, we have the stability and expertise to support the Managemenl team on this Journey. As In previous years. l am confident in the continued success of Kapella, even through this period of change, and especially in the hands of our current team. I look forward to our further aGhievement and development. On behalf of the Board, I wish to express our appreciation to all our Management and Staff for their hard work and dedication in keeping Kapella at the forefront of our sector. Finally, I would also thank my fellow Board members for theirsupport to me and the management team through thls period of transfortnation and change. Malcol 'Pearson Chatr an Dale: 3 September 2025 Page 2 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) TRUSTEES, REPORT FOR THE YEAR ENDED 31 MARCH 2025 The Trustees present their report and the financial statements of the charity for the year ended 31 March 2025. The trustees have adopted the provisions of the Statement of Recommended Practice (SORP) "Accounting and Reporting by Charities" in preparing the annual report and financial statements of the charity. The financial statements have been prepared in accordance with the accounting policies set out in notes to the accounts and comply with the charity's governing document, the Charities Act 2011 and A¢Gounting 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 published in October 2019. Principal activity The charitable objectives of the Gompany (the Common Purpose Statement) are explained on page 9. The principal activity during the year was the provision of relationship and wellbeing support, delivered through counselling for individuals, couples, families and young people. psychosexual therapy. family mediation. child contact services and education and training work. STRUCTURE, GOVERNANCE AND MANAGMENT Governing document Kapella (formerly Relate Birmingham) is a company limited by guarantee governed by its Memorandum and Articles of Association dated 23 October 2013 and is registered as a charity with the Charity Commission. There are currently nine members. each of whom agrees to contribute £1 in the event of the charity winding up. Appointment of the trustees All directors of the company are also trustees. Trustees are elected from eligible members, by members, at the Annual General Meeting. The third longest serving Trustees stand down each year and may stand for re- election at the Annual General Meeting. The Tnjstees have the power to appoint and fill vacancies arising during the year. Trustee induction and training New truste8s are briefed on their legal obligations under charity and company law and the Charity Commission guidance on public benefit and are informed of the Content of the Memorandum and Articles of Association. the committee and decision-making processes, the business plan and th8 re￿nt financial performance of the charity. Organisation of charity (a) Executlve Committee (The Board of Trustees) The board, which can have up to 18 members, is responsible for setting the policy of the charity and ensuring that all monies received are used for the objectives of the charity. There were nine members of the executive committee at 31 March 2025. (b) Chlef Executive The Chief Executive is appointed by the trustees to manage the day-to-day operations of the charity and has delegat9d authority, within terms of delegations approved by the trustees for operational matters including finance, marketing, personnel and service delivery. The trustees and Chief Executive developed a business plan uring the year. to which the Chief Executive has worked. Page 3 KAPELLA (FORMERLY RELATE BIRMINGHAM> (A Company limited by guarantee> TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 {c) Support Staff The Chief Executive was supported by the 1 Service Manager, 1 part time Finance Manager, 1 Clinical Supervisor, 1 Domestic Abuse Service Co-ordinator. 1 part time Children, Young People and Families Servi Lead, 1 Marketing and Communications Manager and 4 paid administrative and reception staff covering Birmingham. Wolverhampton, Solihull. Walsall. Sandwell and Dudley and South Staffordshire. At the start of the year this included- 1 Service Manager 1 Clinical Supervisor 1 Domestic Abuse Service Co-ordinator 1 CYPF Service Lead 1 Marketing and Communications Manager 1 Finance Manager 3 Administrative assistants 37 hours per week 37 hours per week 37 hours per week 24 hours per week 35 hours per week 16 hours per week 103 hours per week The Bimiingham office is the base for the administration team. (d) Counsellors At 31 March 2025, there were twenty-￿0 counsellors working between three and twenty-five hours per week. 8 /0 of the total number of counselling sessions delivered was provided by counsellors on a voluntary basis. {e) Family Team At 31 March 2025, there were 2 Family Contact Workers and 1 Family Mediator. (fj Domestic Abuse Services Team At 31 March 2025. there was 1 Domestic Abuse Service Co-ordinators and 2 Choose2Change programme facilitators and a Partner Safety Worker (g) CYP Wellbeing Team At 31 March 2025. there were 4 Children and Young People Wellbeing Practitioners and 1 ADHD Wellbeing Practitioner. Related parties and co-operation with other organisations None of our trustees ￿CeIve remuneration or other benefit from their work with the charity. Any connection beL￿een a trustee or senior manager of the charity with a client or supplier must be disclosed to the full board of trustees in the same way as any other contractual relationship with a related party. Related party transactions in the current year are described in note 20 to the accounts. Pay policy The board of directors, who are trustees and the senior management team together comprise the key management personnel of the charity in charge of directing and operating the charity on a day to day basis. No director received remuneration in the year and details of directors. expenses and related party transactions are disclosed in note 7 to the accounts. The pay of staff is reviewed annually and. where finances permit. are increased in accordance with average earning5 Page 4 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmlted by guarantee) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 Founded in 1946 (originally as Birmingham Marriage Guidance and then as Relate Birmingham until June 2025), Kapella is an independent, registered charity. We recognise relationships have difficulties and aim to help individuals. couples and families build better relationships through the counselling, sex therapy, mediation, training and other relationship support and wellbeing services. At Kapella our mission is to.. Deliver counselling, mediation and training services Enhance the quality of couple, family and parental relationships for adults, families and young people In Birmingham, Solihull, Sandwell, Walsall. Wolverhampton, Dudley and South Staffordshire and surrounding areas. Work as part of the Relationships England and Wales Ne￿Ork OUR SERVICES Relationship Counselling Relationship Counselling is for couples and individuals having issues in their personal relationships or need support in their role as parents. We help them cope with issues such as communication, parenting and co- parenting, divorce and separation and improve their relationships with partners, children and relatives. Other issues we work with include domestic abuse, adult survivors and mental health issues. Sessions can be face to face, via webcam or phone. Sex Therapy Sex therapy is for people having problems in their sexual relationships due to physical or emotional issues. They can be in a couple or single. Many people are referred by their GP. Family Counselling Family Counsèlling addresses issues occurring in a family situation. This can include difficulties in communication between parents and children, differing parenting ideas Causing friction within the family unit. blended families bringing together a 'new' family, children and young people struggling with relationships or supporting family members recovering from the impact of abuse. Children & Young People's Counselling & Wellbeing Time for You is our service for children and young people aged 7-18 experiencing changes in their family such as separation. divorce. blended families, absent parents, illness, bereavement. and conflict. It also helps where this has an impact on school. work. peer relationships or where there are issues around bullying or domestic abuse. It gives them an opportunity to be listened to and express their feelings. We also provide wellbeing sessions and ADHD coaching and support. Llfeskllls, Training and Educatlon Services We can provide relationship. parenting and lifeskills workshops for the public. as well as tailored training courses for other professionals, voluntary groups or organisations supporting families. Family Mediation Mediators work with couples involved in family breakdown to make arrangements, either to plan for a separation or divorce. or once a separation or divorce has taken place. Mediation can help to settle disputes over contact and living arrangements. child maintenance, property and money. without having to go to court, paving the way to a smoother separation. Page 5 KAPELLA (FORMERLY RELATE BIRMINGHAM) {A company limited by guarantee) TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 Child Contact We work directly with children and families. referred to us by CAFCASS, in community settings to promote safe and beneficial contact be￿een separated I non-resident parents and their children. Domestic Abuse Services Choose2Change is our group programme designed to help people slop using abusive behaviour towards intimate partner or ex-partner and to increase the safety of women and children an REVIEW OF ACTIVITIES AND ACHIEVEMENTS Name Change from Relate Birmingham to Kapella. In January 2025, Family Action acquired Relate National's service delivery and the Relate Brand. In March 2025, we took the decision not to enter a new agreement with Family Action and to move away from the Relate Brand. Over the following 3 months we worked collaboratively with Family Action to have a managed exit process. with the focus on a smooth transition for staff, clients and stakeholders. On 30 June 2025 we officially rebranded as Kapella and this name change is reflected in these annual accounts and reports. During the year we have continued to provide services covering the area of Birmingham. Solihull, Wolverhampton. Dudley. Sandwell. Walsall and South Staffordshire. In line with our plans. we added more face-to-face counselling in our Birmingham centre and Sutton Coldfield premises and reopened our Wolverhampton centre part time in October 2024. We made more progress in building the management team, recruiting a full-time marketing and communications manager. part time children and young people's service lead and a full time Clinical Lead supervisor to oversee the quality and safety of our Counselling. We developed a marketing strategy. updated our website and materials and increased our presence on digital and social channels. During 2024-25, we delivered 9.165 hours of Servi￿ and 5UPPOrt. working directly with 2.650 adults. young people and children. and indirectly benefitting a further 1,487 children. Overall, we registered 1486 new cases and delivered 6643 hours of counselling and the ongoing strain on lationships and wellbeing is clear. Children and parenting difficulties were an issue for 410/0 of adults and Couples. Mental health was an issue for 34°/o and domestic abuse was an issue for 200/0. We believe services should be accessible to all. Many of our clients are on low incomes and 200/0 live in the most deprived areas. Concerns about work and money worries were the key issue for 29 /0 of self- referral clients. especially with the cost of living pressures. We have continued to provide a subsidised service for clients who need it and a full bursary to support parents with severe financial difficulties. This year. our subsidy rate is 430/9 on average. We also supported clients referred through national Relate benevolent funding for army, navy and RAF personnel and bank workers, as well as retail and licencing trade employees. Based on the pilot of a relationship support service to NHS staff affected by the cost of living, the service has been commissioned, and we su¢ces5fully bid for the first contract. We also provided counselling to patients with relationship and family issues referred by their GP. We also offered counselling in a residential unit for parents undergoing assessment. Our Time for You Service for children and young people underwent some changes this year. The SCVO funded project, providing counselling in 11 Sandwell schools. ended in December. as did the Sandwell CAMHS contract and this is reflected in the lower counselling activity. We have stsrted 2 new initiatives - Page 6 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limlted by guarantee) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 taking on 4 Community Wellbeing Practilioners and Think ADHD to provide checks, coaching and support for children. young people and their parents. Our Domestic Abuse Service continued to work in partnership with St Giles Trust, Black Country Women's Aid, the Police and Relate Coventry on the Pathways to Change project to pilot perpetrator interventions to Increase the safety of women and children. The pilot. fvnded by the OPCC, ended in March and a research paper will be published in 2025. Family Mediation continued to support separating or divorcing parents reach agreement about their finances. property and child contact and delivered online and face to face meetings. We provided the ICFA Servi￿ in our area, in partnership with Child Action North West. This service supports parents and children referred by CAFCASS to have safe and beneficial contact through lailored work plans and time-limited contact work. We also maintained our NACCC Accreditation. Analysis of Activity Year to Year to March 2024 Mar¢h 2025 10023 9165 3357 2650 2240 1486 Total units of work delivered: Total number of users Total number of new cases: Self Referrals 38•Jo of work Is self-referral. Number of New Cases Regislered Total Hours of Counselling Appointments Given 1114 3305 933 3511 Total Hours Service Given 3975 3570 Relationship Counselling Sex Therapy Children & Younq People's Counsellino Family Counselling Family Mediation Contracts and Commlssloned Services-. 840 5°/D 800/0 3Vo 4/0 62Yo of work is contract or commissioned. Total Hours Seryice Given 6048 5595 Primary CarelHealth Counselling CYP CAMHSISchoollProjecl CoLtnsellinq Residential Centre Counselling Child Contact Service Domestic AbLJse Behaviour Change Programme 110/0 61¥0 220/0 31Q 3/0 43% 10 26Y4 Page 7 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmlted by guarantee) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 Clients Infomiation 2650 adults, young people and children benefited directly from our services. 1487 children of adult clients benefited indirectly. Who We Worked With Couples Women Men Families Childrenlyoung People Where They live Bimiingham Solihull Sandwell South Staffs Walsall Dudley Wolverhampton Other 26% 26Yo 190 201. 270/0 38% 18¥ts 120/ Presenting Issue- Adultslcouples CommLinication Difticulties Children, Family, Parenting Work & Money Worries Separation and Divorce Sexual Pioblems Mental & Physical Health Affairs Domestic Abuse Inipacl of Past Relationships Bereavement Alcohol and Drug Misuse Sexual Abuse Caring Responsibilities 84% 4110 2911. 28% 22% 390/ 5% Ethnicity White Brilishllrishlother AsianlAsian Brib-sh BlacklAfiicaniCaribbeanlBlack Britssh Mixed1￿1￿[tip1e Elhnic Groups Other Not known 63/ 10Vo 5¥0 20tr/. 220/ 14% 11% Employment status- Adults Full Time Part Time Self Employed At Home On Benefit Retired Student 60°/v Relationship Status - Adults Marnedllcohabiting SeparatedlDivorced Single None Civil Partnership 72% 19% 5/0 4¢1. 2¥0 Summary Financial Information How We Funded Our Services 2024 2025 Donations and Grants Local Authority Client Contributions Grants & Contracts Education and Trainino Family Mediation Room Hire and Other Income 34,150 36.464 123.955 587,206 29,657 15,000 124.017 527,012 5,890 4,138 6,098 4,723 Average cost per counselling hour Averaqe client contribution per hour 56.38 28.16 56.54 31.92 Average subsidy made per client appointment On average we subsidised clients by 28.22 50D/o 24.62 430/. Page 8 KAPELLA (FORMERLY RELATE BIRMINGHAM) {A company limited by guarantee) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 FUTURE PLANS AND DEVELOPMENT This year we made significant progress. while going through a period of change and instsbility within Relate. We are now looking forward to building our new future as a fully independent charity. as we rebrand as Kapella from 30 June 2025. Our mission and values haven't changed and we will provide the same relationship and wellbeing services as before and with the same commitment to accessibility and affordability. This year our objective is to complete the rebrand and market our new identity, make progress on building the team and developing our infrastructure, and seek more contracts and funding to enable us to provide accessible services to more clients with mental heallh and wellbeing concerns, who are also facing higher living costs. We will continue to broaden our counselling offer and focus on developing Mediation and Family Contact services. In 2025126 our priorities are to.. Organisational Structure and Systems Develop the staff structure and recruil to identified roles to deliver the plan. Extend the opening hours at main centres and build a network of delivery venues. Update our booking and case management systems- including online booking. Manage leaving Relate and develop a new strategic plan for Kapella for 2026-2030. b) Senfice Delivery Increase face to face delivery of services. Develop Counselling services- individual, bereavement, one session, placements Develop Mediation and Family Contact services. Expand and strengthen the Domestic Abuse service. Focus on increasing contracts and funded delivery. Marketing & Income Generation Rebrand and relaunch as Kapella. including new website. Develop our digital media and marketing to increase our reach and client engagement. Increase grant income for our bursary and funded projects to support those in need. d) HR & Staff Development Regular communication and engagement during the rebrand and organisational Change. Increase HR support for staff recruitment and development. Update policies and procedures. Page 9 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmited by guarantee) TRUSTEES, REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 COMMON PURPOSE STATEMENT Kapella's distinctive focus is the adult couple, recognising the benefits of this focus to the mental, physical and emolional health of adults and children involved. This focus recognises different cultural understandings of marriage and other couple relationships. and encompasses work with the adults, together or on their own, at any time in the life or ending of their relationship, whether the couple wish to stay together or separate. Kapella aims to deliver its services with cultural sensitivity and without discrimination. Kapella's objectives are to enhance the quality of couple, parentsl and family relationships to help avoid unnecessary relationship and family breakdown to limit the damage which commonly accompanies poor relationships. separation and divorce and increase the prospect of subsequent relationships succeeding Kapella's tasks are to aim to achieve these objectives by the provision of relationship ¢ounselling. sex therapy. education, training and related services, which are timely. evaluated and offer equal access and opportunity to all who can benefit from them. to influence opinion formers and govemment, through research and other means, in order that improvements are made in funding. social policy and the law and related public services. Kapella's work is based in the beliefs that an individual's physical well-being and emotional and mental health benefit from a committed relationship that the ability of both children and adults to develop and contribute effectively in society is directly related to the quality of their family relationships. that since family relationships change, second and split parent, step-family and cohabiting partnerships are no less a focus for Kapella than first families. that expressing clear commitment is a helpful contribution to a healthy and secure couple relationship that the quality of couple and family relationships can be improved, avoidable breakdowns prevented, and new relationships formed with the help of a trained counsellor or practitioner. Page 10 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) TRUSTEES. REPORT (CONTINUED} FOR THE YEAR ENDED 31 MARCH 2025 FINANCIAL REVIEW The financial results of Kapella are detailed in the following pages. It is considered that the finances are sound and well established. The principal funding source is grant and contract income. followed by client contributions income and we have a diverse set of income streams. All expenditure of this income is planned to fulfil the objectives and strategies of the charity. During the year ended 31 March 2025 total income received was £706,507 and total resources expended were £730,464 giving deficit income over expenditure of £23,957. Compared to the previous year. income was lower due to the ending of grant funded project work and reduced Client income. Centre and staff costs increased due to the planned recruitment of new roles and in updating the healing system and premises. We plan to have a deficit budget in 2025-26 as we invest reserves in our infrastructure. marketing and recruiting new roles to generate income. The principal risks and uncertainties and the plans and strategies adopted to manage these risks are described in the risk management section of the report below. Investment powers and policy The trustees have invested surplus funds with CAF Bank. The invested funds achieved an average interest rate of 1.74 % which due to wider economic circumstances failed to achieve the rate of increase in the retail price index. Reserves policy and going concern The trustees consider that unrestricted funds should not exceed six months of resources expended. Unrestricted reserves amounted to £582.391 {2024 - £603,492). Current reserves are Gonsidered to be at a reasonable level as resources expended for the next six months are expected to be £458.843. The Trustees have reviewed the Charitvs need for reserves in line with guidance issued by the Charity Commission. Holding reserves allows the Charity to protect itself against any financial uncertainties, be able to operate despite gaps in funding income and provides a safeguard for the Charity's service commitments. The reserves of the Charity have been divided where appropriate into restricted, designated and general funds in accordance with charity legislation. Restricted Funds The restricted fijnd represents money given to Kapella for specific capitsl or project work. Our current restfl¢ted reserves are £391.440 and they include: The current value of the Bishopsgate Street property, which was purchased with a Community Fund grant of £330,238 in December 2001 and depreciates each year. This property was revalued at £250.000 in 2015. The Wolverhampton property, which was acquired in June 2014 at a value of £170,000. Unrestricted Funds The trustees, policy in respect of the monies held in the general fund is influenced by: Forecast levels of income in the ensuing year., Forecast expenditure in the ensuing year on the basis of planned activity. Funds designated for specific purposes,. and An analysis of any future needs, opportunities, contingen¢Se5 or risks, the effects of which are not likely to be met from planned expenditure. Page11 KAPELLA (FORMERLY RELATE BIRMINGHAMI (A company limlted by guarantee) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 Risk Management The Trustees have a risk management process which comprises.. An annual review of the principal risks and uncertainties that the Charity faces. The establishment of policies, systems and procedures to mitigate those risks identified in the annual review. The implementation of prO￿dureS designed to minimise any potential impact on the Charity should those risks materialise. This work has identified that financial sustainability is the major financial risk for the charity. Key elements in the management of financial risk are a regular review of available liquid funds to settle debts as they fall due, regular liaison with the bank, and active management of operational debtor and creditor balances to ensure sufficient working capital by the Trust. Attention has also been focussed on non-financial risks arising from fire, health and safety. employrnent matters and data protection. These risks are managed by ensuring accreditation is up to date. having robust policies in place. and regular awareness training for staff working in these operational areas. Trustees. responsibilities in relation to the financial statements The charity trustees (who are also the directors of the charitable company for the purposes 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 stste of affairs of the charitable company and of its incoming resources and application of resources, including its income and expenditure for that period. 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 SQRP- make judgements and accounting estimales that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departure5 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 charitable company will continue in business. The trustees are responsible for keeping proper accounting records that disc105e with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the finanGial statements comply with Ihe Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking raasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the ￿rpOrate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dlssemination of financial statements may differ from legislation in other jurisdictions. Page 12 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Accounting pollcles (Continued) 2.3 Income All income is recognised once the charitable company has entitlement to the income, it is probable that the income will be received and the amount of income re￿1vable can be measured reliably. Grant receivable Grants are included in the Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relavant funds on the Balance Sheet. Where income is received in advance of entitlement of receipt. its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued. Donations Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. If there are conditions attached to the donation and this requires a level of performance before entitlement can be obtained then income is deferred until those conditions are fully met or the fulfillment of those conditions is within the control of the charity and it is probable that they will be fulfilled. Donated services and gifts in kind Donated facilities and donated professional services are recognised in income at their fair value when their economic benefit is probable. it can be measured reliably and the charily has control over the item. Fair value is determined on the basis of the value of Ihe gift to the charity. For example. the amount the charity would be willing to pay in the open market for such facilities and services. A corresponding amount is recognised in expenditure. Gifts in kind Fixed asset gifts in kind are recognised when receivable and are included at fair value. They are not deferred over the life of the asset. Other income Other income, including the hire of facilities. is recognised in the period it is receivable and to the extent the goods have been provided or on completion of the service. 2.4 Expenditure All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or Constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably. It is categorised under the following headings: Costs of generatlng funds These are costs incurred in attracting voluntary income. and those incurred in trading activities that raise funds. Charltable actlvities These are costs incurred in activities undertaken to further the purposes of the charity and their associated support costs. Page 22 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limlted by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Accounting pollcles (continued) 2.4 Expenditure (continued) Governance Costs These include the costs attributsble to the charivs compliance with constitutional and statutory requirements. including audit, strategic management and trustees, meetings and reimbursed expenses. Allocation of support costs Support costs are those that assist the work of the Charity but do not directly represent charitable activities and include office costs, governance costs and administrative payroll costs. Where support costs cannot be directly attributed to particular headings they have been allocated to cost of raising funds and expenditure on charitable activities on a basis consistent with the use of resources. Irrecoverable VAT is charged as an expense against the activity for which expenditure arose. 2.5 Interest receivable Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charitable company,. this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited. 2.6 Taxation The charitable company is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charitable company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. 2.7 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impaimient losses. Cost includes costs .directly attributable to making the asset capable of operating as intended. Depreciation is charged so as to allocate the cost of tangible fixed a55ets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following bases- Freehold property Fixtures and fittings 200/0 per annum 2.8 Investments Surplus cash over and above what is considered necessary as working capital is invested in low to medium risk assets. Such assgts must be diversified and may include cash if it is considered prudent. The object is to maintain value and keep pace with inflation while providing income for the use of the charity where possible. At the same time holding such funds for future capital expgnditure as necessary. Page 23 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Accountlng policies (continued) 2.9 Debtors Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. 2.10 Cash at bank and in hand Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. 2.11 Llabilities and provlslons Liabilities are recognised when there is an obligation at the Balan￿ sheet date as a result of a past event. it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement Can be estimated reliably. Liabilities are recognised at the amount that the charitable company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts. discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of Financial Activities as a finance cost. 2.12 Financial instruments The charitable company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the ex￿ptIOn of bank loans which are subsequently measured at amortised cost using the effective interest melhod. 2.13 Operating leases Rentals paid under operating leases are charged to the Statement of financial activitl8s on a straight- line basis over the lease term. 2.14 Pensions The charitable company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Charitable company to Ihe fund in respect of the year. 2.15 Fund accountlng Unrestricted funds are available to spend on activities thal further any of the purposes of the charity. Designated funds are unrestricted funds of the charity whiGh the trustees have decided at their discretion lo set aside to use for a specific purpose. Restricted funds are donations which the donor has specified are to be solely used for particular areas of the trust's work or for specific projects being undertaken by the trust. Investment income, gains and losse5 are allocated to the appropriate fund. Page 24 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Income from donatlons and legacies Unrestricted funds 2025 Restricted funds 2025 Total funds 2025 Total funds 2024 Donations 13,492 16.165 29,657 34,150 Total 2024 10.700 23,450 34,150 Income from charitable activities Unrestricted funds 2025 Restricted funds 2025 Total funds 2025 Total funds 2024 Counselling services Grants and contracts 130,115 140.439 130,115 542.012 129.845 599,644 401.573 270,554 401,573 672.127 729.489 Total 2024 491.196 238.293 729.489 Investment Income Unrestricted funds 2025 Total funds 2025 Total funds 2024 Deposit account interest 4,723 4,723 4,091 Page 25 KAPELLA {FORMERLY RELATE BIRMINGHAM} {A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Analysis of expenditure on charitable actlvities Summary by fund type Unrestricted funds 2025 Restricted funds 2025 Total 2025 Total 2024 Counselling services 273.885 420.594 694,479 579,147 Total 2024 314,548 264.599 579.147 Analysis of expenditure by activities Activities undertaken directly 2025 Support costs 2025 Total fund5 2025 Total funds 2024 Counselling services 335,669 358.810 694,479 579,147 Total 2024 289,172 289,975 579.147 Analysls of direct costs Counselling services 2025 Total funds 2025 Total funds 2024 Staff costs Invoiced supplies Training Volunteer expenses Bad debts 288.117 39,810 4,513 520 2.709 288.117 39.810 4.513 520 2,709 215,445 69.452 3.872 403 335,669 335,669 289,172 Total expenditure on charitable activities was £694,479 {2024 £579,147) of whiGh £273,885 (2024 £314.548) was unrestricted and £420.594 (2024 - £264.599) was restricted. Page 26 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmlted by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Analysls of expenditure by activlties (continued) Analysis of support costs Counselling services 2025 Total funds 2025 Total funds 2024 Staff costs Depreciation Training and recruitment Premises costs Insurance General office costs Legal and other professional Bank Gharges Govemance costs 243,468 4,114 267 31,694 9,761 32,130 256 3.600 33,520 243,468 4,114 267 31.694 9,761 32,130 256 3,600 33.520 187,042 4,103 8,915 15,611 11,625 21,822 3,180 37,677 358.810 358.810 289.975 The allocation of general support and govemance costs is based upon Counselling and Educational income as a per¢enlage of total income received. Net expenditure for the year 2025 2024 Net expenditure is stated after Charging Fees payable to the charitable company's auditor for the audit of the charitable companvs annual accounts 3,450 3,433 Depreciation of tangible fixed assets Operating lease rentals- Premises Operatlng lease rentals - Office equipment 4,114 4,448 4.103 6.000 1,823 Page 27 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company Ilmited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 Staff costs 2025 2024 Wages and salaries Social security costs Pension costs 485,275 37,406 8.904 375.465 20,462 6,560 531.585 402.487 The average number of persons employed by the charitable company during the year was as follows.. 2025 2024 Delivery staff Support staff 35 35 44 43 The average headcount expressed as full-time equivalents was: 2025 No. 2024 No. Delivery staff Support staff 15 12 22 18 The number of employees whose employee benefits (excluding employer pension costs) exceeded £60.000 was: 2025 2024 In the band £60.001- £70,000 The charity considers its key management personnel comprise the Chief Executive and Service Manager. The total amount of employee benefits received by key management personnel was £110.621 (2024- £100.224). Page 28 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 10. Trustees. remuneratlon and expenses During the year. no Trustees received any remuneration or other benefits {2024 - £NIL). During the year ended 31 March 2025, expenses were reimbursed or paid directly to no Trustee (2024 - to 1 Trustee) broken down as follows: 2025 2024 Travel 41 11. Tangible fixed assets Freehold Fixtures and property fittings Total Cost or valuation At 1 April 2024 Additions 420.000 55.934 2,563 475,934 2,563 At 31 March 2025 420,000 58.497 478,497 Depreciation At 1 April 2024 Charge for the year 25,704 2,856 52,770 1,258 78.474 4,114 At 31 March 2025 28.560 54.028 82,588 Net book value At 31 March 2025 391.440 4.489 395,909 At 31 March 2024 394,296 3,164 397,460 Page 29 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limlted by guarantee} NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 12. Debtors 2025 2024 Due within one year Trade debtors Prepayments and accrued income 101,686 71.723 159,470 15,436 173,409 174,906 13. Creditors: Amounts falling due withln one year 2025 2024 Trade creditors Other taxation and social security other creditors Accruals and deferred income 26,212 11,225 28,057 38.714 23,303 6,910 28,761 123.171 104,208 182,145 2025 2024 Deferred income Deferred income at 1 April 2024 Resources deferred during the year Amounts released from previous periods 113,313 200.213 20,278 88,739 (104.904) {175,639) 28,687 113.313 At the balance sheet date the charity was holding funds received in advance where the qualifying expenditure is expected to be incurred in a future year. Page 30 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limlted by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 14. Summary of funds Summary of funds - Current year Balance at 31 March 2025 Balance at 1 April 2024 Income Expenditure General funds Restricted funds 603,492 394,296 288,769 417,738 {309,870) (420,594) 582.391 391.440 997.788 706,507 (730.464) 973,831 Summary of funds - prlor year Balance at 31 March 2024 Balance at 1 April 2023 Income Expenditure General funds Restricted funds 437,432 397.152 506.035 261,743 (339,975) (264,599) 603,492 394,296 834,584 767.778 (604,574) 997.788 Restricted general fund Money given to the charity where the donor requires that a grant or donation be spent for a specific project. Unrestricted general fund The free reserves of the charity which are not designated for particular purposes. Page 31 KAPELLA (FORMERLY RELATE BIRMINGHAM) {A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 15. Analysis of net assets between funds Analysis of net assets between funds - current year Unrestricted funds 2025 Restricted funds 2025 Total funds 2025 Tangible fixed assets CUr￿nt assets Creditors due within one year 4,469 682,130 (104,208) 391.440 395.909 682.130 (104,208) Total 582,391 391,440 973.831 Analysis of net assets between funds - prior year Unrestricted funds 2024 Restricted funds 2024 Total funds 2024 Tangible fixed assets Current assets Creditors due within one year 3,164 782,473 1182,145) 394,296 397,460 782,473 (182.145) Total 603.492 394.296 997,788 16. Reconciliatlon of net movement in funds to net cash flow from operating activities 2025 2024 Net incomelexpenditure for the year (as per Statement of Financial Activities) (23.957) 163,204 Adjustments for: Depreciation charges Decreasel(in¢rea5e) in debtors Decrease in creditors Interest receivable 4,114 1.418 (77.858) (4.723) 4,103 {22,981) (63.937) (4,091) Net cash provlded byl{used in) operating activities (101,006) 76.298 Page 32 KAPELLA (FORMERLY RELATE BIRMINGHAM) (A company limited by guarantee) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 17. Analysis of cash and cash equivalents 2025 2024 Cash in hand 508,721 607.567 Total cash and cash equivalents 508.721 607,567 18. Analysis of changes in net debt At 1 April 2024 Cash flows At 31 March 2025 Cash at bank and in hand 607,567 (98,846) 508,721 607.567 {98,846) 508.721 19. Operating lease commitments At 31 March 2025 the charitable company had commitments to make future minimum lease payments under non-cancellable operating leases as follows.. 2025 2024 Land and buildings Not later than 1 year 4.000 20. Related party transactions The charitable company has not entered into any related paty transaction during the year, nor are there any outstanding balances owing between related parties and the charitable company at 31 March 2025. 21. Post balance sheet events - Federation exit and name change Following the administration and Subsequent takeover of the Relate National Federation. Relate Birmingham took the decision to exit the federation. The transition was completed on 1 July 2025, at which point the charity began operating entirely independently under the new name Kapella. The trustees do not Consider this to require any adjustment to the financial statement5 for the year ended 31 March 2025. Page 33 KAPELLA LTD (FORMERLY RELATE BIRMINGHAM) {A company limited by guarantee) Trusts and Donations YEAR ENDING 31 MARCH 2025 Thank you to the following funders who have supported us this year: Donations CB & HH Taylor 1984 Trust Charles Brotherton Trust Jabbs Foundation Roger & Douglas Turner Trust William A Cadbury Charitable Trust Other personal donations M Levesley Grants Wa15all MBC SCVO Page 34