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← Valleys Kids

2025-03-31-accounts

REGISTERED COMPANY NUMBER: 03717865 (England and Wales) REGISTERED CHARITY NUMBER: 1074840

REPORT OF THE TRUSTEES AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2025

FOR

VALLEYS KIDS

Bevan Buckland LLP (Statutory Auditors) Ground Floor Cardigan House Castle Court Swansea Enterprise Park Swansea SA7 9LA

VALLEYS KIDS

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

Page
Report of the Trustees 1 to 20
Report of the Independent Auditors 21 to 24
Statement of Financial Activities 25
Balance Sheet 26
Cash Flow Statement 28
Notes to the Cash Flow Statement 29
Notes to the Financial Statements 30 to 46

VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2025. The trustees have adopted the provisions of 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).

Summary Report

The full report presents a comprehensive and honest assessment of the charity’s financial challenges and the rigorous actions taken through our Transformation Business Plan (TBP).

Financial Position and Transparency

Valleys Kids continues to face severe financial challenges, despite considerable operational changes. Key financial realities include:

Immediate Risks

Despite strategic planning and cost reductions, the financial forecast reveals continued instability:

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Transformation Business Plan (TBP)

The TBP (focusing on People, Property, Income Generation, and Service Provision) has provided us with a structured approach and implementation has been monitored closely. However, full implementation at strategic and operational levels is ongoing and risk remains high.

TBP
Strand		 Actions Taken/Planned Critique
People Implemented a small, targeted redundancy programme This has created a smaller, more
(compulsory and voluntary), reduced hours, and a policy of connected leadership team and a
only backfilling critical or funded roles. Total annual savings strongly motivated workforce,
of £72k were realised through a Q1/2025 redundancy delivering services to a high
programme. standard. Further reconfiguration of
services will have an impact upon
staff numbers. Work to clarify roles
and responsibilities in the light of
downsizing is underway. We are
implementing a skills and capacity
analysis to determine next steps.
Property Divested three non-core properties (Bute St, Tylacelyn Rd, We remain aware that property
and the Library), resulting in a net cash injection of £282k in divestment is not income
FY 24/25, with the sale of Cross Street completed. Lease generation but rather "liquidating
termination on Rhydyfelin Community Centre saved £26k reserves," thereby reducing overall
annually. Divestment of Little Bryn Gwyn (valued over £1m) balance sheet stability.
completed August 2025. Furthermore, future property
divestment is more difficult as
remaining properties are core to
service delivery and achieving
income potential.
Income Secured £100,000 of unrestricted investment from the The target for donations is currently
Generation Waterloo Foundation toward core costs and income minimal (£20k), suggesting
generation. Working with Manchester Business School to untapped potential, with a
design a new marketing strategy. Identified significant suggested target being 10% of
potential in utilising current remaining property assets (under
income (£100k). The success of the
occupied @£34k) with a potential income of £80k. recovery plan hinges on rapidly
building income-generating
capability to fill the funding gap.
Service Reduced physical footprint by focusing delivery within fewer Our commitment is to protect
Provision hubs (two Community and Family Hubs now remain). services notwithstanding a leaner
Adopted a flexible model using sessional workers for operational base by focusing
specialist projects. Launched new initiatives like Penny resources where they deliver the
Farthings café. "greatest benefit". The reduction
from four hubs to two represents a
significant cut in physical presence
but this has been offset by focusing
on impact and achieving targets for
participation.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Service Delivery Operational Highlights

Despite the profound financial difficulties, we can highlight numerous achievements that demonstrate continued commitment to the charity’s mission.

Viability Considerations

The full Trustees report describes our detailed roadmap for securing the charity’s future but also the severe existential nature of the current situation. The immediate reliance on external short-term funding and the large VAT liability present acute liquidity risks.

The trustees have a clear set of emergency options if critical external funding (such as the WCVA loan) is not approved. These options include exploring alternative loans, controlled wind-down and voluntary liquidation, or forced liquidation if the organisation is becoming insolvent. This framework serves as a sober reminder that, while the transformation plan is in place and actions have been taken, our "going concern" status remains precarious, depending heavily on the successful implementation of the Transformation Business Plan strategies and favourable external financing decisions.

In summary, continuing deficits have put us in jeopardy and made us dependent on external financial support. However, actions such as oswever, property sales, redundancies, service configuration, costs reduction and better financial management have enabled us to stay afloat. Key stakeholders such as the bank and the local authority have demonstrated confidence by providing ongoing, concrete support. We now need to time to implement plans for increasing income generation and financial management capacity.

THE FULL REPORT

The trustees, who are also directors of the charity for the purposes of the Companies Act 2006, present their report together with the consolidated financial statements of the group for the year ended 31 March 2025. The trustees have adopted the provisions of 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).

AIMS, OBJECTIVES AND ACTIVITIES

The charity’s objectives are:

To provide and assist in the provision of facilities and services for education, play, arts, recreation, and other leisure time occupation to residents of South Wales, targeting those in need because of youth, poverty, or social and economic circumstances, thereby improving their physical, mental, and spiritual well-being. Valleys Kids meets these objectives by continually adapting its community support projects to the changing needs of the community.

Public Benefit

The trustees confirm that they have complied with the duty in Section 17 of the Charities Act 2011 (i.e., to have due regard to public benefit guidance published by the Charity Commission). Our objectives and our work provide benefit to the public. All our work takes place in areas experiencing social disadvantage and we provide our core activities free of charge. While focusing on those most in need, the facilities are open to everyone in the areas we serve and provide substantial benefit to the children and families who participate, as demonstrated in this report.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Our Principles

We operate under the following principles.

1. Every child is Valued

Every child deserves the best start in life; this is the aim of our pre-school provision. Because we believe that play has a key role in the development and well-being of children, providing out-of-school play opportunities has been one of our commitments from the beginning. Valleys Kids' play services offer exciting opportunities for children to experiment and help them grow. Most importantly, all our play is about children having fun and discovering they can do many different things.

2. Everyone matters

In pursuit of our commitment to place-based community development, Valleys Kids Community and Family Hubs welcome everyone who wants to attend local facilities that offer pre-school, play, youth or adult services and activities. We also provide time-limited, targeted provision which helps people to deal with particular issues, problems or needs.

Often these important programmes are supplemented by continued support available through open access provision. Nobody should be left behind.

3. Everyone has potential.

Our role is to enable people of all ages to believe in themselves, grow in confidence and realise their ambitions. We take considerable pride in creating the many pathways to increased well-being and achievements needed by people of all ages in all our communities. This can range from a young person getting re-engaged in education and succeeding in school/college/university, training and employment to an isolated older person taking advantage of opportunities to socialise, getting involved in arts and acting as a volunteer. Our Youth Work is about helping young people face up to the challenges in their lives and to seek solutions. Valleys Kids' aim is to provide for all young people but with a commitment to engage the most challenging and challenged. To do this, we create situations where young people want to participate, places which they feel belong to them and which are warm, welcoming and friendly spaces staffed by quality youth workers. In-depth youth work happens when young people feel comfortable and able to develop relationships with trusted adults.

ACTIVITIES

For nearly fifty years, Valleys Kids has worked in communities in the South Wales Valleys, supporting people to grow in self-confidence, improving their skills and knowledge and encouraging them to have high aspirations and high expectations to achieve their potential. We now have two Community and Family Hubs in disadvantaged communities where activities and services are provided for all ages, from babies to those over ninety. We have also developed a Hub for the Arts and Cultural Industries so that the people from Valleys communities can gain the skills and knowledge which will enable them to secure employment in this growing industry in Wales. The Family Team provides targeted services for the most disadvantaged families. We are developing the social enterprise of Valleys Creative through the Play Yard, Coffee Shops and The Factory. Our Arts programme through Sparc continues to thrive with the inclusion of visual arts.

Operational Highlights and Impact (FY 24-25)

Despite significant organisational changes this year, we have maintained a comprehensive programme of support, engaging people across all age groups. Key achievements include:

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

The progress made

Grant funding received in the year has been instrumental in enabling us to deliver strategic initiatives as well as a wide range of support services and creative projects that meet the needs of children, young people, and families across our communities.

We have continued to deliver a varied programme of activities this year, albeit from a smaller number of locations. These activities have engaged people from all sections of the community, from parent and toddler groups to older people’s programmes, helping individuals build connections and a strong sense of belonging.

These are just a few highlights from a wide-ranging programme.

The number of people we worked with in the past year

----- Start of picture text -----
Activity Unique visitors Sessions Total visits
Babies and toddlers 85 30 333
Children and young people 287 192 3937
Adults 107 75 463
Older adults 57 100 841
Partner organisations 148 336 1496
TOTAL 684 733 7070
----- End of picture text -----

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

What we are especially proud of

Significant changes in the organisation

What we did not achieve and why

What we learned this year

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

Valleys Kids is a registered charity and is a company limited by guarantee, incorporated in 1999, governed by its Memorandum and Articles of Association.

Valleys Kids' mission is to work with and support people living in disadvantaged communities enabling them to realise their potential. The people we work with are involved in shaping the services we provide. Our centres provide a welcoming atmosphere, are not judgmental and operate open access activities free at the point of access. We offer targeted activities including activities for adults, parenting, youth programmes and provide challenging activities enabling people to explore their lives and see that they have potential, that they can change and improve the quality of their lives and of the communities where they live. We consult with our local people in a variety of ways to ensure that our activities and services meet the needs of the communities. We continually explore diverse ways and methods of working to ensure that we offer the best opportunities to people.

The charity has a trading subsidiary, Valleys Creative Limited, which undertakes all non-charitable trading activity.

Organisational structure

Members of the Board of Trustees are also the directors of the company. They are responsible for overseeing the management of all the affairs of Valleys Kids. They are subject to fixed-term appointments and election or re-election according to procedures set out in our Memorandum and Articles of Association. Working groups are established to undertake specific pieces of work.

New trustees take part in an induction to the charity that includes meetings with staff and existing trustees. They are provided with a history of the charity and copies of the Charity Commission's Guidance for Trustees.

The Board seeks to ensure that all activities are within UK law and come within agreed charitable objectives. Its work includes setting strategic direction and agreeing the financial plan. The Board acts on advice and information from regular meetings with the senior managers. Decisions made at other levels of the organisation are reported to the Board. Where appropriate, Trustees are able to take independent professional advice.

The Board is looking to put in place a three-year strategic plan with the following sections:

This will be supplemented by an 18-month operational plan to take forward the work.

Equal opportunities

Valleys Kids is committed to the principle and practice of Equal Opportunities. Our activities are open to all, and we take every opportunity to integrate those with disabilities within our everyday work. We aim to be an equal opportunities employer and seek to ensure that all staff receive equal treatment. Policies and procedures are in place for Child Protection, Whistle Blowing and Health and Safety.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Key management remuneration

Valleys Kids aligns its pay structure with legislative requirements.

Financial Report

This report outlines the current financial challenges facing Valleys Kids and our response to those challenges. It reflects a belief shared by the charity and significant stakeholders that the long-term future of Valleys Kids can be secured through a slimmed down organisation with a smaller but still highly skilled workforce and a more focused property portfolio, together with better business planning and strict financial discipline.

This update is a compressed version of the detailed plan which now underpins our programme of change. It sets out the factors which led to the current position, the journey and actions taken so far, and the plans in place to provide a more secure future. It describes how we intend to transform the financial position of Valleys Kids through combined measures that include:

It does not include information about the history and services we have provided to communities; this story is told very well elsewhere. Similarly, it does not attempt to demonstrate at length the strength of feeling in the community about the valued contribution Valleys Kids has made changing lives. The Covid 19 Impact Report, attendance at a series of public meetings and a petition signed by over 800 people locally in support of Valleys Kids are all testament to the high regard in which the Charity is held.

The plan incorporates advice from an independent financial report provided by FRP Advisory Trading Ltd which sets out options and recommendations that trustees and the Senior Management Team have taken on board as the best approach to resolving the current difficulties. It refers to the Watershed Group which was set up in July 2023 in response to signals that the charity would be facing a financial crisis.

The main purpose of the group is to manage Valleys Kids through the current situation and to devise a plan for navigating the immediate cash shortfall and to prepare/implement actions that will secure the long-term future of the charity. Comprising the Senior Executive Team and various trustees and board members, the Watershed Group meets regularly.

To continue acting as an integral pillar of support for the communities it serves, Valleys Kids needs to change substantially. Securing support from its three main long-term sponsors and other stakeholders in providing short, medium and long long-term finance will be crucial in ensuring that the Transformation Business Plan succeeds. The measures being taken to increase income, dispose of property and reduce costs lead us to conclude that:

Valleys Kids Senior Leadership Team and the Trustees/Directors are committed to securing the viability of Valleys Kids by carrying out the actions proposed in this plan and to bringing about change, however difficult the task. In addressing the current challenges, all three key business sponsors and other long-term partners and stakeholders have provided considerable support for our own efforts.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

The Current Financial Position

Between 2016-2021, Valleys Kids was able to generate over £2m in income annually (including a significant contribution from funding for capital projects). The years 2022/3 and 2023/4 saw the financial position significantly deteriorate with cumulative deficits of £1m.

Decreases in grant income and inflationary cost increases contributed to the £580k net deficit in FY23/24, during which time cash reserves of £355k were used to support the organisation. During 2024, while the recovery plan was being actioned, running costs of the Charity were supported by a monthly renewable overdraft facility from Unity Bank of £140k.

As part of a “lessons learnt" exercise, the Watershed Group has analysed the factors that led to this deterioration in the financial position.

The result was a considerable cash flow crisis. As outlined earlier, our response to the immediate funding gap was to secure an overdraft facility with Unity Trust Bank and to set up the Watershed Group tasked with designing and implementing an interim Transition Business plan to resolve the crisis.It was apparent that urgent and tough decisions were required about the levels of service Valleys Kids could provide to the

community, the way we resource the organisation and how we manage our property portfolio. To date, deficits have been funded by:

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

These measures were designed to be short-term solutions, but they have given us time to design robust plans for the short-, medium- and long-term sustainability of the charity and to begin implementing a Transformation Business Plan that would bring about substantial change for Valleys Kids.

We recognise the amount of work still needing to be done and we will continue to work closely with stakeholders to maintain strong relationships moving forward.

The Transformation Business Plan

To design and implement the Transformation Business Plan, it was clear that the Watershed Group would need timely and accurate financial information to assist with good planning and decision-making. With the help of the Finance Team at RCTCBC and FRP Advisory Trading, the charity now has a much clear view of current and future cash flow projections. The engagement of a professional accountant to prepare these reports has been invaluable. The Watershed Group reviews weekly the reports. Provision for the cost of permanent financial expertise support is included in the request for longer-term financial support, as referenced in the Executive Summary.

In addition to achieving timely and accurate reporting, the Transformation Business Plan focused on four main areas that are essential to overcoming the current cash flow challenges and securing the long-term future of the charity: People; Property; Income Generation and Cost Control; Service Provision. There is an action plan for each strand.

People

People are the biggest expense to the charity, with an average monthly cost of £75k from April to September 2023 but falling to £60k post introduction of a compulsory redundancy programme. A full assessment of the people portfolio was undertaken with specific consideration given to the skills needed for a future streamlined and effective organisation. Various steps were introduced to reduce staff costs. These included:

Further savings have been realised through a voluntary and compulsory Redundancy Programme in Q1/2025 – Total annual savings £72k.

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REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

The table below demonstrates the fall in staff costs because of measures taken since January 2021.

Comments:

Wages peaked in 1st half 2022 at £112,000 monthly average*

Dinas, Future Families, Parenting support and Sparc projects are main drivers of increase

Wages have been steadily reducing since Jan 2023 through natural wastage and voluntary redundancies

Total wages reduction has been £56,000 average per month, or a reduction to half of what it was in 1st half of 2022.

*Monthly averages have been used per quarter as wages fluctuate month on month due to 4 week v 5 week months, overtime etc

Graph does not include Fundraising new hire(s)

Year on year savings realised through the reduction programme

2022-23 15,084.63 2023-24 157,320.75 2024-25 127,631.96 2025-26 111,373.74 411,411.08

*Monthly averages have been used per quarter as wages fluctuate month on month due to 4 week v 5 week months, overtime etc.

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REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Property

A Property Sub-Group was established to assess the current property portfolio and identify which properties were deemed core to the service provision of Valleys Kids. A plan was then drawn up for the disposal of all non-core properties.

Part of the advice given by FRP Advisory Trading was to divest all non-core assets in the property portfolio. In effect, the charity was asset rich but cash lean. In February 2024, it was identified that four of the seven properties could be put on the market without a detrimental impact on the provision of services. Valleys Kids has sold three of these (Bute St, Tylacelyn Rd and the Library, bringing a net cash injection of £282k this financial year). The sale of Cross Street In June 2025 contributed a further cash injection of circa £140k. Little Bryn Gwyn was sold for £1m in August 2025. This has enabled Valleys Kids to clear the business loan and overdraft facilities and generate operational savings of £100k between operating costs and financing of debt.

In January 2024, the lease on Rhydyfelin Community Centre was terminated early, saving £26k p.a. in rental and servicing costs.

Income Generation and Cost Control

Historically, Valleys Kids has been highly successful in its fund-raising efforts, with over £1m secured in 2023. However, because of the factors referred to earlier in this report, it has become evident that a new approach is needed to generate sufficient income and control costs effectively. The way we manage, spend, co-ordinate and approve grant and funding applications are all in the process of change. We have focused on securing longer term grant funding, which, while the grant funding for 24-25 has reduced compared to budget, has secured over £1 million in grant funding over the next three years.

In addition to the appointment of a Financial Controller referred to previously in this section of the report, we have recently secured £100,000 of unrestricted investment from Waterloo Foundation towards core costs, including an income generation function to identify, apply for and secure investment from independent, private, public and other funding bodies.

As the competition for limited funds is becoming tougher, marketing and evidence of positive outcomes are becoming increasingly important. How we sell the ambition of Valleys Kids and the impact it has on individuals and communities are critical factors in securing funds.

Valleys Kids has fostered a good working relationship with Manchester Business School which for the past three years has conducted annually a Not-for-Profit project on our behalf. In Q4 of last calendar year, they delivered a marketing strategy and specifically make recommendations about to whom who we should be applying for funds and how we should conduct this programme. This service comes free of charge but is estimated to be worth £10k- £100k in consultancy fees. This year they are reporting on commercial opportunities for the Factory.

Valleys Kids is nearly two years into a three-year budget recovery plan.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Valleys Kids

Forecast Income and Expenditure

INCOME Current Year
Category 25-26 26-27
Grant Income
Sales Receipts
Donations
Rental / VH Income		 554,588
41,863
25,762
98,048		 652,062
33,141
40,000
103,719
Valleys Creative
Miscellaneous
Interest Earned
Additional Income generation
Property
Loan Drawdown		 157,700
433
437
-
1,136,968
100,000		 180,147
-
-
100,000
450,000
50,000
2,115,801 1,609,069
OVERHEADS
Category 25-26 26-27
Property
Supplies & Services
Project Costs
External Support
Training
People / staffing		 575,250
29,771
145,798
25,680
1,392
757,794		 215,232
30,573
92,000
35,999
2,000
713,551
Servicing Debt
Capital Projects		 441,186
484		 170,489
23,750
1,977,355 1,283,594
Cash Position 25-26 26-27
Opening Cash in bank
Cashflow
Balance sheet movement
Cash at end of Year		 (124,157)
138,446
(7,585)
**6,704 **		 6,704
325,475
-
**332,179 **

Service Provision

The Service Redesign strand looks at areas for which there is confirmed funding. It assesses where and how the services we provide the community needs to change in adapting to a new environment which initially involves lower staffing numbers, less funding and fewer properties. The action plan considers how we can best protect services delivered to the community, how we can maximise the contribution from our very skilled complement of staff and from volunteers.

While the transformation business plan was evolving, a new management structure was put in place that included posts of Chief Executive Officer, Chief Operating Officer and two further Director posts which has helped to clarify designated areas of responsibility.

The following information has been put together to support the future forecasting and demonstrate the shift in income generation needed going forward. Forecasting has been undertaken for a 3-5 year period and realistic, optimistic and pessimistic scenarios have been developed.

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REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Valleys Kids Forecast Notes

Notes to assist with the interpretation of the financial forecasts

General Assumptions

Foremost the forecast is a cashflow forecast, as such the working assumption is that all income and expenditure is on a cash basis. There is no attempt to adjust for timing between Commitment of expenditure and payment.

As such, while there are balance sheet movements built in these are to accommodate timing and to reconcile the forecast with the financial statements which include non cash items such as provisions and depreciation.

Forecast Growth

Valleys Kids is going through a transformation in structure and operations. The organisation has successfully downsized the property portfolio and reduced the workforce to a level needed to deliver the services and impact at a sustainable level

"The forecast is deliberately modest in terms of projected increases in income as it is better to take small steps and succeed.

Also steady moderate growth is desirable. If the organisations forecast growth were too rapid there would be a danger that potential funders may perceive their funding as building reserves rather than delivering outcomes."

"The business as usual is based on historical performance, with costs more closely aligned to the grant delivery commitments than has previously been the case.

Additionally there is a 10% across the board reduction in forecast income to stress the targets and determine the outcomes if income generation falls short of target. This is reflected in the forecast cash position."

The early drawdown of the loan tranches will help to facilitate a cash positive year end position, which is important when applying to grant funders as this is a key metric alongside Valleys Kids proven ability to deliver on project outcomes.

Target Rental / VH Income

Venue hire targets

Based on 50% Utilisation and charity published rates potential income of £ 79,800 Existing forecast income from remaining properties £ 33,677 Therefore there is a potential increase in income of £ 46,123

However - need to monitor and understand the current internal use as well as potential external hire to ascertain the true potential increase in income.

Have suggested using a booking system to monitor use and control room hire as well as automate the charging of external room hire

As Valleys Creative is currently using a booking system it makes sense to use this for Valleys Kids also as there is familiarity and confidence in how it works.

Current **Optimistic ** **Optimistic ** Pessimistic Pessimistic
The Annual forecast is therefore downgraded from the potential above to: 38,588 46,305 19,294
20% -50%
Potential property income therefore £ 72,265
 £ 79,982
 £ 52,971

Revenue recognition

For each site, where Rent / Venue hire is greater that the original budget for 25-26 this will be shown as target rental / venue hire income. This will help to demonstrate and recognise where gains have been achieved.

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REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Service Redesign

Incremental increase in chargeable services. Mainly utilising current Family Team expertise and staff capacity alongside existing services

Current Optimistic Pessimistic 10,000 12,000 8,000 20% -20%

Service redesign also covers redefining how existing and future services are delivered. This is explored in the operational plan and is expected to be cost neutral.

Income Generation

Increase in Fundraising and Donations through fundraising initiatives and Business development opportunities. Fundraising team comprising of existing Grant Officer plus Fundraiser(s) The existing grant officer is included in existing operational budget

Officer plus Fundraiser(s)
g operational budget
Current Optimistic Pessimistic
Projected additional Income 100,000 120,000 80,000
Incremental costs (36,720) (36,720) (36,720)
£ 63,280
 £ 83,280
 £ 43,280
No of People 1.00 1.00 1.00

It is anticipated that the additional income generating resources will also increase grant fund raising and reporting capacity.

The current grant funding landscape is such that grants are more difficult to obtain, more targeted, and will require increased reporting to funders. Therefore will require additional resource in order to maintain the grant funding target.

It is also recognised that income generation is perhaps the most challenging operational change for Valleys Kids, therefore the additional income projections have been deliberately modest. (The transformation Plan initially targeted £272,000 of income generation)

Income generation initiatives already budgeted @ Feb 2025 (Included in the operational budget)
26-27 27-28 and onwards
Donations
Increase in donations across the organisation 14,238
+ 10% YoY
Valleys Creative
Increase profitability and therefore donation to Valleys Kids 22,447
+ 5% YoY

Operational Costs

Operational Costs Operational Costs
Divestment of properties and the redundancy programme has resulted in a steady reduction in operating costs
26-27 Monthly operating cost (Not including new initiatives above) 103,333 + 2% YoY
24-25 Average _107,000 _
25-26 Average _97,000 _
Savings compared to 24-25 44,000 per year
Savings compared to 25-26 (76,000) per year
Current Optimistic Pessimistic
Combined effect of Income Generation initiatives and cost savings
**72,552 **		 **102,270 ** **31,258 **

Conclusion

It is evident that Valleys Kids needs to change substantially if we are to continue to act as an integral pillar of support for the communities we serve.

The measures being taken to increase income, dispose of property and reduce costs lead us conclude that:

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REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

.

Investing in key new roles to drive the Plan forward is critical to success but it is essential also that the considerable talent we have within Valleys Kids is kept and nurtured. This means maintaining an environment which is open, supportive and entrepreneurial and where staff and volunteers are highly motivated and feel happy and valued. Also critical is retaining a transparent and close working relationship with all stakeholders, particularly RCT CBC, Unity Bank and the WCVA.

The Valleys Kids Senior Leadership Team and the Trustees/Directors are committed to securing the longterm future of Valleys Kids by carrying out the actions proposed in this plan and to bringing about necessary change, however challenging.

Where we are now

So Far

Withdrawal of RCT contract has left a significant budget shortfall operationally this combined with other factors, such as the grant funding landscape generally is far more challenging, has had a negative impact on the organisation.

As a result, VK has utilised £1.5million of reserves since 2022 in an attempt to maintain services VK has divested properties worth £1.3million and is currently debt free. However, the organisation is still not in a secure position

Transformation plan

People:

Voluntary then compulsory redundancies have reduced the workforce significantly. We ask ourselves is it enough? Are the right people in the right places? (The skills matrix we have developed and capacity planning will help to highlight gaps and any spare capacity).

Properties:

Valleys Kids has divested relatively easy to sell properties that have been surplus to core requirements The remaining properties are more difficult to divest.

Divesting them may not necessarily be a good idea as remaining properties: Have a significant income potential Are occupied by Valleys Kids

Are used for service delivery and by the local community

We must also remember property divestment is not income generation; it is liquidating reserves thereby reducing reserves on the balance sheet.

Income Generation:

Grant Funding : there is a big gap compared to historically. Focus has been on securing longer term grant funded projects. Grant funding ALWAYS comes with performance requirements. These performance requirements, service delivery plans and reporting all require capacity. The current forecast expectation is £700k ( vs £900k+ in previous forecasts).

It is useful to remember unrestricted income can be used for whatever legal purpose the charity decides. Therefore, is a very desirable income to have.

The target for donations is currently minimal @ £20k. Suggested target of 10% of income £100K Property Income : is there significant potential for growth in property income as currently properties are under utilised.

Chargeable services:

The Family Team have sold services e.g. Trauma Informed Training. Is there scope to do more? We need to identify and pursue chargeable services. This should not be to the detriment of committed grant funded activity. It requires spare or additional capacity to be factored in.

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VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

Where to next?

We still have a long way to go to reach sustainability.

Therefore, in the short term VK will be still reliant on Loans and/or Overdraft facility to maintain liquidity. .

The organisation recognises that achieving long-term financial sustainability remains a significant challenge. The recently approved WCVA loan of £150,000 (approved on 28 January 2026) provides essential short-term liquidity and allows time for the organisation to implement its strategic plans to strengthen income generation. The loan includes a one-year repayment holiday, followed by repayments over a five-year period, or earlier should the property securing the loan be sold.

Following the sale of Little Bryn Gwyn, the organisation is required to repay £178,000 of VAT apportionment to HMRC. Discussions with HMRC are ongoing to agree an appropriate repayment approach.

While the WCVA loan offers much-needed stability, the organisation remains reliant on it in the short term. Continued progress on delivering the income-generation strategy, alongside careful financial management, will be essential to securing future sustainability.

Further contingency measures have been considered.

We still have a long way to go to reach sustainability

Need to build income generating capability to fill the gap

The organisation recognises the need to strengthen its income-generating capacity to address funding gaps and ensure long-term sustainability. Close monitoring is required to ensure that expenditure on service delivery remains aligned with income from grant funders, and particular care must be taken to ensure that all funded activity is fully cost-recovered.

The recent redundancy programme has reduced staffing costs, but ongoing review is needed to ensure the organisation has the right skills and capacity to move forward. Additional capability is required in fundraising, income generation, financial management and facilities management, and work is underway to recruit these skills while also exploring whether existing staff can be redeployed into critical roles.

The Board has undertaken comprehensive contingency planning, including the development of a “worst-case” roadmap that covers a range of potential scenarios such as a managed voluntary wind-down or forced closure. This planning includes assessment of borrowing options, with early research identifying a potential alternative lender if required. The possible sale of further capital assets has also been considered, supported by appropriate legal and financial advice.

In parallel, the organisation has explored alternative operating models should restructuring become necessary. This includes assessment of continuing service delivery, completing existing grant-funded commitments, and managing associated staffing implications. Options considered include the potential separation of the social enterprise and, where appropriate, exploring opportunities for merger with a like-minded charity.

Page 17

VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

The risks

Valleys Kids trustees and staff have considered the major risks that affect our work and have put in place controls to deal with them. The controls include clearly documented accounting procedures and risk/ benefit assessments throughout the organisation. We review our risk register regularly to ensure that we are aware of any emerging threats to the organisation.

Reserves policy

The trustees believe it is necessary to maintain reserve funds to ensure that the charity is able to meet ongoing commitments. At the 31 March 2025 total funds amounted to £2,767,574. The unrestricted funds were £2,666,334 and the free reserves after excluding fixed assets and associated loans were (£334,663). The trustees intend to gradually increase reserves to meet the trustees' policy of having sufficient funding to cover up to three months operating costs, which is approximately £300,000

Page 18

VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

REFERENCE AND ADMINISTRATIVE DETAILS Registered Company number 03717865 (England and Wales)

Registered Charity number

1074840

Registered office

The Factory Jenkin Street Porth Rhondda Cynon Taff CF39 9PP

Trustees

(Chair) Philip Evans (Vice Chair) Ceri Assiratti (Treasurer) Marian Stokes Rebecca Booth Nadine Hussein Howell Edwards (stepping down AGM 2026) Lyn Evans Rhiannon Howells Jason Camilleri

Executive team

Elise Stewart Kath Edwards Miranda Ballin Debra Jones

Auditors

Bevan Buckland LLP (Statutory Auditors) Ground Floor Cardigan House Castle Court Swansea Enterprise Park Swansea SA7 9LA

Solicitors

Darwin Gray Solicitors, Helmont House Churchill Way Cardiff CF10 2HE

Bank

Unity Trust Bank PLC 4 Brindley place Birmingham B1 2JB Barclays Bank UK PLC 1 Churchill Place London E14 5HP

Page 20

VALLEYS KIDS

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2025

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Valleys Kids for the purposes of company law) are responsible for preparing the Report of the Trustees 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. Under that law, the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

AUDITORS

The auditors, Bevan Buckland LLP (Statutory Auditors), will be proposed for re-appointment at the forthcoming Annual General Meeting.

Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on ............................................. and signed on the board's behalf by: 30 January 2026

................................................................. P Evans - Trustee

Page 20

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF VALLEYS KIDS

Opinion

We have audited the financial statements of Valleys Kids (the ‘ parent charitable company') and its subsidiary (‘the group’) for the year ended 31 March 2025 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Charity Balance sheet, the Consolidated Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

In forming our opinion on the financial statements which is not modified, we have considered the adequacy of the disclosure in Note 2 of the financial statements concerning the group’s ability to continue as a going concern.

As disclosed in Note 2, the Group has incurred significant operating losses during the period and is forecasting further losses for the remainder of the current financial year and the year ending 31 March 2027. Although the Group has secured a £150,000 WCVA loan facility on 28 January 2026 to support short-term liquidity, the Group remains dependent on the successful implementation of its revised operating structure and the realisation of assets to generate additional cash.

These conditions, along with the other matters set out in Note 2, indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

Other matters

The financial statements of the group for the year ended 31 March 2024 were audited by another auditor who expressed an unmodified opinion on those statements on 21 February 2025.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Page 21

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF VALLEYS KIDS

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group and parent charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.

Page 22

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF VALLEYS KIDS

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

We discussed our audit independence complying with the Revised Ethical Standard 2024 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process.

Identifying and assessing potential risks related to irregularities.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

Audit response to risks identified

In addition to the above, our procedures to respond to risks identified included the following: reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations;

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.

Page 23

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF VALLEYS KIDS

Use of our report

This report is made solely to the Group and parent charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Llinos Williams (Senior Statutory Auditor) for and on behalf of Bevan Buckland LLP (Statutory Auditors) Ground Floor Cardigan House Castle Court Swansea Enterprise Park Swansea SA7 9LA

Date: 30 January 2026

Page 24

VALLEYS KIDS

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2025

Notes
INCOME AND ENDOWMENTS FROM
Donations and legacies
3
Charitable activities
6
Community Projects
Community Support
Other trading activities
4
Investment income
5
Other income
Property revaluation gain
Total
EXPENDITURE ON
Raising funds
7
Charitable activities
8
Community Support
Total
NET INCOME/(EXPENDITURE)
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
fund
£
167,453
171,850
223,250
257,716
43,236
5,033
-
868,538
92,369
1,034,369
1,126,738
(258,200)
2,924,534
2,666,334
Restricted
funds
£
-
-
491,457
-
-
-
-
491,457
-
513,076
513,076
(21,619)
122,859
101,240		 2025
Total
funds
£
167,453
171,850
714,707
257,716
43,236
5,033
-
1,359,995
92,369
1,547,445
1,639,847
(279,819)
3,047,393
2,767,574		 2024
Total
funds
£
314,366
-
854,183
134,451
53,832
1,495
171,933
1,530,260
106,101
1,798,211
1,904,312
(374,052)
3,421,445
3,047,393

The notes form part of these financial statements

Page 25

VALLEYS KIDS

CONSOLIDATED BALANCE SHEET 31 MARCH 2025

2025 2024
Unrestricted Restricted Total Total
fund funds funds funds
Notes £ £ £ £
FIXED ASSETS
Tangible assets 16 3,417,310 - 3,417,310 3,704,625
CURRENT ASSETS
Stock 1,916 - 1,916 1,916
Debtors 17 18,366 - 18,366 41,620
Cash at bank and in hand (71,404) 101,240 29,836 93,536
(51,122) 101,240 50,118 137,072
CREDITORS
Amounts falling due within one year 18 (272,526) - (272,526) (342,866)
NET CURRENT LIABILITIES (323,648) 101,240 (222,408) (205,794)
TOTAL ASSETS LESS CURRENT
LIABILITIES 3,093,662 101,240 3,194,902 3,498,831
CREDITORS
Amounts falling due after more than one year 19 (427,328) - (427,328) (451,438)
NET ASSETS 2,666,334 101,240 2,767,574 3,047,393
FUNDS 22
Unrestricted funds 2,666,334 2,924,534
Restricted funds 101,240 122,859
TOTAL FUNDS 2,767,574 3,047,393

The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by: 30 January 2026

............................................. P Evans - Trustee

The notes form part of these financial statements

Page 26

VALLEYS KIDS

CHARITY BALANCE SHEET 31 MARCH 2025

2025 2024
Unrestricted Restricted Total Total
fund funds funds funds
Notes £ £ £ £
FIXED ASSETS
Tangible assets 16 3,403,988 - 3,403,988 3,645,978
CURRENT ASSETS
Debtors 17 17,242 - 17,424 116,680
Cash at bank and in hand (98,127) 101,240 3,113 57,758
(80,885) 101,240 20,537 174,438
CREDITORS
Amounts falling due within one year 18 (235,734) - (235,734) (323,399)
NET CURRENT ASSETS (316,619) 101,240 (215,379) (148,961)
TOTAL ASSETS LESS CURRENT
LIABILITIES 3,087,369 101,240 3,188,609 3,497,017
CREDITORS
Amounts falling due after more than one year 19 (424,349) - (424,349) (447,705)
NET ASSETS 2,663,020 101,240 2,764,240 3,049,312
FUNDS
Unrestricted funds 2,663,020 2,926,453
Restricted funds 101,240 122,859
TOTAL FUNDS 2,764,020 3,049,312

The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by: 30 January 2026

............................................. P Evans - Trustee

The notes form part of these financial statements

Page 28

VALLEYS KIDS

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2025

Notes
Cash flows from operating activities
Cash generated from operations
1
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Sale of tangible fixed assets
Interest received
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Loan repayments in year
Net cash used in financing activities
Change in cash and cash equivalents
in the reporting period
Cash and cash equivalents at the
beginning of the reporting period
2
Cash and cash equivalents at the end
of the reporting period
2		 2025
£
(88,634)
(49,051)
(137,685)
(7,235)
109,167
213
102,145
(21,902)
(21,902)
(57,442)
(35,576)
(93,015)		 2024
£
(333,080)
(35,076)
(368,156)
(7,322)
1,499
464
(5,359)
(17,766)
(17,766)
(391,281)
355,705
(35,576)

The notes form part of these financial statements

Page 28

VALLEYS KIDS

NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2025

1. RECONCILIATION OF NET EXPENDITURE TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net expenditure for the reporting period (as per the Statement
of Financial Activities)
Adjustments for:
Depreciation charges
(Profit)/loss on disposal of fixed assets
Interest received
Interest paid
Property revaluation gain
Decrease in debtors
(Decrease)/increase in creditors
(Decrease)/Increase in stock
Net cash used in operations
2.
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Overdrafts included in bank loans and overdrafts falling due within one
year
Total cash and cash equivalents		 2025
£
(279,822)
144,322
41,061
(213)
49,051
-
26,067
(69,100)
(88,634)
2025
£
29,836
(122,851)
(93,015)		 2024
£
(374,052)
129,784
2,167
(464)
35,076
(171,933)
7,286
39,099
(43)
(395,427)
2024
£
93,536
(129,112)
(35,576)

3. ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24 Cash flow At 31.3.25
£ £ £
Net cash
Cash at bank and in hand 93,536 (63,700) 29,836
Bank overdraft (129,112) 6,261 (122,851)
(35,576) (57,439) (93,015)
Debt
Debts falling due within 1 year (21,906) 14,546 (7,360)
Debts falling due after 1 year (447,705) 20,377 (427,328)
(469,611) 34,923 (434,688)
Total (505,187) (22,516) (527,703)

The notes form part of these financial statements

Page 29

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

1. STATUTORY INFORMATION

Valleys Kids is a company limited by guarantee incorporated in Wales within the United Kingdom. The registered office is 1 Cross Street, Penygraig, Tonypandy, Mid Glamorgan, CF40 1LD. The nature of the charitable company's operations is to provide and assist in the provision of facilities and services for education, play, arts, recreation and other leisure time occupations with the object of improving the conditions of life.

Valley Creative Limited is a 100% owned subsidiary of Valleys Kids. It is a company incorporated in Wales within the United Kingdom. The registered office is the same as the parent company. The nature of the operations is that of providing recreational, educational and wellbeing facilities for the public at large and in particular people in need.

The financial statements are presented in Sterling (£), the company's functional currency, and rounded to the nearest pound. The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets.

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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)" Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. There have been no material departures from Financial Reporting Standard 102.

Going concern

The trustees have assessed the Group’s ability to continue as a going concern. In view of the challenging financial circumstances currently faced, a detailed review has been undertaken. This assessment has taken into account the Group’s current and potential income streams, ongoing and planned cost reduction measures, and the extent to which assets could be realised to generate cash.

For the nine month period ended 31 December 2025, the Group reported an operating loss of £140,000. In addition, one off costs of £371,000 were incurred in connection with the sale of the property at Little Bryn Gwyn. As a result, the total loss reported for the period amounted to £512,000. For the remaining three months of the financial year ending 31 March 2026, the Group is projecting a loss of £90,212. For the financial year ending 31 March 2027, the group is forecasting a loss of £66,854.

From a cash flow perspective, a WCVA loan facility of £150,000 has been secured on 28[th] January 2026. This facility is expected to provide short term liquidity while the Group stabilises under its revised operating structure. The loan will be repayable over a five year period, or earlier on the sale of a property over which the loan is secured upon.

Page 31

continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

NOTESS TO THE FINANCIAL STATEMENTS - continued

2. ACCOUNTING POLICIES - continued

The sale of this property, which is anticipated to take place during the financial year ending 31 March 2027, is expected to generate sufficient proceeds to repay the loan and to improve the Group’s overall financial position. Furthermore, the cessation of operating the property at a loss, together with the associated cost savings, is expected to result in a reduced cost base going forward.

Notwithstanding these plans, the group remains dependent in the short term on securing the proposed loan facility in order to meet its ongoing obligations. The trustees consider that the successful sale of the property will enable the repayment of the loan and support the group’s longer term financial sustainability.

The forecasts prepared by the Trustees indicate a deficit of approximately £66,854 for the year ending 31 March 2027. These projections are based on the Charity’s strategic commitment to investing in enhanced fundraising capacity in order to develop a more sustainable income base. The anticipated growth in income reflects the expected return on this investment and incorporates targets that have been set following a careful assessment of the group’s income-generation strategy. These targets have been established prudently, with the intention of progressively restoring historical income levels, taking into account the current grant-funding environment and the additional resources required to support expanded income-generating activity.

Consolidation

The Statement of Financial Activities (SOFA) and Balance Sheet consolidate the financial statements of the charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a lineby-line basis.

Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

The preparation of the financial statements requires management to make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, be likely to differ from the related actual results.

Depreciation

Depreciation is based upon the useful economic life of the asset which has been estimated by the charity based upon knowledge of the assets. The manual nature of this estimate makes it a risk!

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Donation and legacies income

Donations and legacies income includes donations, gifts and grants that provide core funding or, are of a general nature and are recognised where there is entitlement, probability of receipt and the amount can be measured with sufficient reliability. Such income is only deferred when the donor specifies it must be used in future accounting periods or the donor has imposed conditions which must be met before the charity has unconditional entitlement.

Investment income

Investment income is recognised on a receivable basis. Interest on funds held on deposit is included when receivable, and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Charitable activities

Community support income is recognised when the respective activities occur.

Page 31

continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

2. ACCOUNTING POLICIES - continued

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, 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 accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Expenditure on charitable activities comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.

Support costs are those costs that, whilst necessary to deliver an activity, do not themselves produce or constitute the output of the charitable activity. This includes governance costs which are those costs associated with meeting the constitutional and statutory requirements of the charity and include the audit and accountancy fee.

Tangible fixed assets

Fixed assets initially recorded at cost . Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property 2% straight line Plant and machinery 20% on cost

Taxation

The charity members of the group are exempt from income and corporation taxes on income and gains to the extent that they are applied for their charitable objects. The trading subsidiaries do not generally pay UK Corporation tax because their policy is to pay taxable profits to the Charitable Company as gift aid.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements

Pension costs and other post-retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Financial instruments

The Charity has chosen to adopt FRS 102, Section 11:Basic Financial Instruments and Section 12: Other Financial Instruments Issues of FRS 102 in respect of financial instruments. All financial assets and liabilities are initially measured at transaction price, including transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value (at transaction price excluding transaction costs) unless the arrangement constitutes a financing transaction.

Financial assets and financial liabilities are only offset in the Group balance sheet when, and only when, there is a legally enforceable right to set off the recognised amounts and the Group intends to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments (other than those repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the present value of the future cash flows and subsequently amortised using the effective interest method.

Page 32

continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

2. ACCOUNTING POLICIES - continued

Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. The charity 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 exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

3. DONATIONS AND LEGACIES

Donations
Grants
Grants received, included in the above, are as follows:
The Tudor Trust
Garefield Weston Fund
The Hodge Foundation
The Waterloo Foundation
Leathersellers Foundation
Janet and Peter Swinburn Fund- CAF America
4.
OTHER TRADING ACTIVITIES
Retail income
Income from Valleys Creative Limited
5.
INVESTMENT INCOME
Rents received
Deposit account interest		 2025
£
12,452
155,000		 2024
£
62,790
251,576
167,453
2025
£
-
45,000
35,000
50,000
25,000
-		 314,366
2024
£
48,000
45,000
60,000
50,000
25,000
23,576
155,000 251,576
2025
£
2,728
254,988
257,716
2025
£
43,023
213
43,236		 2024
£
12,132
122,319
134,451
2024
£
53,368
464
53,832

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NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

6. INCOME FROM CHARITABLE ACTIVITIES

Activity
Gain on sale of tangible
Community Projects
fixed assets
Community activities
Community Support
Grants
Party and play
Community Support
Community Support
Hire income
Community Support
INCOME FROM CHARITABLE ACTIVITIES - continued
Grants received, included in the above, are as follows:
Voluntary Action Merthyr Tydfil - Regional Integration Fund
Interlink RCT
Arts Council of Wales
National Lottery
The National Lottery Heritage Fund
Penygraig Community Project
RCTCBC - Community Dementia Prevention Programme
National Lottery Community Fund
CWVYS
The Neighbourly Food Grant
Save the Children
Arts & Business Cymru
RCTCBC - Community Micro Grant
RCTCBC - Winter Hardship Fund
RCTCBC - Energy Costs Grant
RCTCBC - Fun, Food & Friends
RCTCBC - Neighbourhood Network Fund
National Grid Electricity Distribution - Warm Place Energy Club
RCTCBC - Food Support Fund
Children in Need
Peny Y Cymoedd Community Fund
Trust colwinston
Penyrenglyn Hub
NGED Community matters
Together Stronger		 2025
£
171,850
166,077
491,457
-
57,173
886,577
2025
£
21,480
14,146
216,420
19,773
96,360
17,523
-
-
-
-
5,000
-
900
2,000
-
-
-
-
-
-
22,749
20,000
26,000
3,746
25,360
491,457		 2024
£
-
212,234
452,875
118,334
70,740
854,183
2024
£
45,120
7,831
179,748
-
120,045
-
1,899
9,509
9,500
5,500
7,000
2,492
1,000
2,000
2,700
15,615
1,000
9,814
1,000
29,935
1,167
-
-
-
-
452,875

6. INCOME FROM CHARITABLE ACTIVITIES - continued

7.
RAISING FUNDS
Raising donations and legacies
Staff costs
Premises costs
Trading subsidiary costs		 2025
2024
£
£
10,806
27,190
12,179
69,384
10,699
68,212
92,369
106,101		 2024
£
27,190
10,699
68,212

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NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

8. CHARITABLE ACTIVITIES COSTS

Community Support
9.
DIRECT COSTS OF CHARITABLE ACTIVITIES
Staff costs
Travel
Staff training
Telephone and postage
Printing and stationery
Activities
Premises costs
Depreciation
Loss on sale of assets
10.
SUPPORT COSTS
Management
Finance
£
£
Community Support
165,230
46,122		 Direct
Costs (see
note 9)
£
1,219,345

Other
£
104,983		 Support
costs (see
note 10)
£
328,100
2025
£
666,046
9,216
1,083
2,182
1,034
196,519
179,232
122,972
41,061
1,219,345
Support
costs
£
11,765		 Totals
£
1,547,445
2024
£
857,963
17,010
1,031
2,094
1,569
219,184
219,896
103,584
2,167
1,424,498
Totals
£
328,100

11. NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

Auditors' remuneration
Auditors' remuneration for non audit work
Depreciation - owned assets
Surplus/(deficit) on disposal of fixed assets
Property revaluation gain		 2025
£
8,075
2,690
140,058
(171,850)
-		 2024
£
17,057
3,299
129,486
2,167
(171,933)

12. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 March 2025 nor for the year ended 31 March 2024.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 March 2025, nor for the year ended 31 March 2024.

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VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

13. STAFF COSTS

Wages and salaries
Social security costs
Other pension costs		 2025
2024
£
£
774,112
973,315
51,054
68,181
13,509
17,926
838,675
1,059,422		 2024
£
973,315
68,181
17,926

The average monthly number of employees during the year was as follows:

Employees 2025
44		 2024
46

No employees received emoluments in excess of £60,000.

The total key management personnel remuneration benefits paid during the year was £162,165 (2024 £106,101).

Included within staff costs are termination payments of £38,507 (2024 £14,564).

14. RESULTS OF THE PARENT CHARITABLE COMPANY

No separate statement of financial activities has been included for the parent charitable company.

The income of the parent charitable company was £1,225,729 and net expenditure was £285,052.

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NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

15. COMPARATIVES FOR THE CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

INCOME AND ENDOWMENTS FROM
Donations and legacies
Charitable activities
Community Support
Other trading activities
Investment income
Other income
Property revaluation gain
Total
EXPENDITURE ON
Raising funds
Charitable activities
Community Support
Total
NET INCOME/(EXPENDITURE)
Transfers between funds
Net movement in funds
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
fund
£
147,790
392,680
134,451
53,832
1,495
171,933
902,181
106,101
1,178,327
1,284,428
(382,247)
82,703
(299,544)
3,224,078
2,924,534
Restricted
funds
£
166,576
461,503
-
-
-
-
628,079
-
619,884
619,884
8,195
(82,703)
(74,508)
197,367
122,859
Total
funds
£
314,366
854,183
134,451
53,832
1,495
171,933
1,530,260
106,101
1,798,211
1,641,982
(353,535)
-
(374,052)
3,421,445
3,047,393

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VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

16. TANGIBLE FIXED ASSETS - GROUP

COST OR VALUATION
At 1 April 2024
Additions
Disposals
At 31 March 2025
DEPRECIATION
At 1 April 2024
Charge for year
Eliminated on disposal
At 31 March 2025
NET BOOK VALUE
At 31 March 2025
At 31 March 2024		 Freehold
property
£
5,354,314
7,235
(217,583)
5,136,731
1,708,108
119,641
(67,355)
1,760,394
3,376,337
3,646,206
Plant and

machinery
£
180,028
7,235
-
187,463
121,809
24,681
-
146,490
40,973
58,419
Totals
£
5,534,542
7,235
(217,583)
5,324,194
1,829,917
144,322
(67,355)
1,906,884
3,417,310
3,704,625

16. TANGIBLE FIXED ASSETS – CHARITY

COST OR VALUATION
At 1 April 2024
Additions
Disposals
At 31 March 2025
DEPRECIATION
At 1 April 2024
Charge for year
Eliminated on disposal
At 31 March 2025
NET BOOK VALUE
At 31 March 2025
At 31 March 2024		 Freehold
property
£
5,307,655
-
(170,924)
5,136,731
1,703,443
118,708
(61,757)
1,760,394
3,376,337
3,604,212
Plant and

machinery
£
262,994
7,235
-
270,229
221,228
21,350
-
242,578
27,651
41,766
Totals
£
5,570,649
7,235
(170,924)
5,406,960
1,924,671
140,058
(61,757)
2,002,972
3,403,988
3,645,978

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VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

17. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade debtors
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income		 GROUP
2025
2024
£
£
13,191
26,941
-
-
2,044
980
3,131
13,699
18,366
41,620		 CHARITY
2025
2024
£
£
13,191
26,941
-
76,973
920
980
3,131
11,786
17,242
116,680		 CHARITY
2025
2024
£
£
13,191
26,941
-
76,973
920
980
3,131
11,786
17,242
116,680
116,680

18. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank loans and overdrafts (see note 20)
Other loans (see note 20)
Trade creditors
Social security and other taxes
Other creditors
VAT
Accruals and deferred income
Included within deferred income above is the following:
The Hodge Foundation
Little Bryn Gwyn – Hire Income
RCTCBC – Capital Grant		 GROUP
2025
2024
£
£
139,999
144,952
6,212
6,066
47,499
46,294
25,642
32,318
30,913
22,688
10,736
9,677
11,575
80,871
272.526
342,866		 GROUP
2025
2024
£
£
139,999
144,952
6,212
6,066
47,499
46,294
25,642
32,318
30,913
22,688
10,736
9,677
11,575
80,871
272.526
342,866		 CHARITY
2025
2024
£
£
139,999
144,952
6,212
6,066
39,806
41,207
25,642
32,318
12,500
19,079
-
-
11,575
79,777
235,734
323,399
2025
2024
£
£
35,000
1,586
10,700
933
1,586
46,633
342,866

The deferred income relates to income received in advance of the project delivery.

19. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Bank loans and overdrafts (see note 20)
Other loans (see note 20)
Accruals and deferred income		 GROUP
2025
2024
£
£
405,313
438,776
19,036
31,309
2,979
3,733
427,328
451,438		 CHARITY
2025
2024
£
£
405,313
422,461
19,036
25,244
-
-
424,349
447,705		 CHARITY
2025
2024
£
£
405,313
422,461
19,036
25,244
-
-
424,349
447,705
447,705

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VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

20. LOANS

An analysis of the maturity of loans is given below:

Amounts falling due within one year on demand:
Bank overdrafts
Bank loans
Other loans
Amounts falling between one and two years:
Bank loans - 1-2 years
Other loans - 1-2 years
Amounts falling due between two and five years:
Bank loans - 2-5 years
Other loans - 2-5 years
Amounts falling due in more than five years:
Repayable by instalments:
Bank loans more 5 yr by instal
Other loans more 5yrs instal
SECURED DEBTS
The following secured debts are included within creditors:
Bank loans		 2025
£
122,851
17,148
6,212
146,211
2025
£
19,995
3,714
23,709
70,335
5,028
75,363
314,983
10,294
325,277
2025
£
422,461		 2024
£
129,112
15,840
6,066
151,018
2024
£
17,148
6,212
23,360
64,979
8,746
73,725
340,334
10,286
350,620
2024
£
438,301

21. SECURED DEBTS

The bank loan is secured by:

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continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

22. MOVEMENT IN FUNDS

Unrestricted funds
General fund
Fixed Asset - Designated fund
Restricted funds
General
Arts
Valleys Voices
Colwinston Trust
TOTAL FUNDS		 At 1.4.24
£
2,924,534
-
2,924,534
25,725
2,637
94,497
-
122,859
3,047,393		 Net
movement

in funds
£
(258,200)
-
(258,203)
(25,725)
(2,637)
(1,500)
8,243
(21,619)
(279,819)		 Transfers

between

funds
£
(2,395,332)
2,395,332
-
-
-
-
-
-
-
At
31.3.25
£
271,002
2,395,332
2,666,334
-
-
92,997
8,243
101,240
2,767,574

Net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Restricted funds
InterlinkRCT
General
Arts
Valleys Voices
Regional Intergration fund
National Lottery
Penygraig fund
Colwinston Trust
Children in need
Pen-Y-Cymoedd Community
Save the Children
Together Stronger
TOTAL FUNDS		 Incoming
resources
£
868,538
14,146
6,646
216,420
96,360
21,480
19,773
17,523
20,000
22,749
26,000
5,000
25,360
491,457
1,359,995
Resources

expended
£
(1,126,738)
(14,146)
(32,371)
(219,057)
(97,860)
(21,480)
(19,773)
(17,523)
(11,757)
(22,749)
(26,000)
(5,000)
(25,360)
(513,076)
(1,639,814)
Movement

in funds
£
(258,200)
-
(25,725)
(2,637)
(1,500)
-
-
-
8,243
-
-
-
-
(21,619)
(279,819)

Page 41

continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

22. MOVEMENT IN FUNDS - continued

Comparatives for movement in funds

Unrestricted funds
General fund
Restricted funds
Sparc
The Tudor Trust
Interlink- Adverse Childhood
Experiences
General
Children and Young People
Arts
Valleys Voices
TOTAL FUNDS		 At 1.4.23
£
3,224,078
6,332
19,495
20,876
86,867
1,798
61,999
-
197,367
3,421,445		 Net
movement

in funds
£
(382,247)
(6,332)
-
(20,876)
2,066
(1,798)
(59,362)
94,497
8,195
(374,052)		 Transfers

between

funds
£
82,703
-
(19,495)
-
(63,208)
-
-
-
(82,703)
-
At
31.3.24
£
2,924,534
-
-
-
25,725
-
2,637
94,497
122,859
3,047,393

Comparative net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Restricted funds
Sparc
Interlink- Adverse Childhood
Experiences
General
Children and Young People
Arts
Older People
Family work
Valleys Voices
TOTAL FUNDS		 Incoming
resources
£
902,181
-
-
181,085
44,916
186,554
47,120
48,359
120,045
628,079
1,530,260
Resources

expended
£
(1,284,428)
(6,332)
(20,876)
(179,019)
(46,714)
(245,916)
(47,120)
(48,359)
(25,548)
(619,884)
(1,904,312)
Movement

in funds
£
(382,247)
(6,332)
(20,876)
2,066
(1,798)
(59,362)
-
-
94,497
8,195
(374,052)

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continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

22. MOVEMENT IN FUNDS - continued

A current year 12 months and prior year 12 months combined position is as follows:

Unrestricted funds
General fund
Fixed Asset - Designated fund
Restricted funds
Sparc
The Tudor Trust
InterlinkRCT
General
Children and Young People
Arts
Valleys Voices
Colwinston Trust
TOTAL FUNDS		 At 1.4.23
£
3,224,078
-
3,224,078
6,332
19,495
20,876
86,867
1,798
61,999
-
-
197,367		 Net
movement

in funds
£
(640,447)
-
(640,447)
(6,332)
-
(20,876)
(23,659)
(1,798)
(61,999)
92,997
8,243
(13,424)		 Transfers

between

funds
£
(2,312,629)
2,395,332
82,703
-
(19,495)
-
(63,208)
-
-
-
-
(82,703)
At
31.3.25
£
271,002
2,395,332
2,666,334
-
-
-
-
-
-
92,997
8,243
101,240
2,767,574
3,421,445 (653,871) -

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Restricted funds
Sparc
InterlinkRCT
General
Children and Young People
Arts
Older People
Family work
Valleys Voices
Regional Intergration fund
National Lottery
Penygraig fund
Colwinston Trust
Children in need
Pen-Y-Cymoedd Community
Save the Children
Together Stronger
TOTAL FUNDS		 Incoming
resources
£
1,770,719
-
14,146
187,731
44,916
402,974
47,120
48,359
216,405
21,480
19,773
17,523
20,000
22,749
26,000
5,000
25,360
1,119,536
2,890,255
Resources

expended
£
(2,411,166)
(6,332)
(35,022)
(211,390)
(46,714)
(464,973)
(47,120)
(48,359)
(123,408)
(21,480)
(19,773)
(17,523)
(11,757)
(22,749)
(26,000)
(5,000)
(25,360)
(1,132,960)
(3,544,126)
Movement

in funds
£
(640,447)
(6,332)
(20,876)
(23,659)
(1,798)
(61,999)
-
-
92,997
-
-
-
8,243
-
-
-
-
(13,424)
(653,871)

Page 43

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VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

22. MOVEMENT IN FUNDS - continued

Designated funds

The trustees designated £2,395,332 from general funds towards fixed assets, although the net book value of those assets was £3,403,988. The designated amount represents the total NBV of £3,403,988 less the NBV of Little Bryn Gwyn (£1,008,655) and is a notional allocation for internal reporting purposes, not backed by unrestricted cash.

Interlink provided £14,146 for further work on Adverse Childhood experiences.

General

£6,649 was received into general funds for core work. The included RCTCBC Community facilities grant, RCTCBC Winter hardship grant and NGED Community matters grant.

Arts

Funding was received from the following organisations as contributions toward the Arts programme which focuses on involving young people in a range of art activities: - Arts Council of Wales

Valleys Voices (The National Lottery Heritage fund) provided us with funding (Dec 23 - November 25 - extension to March 26 pending) for an archiving project capturing voices from the community during the 40+ years of Valleys Kids history and enables us to provide a contemporary archive going forward. It shines a light on the challenges facing communities and their resilience. The project presents the journey in a variety of rich content.

The Regional Integration Fund provided us with £21,480 in order to enable us to continue our work with older adult, ensuring we provide support, befriending and creative activities to facilitate engagement, fight social isolation and contribute to mental well being.

The National Lottery Community Fund provided grant funding towards Working Families which is a project, based in Rhondda Cynon Taf, working in partnership with Tempo to provide opportunities for working families experiencing in-work poverty. By using a time credit model, individuals increase in confidence, self-esteem and health and well-being, whilst also building resilience and increasing social capital, and being empowered to participate in activities and experiences that they cannot ordinarily access, thus improving their quality of life. this project ended in this year.

We received £17,523 from the Penygraig Fund to continue to support our play and youth work.

Colwinston Charitable Trust contributed £20,000 to support the Artist in residence salary plus a contribution towards participatory arts workshops and the exhibitions programme. This funding has now come to an end.

BBC Children in Need provided grant funding to fund a part-time Play Worker (as well as training and travel), sessional staff, small equipment and trips and activities in Dinas. The funding for this project ended and fixed term staff left the organisation.

Grant funding was received from the following organisations as contributions toward the Spare programme which focuses on involving young people in a range of art activities:

Pen-y-Cymoedd Community provided £26,000 to conduct consultation work in the Penyrenglyn project.

Save the Children provided £5000 funding to contribute to the work of our family team.

We received £25,360 through our partnership with the Wales Millennium Centre (Together Stronger) to continue our work on the Radio Platform initiative and partnership arts work with the WMC.

Page 44

continued...

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

23. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

Within one year 2025
£
1,478		 2024
£
1,410

Total operating lease payments recognised as an expense in the year were £22,969 (2024 £16,915).

24. EMPLOYEE BENEFIT OBLIGATIONS

The charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charity in independently administered funds. The pension cost charge represents contributions paid by the charity to the fund and amounted to £17,592 (2024: £17,928). Contributions outstanding at the year end amounted to £1,945 (2024: £NIL).

25. CONTINGENT LIABILITIES

Improvements to property include amounts of £1,575,557 which represent funding received for the project from the Arts Council of Wales and Welsh Government. The funding is subject to a charge on property (Soar Centre} which will not be released until 18 August 2030. If the property is sold at any time in the period to that date, both organisations reserve the right, at their discretion, to reclaim a percentage of the sale proceeds up to but not exceeding £1,575,557.

Funding of £250,000 was received from Welsh Government in 2019 for the purchase of and improvements to Little Bryn Gwyn. The funding is subject to a charge on the land known as Valleys Kids, Little Bryn Gwyn, Cilibion, Llanrhidian, Swansea, SA3 1 ED.

26. RELATED PARTY DISCLOSURES

During the year, the charity received donations of £nil (2024: £802) from two trustees (2024: two).

The trustees of the Penygraig Community Project charity are also trustees of Valleys Kids and therefore the two charities are related parties. During the year, the following transactions occurred between Valleys Kids and the Penygraig Community Project charity.

2025 2024
Rent expense paid 5,574 22,296
Donation received - 67,500

27. POST BALANCE SHEET EVENTS

In January 2025, trustees made the decision to sell ‘Little Bryn Gwyn’ under a pre-emption agreement with Down to Earth dated 28 November 2017. The sale completed in August 2025 for £1,000,000. Under the agreement, £200,000 of matched funding was netted off the sale proceeds, and the charity will also pay VAT in accordance with applicable law. As completion occurred after the reporting date, this is treated as a non-adjusting event; no amounts are recognised in these financial statements.

Page 45

VALLEYS KIDS

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2025

28. SUBSIDIARY COMPANY

Valleys Creative Limited, company number 08151686, was incorporated on 20 July 2012 as a company limited by guarantee.

It is wholly owned by Valleys Kids with the guarantee limited to £1.

Valleys Creative Limited, registered office: The Factory Welsh Hills Works Jenkin Street Porth CF39 9PP

Valleys Creative Limited provides recreational, educational and wellbeing facilities. The total net profit is donated to Valleys Kids.

A summary of the results of the subsidiary is shown below:

Turnover
Cost of sales
Gross profit
Other income
Expenditure
Net profit before tax
Tax
Net profit after tax
The aggregate of the assets and liabilities at 31 March were:
Assets
Liabilities		 2025
£
254,988
(69,384)
185,604
933
(241,712)
(55,175)
-
(55,175)
43,085
(100,176)		 2024
£
251,922
(68,212)
183,710
1,167
(200,393)

(15,516)
-
(15,516)
101,067
(102,983)

This page does not form part of the statutory financial statements

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