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2020-10-31-accounts

Registered number: 08979945 Charity number: 1159854

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

CONTENTS

Page
Reference and Administrative Details of the Charity, its Trustees and Advisers 1
Trustees' Report 2 - 7
Independent Auditor's Report on the Financial Statements 8 - 10
Consolidated Statement of Financial Activities 11
Consolidated Balance Sheet 12
Charity Balance Sheet 13
Consolidated Statement of Cash Flows 14
Notes to the Financial Statements 15 - 35

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 OCTOBER 2020

Trustees Mr Ian Davies, Chairman
Ms Anne Segall
Mr David Pilgrim
Mr Adrian Fry
Dr. Alexander Burnfield, (resigned 18/12/2020)
Company registered
number
08979945
Charity registered
number
1159854
Registered office
Suite 8, Fairways House
Mount Pleasant Road
Southampton
Hampshire
SO14 0QB
Company secretary
Mrs Vivien A Sheath
General Manager
Paul Moran
Independent auditor
Mazars LLP
Chartered Accountants
90 Victoria Street
Bristol
BS1 6DP
Bankers
Unity Trust Bank
Nine Brindley Place
Birmingham
B1 2HB

Page 1

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT FOR THE YEAR ENDED 31 OCTOBER 2020

The Trustees present their annual report together with the audited financial statements of the Charity for the year 1 November 2019 to 31 October 2020. The Annual Report serves the purposes of both a Trustees' report and a directors' report under company law. The Trustees confirm that the Annual Report and financial statements of the charitable company comply with the current statutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2015) as amended by Update Bulletins 1 and 2.

Objectives and activities

a. Policies and objectives

In setting objectives and planning for activities, the Trustees have given due consideration to general guidance published by the Charity Commission relating to public benefit, including the guidance 'Public benefit: running a charity (PB2)'.

The objectives of our Charity are to:

The vision that shapes our annual activities remains the promotion and fostering of knowledge of the plight of children and young people in the care system and vulnerable people and enabling these conditions to be addressed.

b. Strategies and activities undertaken for achieving objectives

The strategies and activities employed to meet the Charity's objectives include:

Establishing and administering annual education bursaries or grants for young people who have left the Care system. The Foundation will ensure that further education opportunities will be available to individuals who otherwise would not have this opportunity.

Support, financially or otherwise, services delivered to young people in need who otherwise would not qualify for the funding that is required to meet that identified need – such as therapy delivered by qualified BACP Registered therapists.

Acquire or develop property to provide suitable accommodation for care leavers who otherwise would not qualify for adult services support.

Promote and educate society with respect to the plight of looked after children and young persons.

Page 2

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 OCTOBER 2020

Strategic report

Achievements and performance

a. Main achievements of the Charity

The Trustees commend the efforts of all staff in responding to the constraints and restrictions imposed by the Covid 19 pandemic. The safety of the service users and all staff has been the primary focus. This has been achieved by rapid and rigorous segregation of care teams to minimise the risk of spreading the virus, and enabling staff to work from home wherever possible.

b. Key performance indicators

Delivering a high standard of care and education to all service users is paramount. The Charitable group has robust internal quality audits and health and safety processes in place to ensure these high standards are achieved. During the year to 31 October 2020 all regulatory standards were met or exceeded.

A key factor to achieve any of our strategic goals is to ensure that we have highly trained, high performing staff at every level throughout the organisation. The charitable group increased the amount it spent on training from £640,000 in 2019 to £725,000 in 2020. Training spend represented 4.9% of turnover from care and education services (2019: 4.9%).

The outcomes for our service users is the most visible measure of our achievements. The Charitable group will continue to collate data and to develop a range of measures to determine success and ensure that such measures are independently verifiable.

c. Review of activities

Fairways Care (UK) Limited had another successful year looking after 588 service users (2019: 420) on behalf of 29 local authorities (2019: 21).

The Foundation has made grants to enable a group of young people (who are service users) to undertake a trip to the Atlas mountains. Unfortunately the trip, which was scheduled to take place in 2020, had to be deferred due to the Covid-19 pandemic, but the costs have been incurred and the trip will take place when restrictions are lifted and travel is possible.

The Trustees redeemed the outstanding loan notes from a combination of accumulated reserves and a smaller banking facility.

d. Fundraising activities and income generation

The Charity does not employ fundraisers.

e. Investment policy and performance

The Trustees will continue to look for opportunities to invest in the acquisition of properties to assist the activities of the trading business.

Page 3

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 OCTOBER 2020

Strategic report (continued)

Financial review

a. Going concern

After making appropriate enquiries, the Trustees have a reasonable expectation that the Charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the accounting policies.

b. Reserves policy

The Trustees intend to ensure that the charity and the operating business adopt a prudent approach to reserves.

In the short term the Trustees intend to ensure that sufficient dedicated reserves are retained as follows:

The trading company has a prudent reserves policy as follows:

These key performance indicators are reported to the Trustees on a quarterly basis.

At the year end total reserves of the group stood at £3,501,029 of these £3,917,222 less associated debt of £3,310,843 are invested in tangible fixed assets.

c. Principal risks and uncertainties

The principal risks to the Charity are considered to be local authority cost constraints that could impact the services provided by its trading company and the risk of damage to the organisation’s excellent reputation in the provision of services to children and young people. The Trustees are satisfied that the principal and other risks are mitigated appropriately though the implementation of its risk strategy which comprises:

In addition, the issue of risk management is a key imperative for Fair Ways and the trading company has comprehensive policies and procedures in place. Risk management is a key element in the quarterly managing director reports to Trustees.

The risks from COVID-19 are the most significant risks to the activities of the trading company, which has contingency plans regularly updated.

d. Financial risk management objectives and policies

The Charity maintains a cautious policy of developing services and building reserves. During the year it redeemed the outstanding loan notes and continues to build its reserves.

Page 4

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 OCTOBER 2020

Structure, governance and management

a. Constitution

Fair Ways Foundation is a company limited by guarantee governed by a Deed of Governance dated 20 October 2014 and by its Memorandum and Articles of Association dated 4 April 2014. It is registered as a charity with the Charity Commission.

The charity and the group is constituted under a Memorandum of Association dated 21 October 2014 and is a registered charity number 1159854.

b. Methods of appointment or election of Trustees

Trustees determine the skill set and experience required for an effective board, and search for suitable candidates, using external advertising when appropriate. Candidates are interviewed, references taken, and are subject to DBS checks prior to appointment for an initial term, and subject to reappointment at the first AGM following their appointment.

c. Organisational structure and decision-making policies

The Trustees meet quarterly to review information prepared by management and make any decisions required. The day to day management of the charity is devolved to the management team as outlined in paragraph e. below.

d. Policies adopted for the induction and training of Trustees

All Trustees are given a bespoke induction course tailored to add to their prior experience. This includes introductions to senior staff in the operating company, visits to company care facilities, training centres, and schools, and attendance at professional adviser training courses.

Further opportunities for continuing professional development courses as a Trustee are also provided.

e. Pay policy for key management personnel

The Trustees, Chief Executive Officer, Company Secretary (Director of Finance) and the General Manager comprise the key operational management personnel of the group in charge of directing and controlling, running and operating the trading company on a day to day basis. All Trustees give of their time freely and are not remunerated. The remuneration of the managing director is set by a remuneration committee made up of Trustees. The managing director sets the pay for the executive team. Details of Trustee expenses are disclosed in Note 10 to the accounts.

f. Related party relationships

The Charity's trading subsidiary is Fairways Care (UK) Limited, a wholly owned limited company, which provides high quality social care and education services including school and foster placements, residential children’s homes, a post 16 service and a family assessment centre.

Page 5

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 OCTOBER 2020

Structure, governance and management (continued)

g. Trustees' indemnities

The Trustees are covered by a qualifying third party indemnity policy. This policy was in place for all Trustees for the whole of the financial year.

Plans for future periods

The Charity operates independently from the trading operations of Fairway Care (UK) Limited, focused on the welfare of children and young and vulnerable people. The Charity will continue to focus on the delivery of activities set out in the “objectives and activities” section on page 2 of this report and with its grant making activities set out on page 2.

During the year to 31 October 2021, the group is committed to expanding its fostering provision and also to expanding its residential services as the new homes opened in 2020 become fully occupied. It also intends to enhance the outdoor facilities offered to young people placed within our crisis provision by setting up an outdoor activity centre in Wales. The company plans to further develop the services provided by its Therapeutic Hub, designed around the needs of our young people in order to maximise their potential to engage in services.

Engagement with employees and employment of the disabled

Employees of the trading company have been consulted on issues of concern to them by means of regular consultative committee and staff meetings and have been kept informed on specific matters directly by management. The Group carries out exit interviews for all staff leaving the organisation and has adopted a procedure of upward feedback for senior management and the Trustees.

The Group has implemented a number of detailed policies in relation to all aspects of personnel matters including:

In accordance with the Group's equal opportunities policy, the Group has long-established fair employment practices in the recruitment, selection, retention and training of disabled staff.

Fair Ways aim is to ensure that the abilities of all people are recognised and valued at all levels of Fair Ways. This is achieved by providing any reasonable adjustments to ensure disabled people have access to our services and employment opportunities, challenging discriminatory assumptions about disabled people and seeking to continue to improve access to information by ensuring availability of loop systems, Braille facilities, alternative formatting and sign language interpretation.

Full details of these policies are available from the Charity's offices.

The Trustees wish to record their thanks to Alexander Burnfield who served as a trustee since the inception of the foundation in 2014 until his resignation in 2020.

Page 6

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 OCTOBER 2020

Statement of Trustees' responsibilities

The Trustees (who are also the directors of the Charity for the purposes of company law) are responsible for preparing the Trustees' Report including the Strategic Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year. 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 Group and the Charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditor

Each of the persons who are Trustees at the time when this Trustees' Report is approved has confirmed that:

Auditor

The auditor, Mazars LLP, has indicated its willingness to continue in office. The designated Trustees will propose a motion reappointing the auditor at a meeting of the Trustees.

Approved by order of the members of the board of Trustees on and signed on their behalf by:

Ian Davies

Ian Davies (Jan 21, 2021 15:10 GMT)

Mr Ian Davies Chairman 21 January 2021

Page 7

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FAIR WAYS FOUNDATION

Opinion

We have audited the financial statements of Fair Ways Foundation (the ‘Charity’) and its subsidiary (the 'Group') for the year ended 31 October 2020 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Statement of Cash Flows 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, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Charity 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.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

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 auditor’s report 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 there is a material

Page 8

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FAIR WAYS FOUNDATION (CONTINUED)

misstatement in the financial statements or a material misstatement of the other information. 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.

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 light of the knowledge and understanding of the Charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Trustees' Report.

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

Responsibilities of Directors

As explained more fully in the Trustees' responsibilities statement set out on page 2, the directors 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 directors are responsible for assessing the Charity’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 directors intend to liquidate the Charity or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 an auditor’s report 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.

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 auditor’s report.

Page 9

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FAIR WAYS FOUNDATION (CONTINUED)

Use of the audit report

This report is made solely to the Charity'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 Charity's members those matters we are required to state to them in an auditor's 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 Charity and the company's members as a body for our audit work, for this report, or for the opinions we have formed.

Jonathan Marchant

Jonathan Marchant (Jan 21, 2021 15:18 GMT)

Jonathan Marchant (Senior statutory auditor)

for and on behalf of

Mazars LLP Chartered Accountants and Statutory Auditor 90 Victoria Street Bristol BS1 6DP

Page 10

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 OCTOBER 2020

Note
Income from:
Donations and legacies
4
Charitable activities
5
Investments
6
Total income
Expenditure on:
Charitable activities
8
Total expenditure
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2020
£
145,157
14,804,358
4,791
14,954,306
14,319,497
14,319,497
634,809
2,866,220
634,809
3,501,029		 Restricted
funds
2020
£
14,000
-
-
14,000
14,000
14,000
-
-
-
-		 Total
funds
2020
£
159,157
14,804,358
4,791
14,968,306
14,333,497
14,333,497
634,809
2,866,220
634,809
3,501,029		 Total
funds
2019
£
180,579
13,195,096
6,852
13,382,527
12,711,732
12,711,732
670,795
2,195,425
670,795
2,866,220

The Consolidated Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 15 to 35 form part of these financial statements.

Page 11

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED 31 OCTOBER 2020

Note
Fixed assets
Intangible assets
12
Tangible assets
13
Current assets
Debtors
15
Cash at bank and in hand
Creditors: amounts falling due within one
year
16
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
17
Provisions for liabilities
Total net assets
Charity funds
Unrestricted funds
20
Total funds		 1,578,211
2,522,784
4,100,995
(2,287,685)		 2020
£
908,398
3,917,222
4,825,620
1,813,310
6,638,930
(3,132,346)
(5,555)
3,501,029
3,501,029
3,501,029		 1,192,653
2,686,935
3,879,588
(2,156,932)		 2019
£
1,099,639
3,769,820
4,869,459
1,722,656
6,592,115
(3,720,340)
(5,555)
2,866,220
2,866,220
2,866,220

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:

Ian Davies

Ian Davies (Jan 21, 2021 15:10 GMT)

Mr Ian Davies

(Chairman) 21 January 2021

The notes on pages 15 to 35 form part of these financial statements.

Page 12

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

CHARITY BALANCE SHEET FOR THE YEAR ENDED 31 OCTOBER 2020

Note
Fixed assets
Tangible assets
13
Investments
14
Current assets
Debtors
15
Cash at bank and in hand
Creditors: amounts falling due within one
year
16
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more
than one year
17
Total net assets
Charity funds
Unrestricted funds
20
Total funds		 23,179
1,721,108
1,744,287
(220,233)		 2020
£
3,294,666
3,035,030
6,329,696
1,524,054
7,853,750
(3,132,346)
4,721,404
4,721,404
4,721,404		 26,512
1,709,653
1,736,165
(388,347)		 2019
£
3,266,466
3,035,030
6,301,496
1,347,818
7,649,314
(3,720,340)
3,928,974
3,928,974
3,928,974

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:

Ian Davies

Ian Davies (Jan 21, 2021 15:10 GMT)

Mr Ian Davies (Chairman) 21 January 2021

The notes on pages 15 to 35 form part of these financial statements.

Page 13

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2020

Cash flows from operating activities
Net cash used in operating activities
Cash flows from investing activities
Dividends, interests and rents from investments
Proceeds from the sale of tangible fixed assets
Purchase of tangible fixed assets
Net cash used in investing activities
Cash flows from financing activities
Cash inflows from new borrowing
Repayments of borrowing
Net cash used in financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 2020
£
848,569
4,791
6,684
(314,082)
(302,607)
1,400,000
(2,110,113)
(710,113)
(164,151)
2,686,935
2,522,784		 2019
£
1,250,799
6,852
11,049
(444,737)
(426,836)
133,000
(286,333)
(153,333)
670,630
2,016,305
2,686,935

The notes on pages 15 to 35 form part of these financial statements

Page 14

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

1. General information

The charity is a private company limited by guarantee (company registered number 08979945 and charity registered number 1159854) registered in England and Wales. The registered office is Suite 8, Fairways House, Mount Pleasant Road, Southampton, Hampshire, SO14 0QB.

The presentation currency of the financial statements is sterling and the financial statements are rounded to the nearest £. The financial statements cover the current year ended 31 October 2020 and the comparative information relates to the year ended 31 October 2019.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements 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 2015), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Fair Ways Foundation meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

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

The charity has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Financial Activities in these financial statements. The income and expenditure account for the year for the charity was a surplus of £601,188 (2019 - £554,342).

2.2 Going concern

The group continues to provide essential care services and its frontline employees have key worker status to enable them to continue their roles. Funding for this care is also anticipated to continue at budgeted levels. Management have prepared forecasts to consider a variety of scenarios in relation to the continuing impact of the pandemic which focus on robust contingency plans to ensure staffing levels are maintained at the required levels. These plans could lead to higher employment costs and an impact on costs and liquidity over the course of the pandemic, but management’s assessment is that these will not be at a level which would significantly impair the group’s financial resilience. As a result, the accounts have been presented on a going concern basis.

2.3 Income

All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Page 15

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

2. Accounting policies (continued)

2.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.

Support costs are those costs incurred directly in support of expenditure on the objects of the charity and include project management carried out at Headquarters. Governance costs are those incurred in connection with administration of the charity and compliance with constitutional and statutory requirements.

Charitable activities and Governance costs are costs incurred on the charity's educational operations, including support costs and costs relating to the governance of the charity apportioned to charitable activities.

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

2.5 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Group; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.

2.6 Intangible assets and amortisation

Intangible assets costing £NIL or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on intangible assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life.

The estimated useful lives are as follows:

Amortisation is provided on the following basis:

Customer relations - 10 % Straight line

Page 16

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

2. Accounting policies (continued)

2.7 Tangible fixed assets and depreciation

Tangible fixed assets costing £250 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, .

Depreciation is provided on the following bases:

Freehold property - Nil - Short-term leasehold property Shorter of 15 years or remaining life of the lease Motor vehicles - Straight line over 3 years - Fixtures and fittings Straight line over 3 years

2.8 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Consolidated Statement of Financial Activities.

Investments in subsidiaries are valued at cost less provision for impairment.

2.9 Debtors

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

2.10 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Page 17

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

2. Accounting policies (continued)

2.11 Liabilities

Liabilities and provisions are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated Statement of Financial Activities as a finance cost.

2.12 Deferred taxation

Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation.

A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable surpluses from which the future reversal of the underlying timing differences can be deducted.

Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse.

2.13 Financial instruments

The Group 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.

2.14 Pensions

The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund in respect of the year.

2.15 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Group for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Page 18

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

3. Critical accounting estimates and areas of judgment

The Charity does not charge depreciation on its freehold properties. The properties are required to be maintained at an extremely high standard to serve their service users and as a result of this, and previous valuations demonstrating increases in value, the Trustees believe that the residual value of the property portfolio would mean that any depreciation charge would be immaterial.

4. Income from donations and legacies

Donations
Grants
Total 2019		 Unrestricte
d funds
2020
£
2,593
142,564
145,157
180,579		 Restricted
funds
2020
£
14,000
-
14,000
-		 Total
funds
2020
£
16,593
142,564
159,157
180,579		 Total
funds
2019
£
2,622
177,957
180,579

Page 19

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

5. Income from charitable activities

Provision of care and education activities
Total 2019		 Unrestricte
d funds
2020
£
14,804,358
13,195,096		 Total
funds
2020
£
14,804,358
13,195,096		 Total
funds
2019
£
13,195,096

6. Investment income

Investment income - local cash
Total 2019		 Unrestricte
d funds
2020
£
4,791
6,852		 Total
funds
2020
£
4,791
6,852		 Total
funds
2019
£
6,852

7. Analysis of grants

Grants, Direct costs
Total 2019		 Grants to
Institutions
2020
£
32,650
37,627		 Total
funds
2020
£
32,650
37,627		 Total
funds
2019
£
37,627

Page 20

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

8. Analysis of expenditure on charitable activities

Summary by fund type

Direct costs
Total 2019		 Unrestricte
d funds
2020
£
14,319,497
12,711,732		 Restricted
funds
2020
£
14,000
-		 Total
funds
2020
£
14,333,497
12,711,732		 Total
funds
2019
£
12,711,732

9. Analysis of expenditure by activities

Direct costs
Total 2019		 Activities
undertaken
directly
2020
£
11,386,161
10,232,158		 Grant
funding of
activities
2020
£
32,650
37,627		 Support
costs
2020
£
2,914,686
2,441,947		 Total
funds
2020
£
14,333,497
12,711,732		 Total
funds
2019
£
12,711,732

Analysis of direct costs

Staff costs
Other direct costs
Total 2019		 Care and
education
activities
2020
£
7,430,231
3,955,930
11,386,161
10,232,158		 Total
funds
2020
£
7,430,231
3,955,930
11,386,161
10,232,158		 Total
funds
2019
£
6,091,240
4,140,918
10,232,158

Page 21

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

9. Analysis of expenditure by activities (continued)

Analysis of support costs

Care and
education
activities
2020
£
Staff costs
1,767,672
Depreciation
154,470
Other support costs
785,559
Governance costs
206,985
2,914,686
Total 2019
2,441,947
10.
Auditor's remuneration
Fees payable to the Charity's auditor for the audit of the Charity's annual
accounts
Fees payable to the Charity's auditor in respect of:
Fees payable to the Charity's auditors in respect of the audit of its
subsidiary
All non-audit services not included above
11.
Staff costs
Wages and salaries
Social security costs
Contribution to defined contribution pension schemes		 Total
funds
2020
£
1,767,672
154,470
785,559
206,985
2,914,686
2,441,947
2020
£
5,000
9,000
5,100
Group
2020
£
8,266,349
696,224
235,330
9,197,903		 Total
funds
2019
£
1,578,211
116,943
535,424
211,369
2,441,947
2019
£
3,580
7,525
7,257
Group
2019
£
6,915,486
565,683
188,283
7,669,452

Page 22

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

11. Staff costs (continued)

The average number of persons employed by the Charity during the year was as follows:

Directors
Maintenance
Admin
Direct staff		 Group
2020
No.
6
6
67
227
306		 Group
2019
No.
6
5
40
235
286

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2020 2019
No. No.
In the band £60,001 - £70,000 5 2
In the band £70,001 - £80,000 1 1
In the band £80,001 - £90,000 1 1
In the band £100,001 - £110,000 1 1
In the band £110,001 - £120,000 - 1
In the band £120,001 - £130,000 1 -

The key management personnel of the group comprise those of the Charity (the Trustees), the Chief Executive Officer, the General Manager and the Chief Finance Officer. The aggregate remuneration and benefits for key management personnel total £298,433 (2019: £312,444).

Page 23

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

12.
Intangible assets
Group
Cost
At 1 November 2019
At 31 October 2020
Amortisation
At 1 November 2019
Charge for the year
At 31 October 2020
Net book value
At 31 October 2020
At 31 October 2019		 Customer
relations
£
1,912,413
1,912,413
812,774
191,241
1,004,015
908,398
1,099,639

Page 24

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

13. Tangible fixed assets

Group

Cost or valuation
At 1 November 2019
Additions
Disposals
At 31 October 2020
Depreciation
At 1 November 2019
Charge for the year
On disposals
At 31 October 2020
Net book value
At 31 October 2020
At 31 October 2019		 Freehold
property
£
3,266,466
28,200
-
3,294,666
-
-
-
-
3,294,666
3,266,466		 Short-term
leasehold
property
£
597,462
126,067
(31,315)
692,214
249,260
57,570
(25,790)
281,040
411,174
348,202		 Motor
vehicles
£
154,827
41,944
(25,580)
171,191
70,997
49,057
(19,894)
100,160
71,031
83,830		 Fixtures and
fittings
£
365,197
117,871
(32,429)
450,639
293,875
47,843
(31,430)
310,288
140,351
71,322		 Total
£
4,383,952
314,082
(89,324)
4,608,710
614,132
154,470
(77,114)
691,488
3,917,222
3,769,820

Page 25

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2020
13.
Tangible fixed assets (continued)
Charity
Cost or valuation
At 1 November 2019
Additions
At 31 October 2020
At 31 October 2020
Net book value
At 31 October 2020
At 31 October 2019
14.
Fixed asset investments
Charity
Cost or valuation
At 1 November 2019
At 31 October 2020
Net book value
At 31 October 2020
At 31 October 2019		 Freehold
property
£
3,266,466
28,200
3,294,666
-
3,294,666
3,266,466
Investments
in
subsidiary
companies
£
3,035,030
3,035,030
3,035,030
3,035,030

Page 26

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

14. Fixed asset investments (continued)

Principal subsidiaries

The following was a subsidiary undertaking of the Charity:

Name Company Registered office or principal Principal activity Class of Holding Included in
number place of business shares consolidation
Fairways Care (UK) Limited 04460658 Fairways House, Mount Pleasant the provision of social, Ordinary 100% Yes
Road, Southampton, educational and
Hampshire,SO14 0QB health care services
to children

The financial results of the subsidiary for the period were:

Name Income Expenditure Profit/(Loss) Net assets £ £ / Surplus/ £ (Deficit) for the period £ Fairways Care (UK) Limited 15,399,856 14,084,235 1,315,621 906,260

Page 27

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

15. Debtors

Due within one year
Trade debtors
Other debtors
Prepayments and accrued income		 Group
2020
£
1,270,460
74,419
233,332
1,578,211		 Group
2019
£
900,307
46,592
245,754
1,192,653		 Charity
2020
£
-
-
23,179
23,179		 Charity
2019
£
-
-
26,512
26,512

16. Creditors: Amounts falling due within one year

Bank loans
Other loans
Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Pension fund loan payable
Other creditors
Accruals and deferred income
Deferred income at 1 November 2019
Resources deferred during the year
Amounts released from previous periods		 Group
2020
£
178,497
-
227,305
-
261,025
17,201
581,101
1,022,556
2,287,685		 Group
2019
£
58,979
241,637
149,880
-
291,330
12,273
525,526
877,307
2,156,932		 Charity
2020
£
178,497
-
-
513
-
-
-
41,223
220,233
Group
2020
£
598,320
623,894
(598,320)
623,894		 Charity
2019
£
58,979
241,637
-
44,801
-
-
-
42,930
388,347
Group
2019
£
553,389
598,320
(553,389)
598,320

Page 28

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

17. Creditors: Amounts falling due after more than one year

Group
2020
£
Bank loans
3,132,346
Other loans
-
3,132,346
Included within the above are amounts falling due as follows:
Group
2020
£
Between one and two years
Bank loans
188,020
Between two and five years
Bank loans
610,325
Other loans
-
Over five years
Bank loans
2,334,001
Other loans
-		 Group
2019
£
1,922,778
1,797,562
3,720,340
Group
2019
£
62,499
203,342
1,175,668
1,656,937
621,894		 Charity
2020
£
3,132,346
-
3,132,346
Charity
2020
£
188,020
610,325
-
2,334,001
-		 Charity
2019
£
1,922,778
1,797,562
3,720,340
Charity
2019
£
62,499
203,342
1,175,668
1,656,937
621,894

The aggregate amount of liabilities payable or repayable wholly or in part more than five years after the reporting date is:

Payable or repayable by instalments Group
2020
£
2,334,001
2,334,001		 Group
2019
£
2,278,646
2,278,646		 Charity
2020
£
2,334,001
2,334,001		 Charity
2019
£
2,278,646
2,278,646

The bank loan has a fixed and floating charge over freehold property of the Charity and all freehold and leasehold property vested in the company both at present and in the future. The loan is repayable over 25 years and interest is charged at bank base rate plus 3%.

Page 29

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

18. Financial instruments

Financial assets
Financial assets that are debt instruments
measured at amortised cost
Financial liabilities
Financial liabilities measured at amortised
cost		 Group
2020
£
3,867,663
Group
2020
£
(4,119,249)		 Group
2019
£
3,633,834
Group
2019
£
(4,696,362)		 Charity
2020
£
1,721,108
Charity
2020
£
(3,310,843)		 Charity
2019
£
1,709,653
Charity
2019
£
(4,020,956)

Financial assets measured at amortised cost comprise cash at bank, trade and other debors.

Financial liabilities measured at amortised cost comprise trade and other creditors and bank and other loans.

19. Deferred taxation

Group and Charity
At the beginning of the period
The deferred tax balance is made up as follows:
Accelerated capital allowances		 2020
£
5,555
5,555
Group
2020
£
5,555
(5,555)		 2019
£
5,555
5,555
Group
2019
£
5,555
(5,555)

Page 30

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

20. Statement of funds Statement of funds - current year

Balance at 1
November
2019
£
Unrestricted funds
General Fund
2,362,183
Revaluation reserve
504,037
2,866,220
Restricted funds
Restricted Fund
-
Total of funds
2,866,220
Statement of funds - prior year
Balance at
1 November
2018
£
Unrestricted funds
General Fund
1,691,388
Revaluation reserve
504,037
2,195,425		 Income
£
14,954,306
-
14,954,306
14,000
14,968,306
Income
£
13,382,526
-
13,382,526		 Expenditure
£
(14,319,497)
-
(14,319,497)
(14,000)
(14,333,497)
Expenditure
£
(12,711,731)
-
(12,711,731)		 Balance at
31 October
2020
£
2,996,992
504,037
3,501,029
-
3,501,029
Balance at
31 October
2019
£
2,362,183
504,037
2,866,220

Page 31

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

21.
Summary of funds
Summary of funds - current year
Balance at 1
November
2019
£
Unrestricted funds
2,866,220
Restricted funds
-
2,866,220
Summary of funds - prior year
Balance at
1 November
2018
£
Unrestricted funds
2,195,425
22.
Analysis of net assets between funds
Analysis of net assets between funds - current period		 Income
£
14,954,306
14,000
14,968,306
Income
£
13,382,526		 Expenditure
£
(14,319,497)
(14,000)
(14,333,497)
Expenditure
£
(12,711,731)		 Balance at
31 October
2020
£
3,501,029
-
3,501,029
Balance at
31 October
2019
£
2,866,220
Tangible fixed assets
Intangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
Provisions for liabilities and charges
Total		 Unrestricte
d funds
2020
£
3,917,222
908,398
4,100,995
(2,287,685)
(3,132,346)
(5,555)
3,501,029		 Total
funds
2020
£
3,917,222
908,398
4,100,995
(2,287,685)
(3,132,346)
(5,555)
3,501,029

Page 32

(A Company Limited by Guarantee)

FAIR WAYS FOUNDATION

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

Analysis of net assets (continued)

Analysis of net assets between funds - prior period

Tangible fixed assets
Intangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
Provisions for liabilities and charges		 Unrestricte
d funds
2019
£
3,769,820
1,099,639
3,879,588
(2,154,011)
(3,723,261)
(5,555)
2,866,220		 Total
funds
2019
£
3,769,820
1,099,639
3,879,588
(2,154,011)
(3,723,261)
(5,555)
2,866,220

23. Reconciliation of net movement in funds to net cash flow from operating activities

Net income for the period (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Amortisation charges
Dividends, interests and rents from investments
Loss/(profit) on the sale of fixed assets
Decrease/(increase) in debtors
Increase in creditors
Net cash provided by operating activities		 Group
2020
£
634,809
154,470
191,241
(4,791)
5,526
(385,558)
252,872
848,569		 Group
2019
£
670,795
308,185
-
(6,852)
(1,305)
126,224
153,752
1,250,799

Page 33

FAIR WAYS FOUNDATION

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

24. Analysis of cash and cash equivalents

Cash in hand
Total cash and cash equivalents		 Group
2020
£
2,522,784
2,522,784		 Group
2019
£
2,686,935
2,686,935

25. Analysis of changes in net debt

Cash at bank and in hand
Debt due within 1 year
Debt due after 1 year		 At 1
November
2019
£
2,686,935
(312,888)
(3,720,340)
(1,346,293)		 Cash flows
£
(164,151)
117,190
587,994
541,033		 At 31
October
2020
£
2,522,784
(195,698)
(3,132,346)
(805,260)

26. Pension commitments

The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £235,330 (2019: £188,283). Contributions totalling £40,281 (2019: £36,207) were payable to the fund at the balance sheet date and are included in creditors.

Page 34

FAIR WAYS FOUNDATION (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2020

27. Operating lease commitments

At 31 October 2020 the Group and the Charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

Land and buildings
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years		 Group
2020
£
701,873
2,165,781
2,529,422
5,397,076		 Group
2019
£
359,781
1,015,907
1,501,041
2,876,729		 Charity
2020
£
245,699
982,796
1,161,951
2,390,446		 Charity
2019
£
146,133
584,531
1,061,650
1,792,314

28. Related party transactions

Related party transactions between group companies have not been disclosed in accordance with section 33 of FRS 102.

The Trustees were not paid or in receipt of any other benefits from employment with the Charity or its subsidiary in the year. One Trustee was reimbursed £80 (2019: £730 to one Trustee) for travel expenses and one trustee was reimbursed £733 for IT costs in the year. No Trustee received payment for professional or other services supplied to the Charity.

The Independent Director Limited, a company in which I Davies (a Trustee) has an interest provided business consultancy services to Fairways Care (UK) Limited, the Charity's subsidiary, amounting to £26,900 (2019: £26,700).

Page 35