2022-03-31-accounts - Fusion21 Foundation

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Draft Financial Statements at 20 December 2022 at 14:35:17

Charity Registration No. 1164818

Company Registration No. 7998339 (England and Wales)

FUSION 21 FOUNDATION

COMPANY LIMITED BY GUARANTEE

CONSOLIDATED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE LEGAL AND ADMINISTRATIVE INFORMATION

Trustees	Ms A Astbury
	Mr T Cahill
	Mr E Livesey
	Mr C E C Murray
	Ms C Baxter
	Ms A Taylor
Secretary	Mr M Chadwick
Charity number	1164818
Company number	7998339
Registered office	Unit 2
	Puma Court
	Kings Business Park
	Knowsley
	Merseyside
	L34 1PJ
Auditor	BWM
	Tempest
	Suite 5.1
	12 Tithebarn Street
	Liverpool
	L2 2DT
Bankers	Barclays Bank PLC
	Lord Street
	Liverpool
	L2 1TD

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE CONTENTS

	Page
Chair and chief executive report	1
Trustees' report	2 - 17
Statement of trustees' responsibilities	18
Independent auditor's report	19 - 21
Statement of financial activities	22
Consolidated balance sheet	23
Charity balance sheet	24
Statement of cash flows	25
Notes to the financial statements	26 - 48

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE Chair and Chief Executive Report

FOR THE YEAR ENDED 31 MARCH 2022

Welcome to the 2021-22 Trustee report

This year we are pleased to introduce a report that, although still framed by Covid-19, focuses on the positive outcomes achieved on behalf our members to support the recovery stages of the pandemic.

We were especially proud to be a founding investor in the Covid-19 Recovery Loan Fund, launched by the Social Investment Business. As a founding investor in the Recovery Loan Fund worth more than £25 million in size and since the year end our Foundation has committed £2 million to the initiative to provide accessible financial support for organisations in the VCSE sector, whose primary purpose is to improve people’s lives, their environment, and the society they live in.

We were also able to successfully develop our core grant funding strategy by introducing a focus on funding research to better understand challenges in communities and create opportunities for policy advocacy. Through our research led approach, we have already seen the emergence of new ideas and thinking and have been able to support some of these projects to further their research through a test and learn approach.

We have continued to support our members through our social enterprise arm, Fusion21 Ltd, providing valued procurement and social value services. We are delighted to see a continued growth and strong performance in both areas, supporting even more of our members.

We look forward to a landmark year in 2022-23, celebrating our 20th anniversary. Reflecting on nearly 20 years of service to the public sector, particularly in the social housing sector, it is clear to see the impact Fusion21 has had on communities and in people’s lives over this period. As we look ahead to the future, our focus remains on continuing this impact as an organisation focused on positive change.

..............................

Chris Murray and Dave Neilson

Group Chair and Group Chief Executive Dated: .........................

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 MARCH 2022

The trustees present their report and financial statements for the year ended 31 March 2022.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).

Our Purpose

Everything we do at Fusion21 is designed to support for purpose and drive for creating a positive change. We work with like-minded public sector organisations, partners, and suppliers to build up communities and motivate sustainable change where it’s needed most. Our team of procurement, social value and community investment specialists is driven by a passion to make a difference.

Consequently, our members benefit from our specialist knowledge and determination to help them procure more efficiently and meaningfully.

Objects

The charity's objects are the advancement of citizenship and community development for the benefit of the public by the promotion of urban and rural regeneration in areas of social and economic deprivation by all or any of the following means

(a) the relief of financial hardship,

(b) the relief of unemployment,

(c) the advancement of education, training or retraining, particularly among unemployed people and offenders, and providing unemployed people and offenders with experience,

(d) the provision of financial assistance, technical assistance or business advice or consultancy in order to provide training and employment opportunities for unemployed people in cases of financial or other charitable need through help (i) in setting up their own business, or (ii) to existing businesses,

(e) the creation of training and employment opportunities by the provision of workspace, buildings, and/or land for use on favourable terms,

(f) the improvement of housing in the public sector or in charitable ownership provided that such power shall not extend to relieving any local authorities or other bodies of a statutory duty to provide or improve housing,

(g) the protection or conservation of the environment,

h) the advancement of education in the use of information technology by the provision of facilities and resources in particular for those who by virtue of their age or social or economic circumstances would not have otherwise have access to information technology,

(i) the promotion of social inclusion by preventing people from becoming socially excluded, relieving the needs of those people who are socially excluded and assisting them to integrate into society (socially excluded means being excluded from society, or parts of society, as a result of one of more of the following factors: unemployment; financial hardship; youth or old age; ill health (physical or mental); substance abuse or dependency including alcohol and drugs; discrimination on the grounds of sex, race, disability, ethnic origin, religion, belief, creed, sexual orientation or gender re-assignment; poor educational or skills attainment; relationship and family breakdown; poor housing (that is housing that does not meet basic habitable standards; crime (either as a victim of crime or as an offender rehabilitating into society)),

(j) such other means as may from time to time be determined subject to the prior written consent of the charity commissioners for England and Wales.

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Vision and Mission

Integral in our approach to achieving our purpose is our vision, mission and values: our guiding principles.

One Fusion21

We believe firmly in a One Fusion21 approach; whereby everything we do is to benefit our public sector members and thereby their communities. Our governance model supports our dual charitable and commercial priorities in support of this, and our culture embodies the principles of a single organisation working towards a common purpose.

The boards of Fusion21 Foundation and Fusion21 Ltd continue to work closely to ensure we remained aligned to the needs of our members. Our joint work on the next phase business plan, due to be launched in 2022-23, is a great example of this collaborative approach.

Public Benefit

The Trustees have referred to guidance published by the Charity Commission’s general guidance on public benefit when reviewing the charity’s objectives and activities, and in future planning. Particular attention has been paid as to how the planned activities will contribute to the objectives that have been set. The Trustees have undertaken a review of The Foundation’s public benefit to satisfy themselves that the Foundation’s activities meet with Charities Commission requirements on ‘public benefit’.

The Foundation’s public benefit principally derives from the social investment and support provided to the residents and communities of its 900+ public sector members. The Foundation is fully funded by Fusion21 Ltd and projects are often co-funded by Fusion21 Members. The Foundation does not engage in fundraising activities with its sole source of revenue currently being Fusion21 Ltd.

Objects and Activities for Fusion21 Foundation

The objects of the Foundation remain the same as the previous year and are detailed above.

Our strategy to deliver against these objects is focused on supporting the long term recovery from the Covid-19 pandemic, funding innovation and research to build brighter futures for local communities.

Our funding priorities are health & wellbeing , employment & skills , financial inclusion & resilience . We fund research to better understand issues and/or to create opportunities for policy advocacy. We also fund delivery projects that are innovative – projects that have a ‘test and learn’ approach – creating new solutions to ongoing issues.

We see partnership working as the best way to maximise impact with the grant funding we have available. We take a proactive approach to our grant making. Only invited applications will be considered. We like to develop relationships with our potential grantees. We do this by collaborating directly with our members (the public sector organisations using our procurement services) to understand the need in their communities. This helps us to spot opportunities to co-fund projects with them. Sometimes those projects are directly commissioned from organisations in the voluntary, community and social enterprise (VCSE) sector.

We fund research to better understand challenges in communities and create opportunities for policy advocacy. We also fund innovative delivery projects that have a ‘test and learn approach, creating new solutions to ongoing issues.

A key priority within our strategy is to support projects that:-

are transformational in terms of their design, delivery or impact
add value and don't duplicate existing work. They seek to shape and inform future work and dialogue
demonstrate clear partnership working between beneficiaries and relevant stakeholders

Achievements and performance: Fusion21 Foundation

Social Investment

As a founding investor in the Recovery Loan Fund (the Fund) worth more than £25 million in size, the Foundation has committed £2 million to the initiative since the year end to provide accessible financial support for organisations in the VCSE sector, whose primary purpose is to improve people’s lives, their environment, and the society they live in.

Instrumental in the Fund’s launch, the Fusion21 Foundation continues to support Fusion21 members and community organisations through our grant programme, helping to build brighter and sustainable futures for local communities.

Our investment in the Fund aims to increase sector resilience as businesses recover from the last couple of years, while offering crucial support to VCSEs and communities that have been hardest hit by Covid-19.

This is the largest social investment Fusion21 Foundation has made to date and demonstrates our commitment to leveraging social investment as a strategic tool to have a positive impact on the social enterprise sector.

The Fund was established by Social Investment Business (SIB) to make the Recovery Loan Scheme more accessible to UK charities and social enterprises.

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

Achievements and performance: grant funding

This year, the Foundation built upon the partnerships it established in 2020-21 to grow our strategic partnerships and investments to support communities’ responses to the impact of the pandemic.

We spent over £330,000 supporting projects across the country over our three priority themes:

employment and skills
health and well-being
financial inclusion and resilience

40% of spend was attributed to projects that were commissioned this year. We commissioned a number of multi-year projects this year, to the total value of £247,572.

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

These projects generated a range of outcomes across the priority themes including:

£2m committed for social investment
2 policy reports published
1 national survey on food insecurity conducted
4 community food organisations supported to build their sustainability
3 business start-ups created
16 businesses supported to develop
14 people reported a reduction in their loneliness
120 people reported improved mental health
42 young people completed accredited training
152 young people attended a health and social care employability programme – with 57 young people entering employment in the sector as a result

The key emerging themes and challenges identified by our members this year included:

Impact of end of covid interventions – eg. furlough, UC top up, eviction restrictions
The changing landscape of employment
Mental health ‘fall out’ from the pandemic

Mental health

Young people

It’s been widely reported that the Covid-19 pandemic has significantly increased the risk of young people experiencing mental illness, and there is a growing need for support services in this area.

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Committed to enhancing the health and wellbeing of young people, the Foundation announced a new partnership this year with OnSide - a national charity which inspires young people to lead happier, healthier lives while providing safe places to talk and enjoy activities. The charity has a network of 14 Youth Zones in the most economically disadvantaged areas across the UK and works with young people aged 8 – 19, or up to 25 with additional needs.

We’re one of 5 funding partners to support a 3 year, £0.5m project with Onside Youth Zones - delivering a holistic programme to create a culture of health in the Youth Zone Network across England. We have invested £67,500 in the charity’s ‘Culture of Health’ £500,000 initiative, which aims to provide mental health support to 840 young people across the Youth Zone network while also improving overall health outcomes.

Following the success of a pilot scheme in 2020, it’s 3-year ‘Culture of Health’ programme was established in partnership with the Oglesby Charitable Trust and is also supported by the Rayne Foundation and the CareTech Foundation. Now in its second year, the initiative is supporting young people to tackle mental health by building resilience to deal with the issues they face; in addition to promoting positive health choices - from good nutrition to the avoidance of substance abuse.

Grant funding from the Foundation is supporting the programme in its second and third year, specifically supporting youth zones in Wolverhampton, Barnet, Croydon and Barking and Dagenham.

Overall project outcomes will include:

Empowering 10,000 young people to live a healthy lifestyle
Providing 840 young people with mental health support across the Youth Zone network
Training 280 staff to identify mental health issues, offering support or making referrals
Engaging 1,960 young people in targeted health projects to develop healthy behaviours
Signposting 1,400 young people to additional local support services

Social Isolation

In October, we were delighted to kickstart a project with Clarion Housing Group and Homeshare UK , offering Clarion residents the chance to take part in a unique pilot programme - bringing older and younger people together with the aim of tackling social isolation and housing shortages.

The programme, called Homeshare, matches older people who can offer a spare room with a younger person who is looking for somewhere affordable to live and able to share their company and offer practical support around the home. Through Homeshare, people learn new skills and older householders are able to remain independent in their own homes for longer, with the housing model bringing communities and generations together to reduce loneliness and social isolation which affects all ages.

In the pilot phase, Clarion is seeking eight pairs of residents – one older and one younger – to live together and share their experiences to inform the future rollout of the programme.

The latest report by Homeshare UK, the membership network for over 20 local Homeshare services, shows that 96% of older people sharing their home (“Householders”) felt ‘less lonely’ and that having a younger Homesharer has ‘helped them a great deal through lockdown’. Across the UK, over 1,000 people took part in Homeshare in 2020, with growing numbers of people in their 50s and 60s looking for affordable, sociable accommodation.

Cost of living crisis

Food insecurity

Food insecurity has been a top priority for our members, especially during the pandemic. We’ve funded Business in the Community to improve the sustainability of four community food projects in the Midlands and to increase their ability to tackle the root causes of food poverty by drawing upon the experience and expertise of the community, private, not-for-profit and government sectors. The final outcomes report will be published in October 2022.

Food Foundation published their first of three surveys on food insecurity this year. The results of the survey received significant interest both from the media and parliamentarians. We distributed the survey results to our members and partners to support their strategic planning. We have also connected the Food Foundation to HACT to inform their network discussions around food insecurity.

Fuel poverty

We donated £5,000 to HACT’s Energy Hardship Fund which helped social housing tenants on low incomes cover their energy costs and enable them to keep warm over the winter months.

Supporting young tenants

We have co-funded a new pilot project with Clarion Housing Group called ‘Hometruths House’. The early intervention project aims to support new young tenants to effectively navigate and sustain their first tenancy - reducing rent arrears and eviction rates amongst 18–25 year-old residents. The project will deliver a virtual training session and an interactive website, alongside additional follow-up support and advice available for those who need it.

Inspired by a project conceived by young Clarion residents in 2017, the programme covers topics including rights and responsibilities, setting up bills and managing money, getting involved in community activities, damp and mould prevention, cooking on a budget and simple DIY. Broadband access is provided through a three-month MiFi subscription to ensure digital exclusion does not affect participation. Upon completion of the programme, young residents receive a £70 supermarket voucher to get them off to a flying start.

Employment and skills

Young people

Our multi-year employment and skills projects continued to support young people, develop their skills and create great employment opportunities.

At the Manchester Youth Zone , 42 young people completed accredited training relating to catering and hospitality through the Youth Zone’s Learning Kitchen and partnership working with Manchester College.

Despite the challenging recruitment environment within health and social care, The Prince’s Trust continued to support young people to develop their confidence and start a career in the sector. Our match funding of the nationwide programme enabled 152 young people to attend a health and social care employability programme – with 57 young people entering employment in the sector as a result.

Community assets

One Knowsley , the VCFSE infrastructure organisation, received an asset transfer of Court Hey courtyard and buildings from Knowsley Borough Council this year. One Knowsley, along with their key stakeholders, will be leading significant investment into the refurbishment of the two buildings, establishing a vibrant community hub with real economic impact and green credentials.

Fusion21 Foundation have supported the funding of two key posts to ensure the new asset is fully mobilised and used by the community. The buildings and grounds will be used to support, develop and deliver the activities of the VCFSE sector within the borough, by creating a resource for local residents and the wider population.

Policy advocacy

Universal Credit and Mental Health

Last year, we commissioned a piece of research by the Child Poverty Action Group : ‘Making Adjustments? The experiences of Universal Credit claimants with mental health problems’ . The report was launched in February and shone a spotlight on the experiences of people with mental health problems when navigating the social security system.

This is an important issue and area of interest for many Fusion21 member organisations who are working in communities. As such, we partnered with HACT’s Centre of Excellence in Community Investment to deliver a webinar on 30[th] March to talk about the report and share its findings. The webinar had 70 participants from the housing and VCSE sector.

The report was also cited as part of a joint All Party Parliamentary Group (APPG) on mental health and universal credit and by MIND during the DWP Select Committee (Oral Evidence on UC and managed migration).

The partnership between the Foundation and the CPAG was extremely positive – and the impact of the commissioned report is still being felt.

CPAG will advocate for the report’s recommendations to be considered by The Equality and Human Rights Commission in drawing up an agreement with the DWP, and they have already had valuable engagement with MPs and directly with DWP.

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Support for the social enterprise sector

In January, the Independent Commission on Social Investment published its final report (funded by the Foundation) on how the social investment market can support the growth of social enterprises.

The Commission engaged with over 300 social enterprises, has taken over twenty hours of recorded evidence and held sixteen engagement sessions with social enterprises, policy workshops and public witness sessions.

The Commission’s final report has called for “comprehensive structural reform” to the social investment market. It concludes that “the needs of social enterprises have been deprioritised over the past decade” and that “social investment cannot work – and has no purpose – without social enterprise.” This deprioritisation has come at a time when social enterprises need greater access to finance, with the social enterprise sector growing rapidly.

The Commission also highlights a major opportunity for economic and jobs growth. Its recommendations could see 5,000 social enterprises grow, creating 180,000 jobs either directly or indirectly, with 36,000 jobs in our most deprived communities, adding £3bn to the UK economy and injecting over £600m into the poorest parts of the UK.

Tenants’ Voices

This year was our second of three years supporting TAROE Trust to develop a sustainable business plan to ensure tenants’ voices continue to be heard at a national level. Throughout the year, the charity has firmly cemented its position as a national organisation working on behalf of tenants, particularly as the DLUHC and the RSH moved forward with plans to implement the Social Housing White Paper. The TAROE Trust has been able to work directly with residents to inform its engagement in key sector working groups.

The organisation has positioned itself in several strategic forums to further its manifesto aims, including:

DLUHC’s new Social Housing Quality: Expert Challenge Panel, the prime group responsible for monitoring the Government’s implementation of the Social Housing White Paper.
Interim Resident Panel at the HSE to assist in the establishment of the new Building Safety Regulator.
New Tenant Voice Steering Group, to be led by the NHF, to commission research into the establishment of a national tenant platform which contributes to a key objective of the charity.
Delivery of Oral Evidence to the HCLG Housing Select Committee Inquiry into Social Housing Regulation in January.
DLUHC Social Housing Quality Resident Panel – a working group which provides an opportunity for the charity to influence the set-up and subsequent operations of the new DLUHC Resident Panel.
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Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Housing Safety and Wellbeing Taskforce – Membership to provide input into a collaborative platform, to share best practice and support organisations, stakeholders, and communities
DLUHC Residents Voice Advisory Group – overseeing implementation of building safety reforms
RSH Sounding Board and National Tenant Organisations Liaison Group
RSH TSM Working Group - responsible for development of the new Tenant Satisfaction Measures for the sector.
DLUHC Decent Homes Review Sounding Board – Body responsible for taking forward Social Housing White Paper commitment to review Decent Homes Standard
BEIS Social Housing Decarbonisation Fund Consultative Panel – Government body responsible for developing and offering decarbonisation and retrofit funding to social housing sector
National Social Housing Fire Safety Group (NSHFSG) – Sector led group to share learning and drive-up standards in fire safety

Strategic Partnerships

HACT’s Centre of Excellence in Community Investment (CECI)

This year, we were delighted to join forces with HACT’s Centre of Excellence in Community Investment (CECI). The CECI was established by HACT in 2018 and has championed and celebrated the importance and impact of community investment across the UK. The five core founding funders were Clarion, L&Q, Orbit, Peabody and Sovereign.

Fusion21 Foundation - along with eight housing associations – will be co-funding the Centre for the next 3 years, becoming a part of their networks, and playing a strategic role in relation to community investment across the housing sector.

This partnership enables the Foundation to demonstrate its support across the social housing network – helping us to develop our networks, strategic funding opportunities and profile in the sector.

CECI have six thematic networks: Financial Hardship; Digital Exclusion; Racial Equality; Support for Young People; Community Assets; and Age Friendly Communities.

Homes UK 2021

The Foundation was represented at the Homes UK conference in November, taking part in a session entitled ‘Procurement with Purpose’. Within the session the Foundation - alongside Clarion Futures - showcased how it is making a vital contribution to Fusion21 as purpose-led, strategic funder driving social impact.

The Foundation’s Plan for the future

Our strategic approach to engaging the housing sector has become the blueprint for how we will continue to work in the future. We will embed our approach in housing and, going forward, we aim to take that from strength to strength and replicate this in other sectors. We will engage with more members directly, particularly to support cost of living challenges (including the expected increase in fuel poverty due to the increase in the energy price cap).

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Given the scale of the national challenges around cost of living, we will work with more experts in financial inclusion, welfare rights and hardship grant provision to understand the challenges in more detail as well as considering how we can play our part in co-funding solutions and creating impact.

We do not underestimate the impact of this economic crisis on individuals’ mental health, and it is therefore inevitable that future grant commitments will have a considerable focus in this area.

Employment and skills will continue to be a priority. Alongside our continued support of Prince’s Trust, we envisage greater collaboration with Fusion21’s social value offer, adding value to the Green Skills agenda and seeking out opportunities to support a green transition.

Our increased profile in the sector, and continued success in commissioning projects is testament to our broader engagement with Fusion21 members and our strategic partners. This approach supports the longer-term development of a funding pipeline and enables us to utilise more channels to disseminate the learning from our commissioned projects.

We will continue to raise the profile of the Fusion21 Foundation next year – with plans to develop the website content and to take active roles in webinars and conferences of our partners to showcase our impact as a funder and shape thinking within our funding priority areas. Feedback from grantees and partners is particularly important to us and we will continue to use that to shape our offer and processes to best effect. We are already noticing partners and stakeholders valuing the connections we facilitate for organisations through our networks - this can be just as valuable as any financial commitments offered. Our ambition to become a funder of choice and a relevant, effective connector across sectors is being realised and we look forward to developing that further in 2022/23.

Achievements and Performance: Fusion21 Ltd

Procurement

Headlines

848 members by the end of the year
£302m in contract spend procured
£35m efficiency savings secured for members
£870m in future contract value identified through new Decarbonisation and Consultants Frameworks

Social Value

Headlines

210 jobs generated through procurement activity
551 jobs sustained through procurement activity
66 apprenticeships created and 38 apprenticeships sustained
295 employment opportunities for local people created through Social Value in Planning activity
589 young people engaged in careers advice activities
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Future Plans

2022-23 will see the launch of the 5 year business plan for Fusion21. Focusing on key areas of strategic importance to our membership, the plan will continue the momentum gained over the past few years and set out our longer term goals and objectives.

The next financial year looks to be an exciting year, as we focus on developing key partnerships with like minded organisations to help maximise the impact of public expenditure, continue to support our membership with the next generation of our construction frameworks and implement the next stage strategy for the Foundation.

Focusing on our people, our procurement services, maximising our social impact, embedding sustainability into the heart of our DNA and continuing the Foundation’s positive impact in communities across the UK, provides a strong roadmap to continuing to deliver against our purpose.

Financial review

Review of the financial position

The consolidated Statement of Financial Position shows total group income for the year was £7,084,843. (2021: £6,142,853). This income was generated solely by the trading subsidiary, Fusion21 Ltd, through its procurement support work.

The charitable activities of the foundation are funded solely from donations received from the trading subsidiary and in the year to 31 March 2022 a donation was paid to the foundation of £1,989,845 (2021: £1,243,000). Further donations were made in respect of the year ended 31 March 2022 totalling £2,000,000 with the amounts being paid since the year end date.

After taking in account the total expenses of £5,325,650 (2021 - £4,797,245) the group recorded a net surplus for the year of £1,818,454 (2021 - £2,122,586) and had total carried forward funds of £12,763,887 (2021 - £10,945,423).

Of the total group funds carried forward £7,916,463 (2021 - £6,872,751) relate to reserves held within the trading subsidiary Fusion 21 Limited. The Trustees have chosen to retain such funds within Fusion21 Ltd to reflect the fact that a significant proportion of the group’s financial liabilities are held within the company. Such reserves are therefore considered necessary to enable the subsidiary to meet its debt obligations and to protect it against any potential future claim made against it. Funds have also been retained within the subsidiary to support the company’s growth and secure a source of considerable future funding through further annual donations.

The Foundation has designated funds totalling £3,642,034, set aside to fulfil the charitable objectives of the Fusion21 Foundation and includes £2m allocated for Social Investment supporting Social Enterprises and Charites struggling following Covid-19. Further details regarding the designated fund are set out in note 28.

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Policy for holding reserves

Fusion21 Foundation endeavour to maintain free reserves in each financial year to meet any reasonably foreseeable contingency. The free reserves are defined as funds that are available for use at the discretion of the Trustees. This excludes funds retained in the trading subsidiary and any amounts designated for other specific purposes.

A core part of the strategy of the Foundation is to play an active role in within the social investment community. As such, the Trustees agreed in December 2020 to work towards a model of 2/3 of available reserves to be committed to social investment activities and 1/3 for grant making. Provision has already been made within the designated funds for a social investment of up to £2m, with additional investments of similar size scheduled to follow thereafter.

The surplus recorded for the year ended 31 March 2022 saw total group funds increase to £12,763,887 (2021 - £10,945,433). The current year donation from the trading subsidiary, Fusion 21 Ltd, of 1,989,845 will look to be expended on charitable activities in 2022/23 and beyond in line with the foundations future plans and strategy. The trustees are also considering the investment of any surplus reserves with the aim to generate future incomes to fund further charitable activities.

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Structure, governance and management

Fusion21 Foundation;

A Company Limited by Guarantee (without share capital)
A registered charity
The parent company of Fusion21 Ltd
The sole Member of Fusion21 Ltd

Fusion21 Ltd:

A Company Limited by Guarantee (without share capital)
The “trading subsidiary” of Fusion21 Foundation
A social enterprise undertaking a range of business activities for the purpose of profit and social benefit
The Managing Agent for the Fusion21 Members Consortium
Donates profit to the Foundation to allow it to meet its charitable objects

Fusion21 Members Consortium:

• A membership organisation and procurement consortium; which is open to all public bodies/contracting authorities

Governed by its Membership
A ‘Contracting Authority’ for the purposes of Public Procurement Regulations
Holds ‘compliant’ framework agreements that Members can access to deliver cost efficiencies

Fusion21 Foundation (company number 07998339 , charity number 1164818) is the parent company and Fusion21 Ltd (company number 05090266) is a social enterprise subsidiary. The Foundation Trustees are responsible for the charity and can exercise control over Fusion21 Ltd, although it is governed and managed by an independent board of non-executive directors. In order to foster cohesion across the group there are two common directors (one common chair and one common director) with both boards having an independent majority.

The Foundation has made a commitment to adopting the Good Governance Code and has been working with Anthony Collins Solicitors on this objective to comply with the recommendation and guidance outlined in the “Decoding the Charity Governance Code” report published by RSM Accountants. To ensure consistency Fusion21 Ltd has also committed to adopting the 7 principles of The Good Governance Code along with an additional theme that will report annually on company viability.

An Inter Group Agreement has also been drafted which will be adopted by the Foundation and Ltd. These matters represent significant commitments to establishing long term good practice and will help to demonstrate how the Ltd board has ceded overall group control to the Foundation.

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Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Fusion21’s executive (the Leadership Team) is responsible for the day to day management of both organisations. Considering the charity is the newest addition to the Fusion21 group, management services are provided by Ltd either by gift aid or at actual cost. The executive comprises the Chief Executive, Director of Operations, Director of Business Services. This team is employed and remunerated by Fusion21 Ltd, from trading revenue, ensuring that no executive costs are attributed to the charity.

The only employee management costs incurred by the charity relate to one individual who is directly involved in managing the day to day activities of the Foundation. Fusion21 Ltd has a remuneration policy, managed by a Remuneration Panel of Non-Executive Directors, that determines executive pay. The Remuneration Panel commissions independent advice on executive pay and ensures that the policy is based on the commercial environment that Fusion21 Ltd operates within. This Panel also sets Recruitment, Retention and Succession Policy to attract and retain the appropriate knowledge, skills and experiences required by Fusion21 Ltd. The only other costs the Foundation incur are professional fees directly related to Foundation business.

Trustees are appointed in line with the group ‘Recruitment, Retention & Succession’ and ‘Equality & Diversity’ group policies which apply to all staff, Directors and Trustees. The articles of association also defines Trustee recruitment and appointment arrangements; and minimum and maximum Trustee numbers. Vacancies are actively recruited in the public domain using the services of professional recruitment agencies. Trustees are appointed on agreed ‘Terms of Office’ policy which provides for a three year term with options to extend to 2 further 3 year terms. A Board appraisal process is in place will be undertaken when the current trustees reach one year’s service and annually thereafter.

The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:

Ms A Astbury Mr T Cahill Mr E Livesey Mr C E C Murray Ms C Baxter Ms A Taylor

None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up.

Disclosure of information to auditor

Each of the trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

The trustees' report was approved by the Board of Trustees.

..............................	..............................
Mr E Livesey	Mr C E C Murray
Trustee	Trustee
Dated: .........................	Dated:.........................

17 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 MARCH 2022

The trustees, who are also the directors of Fusion 21 Foundation for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company Law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities SORP;
make judgements and estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.

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

18 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE INDEPENDENT AUDITOR'S REPORT

TO THE TRUSTEES OF FUSION 21 FOUNDATION

Opinion

We have audited the financial statements of Fusion 21 Foundation (the ‘charity’) and its subsidiary (the "Group") for the year ended 31 March 2022 which comprise the Consolidated Statement of Financial Activities, the Consolidated and parent charitable company Balance Sheets, the Consolidated Statement of Cash Flows and the notes to the accounts, 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 Financial Reporting Standard 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:

give a true and fair view of the state of the group and charitable company's affairs as at 31 March 2022 and of its incoming resources and application of resources, for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

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 group and 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

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. 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. 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 course of 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.

Opinions on other matters prescribed by the Companies Act 2006

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

the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.
19 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF FUSION 21 FOUNDATION

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group, the charity, the subsidiaries and their environment obtained in the course of the audit, we have not identified material misstatements in the directors’ Report included within 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:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose 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's and 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 trustees either intend to liquidate the group or the charitable company 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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
20 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF FUSION 21 FOUNDATION

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the 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.

Louise Casey ACA (Senior Statutory Auditor) for and on behalf of BWM ......................... Chartered Accountants Statutory Auditor Tempest Suite 5.1 12 Tithebarn Street Liverpool L2 2DT

21 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING THE CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 MARCH 2022

Unrestricted Unrestricted funds funds 2022 2021 Notes £ £	Unrestricted Unrestricted funds funds 2022 2021 Notes £ £	Unrestricted Unrestricted funds funds 2022 2021 Notes £ £
	funds	funds
	2022	2021
	£	£
Income and endowments from:
Other trading activities 3	7,004,602	6,119,697
Investments 4	435	7,579
Other income 5	79,807	15,577


Total income	7,084,844	6,142,853
Expenditure on:

Raising funds 6	5,325,650	3,896,093


Charitable activities 7	498,628	573,981
Other 13 Total expenditure

	(347,377)	327,171


	5,476,901	4,797,245


Net incoming resources	1,607,943	1,345,608

Other recognised gains and losses
Other gains or losses 14	210,511	776,978


Net movement in funds	1,818,454	2,122,586
Fund balances at 1 April 2021 Fund balances at 31 March 2022 Net movement in funds for the financial year is attributable to:
	10,945,433	8,822,847


	12,763,887	10,945,433


- Parent charity	2,028,965	1,930,718
- Non controlling interest	(210,511)	191,868


	1,818,454	2,122,586

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

The movement in funds detailed above compiles withthe requirement for a statement of changes in equity under FRS102.

22 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2022

Notes	2022	2022	2021 £ £ 592,970 214,764 807,734 975,339 437,207 2,220,280 734,153 2,478,493 7,468,284 10,680,930 (1,101,239) 9,579,691 11,799,971 (296,143) (558,395) 10,945,433 3,026,859 7,751,685 10,778,544 166,889 10,945,433	2021 £ £ 592,970 214,764 807,734 975,339 437,207 2,220,280 734,153 2,478,493 7,468,284 10,680,930 (1,101,239) 9,579,691 11,799,971 (296,143) (558,395) 10,945,433 3,026,859 7,751,685 10,778,544 166,889 10,945,433
	£	£	£

Fixed assets
Goodwill 15 Other intangible assets 15 Total intangible assets Tangible assets 16 Investments 17 Current assets	734,153 2,336,585 9,103,634 12,174,372 (1,335,569)	842,625 160,371 1,002,996 917,486 409,103 2,329,585 10,838,803 13,168,388 (245,730) (158,771) 12,763,887 12,878,753 (114,866) 12,763,887	734,153 2,478,493 7,468,284 10,680,930 (1,101,239) 3,026,859 7,751,685
Stocks 19
Debtors 21
Cash at bank and in hand Creditors: amounts falling due within one year 22
Net current assets
Total assets less current liabilities Creditors: amounts falling due after more than one year 23 Provisions for liabilities note 26 & 27 Net assets	3,642,034 9,236,719
				(296,143)

				(558,395)
				10,945,433 10,778,544 166,889 10,945,433
Income funds
Unrestricted funds
Designated funds 28
General unrestricted funds

Funds attributable to parent charity
Non controlling interest

The financial statements were approved by the Trustees on .........................

..............................	..............................
Mr E Livesey	Mr C E C Murray
Trustee	Trustee
Company Registration No. 7998339

23 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE CHARITY BALANCE SHEET

AS AT 31 MARCH 2022

Notes	2022	2022	2021	2021
	£	£	£	£

Fixed assets
Investments 17 Current assets	3,490 4,793,281 4,796,771 (6,000)	371,916 4,790,771 5,162,687 5,162,687 5,162,687	311 3,295,483 3,295,794 (6,106) 3,026,859 634,745	371,916

Debtors 21
Cash at bank and in hand Creditors: amounts falling due within one year 22
Net current assets				3,289,688
Total assets less current liabilities	3,272,000 1,890,687

				3,661,604


Income funds
Unrestricted funds
Designated funds 28
General unrestricted funds

				3,661,604


				3,661,604

As permitted by s408 Companies Act 2006, the charitable ccompany has not presented its own statement of financial activity and related notes. The charitable company’s net income for the year was £1,501,083 (2021: £684,597).

The financial statements were approved by the Trustees on .........................

..............................	..............................
Mr E Livesey	Mr C E C Murray
Trustee	Trustee

Company Registration No. 7998339

24 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2022

Notes Cash flows from operating activities Cash generated from operations 32 Interest paid Income taxes refunded / (paid) Investing activities Purchase of intangible assets Purchase of tangible fixed assets Amounts received from fixed assets investments	2022	2022	2021 £ £ 2,092,402 (9,603) (120,351) 1,962,448 (194,347) (121,337) 7,639 7,579 (300,466) 8,370 8,370 1,670,352 5,797,932 7,468,284	2021 £ £ 2,092,402 (9,603) (120,351) 1,962,448 (194,347) (121,337) 7,639 7,579 (300,466) 8,370 8,370 1,670,352 5,797,932 7,468,284
	£	£	£
	(12,600) (63,549) 28,104 435 (46,633)	1,687,354 (10,189) 52,428 1,729,593 (47,610) (46,633) 1,635,350 7,468,284 9,103,634	(194,347) (121,337) 7,639 7,579 8,370
				(9,603)
				(120,351)
				1,962,448
Investment income received
Net cash used in investing activities
				(300,466)
				8,370 1,670,352 5,797,932 7,468,284
Financing activities
Repayment of bank loans Net cash (used in)/generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

25 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

Charity information

Fusion 21 Foundation is a private company limited by guarantee incorporated in England and Wales. The registered office for the charity and its subsidiaries is Unit 2, Puma Court, Kings Business Park, Knowsley, Merseyside, L34 1PJ.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's memorandum and articles of association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)". The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

1.4 Incoming resources

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

In respect of long term contracts and contracts for ongoing services, income represents the value of work done in that year, including estimates of amounts not invoiced. Income in respect of long term contracts and contracts for ongoing services is recognised by reference to the stage of completion.

Grants receivable are credited to the Statement of Financial Activities in the year in which they are received.

26 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(continued)

1.5 Expenditure

Expenditure is included within the Statement of Financial Activities on an accruals basis and is recognised when there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably.

Expenditure is categorised under the following headings:

Costs of raising funds including management fees
Expenditure in charitable activities including cost of providing financial support to those in need.
Other expenditure represents these items not falling into the categories above.

Grants payable to third parties are within the charities charitable objectives. Where unconditional grants are offered, they are accrued as soon as the recipient is notified of the grant, as this gives rise to a reasonable expectation that the recipient will receive the grants. Where grants are conditional relating to performance then the grant is only accrued when any unfulfilled conditions are outside of the control of the charity.

Membership and charitable activity costs include expenditure which is directly attributable to specific activities and has been included within these cost categories. Certain other costs which are attributable to more than one activity are apportioned across cost categories on the basis of an estimate of the proportion of time spent by staff on those activities.

Governance costs are costs incurred in connection with the strategic management of the charity and in compliance with constitutional and statutory requirements.

Irrecoverable VAT is charged as an expense against the activity for which the expenditure arose.

1.6 Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7 Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill shall be considered to have a finite useful life, and shall be amortised on a systematic basis over its life.

Goodwill is being amortised over 10 years

1.8 Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software 3 years straight line Development costs 5 years straight line

27 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(continued)

1.9 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold property	Not depreciated
Leasehold improvements	3 years straight line
Office improvements	3 years straight line
Fixtures and fittings	3 years straight line
Equipment	3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.

1.10 Fixed asset investments

In the parent company financial statements iinterests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in or .

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a longterm interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

The company has issued loans with fixed or determinable payments that are not quoted in an active market. These loans are recorded at transaction price.

1.11 Impairment of fixed assets

At each reporting end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.12 Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

1.13 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

28 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(continued)

1.14 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

29 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(continued)

1.15 Taxation

The charity benefits from various exemptions from taxation afforded by tax legislation and is not liable to corporation tax on income or gains falling within those exemptions.

The tax expense represents the sum of the tax currently payable and deferred tax in respect of the subsidiary company.

Current

Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred

tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.16 Employee benefits

The costs of any short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17 Retirement benefits

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.

30 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(continued)

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in income/(expenditure) for the year.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other recognised gains and losses in the period in which they occur and are not reclassified to income/(expenditure) in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.18 Leases

Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.

1.19 Consolidation

The group financial statements consolidate the results of Fusion21 Foundation (the charity) and its subsidiaries, Fusion 21 Limited, Fusion 21 Asset Management Limited and Corehaus Ltd. The results of the charity's subsidiaries have been incorporated on a line by line basis.

No separate SOFA or income and expenditure accounts has been presented for the charity alone as permitted by the exemption afforded by section 408 of the Companies Act 2006 and the SORP.

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3 Other trading activities

	Unrestricted	Unrestricted
	funds	funds
	2022	2021
	£	£
Professional service and training contracts	7,004,602	6,119,697

31 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

4 Investments	4 Investments	4 Investments
Unrestricted Unrestricted funds funds 2022 2021 £ £ Interest receivable 435 7,579
	funds	funds

	2022	2021
	£	£

	435	7,579


5 Other income
Unrestricted Unrestricted funds funds 2022 2021 £ £ Other income 79,807 15,577

32 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

6 Raising funds

Unrestricted Unrestricted funds funds 2022 2021 £ £ Trading costs	Unrestricted Unrestricted funds funds 2022 2021 £ £ Trading costs	Unrestricted Unrestricted funds funds 2022 2021 £ £ Trading costs
	funds	funds

	2022	2021
	£	£

Other trading activities	1,848,548	1,249,822
Staff costs	3,209,607	2,480,699
Depreciation and amortisation	267,495	165,572
Trading costs

	5,325,650	3,896,093


	5,325,650	3,896,093

7 Charitable activities

Unrestricted funds Unrestricted funds 2022 2021 £ £	Unrestricted funds Unrestricted funds 2022 2021 £ £	Unrestricted funds Unrestricted funds 2022 2021 £ £
	2022	2021
	£	£

Staff costs	102,973	36,798
Letting costs	-	1,403


	102,973	38,201

Grant funding of activities (see note 8)	334,561	518,240

Share of support costs (see note 9)	46,013	682
Share of governance costs (see note 9)	15,081	16,858


	498,628	573,981

33 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

8 Grants payable

Unrestricted funds Unrestricted funds 2022 2021 £ £ Grants to institutions: BITC Sustainability of food community Covid Phase 2 20,000 - Child poverty action group 29,488 - Post lockdown recovery 30,000 - Food Foundation 35,000 - Tunza Pride - 6,240 Oneside Youth Zones 13,163 - New Horizon Youth Zone - 8,000 One Knowlsey 17,498 - Dream High 6,250 11,250 Onside: Culture of Health 13,162 - CAF - 100,000 NET - 100,000 Taroe Trust 70,000 90,000 Social Enterprise Coalition - 20,000 Homes4Good - 50,000 Thriving Spaces - 8,000 HACT 20,000 30,000 SEUK 5,000 - Shared Lives plus 25,000 - Dream Donation - 3,750 CPAG - 21,000 The Princes Trust 50,000 50,000 Business in the Community - 20,000 334,561 518,240	Unrestricted funds Unrestricted funds 2022 2021 £ £ Grants to institutions: BITC Sustainability of food community Covid Phase 2 20,000 - Child poverty action group 29,488 - Post lockdown recovery 30,000 - Food Foundation 35,000 - Tunza Pride - 6,240 Oneside Youth Zones 13,163 - New Horizon Youth Zone - 8,000 One Knowlsey 17,498 - Dream High 6,250 11,250 Onside: Culture of Health 13,162 - CAF - 100,000 NET - 100,000 Taroe Trust 70,000 90,000 Social Enterprise Coalition - 20,000 Homes4Good - 50,000 Thriving Spaces - 8,000 HACT 20,000 30,000 SEUK 5,000 - Shared Lives plus 25,000 - Dream Donation - 3,750 CPAG - 21,000 The Princes Trust 50,000 50,000 Business in the Community - 20,000 334,561 518,240
	2022
	£

Grants to institutions:
BITC Sustainability of food community Covid Phase 2	20,000
Child poverty action group	29,488
Post lockdown recovery	30,000
Food Foundation	35,000
Tunza Pride	-
Oneside Youth Zones	13,163
New Horizon Youth Zone	-
One Knowlsey	17,498
Dream High	6,250
Onside: Culture of Health	13,162
CAF	-
NET	-
Taroe Trust	70,000
Social Enterprise Coalition	-
Homes4Good	-
Thriving Spaces	-
HACT	20,000
SEUK	5,000
Shared Lives plus	25,000
Dream Donation	-
CPAG	-
The Princes Trust	50,000
Business in the Community	-

	334,561

34 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

9 Support costs

Support costs Governance costs £ £	Support costs Governance costs £ £	Support costs Governance costs £ £	2022 Support costs Governance costs	2022 Support costs Governance costs	2022 Support costs Governance costs	2021

	£	£	£	£	£	£

Office costs	294	-	294	35	-	35
Travel and subsistence	332	-	332	-	-	-
Computer & software costs
	432	-	432	625	-	625
Miscellaneous	-	-	-	14	-	14
Postage	31	-	31	8	-	8
Marketing	44,924	-	44,924	-	-	-
Audit fee of the parent charity
	-	6,000	6,000	-	2,880	2,880
Accountancy	-	-	-	-	2,520	2,520
Legal and professional	-	9,081	9,081	-	11,458	11,458


	46,013	15,081	61,094	682	16,858	17,540


Analysed between
Charitable activities	46,013	15,081	61,094	682	16,858	17,540

10 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year (2021 - no remuneration paid to trustees).

11 Auditor's remuneration

The analysis of auditor's remuneration is as follows:
Fees payable to the charity's auditor:	2022	2021
	£	£

Audit of the charity's annual accounts	3,250	2,880
Other services to the group
- the audit of the subsidiaries	10,420	8,750


Total audit fees	13,670	11,630


Non-audit services
All other non-audit services	7,360	5,900

35 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

12 Employees

Number of employees

The average monthly number of employees during the year was:

	2022	2021
	Number	Number

Management	6	6
Client facing, adminstration and support	57	47


	63	53


Employment costs	2022	2021
	£	£

Wages and salaries	2,867,004	2,159,817
Social security costs	296,198	240,841
Other pension costs	149,378	116,839


	3,312,580	2,517,497

The number of employees whose annual remuneration was £60,000 or more
were:
	2022	2021
	Number	Number
£60,000 - £70,000	6	5
£70,001 - £80,000	4	1
£80,001 - £90,000	1	2
£100,001 - £110,000	-	1
£110,001 - £120,000	2	1
£130,001 - £140,000	1	-
£140,001 - £150,000	-	1

13 Other

Unrestricted Unrestricted funds funds 2022 2021 Taxation 82,623 (99,829	Unrestricted Unrestricted funds funds 2022 2021 Taxation 82,623 (99,829	Unrestricted Unrestricted funds funds 2022 2021 Taxation 82,623 (99,829
	funds	funds

	2022	2021
	82,623
Taxation		(99,829
Actuarial (gain)/ loss on defined benefit pension scheme	(430,000)	427,000


	(347,377)	327,171

36 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

14 Other gains or losses

The other gains and losses shown on the Statement of Financial Activity, totalling £210,511 (2021 - £776,978) relate to the goodwill and non controlling interest movements recognised on consolidation. The current year movement relates to a further acquisition of shares in CoreHaus Ltd during the year by Fusion 21 Ltd.

15 Intangible fixed assets

Intangible fixed assets
	Goodwill	Software Development costs Group		Total £ 894,310 12,600 328,756

		Group
	£	£	£
Cost
At 1 April 2021	622,633	84,555	187,122
Additions - separately acquired	-	12,600	-
Additions - business combinations	328,756	-	-
Disposals	-	(9,750)	-	(9,750)
				1,225,916 86,576 146,094
At 31 March 2022	951,389	87,405	187,122

Amortisation and impairment
At 1 April 2021	29,663	56,913	-
Amortisation charged for the year	79,101	20,212	46,781
Disposals	-	(9,750)	-	(9,750)
				222,920 1,002,996 807,734
At 31 March 2022	108,764	67,375	46,781

Carrying amount
At 31 March 2022	842,625	20,030	140,341

At 31 March 2021	592,970	27,642	187,122

The brought forward goodwill relates to the acquisition of a controlling interest in Corehaus Ltd by Fusion 21 Limited during the year ended 31 March 2021. During the current year, Fusion 21 Ltd acquired a further 4.2% of the ordinary share capital for a total amount of £400,000 resulting in the additional goodwill shown above. This was completed in two tranches with an additional 2.2% of the share capital being purchased on 20 July 2021 for £200,000 and a further 2% of the ordinary share capital being purchased on 8 November 2021 for £200,000. All consideration was paid in cash.

Charity

There are no intangible fixed assets held within the charity

37 -

Draft Financial Statements at 20 December 2022 at 14:35:17

FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

16 Tangible fixed assets	16 Tangible fixed assets	16 Tangible fixed assets
Group Freehold land and buildings Leasehold improvements £ £ Cost At 1 April 2021 782,301 41,697 Additions - 15,206 Disposals - - At 31 March 2022 782,301 56,903 Depreciation and impairment At 1 April 2021 - 2,144 Depreciation charged in the year - 18,795 Eliminated in respect of disposals - - At 31 March 2022 - 20,939 Carrying amount At 31 March 2022 782,301 35,964 At 31 March 2021 782,301 39,553			Plant & machinery Fixtures and fittings		Equipment	Total £

	£	£	£	£	£

	782,301	41,697	11,367	209,855	196,907	1,242,127 63,549
	-	15,206	8,943	16,726	22,674
	-	-	-	(89,201)	(6,106)	(95,307)
						1,210,369 266,788 121,401
	782,301	56,903	20,310	137,380	213,475

	-	2,144	563	172,503	91,578
	-	18,795	6,055	31,785	64,766
	-	-	-	(89,200)	(6,106)	(95,306)
						292,883
	-	20,939	6,618	115,087	150,239


	782,301	35,964	13,692	22,293	63,236	917,486 975,339

	782,301	39,553	10,804	37,352	105,329

Charity

There are no tangible fixed assets held within the charity

38 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

17 Fixed asset investments Group

Fixed asset investments Group	Fixed asset investments Group	Fixed asset investments Group
Shares in group undertakings and participating interest Other investments £ £			Total £ 437,207
	£	£
Cost or valuation
At 1 April 2021	1,654	435,553
Repayments	-	(28,104)	(28,104)
			409,103 409,103 437,207 Total £ 371,916 - 371,916 371,916
At 31 March 2022	1,654	407,449

Carrying amount
At 31 March 2022	1,654	407,449

At 31 March 2021	1,654	435,553
Charity
Cost or valuation
At 1 April 2021 & 31 March 2022
Impairment
At 1 April 2021 & 31 March 2022
Carrying amount
At 31 March 2022 At 31 March 2021

39 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

18 Subsidiaries Group & Charity

Subsidiary undertakings

The charity is the sole member of Fusion 21 Limited, a company limited by guarantee which provides support to public sector members and other training services

Fusion 21 Limited owns 100% of the share capital of Fusion 21 Trading Limited, a dormant company.

Fusion 21 Limited owns 100% of the ordinary share capital of Fusion 21 Asset Management Limited, a buidling development company.

Fusion 21 Limited owns 65% of the ordinary share capital in CoreHaus Ltd, a company which specialises in offsite contrstuction. During the year, Fusion 21 Limited purchased an additional 4.2% of the company's share capital for an amount of £400,000.

Details of the charity's subsidiaries at 31 March 2022 are as follows:

Name of undertaking	Registered	Nature of business	Class of	% Held
	office		shares held	Direct
Fusion 21 Ltd	England & Wales	Pubic sector member support	Ltd by guarantee	100
Fusion 21 Trading Ltd	England & Wales	Dormant	Ordinary	100
Fusion 21 Asset	England & Wales	Development of building	Ordinary	100
Management Ltd		projects
Corehaus Ltd	England & Wales	Offsite construction	Ordianry	65

The aggregate capital and reserves and the result for the year of the subsidiaries included in the consolidation was as follows:

Name of undertaking				Capital and
	Turnover	Expenditure	Profit/(loss)	Reserves
	£	£	£	£
Fusion 21 Ltd	6,855,849	3,822,292	3,033,557	7,916,463
Fusion 21 Trading Ltd	-	-	-	1
Fusion 21 Asset
Management Ltd	43,489	36,188	36,188	405,283
Corehaus Ltd	148,750	1,062,567	(918,317)	(153,120)

Loans

In the three years to 31 March 2017 Fusion 21 Limited invested a sum of £199,999 in Big Issue Invest Corporate Social Venturing Limited, a corporate social venturing programme. At 31 March 2022 an amount of £35,531 was outstanding in respect of this loan.

Stock
Group & Charity	2022	2021
	£	£
Home plots	734,153	734,153

40 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

20 Financial instruments
Group Carrying amount of financial assets Debt instruments measured at amortised cost Equity instruments measured at cost less impairment Carrying amount of financial liabilities Measured at amortised cost Charity Carrying amount of financial assets Debt instruments measured at amortised cost Carrying amount of financial liabilities Measured at amortised cost					2022		2021
					£		£

					10,041,225		8,410,805
					409,103		437,207



					1,424,279		1,397,382


					2022		2021
					£		£

					4,793,281		3,295,483



						6,000	6,106


21 Debtors		Group		Group		Charity Charity
Amounts falling due within one year: Trade debtors Corporation tax recoverable Other debtors Prepayments and accrued income		2022		2021		2022 2021
		£		£		£ £
				778,137
		819,117
		95,056		60,540		- -
		23,418		103,844		- -
		1,398,994		1,535,972		3,490 311


		2,336,585		2,478,493		3,490 311


22 Creditors: amounts falling due within one year
Bank loans (secured) 24 Corporation tax payable Other taxation and social security Deferred income Trade creditors Other creditors Accruals and deferred income	Group			Group		Charity	Charity
	2022			2021		2022	2021
	£			£		£	£

	43,963			40,183		-	-
	173,843		137,683			-	-
	416,468		362,890			-	-
	157,020		623			-	-
	109,879		142,735				83
	8,346		25,644			-	-
	426,050		391,481			6,000	6,023


	1,335,569		1,101,239			6,000	6,106

41 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

23 Creditors: amounts falling due after more than one year	23 Creditors: amounts falling due after more than one year
Bank loans (secured) 24	Group	Group	Charity	Charity
	2022	2021	2022	2021
	£	£	£	£

	245,730	296,143	-	-


	245,730	296,143	-	-


24 Loans and overdrafts (Group)
Bank loans Payable within one year Payable after one year			2022	2021
			£	£

			289,693	336,326


			43,963	40,183
			245,730	296,143

The loan is secured by way of a fixed charge over the premises at Unit 2, Kings Business Park, Kings Drive, Prescot dated 7 July 2017 and a debenture comprising a further fixed and floating charge over all assets of the company dated 8 June 2017.

25 Provisions for liabilities	2022	2021
Group Notes Deferred tax liabilities 26 Retirement benefit obligations 27	£	£

	11,771	23,795
	147,000	534,600


	158,771	558,395

Charity

There are no provisions for liabilities within the charity accounts.

42 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

26 Deferred taxation (Group)

Deferred tax assets and liabilities are offset where the charity has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Group Liabilities Liabilities	Group Liabilities Liabilities	Group Liabilities Liabilities
	2022	2021
Balances:	£	£

Accelerated capital allowances	11,771	23,795


Charity Liabilities Liabilities
	2022	2021
Balances:	£	£

Accelerated capital allowances	-	-
Retirement benefit obligations	-	-


	-	-


	Group	Group
	2022	2022
Movements in the year:	£	£

Liability at 1 April 2021	23,795	-
Charge to other expenditure (12,024)		-


Liability at 31 March 2022	11,771	-

The deferred tax liability set out above is expected to reverse within 36 months and relates to accelerated capital allowances that are expected to mature within the same period.

27 Retirement benefit schemes

The charity's trading subsidiary, Fusion 21 Limited, operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.

43 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

27 Retirement benefit schemes

(continued)

Defined benefit schemes

The trading subsidiary contributes to the Social Housing Pension Scheme (SHPS) which is a multiemployer defined benefit pension scheme with approximately 150 sponsoring employers. The scheme is administered by TPT Retirement Solutions (formerly The Pensions Trust( ('TPT'). Under the scheme the employees are entitled to retirement benefits based on a percentage of their final salary on attainment of a retirement age . No other post retirement benefits are provided.

Historically, TPT has not been able to provide sufficient information for each social landlord's share of SHPS in order for each employer's share of the scheme assets and liabilities to be recognised on the balance sheet. As such the scheme had previously been accounted for as a defined contribution scheme with the balance sheet including a provision for the company's deficit contributions only.

Sufficient information about the multi-employer defined benefit plan had now been made available in prior years and as such it had previously been accounted for as a defined contribution scheme. However, since the year ended 31 March 2019 TPT have made the necessary information available and the defined benefit accounting has been applied since.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were provided by TPT Retirement Solutions for the period ended 31 March 2022. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

Key assumptions
	2022	2021
	%	%
Discount rate	2.77	2.22
Expected rate of salary increases	4.11	3.88
Inflation (RPI)	3.39	3.18
Inflation (CPI)	3.11	2.18

Mortality assumptions The assumed life expectations on retirement at age 65 are:

Mortality assumptions The assumed life expectations on retirement at age 65 are:	Mortality assumptions The assumed life expectations on retirement at age 65 are:
2022 Years		2021
		Years
Retiring today
- Males	21.1	21.6
- Females	23.7	23.5


Retiring in 20 years
- Males	22.4	22.9
- Females	25.2	25.1

44 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

27 Retirement benefit schemes	(continued) 2022 2021 £ £ 14,000 5,000 3,000 3,000 17,000 8,000 2022 2021 £ £	(continued) 2022 2021 £ £ 14,000 5,000 3,000 3,000 17,000 8,000 2022 2021 £ £


	2022
	£

	14,000
	3,000

	17,000


	2022
	£

	(404,000)	(226,000)
	37,000	33,000

	(367,000)	(193,000)
	(63,000)	620,000 427,000 2021 £ 2,322,000

	(430,000)

	2022
	£

	2,298,000

45 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

27 Retirement benefit schemes	(continued)	(continued)
Movements in the fair value of plan assets: Fair value of assets at 1 April 2021 Interest income Return on plan assets (excluding amounts included in net interest) Benefits paid Contributions by the employer At 31 March 2022 The fair value of plan assets at the reporting period end was as follows: Equity instruments Debt instruments Property Liability driven investments Absolute return Alternative risk permia Secured income Other categories

		2022
		£

		1,662,000
		37,000
		367,000
		(15,000)
		51,000


		2,102,000



	2022	2021
	£	£

	404,000	265,000
	250,000	205,000
	117,000	77,000
	587,000	422,000
	84,000	92,000
	69,000	63,000
	78,000	69,000
	513,000	469,000


	2,102,000	1,662,000

28 Designated funds (group)

The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:

Balance at 1 April 2020 £	Balance at 1 April 2020 £	Transfers Balance at 1 April 2021	Transfers Balance at 1 April 2021	Transfers 31	Balance at March 2022
	£	£	£	£	£
			370,000
Corehaus investment	347,707	22,293			370,000
Employment skills, health wellbeing & deprivation
	370,000	2,222,359	2,592,359	679,675	3,272,034
Social investment manager	64,500	-	64,500	(64,500)	-


	782,207	2,244,652	3,026,859	615,175	3,642,034

Corehaus investment: The Fusion21 Foundation has designated the purchase of 2 housing units made with modern methods of construction. These units will use innovate building solutions to enhance the experience of the occupants and will be available at an affordable rent to support the housing crisis.

46 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

28 Designated funds (group)

(continued)

Employment skills, health wellbeing & deprivation: The programme will deliver benefits in all three themes and support the achievements of impacts. As part of the programme we will encourage our members to share their social value priorities and long term thinking with the Foundation in return for access to a grass roots grant to fund current projects. This will help to develop the Foundation’s research and member engagement capabilities and improve the knowledge base around member requirements. Projects that receive funding will contribute to meeting the programme objectives and addressing the specific impacts listed against each theme. The designated fund includes £2,000,000 allocated for Social Investment supporting Social Enterprises and Charites struggling following Covid-19.

Social investment manager: The social investment manager was responsible for discharging social value activity on behalf of the Fusion21 Foundation,.

29 Operating lease commitments

At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group Within one year Between two and five years Charity Within one year Between two and five years In over five years Within one year	2022	2021
	£	£

	139,403	141,779
	347,875	487,278


	487,278	629,057


	2022	2021
	£	£

	-	-
	-	-
	-	-


	-	-


30 Related party transactions

Remuneration of key management personnel

The remuneration of key management personnel is as follows.

	2022	2021
	£	£

Aggregate compensation	436,692	404,697


Transactions with related parties

47 -

Draft Financial Statements at 20 December 2022 at 14:35:17 FUSION 21 FOUNDATION COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 MARCH 2022

30 Related party transactions

(continued)

The group has taken advantage of the disclosure exemptions to which it is entitled regarding transactions between parent and 100% owned subsidiary companies.

No guarantees have been given or received.

31 Members' liability

The company is limited by guarantee and has no share capital. Every member of the charity undertakes to contribute to the assets of the charity, in the event of it being wound up while he or she is a member or within one year of ceasing to be a member or within one year of ceasing to be a member for debts and liabilities of the charity contracted before he or she ceases to be a member, such amounts as may be required not exceeding £1.

32 Cash generated from operations	32 Cash generated from operations	2022	2021 £ 2,122,586 66,801
Surplus for the year Adjustments for: Taxation (credited) / charged Investment income recognised in statement of financial activities Interest payable Amortisation and impairment of intangible assets Depreciation and impairment of tangible fixed assets Consolidation adjustments re Goodwill arising on acquisition Movements in working capital: (Increase) in stocks Decrease in debtors Increase in creditors Increase in provisions Increase in deferred income Cash generated from operations		£

		1,818,454

		(46,127)
		(435)	(7,579)
		10,189	9,603 56,663 108,909 286,754
		146,094
		121,401
		(328,756)
		-
			(734,153)
		107,392	404,217 200,406
		42,404
		(335,248)	(422,428)
		151,986	623 2,092,402 March 2022 £ 9,103,634

		1,687,354

33 Analysis of changes in net funds
At 1 April 2021 £ Cash at bank and in hand 7,468,284 Loans falling due within one year (40,183) Loans falling due after more than one year (296,143) 7,131,958		Cash flows At 31
	£	£

	7,468,284	1,635,350

	(40,183)	(3,780)	(43,963)
	(296,143)	50,413	(245,730)
			8,813,941
	7,131,958	1,681,983

48 -