Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## Financial Statements
## Fedcap UK
For the year ending 30 September 2025
Charity Number: 1175737 Registered Number: 10466370
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
|**Contents**||
|---|---|
|Reference and Administrative details|2|
|Chair’s Report|3|
|Trustees’ Report|8|
|Strategic Report|11|
|Independent Auditor’s Report|24|
|Consolidated and Parent Statement of Financial Activities|29|
|Consolidated and Parent Balance Sheet|30|
|Statement of Consolidated Cash Flows|31|
|Analysis of Net Debt|32|
|Notes to the Financial Statements|33-61|
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Commercial in Confidence
## **Fedcap UK**
## **Reference and Administrative Details**
## **Company Information**
|**Directors**|Kenneth Samuel Brezenoff|
|---|---|
||Jeffries Richard Briginshaw|
||Michael Friedman|
||Carol Lynn Khoury|
|**Charity Registered number**|
1175737|
|**Registered number**|10466370|
|**Registered office**|Boaz House,|
||Massey Road,|
||Thornaby,|
||United Kingdom,|
||TS17 6DY|
|**Independent auditor**|Grant Thornton UK LLP|
||8 Finsbury Circus|
||London|
||EC2M 7EA|
|**Bankers**|HSBC|
||60 Queen Street|
||Victoria|
||London|
||EC4N 4TR|
|**Solicitors**|Shepherd and Wedderburn LLP|
||9 Haymarket Square|
||Edinburgh|
||EH3 8FY|
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Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Chair’s Report**
As chair of Fedcap UK, I am proud of the impact our services, provided by Fedcap UK and its subsidiaries, continue to have in the UK market, effecting positive change for our customers, our people and our funders. During the last 12 months, whilst our employability programmes have continued to significantly impact more people who are unemployed, inspiring confidence in them to pursue and achieve their goal of returning to work, we have also diversified our business bringing to life, the group wide strategy of offering high impact services, across four integrated practice areas. At Fedcap, we deliver research-based solutions that opens the door to economic mobility and wellbeing for barriered communities. The social value brought about through the services we offer is fundamental to supporting government with the achievement of its long term plans and it is therefore crucial that we continue to successfully deliver our range of contracts which activities fulfil our charitable goals within the UK and across the world.
Fedcap UK is a subsidiary of the Fedcap Group, a New York based charity. The Fedcap Group, through a network of nonprofit affiliates and a footprint across the U.S., U.K., and Canada, serves more than 332,000 people each year. Across our four integrated practice areas – education, workforce development, health, and economic development – we deliver research-based solutions for a broad cross-section of individuals facing barriers including supporting people to move into long term sustainable employment, upskilling individuals, supporting people with disabilities, people affected by substance misuse, veterans, children and working families.
Ou strategic work is delivered through four integrated practice areas
## **Education**
Education is a driver of lifelong opportunity. From early childhood to post-secondary and technical training, our programmes span every stage of learning. Children are prepared and supported to thrive in school, young people with barriers receive critical support, and adults gain skills to succeed in college/university and the 21st-century workforce.
## **Employability**
Employability is a bridge to economic stability and business growth. Through individual tailored support packages, industry-driven training, soft skills development, and postplacement support, individuals are prepared for in-demand jobs. Our programmes also help employers meet evolving staffing needs across the U.K., U.S. and Canada.
## **Health**
Health is foundational to stability and economic mobility. Our programmes focus on public health education, care coordination, and access to treatment, reducing hospitalisations and improving long-term outcomes. Partnerships with integrated provider networks help individuals manage chronic conditions and stay connected to care.
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Commercial in Confidence
## **Fedcap UK**
## **Chair Report (cont.)**
## **Economic Development**
Economic development expands opportunity by building strong businesses, skilled talent, and resilient communities. Through commercial enterprises, workforce investment, and green innovation, our programs generate jobs and strengthen local economies. We bring funding and tools to historically excluded communities to support growth and build better futures.
These practice areas are all targeted to creating opportunities and improving the lives of people with barriers to economic mobility. Its aim in the UK is to serve UK people, providing services and a wealth of experience which has made us a large successful charity.
During the reporting year we continued to successfully deliver our contracts across England and Scotland whilst progressing our diversification strategy aimed at building a long term sustainable business where our people can have challenging and exciting careers across a number of different business lines including health, education, skills and training.
Within Fedcap Employment Limited, we have continued to successfully deliver the Restart South Central and IPES contracts, held with the Department of Work and Pensions along with Restart Northwest and Working Health contracts under subcontracting arrangements. In addition, the entity secured a new health contract with Surrey County Council whilst securing extensions to its Inspiring Futures programme with Cheshire East Council and its New Directions contract with Hampshire County Council. The period saw the IPES contract come to an end with an efficient exit and closure, concluding this contract successfully after 6 years of delivery.
The impact of the IPES contract, which was the first contract awarded to Fedcap Employment Ltd in 2019, supported 1,757 people with disabilities and complex needs over a minimum period of 12 months both in pre-employment and in work. The programme supported 952 people into work with 52 people registering as self-employed, an amazing outcome on a truly impactful programme for people in the Southwest of England.
Building on this, to September 2025, Fedcap Employment Limited welcomed 19,387 customers across all of its programmes and moved 8,837 people were supported into employment and other contractual milestones aimed at improving people’s health.
Looking to Scotland, Start Scotland Limited has continued to successfully deliver the Fair Start Scotland contract across their three allocated lots, East, South-West and North-East. The entity continued to service the contract with starts on the programme having ended in March 2025 and services anticipated to continue to be delivered through to March 2026 whilst participants complete their time on programme.
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Commercial in Confidence
## **Fedcap UK**
## **Chair Report (cont.)**
As the main subcontractor of Start Scotland Limited, Fedcap Employment Scotland Limited also performed well during the period. Performance in year was in line with expectation given the position of the contract in its lifecycle with most customers completing their time on programme and or moving into employment. 91 people into employment and 198 people into further employment when there first position ceased. Overall, sustained employment trended in line with expectations across all three sustainment milestones of 13, 26 and 52 weeks with 634 people sustaining employment for one year or more, which is a major indicator of the success of the programme.
As part of the wider diversification strategy, in the reporting period Fedcap Employment Scotland Limited launched a new business line, bringing to market a new education and learning offer from Fedcap to the UK, opening our first Apex Centre in January 2025. Since then, 69 participants have undertaken our Photovoltaic installation course, a 12 week National Open College Network “NOCN” accredited course of which 38 people completed in year, achieving a level 3 qualification in Solar installation and 31 continue with their studies towards the qualification. In addition, all participants have achieved a level 1 Award for Health & Safety in a construction environment.
Also in the year the health contract held by Fedcap Employment Scotland with Dumfries and Galloway council came to an end in March 2025. The contract funded by Dumfries and Galloway (D&G) Council was to provide Health & Wellbeing support to individuals with health challenges to supplement D&G Council’s Employability Service. Offering six personalised health one-toone interventions to 50 customers, of which 100% of customers reported improvement in mental wellbeing, measured through Warwick Edinburgh Wellbeing Scale and 97% reported a reduction in functional impairment with improved mental health, measured through Work and Social Adjustment Scale.
Building on the diversification strategy and strategic goal to grow the UK business to £100 million revenue per annum, we are pleased to announce that Fedcap UK successfully combined with three new organisations during the reporting period. These combinations brought to life business lines across all four of our strategic practice areas which we believe are the key to opening doors to economic mobility and wellbeing.
In May 2025, Fedcap UK successfully partnered with Elite Supported Employment Agency, a registered charity working with people with disabilities or those at a disadvantage, aged 14 to 65+ across South, Mid and West Wales. Its mission is far-reaching - to support hundreds of people every year with vocational opportunities, training and employment through our wide network of partnerships, funders and stakeholders, and through four business lines:
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## **Fedcap UK**
## **Chair Report (cont.)**
Elite Supported Employment Services Elite Training Services Elite Paper Solutions (social enterprise) Elite Clothing Solutions (social enterprise)
Since joining forces with Fedcap UK and the wider Fedcap Group, Elite has expanded its current services across more regions, piloting new programmes aimed at supporting individuals with autism, mental health conditions, and complex disabilities, and benefit from Fedcap’s operational infrastructure and best-in-class programme models.
The Elite partnership was swiftly followed by the combination of Fedcap UK with The Verdancy Group in June 2025. The Verdancy Group are a leading provider of green skills training and sustainability consultancy based in Scotland. Their mission is to inspire positive environmental change within communities, be that at home, in school or in the workplace. This mission has a strong alignment with the wider Fedcap Group mission and a combination would bring additional capabilities and service offers into the group whilst offering a strong foundation on which to grow the verdancy business.
Since it combined, The Verdancy Group has launched its green skills training offer through its Apex Training arm, secured two new contracts providing retrofit training to individuals across the UK and continued to provide consultancy and environmental guidance to organisations, schools and communities.
Finally in July 2025, Fedcap UK secured its final partnership in the reporting period, combining with BP Learning UK. Big Picture Learning is an inclusive provision for children in Years 5 – 8 which is part of a local offering in partnership with the City of Doncaster Council. The main focus is to support young people who struggle with the challenges of transitioning to secondary school, or maintaining a successful position in mainstream education, with the aim of ensuring they can remain without the need for further, more complex intervention at a later stage, and crucially before they are disillusioned and distanced from school. With this partnership the education practice area was formally established in the UK.
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Commercial in Confidence
## **Fedcap UK**
## **Chair Report (cont.)**
With the establishment of three practice areas though Fedcap Employment, BP Learning UK and Elite Supported Employment Agency, the Trustees made the strategic decision to launch the health practice area formally in the UK. Kennedy Scott Limited, a dormant member of the Fedcap UK was renamed _Fedcap Insynery Limited_ in readiness for the implementation of a new strategic health plan aimed at offering health solutions across a broad section of services, through integrated care coordination and community health initiatives. At the end of the reporting period, Fedcap Insynergy (formerly Kennedy Scott Limited) remained dormant and still remains dormant with the name change enacted on the 5[th] November 2025.
With the growth of Fedcap UK, the introduction of new subsidiaries and activation of the four integrated practice areas in the UK, the trustees made the decision to reorganise the group structure and across Q4 of the reporting period moved all corporate services into Fedcap UK. This move ensured that the group was structured to effectively respond to a diverse organizational structure with a range of service offerings, ensuring corporate services where structured to respond to UK group needs ensuring the continued success of the UK Charity, its subsidiaries, their mission and the achievement of the wider Fedcap Group mission.
In closing, myself and the trustees continue to be strongly committed to our mission and are excited at the future prospects of the UK charity and the positive impact it can have on UK society. We would like to offer a special thank you to everyone who has helped support our mission during the year with a particular thank you to our people, in what has been an extremely busy year and to our customers who access our range of services, we are here to help you at each step of your journey.
Kenneth Samuel Brezenoff
## **Chair**
Date 23/6/2026
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## **Fedcap UK**
## **Trustees’ Report**
The Trustees are pleased to present their annual Trustees’ report together with the consolidated financial statements of the charity and its subsidiaries for the year ended 30 September 2025 which are also prepared to meet the requirements for a directors’ report and accounts for Companies Act purposes.
The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, 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).
## **Objectives and Activities**
## **Purpose and Activity**
The principal objectives and activities for the charity are:
- The advancement of social inclusion, by enabling economic independence, employment and opportunity to participate in society for socially and economically disadvantaged and disabled individuals through various workforce and economic development initiatives and programmes.
- The advancement of education for all ages including but not limited to, the fields of early education and intervention, vocational training, and adult and youth education programmes.
- The advancement of occupational health, including but not limited to, assisting individuals with physical, mental or emotional health difficulties which may include substance abuse disorders, that create or exacerbate barriers to economic stability or employment.
## **Main activities of the charity and activities undertaken to further the charitable purpose**
Through our subsidiary entities we further our charitable purpose through a range of service offerings across four integrated practice areas: Employability, Health, Education and Economic Development. Across these four practice areas we deliver a range of contracts and offerings for a broad spectrum of people, including children, people with disabilities and complex needs, people with health and/or employment challenges. Our programmes include delivery of targeted and largescale employment programmes whose main aims are to support people to move into long term sustainable employment, through to small social enterprise offerings where people with complex needs and disabilities can gain vocational experience in their pursuit of employment, training and volunteering. Our customers range from those people who are diagnosed with a disability and need specialist support to achieve their employment aims, through to working with individuals who are
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## **Fedcap UK**
subject to generational unemployment and providing the tools, confidence, individual support and guidance to break the cycle and improve the lives of themselves and their families. As a charity, we are committed to advancement of individuals whatever their barrier may be, and this is realised through the programmes, initiatives and contracts we run.
Our funders are the UK government, governments of the devolved nations, local authorities and leading employability providers with whom we work closely in partnership to deliver key public services. We also provide business to business and business to customer offerings through our commercial enterprises and training offers. In the year to 30[th] September 2025, the subsidiaries of the charity had provided services to 20,245 individuals with 9,214 people achieving a milestone or agreed programme outcomes.
With the continued support of our parent, the Fedcap Group, a large US based charity, we are committed to continuing to grow and amplify our services in the UK and to continue to progress our diversification strategy through our practice areas of Employability, Health, Education and Economic Development to create a £100m group by 2028. This will allow us to expand the impact of our services, continuing to develop our relationships with our funders, apply for new contracts which align with our charitable purpose and measuring our success through achievement of key milestones and full delivery of quality services.
## **Public Benefit**
The charity’s aims and achievements are set out in this report. The activities in this report have been undertaken to further the charity’s charitable purposes for the public benefit. The directors have complied with the duty under Section 4 of the Charities Act 2011 to have due regard to public benefit guidance published by the Charities Commission and the Directors have paid due regard to this guidance in deciding what activities the charity should undertake.
## **Employees**
- a) During the financial year the Directors have actioned an employee engagement plan to introduce, maintain and develop communications. The arrangements are aimed at:
- Providing communications on business and employee matters, through six communication channels, an All People call; CEO/Executive briefing “Insight”, Senior Leadership Team specific channel “Ignite”, Manager and Team briefing “Inspire”, a weekly business update “Innovate”; and finally, a quarterly newsletter of success stories, “Impact”.
- Improving communications: the continued offer of group wide people engagement survey to measure engagement across all entities and subsidiaries and set action plans based on findings to improve employee experience.
- Continuing with the employee “We Listen” forums where employees review current company policies process and topics and seek feedback and approval
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## **Fedcap UK**
These communications and forums allow for employee questions and feedback, which is then followed up by management.
- b) Employee support and rewards:
- Offered four times of salary life assurance for death in service for all people from start date in majority of subsidiaries.
- Awarded a 4% pay-rise to all employees in May.
- We continue the “We Reward” flexible benefits package and “We Listen” our employee led feedback forum and this year.
- We continue the “We Celebrate” and employee of the month and employee of the year initiatives.
- Continued the “We Care” health sessions to promote wellbeing.
-
- Launch of the “Spark” wellbeing platform.
During our recruitment process we have full and fair consideration of all applications for employment made by disabled persons, currently 16% of our workforce are disabled an increase of 2% on prior year. We are developing training and career development for all employees within our workforce, allowing for any needs that our people need to maintain and improve the services we offer to our customers.
## **Matters covered in the Strategic Report**
The following matters covered in the Strategic Report under s414 C(11):
Business review Future developments Principal risks Reserves policy Investment policy Structure, governance and management Streamlined Energy and Carbon Reporting (SECR)
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## **Fedcap UK**
## **Strategic Report**
## **Achievements & Performance**
During the year the charity, through its subsidiaries Fedcap Employment Limited, Fedcap Employment Scotland Limited, Fedcap Insynergy (formerly Kennedy Scott Limited), Elite Supported Employment Limited, The Verdancy Group, BP Learning UK and Start Scotland Limited have provided a range of services aimed at opening the doors to economic mobility and wellbeing. These services are aligned to the charity’s purpose and main activities, the charity’s activities and performance are detailed below.
During the period, as well as our significant achievements we have faced many challenges, from working to retain our people in the organisation against a backdrop of high attrition in the industry, working to successfully integrate newly combined organisations into the UK Group and continuing to diversifying our contract portfolio and revenue streams, removing reliance on a small number of funders and varying our revenue steam to an optimum blend which provides long term financial security. Whilst we have done well, we continue to review our performance and continue to reflect improvements into our continuous improvement approach, which supports the achievement of our 5-year strategic plan and strategic objectives linked to business growth and service diversification and impact.
For the period our main tool for performance measurement continues to be the annual budget. The budget framework captures our financial and non-financial targets and indicators such as numbers into employment, number of interventions per advisor, number of guided learning hours delivered, number of successful learning outcomes and headcount ratio’s. With regards to performance the results were good during the period, despite the changes occurring within the UK group structure and a significant increase of flows onto our restart programmes, compared to the prior year . Overall, all entities achieved budgeted revenue targets and profitability margins where as anticipated growing the reserves from surpluses overall to fund the charity.
## **Financial Review**
## **Key Financial Performance Indicators**
The majority of the group’s income is obtained from employment contracts held with the Department of Work and Pensions and Scottish Government. These contracts are aligned to the Charity’s principal objectives, in particular the advancement of social inclusion through employment. During the year ended 30 September 2025, the group generated income from activities which amounted to £42,892,526 and other income amounting to £7,042, total expenditure of £41,729,908 resulting in a surplus of income over expenditure of £1,169,660. These results are an improvement on prior year, as the revenue diversified offsetting the reduction of revenue in Scotland with the close of the Fair Start Scotland contract. At 30 September 2025, the group reported net assets of £ 5,514,359 an increase of 27% on prior year net assets. It held fixed assets
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## **Fedcap UK**
with a book value of £2,601,179 and a cash position of £3,871,199. All of the expenditure shown in the Statement of Financial Activities is in furtherance of the UK Charity’s objectives.
The improved position of the group balance sheet for Fedcap UK and its subsidiaries ensures there are sufficient cash reserves to meet its financial and working capital requirements as and when required, for the 12 month period following the date of signing of this report, ensuring the Charity and its subsidiaries can continue as a going concern. This is outlined further in the going concern section of these accounts.
The Charity generated gift aid from subsidiaries of £ 1,835,593 and total expenditure of £116,083, a net loss on impairment of the investment of subsidiaries amounting to £113,326 resulting in a net surplus for the year to the 30[th] September 2025 of income over expenditure of £1,606,184, and net assets of £2,910,300.
## **Reserves policy**
The board of directors have established a reserves policy to ensure that the majority of the surplus generated in the UK is utilised to further our non-profit mission both here and in the US, aiming to improve the long term self-sufficiency and social well-being of the people we work with.
At 30th September 2025 the total reserves stand at £5,514,359 and are calculated as follows: Total of unrestricted funds £4,736,663 Minority interest £777,696 **Total reserves £5,514,359**
To ensure the minimum level of reserves achieved we aim to maintain a target level of free reserves equal to 8% of revenue, with a range between £3.4 to £4 million, at year end free reserves held total £2,135,484 (unrestricted funds less total fixed assets) which is below the target range. This is due to investment in new business in this financial year and will ensure we achieve our objective for diversification in business to provide financial stability for the charity and its activities to meet financial commitments as they fall due.
During the year as funds and surplus improved, the charity’s subsidiaries agreed to gift an agreed amount of surplus into the UK charity via a deed of covenant, whilst retaining a sufficient amount of reserves in each entity to ensure there is sufficient working capital and funds available for investment. Fedcap UK has agreed in year to gift 3.1% of revenue onwards to our parent, the US charity the Fedcap Group in furtherance of the global charitable objectives, and align to Fedcap UK charitable objectives..
To ensure future management of risks that it faces and to fund future work to achieve its aims, the board of directors are monitoring our targeted level of free reserves.
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## **Fedcap UK**
Free reserves or unrestricted funds can be spent or applied at the discretion of the trustees to further any of the charity’s purposes.
## **Treasury Policy**
The charity manages its cash in line with the Fedcap Group wide international treasury management policy with cash held in entities to the equivalent of 2.5 times working capital requirements with excess cash held in a group bank account and recorded as a receivable on the UK entities balance sheet. The decision to approve transfers of cash from UK to Group sits with the Trustees of the Charity and the management of the international treasury management is delegated to the Fedcap Group CFO. For use of cash held in entity accounts for investment, decisions are delegated to those entities management teams in accordance with their Treasury Management and Reinvestment Policies and managed through the Executive Investment board.
## **Streamlined Energy and Carbon Reporting**
The UK Government’s Streamlined Energy and Carbon Reporting (SECR) regulations require us to report on our emissions of greenhouse gases (GHGs) and energy consumption.
Carbon Emissions for the reporting year were 23.5 tonnes CO2e with 100% arising from Energy in Buildings and 0% from Business Travel, this consumption and emissions data is summarised as follows:
|**Group**|Unit|**24-25**|**23-24**|**%**
**Change **|
|---|---|---|---|---|
|Energyconsumption|kwh|708,976.30|2,678,447.54|-73.5|
|Scope 1 -Direct Emissions|tonnesCO2e|5.2|6.01|-13.5|
|Scope 2- EnergyIndirect Emissions|tonnesCO2e|18.3|25.87|-29.3|
|Scope 2- EnergyIndirect Emissions(Location Based)|tonnesCO2e|126.9|166.77|-23.9|
|Scope 3- Other Indirect Emissions|tonnesCO2e|0|617.75|-100.0|
|Total Emissions - Location based|tonnesCO2e|132.1|790.53|-83.3|
|Relative Emissions - Location based - Per Employee|tonnesCO2e|0.3|2.1|-85.7|
|Total Emissions - Market based|tonnesCO2e|23.5|649.63|-96.4|
|Relative Emissions - Market based - Per Employee|tonnesCO2e|0.1|1.73|-94.2|
Figures collated from a full data set and analysis that have been independently audited to ensure they comply with internationally recognised standards such as Green House Gas and Science Based Target Protocol’s and is consistent with SECR requirements.
We began to baseline data at the start of 2023 and we will continue to improve our carbon accounting methodologies in line with best practice, and ensure our carbon emission inventory accurately reflects any structural changes that affect the scope or boundary of our emissions. Emissions from Scope 1 & 2 have been measured in accordance with SECR requirements. The Scope 3 emissions have been excluded this year while we improve data completeness and
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## **Fedcap UK**
accuracy. These were reported previously and will be reinstated in future reporting cycles. As this is our third annual report presented for the year 2024/25, overall emissions are relatively static. As data reporting improves, we aim to set realistic timebound carbon reduction targets in order to work towards achieving our 2035 Net Zero target. As a people based, service business we feel the most relevant intensity metric to report on is our staff FTE we are developing output metrics internally relating to our carbon emissions also.
## **Renewable energy statement / landlord ‘other’ energy**
Our premises are leased, for most offices we are liable for the utility supply contracts and where possible we use 100% renewable electricity contracts. For some of our offices, where the landlord supplies utilities, we have approached these landlords to supply data to understand the energy mix, to date, we have had a low response to the survey, and this is an ongoing focus for Fedcap.
## **Energy efficiency measures**
We have completed a sample energy audit during the reporting period and are currently undertaking a full ESOS (Energy Savings and Opportunities Scheme) audit and will reflect on the recommendations from this in developing future energy efficiency measures.
## **Going Concern**
The consolidated financial performance of the charity is reporting a net surplus of £1,169,660 (2024: £472,662 deficit) of income over expenditure for the reporting period. The group surplus was driven by underlying performance of its subsidiaries.
The overall improvement of the group’s financial position and considering the UK group three-year financial plan, the charity deems it has access to sufficient cash reserves within the UK to meet its financial and working capital requirements as and when required for the 12 month period following the date of signing of this report, ensuring the Charity and its subsidiaries can continue as a going concern. The cash balance for the reporting period of £ 3,871,199 ensures that the charity and its subsidiaries can settle their liabilities as they arise and ensures the group’s ability to operate as a going concern.
The Trustees have considered and agreed a three-year financial plan of its current business, using all available information and data including the strategic plan for investment. It has been assessed for impact on the overall financial position of each entity within the Group with consideration of working capital and capital investment requirements to deliver our contractual obligations, grow the business organically and by acquisition.
The assessment includes management undertaking sensitivity analysis/reverse stress testing on the groups financial position. The main sensitivities and stress tests were applied for (i) starts on programme; (ii) achieving performance offer in line with our business model, and (iii) attracting new business and new revenue streams into the group. These scenarios tested revenue, costs, profitability and cashflows and were calculated over a 3 year period: FY26 to FY28 and the
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## **Fedcap UK**
sensitivities/stress testing scenario focussed on the impact of removing new business and revenue reduction by reducing starts onto the programme and conversion rates into outcomes.
Management then assessed the likelihood of this happening and deemed that these conditions where highly unlikely due to a number of factors
- Strong cash balances and access to further receivables with Fecap Group under the international treasury management policies operated Groupwide
- Variability of the cost base of each entity up to 76% of revenue
- A further extension to the Restart contracts announced taking starts through to 2027 at current run rates
- Strong business development pipeline of opportunities to support business growth across all subsidiaries.
In the final analysis, management and the charities trustees are satisfied that the Group remains a going concern for the foreseeable future and it is able to meet all of its obligations, both financial and non-financial from its current financial position.
## **Principal Risks and Uncertainties**
The charity has a comprehensive risk management process and major risks are captured in our risk management system, Optial, and reviewed by the Executive Team and the Trustees on a regular basis. A Risk and Audit Committee was established in the previous year, and meets monthly to discuss systematic and non-systematic risks. We have established a governance function led by a Director of Risk and Audit who oversees our risk management framework and our fraud and whistleblowing activities with a direct access to the Fedcap UK board and participates in the audit sub-committee meetings. A risk register process is fully embedded into the organisation where risks are identified and categorised, actions are identified and taken where necessary to mitigate risks. All areas of risk are evaluated in the business including operational, financial, IT, governance and compliance, people, and development.
As part of our 3-year strategy and investment programme we have established a Project Management office, who in conjunction with the appropriate Executive Sponsor and project strand business owner will manage the day to day risks of the programme. The following notes outline the principal risks and uncertainties facing the Fedcap Group.
The top three risks identified by the group going forwards are as follows:
## **Sustainable growth**
As most of the income is from the subsidiaries with the Department of Work & Pensions, Scottish Government and other employability prime providers and there is a level of reliance on these streams of funding to cover financial requirements of the group and its entities. In addition, we need
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## **Fedcap UK**
to ensure that we have sufficient resources to continue to build our business development pipeline, as well as the ability to identify potential funding opportunities across a number of markets and funders. We have progressed our diversification strategy this year with the introduction of new funders and revenue streams and in addition our established business development function continue to pursue opportunities for all subsidiaries across a breadth of funders, geographies and service offers. The team operate a robust pipeline management process, overseen by our Commercial Director whose primary objective is to build long-term sustainable funding across all subsidiaries with a blend of revenue types between payment by results and fee for service. Pipelines of opportunities are reviewed on a weekly basis at the investment board.
## **Service delivery - volumes**
All our funders have given indicative volumes on which revenue will be paid on for our performance by results contracts based on a set of underlying economic assumptions and the management team have based budgets and cashflow on these volumes, with prudent adjustments as required, however these volumes are not guaranteed. If volumes fluctuate, an increase could result in a requirement for increased funding, however a reduction in flows would result in a reduced contract value and failure to meet the minimum level of return originally forecast. This risk has been considered and forecasts tested for sensitivities and impact. Performance will be continually monitored by our Executive Team who will undertake continual dialogue with funders to understand the flows and how we can respond to demand whilst delivering contractual obligations.
## **Service delivery - performance**
Whilst our contracts continue to perform well, particularly on the government’s flagship program Restart, the revenue of the charity’s subsidiaries are largely dependent on performance related pay. If performance falls below forecasted expectations, this can impact the UK group’s ability to meet its required returns for reinvestment. In particular, there is volatility on the achievement of cohort performance on the restart contract and it is crucial that each cohort performs. To mitigate this risk, we have established a taskforce which continually monitors cohort performance, rolled out enhanced performance reporting, and embedded a caseload management technique with a focus on cohorts.
## **Risk of Fraud/Mismanagement**
The charity has a set of financial controls to minimise the risk of fraud and mismanagement by using expertise of key management teams within its entities.
## **Cash Flow Risk**
The charity and its subsidiary entities have developed a full cashflow forecast in relation to the 3- year plan. This forecast considers the required working capital to successfully deliver our contracts and the investment requirement for delivering our growth targets. We have identified the maximum level of cash required for our business operations and our forward looking projections confirm that we have sufficient cash reserves to meet all our obligations, investment and working capital requirements in the next 12 months.
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Commercial in Confidence
## **Fedcap UK**
## **Future Developments**
The Charity’s plans, aims and objectives continue to be underpinned by the five year strategy set in 2023 with a target to become a highly successful charity by 2028. We will deliver this by being a fundamentally different kind of organisation – a not for profit that can develop scalable projects that deliver results by supporting people to improve their economic mobility and wellbeing. Sometimes delivering ourselves, sometimes working with great community organisations and helping them build capacity within their communities. This means strategic delivery through four integrated practice areas underpinned by 5 bold goals that measure the impact we have in delivering our vision and mission, these are:
- Our People
- to grow the group to £100m within the next five years building a sustainable, diversified business offering long term careers to people
- Our Customers
- support 500,000 customers over the next 10 years to improve their economic wellbeing. Through solid evidence of what works, we will offer solutions to key government challenges and developing our products in partnership with stakeholders to support a wide range of funders across Employability, Education, Health and regional and national Economic Development
- Our Partners continue to build on our reputation as a best-in-class delivery partner and move to a trusted strategic partner with all our funders
- Our Communities continue to generate Social Impact investment in the communities we serve
- Our Environment We will aim to be **net zero** by 2035
A key area of the strategic plan is to grow the UK charitable activities to deliver a range of services, across four key practice areas, to a sustainable annual group revenue of £100m by 2028. In progressing our diversification strategy we have welcomed three new subsidiaries into the UK Group all with different offers, access to different geographies and funders.
In Employability, through Fedcap Employment Limited, we have entered into discussions to extend a key service contract with a major customer, securing an additional 12 months of service delivery beyond the original term. This extension is considered material to the entity as it represents a significant source of recurring revenue and reinforces our strategic objective of building a longterm, sustainable business. By maintaining continuity with a valued client, we strengthen our market position and create greater visibility of future cash flows, supporting our commitment to stability and growth. In addition, in Scotland through Fedcap Employment Scotland Limited, it is the intention of the Board to position the entity in readiness to respond rapidly to any further employability funding commission by the devolved government whilst continuing to service and
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Commercial in Confidence
## **Fedcap UK**
conclude the long standing Fair Start Scotland contract. Both entities are currently undertaking extensive commissioning activity in response to a number of government and local authority opportunities in particular those currently being commissioned by the Ministry of Justice and by local authorities through the connect to work programme.
In Education, between Fedcap Employment Scotland and The Verdancy Group, the Apex training centres will be refined, aligning provision with emerging industry needs in low-carbon technologies and retrofit. The Centre intends to expand course offerings and delivery formats to support broader employer demand and learner progression. Planned developments will enhance regional capacity and strengthen engagement with key sectors. A second Apex centre is planned to open in Scotland in Q2 of the next financial year. Both entities have also been successful in securing a new contract with the Department for Energy Security and Net Zero to deliver their warm homes programmes building their brand and customer base as an organisation which provides high quality impactful training and additional funding through local authority Bootcamp funding. In addition, there is planned expansion of the Big Picture Learning offer through multi-site offerings and further potential acquisitions in the education space across 2026.
In Health, we will continue to successfully deliver our existing contracts whilst continuing to monitor potential opportunities across a range of funders and geographies. To support this the Trustees have enacted the strategic decision to launch the health practice area formally in the UK and renaming Kennedy Scott Limited, a dormant member of the Fedcap UK, to Fedcap Insynergy – a new health division aimed at offering health solutions across a broad section of services, through integrated care coordination and community health initiatives. The name change was enacted on the 5[th] November 2025.
Finally, in Economic Development, through our subsidiary Elite Supported Employment, we plan to grow our social enterprise models taking to market more commercial offerings in the next 12-18 months whilst capitalising on the upcoming market opportunity in Wales, Connect to work, aimed at offering a full Supported Employment provision for the next 3 years. This will bring stability and growth to this long established charity to continue to deliver it good work in Wales and potentially across the rest of the UK.
## **Statement by the directors in performance of their statutory duties in accordance with Section 172(1) Companies Act 2006**
## **General confirmation of Directors' duties**
The directors engagement with its stakeholders provides the framework for the UK Group strategic direction, informs their decision making process and promotes the success of the group as set out in Section 172 of the Companies Act 2006. The directors consider they have performed
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Commercial in Confidence
## **Fedcap UK**
their duties, acting in good faith and promoting the success of the group for the benefit of all members.
The directors consider they have fulfilled their duties as described below:
## (a) consequences of decisions in the long term
The directors understand the business and environment we operate in, on an ongoing basis the group assesses the major risks affecting the business and puts strategies in place to mitigate risk. This approach ensures our strategic decisions inform our current and future plans.
## (b) our people
The directors recognise that our employees are fundamental to the future growth and success of the business, investing and retention in talent is a key part of what we do. In the current period, we have invested in our onboarding and induction, learning and development, and we continue to invest in our recognition and rewards schemes. Communication is also a regular feature within our corporate calendar to ensure key messages are conveyed and gives everyone the opportunity to be involved and share ideas and successes.
## (c) community and environment
The directors understand our business activities have an impact on the natural environment and are committed to being a responsible employer. We have invested and developed a sustainability plan with the help of an industry professional to reduce our carbon footprint and we are now measuring and reporting on this.
## (d) business relationships
We engage with a range of stakeholders, whether this is other Fedcap group companies, customers, suppliers, funders, strategic partners, delivery partners and local stakeholder organisations to ensure this enhances our current delivery and help us shape the future plans and business opportunities. We are committed to fostering long term productive and positive relationships managed through our Fedcap synergy partnership approach.
## e) business conduct and fairness
Maintaining high standards of business conduct is at the heart of the organisation and is demonstrated through our value of integrity. Fedcap approaches all its business dealings in a fair and transparent manner and employs established codes of conducts in relation to our people, our customers and our wider stakeholders. This ensures we maintain our reputation of being a trusted partner, employer and service provider and that our directors our responsible and fair in their actions, direction and leadership of the organisation, to all its members.
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Commercial in Confidence
## **Fedcap UK**
## **Structure, Governance and Management**
## **Constitution**
Fedcap UK is a company limited by guarantee. The charitable company’s memorandum and articles of association are the primary governing documents of the group.
The trustees of Fedcap UK (a company limited by guarantee) are also the directors of the charitable company for the purposes of company law. Its subsidiaries Fedcap Employment Limited, Fedcap Scotland Limited (whom has a majority shareholding in Start Scotland Limited), Elite Supported Employment Agency Limited, Big Picture Learning, The Verdancy Group Limited and Fedcap Insynergy Limited (formerly Kennedy Scott Limited), all operate in the UK employment, education and training services industry.
## **Members’ Liability**
The liability of each member is limited to £1, being the amount that each member undertakes to contribute to the assets of charity in the event of it being wound up while it has a member or within 1 year it ceases to be a member for.
## **Indemnity**
Without prejudice to any indemnity to which a Trustee may otherwise be entitled, every Trustee of the charity shall be indemnified out of the assets of the charity in relation to any liability incurred by him or her in that capacity but only to the extent permitted by the Companies Act, and every other officer of the charity may be indemnified out of the assets of the charity in relation to any liability incurred by him or her in that capacity, but only to the extent permitted by the Companies Acts.
## **Method of Recruitment and Appointment for Election of Trustees**
The current arrangement for the appointment of Trustees, are as follows:
- Up to 4 Trustees appointed by Members by ordinary resolution
- The Chief Executive Officer and directors of Fedcap Group US
- All Trustees appointed in accordance with Articles of Association
## **Policies and Procedures Adopted for the Induction and Training of Directors**
The training and induction for new directors depends on their existing experience. Where necessary induction and training is provided on charity, educational, legal and financial matters. All Directors are provided with copies of policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as Directors.
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Commercial in Confidence
## **Fedcap UK**
## **Organisational Structure**
The Trustees are responsible for setting general policy, adopting a strategic delivery plan and budget, monitoring performance and assessing potential opportunities and making major decisions about the strategic direction of the Charity, capital expenditure and senior staff appointments.
A management team has been established to oversee all entities and undertake day to day management of key operations and are accountable to the Directors of those entities who in turn are accountable to the Board of the UK Charity.
## **Arrangement of setting Pay and Remuneration of Key Management Personnel**
The Board of Trustees for the UK charity hold unpaid positions within the charity and consist of members from the US and UK based non-executive Directors.
The arrangements for each entity of Fedcap UK are set locally between management and human resource department. This includes annual performance review of staff at all levels, including specific performance objectives and monitoring progress towards them and their achievement in accordance with legal and regulatory requirements. The entities use discretion to recommend a performance bonus and review salaries annually against external benchmarks without being obliged to increase them.
## **Related Parties and their Connected Charities and Organisations**
Fedcap UK is parent of Fedcap Employment Limited, Fedcap Employment Scotland Limited, Fedcap Insynergy, The Verdancy Group, BP Learning UK and Elite Supported Employment Agency. Fedcap Employment Scotland Limited has 51% shareholding in Start Scotland Limited whom they co own with The Lennox Partnership that has a minority interest shareholding of 49%. Fedcap UK and its subsidiaries, ultimate parent is The Fedcap Group based in New York, USA.
## **Auditor**
The auditor, Grant Thornton UK LLP, will be proposed for re-appointment in accordance with section 485 of the Companies Act 2006.
This Strategic and trustees report was approved by the board on and signed on 23/6/2026 its behalf by:
## **Kenneth Samuel Brezenoff**
Chair and Director
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## **Fedcap UK**
## **Trustees’ Responsibilities Statement**
The trustees (who are also the Directors of Fedcap UK for the purposes of company law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under the company law the trustees must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the charitable company and the group; and of the incoming resources and application of resources, including its income and expenditure of the charitable group for that period. In preparing these financial statements, the trustees are required to:
- Select suitable accounting policies and then apply them consistently
- Observe the methods and principles in the Charities SORP (FRS 102)
- Make judgements and accounting 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.
The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. The trustees are responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees confirm that:
- So far as each trustee is aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and
- The trustees have taken all the steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
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Commercial in Confidence
## **Fedcap UK**
The trustees are responsible for the maintenance and integrity of the corporate and financial information included in the charitable company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Approved by order of the members of the board of trustees on and signed on 23/6/2026 its behalf by:
Kenneth Samuel Brezenoff Chair of Trustees
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Commercial in Confidence
## **Fedcap UK**
## **Independent auditor's report to the members of Fedcap UK**
## **Opinion**
We have audited the financial statements of Fedcap UK (the ‘parent charitable company’) and its subsidiaries (the ‘group’) for the year ended 30 September 2025, which comprise the Group and Parent Charitable Company Statements of Financial Activities, the Group and Parent Charitable Company Balance Sheets, the Group and Parent Charitable Company Cash Flow Statements and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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’s and parent charitable company's affairs as at 30 September 2025 and of the group’s and the parent charitable company’s incoming resources and application of resources including, the group’s and the parent income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice: Accounting and Reporting by Charities, 2019 Edition; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We have been appointed as auditor under the Companies Act 2006 and report in accordance with regulations made under that Act. 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 parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
We are responsible for concluding on the appropriateness of the trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s and the parent charitable company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related
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Commercial in Confidence
## **Fedcap UK**
disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group or parent charitable company to cease to continue as a going concern.
In our evaluation of the trustees’ conclusions, we considered the inherent risks associated with the group’s and parent charitable company’s business model including effects arising from macroeconomic uncertainties such as inflation, we assessed and challenged the reasonableness of estimates made by the trustees and the related disclosures and analysed how those risks might affect the group’s and parent charitable company’s financial resources or ability to continue operations over the going concern period.
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 group’s and parent 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 directors 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 Trustees’ Annual Report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Trustees’ 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material 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.
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Trustees Report, prepared for the purposes of company law, included in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements,
- the Strategic Report and the Trustees Report included in the Trustees' Annual Report have been prepared in accordance with applicable legal requirements.
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Commercial in Confidence
## **Fedcap UK**
## **Matter on which we are required to report under the Companies Act 2006**
In the light of the knowledge and understanding of the group and parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report included in the Trustees' Annual Report.
## **Matters on which we are required to report by exception**
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent charitable company, or
- returns adequate for our audit have not been received from branches not visited by us; or
- the parent charitable company’s 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.
## **Responsibilities of trustees**
As explained more fully in the Trustees' Responsibilities Statement set out on page 22-23, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the group and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.
## **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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
- The group are subject to many laws and regulations where the consequences of noncompliance could have a material effect on amounts or disclosures in the financial statements. We identified that the following laws and regulations as the most likely to have a material effect
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## **Fedcap UK**
if non-compliance were to occur: Charities SORP (FRS 102), the Charities Act 2011, the Companies Act 2006, The Financial Reporting Standard applicable in the UK and the Republic of Ireland (United Kingdom Generally Accepted Accounting Practice) and tax legislation.
- We understood how the Group and parent company are complying with these legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures. We corroborated the results of our enquiries through our review of board minutes, and through our legal and professional expenses review.
- We assessed the susceptibility of the Group and parent company’s financial statements to material misstatement, including how fraud might occur by evaluating management's incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. We determined that the principal risks were in relation to:
- journal entries that increased revenues, were back dated, closing entry postings or were made post year end
- potential management bias in determining accounting estimates
- transactions with related parties
- Our audit procedures involved:
- evaluation of the design and implementation effectiveness of controls that management has in place to prevent and detect fraud
- journal entry testing, with a focus on material manual journals, including those which increased revenues, were back dated, closing entry postings or were made post year end
- challenging assumptions and judgements made by management in its significant accounting estimates
- testing the completeness of the company’s related party transactions through information obtained from group entities and testing that these transactions had a valid business purpose
- evaluation of the compliance of disclosures in the strategic report and accounts with applicable financial reporting requirements and
- assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item
- These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
- The engagement partners’ assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s
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## **Fedcap UK**
- Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation
- Knowledge of the industry in which the group and parent company operates, and
- Understanding of the legal and regulatory requirements specific to the entity including:
- the provisions of the applicable legislation
- the regulators rules and related guidance, including guidance issued by relevant authorities that interprets those rules
- ▪ the applicable statutory provisions
- Team communications in respect of potential non-compliance with laws and regulations and fraud included the potential for fraud in revenue recognition through manipulation of accrued or deferred income
- We communicated relevant laws and regulations and potential fraud risks to all engagement team members, including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
## **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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the 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.
Stephen Dean BA(Hons) FCA DChA Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants London
Date: 23/6/2026
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## **Fedcap UK**
## **Consolidated and Parent Statement of Financial Activities (including consolidated income and expenditure account) for the year 30 September 2025**
|**Consolidated and Parent Statement of Financial Activities**
**(including consolidated income and expenditure account)**
**for the year 30 September 2025**|**Consolidated and Parent Statement of Financial Activities**
**(including consolidated income and expenditure account)**
**for the year 30 September 2025**|
|---|---|
|**Note**
**Unrestricted**
**funds**
**Total 2025**
**Total 2024**
**Unrestricted**
**funds Total**
**2025**
**Unrestricted**
**funds Total**
**2024**
**£**
**£**
**£**
**£**
**£**
**Income and endowments from:**
Charitable activities
42,892,526
42,892,526
41,752,956
-
-
Donations and legacies
-
-
1,300
-
1,300
Investment Income
7,042
7,042
2,125
1,835,593
2,199,612
**Total Income**
4
**42,899,568**
**42,899,568**
**41,756,381**
**1,835,593**
**2,200,912**
**Expenditure on:**
Charitable activities
5,7
41,729,908
41,729,908
42,229,043
116,083
2,727,689
**41,729,908**
**41,729,908**
**42,229,043**
**116,083**
**2,727,689**
**1,169,660**
1,169,660
**(472,662)**
**1,719,510**
**(526,777)**
Net (Loss) on investments
-
-
-
(113,326)
-
**Net income/(expenditure)**
**1,169,660**
**1,169,660**
**(472,662)**
**1,606,184**
**(526,777)**
**1,169,660**
**1,169,660**
**(472,662)**
**1,606,184**
**(526,777)**
**Share of net income/(expenditure) attributable to:**
1,136,706
1,136,706
(612,122)
1,606,184
(526,777)
Minority Interest
32,954
32,954
139,460
-
-
**Net Income**
Owners of the parent
**Parent Only**
**Total expenditure**
**Net expenditure before**
**investment gains**
**Group**||
|Minority Interest
Owners of the parent||
|**Reconciliation of funds:**
Total funds brought forward
Total funds carried forward|**1,169,660**
**1,169,660**
**(472,662)**
**1,606,184**
**(526,777)**|
||4,344,699
4,344,699
4,817,361
1,304,116
1,830,893|
||5,514,359
5,514,359
4,344,699
2,910,300
1,304,116|
There were no gains and losses other than those included in the Statement of Financial Activities. All activities are continuing.
All activities are unrestricted and consequently there are no restricted or endowment funds to report.
The notes on pages 33 to 61 form part of these financial statements.
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## **Fedcap UK**
## **Consolidated and Parent Balance Sheets as at 30 September 2025 Company number: 10466370**
|**Note**
**Fixed assets**
Goodwill
9
Investments
10
Tangible assets
11
Intangible assets
11
**Total fixed assets**
**Current assets**
Stocks
12
Debtors
13
Cash at bank and in hand
14
**Total current assets**
**Creditors**: amounts falling due
within one year
15
**Net current assets**
**Total assets less current**
**li biliti**
Provisions for liabilities
16
**Total net assets**
**Funds of the Charity**
Unrestricted funds
17
Minority Interest
17
**Total funds**|**Unrestricted**
**funds**
**Total 2025**
**Total 2024**
**£**
**£**
**£**
238,014
238,014
-
175,000
175,000
-
1,908,162
1,908,162
987,308
280,003
280,003
362,115
**2,601,179**
**2,601,179**
**1,349,423**
34,005
34,005
-
11,966,627
11,966,627
10,712,632
3,871,199
3,871,199
6,896,095
**Group**|**Parent Only**|
|---|---|---|
|||**Unrestricte**
**d**
**funds**
**Unrestricted**
**funds Total**
**2024**
**£**
**£**
-
298,717
-
-
-
-
-|
|||**298,717**
**-**|
|||-
-
8,513,566
5,791,306
140,834
467,907
**8,654,400**
**6,259,213**|
||**15,871,831**
**15,871,831**
**17,608,727**||
||(11,804,700) (11,804,700)
(13,362,404)|(6,042,817)
(4,955,097)|
||**4,067,131**
**4,067,131**
**4,246,323**|**2,611,583**
**1,304,116**|
||||
||**6,668,310**
**6,668,310**
**5,595,746**|**2,910,300**
**1,304,116**|
||(1,153,951)
(1,153,951)
(1,251,047)|-
-|
||**5,514,359**
**5,514,359**
**4,344,699**|**2,910,300**
**1,304,116**|
||4,736,663
4,736,663
3,599,957
777,696
777,696
744,742|2,910,300
1,304,116
-
-|
||**5,514,359**
**5,514,359**
**4,344,699**|**2,910,300**
**1,304,116**|
These financial statements are approved by the Board of Trustees and authorised for issue on 23/6/2026
**Kenneth Samuel Brezenoff**
Chair of trustees on behalf of the trustees
Approved by the trustees on 23/6/2026
The notes on pages 33 to 61 form part of these financial statements.
30
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Statement of Consolidated Group Cash Flows for the year ended 30 September 2025**
|**Net (expenditure)/income for the reporting period**
**Adjustments for:**
Depreciation of tangible assets
Amortisation of intangible assets
Dividend
Dividend paid
Loss on investment
Interest paid
Taxation
Tax Paid
(Increase)/decrease in debtors
(Increase)/decrease in prepayments and accrued income
Increase in stocks
Increase/(decrease) in creditors
Increase/(decrease) in amounts owed by groups
Increase in amounts owed to group
(Decrease) in provisions and other creditors
**Net cash generated from operating activities**
**Cash flows from investing activities:**
Purchase of tangible fixed assets
Purchase of intangible fixed assets
Interest paid
Acquisition of Subsidiaries
**Total investing**
**Net (decrease)in cash and cash equivalents**
Cash and cash equivalents - brought forward
Movement of cash and cash equivalents during year
**Cash and cash equivalents - carried forward**|**Group**
**Parent**|
|---|---|
||**2025**
**2024**
**2025**
**2024**
**£**
**£**
**£**
**£**
1,169,660
(472,662)
1,606,184
(526,777)
660,196
208,436
-
-
88,210
386,527
-
-
153,000
125,000
-
-
(153,000)
(125,000)
-
113,326
-
17,855
-
-
-
(61,138)
69,199
-
-
(94,871)
(80,848)
(107,402)
216,600
-
-
(1,813,992)
(669,206)
-
5,241
1,279
-
-
-
274,437
51,022
-
(11,757)
(390,576)
139,790
(2,722,260)
(2,786,342)
-
-
1,096,567
2,654,931
(1,980,463)
(1,814,078)
(8,847)
23,889|
||**(2,236,805)**
**(1,965,220)**
**84,970**
**(640,815)**|
||(358,192)
(84,574)
-
-
-
(213,785)
-
-
(17,855)
-
-
-
(412,043)
-
(412,043)
-|
||**(788,090)**
**(298,359)**
**(412,043)**
-|
|||
||**(3,024,895)**
**(2,263,579)**
**(327,073)**
**(640,815)**|
||6,896,095
9,159,674
467,907
1,108,722
(3,024,895)
(2,263,579)
(327,073)
(640,815)|
||**3,871,200**
**6,896,095**
**140,834**
**467,907**|
The notes on pages 33 to 61 form part of these financial statements.
31
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Analysis of Changes in net debt**
|**Analysis of Changes in net debt**||
|---|---|
|
**At 30**
**September**
**2024**
**Cash Flows**
**At 30**
**September**
**2025**
**£**
**£**
**£**
**Cash and cash equivalents**
Cash
6,844,824
(3,005,872)
3,838,952
Cash equivalents
51,271
(19,024)
32,247
6,896,095
(3,024,896)
3,871,199
**Group Lending & Borrowing**
Repayments due within one year
2,357,250
(667,399)
1,689,851
Debt due within one year
- - -
9,253,345
(3,692,295)
5,561,050
Group|**At 30**
**September**
**2024**
**Cash**
**Flows**
**At 30**
**September**
**2025**
**£**
**£**
**£**
467,907
(327,073)
140,834
467,907
(327,073)
140,834
5,791,306 2,722,260 8,513,566
(4,909,417) (1,096,567) (6,005,984)
Parent Only|
||1,349,796
1,298,620
2,648,416|
32
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **1. General information**
Fedcap UK (the Company) is a private company limited by guarantee and incorporated in the UK. Its registered head office is located at Boaz House, Massey Road, Thornaby, United Kingdom, TS17 6DY.
## **2. Accounting policies**
## **2.1. Basis of preparation of financial statements**
The financial statements have been prepared in accordance with 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) - (Charities SORP (FRS 102)), and the Companies Act 2006. Fedcap UK meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).
The financial statements are presented in Sterling (£).
## **2.2. Going Concern**
The consolidated financial performance of the charity is reporting a net surplus of £1,169,660 (2024: £472,662 deficit) of income over expenditure for the reporting period. The group surplus was driven by underlying performance of its subsidiaries.
The overall improvement of the group’s financial position and considering the UK group threeyear financial plan, the charity deems it has access to sufficient cash reserves within the UK to meet its financial and working capital requirements as and when required for the 12 month period following the date of signing of this report, ensuring the Charity and its subsidiaries can continue as a going concern. The cash balance for the reporting period of £ 3,871,199 ensures that the charity and its subsidiaries can settle their liabilities as they arise and ensures the group’s ability to operate as a going concern.
The Trustees have considered and agreed a three-year financial plan of its current business, using all available information and data including the strategic plan for investment. It has been assessed for impact on the overall financial position of each entity within the Group with consideration of working capital and capital investment requirements to deliver our contractual obligations, grow the business organically and by acquisition.
The assessment includes management undertaking sensitivity analysis/reverse stress testing on the groups financial position. The main sensitivities and stress tests were applied for (i) starts on programme; (ii) achieving performance offer in line with our business model, and (iii)
33
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
attracting new business and new revenue streams into the group. These scenarios tested revenue, costs, profitability and cashflows and were calculated over a 3 year period: FY26 to FY28 and the sensitivities/stress testing scenario focussed on the impact of removing new business and revenue reduction by reducing starts onto the programme and conversion rates into outcomes.
Management then assessed the likelihood of this happening and deemed that these conditions where highly unlikely due to a number of factors
- Strong cash balances and access to further receivables with Group under the international treasury management policies operated by the UK Group
- Variability of the cost base of each entity up to 76% of revenue
- A further extension to the Restart contracts announced taking start through to 2027 at current run rates
- Strong business development pipeline of opportunities to support business growth across all subsidiaries
In the final analysis, management and the charities trustees are satisfied that the Group remains a going concern for the foreseeable future and it is able to meet all its obligations, both financial and non-financial from its current financial position.
## **2.3. Accounting for the consolidation of non-charitable subsidiaries**
The income and expenditure of Fedcap UK’s subsidiaries are included in the consolidated accounts for the full reporting period or from their date of acquisition. The income and expenditure of subsidiaries are only included in the consolidated accounts until the date on which the parent charity ceases to control the subsidiary. As at the reporting date all subsidiaries continue to be controlled. Within the combination Fedcap Employment Scotland limited owns a shareholding in Start Scotland Limited of 51%. The minority interest in Start Scotland Limited of 49% (The Lennox Partnership) has been accounted for by reducing their share of the income and expenditure within the financial statements produced.
## **2.4. Revenue**
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
34
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
**Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **Rendering of Services**
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Company will receive the consideration due under the contract;
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be measured reliably.
There are two main types of funding models across its contract, these are a payment by results framework and for some contracts a cost recovery payment model. For these contracts revenue is recognised to the extent of the costs incurred in the delivery and performance of the contracts and their obligations therein. Recognition occurs in the period that the costs were incurred when all the standard recognition criteria outlined above have been satisfied.
Fixed service fees paid in line with contractual year are measured against the performance of services delivered in the financial year and, the net result is a deferral of income to be recognised in subsequent years.
## **2.5. Tangible Fixed Assets**
Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Any individual item purchased below £1,000 is not capitalised and expensed through the Income and Expenditure in the reported period, however if grouped to other items and exceeds £1,000 will be capitalised.
All depreciation is charged over the life of the relevant contract, or over three years if the asset is not directly attributable to a particular contract and applied on a straight-line basis, as follows:
- IT Equipment – between 2 and 6 years
- Leasehold Improvements - between 1 and 6 years
- Office Equipment – between 1 and 6 years
- Furniture and Fittings– between 1 and 6 years
- Freehold Property – over 50 years
Freehold property assets are initially measured at cost less accumulated depreciation, and have been revalued annually, and carried at revalued amounts, with the latest valuation 19[th] December 2024. The fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses as a result the policy then the resulting gain or loss on valuation.
35
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other recognised gains and losses, unless it reverses a charge for impairment that has previously been recognised as expenditure within the statement of financial activities. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other recognised gains and losses, except to which it offsets any previous revaluation gain, in which case the loss is shown within other recognised gains and losses on the statement of financial activities. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Financial Activities.
## **Investment property**
Investment property is initially recorded at cost, which includes purchase price and any directly attributable expenditure. Investment property is revalued to its fair value at annually and any changes in fair value are recognised in income or expenditure
## **2.6. Intangible Assets**
Intangible assets such as those arising from a development phase, will only be recognised if they meet the conditions of:
- The asset is complete and is intended to be used
- It is probable it will generate future economic benefits
- Expenditure attributable to the asset during its development
Intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. All intangible assets shall be considered to have a finite useful life and amortisation is charged on the following basis unless the finite life of the asset cannot be established, and it is therefore held to a maximum useful life of 10 years:
- System Development – between 3 and 5 years
- Goodwill – between 5 and maximum of 10 years
For each of the above, amortisation is calculated and applied on a straight-line basis.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted retrospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Financial Activities.
36
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
**Notes to the Financial Statements For the period ending on 30 September 2025**
## **2.7. Investments and Goodwill**
## **Goodwill**
In respect of a business acquisition at the acquisition date, the acquiree’s identifiable assets and liabilities that satisfy the recognition criteria are brought in at their fair values
at that date. The differences between the cost of the business combination and the acquirer’s interest in the net fair value (i.e. net of any non-controlling interest’s share) of the identifiable assets and liabilities is accounted for as goodwill, or so-called ‘negative goodwill’.
At the acquisition date, the goodwill acquired in a business combination is recognised as an asset. It is measured as the excess of cost over the acquirer’s interest in the net fair value of the assets, liabilities and contingent liabilities recognised on acquisition.
Goodwill is generally amortised on a systematic basis over its useful economic life and is allocated with a finite life of up to a maximum of 10 years.
When the interest in the net fair value of the identifiable assets, liabilities and provisions for contingent liabilities acquired exceeds the cost of the business combination (sometimes referred to as ‘negative goodwill’), the acquirer:
(a) reassesses the identification and measurement of the acquirer’s assets, liabilities and provisions for contingent liabilities and the measurement of the cost of the combination;
(b) records any excess that remains after the reassessment on the balance sheet immediately below any positive goodwill (striking a net total of the positive and negative goodwill); and
(c) recognises the excess in statement of financial activities in the periods in which the nonmonetary assets acquired are recovered. Any excess over the fair value of non-monetary assets acquired is recognised in profit or loss in the periods expected to benefit.
## **Investments**
Investments in subsidiaries are held at cost less impairment and are reviewed annually for impairment.
## **2.8. Fund accounting**
Unrestricted funds are available to spend on activities that further any of the purposes of charity. Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose. Restricted funds are donations which the donor has specified are to be solely used for particular areas of the Trust’s work or for specific employability projects being undertaken by the Trust. Fedcap UK only holds general unrestricted funds.
37
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **2.9. Expenditure**
Expenditure is recognised on an accruals basis as a liability is incurred. It is recognised once there is a legal obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total direct costs and allocated support costs in undertaking each activity. Trading activities represents the costs associated with commercial trading operations relating to the income and expenditure incurred by the trading subsidiaries of the entity and its investment within the subsidiaries. Irrecoverable VAT is included within the expense items to which it relates.
## **2.10. Allocation of Support Costs**
Support costs are those back office functions that support the work of the charity but do not directly undertake charitable activities. Support costs include property costs, audit fees, legal & professional and consultancy costs which support the Charity’s Employability programmes and activities. These costs have been allocated between cost of generating income and expenditure on charitable activities. The basis on which support costs are allocated are set out in note 5.
## **2.11. Stocks**
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
## **2.12. Debtors**
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
## **2.13. Creditors**
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
38
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **2.14. Leases and leased assets**
At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.
## **Operating Leased assets**
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straightline basis over the period of the lease.
Operating leases are charged on a straight-line basis over the lease term.
For each rental property a separate provision for dilapidations is made at the start of the lease under the dilapidations provision accounting policy. This is for potential dilapidations costs, based on information provided by our third-party property partner and held on the balance sheet until the lease expires and is reviewed annually.
## **2.15. Tax**
As a registered charity Fedcap UK is entitled to certain exemptions from corporation tax on profits from investments and any trading activities carried on in furtherance of the Charity’s primary objectives. The subsidiary companies make qualifying donations from taxable profits.
Subsidiaries tax is recognised for current tax liability where tax is payable on taxable profit for the current and past periods. If the amount of tax paid for the current and past periods exceeds the amount of tax payable for those periods, the entity shall recognise the excess as a current tax asset. The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and . generates income
## **2.16. Cash and cash equivalents**
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible . to known amounts of cash with insignificant risk of change in value
39
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **2.17. Financial instruments**
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities in respect of trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted . at a market rate of interest for a similar debt instrument and subsequently at amortised cost
## **2.18. Pensions**
## **Defined contribution pension plan**
A defined contribution pension plan is in place for all employees. A defined contribution plan is a pension plan under which fixed pension contributions are paid to a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Financial Activites when they fall due. Amounts unpaid at the year end are disclosed as a creditor due within one year in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
## **3. Judgements in applying accounting policies and key sources of estimation uncertainty**
When preparing the financial statements, management makes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income . and expenses and the assumptions do not give rise to any material uncertainty
## **3.1. Judgements in applying accounting policies and key sources of estimation uncertainty**
The following are significant management judgements in applying the accounting policies of . the company that have the most significant effect on the financial statements
40
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **3.1. Taxes**
Determining income tax provisions involves judgement on the tax treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that there will be taxable revenue against which these can be offset. Management is satisfied that on the balance of probability future taxable revenues will be generated against which tax losses will be available to offset. Deferred Tax asset at the year end was £66,403, more detail and rates can be found in notes 8 and 16. This note is representative of the group and arising from consolidation of its subsidiaries.
## **3.2. Extrapolation & Customer Service Standard provisions**
A provision of £13,026 has been estimated within the ESF Links to Work contracts in respect of the results of validation work carried out on the DWP outcomes which are yet to be finalised. The value of the provision is based on reviews carried out by DWP following year end and charges applied to cover this period, the sensitivity to estimated extrapolation provision would adversely impact on contract performance if extrapolation rate increased by an excess of 200%. In addition, the Fair Start Scotland contract provision is estimated at £10,449 in respect of the estimate of potential validation work under regular review by the Scottish Government.
## **3.3. Fixed Fee Revenue and Costs – Restart Contract**
In year 1 of the contract the initial requirement was to roll out the contract, and, at this time, there were lower starts onto the contract and management judged the fixed fee should be recognised in equal amounts for the first 12 months. A contract variation was issued in July 22 from DWP and on this basis management moved recognition to be based on actual starts as a proportion of fixed fee as a more appropriate estimate. Therefore, management judged that the remainder of the fixed fee should be recognised in relation to actual starts onto the contract, as this most accurately represents the consumption of costs in relation to the fixed fee ahead of the performance curve. Whilst we do expect volumes to fluctuate monthly the expectation is that the full contractual start profile will be met over the life of the contract. Therefore, recognition of
revenue on a start basis, that being actual or contractual profile as a minimum, is a realistic basis on which to base revenue recognition.
## **3.4. Dilapidations provision**
The amount recognised is the best estimate of the expenditure required to settle the lease obligation at the end of the lease, considering the risks and uncertainties and reviewed annually, this is provided in the dilapidations provision. Note 16 of these accounts gives more details of the dilapidations provision amounting to £1,281,492 and the basis for calculation.
41
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **4. Analysis of Income**
**----- Start of picture text -----**
Group Parent Only
E
Unrestricted n
Funds d Total 2025 Total 2024 Total 2025 Total 2024
£ £ £ £ £
Charitable activities: - - 1,300 - 920
Other trading activities:
UK and Scottish Government
funding relating to provision of 42,892,526 42,892,526 41,752,956 - -
employability services
42,892,526 42,892,526 41,754,256 - 920
Income from investments:
Interest income 7,042 7,042 2,125 - -
Gift aid - - 1,835,593 2,199,612
7,042 7,042 2,125 1,835,593 2,199,612
Total Income 42,899,568 42,899,568 41,756,381 1,835,593 2,200,532
**----- End of picture text -----**
42
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **5. Analysis of expenditure on charitable activities**
|**operations**
**Analysis of Support Costs**
**£**
Depreciation
94
Amortisation
Rent
382
Rates
99
Service Charges & Premises Insurance
46
Health & Safety
5
Cleaning
24
Relocation & Fit Out Costs
4
Dilapidations
30
Other Property Costs
39
Electricity
22
Other Marketing Costs
23
Audit Fees
101
Legal and professional fees
72
**Total Support Costs**
**1,491**|**2025**
**£**
660,196
87,709
2,119,730
392,858
325,020
1,989
331,208
12,759
41,605
192,983
203,191
136,753
247,790
473,712
**5,227,503**|**2024**
**£**
208,436
386,526
2,064,065
446,342
378,444
4,011
345,935
6,300
(53,238)
102,120
242,716
222,796
257,368
478,434|
|---|---|---|
|||**5,090,255**|
All expenditure reported is unrestricted.
43
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **6. Gain/(Loss) on ordinary activities before taxation**
The gain (loss) on ordinary activities before taxation is stated after charging:
||**2025**|**2024**|
|---|---|---|
||**£**|**£**|
|Auditor's remuneration:|||
|Fees payable to the Company's auditor for the audit of
the Company's annual accounts.|47,442|44,850|
|Fees payable to the Company's auditor and its associates|||
|for other services:|||
|Audit of accounts of subsidiaries|159,110|140,441|
|Overrun of subsidiary accounts|45,320|14,183|
|Accounts preparation|3,090|-|
|Tax compliance and advisory service|23,650|17,150|
|Other operating lease rentals|2,206,677|2,061,328|
## **7. Paid Employees**
**Staff costs, including directors’ remuneration, were as follows:**
|Salaries and wages
Social security costs
Defined contribution pension cost
Other staff costs
**Total staff costs**|**Group**|
|---|---|
||**Total 2025**
**Total 2024**
**£**
**£**
15,990,853 15,560,223
1,816,451 1,539,163
647,448 618,217
210,467 228,140|
||
**18,665,219 17,945,743**|
## Trustee’s do not receive remuneration or expenses.
Amount of defined pension contributions recognised in the SOFA as an expense were £ 647,448 (2024: £618,217).
Pension costs are allocated to activities in proportion to the related staffing costs incurred and are wholly charged to unrestricted funds.
44
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **Staff Numbers**
The average monthly number of full-time equivalents (including casual and part-time staff) during the year were as follows:
|Directors
All other staff|**2025**
**No.**
4
436|**2024**
**No.**
4
479|
|---|---|---|
||**440**|**483**|
The key management personnel of the parent charity, Fedcap UK, comprises the Chief Executive Officer, Chief Finance Officer, Restart & Operations Directors and Senior Operational Managers, the total benefits paid to the key management personnel of the Charity were £1,871,939 (2024: £1,600,875).
The number of employees whose total employee benefits (excluding employer pension & national Insurance costs) for the reporting period and fell within each band of £10,000 from £60,000 upwards were:
**----- Start of picture text -----**
Salary Banding 2025 2024
No. No.
£60,000 - £69,999 9 11
£70,000 - £79,999 6 6
£80,000 - £89,999 5 4
£90,000 - £99,999 4 2
£100,000 - £109,999 - 1
£110,000 - £119,999 1 -
£120,000 - £129,999 1 -
£130,000 - £139,999 1 1
£140,000 - £149,999 - 1
£150,000 - £159,999 1 -
£230,000 - £239,999 - 1
£240,000 - £249,999 1 -
29 27
**----- End of picture text -----**
45
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
**For the period ending on 30 September 2025**
## **8. Tax**
|**Analysis of tax charge/(credit) for the period**
Current tax
UK corporation tax at 25% (2024: 25%)
Adjustments in respect of previous periods
**Deferred tax**
Origination and reversal of timing differences
Adjustments in respect of prior periods
**Total deferred tax**
**Taxation on Profit on ordinary activities**
**Reconciliation of tax charge**
Profit/(loss) on ordinary activities before tax
Effect of relief on gift aid at 25%
**Effects of:**
Expenses not deductible for tax purposes
Income not deductible for tax purposes
Fixed asset differences
Deferred tax in respect of prior periods
Other tax adjustments, reliefs and transfer
Movement in deferred tax not
previously recognised
Remeasurement of deferred tax for change in rate
Group relief
**Tax charge/(credit) for the period**
Tax on profits at the standard rate of corporation
tax in the UK of of 25% (2024: 25%)|**Group**|**Parent Only**|
|---|---|---|
||**2025**
**2024**
**£**
**£**
22,418
94,284|**2025**
**2024**
**£**
**£**
-
-|
||-
(30,541)
-
8,184|-
-
-
-|
||-
(22,357)|-
-|
||(40,344)
71,927|-
-|
||1,169,660
(472,662)|1,719,510
(526,777)|
||450,068
319,380
(458,898)
(550,264)
(8,830)
(230,884)
1,275
324,580
(429)
(326)
11,144
140
(2,738)
3,872
(39,817)
(25,455)
(949)
-
-
-
-
-|429,878
(131,694)
(458,898)
(549,903)|
|||(29,020)
(681,597)
30,545
681,923
(326)
-
-
-
-
(1,525)
-
-
-
-
-
-|
||(40,344)
71,927|-
-|
46
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **9. Goodwill**
|At the beginning of the year
Additions
At end of the year
At the beginning of the year
Amortisation
At end of the year
**Net book value**
NBV at beginning of year
**NBV at year end**|**Negative**
**Goodwill**
**Goodwill**
**Totals**
**2025**
**£**
**£**
**£**
(147,690) -
(147,690)
(6,289)
249,900
243,611
**Group**|
|---|---|
||**(153,979)**
**249,900**
**95,921**|
||147,690 -
147,690
262
(5,859)
(5,597)|
||**147,952**
**(5,859)**
**142,093**|
||- - -|
||(6,027) 244,041 238,014|
The negative goodwill in relation to Start Scotland Limited has been fully amortised, the addition to negative goodwill is the result of the business combination on 1[st] May 2025 with ELITE Supported Employment Agency Limited.
The 51% shareholding in Start Scotland Limited was acquired by Fedcap Employment Scotland Limited for a consideration of £1. Fedcap Employment Scotland Limited is a wholly owned subsidiary of Fedcap UK.
Goodwill was recognised as the excess of the cost of the business combination over the net amount of the companies identifiable assets and liabilities. It is the policy of the company to treat goodwill as an asset with a finite useful life and therefore the asset is amortised between 5 and 10 years), if we were not able to determine a reliable estimate of the useful life of goodwill this will be over 5 years. Goodwill has been amortised in line with this policy at from the date of acquisition. The entities acquired were Verdancy Group Limited, Elite Supported Employment Agency Limited and Big Picture Learning for 100% of shareholding.
47
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
## **10. Investments**
|**Valuation**
At the beginning of the year
Additions
At end of the year
**Impairment**
At the beginning of the year
Charges in year
At end of the year
**Net book value**
NBV at beginning of year
**NBV at year end**|**Investment**
**property**
**Totals**
**2025**
**£**
**£**
- -
175,000
175,000
**175,000**
**175,000**
- -
- -
- -
- -
175,000 175,000
**Group**|**Parent**
**Ol**|
|---|---|---|
|||**ny**
**Investment**
**in**
**subsidiaries**
**Totals**
**2025**
**£**
**£**
412,043
412,043|
|||**412,043**
**412,043**|
|||- -
(113,326)
(113,326)|
|||(113,326)
(113,326)|
|||- -|
|||298,717 298,717|
## **Investment property**
Investment property noted above are held at valuation
The investment property at 15 Talbot Road, Talbot Green, Ponytail, RCT, CF72 8AD was valued on 19 December 2024 by Brinsons Chartered Surveyors & Estate Agents, Market Street, Caerphilly, CF83 1NX on an existing use basis. The Trustees consider the fair value to be the same as at 30 September 2025.
## **Other investments**
Investment in subsidiaries are held at cost less provision for impairment, the amount recognised in the year amounts to £113,326 following assessment of current under performance of the subsidiary.
48
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **11. Fixed Assets**
## **Tangible Assets**
|**Group**
**Freehold**
**Property**
**Cost or valuation**
**£**
At the beginning of the year
-
Additions
1,029,000
Disposals
-
At end of the year
**1,029,000**
**Depreciation and impairments**
At beginning of the year
-
Depreciation
(1,750)
Disposals
-
At end of the year
**(1,750)**
**Net book value**
NBV at beginning of year
-
**NBV at year end**
**1,027,250**|**Group**
**Freehold**
**Property**
**£**
-
1,029,000
-|**IT Equipment**
**Furniture,**
**Fittings and**
**equipment**
**Total 2025**
**£**
**£**
**£**
1,055,487 2,277,660 3,333,147
178,304 373,746 1,581,050
(102,242)
(123,445)
(225,687)
**Group**|
|---|---|---|
||**1,029,000**|**1,131,549 2,527,961 4,688,510**|
|||(759,120)
(1,586,719)
(2,345,839)
(186,412)
(472,034)
(660,196)
102,242
123,445 225,687|
||**(1,750)**|**(843,290) (1,935,308)**
**(2,780,348)**|
||-|296,367 690,941 987,308|
||**1,027,250**|**288,259 592,653 1,908,162**|
## **Tangible fixed assets held at valuation**
The property at Units 1-5 Viaduct House, Merthyr Industrial Park, Pentrebach, Merthyr Tydfil, CF48 4DR was valued on 19 December 2024 by Brinsons Chartered Surveyors & Estate Agents, Market Street, Caerphilly, CF83 1NX on an existing use basis. The Trustees consider the fair value to be the same as at 30 September 2025.
49
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **Intangible Assets**
|**Cost or valuation**
At the beginning of the year
At end of the year
**Amortisation and**
At beginning of the year
Amortisation
At end of the year
**Net book value**
NBV at beginning of year
**NBV at year end**|**Group**
**Software**
**Total 2025**
**£**
**£**
2,318,605
2,318,605
**2,318,605**
**2,318,605**
(1,956,490)
(1,956,490)
(82,112)
(82,112)
-
-
**(2,038,602)**
**(2,038,602)**
362,115
362,115|**Group**
**Software**
**Total 2025**
**£**
**£**
2,318,605
2,318,605
**2,318,605**
**2,318,605**
(1,956,490)
(1,956,490)
(82,112)
(82,112)
-
-
**(2,038,602)**
**(2,038,602)**
362,115
362,115|
|---|---|---|
|||**(2,038,602)**|
|||362,115|
||**280,003**|**280,003**|
## **12. Stocks**
|**12. Stocks**||
|---|---|
|**13. Debtors and Prepayments**
Stocks
**Total**|**Total 2025**
**Total 2024**
**£**
**£**
34,005 -
**Group**|
||**34,005**
**-**|
|||
|Trade debtors
Amounts due from Parent
Undertaking
Prepayments and accrued income
Other debtors
**Total**|**Total 2025**
**Total 2024**
**Total 2025**
**Total 2024**
**£**
**£**
**£**
**£**
800,516 693,114
- -
1,689,851 2,357,250 8,513,566 5,791,306
9,425,326 7,659,293
- -
50,934 2,975
- -
**11,966,627 10,712,632 8,513,566 5,791,306**
**Parent Only**
**Group**|
|---|---|
50
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **14. Cash at Bank and in hand**
||**Group**|**Group**|**Parent**|**Only**|
|---|---|---|---|---|
||**Total 2025**|**Total 2024**|**Total 2025**|**Total 2024**|
||**£**|**£**|**£**|**£**|
|Cash at bank and on hand|3,871,199|6,896,095|140,834|467,907|
|**Total**|**3,871,199**|**6,896,095**|**140,834**|**467,907**|
## **15. Creditors: Amounts falling due within one year**
|Trade creditors
Amounts owed to Parent
undertaking
Accruals
Deferred Income
Other Tax & Social Security
Corporation Tax
Other Creditors
**Total**|**Total 2025**
**Total 2024**
**Total 2025**
**Total 2024**
**£**
**£**
**£**
**£**
1,756,973 1,202,825
- -
- - 6,005,984 4,909,417
6,250,743 6,106,512
36,833 45,680
2,445,085 4,408,808
- -
1,111,345 1,358,204
-
22,418 94,871
- -
218,136 191,184
- -
**11,804,700 13,362,404**
**6,042,817 4,955,097**
**Group**
**Parent Only**|
|---|---|
At the end of the period 30[th] September 2025, the outstanding pension contributions were £ 152,821 (2024:£ 109,811).
Deferred Income relates to advance income received by Fedcap Employment Limited in relation to the Restart Contract year one service fee and amounts held in relation to unspent customer participation. It also includes income in relation to Fair Start Scotland contracts, for FY2024, which were deferred covid payments that may be repayable following audit, and for Elite contracts for lottery funding whereby it is paid quarterly in advance.
51
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
||**Group**|**Group**|
|---|---|---|
|**Deferred Income**|**Total 2025**|**Total 2024**|
||**£**|**£**|
|Balance brought forward|4,408,808|5,204,113|
|Amounts released in year|(1,963,723)|(795,305)|
|**Total**|**2,445,085**|**4,408,808**|
## **16. Provisions for liabilities and charges**
|**Provisions for Liabilities**
Dilapidations provision:
Amounts brought forward
Additions/ (released) in year
**Closing provision**|**Total 2025**
**Total 2024**
**£**
**£**
1,317,450 1,372,354
(35,958)
(54,904)
**Group**|
|---|---|
||1,281,492 1,317,450|
Provision has been made for property lease contractual liabilities for schedule of conditions estimated at the balance sheet date, this has been independently calculated by a chartered surveyor, each property lease and provision is reviewed annually. The actual amounts will be fully determined at the end of the lease.
|**Deferred tax**
Balance brought forward
Deferred tax in respect of prior
Charges in year
**Balance carried forward**
**Deferred Tax liability**
Fixed asset timing differences
Short term timing differences
**Closing Provision at 25.00%**|**Total 2025**
**Total 2024**
**£**
**£**
(66,403)
(43,806)
- -
(61,138)
(22,597)
(127,541)
(66,403)
(100,991)
(51,255)
(26,550)
(15,148)
(127,541)
(66,403)
**Group**|
|---|---|
52
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **17. Reserves and Minority Interest**
The reported minority interest has arisen from the Start Scotland Limited entity, which is a subsidiary of the charity, of which Fedcap Employment Scotland Limited holds a 51% controlling interest.
|**Group Reserves**
Subsidiary Reserves
Inherent Contribution in Start Scotland Ltd
Minority Interest - TLP to 30 September 2019
Minority Interest - TLP to 30 September 2020
Minority Interest - TLP to 30 September 2021
Minority Interest - TLP to 30 September 2022
Minority Interest - TLP to 30 September 2023
Minority Interest - TLP to 30 September 2024
Minority Interest - TLP to 30 September 2025
**Total**|**Reserves**
**Minority**
**Interest**
**£**
**£**
4,736,663
141,901
(46,620)
22,426
99,732
247,307
140,536
139,460
32,954|**Total 2025**
**Total 2024**
**£**
4,736,663
3,599,957
141,901
141,901
(46,620)
(46,620)
22,426
22,426
99,732
99,732
247,307
247,307
140,536
140,536
139,460
139,460
32,954
-
**5,514,359**
**4,344,699**|
|---|---|---|
||**4,736,663**
**777,696**||
53
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
**Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
The trading subsidiary Fedcap Employment Limited is incorporated in the United Kingdom (company number 11842787). The entity is a wholly owned subsidiary (100%) of Fedcap UK.
It's net profit and net assets are consolidated into its parent Fedcap UK's position at the reporting year-end. Fedcap Employment Limited is a leading provider of employability services within the UK.
## **The summary financial performance of the subsidiary alone is:**
|Income
Expenditure
Net profit before tax
Corporation tax
Profit after tax
**The assets and liabilities of the subsidiary**
**were:**
Fixed assets
Current assets
Current liabilities
Provisions & Liabilities
**Total net assets**
**Aggregate share capital and reserves**|**2025**
**£000s**
38,650
(36,641)
2,009
70
**2,079**
997
21,564
(19,754)
(1,235)
**1,572**
**1,572**|**2024**
**£000s**
34,401
(32,406)|
|---|---|---|
|||1,995
12|
|||**2,007**|
|||1,208
22,186
(20,987)
(1,078)|
|||**1,329**|
|||**1,329**|
54
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
**Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
The trading subsidiary Fedcap Employment Scotland Limited is incorporated in the United Kingdom (company number SC622885). The entity is a wholly owned subsidiary (100%) of Fedcap UK. It's net profit and net assets are consolidated into its parent Fedcap UK's position at the reporting year-end. Fedcap Employment Scotland Limited is a leading provider of employability services within the UK.
## **The summary financial performance of the subsidiary alone is:**
|**The summary financial performance of the**
**subsidiary alone is:**|||
|---|---|---|
|Income
Expenditure
Net (loss)/ profit before tax
Corporation tax
(Loss)/profit after tax
**The assets and liabilities of the subsidiary**
**were:**
Fixed assets
Current assets
Current liabilities
Provisions and Liabilities
**Total net assets**
**Aggregate share capital and reserves**|**2025**
**£000s**
2,320
(2,618)
(298)
(9)
**(307)**
138
1,427
(872)
(65)
**628**
**628**|**2024**
**£000s**
4,877
(4,689)|
|||188
11|
|||**199**|
|||137
2,246
(1,274)
(174)|
|||**935**|
||||
|||**935**|
55
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
**Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
The trading subsidiary Start Scotland Limited is incorporated in the United Kingdom (company number SC529652). The entity is a wholly owned subsidiary (100%) of Fedcap UK. It's net profit and net assets are consolidated into its parent Fedcap UK's position at the reporting year-end. Fedcap Employment Scotland Limited is a leading provider of employability services within the UK.
|Income
Expenditure
Net profit before tax
Corporation tax
Profit after tax
**The assets and liabilities of the subsidiary were:**
Fixed assets
Current assets
Current liabilities
**Total net assets**
**Aggregate share capital and reserves**|**2025**
**£000s**
3,187
(3,097)
90
(22)
**68**
842
(300)
**542**
**542**|**2024**
**£000s**
7,155
(6,775)|
|---|---|---|
|||380
(95)|
|||**285**|
|||2,102
(1,327)
**775**|
||||
|||**775**|
The subsidiary Elite Supported Employment Agency a company limited by guarantee is incorporated in the United Kingdom (company number 2931254). The entity is a wholly owned subsidiary (100%) of Fedcap UK, acquired on 1[st] May 2025. It's net loss and net assets are consolidated into its parent Fedcap UK's position at the reporting year-end.
**The summary financial performance of the subsidiary alone is:**
|Income
Expenditure
Net loss before tax
Corporation tax
Loss after tax|**2025**
**£000s**
771
(946)|
|---|---|
||(176)
-|
||**(176)**|
56
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
**For the period ending on 30 September 2025**
## **The assets and liabilities of the subsidiary were:**
|Fixed assets
Current assets
Current liabilities
**Total net assets**
**Aggregate share capital and reserves**|1,220
438
(1,834)|
|---|---|
||**(176)**|
|||
||**(176)**|
The subsidiary Verdancy Group Limited is incorporated in the United Kingdom (company number SC678188). The entity is a wholly owned subsidiary (100%) of Fedcap UK, acquired on 1[st] June 2025. It's net profit and net assets are consolidated into its parent Fedcap UK's position at the reporting year-end.
## **The summary financial performance of the subsidiary alone is:**
|Income
Expenditure
Net loss before tax
Corporation tax
Loss after tax
**The assets and liabilities of the subsidiary were:**
Fixed assets
Current assets
Current liabilities
**Total net assets**
**Aggregate share capital and reserves**|**2025**
**£000s**
18
(89)|
|---|---|
||(71)|
||**(71)**|
||9
75
(155)|
||**(71)**|
|||
||**(71)**|
57
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
The subsidiary Big Picture Learning a company limited by guarantee is incorporated in the United Kingdom company no .11120513. The entity is a wholly owned subsidiary (100%) of Fedcap UK, acquired on 1[st] July 2025, its year end is 31[st] August and it's net profit and net assets are consolidated into its parent Fedcap UK's position at their reporting date
## **The summary financial performance of the subsidiary alone is:**
|Income
Expenditure
Profit before tax
Corporation tax
Profit after tax
**The assets and liabilities of the subsidiary were:**
Fixed assets
Current assets
Current liabilities
**Total net assets**
**Aggregate share capital and reserves**|**2025**
**£000s**
251
(248)|
|---|---|
||3
-|
||**3**|
||14
334
(345)|
||**3**|
|||
||**3**|
58
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
**Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **18. Transactions with Related Parties**
During the period ended 30th September 2025 the company entered into the following transactions with related parties, excluding VAT.
The amounts owed to/(by) the following entities at period end were:
|**Name of the trustee**
**or related party**
**Relationship**
**to charity**
**Transa**
**ction**
**Type**
Fedcap Group
Parent
Loan
Split by entity as follows:
Fedcap Insynergy Ltd
Subsidiary
Loan
Fedcap Employment Ltd
Subsidiary
Loan
Fedcap Group
Ultimate Parent
Loan
Fedcap Employment Scotland Ltd
Subsidiary
Loan
Verdancy Group Ltd
Subsidiary
Loan
Elite Supported Employment
Agency Ltd
Subsidiary
Loan|**2025**
**2024**
**Balance at**
**period end**
**Amount**
**£**
**£**
**1,689,851**
**2,357,252**
(2,015)
(2,017)
2,082,934
2,016,598
(744,761)
442,025
(63,307)
(99,354)
65,000
-
352,000
-
**1,689,851**
**2,357,252**
**Group**|**2025**
**2024**
**Balance at**
**period end**
**Balance at**
**period end**
**£**
**£**
**2,657,582**
**881,889**
**Parent Only**|
|---|---|---|
|||-
-
2,082,934
313,879
157,648
441,955
-
126,055
65,000
-
352,000
-|
|||**2,657,582**
**881,889**|
## **19. Ultimate parent undertaking and controlling party**
Fedcap UK is a Company Limited by Guarantee (CLG) and a charity registered with the Charity Commission. The entity is not currently trading. Fedcap UK has a single member, the Fedcap Group Inc, a company incorporated in the US, with head office based at 633 3[rd] Avenue, New York, NY, 10017. Information relating to the US group can be obtained from their website (www.Fedcap.org) or the U.S Securities and Exchange Commission website.
59
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements For the period ending on 30 September 2025**
## **20. Financial Instruments**
|**2025**
**2024**
**£**
**£**
**Financial assets**
**3,871,199**
**6,896,095**
**9,425,326**
**7,659,293**
**13,296,525**
**14,555,388**
**Financial liabilities**
**(11,951,883)**
**(13,226,779)**
**(11,951,883)**
**(13,226,779)**
**Group**
Financial assets measured at fair value
through profit or loss
Financial assets that are debt
nstruments measured at amortised
cost
Financial liabilities measured at
amortised cost|**2025**
**2024**
**£**
**£**
**Financial assets**
**3,871,199**
**6,896,095**
**9,425,326**
**7,659,293**
**13,296,525**
**14,555,388**
**Financial liabilities**
**(11,951,883)**
**(13,226,779)**
**(11,951,883)**
**(13,226,779)**
**Group**
Financial assets measured at fair value
through profit or loss
Financial assets that are debt
nstruments measured at amortised
cost
Financial liabilities measured at
amortised cost|**2025**
**2024**
**£**
**£**
**140,834**
**467,907**
**8,513,566**
**5,791,306**
**Parent Only**|
|---|---|---|
|||**8,654,400**
**6,259,213**|
||**(11,951,883)**
**(13,226,779)**
**(11,951,883)**
**(13,226,779)**|**(6,042,817) (4,955,097)**|
|||**(6,042,817) (4,955,097)**|
## **21. Operating Leases**
At 30 September 2025, the total future minimum lease payments under non-cancellable operating leases were:
|**Operating leases**
Amounts due within one year
Amounts due between one and five
years
Amounts due after five years
Group Totals|**Other**
**Buildings**
**£000s**
**£000s**
19
1,653
19
1,433
38
3,086|**2025**
**£000s**
1,672
1,452
**3,124**|**2024**
**£000s**
1,849
2,396
-|
|---|---|---|---|
||||**4,245**|
## **22. Subsequent Events**
Subsequent to the reporting date, Fedcap Employment Limited entered into discussions to extend a key service contract with a major customer, securing an additional 12 months of service delivery beyond the original term. This extension is considered material to the entity as it represents a significant source of recurring revenue and reinforces our strategic objective of building a long-term, sustainable business.
60
Docusign Envelope ID: 6520B61D-B9FF-8695-8232-4827AF037EE5
Commercial in Confidence
## **Fedcap UK**
## **Notes to the Financial Statements**
## **For the period ending on 30 September 2025**
**23. Business Combinations**
Fedcap UK acquired the following business during the year and consideration paid:
**Elite Supported Employment Agency Limited** (company number 2931254), was acquired on 1 May 2025, a company limited by guarantee and a registered charity providing supported employment and training, acquiring 50% of the voting rights for Fedcap UK and 50% of the voting rights for Fedcap Employment Limited. No consideration was paid for this combination.
**Verdancy Group Limited** (company number 678188), they provide training, consultancy and environmental guidance to organisations, schools and communities, and was acquired on 1 June 2025, acquiring 100% of the issued share capital, the consideration paid was £100,000.
**BP Learning UK Limited** (company number 11120513), was acquired on 1 July 2025, they provide education and is an inclusive provision for children years 5-8. It is a company limited by guarantee, acquiring 100% of the voting rights the consideration paid was £75,000.
||**Elite**|**The Verdancy**|**Big Picture**|
|---|---|---|---|
|**Cost of Combination**||**Group**|**Learning UK**|
||**£**|**£**|**£**|
|Consideration Paid|-|100,000|75,000|
|Costs to bring about combination|47,287|13,326|176,430|
|Total paid|**47,287**|**113,326**|**251,430**|
|Fair Value of TFA|**53,576**|**11,686**|**103,169**|
The fair value by asset category is summarised below:
|Tangible Assets
Stock
Debtors
Cash & cash equivalents
Bank Loan
Creditors
**Fair Value of Assets**|**Elite**
**Verdancy**
**BP**
**Learning**
1,213,439
4,676
14,997
35,285
-
-
304,488
40,352
76,870
85,966
1,230
104,803
-
(23,651)
-
(1,585,602)
(10,920)
(93,500)|
|---|---|
||53,576
11,686
103,169|
61