AZURE CHARITABLE ENTERPRISES A Charitable Company Limited by Guarantee FINANCIAL STATEMENTS YEAR ENDED 31ST JANUARY 2021 Company Registration Number 01666027 Charity Registration Number 513149 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORT) YEAR ENDED 31sfJANUARY 2021 The Board of Trustees presents Its report for the year then ended. REFERENCE AND ADMINISTRATIVE INFORMATION PRESIDENT Nell Roblnson MBE. JP PATRON The Viscount Ridley VICE PRESIDENTS A.E. Kllbum OBE FCtH N Furne55 FCA REGISTERED MEMBERS OF THE CMARITY Rosemary V. Barkes Graham P. Bamard Carol A. Buglass Geoff Crosby Brenda Dalton Mary Davey Peter B. Elllott Neville A. Furness Anne Galbralth John Gemmell Isobel HSndle Nartin Hlne Alan W. Hogg Kenneth S. John Colln Jubb lan A. Keddle Alan E. Kllburn Chr55 S. Utchfield Allan Lynn Jennifer S. Mccallum Ken MCGIII Erlc Morgan m D. Morgan Joseph Ollphant Davld W. Pallett Charles Reed Andrew Reld The V15cDunt Rldley Nell Roblnson Geoffrey W. Robson Harry F. Thornton John C. Tullp Chrfs Turnbull Isabellè T. Tumbull Jennlfer M. Walker R. lan Watson Annemarle Wood BOARD OF DIREcfoRS G.P. Bamar(l LLM {Chèiman) G.W. Robson FCA {Treasurer & Vlce Chalrman) R. J. A¢Jams lappolnted 27th March 20191 S. J. Hallowell lappolnted 29th January 2020) I. Hlndle BA Hons MEd I.A. Keddle Bsc Hons Msc (Reslgned 26th lune 20191 A.E. Kllburn OBE, FCIH C. S. Lltchfield BSC. Hons E. Morgan BS¢ l.T. Tumbull A. Wood (Keslgned 26th June 20191 SECRETARY G. Crosby AUDIT COMMrrTEE G.W. Robson FCA {Chalmian) l. Hlndle BA Hons MEd REMVNERATION COMMITTE G.P. 8amard LLM G.W. Robson FCA Dr P.J.Wllson PhD, MBA, LLB(Hons), Finst LM AZURE CHARITABLE ENTERPRISES TRUSTEES. REPORT IINCORPORATINfj THE STIiATEGIC REPORT} YEAR ENDED 31ST JANUARY 2021 KEY MANAGEMENT PERSONNEL Dr P.J.Wllson PhD, MBA, LLBIHons}. Flnst LM - CEO G. Crosby - Flnance Manager J. Taylor- Director Azure Garden Centre J. Redfern - Dlrector Support Servl¢e5 A. Robson Operations Manager K Clewlow - Reglstered Manager S Prfngle - R￿Istered Manager R Pope - Reglstered Manager P Smlth Traln5ng Mat)agèr E Dobson - Employment Pro9ramme Manager D. Turner - P￿ntIng Manager D Thompson - Landscapes Manager G. Harden - ABC Manager Newburn RefjIsTtRED OFFJCE Mccallum House Klelder Avenue Cramlingttsn Northumberland NE23 8JT AUDrroRS MHA Tait Walker Chartered Accountants & ststutory Audrtor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS BANKERS Lloyds Bank pl SME Banking 102 Grey Street Newcastle upon Tyne NEI 6AG SOLICITORS Mutkle LLP Tlme Central 32 Gallowgate Newcastle Upon Tyne NEI 4BF CHARITY REGISTRATION MO 01666027 COMPAIIY REGISTrA710N NO 513149 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORT) YEAR ENDED 31STJANUARY 2021 STRUCTURE, GOVERNANCE AND MANAGEMENT Governing Instrument and Constltution The organisation is a charitable company limited by guarantee. incorporated on 21st September 1982 and registered as a Charity on 13th October 1982. The Charitable Company was established under a Memorandum of Association that establishèd the objects and powers of the charitable company and is governed under its Articles of Association. In the event of the Charitable Company being wound up members are required to contribute an amount not exceedin8 £1 eoth. The governing instruments were most recently ￿ViSed on 30th June 2010 at the Charity'5 Annual General Meeting. Board of Dlrerto¥s/Trustee5 The Charity is governed by its Board of Trustees- who are the appointed director5 of the Company. The number of trustees at present 1$ 9 (the requirement being that the number is not Fess than 6 nor more than 201. Trustees are elected to serve 3 year tem15. retire by rotation and are able to stand for r￿lertion. At the 2021 Annual General Meeting Mr G.P. Barnard, Mrs C. Litchfield and Mr R. Adams retire by rotation (under Article 291- G.P. Barnard, Mrs C. Litchfield and Mr R. Adams being eligible, offer themselves for re-election. Mrs J. Robinson, being a new member of the board appointed in January. offers herself for re-electlon (under Article 34). The trustees meet as a norm not less than Six times a year. They receNe regular, detailed management accounts (including cash flow projections) as well as reports on operational actlvltles every month. They ￿gular￿ receive presentstions and reports on any major developments or proposals. They participate in the strategic plannin8 process and have ultlmate respongbility. Rè¢ruitrnent of Trustees Any trustee vacancies which arlse are filled by search with due regard to maintaining a proper balance of skills and experlence within the Board. Representstion relevant to the service user group is a key factor given the Charity's mission. All appointments are subject to the approval by members at a General Meetirg. With the notice of such meeting members are provided with a profile of prospertwe new trustees - and equivalent information for any trustee offering themselves for re-election. Additionally a full attendan￿ record is made available to Members. AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORT) YEAR ENDED 315TJANUARY 2021 Truste• induction and training New trustees are provided with a proper induction protess and all relevant papers and guidante to properly fulfil their responsibilities. Briefing papers and familiarisation training is effected for Èll Trustees, as deemed necessary. Sub ¢ommittees The Board of Trustees has three special sub-committees: A Finance Committee consisting of three members of the Board and Chaired by the Treasurer meets 6 time5 a year to support the Board to establish and implement policies. procedures and controls to facilitate financial govemance, which includes financial planning, budget approvals, expenditure approvals and financial reportin8. The Committee: Acts as a sounding board and source of advice to the Chief Executive and on major areas of change, innovation and development. o Undertakes tasks delegated by the Board that are wfthin the Committee's terms of reference. o Reviews and comments upon management accounts and financial forecasts. o Considers the financial implications of proposals for areas of major new strategic development on behalf of the Board and makes recommendations to the Board in respect of their suitability. o Maintains an overview of financial perfom)ance. Reviews the Trust's financial policies, including its financial reseThes policy, an(i comments upon proposed change5 before making recommendations to the Board. Decision5 are ultimately the responsibility of the Trustee members of the Committee, and In reachin8 their decisions and recommendations they will, so far as possible, take account of the views of the executive directors and any COryOPted advisors. The Audit and Risk Committee conslstlng of three members of the Board meets twlce a year to support the Board and Accounting Officer by reviewing the comprehensiveness and reliability of assurances on governance, risk management, the control environment and the integrity of financlal statements and the annual report. The Committee: Keeps a watching brief and provides advice, where appropriate, on potential and actual financial opportunities and th￿ats. A5515ts the Board identify the Trust's major risks and developing appropriate approaches lo risk management. This includes periodic reviews of the Charivs insurance cover. o Oversees the pr(Ke55 for appointing the external auditor, approving the audit fee, onsidering any questions of resignation or dismissal of the external auditor. and making recommendation5 to the Board AZURE CHARITABLE ENTERPRISES TRusfEES' REPORT (INCORPORATING THE STRATEGIC REPORT) YEAR ENDED 31STJANUARY 2021 o Discusses with the external auditor, before the audit commences, the natuwe and scope of the audit o Meets once a year, or part thereof, with the external auditor without management present,. o Reviews the annual audited financial statements before submission to the Board focusing particularly on any changes in accounting policie5, major area5 of judgement, SIBnificant adjustments resulting from the audit, compliance with charity legal requirement5 and financial reporting standards, and presentation of the accounts from a non-financial perspective Discusses with the auditor matters arising from the audit o Reviews policy and procedures in respert of internal financial controls o Reports periodically to the Board. The trustee members of the Audit & Risk Committee, as a nomi. do discu55 matters in private with the external auditors with no management present at the end of every Risk & Audit Committee meeting. The Remuneration Committee consisting of three member5 of the Board meets at least once each year to ensure that Azure'5 Pay & Reward strotegy and policies attract and motivate staff to achieve the long-term interests of the charity and deliver Se￿iceS to communities we serve. More specificalty. the Committee is responsible for and the scope of: {1} annual cost of living or performance related awards lill the remuneration of the chief executive and senlor staff. Ensuring the policy and application of the remuneration poliryls equitable, fair and transparent o Overseeing any major changes in employee benefits structures throughout the ooani5ation Day to day management Day to day management of the charity and its constituent busine55es and service5 15 vested in a professional team led by the Charity's Chief Executive. The Chief Executive meets regularty with the Chair of the Board of Trustee5 lin addition to the formal meetings) and appraises the Chair of any SIEnificant issues as they may arise betsveen meetings. The Chief Executive and, Company Secretsry attend the Board meetings land senior post-holders by rotation) but there is proper provision for the Board to discuss any matter without management attendance when they so wish. AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31sr JANUARY 2021 Key Managem¢nt Personnel The Key Management Personnel are those listed in the Reference and Administration page. In addition to their own attendance at the formal Trustee Board meetings, the Chief Executive and Company Secretary meet together with other management as needed, to addre55 all relevant operational issues. OBJEcfivES AND AcnvinES The geographic scope of the charity's cperations has traditionally been confined to the North East of England. although this is not a policy limitation. The overarching mission of the Charity is to "Improve the Ilves of people who are disabled or disadvantaged" Maximising independence, personal development and achievement are fundamental aim5. Azure's focus, gfven the nature of our client5. disabilities, is °distance travelled" rather than absolute outcomes (such as formal qualifications) and which understands that our clients achieve pro8ress on their own terms and which is not readily measured against rigid educational frameworks or. indeed, across 'academic' terms or years. These aims are achieved in a variety of ways- many of which are complementary- with many of our clients accessing more than one type of Service. Tradlng Buslnesses The charity ha5 established and operates a number of businesses, including SUPPOrted businesses to generate income and to provide sustainable paid employment and real 'on the job, learning and training opportunities for people with a disability and which include Azure Garden Centre (incorporating our horticultural nurseries) and Azure Landscapes and Grounds Maintenance businesses. A'supporte(I business, is defined as where more than SO% of the work-force have a disability AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STrATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 Support Services Azure's aim is to support clients to achieve autonomy. exercise their personal freedoms and make choices about the lives they lead. Our se)vices are tailored to indNidual needs and are delivered in flexible, personalised way to support all our clients including 2417 if required. Our staff are expert and experienced in mentoring and supporting the development of life-5kills and assistin8 our clients to en8a8e with the broader community. We work with each of our client5 to understand and support their personal aspirations, their interests and their active participation in not only leisure and retreational activities but also employment opportunities. As an organisation we are committed to deliverin8 high quality care and support that affords our clients with a sense of continuty and accountability for all working practices and we are registered with the Care Quality CommissM)n to provide personal care. Above all we are determined to protect and secure our clients, rights to high quality care and to ensure that our clients live happy and fulfilling lives. Azure employs highly trained professional staff to support people with a disability to INe in homes approprlate to their needs and to support them to live as independently as they are able. The charity works closety with local authorltles and partner organisations that provlde homes for people with a disability whilst a150 providing an enabling service for clients io better acce55 the community/community facilities and public amenlties. Educatlon SeNlces Working with local authoritie5 and other partner organisations, the charity continues to develop range of education pathways for students. Services are presently focused on providing programmes for those aged 16 and above in recognition of the fact that this client group is perhaps the least well served by mainstream education and, indeed 'special' or'SEND' s¢hools and notwithstanding their best endeavo￿r$. At Azure, our pro8rammes are devised not only to 5UPPOrt our students, personal development but also their social and employability ski115. Employability is a key facet of each of our educational programmes Ihorticulture, catering and hospitality. retail and customer se￿ice> where each student has the OPF)Ortunity to develop key skills and meaningful work experience by working in any of our businesses. We endeavour to provide each of our students with progression opportunities within and outwith Azure and which now include Supported Internships, Apprenticeships, Supported Employment and Volunteering opportunities. Special Educational Needs arKllor disabilities AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORT} YEAR ENDED 31STJANUARY 2021 Employment Services Azure administers and operates, in accordance with demand, pre-employment, basic and key skills, information technology and vocational training courses so that clients may develop transferable work skills enabling disabled or disadvantaged people to find and secure sustainable employment. Our work also includes supporting clients to overcome personal barriers to employment and sUPPOrt their personal development regardless of whether this is linked to specific {formall qualifications or job outcomes. In to-operation with DWP and local employers, clients are assisted to Secu￿ valuable work placements (including in our sUPPOrted buslnessesl and sustainable employment. Azure continues to be commissioned directly by DWP to provide these services and has, in 2020, SOU8ht to increase the scope and scale of our work with support from the North East Local Economlc Partnership and European Social & Investment Fund and by working in partnership with the North East Autism Society. A new support programme entitled 'Diversity NE, will launch in July 2021. Corporate Icentral) Services A variety of corporate funrtions are centrali5ed and performed by a small, dedicated team that supports the charity to deliver seNices and operate the charlty's Const￿Uent businesses. It also assures compliance with all legal and other requlrements. Key functions include finance. administration, work force development. IT infrastrurture, maintenance. janitorial and security. STRATEGIC REPORT The charity's principal objective for the year was to complete work in arresting and reversing the charity's declining financial health while developing new services and working in new ways to better support people with disabilities and those who are otherwise disadvantaged. COVID-19 The lèst 12 months have been concemed with adapting the charity, its seNices and constituent businesses to the COVID 19 pandemic, assuring: i) the health, safety and welfare of our clients, students, staff and our broader community,. and ill the financial vlability and long-term 5ustsinability of the charity a5 a whole in what have been and remain unprecedented circumstances. In February 2020, Azure's management team became aware of the virus and its emerging status as potential global pandemlc. contingency plans were drawn up to ensure the continuous delivery of Support SeNices that included providing emergency childcare for sUPPOrt stsff and other key AZURE CHARITABLE ENTERPRISES TRU5TEES' REPORT (INCORPORATING THE STRATEGIC REPORT) YEAR ENDED 31STJANUARY 2021 personnel antlcipating that schools and other childcare provlslon may be requlred to close and staff might otherwise be unabte to attend work to dellver essentlal servlces. Additional measures included suspending the Company'5 Sick Pay Scheme in the expectation that potential levels of absenteeism might prove to be financially unsustainable and particularly if staff were requlred to self-lsolate or quarantlne themselves land potentlallyl upon muftiple occasions. Service Directors and Managers re-modelled business operation5 to a55ure staff, client and publlc safety in advance of Government, Local Authority, PHE, CQC and ESFA guidance. This included requiring all personnel returning from overseas to self-isolate for 14 day5 upon their return to the UK and. similarly in the absence of Covid-19 testing regime all staff reporting that they were symptomatlc were also required to self-isolate for 14 days las opwsed to the then Government recommended 7 dayterml. Additional measures included acquiring and deploying additional IT infrastructure to SUPPOrt remote working while also requiring our seNices and buildin8S to operate as closed units so as to avoid interchanges of personnel and thereby minimise risks of cross-infection and business interruption. Risk assessments were conducted across all aspects of the business to assure safe workin8 practices, hyglene screens were installed acro55 all premises including the Garden Centre, Business Centre and Mccallum House. PPE was also distributed to all stoff. In anticipation of an enforced lock-down, Support Services prepared and implemented a range of measures to assure the safety and mental health of clients across the region and which included.. Centralised purchase of foods and other essential household goods so as to relieve staff and clients of the anxiety of visiting 5upermarket5 in person given the extended time required to do so a5 a consequence of the measure5 instituted by 5uper-marketS to mitigate risks of infection and especially in the early weeks of the pandemic when local supermarket 5upplie5 were runnin8 low. This allowed Support Services to release more staff hours for one-to-one client SUPPOrt. Temperature control checks completed daily for all clients. students and staff. Assuring consistent staff teams in all services to minimise risk of cross infection with prohibition of staff moving between services. Where Community Access contracts were temporarily cancelled, staff were redeployed to provide extra capacity in services as an alternative to Agency personnel. Purchasing laptops to enable staff to work from client homes in Newcastle and Washington. In addition. to 5UPPOrt our clients. mental health and well-being the charity: Purchased tablets for all cllents In Newcastle to enable contact wlth thelr famlty dlrectly: this allowed staff to arrange meetlngs wlth famlly and frlends vla tablets uslng Teams and Zoom and to support cllents vla Zoom to access church services. Purchased 8arden buildin8 and gazebos along with garden furniture for Washin8ton and Newcastle seNices to allow safe access for lamilyi friends and other visitors. Sourced a range of board games, puzzles and arts and crafts materiats for all services. AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31ST JANUARY 2021 Organlsed weekly social events in respective bubbles e.g. 'dancing in the streev. bingo. Purchased plants and growing kits for Washin8ton Se￿ices. Increased personalisation of services including one to one sUPPOrt for clients as requested and/or where assessed as sufferinB a decline in their mental health. In preparation for the Closure of schools and colleges, the Educatton Services Team prepared learning materials to 5UPPOrt home learning and which supported a transition to home learning for students in March. With the expectation that all but essential retail might be required to suspend trading and for an indefinite term, notwithstanding Speculation that the Government might introduce a universal income that later emerged as the Coronavirus Job Retention lor'Furlough'l Scheme, the management team determined that the likely interruption to our commercial (fund raising) operations would likely frustrate all efforts to sustain Alu￿ Print & Design and which was under review in December 2019 (see below). With the enforced closure of Azure's Garden cent￿ Cafe and for an unspecified temi and with the expectation that consumer tonfidence might not support a resumption of business on a comparable basis. café staff were first furloughed and then subsequently- as we came to better understand the likely economic impact of COVID-19 on the cafe's business model - it was detem)ined lal the cafe would close, Ibl that this part of the Earden centre be remodelled to SUPPOrt the sales of garden furniture, and Icl the kitchen would be refurbished to support the operation of the Cafe as teaching kitchen. A redundancy eKerci5e wa5 launched to slgnlflcantly reduce employment costs In the Cafe and Garden Centre so as to be aligned with the new operating parameters and to mitlgate against the significant loss of income the charlty would otherwlse be requlred to bear as a consequence of any enforced closure and potentlal operating and trading restrictions that We￿ expected to be enforced thereafter (see below}. Given the level of uncertainty that prevailed at this time and the potential business disruplion lo the garden centre's Christmas season. the garden centre team was also restructured to better allgn roles with new operating conditions which were considered likely to prevail for some time. The enforced closure of the Garden Centre prompted the rapid development of our online retall facility to support sale5 and which included the operation of a click and collect and delivery service. While the Garden Centre was otherwise closed to the general public and with a skeleton staff it generated sales of £223k lin 8 weeksl wlth the majority of staff furloughed. Upon the relaxation of trade restrictions, and notwithstanding the closure of the Garden Centre Cafe up until the end of January 2021 the business achieved retail sales of £2.842k which represents an increase of £546k on like fr>r like sales for the same perlod last year and whlch has mitlgated the loss of Cafe sales income. This was also achieved by malntalning stock levels by worklng closely wlth key suppliers and adhering to payment terms in cooperation wlth the suppliers, unlike a number of our competitors who sought the opportunity to seek extended credit. The constant dialogue with suppllers was Immediately rewarded insofar as we have and continue to receive preferential io AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORT) YEAR ENDED 31STJANUARY 2021 consideration from suppliers relative to other Garden centres assurin8 the continuity of supply of key ranges of product. The temporary closure of the Garden Centre Plant Nursery prompted a review of operations which determined that it was no longer cost-effeciive to maintain a facility that existed largely to support the employment of our clients. With escalating employment costs and the increasing year on year costs of client supeNision, it was determined that this aspect of garden centre operations Should close and that it should be reconstituted lif possible) as a day service where the charity is commissioned by the local authority to provide attivitie5 for clients and/or the NHS vis-a-vis rehabilltstion service5 for acquired brain injury patients. While commissioned Employment SeNlces and contract awards, were suspended the Employment Services team was retained to provide support to our 'furloughed' personnel and our supported employees. Occupancy levels at Newburn Busine55 Centre have been, and remain. strong. This has been supported by the concerted efforts the charity has made to sign-post and/or support tenants to acce55 COVID-19 business support 8rants and not least Small Business Rate Rellef that has supported tenant5 ability to honour the terms of their respective leases. COVID-19 has posed a number of significant challenges to the charity and while we are in no doubt that the road ahead will be difficult we remain confident that the measures we have taken and contingency arran8ements we have made will a55ure our lon8 term capability and capacity. ACHIEVEMENTS AND PERFORMANCE Notwithstanding the impact of COVID-19 and the challenges the pandemic have posed the management team is stable, flexible and has demonstrated a capability for innovation that will enable the Board of Trustees to embaik, with COnf￿enCe, on the next phase of the Charity'5 development. Given that we have endured what has been the most challenging year for our staff, both professionally and personally, and a year in which they have not only had to master the anxieties of clients, students. colleagues and, not least. their own: the scope and scale of thelr achlevements thls last year is a testament to their dedication and commitment to the charity and the communities we Serve. Activities & Achievements Azure Business Centres UmSted The business provides office space and business units for small and start up enterprises in Newburn in the North East. Occupancy at the centre is at a very satisfactory level generating a surplus of £73k, before Gift Aid to the Charity, in the year compared with £59k in 2020. The business contribute5 significant value to Azure's balance sheet with both li AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 landlbuildin8S, Stron8 cash 8eneration and by it gift aidin8 any profit to the charity. Azure Garden Centre The ChariV5 wholty owned retail subsidiary, Azure Garden Centre Limited, returned a profit (this yearl of £433k, before Gfft Aid to the Charity, compared to a profit of £194k in 2019120. The Garden Centre continue5 to fulfil its purposes of gainfully employing and training people with disability and by the gift alding of any profit to the Charity to support our broader charltable endeavours, £202,326 In the current year. Azure Landscapes & Gmunds Maintenance The LaDdscape5 department had a better year incurring a much smaller deficit than bL¢d8eted. Thi5 has been achieved by forging a relationship with a number of larger successful organisations In the reglon, something we are actlvety looking to build on. The landscapes operation continues to employ a large number of people wlth dlsabllity- Edu¢ation & Training services The Education SeNices Department has developed new pathways and a new curriculum that now incorporates Hospitality and Catering and will shortly a150 include Retail and Customer Service. leamers have a range of learnin8 difficulties or disabilities that include that may Include.. Attention deficit hyperactTvity disorder IADHDI, Autism spectrum disorder {ASDI, Obsessive-cornpulsive disorder IOCDI, Epilepsy, P05t-traumatic stress di50rder IPTSDI. SightlHearing impairment, Speech and lan8ua8e difficulties. Anxiety, Dyspraxia, Hypermobility. and Fine/gTOSS motor skill difficulties The Hospitality and Catering pro8ramme launched in September 2020 and was supported by £250k capital investment in the creation of a new teaching kttchen land which also attracted financial supp)rt from the Reece Foundation and the Molitor Charitable Trust). 12 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 315TJANUARY2021 Working with Northumberland County Council, recruitment to our education and training programmes has increased. year on year. and for each of the last five years (from 4 students in 20161171. In 2020121, following the introduction of our Hospitality and Catering programme, Azure supported 23 Skill-builders and 3 Intems. The scope to accommodate Intern5 wa5 reduced by the enforced dosure of Café Azure and the aforementioned determination to close and restructure the plant nursery. An employment advisor is also seconded Ipart timel to the department to work more extensiveiy wwth students to plan and secure their progression destinations,. this will include securing voluntary and work-placement opportunities for students, identifying suitable job opportunities and assisting students to apply for roles and prepare for interview. We will also undertake to support any employer that provide5 a progre￿10n destination for our Students. Employment Services The number of people involved in the supported employment activities in its businesses (Corporate Services. Garden Centre, Nurseries, Landscaping bv5ine55 and Education Services) averaged 42 during the year- and is 25 at the year end. The department ha5 also supported people to attend taster days, work placements, traineeships and volunteerlng roles to furtherthelr development and experience. Support SeThlces Support Services continues its residential based work in the various housing departments in Cramlin8ton, Washington, Tynedale and Newcastle-as well as providing a substantial volume of enabling support activity around the North East. The quality of all of these activities 15 regularly verified by third party inspections: the funding stream mix is both complex nd variable. Al the year end, 77 residents were being sUPPOrted in their homes at Cramlington, Washington, Tynedale and, via Supported Livin& in Newcastle and Tynedale. 65 other service users were ￿CeivIng support through the Community Acce55 enabling Se￿lee. 13 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31sr JANUARY 2021 Corporate (Central Service5) Central Servios provides a wide variety of necessary functions to facilitate the work of the organisation as whole and to ensure all legalities are complled with. With the advent of COVID-19. Corporate Services team was also charged with supporting the implementation of business continuity plans across all Azure's services and constituent businesses which included procuring and assuring the integrity of Supply of PPE, Garden Centre Supplies. the implementation of remote working Iwhere practicable), creating on-line retail operations at the garden centre and, not least, the implementation of the furlough scheme FINANCIAL REVIEW The challenge5 facing the learning and physical disabilty social care remain very real and pose significant challenge5 to the charity, not least financial. In October 2018. with the 2018119 deficit forecast to ex￿ed 4300k. the charity commenced a Change and Transformation programme to addre55 the charity'5 underlying financial position which had deteriorated over a number of years. As reported last year: Local Authority fees (for Support and Day servi￿5} still do not reflect the real terms increase in pay costs lincluding the National Living Wègel and overheads which ha5 prompted increasing numbers of seNice provider5 across the UK to hand back services or otherwise decline to provide these services. Thi5 also seems to be driving an increased number of privately owned care businesses being offered Ito Azure) for sale- to date, we have yet to receive an invitation to purchase what we would consider a 'financially viable, business. Fee rates for'day serwices, continue to prompt some of the most notable service providers lin the region) to withdraw seNices on the basis that they are no longer economic to provide. A number of the charity's tradin8 businesses, while providing a much-valued source of employment for our clients. continued to post operating deficits- most notably A2Ufe Landscapes & Ground Maintenance and Azure Print & De5ign15ee below). Azure's Plant Nursery and Café's operating performance, while a8ain providin8 a much valued source of employment for our clients {includin8 Supported Employmentl, continued to be eroded by increases in the National LNin8 Wage that were not supported by commensurate increases in DWP 8rants thereby requiring the Charity to subsidise the employment cost5 of supported employees still further. The Charity has 5tru8gled for a number of years to recruSt Support Staff and continued to be overly reliant on Agency staff to support the dellvery of Support Servlces whlch have ￿qUIred the Charity to incur addltlonal levebs of expenditure. 14 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT{INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 The Charity's se￿ice proposition had become too narrow, the Employment Services department had become greatly diminished las government funding for thi5 service had reduced an(1 succe550r service contract5 had not been secured) while the Education Services department required investment to support the development of new pro8rammes. Post initlal restructuring, the charity aimed to achieve a significant surplus in 2020121 circa £3CK)k and entered 2020121 confident that it would be in a position to repay the balance1£3CXJkl of an Emergency Loan1£400kl taken from the NorthEast Social Investment Fund in 2019 and in the knowledge that the charity was also experted to reduce its reliance on its overdraft facility. the advent of the COVID-19 pandemic prompted the management team to accelerate the implementation of plans to restrurture the charity to deliver further efficiencies. This progromme included a number of redundancies to deliver payroll savinES to mitigate the anticipated adverse financial impacts of business Intemiption assoclated with COVID-19 lock-downs across the charity and although Azure held business interruption insurance Iwhich. it became Clear at the outset of the pandemic that insurers were reluctant to honourl. Following the Supreme Court Judgement in The Finonciol CondurtAuthority v Arch ond Others on the 15 of January 2021. the Charlty is now able to submit a claim for busine55 interruption losses inflicted by the pandemic. Moreover. with operating losses forecast to escalate with the enforced closure of the business due to the COVID-19 pandemic that were likely to be exacerbated by the expected economic slowdown. it was detemiined that Azure Print & Design should close lin the event that It could not be sold). The review of the Garden Centre, Café and Plant Nursery determined- li} The garden centre operation continued to perform strongly with referen￿ to industry benchmarks as regards income generated but.. income generatlon relative to the size of the current retail operation (shop, outdoor plant and car park areal is now limited by a lack of capacity; the operating costs of the cafe and plant nursery exceed industry benchmarks- this is largely a factor of the number of staff the charity employs in each of these business areas relative to other'commercial, Garden Centre operators,. the physical condition of the Plant Nursery Greenhouses requlre5 significant capital investmentlrefurbishment lin the next five year51 if they are to be retair)ed as part of the Garden Centre operating model Garden Centres have. in the main, divested themSe￿eS of Plant Nursery operations in recent years in favour of sourcing supply from more economic andlor speclalist growers and suppliers. lill More specifically and notwithstanding the additional lexceptionall restructurin8 costs that were due to fall in this financial year (from measures instituted in 20191201, the enforced closure of the Garden Centre to the general public lin 20201 and Café Azure (which remains closed to the general public and which accounts for a loss of MO￿ thèn £700k income) prompted a number of redundanties and associated c05t5 of redundancy1£21kl to deliver payroll 5avin85 of £254k and which was completed in July 2020. The costs were mitigated in part by the redeployment of staff to other parts of the charity e.g. Education Services. 15 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 11111 The management team also determined to redraw and repurpose a number of management, supervisory and administrative role5 in the Garden Centre delivering a further pay-roll saving of £44k with associated costs of redundancy1£2.6kl. livl Escalating pay-roll costs in the Plant Nursery and, in particular, the real Icostsl of Supported Employment on its present stale land associated supervisory costs). relative to income generated from these bv5iness operations, could not be 5UStained during the pandemic or, indeed, on the same scale over the longer term. As a consequence, 7 posts were determined io be redundant at a cost of £8.5k delivering a pay-roll saving of £58k. The Business Revièws undertaken at lil Azure Landscapes & Grounds Maintenance and lill Azure Print & Design were scoped and undertaken so as to stem historic loss-making artivty, returning the businesses to 'break-even' lat worst) and to detemiine whether the businesses should be retained i.e. whether they could be operated or'traded. without further'subsidy, from the charity. While it had been possible {in 20191201 to arrest and reverse the declining financial performance in Azure Landscapes & Ground Maintenance. it was determined that the COVID-19 pandemic and associated busine55 interruption land the interruption of customers, businesses which would 5i8ni*icantly disrupt and reduce trading income) would frustrate any effort sustain Azure Print & Design. The management team, with the support of the Board of Trustees. resolved to close A2ure Print & Design, which the Charity has heavily subsidised for a number of years (ond where operotin9 losses over the lost 5 yeors omounted to more than £240k and which looked Set to escalate as Q consequence of the pondemic to unsustainable level). Azure Print & Design ceased trading as from 30 June 2020 incurring exceptional costs of closure mounting to £169k including redundancy costs of £55k and which were offset, in part, by the sale of equipment that generated funds of £13k. Summary While the pandemic required a more extensive programme of re-structuring, a number of the decisions taken these last twelve months already lay before the Board of Trustees and management team in any event to address the underlying financial performance of the charity and to assure its financial viability as illuslrated below. In addition, the management team and Board of Trustees have continued to monitor and, wherever possible, mitigate the impacts of Brexit and in particular its effects on the Garden Centre. The pandemic posed the most significant challenge to Azure's retail capability following the suspension of all but essential services including the enforced closure of the Garden Centre, Café and Landscapes & Garden Maintenance seNice. However, a SiEnificant escalation of demand Iduring lockdown) for all things horticultural including garden furniture and a relaxation of 'lockdown' measure restricting the operation of Garden Centres enabled the management team to mitigate the loss of income from the Café and other 5ervice5. However, a global shortage of shipping containers and capacity in the world's freight infrastructure following a world-wide surge in demand for carriers Ishipping PPE and other associated COVID-19 related Items) dld prompt an increase in costs from our suppliers. 16 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE sfRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 Supply co5t5 were forecast to increase in any event (following Brexltl wlth the Introductlon of plant inspections regimes re imports le.g. plant passports) delaying delivery to UK retailers; whereas UK growers, costs were also forecast to increase as o consequence of lack of migrant labour which coincided with a surge in ICOVID-19 lockdown relatedl demand for UK produrts Unfortunately. UK growers in particular found themselves unable to invest in the creation of new capability and/or capacity with the enforced c105ure of garden centres providing no route to market for their products and which for¢ed a number to develop their own online sales functions dirert to customers. The tharity wa5 nevertheless able to pass on most of these additional costs in the price points of garden centre products although it did require the aforementioned additional efficiencies. Annual Operating Surplus/Deficit (Gross ) IOLMJOOO s92￿0 80C4)C 600000 400000 200QOO -200000 -108579 -400000 -12ZIIO .258740 2014115 B 2015116 I 2016117 2017118 • 2018119 • 2019no •2020121 'Excluding exceptional costs (see below) B ￿xit and the COVID-19 pandemic notwithstandin& during the last 12 months the charity has conlinued to deliver an outstanding array of seNices (Support Services, Education & Employment 5eNices1 in the most challenging of circumstances. Moreover, the commercial perfomiance and financial contribution to the charity of the Garden centre and our Business Centre has exceeded all expectations. 17 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE sfRATEGIC REPORT) YEAR ENDED 31ST JANUARY 2021 Annual Operating Surplus/Deficit {Net°') 600000 500000 400(X)O 300000 200000 iooooo .20930- -100000 -11965Q -300000 -400000 -265579 .304540 2014115 • 2015116 I 2016117 2017118 • 2018119 w 2019120 • 2020121 °As illustrated above, consolidating on work commenced in 2018119 and after a number of exceptional costs in 2020121 that included the c105ure of Azure Print & Design1£156kl. other redundancies1£62kl, a special pay award for staff (paid in December 20201 to recognise their contribution lacross the charityl from the outset of the pandemic1£85kl and professional fees 1£79kl, the charity posted a Net operating surplus of £510k. In addition. the balance of the emergency loan tsken from the NorthEast Social Investrnent Fund ha5 been discharged in full and the overdraft facility upon whith we have been heavily reliont for number of years has also been cleared. Reserves and Goin8 Concern The results for the year leave the Azure group with a net a55et position of £3,285.363. However, at the year end. the charitable group had a net current asset position of £315,615,1£17,662 net liability in year 2019120201 in that current assets exceeded current Ilabilltles. This is a much improved position on the previou5 year end and give5 confidence that the group is in a much more positwe position wwth sufficrent cash to Meet its current and future obligations. The charlty's forecasts and projertions for the next twelve months show that the charity should be able to contlnue In operatlonal existence for that period. taking into account reasonable possible changes in trading performance and the potential impact on the possible future scenarios arisin8 from the impact of COVID-19. This also considers the effectiveness of available measures to assist in mitigating the impact. 18 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE sfRATEGIC REPORn YEAR ENDED 31STJANUARY 2021 The charity and its trading 5ub5idiaries have strong positive cash balances and is forecasting for this to continue to be the case. The trustees have stress-tested their forecasts, taklng into account variou5 scenarios. and remain confldent that whlle the economlc uncertalntles remaln Iprlncipally those associated with 8rexlt and COVID-191, they do not cast signlficant doubt on the company's ability to continue as a golng concern. Pay Pollcy for Kèy Management Personnel Azure has identified Key Management Personnel in the Reference and Administration section. The remuneration of the key personnel isdetemined bythe Remuneration Committee fmm whith the Chief Executive is excluded in relation to discussion of his remuneration. The Committee is guided by fomal report whith sets out all available relevant information which includes legislative obligations. best available benchmark data in relation to salaries and settlement levels, internal differentials, recruitment difficulties, the recent settlement history at Azure, the proposed costs and ability to pay. Fundralslni Pollcy The charity is required to report how it dea15 With fundraising from the public. The charity does not use a profe55ional fundraiser or commercial participator to raise funds. Any monies raised dirert from the public follows all guidelines set out by the Charity Commission and UK law in every respect. We respect the priva￿ and contact preferences of all public donors. PUBLIC BENEFIT STATEMENT The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the aims and objectives and in planning future activities. The charitable objectives also are set in order to provide a clear and demonstrable public benefit PLAN5 FOR FUTURE PERIODS The Charity has no plans at the present to radically alter the mix of ongoing activty, nor to change the focus of the Charity. The Board and Management are committed to a process of continuous improvement to optimise both the financial performance and the activities of the Charity and its subsidiaries. The trustees have referred to the guidance contained in the Charity Commisslon's general guidance on public benefit when reviewlng the aims and objectlves and In plannlng future act5vltles. The charitsble obiertives also are set in order to provide a clear and demonstrable public benefit. It is envisaged that the difficult economic conditions will continue with the potential to affect all departments. The Charity is however concerned to protect itself from the 'seasonality' and 19 AZURE CHARITA8LE ENTERPRISES TRUSTEES, REPORT (INCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 associated risks to Garden Centre revenues Iwhlch remain weather dependantl and this has prompted the preparation of plans to expand the garden centre to increase and diversify its income streams. Perhaps most significantly, while much of the last 12 months has been devoted to restructuring the charity to deliver efficiencies and adapt to the COVID-19 pandemic. the Charity has. at the same time, developed and submitted proposals la planning application to Northumberland County Council) to extend the Garden Centre in Cramlington to increase revenues and better'weather- prooff the Garden Centre's land charit￿$) income streams. The proposals include: increasin8 the retail area to accommodate additional concessions and to support more direct sales creating additional warehousin8 Immediately adjacent to the retail area creating a new Busine55 Centre which wlll agaln support the generation of additional income providlng new tlassroom5 and teaching spaces to support the expansion of our education and training offer: and enabling the redevelopment of Mccallum House and the remainder of our slte In Cramlington. An organisation wide costs control strategy exists with close scrutiny of all dISc￿tiOnary spending. The Trustees have approved a budget forthe forthcoming year consistent with these comments and the Charity's overall strategic plan. The charity will continue to be a strong advocate for those we support and their families, challenging inequality and to make concerted effort to shape policy Inational and locall by working more collaboratively with other Services providers- particularly as regards 'strategic commissioning, and budget setting Ifor the provision of support services) in/by Local Authoritie5 With the aim of supporting improved pay and conditions for our Support SeNices staff. The charity has and continues to en8age other providers of seNices to Northumberland County Council. local Councillors and MPS in debate and discussion a5 to the fee rates paid by Northumberland County Council to service providers which we and our fellow providers consider to be inadequate 20 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT (INCORPORATING ThE STRATEGIC REPORn YEAR ENDED 31STJANUARY2021 PRINaPAL RISKS AND UNCERTAINTIES Rlsk Management The Charity has a comprehensive risk review process and this is fully updated every year. The resultant risk analysis is considered by the Audit & Risk Committee in the first instsnce Ihen is taken to the Board for approval. With respect to Health and safety 3 senior manager is the Charivs safety advisor and safety rep￿SentativeS are appointed in the various areas of the organisation. The Board has a member nominated to have a special responsibility for Health and Safety and that member meets wlth management as appropriate. The Board recelve regular reports on health and safety matters (including accident and 'near mlss. statlstlcsl. With the onset of the Covid pandemic Handelsbanken facilitated a postponement to the outstanding loan capital repayment5 for the year. This will result in marginally higher capital repayments over the remaining life of the loan5. The impact of any future Interest rate increase is taken Into conslderatlon when capital investments and cash projections are under consideration. The Trustees are satlsfied that the systems and procedures In place are sufficient to adequately mitigate identified risks to an ac￿ptable level in the Charity's day-to-day operations. The financial statements which have been prepared in accordance with the Ststement of Recommended Practice: Accounting and Reporting by Charities ISORP FRS1021 conform to current statutory requirements and comply with the charitèble company's governing documents. INVESTMENT POWERS AND RESTRICTIONS The Charity funds are controlled by the directors, who also act as trustees, who invest with a vlew to safely optimising annual investment income while maintsining tapital growth in line with market trends. The trustees can invest any sums or investments ￿ceiVed by them in investments in which they are by law authorised to invest money {including trading subsidiaries}. with power from time to time to change for others of a like nature. srATEMENT OF TRUSTEES, RESPONSIBIUTIES The trustees Iwho are also dirertors of Azure Charitable Enterprises for the purposes of companv lawl are responsible for preparing the strategic report, the trustees, annual ￿port and the financial statements in accordance with applicable law and United KinBdom Generally Accepted Accounting Practice. Company law requires the trustees to prepare financial statements for each finantial year whith give a true and fair view of the state of affairs of the Charitable Company and the group and the incoming resources and application of resources. including the net income or expenditure. of the group for the year. In preparing tho* financial statements. the trustees are required to: 21 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORTI YEAR ENDED 315TJANUARY 2021 select Suitable accountin8 policies, as described on pages 32 to 34, and then opply them consistently* observe the methods and principles in the Charitie5 SORP; make judgements and estimates that are reasonable and prudent; make judgements and estimates that are reasonable and prudent . state whether applicable UK Accounting Standards have been followed, subject to any material deportures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charitable Company and the group will continue in business. The truslees are responsible for keeping adequate accounting records that are sufficient to show and demonstrate with reasonable accuracy at any time the financial position of the Charitable Company and the group and which enable them to ensure that the financial statements comply with the Companies Act 2006. The trustees are also 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 are responsible for the maintenance and inte8rity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom 80verning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 22 AZURE CHARITABLE ENTERPRISES TRUSTEES, REPORT IINCORPORATING THE STRATEGIC REPORTI YEAR ENDED 31STJANUARY 2021 STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR In so far a5 the trustees are aware: there is no relevant audit information which the Charitable Company's auditors are unaware; and the trustees of the Charitable Company have taken all the step5 that they ought to have taken in order to make themselves aware of any relevant audit information and to e5tsblish that the auditors are aware of that information. AUDITOR A resolution to re-appoint MHA Tait Walker as auditor for the ensuing year will be proposed at the annual general meeting in accordance with section 485 of the Companies Ad 21)06. Signed on behalf ofthe Trustees on 714tJ 2.759,911 15.000 774.911 2.877.777 Total fund5 carrfed forward 3,285,363 3.285.363 2,774,911 The resufc fortr* year relates to LNxh ¢othnuin• )¢tivltSes and disconJnued a￿V￿e￿. For further dlsckisure on d15contlnued artlvities *e page 29. The notes paqes 32 to46 form part of thEse financlal staternents AZURE CHARITABLE ENTÈRPRISES rA7EMENT OF FINANCLAL AcrivrriES- Dlocontlnwd and Contlnu•d Athltl•s INCWD114G IMCOME AND EXPENDIfuRE For thg Y•ar End￿ 31st Jarxory 2021 *eontlnLbtd Continuèd Toi*1 Dlk*ntinu•d Fund& 2021 Totsl Fund• 2D20 2021 2021 2020 INCOME Donations and Lepa£ies 13,772 13,772 rf4,296 Provlsion of dient services Grants ￿e1¥a)le 404.405 4.106.722 404A05 410fy722 362.397 3.848,790 Inc•m&f*￿? 4)thÈr tradiry 4ell¥lilM'. Commerdal tradlng artl¥Wes 3,853.059 3.853.059 342.220 3.920,664 other regour¢w: Investrnertt income io AO 87 ¢Xher incDme: SuFplus on dispDs81 DI fixEd ￿etS 45,231 TOTAL zr4COP41 .377.968 .377.968 342,220 8.221.468 EXPENDrnIRE: Expenditureon charltable •cllvlt*•: Ok*ratlDn af cllent ser¥Kes 4,524.474 4.524A74 4,586.831 Co¥t¥ of ral$ln4 lur￿5. Commeroal trading operations 203.739 3.098.302 *30&041 395.474 3.737.503 other expendliure; Delclt on dlsposjl of fixed assets 27,269 13,732 41,001 TOTAL EXPENDTfuRE 231.008 7.636.508 Y,8•7.511 395,474 8,324,334 NET ZNCOME / IEXPENDITUAEI 1231.OOBI 741.46D 514452 153.2541 1102.8661 TRAPISFERS BITweeN FUNDS 21 MOVIMENT IP4 FUNDS (231.0081 741.460 510,452 153.2541 1102.866 The abo¥e conknnuiw aTrJ discontinuing a¢hvibe5 lindudlng those In 20201 relats to unrestrfcted I￿￿￿e5. The nots$4n Me5 32 to 46 form part ofthe5Efinandal 5tstemeTrts AZURE CHARITABLe ENTERPRISES Company R*9￿￿tIOn Numb•r 01666027 BALANCE SHEET A& at 31#t Janu* 2021 Gvoup 2021 Gr￿Jp 2020 Charfty 2020 2021 FIXED ASSETS Tanglble assets Investment5 A2 13 3,120,834 3,037,379 4245,3XO 2,231,697 3.126.834 3,037,379 245.318 2.231.699 cuRREP￿ A55Ers Stocks Debtors Property held for salt Cash at bank and in hand 14 15 310,261 446,503 252,913 546,008 4.727 484.052 356.828 60&A07 224.883 144.605 51.574 1.358.871 1,023,804 501.433 S40,353 CURReNT LIABILMES Creditors- amcurts falllng due wthin ene year X6 1.043.25• 1.041.466 975.772 1.118,204 N17 aiRREMf (LIABILIIES)A55ET5 315.015 {Y7.6621 (472.339) 1577,8511 TOTAL ASSEfs LESS CURRENT LIABILrrIES 3M4W 3,019,717 1.77¥979 1,653.848 Luan5 and hire purchèse •grewneThts 17 157.Q86 244,806 157,086 244,806 NET ASSETS 3.28S.363 2,774,911 1.615,893 1,409,042 FUNDS OF THe CHARITY Kestrlcted fLtnds Llnrestrlrted funds 22 22 15.000 2.759.911 15.wo 1.394.042 3.285.363 1.615.893 TOTAL PIINDS 22 3.285.363 2.774,911 1,615,893 1.409.042 ApF¥ove¢ by the Board of Direttots i)n 716lzGIi and slgned on thelr behalf by.. G.P. Barnard LLM Cholmian G.W. Robson FCA Treasurer Thè note$ ￿ ￿lle$ 32 10 46 form of these flnanclal sratements AZURE CHARITABLE ENTERPRISES GROUP STA7EMET4T OF CASHFLOWS rth• Y••r Ended 31rt Jonua 2021 2021 2020 Notes CASH FLOWS FROM OPEIIATING Acmirnffis: r4•t ta%h provkl•d by in) OPBvatlng athlll•g io 913.405 20,176 CASHFLOW$ FROM IIIVESTZNG AcfzviTIES: Jrchose of ronglNe fixed assets Transfer of fixeLI èssets held for 5a12 proceeds from dlSPD5al of fixed assets N•tcagh prov1d￿ by (u¥•d in) inve8tihll •ctiYitiE 1265.3651 120,8351 13,325 12S&042) 76,743 SS,9Q8 CASH ILOWS PR014 FINANCZNG ACTlVtTies: I￿￿ose In borrowlngs Repayment of borrowln9S Finance of tBngible fixed assets HI￿ purchase repaymerts Pl•t cash prwl¢l•d by (wad In) flnanclng S0.IXIO {300,000} 300,000 168,4941 9,497 126,7061 214,297 134.1391 (284,1391 CHANfjE IN CASH AND CASH EQUIYAiENTS IN THE ftEPQRIING PERIOD 377.224 290,382 CASH AND CASH EQUIVALEPITS AT THE BEGINNING OV THE REPORTZNG Pe￿0D 224,883 165,4991 CASH AND CASH EQUIVALEKfs AT THE END OF THE REPORTING PERIOO As set out below 602.107 224.883 2021 2Q20 TIALYS15 QF CASH ANO CASH EQUIVALINTS Cath In hand 601107 224.883 TOt•l ¢*h ¢•lh •W¥•i￿tr 60&107 Net Oebt R•c•nelllatlo At •tsrt At •nd ol Ca￿Aor 224.883 377.224 602.107 Cash equlvalents HPILoons falllTrg due wlthln one year HP/Loans fallln9 due after one year Other borrowing5 1323,2451 1244.8061 (300.0001 246,419 87,720 250,OQQ 176.926} 1157.0861 150.0001 TOTAL 043.168 961,364 318 196 The ntst8& on pages 32 10 46 form part of these flnèndal stjtements 31 AZURE CHARITABLE ENTERPRESES NOTES TO THE FINANCIAL STATEMENTS Forth• Y•¥ ended 31StJanuary 2011 I. MEMBERS. LIABILITY Azure Charltable Enterprfses Is a charftable company Ilmbted by guarantee bLrt exempt from the wulrement to use Ihe wor Ilmlted. The char￿ble Company Is Ilrnlted In that every member uTh1ertakes to contrlbtste such amount, not exceedlng El, as may be required in the event of the company belnp wound up whlle he Is a member, or wlthln one year after he ceases to be member. 2. ACWUNTING POUCIES The prfnclpal accountlng pollcles atlopted, ludgernenls and key source5 of estlrnatlon urKertalnty In the preparntlon of the fina￿1*1 statements are as follows.. Basis ofprep•r•tson. The flnandal statements have been piepared In 6C[ordan￿ wlth Accountlng and RepDrtlng by Charllles.. Ststetnent or Recommended Practice appllcable to charftles p￿Parfnq thelr accounts In accordantr wlth Flnanclal Reportlng Standaid pplicable in the UK and Republlc of Ireland (FR5 102) {effectlve l January 20191- Icharftles SORP IFRS 10211, the Flnanclal Reportlng StaThJard arvllcable In the UK and Republlc of Ireland IFRS 1021 and the Cotnpanles Act 2006. The fun¢Yonal Currenty of the grwp 15 5teding. The charfty and the trading companfje5 have adopted Update Bulletln 2 of the Chadty 50RP IFR51021 Azure cha￿table Enterprises meets the definition of a public benefit entity under FRS102. Assets and liabilities are iniknally recorded at historical cost or transactlon value unless otherwise stated In the relevant accounting policy notelsl. .Preparatlon of the 1￿COUnt$ on • qolng eoncern b•&ts- The tharity's forecast5 and proJettlons for the next twelve months show that the tharity should be able to continue oper?tygnal existence for that perfod, taklng Into account reasonable p05slble chanqe5 In tradlng performance and the poten￿￿1 impact on the chartty of posslble future scenarltss arlslng from the Impact ol COVLD-19. This algo considers the effectiveness of available rnea5ures to asslst In rnStlgatlng the impact. The charity and its trading subsidiaries have stron9 Positive cash balances and is foTecastlng for thls to contlThue to be the case. The trustee5 have stre5S tested thelr forecasts, taklng Into account varfous scena￿OS, and remaln confident that the uncertalnt*s do not cast slgnifi¢4nt t1oubt on the company s ability 10 ctsrttlnue as a gdng concem. The group financial stèternents consolidate the financSal statements of the charltable company and Its subsldlary undertaklngs drasyn up to the perK)d end date on a line by Ilne b3sls. A separate St6ternent of FlnarKtsI Artlvlty and Incorne and Expendlture Account for the charlty has not been presented for Azure Charftable Enterprlses as pem)itted by sectlon 408 of the Companles Act 2006. -Incom Income Is recognlsed when the charfty has en￿￿er￿nt to the funds. any perforn￿r￿e condltlons attached to the Item of Income have been met, it is probable that the Income wlll be recelved and the amount can be meagjred rellably. I￿￿￿e from governtrEnt other graHts, whether 'c3pltsl' grant5 or 'revenue' grants, Is recogn15ed when the charlty has entItler￿nt to the fiJnds, any perfom)ance wndltlons attached to the grants have been mei It Is ptobable Ihat Ihe Income wlll be recelved and the amount can be measured rellably and Is not deferred. Income frorn cotnrtEr£i61 trading octivitles Is recognlsed as earned los the related 90(*J5 and servke5 are provldedl and is the rental and seNlce charges fa11 due. Intefest rettfvable 15 reccgnlsed on a recelvable basls. wheTh the amount can be measured rdlably - thls Is nonnally upon nodficatlon of Ihe Interest Pald or payaNe by the bank. Income from charftaNe attivlties Includes incorne recelved under contract or where entitlernent to qrant fundlng Is subjert to speclflc perfoimance Conditions is recognised as earned las the related good5 or services a￿ providedl. Grant incorne included in thLE category provldes fijndlng to support cllent service actlvltles and is recognised where there is entiuement. certainty of re¢elpt and the amount can be MeasU￿d wlth SLthclent rellablllty. Incorne 55 deferred when related grants are retrlved and the DerformaKe condltions ￿latin0 to its entiuement are not met. 32 AZURE CHARITABLE E14TERPIUSES NOTES TO THE FINANCIAL STATEMENTS For th• Y•ar End•d 3JstJ•nu•ry 2021 2. ACCOUNTING POUCIES- (w?Unts¢dJ -Expendlture- EXpendItu￿ Is recognlsed once the￿ is ) legal or censtwctive obllgatlon to make a pay￿Ent to a thlrd party. It Is probable that settlernent wlll be required and the amount of the obligatioo ¢8n be measured rellably. Expendlture 15 cla551fled under the followlng acifjvlty headlngs: Cost5 of rnlslng funds are those costs of corntnercial trading inrluding the garden centre xtfvllles Jjnd the lettlng Opera￿0￿5, togethef wlth their assoclated support costs, Expenditu￿ on charftable a¢(Svltle5 includes the cost5 assccl4ted wlth the provlslon of cllent suppOr￿n9 servltrs and Include both the dirett costs and supw>rt Costs ￿lating to the actlvityes of the ¢haTIty. other expendItU￿ ￿presents those Stems not falling Into any other heading. Erre¢overable VAT Is Charged as a ￿5t aga1[￿ the artivity for whlch the expendItU￿ tmas Incurreo, Support costs a￿ those fijnctions that asslst the work of the charty but do not dlreLf y undertake tharftable èctlvltles. Supp)rt costs Include back offSce costs. flnance, pwsonnel. payroll gtsvemance ¢osts which support the charity's land the group's} 8rtlvltle5. These costs, whlth have not been directly apptsrtioned, have been allocated bets¥een CDSt of ralslng fijnds Ind expenditu￿ on charltable actlvltles. The base5 on whlch support costs have been allocated are set out In the Support Cost note. The charfty and the group classlfies the leasiw of equirxnent. as cperating lease5,' the title to which equiprnent remains wlth the lessor and the experted economlc life or the equlpment Is longer than the ¥ental period. Rentri ¢ha*ges a￿ charged orn a 5traiyht line basls over the terrn of the leèse. The Charfty has restrlcted fjjnds to account for the donor reqUI￿n9 that the donation must be spent on a particular purpose. All other are un￿strIcted Income funds. The funds held In each of the* categories a￿ discl¢ised in the Reserve5 Notes. All fixed assets are InI￿allY recorded at cost. Items under £500 In value a￿ not oenerally capitaiised. The cost ol fixed asset$ is depretiated over the expected u5efvl lives cf the JJsset5 a5 fc41ows'. Freehold land no depreclatlcn Long leasehold lond perfod of the lease Freehold I long & Short leasehold bulldlnos 50140 yeèrs stralght Ilne or over the tsmi of the lease Garden centre roof and Improvements 10 years stralght Ilne Plant and fIxtu￿$ 5 110 years straioht line Motor vehlcle5 4 years strèight Ilne Equlpment 3 year5 5tralght Ilne FlxtutEs and fittings 5 year5 5tralght Ilne No dep￿latIon L* charged on assets under constructJoTr. Long and short terni leasehold buildSngs and f￿ehOld buildings held by knure Bu5ine55 Cerrtres Lsrnited continue to be dep￿cIated and a￿ nol consldered to be Investment propertles In accordance wlth the prlnclpal tradlng alms and aciivllles ol the company. The carrylThJ value5 of tsr¥Jlble fixed assets are revlewed for impaimient In periods If events or ehanges In CIrcu￿￿nCeS IndI￿te the carryirvj value may not be recoverable. -Investments- Investmernts are Induded In the flnanclal statements at Cost less any provlslon for pern￿nent diminuuon In value. stocks are valued at tt)e k>wer of cost or net wlisable value, after rnaklng due èllowantr for any obsolete or slow movlnp Items. Donated Iterns of stock aTE recognised at fèir value whith is the arnourbt the chiritable cornpany wvuld have been v411111￿ to pay for the Iterns on the open market. AZURE CHARThABLE ENTERPIUSES NOTESTO THE FINANCIAI STATEMENIS Vor th•V•ar Endw1 31st JaYNwry 2021 2. AccouiirrNG POLICIES- (contlnued) Trdde and other debtors are recogn1￿ at the settlement anKJunt due after any trade d15cgunt offe￿. p￿paYment a valued at the ornount prepald net of any trade dlscounts due. Cash atbank artd in hand- Cash at bank and Sn hand include5 cash and short term hlghly Ilquld Investrnents wlth a short rnaturfty of three rnonth5 or les5 Irom the date of acqulsitlon or openino of the deposlt or similar attount. Creditors and prov15ions are recognlsed wnere the Charity has a present obligation iesulting trom a past event that wlll probably result in the transfer of funds to a thlrd party and the amount due to settle the obllgatlon can be measured or estlmated iellably. Credltors and provlslon are norfflally recognlsed at thelr settlement amount after allow5no for any trnde ¢Jlxounts due. The charitable group only has flnanclal assets and nnanclal Ilabllltles of a klnd that quallfy as baslc financlal In5ttuments. Baslc financial instruments are initially recounised at transactlon value and 5ub5equently measured at thelr settlernent value with the exception of bank loans which are subsequently meaSU￿d at aMortI￿ cost uslng the effettive Inte￿$t method. A55ets hekl under finance leases, whth are leases where substsntlally all the rlsks and rewards of ownershlp of the asset have passed to the companyi and h1￿ purchase contracts are capltsllsed In the balance sheet and are depreclated over their useful Ilves. The capltal element of the fvture oblwations under the leases and hire purchase contracts are induded as Ilabilitres In the balan￿ sheet. The Interest element of the rental obllgatlons Is charged to the income and expendlture account over the pErlod of the lease and h1￿ pvrchase contracts and represents a constant proportlon of the balance of capllal repayrnents outstandlng. -Pen$ion The group supports personal pe￿10￿ plan5 taken out by employees. ContrtbuU0r￿ are charyed to the Incorne and expendlture oc￿Jnt as they tecome payable. orporate Taxatlo The charity Is exempt from tax on Income and galns falllno wlthln sectlon 505 of the Taxes Art 1988 or secuon 252 of tr Taxation of Chargeable Goin5 Act 1992 to the extent that these are opplled to Its charitable objects. The group companles Ileve their tax Ilablllty by making Glft Aid payrnents to the parent tharity within nine months of the year end. AZURE CHARrrABLE ENTERPRISES NOTESTO TME FINANc￿L STATEME14TS Forth• V•ar End¢d 31rt 2011 3. INCOME: 2021 2020 COMMIRCIAL TRADING AcmiiTIE$ Commer¢i•l opBrations- Unrestricted 6•rd•n Cqntrn Les5.' Sale5 to Charlty et G•rden C•ntr• S•1•• 3,151M4 IS31) 3,151433 3,074,615 106.769 19.000 PrthtlThJ Less.. Intem31 Sal2s Sale5 to Gzrden Centre Nel Prlntlng Sales •7,8fj3 (183) 1136) 349,114 11,9851 14,9091 342,220 87.444 332,319 14,800) 325,640 14,8001 320,840 Le55: Internal land5￿pIng Nét Landscapp5 Sale5 317.519 Azyr• Juglno98 C•ntMS L￿.. Sales to 189,99 (Ill￿> 177.217 114,OODI 163.217 177.•31 Fwl In Tarllf Income 1.064 3.853.059 772 3.920.064 2021 2020 Prov161on of¢lknt W¥i¢4s- Unw*rtrt¢t4d Fun Rentsl I1￿cMe Department for Work ènd Pensk)r Eduratlon Furvjino Aoeney Mlscellaneous $1.579 81.836 211.345 59,645 404.405 55.644 57.086 163.150 86,517 362,397 Gran1¥ r•c•lvabl•- Unr•gtrl¢t•d Fund* DWP- Supported Business Grant DWP- Corona¥*us Job Retentk)n Scheff Sunderland Cty Councl Newcttst￿ Social Services NorthumbertaThJ County Ctyjntsl Client Direct PaITT￿rts 149.414 90.225 582,017 1.285,098 1.661.741 337.427 4,10&722 197.S04 562.538 1,203.772 J,475.721 409.255 3.848.790 AZURE CHARITABLE ENTERPRISES NOTESTO THE FINANcfAL STATEMÉf4TS Forth• Y•4r End•d 31st Janua 2021 4. DONAn¢NS & LEGAaES Covenallts £100 and under Donations £100 and under Hand*y Chirts￿e Trust gie S Letsnèrd 380 490 1.000 557 200 MoltiorTrnst pamant ML 10.000 1.050 <￿t on CLwen8nLs 95 ii. For the Year Ended 31StJanu8ry 2020 Thro 30,616 . INVESIMENT INCOME 2021 2020 Buslness Premium Actount - Lknrestrieted Funds Buslness ￿mIuM Account- Azure Centre5 Llmknd 87 li 87 6. EXPENOITVRe 2021 2020 coMMeftciAL TRADING ACTivmES Cost of goods sold Employrnent costs Deprecia￿0￿ t & rdtes Adve￿￿n0 Heat, light and water Insurnncts Tralnlng orher 1.640,056 1.114.176 79,219 7,195 25,505 S3.250 40,755 1,201 340.678 P2.Q41 1.715.306 1,334,408 92,080 25,003 87,352 93,179 56,404 8.g73 324,798 AZURE cHA￿TABLE ENTERPRISES 140TES70 THE FINANCIAL sfATEMENTS Forth• Y•ar EndBd 31st January 2021 7. ANALYSIS OF expENDITURE ON CHARITABLE AcmimES Provlslon of dlent¥ervlcM: Unr•strkt•d R•strlctqd Fund• 3021 2020 Ernployment cL￿ts Deprttiakntsn Rent & rates AdvertÈlng HeaL Iioht and water Ith>Jrances Trainee allowances and travel ResN1ents' trainirvJ and IN)lidbys Other 3,392.389 400 49,893 364 11.002 24,231 J4.780 604 442.892 37.439 549.430 3.342.768 133 45.127 4,035 11.063 67,337 26,443 5,239 500,724 37,811 546.151 400 49,893 364 11.002 24.131 14,780 1,654 442.192 37,439 549A30 L,050 S¢Jpport costs 4.523.424 1.050 4524rt74 4.586.831 For the Year E￿ded 3tst January 2020 4.S67,739 19.092 SiIMMARY ANALYSIS OF EXPÈPIDin•RE RELATED IPKONI FRtX4 CHARITABLE Acmwm Thlstable the cost of the main thbrit4blÈ acbVrt￿ and the sourtt5 of kncome ¢IreCt￿ to wpport those acYV￿es. Provknlon of cll•nt MnTk•* UnT•Strictqd Restrlcied Funds Fund• 2021 2020 Costs (Bs above) 14,523,424) 11.0501 (4.524A74) 14.586.831) Ser¥K¢ level 4gryements and dlrett payments (*ants rec2lvatAe - Indireci l Ad-hoc - Oirett grdnt support 404.405 404OOS 362.397 4,106,722 4106.722 3.848.790 Net Cost funded fr(¥r¥ ot￿r Intome (L2,297 11.0501 (13,347} 1375,644) AZURE CHARITABLE ENTERPRISES NOTES TO THE FINANCIAL STATEMENTS orth& Yo¥ ended 31st￿nu￿ry 1021 8. ANALYSIS OF GOVERNANCE & SUPPORT COSTS The charthbk company albcate5 Costs direct to artIV￿e$ as tsr as posslble. then Identsfies the remalning costs of ts SUPPOrt fur*bons. It then Ide￿￿ those etsts which relatè to the govemanTr fvnctton. ideniffeo ts wvemantt costs, the remaining support costs together with the govemance costs are tspportloned betheen the key charitatle 3cbvities Undertaken (see previous Dote) ID the year. Refer to the table below for thE ba￿5 for apportionment and the analysls of support and govemance costs. Ah•ly•li of •upportand governanc• cosls: G•neral fjovernance 2021 5UPPOrt functii)n 2020 Ttstal B•si• •tapportionment EMploym￿t costs Depreciation Interest Po¥ver Insurances Re5trtoe¢ Fur other Aud￿ fees Legal & other proles4onal costs 391,151 41,174 11.091 21.420 3.311 22,377 2,355 634 1.225 413.528 43.S29 11,725 22,645 3.500 421.263 43.489 27,394 14,634 6,114 lotated on time Chi a55et use pro-rata to staff time Pry-Tata tiTne pro.ratè to staff ume Pro-rata to staff tyme Pm-rntè to bme Goveman Go¥ernaD 45.614 2.609 8.050 48.223 8,050 35,669 56,630 7,560 6,878 35,669 549,430 37,439 556,869 583.962 For the Year ErKled 31st January 2020 546,151 37,811 9. NET INCOME / (EXPENDITURE) F¢)R 7He YtAM 2021 2020 The 9WUP sU￿￿¥defi&t Is alter chargno.. Operatho lÈase5 tiekweeiètion Owned 8ssets Assets held under hlre purthase agreew*nts Bank interest p&yab Mortgage Interesi 15urplLL%IIDeficit on disposal OF fixed a55eLI Office equipment, fixwres fittlThJs Aud4tor Remunern¥on Audtt fees of the group Other fe¥ of the qroup IlJ8.628 12.960 3,642 41,ODI 15,150 111.082 21,685 4.610 145,2341 14,510 920 The surplu5 de4lt sYf(h kn the finandal stttements of the parent tompany was £206,B57 12020.. Deficit £54.1061. The oroup surpbjs Indudes a reported surplus of £433.019 12020.. £L94.5001 artsing in Azure GardÈn centrt L4mited and a reported surplus of £72,995 12020.. £59.4231 an5ing in Azure Buslness Centres UM￿. 10. NOTES TO C4SMFLOW econclllatlon of n•t lftcom• l {•xpondtture) to n•t GTsh Ilow from op•ratlng artlvlllos: 2021 3020 Not Incom• / l*xptndlture) forth• r•porttng porvxl (•$ per the &O.F.A) SIO,452 1102.8661 dJustm*nts for: Deprecl4tlon Irnpairm¢n¢ IProfrtllLos5 on disposal of fixed assets Decreasellintreasel In stotk IlncoasellDecrea5e in properkne5 held for sa Ilncreasèl/Decrtase in debtots Increase/ldecre3se} ITh (￿01t0r$ A21.588 132.767 41.1)01 (57.348) 145.234) 17.172 99.504 198.208 22,948 14,6101 Net cash provld•d by (wwl In) 913,405 20,177 AZURE CHARrrABLE ENTERPRISES NOTES TO THE FINAI4CfAL STATEMENTS Forthe y￿r Endod 31Jt January 2021 11. ANALYSIS OF STAFF COSTS TRUSTEI RW4UNfRAIION & EXPENSES AND THe COST OF KEY MANAGEMINT PERSONNeL 2021 2020 *aff c95ts thjrfng the year: wages salarfes soaal secur4ty costs Ixher pen51on costs 4461,605 51>4,675 222.#J5 4.610.250 316.586 215.06S 4,989,113 5.141.901 Salary costs iniurred on behaw of Supported Plocement workers ITh the year were É504.048 12020= £532,375). An averboe of 35 12020.. 421 people We￿ In post ¢uMno the Y￿r, clwhith 24 were employed by ￿Ure Charftz&le Enterprises at the year end. Nurnber of empwes earnlng than £60,QOO per anwm.. 2021 2Q20 £60,000 to E70.000 £70,000 to £80,000 £iOO,000 to £iiO,000 Defined eontnbj￿n pensknn'.- Contrlbutlons - Number of emplovees $4,988 26.413 None of the dlrector¥trustees of the tharity received any rernuneraODn or expenses from the group. The key managemert personnel of the parent charfty, crynprlse the trysrees, the Chlef Executlve. Finance, Printino. landscap￿ aDd S￿[￿rt Servlces Manaoers. The total employee benefV¥ of the key m¥n•Gement personnel of the parent chartty were £459.272 12020.. £474,346) Th2 key rnanagement personfiel of the gmupi eomprfse those of the parent charity and the key management per50nn21 of ts wholly osyned Subsidiaries, Azure GardeTr Centre Ltd and ￿Vre Business Centre Ltd. The key management personnel of the subsldiary companies are the Garden Centre and Busness Centre MaDager5 whose eThployee beneflts total £lQl,760 12020= £79.2771. The emplDyee benefits of key management perso)nel forthe group was therefore £561.032 12020.. £553.6231. cost5 above exrlude the contrarted empfoyee costs whkh make up the employment Costs )ythJn Charitablè Artivitie5 aTrJ G0veM￿￿. The average headcount cl persons emplDyed by the grwp lincludlng ty$u41 ond port-tlmel dvrln9 the year was.. 2021 2020 No. G¥rden CeTrtre SkJDP)rted Uvln9 Landscapes Prmtng Supwrt Servkes Employment Servlces Educatian A(knin15tratlon AwrE ￿J￿ne$S Certre$ Urnlted 66 14 66 15 56 12 12 193 209 AZURE CHARrrABLE ENTERPRISES NofÈs TO THE FINANCUL STATEP4ENYS Forthe Y•ar End9d 31st January 2021 12A. FfAED AsseTS. GROUP FretlLold/ Lonu & short l•asehold land and bulldlnys agulprngnt flxtsre• Q¥mrnev¢l•l & ffttln95 v•hlclo5 Tot•1 As at l February 2020 Adithtlons DisposaL5 Tran5fer5 4.981,247 13D,711 {55,3361 638.364 134.654 1166,5241 729.689 47.770 6.397.070 265.365 1221.8601 AS at 31 January 2021 5.056,622 606,494 729,689 47,770 6.440,575 D•prgclatlon: AS at l Febnjary 2020 Charge for the year On disposals Transfers 2,058,382 90,371 144,7301 555,334 14,922 1122,8071 12,1421 714,729 6,852 31.246 9.443 3,359,691 121,588 (167,5371 2.142 As at 31 )brM￿ry 2021 2,104,023 445.307 723.723 40.689 3,313.742 N•t bDok ¥alu•: AS at 31 January 2021 2,952,599 161.187 5,966 7,081 3.126.834 As at 31 January 2020 2.922,865 83,030 14,960 16,524 3,037,379 14nOe15banken hdd a first legal charqe over the Garden Centrt land and bLMlthngs. The Department lor Wod¢ and Pe￿0￿$ hold a second leg81 charoe over the Gèrden Centre ￿nd bulkllnos. Hwe purchase agreements IDtluded within the net book valu2 of É3.126.834 6 £LI.185 12020 - £93.5661 relafjng to assets hdd under hlre purchase aoreements. The ￿￿￿￿ecI*l￿n charyed to the flnanc*al statements kn the year In re5pert of such assets amounted to £12,960 {2020 - É21,6B51. AZURE CHARITABLE EPITERPRISES NQTESTO THE FINANCIAL STATÈMEF4TS For Y•ar End•d 31rt Janu¥Jry 21121 12B. Fixeo 4sse7S. CTrIARITY Frttholdl Offlc• le•¥thold t4uipmenty land and Plant & IlxtureB & Comrrmrclal bulldlngs ¢•qulpm•it flitlng5 Total Coltr As at l February 2020 A￿d￿onS Transfer5 D15pDsals s at 31 hnuary 2021 3.469.544 130.711 415.536 350.301 47,770 4,283,L51 131Tr.711 1105,2511 310,28S 1105.2511 4,308.611 3,600,25S 350,3UI 47,770 AS at l February 2020 Charge for tv* year Transfers On di%poséls 1,318.172 53.560 365.195 8,615 12.1421 165.6821 336,840 5.906 2,142 31,247 9.443 2,051,454 77,524 165,6811 As at 31 January 2C121 1,371.732 305.986 344.888 40.690 2.063.295 N•t book ¥alu•.' As at 31 January 2021 2.228,523 5,413 2,245,316 A5 at 31 Janu4ry 2020 2,151,372 50,341 13.461 16,523 2,231,697 HamdeL*banken hold i fir* legal charge over the Garden Centre land and buildinJ5. Dtwrtmént for and Pe￿on5 hdd a second leoal charge overthe Garden Centre ljnd Ind bullding5. 41 AZURE CHARITABLE ENTERPRISES NOTE5 TO THE FINANCTAL STATEMEPI For th• Yèar End•d 31st January 2021 13. fN¥esTMEpirs The investment comprises a hotdlrvJ of lo(￿ rf the tssued ordinary share cayral ￿ Azure Garden Centrt Um￿d, a company gistered In Enoland wales. The co# of the Invesbment In Azure Garden Centre Umlbj In the own fimndal st8t¢ments 1$ £2 12020.. £21. ncipal ath￿ty of the sub&diary undertaklng 15 the operatyw of a garden ttntre. A surnmary rfthe tradlng results of Azure Garden Centre Umw Is shown beb¥rf'. 2021 2020 Twnover Cost of ￿e5, admk)Isttatlve expense5 and InterESt Othw operniing IKON 949,262 11719.943) 203,702 2,996,815 {2,886,L381 83,823 433.021 194,5fA) A wn)m)ry cf the balance sheet posthn of N2urt Garden Centre Umlted 15 shown below: 2021 2020 Fixed Assets Current Assets Curyent LIa￿lIt￿$ 193,397 841,241 {389,704} B6.722 677.250 1349,7341 Net Assets 6H934 414,238 A2ure Chantsble Enter￿Se$ Is the sole corporate member of Azure Business Certtrts timited, a company regithred in England Wale This £trmpany is lirnited by guarantee. The pmneipal artivlty ef the subs￿l￿ry undertaktn9, whlch 15 an approved Enterprfse Agency. is the pwi%lon of Workst￿P and offltr space for now and small ￿￿TreSSeS and provlding support sÈrvlces to such bu51nesses. A surnfflary of the trndlng results of A￿re ￿sir￿ centres ￿mited Is shown b￿0￿-. 2011 2020 Tumover C05t Df sale5, odrnlnistrative expenses Jnd Int¥est othtr oper?bThg income Taxation 174,236 (117,00S) 15,764 177,218 1117,8821 87 72.995 59.423 A ￿mM￿ry of the bapance sheet poslfjon of Azure Bu￿ne$S Centres Limite4 is shown below.. 2021 2020 Fixed Assets CuTTent A55ets Current tsabilrties 8.120 363.007 12fj.5901 718,960 272,770 140,1011 et Assets ¥024.537 951.629 AZURE CHARrrABLE ENTERPRfSES NOTES TO TrIE FINA14CIAL sfATEMEp¥rs R+rthè Y•ar Ended 3l¥t J)n￿ry 2021 14. SYOCKS hority 2021 zozi zozo 2020 Garden Centre- see belo Azure Charltsble Enterprises Prtnt- consurnables 31ffj2fj1 248,186 4,727 4.727 31Q,245L 252,913 4,727 The dlfference betbyeen thè purchase priEe or produrtlon cost of stocks and thelr replacement costls not materfal. Garden Centre stt¢k ¢omprises of E310.261 ooods held lor resale12020.. £248.030 Garden Centre and £156 Café stoekl 15. DEBTORS ChDrity 2021 2021 2020 2020 Trade debtors VAT Debt¢r Other debtors Prepjymernts and aecrued Inccme 294H•O 297,350 217.175 241,517 6,444 145.699 594 248,064 391 139.262 104 242.431 446,503 546.008 356,828 484,052 Ifj. CREDm)ftS: amounts f•lliThJ Y•ithin one v¥r h•rliy 2021 2021 2020 2020 Trade crtthttrs Amwnts owed tg sub51dvary Undertra￿n9 Other taxes and sc*￿1 seeurty tosts other (￿ltorS Accrnals Nortgage loans Hlre purchase agreemen Northsiar Venture5 Loan Lk)yds Bounte Back Loa 6.069 255,023 73,119 350.06q 95.714 64,965 263.084 67.586 9.240 109,738 466,570 111.491 6,755 100,405 169.938 78,545 381,878 67,586 >.240 233,914 25,991 203.293 23,245 300,OiKI 23.245 300.000 50.000 50.000 1.043.256 1,041.466 973.772 1,118,204 The followlng liabil￿eS disclosed under cre¢tors falllng due wr(hln one year are secured by the companv.. 2021 2020 Morto#ge loans trllre purchase agreements NortWar Yentures Loan 67,586 23.245 300.000 For details of secumty ln re5FeCt of the mortgage loans reler to the nots.. C￿d￿r$- amounts falllrvJ due aftwotE year. 43 AZURE CHARITABLE ENTERPRISES NOTES TO THE FZNA14CIAL STAYEMENTS Forth• YMr End*d 31stJanuary 2021 17. CREDITORS: •mount• f•lllfig •ft•r on• y Charity 2021 2021 2020 202Q Hlrt PLrthase agreements Handelsbanken Mortoège 524 15*502 20,658 224,148 5Z4 151562 20.65B 224,148 B&￿n¢e at 31stJanu)ry 157.086 244,BQ6 157.086 244,B06 The folbwhg Ilablif(￿ dtsdosed under credltors falllna due atsr one year are secured by the company.. 2021 2020 H*e Purchèse aoreementS Mortgage lo*s 524 IS6,562 20,658 224,148 The mortgage loans are seeured by legal charge5 on land occupied by the oarden cenrre at ststlon Road. Cramllngton. and represents 36.0% 12020.. 36%} of the carrylnQ value of the property as dehned In Accountlng Polldes. ThÈ balan￿ of the Mortgage loar6 are £124,148. Orfglnalty the mtrtgage wa5 repayable over 20 yews (the grfqln41 sièrt date wa5 5th Clctober 20Q51, bv way of quarwy Insralments. The mortg8ge has been arrawed in three pèrts,. lil The balancè of this first part was rEP8hl in full dunrvJ the year, Iiil An amount of £111.323, IrKurs Interest at a commeraal rate, liiil A final balantr of £112,825 bwhieh Incurs Interest Jt a commErual rate. RepaymEnts Jre due to c(Krbmentt In March 2021 followlng a repayment hollday from March 2020 tts JanuBry 2021. I& FINAIICUL INSTRiIMÉNT$ F¢nanclal rreasured at cost comprtse the loan finanaw provided by NaThJd*Ja￿trt, Lloyds Asset Finantè and Nortststar ventures to the tharitable company ar&1 group. Gniup 2021 Chavlty 2021 2020 2020 Loan payable falllng due.. Withln l year More thin l year but less than 5 years After 5 ytèrs 120.816 157,086 323,245 244005 126.826 IS7.￿6 323.245 244,805 Tot•1 283.912 568,050 283.912 568,050 The loan fin0￿Ing 1$ kn the form of a sewred loan a vartable Interest rate, The market rtsk fatsno the tharttable ¢omNrty and the otoup Is that Interest rates wlll rtse as the ec¢nomt ￿t0Very gèins momentum. 19. LeASE14G C1￿METI1tNTs Growi 2021 Char 2021 2020 2020 Total minknurn lease payments ¢Jue over the lease tem, fèlliNJ due as follow$.' Le4se5 expiring syithin l year 19.344 Leases expiring 2 to 5 year5 25.509 Leases expirinp over S wrs 56,818 33,881 15,437 22,579 50,343 22,549 20. PENSIOPI COMMThMENTS The group operntes a defined contrfbvtlon scheme. The assets of the scherne are held separnk1y to the group In Independently admmi*prEif fund5. The perwon c05t charged represents contrlbutlons payable by the group to the scheme and amounted to £222,835 12020.. £215,065). At the year irKluded in other taxe5 and social security costs. ￿ an amount pay4ble to th¢ sthem¢ totalllng £34.579 1202Q'. L31.4291. AZURE CHAIUTABLE ENTERPRISES NOTES TO THE FINANCIAL STATEMENTS For th• Y•ar Ended 31st J#hu8ry 2021 21. TRANSFIRS BeTweEN FVNDS In 2021 ) sum of E25,000 ha5 been trnn*rred from Re#ritted Funds to Unrestricted Funds12020: £1.¥241. 21. A14ALYSIS OF CHARITABLe FUNDS •ly&i* of movernnts In unrnotrkt•d fundB A¥ al i In¢￿￿1￿j R•Murt•• F*br￿ry EMp•nd•d & Trèn•f•M a131 January General fund 2.759.911 8.366,918 17.866.466) 25.000 Total unrestricted funrf5 2,759,911 8,366,918 17,866,466) 2S,ODO 285.3fj3 AnaWls of m0ven￿ In w*JlrFct•d funds As at I IncomlrwJ Re￿¥*¢ A*•t31 nuAry Educatlpnal voyrarnme expanyon SuppDrt of trairee de¥elopment and 1S,OTrJ (15,OW) iio,0001 10,ODO Residents a￿Vit￿5 Keele Ortve 1.050 ii.osoi Tcul restrtted fLm¢ts 15,000 11,050 11,0501 {25,0001 ol re¥lrlcleO lund: EOJtthon81 pro9ramme eXpJns￿n A £15,000 recefved In the previous year syas utlllsed In the creatkin of a tÈathlng kitchen at Azure Garden Centre tv knirea5e the capacty and ImtKove lacllttks ID the hospltd￿¥ sector of the S(Illbulld&r programme Support of traI￿e deYebpft*rtand A £IO.000 donalKin was ￿e1Ved from the mol￿or Trtsst to be used In vidino rnaterf3ls for 16-19 year olds on the Sklllbuii1er trainiw programme. Residents athvltSe5 Keele Drf¥e Vartous donat￿n$ were rettlved from Damènt ML dudng the year towards the cost of provldlng social for the reskients ￿ Kede Drlve. 23. ANALYSIS OF GROUP NET ASSETS BeTWteN FUP•DS Cpplt•l R••trlLt•d FyrKI¥ Tot•l Funds Fund balan Tanglble flxed assets et current Ikibiif(les Long tern liabl1￿e$ 3,126,834 315,615 Ik57,0861 3.X2d.834 315,015 (157,086) Totsl net ass¢ts 3.285,363 3.285,363 AZURE CHAIUTABLE ENTERPRISES NOTES TO THE PINAPICIAL STATeMENTS Forth• Yvr ￿n￿a 31stJ•nu• 2011 At the year end the ch)rtty was In trE proctss & defending a claim for unfair dismissal following notice of redundancy. Whi15t the chartty fully Expects to be able to defend the C￿lm, It expects to Incur legal fees In the ma9nitude of £20-£25k. AS a result a sum of £25,DOD hès been prOvkI￿ as a Ilability (￿trAn a￿￿415) In the year end flnanclal statements In respett of the legal fees connetted with the onooin9 Ilfjgauon (which the chartty expects to fully def¢n¢l- 25. RELATED PARTY 7RAMSAclloNS Durin9 the course of the year, the Iharity purtha5ed goads fnrn Its sub51diary Azure Garden Centre Llrnlted arnDunUrng to £531 12020-. £6.023} on normal commpJckil terms. The amount outstanding at the year end, IncIL￿ In the charltable company's ¢Tedltor5 Is £NII 12020=£3.2681. Durino the Cour￿ of the year. the tharty sold goods to Azure G)rden Centre Limited amounbno to £236 12020.. £4,909) on normal cc*))memal trrms. The amaunt outst4ndlnq at the year end. Included In the charftsble companys debt0￿. Is £NII 12020.. £424}. Durln9 the course of the year, the tharfty prO￿ded rnBnageThent seNlces to Azure Garden Centre Umlted aMoun￿ng to £159,046 12020.. £162,557) on nom)al tommercbl terms. the ye4r there were a150 re¢harges of costs beTheen the chartty ind Azure Garden Centre Llmtsd. The amount outstan¢Jino atthe year end. Induded In the Charita￿tr tompany's debtors. 15 £159.046 12020.. £162.5571. Azure Garden Centre Urnlted transferred money to the chanty to Invest. The amount held at the year end, In￿￿ed In the charttable cènpony'$ credltors. is £272.01612020". £514,342). During Ihe cwtse of the year. the ch4rW purchased goods from Its subsldiary Azure Buslness Centre5 Umlted amountyno to £12,159 (2020.. £14,000) on normal Comrne￿Ièl turn5. The 4moun¢ outstanding * th¢ year end. Indvded In the chartt?ble cornpany's ￿edItO Is £NII (2020.. £2,417). Durfno the course of the year. the charify 501d gODds to its sub9d￿ry Azure Bu51ne55 Centre5 Umlted amountlng to £1.310 12020 É3,3981 on normal commerclal temis. The amount outstanding at the year end, inclvded in the chèrltable company's debtors. Is £Nil Jrfno the coU￿e of the year, the chartty pro¥￿ed management servlces tt) Azure Buslness Centres Lim￿ed amounting to £3,486 12020- £3,563) on nomal eommertKJl terrns. during the year there were also recharge5 of costs between the chadtv and Azure Wlness Centres Umw. The amount (yJtste4)thno at year end. Included In the chantable companys debtors, Is El,48612020 - E7.8651. Jrlnp the course of the year thÈ tharity sold yoods to i Hindle, 3 trustee. tut3lliDg £260 12020 - £1.2501 on ncrmJl commerclal term The arnount outstarmllng 4t rhe year end, In(￿ded In the charitable company's debtors, Is £NII 12020- £3001. Durino the coutse of year the charty 5dd goods to Blagdon Estare. rewed bv vlrtue of the patron, totslllng £5,586 12020 - £10.0511 on normal commercial terms. The amount out5tandlno at ihe year end & E205 12020 - £3371. Durlng the course of the year the charity rEcEived a donafjon frvm The Molitor Charltable Trust. a charity related by vlrtue of a trurtee. totalwng £IO.000 12020 £10.0001. The èmount outstandiNJ at the yeaT end Is £NII. 25. iILTZMA7E COt4TROLU146 PARTY In the opirHon of the trn$tees there is no ulumate controlling patty, othertron the trustees themselves.