REGISTERED NUMBER: 02697467 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

FARA ENTERPRISES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

7

Statement of Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

Mr R Phelan

Mrs L J Dawson

Ms E H A Middleton

Ms E M Gordon

Mr R Davidson

SECRETARY:

Mr R Phelan

REGISTERED OFFICE:

2nd Floor

Suite 1

8 Waldegrave Road

Teddington

Middlesex

TW11 8GT

REGISTERED NUMBER:

02697467 (England and Wales)

AUDITORS:

Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Chilworth Point

1 Chilworth Road

Southampton

Hampshire

SO16 7JQ

The directors present their strategic report for the year ended 31 December 2025.

REVIEW OF BUSINESS

Retail Performance

At the operational level, total 2025 retail turnover from shops reached £10.9m, on par with 2024 at £10.86m a small increase of £37,453. A £222k increase in shop staffing costs , alongside other significant cost increases , most notably rent and rates, resulted in the total contribution before overheads from trading activities declining from £3.88m to £3.65m. a return of 33.5% on income.

Shop-by-shop analysis shows a mixed picture, with over 56% of shops achieving sales growth above cost inflation (2.5%), balanced by 33% which had a decline in sales revenue. The shop portfolio is a mix of mature shops where above 5% growth is a significant challenge and achievement, a few shops with double-digit growth from strong managers realising the potential of a location and 6-7 shops in significant decline due to either locational or leadership challenges or a combination of both. The strategy continues to be to invest in leadership development both at the shop and middle management levels to maintain income and turn around shops, as well as to manage costs in order to eventually build confidence for growing the portfolio of shops.

With shop salaries constituting 44% of total income (shops ranging from between 29%-72% depending on location), staff are by far the biggest investment FARA makes and one with significant inflationary pressure. Maximising the potential of this investment remains FARA's best means of driving growth and hedging against trading headwinds. A high proportion of leadership time and energy currently goes into developing management capability and streamlining processes essential for satisfactory return on this investment.

Confidence still remains in the retail strategy, which is centred around five stepping stones Organisation, Ground Rules, Staff Training, Volunteering, Community Engagement as a way to support and develop the shops, however the organisation may have to provide additional investment and resources to the Area Management team to help some shops attain the minimum standard required by this. An exercise is underway to understand the gaps in capacity and capability, within the e operational management team and those who support them in order that we can work to fill these.

Recognising sector-wide issues and the specifics of the FARA business model, we retain confidence that this is best strategy to stabilise and then turn around the retail contribution.

Non-shop trading performance

Non-shop Trading struggled during much of 2025 in an environment where e-commerce sales in the UK were 3.5% down on the previous year, and internally, where shops were no longer supplying the same quantities of items for sale to the Online channel. As a consequence, a modest contribution was made to overall trading profit, prompting an in-depth review of the operation, which commenced at the start of 2026 and is due to report back its findings in May 2026. Two specialist categories, Fine Art and Books, have emerged as strong prospects for future growth, with focus placed on building relationships with London Auction Houses and dealers.

Development

The drive for generating stock into the business proved erratic, with some of the new initiatives not bearing fruit and being shelved. Within the corporate partnership programme, three partnerships were realised, and a project is being carried out exploring the potential benefits of reaching out to UK brands that manufacture in Romania . The promotion of Fine Art on the FARA website has generated large donations of artworks, mainly from inheritance and parental house clearances, directly to the Warehouse hub, and this may be a source of future growth.

The planned growth in stock-out routes has materialised through a collaboration that diverts broken hard toys away from waste into creative workshops for children, which will be expanded to other shop locations during 2026. In addition, a reuse collaboration is planned utilising rag clothing in reuse and repair workshops throughout 2026.

Once again, FARA collaborated with the London College of Fashion; this year's theme, Denim ReFramed, redefined what fashion can be when we look past imperfections to remake, reuse, and reframe waste textiles.

Marketing and Communications

Marketing, Communications and Fundraising activity in 2025 focused on rebuilding core capability, strengthening collaboration with Retail, and laying the foundations for a more strategic and supporter-centred approach to income generation. The year was one of significant transition, marked by staff changes and organisational pressures, but it also saw important progress that positions FARA strongly for 2026.

A key priority for the year was reestablishing momentum following earlier departures within the department. Interim leadership during 2025 supported the stabilisation of the function and ensured continuity of delivery across essential workstreams, including supporter communications, brand implementation and the first phase of fundraising development. This transition period also provided an opportunity to improve ways of working between Marketing and Retail through clearer processes and more accessible support.

Significant progress was made in developing the digital and data infrastructure required for future growth. In parallel, plans were developed for the tender of a new website agency in early 2026, recognising that the current website requires a full redevelopment to meet the organisation's strategic ambitions.

Another major strand of work was the Brand Experience project, which will continue to progress throughout 2026. This project supports a more coherent and contemporary presentation of FARA's identity across the retail estate.

The year also saw important steps in building FARA's fundraising capability. with a shift towards more impactful, case study storytelling designed to deepen supporter understanding of FARA's charitable mission.

To underpin both fundraising and broader communications work, substantial effort was invested in strengthening FARA's storytelling content and programme information.

Work also progressed on enhancing supporter communications, with the reset of the supporter email programme. Moving away from traditional newsletter formats, the new approach emphasises short, focused messages designed to test engagement, build insight and strengthen long-term supporter relationships.

While 2025 saw meaningful progress, it was also a year that presented significant challenges. The proportion of supporters providing consent to receive marketing communications fell sharply following the introduction of the new EPOS system in 2024, and work has begun across teams to address this decline. Staff turnover and capacity constraints also affected delivery timelines and created delays in content development and programme communications.

Despite these pressures, the work completed in 2025 represents a strong foundation for the future. The Director of Marketing, Communications and Fundraising is now in post (started Jan 2026) and FARA is well positioned to build on the renewed momentum, develop the brand, marketing and comms strategy and continue strengthening supporter engagement. The coming year will focus on embedding these foundations, delivering the website redevelopment, expanding the supporter communications framework and launching the next phase of fundraising development, informed by the new organisation strategy and vision.

Human Resources

2025 has been a challenging year for the FARA workforce, during which we sought to continuously improve staff competencies through development. The HR team has supported the organisation by ensuring the appropriate HR policies and processes are in place, while also ensuring staff are able to access the necessary support when needed, including well-being and financial support and advice.

To improve staff productivity and efficiency across the organisation, various digital solutions are being assessed for suitability while recognising that the FARA workforce requires some development in the use of digital solutions to support them. One of the top challenges is managing the current levels of short and long-term sickness absence whilst looking at ways to enhance wellbeing.

HR policies and processes are being developed in line with changes to legislation and current policies updated in 2026 to ensure they remain current, relevant, and fit for purpose. Improving recruitment processes, employee relations, and absence management remain high on the agenda, with dedicated expertise available in some of those areas.

Looking forward, we will continue to develop and refine the initiatives rolled out in 2025 and in addition, act on the November 2025 employee satisfaction survey by introducing a Staff Forum, a Staff Recognition and reward scheme, reviewing internal communications and reshaping internal knowledge management systems. Priority focus will be given to introducing updated employment contracts in Q2 2026, building management capability, improving recruitment processes, and, where possible, investing more time and resources in staff training and development, including support with the use of technology.

Engagement with the FARA workforce

The FARA UK workforce has approximately 180 full-time equivalents, comprising around 300 paid staff, 120 full-time staff, 180 part-time or casual staff, and over 300 volunteers.

We are grateful to all our volunteers who give their time for free, from those completing their Duke of Edinburgh awards, giving one hour a week, to those who help with a specific specialisation (like books, social media or checking jewellery) and those who can give a few days a week, assisting with a wide range of general tasks in our shops.

The charity communicates with its workforce through monthly internal newsletters, email communications, the FARA intranet, regular team and area meetings, and leadership visits.

The year activity focused on maintaining effective policies and support while improving productivity thought things including developing recruitment processes. Priority areas included staff wellbeing, enhancing management capability and preparation for the introduction of new employment contracts in 2026. Looking ahead, FARA will act on staff survey feedback by introducing a Staff Forum and recognition initiatives, alongside continued investment in training, digital capability, and leadership development.

Equal Opportunities Policy

FARA Charity Shops does not discriminate against staff on the basis of age, disability, gender reassignment, marital or civil partner status, pregnancy or maternity, race, colour, nationality, ethnic or national origin, religion or belief, sex, or sexual orientation ("protected characteristics"). Our approach to remuneration (The Remuneration Committee of the board oversees this area on behalf of the board), promotion and training of all staff members is designed to ensure that we attract and retain staff while maintaining affordability. Pay banding has been developed for the organisation to ensure consistency, and roles have been benchmarked to the sector.

PRINCIPAL RISKS AND UNCERTAINTIES

FARA has completed the second year of its three-year organisational strategy of which the trading strategy, forms a large part, and work continues to ensure all levels of the organisation are fully aligned with it, and it delivers as intended in providing the required level of funds the FARA Foundation wishes to grant fund in pursuit of its charitable causes.

The strategy will be thoroughly reviewed during 2026 and form the basis for the development of the 2027-2029 organisational strategy, which includes the trading strategy.

The shops and non-shop operations continue to perform roughly in line with the wider charity retail sector. Exposure to rising staff and other operational costs driven by inflation makes it more difficult to maintain the required profitability without significantly improving staff productivity. The key to improving productivity and profitability is the continued development of motivated and engaged shop managers as leaders who take full ownership of their shops and are appropriately and actively supported Area Managers and the wider organisation.

For over 35 years, FARA has modelled itself on general high street retail, using paid staff to perform many of the routine tasks in store. To maintain staff costs at a sustainable level in the future, that model must, of necessity, include volunteers as an intrinsic part of its workforce - to add value, improve productivity and drive sales growth. The drive to recruit and introduce volunteers commenced in 2024, continued in 2025 and will continue in 2026 with a range of pilots taking place in shops, the intention of which is to learn in order to share success stories and best practice to further drive growth. This needs careful management to be successful and gain traction and active support from both among existing employed staff and the volunteers themselves. Feedback from the pilots will work to ensure the organisation offers a rewarding volunteer proposition that meets individual volunteer aspirations and is fully supported at shop level.

Income generated through the recycling of textiles and accessories not sold in-store or online fell by over 43% in 2025 after a drop of 50% in 2024. The overseas market for such items continues to contract, and with the ongoing situation in the Gulf, the situation may get worse before it stabilises. The primary focus for FARA right now is ensuring our shops remain safe places to work, and we are able to dispose of items we cannot sell in store or online sustainably.

Overdependence on key and senior staff remains a cause of concern, but digital tools and additional resources are gradually being introduced in an effort to lessen that dependence.

Good quality donations are the lifeblood of all charity retailers, even those who offer new goods for sale, and the increasing propensity of donors to sell their more valuable items online rather than donate to charity poses a significant risk to the viability and sustainability of the FARA donation-only based model. Key to ensuring FARA receives its fair share of decent quality saleable donations will be each shop's engagement with its local community, as well as the development of corporate and other donation pathways.

Changes to the current Gift Aid scheme or the rates relief enjoyed by charities and their subsidiaries would risk the profitability of trading operations. FARA is a member of the Charity Retail Association, which advocates for the third sector and maintaining the benefits charities enjoy is a key part of its role.

The improper use of AI represents an emerging risk with the possibility of data privacy breaches, biased or inaccurate outputs, over reliance on automated decisions, and potential non compliance with legal, regulatory, or ethical obligations if not properly governed. A new AI policy is being developed to mitigate those risks.

Dependence on one means of raising income, particularly in the current difficult trading environment, is not sensible and much work has been done in 2024 and 2025 - with more to follow in 2026 - on laying the foundations for alternative forms of fundraising in order to diversify the risk associated with retail trading.

FARA Enterprises donated £1.44m to the FARA Foundation in 2025 (2024 £1.70m). Additionally, acting as agent for the FARA Foundation £0.97m was raised through the retail Gift Aid scheme (2024 £0.86m ).

In line with many other charity retailers, 2026 started slowly. Like-for-like trading revenues after 15 weeks were level with 2025 and 1.7% down on budget. It appears that 2026 will be another testing year for the retail part of the organisation, but one which the team will embrace as it seeks to implement the third year of its three-year strategy, designed to ensure FARA trading remains relevant to it supporters.

ON BEHALF OF THE BOARD:

Mr R Phelan - Director

6 July 2026

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIVIDENDS

Charitable Distribution

The company's trading profit of £1,411,053 (2024: £1,699,341) has been distributed to FARA Foundation (Limited by Guarantee), the parent undertaking, and is paid under Gift Aid rules.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

Mr R Phelan

Mrs L J Dawson

Ms E H A Middleton

Ms E M Gordon

Mr R Davidson

Other changes in directors holding office are as follows:

Mr P W Groves - resigned 31 December 2025

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Rothmans Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr R Phelan - Director

6 July 2026

Opinion

We have audited the financial statements of FARA Enterprises Limited (the 'company') for the year ended 31 December 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 company's affairs as at 31 December 2025 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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

In auditing the financial statements, we have concluded that the directors' 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 company'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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

The objectives of our audit, in respect of fraud or error are; to identify and assess the risks of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses, and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

Our approach was as follows:

Enquiring of management concerning the company's policies and procedures relating to:

>

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; and

>

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and

>

the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

Discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud.

Obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on operations.

The key laws and regulations we considered in this context included the UK Companies Act 2006 and the accounting standard. The engagement team is familiar with these and has resources available to support the review. Other relevant laws and regulations are those concerned with the retail activity of the company, for which the management's assumptions and decisions were reviewed.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be

within the recognition of income and the override of controls by management. To address the risk of fraud in these areas, we:

>

Reviewed all material estimates affecting income, including recoverability of debtors and completeness and accuracy of deferred and accrued income;

>

Selected a sample of transactions from material income streams and compared expected income to that recorded within the financial statements;

>

Tested journal entries during the year and at the year-end to identify unusual transactions;

>

Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

>

Investigated the rationale behind significant or unusual transactions;

>

Reviewed minutes of meetings of those charged with governance and obtained an understanding of Risk Assessments and Policies introduced by management;

>

Compared results of estimates previously made to actual outcomes to consider if there were indications of misstatement due to bias, including but not limited to dilapidations provisioning.

The procedures carried out which relate to detecting errors in the application of the laws and regulations are thought to be capable of detecting, and advising the correction of, any irregularities.

As explained above the shops are identified as a high risk area for fraud. For this reason substantive procedures were carried out to gain reasonable assurance. However, the audit team understands that there are inherent limitations to the ability to detect all actual or suspected instances of fraud.

Misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. However, audit procedures were designed to account for the management override of controls being considered a high risk.

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

Use of our report

This report is made solely to the 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 company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Lisa Wilson FCA (Senior Statutory Auditor)

for and on behalf of Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Chilworth Point

1 Chilworth Road

Southampton

Hampshire

SO16 7JQ

15 July 2026

TURNOVER

10,900,973

10,863,520

Cost of sales

7,249,358

6,986,985

GROSS PROFIT

3,651,615

3,876,535

Administrative expenses

2,330,680

2,303,552

1,320,935

1,572,983

Other operating income

143,061

143,125

OPERATING PROFIT

5

1,463,996

1,716,108

Interest receivable and similar income

1,093

2,633

1,465,089

1,718,741

Interest payable and similar expenses

6

24,036

19,400

PROFIT BEFORE TAXATION

1,441,053

1,699,341

Tax on profit

7

-

-

PROFIT FOR THE FINANCIAL YEAR

1,441,053

1,699,341

FIXED ASSETS

Tangible assets

11

261,799

198,018

CURRENT ASSETS

Debtors

12

659,353

522,893

Cash at bank and in hand

3,971

82,433

663,324

605,326

CREDITORS

Amounts falling due within one year

13

477,569

401,557

NET CURRENT ASSETS

185,755

203,769

TOTAL ASSETS LESS CURRENT LIABILITIES

447,554

401,787

PROVISIONS FOR LIABILITIES

15

405,608

387,276

NET ASSETS

41,946

14,511

CAPITAL AND RESERVES

Called up share capital

16

5,000

5,000

Retained earnings

36,946

9,511

SHAREHOLDERS' FUNDS

41,946

14,511

The financial statements were approved by the Board of Directors and authorised for issue on 6 July 2026 and were signed on its behalf by:

Mr R Phelan - Director

Mr R Davidson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

5,000

9,511

14,511

Changes in equity

Gift Aid distribution to parent

-

(1,699,341

)

(1,699,341

)

Total comprehensive income

-

1,699,341

1,699,341

Balance at 31 December 2024

5,000

9,511

14,511

Changes in equity

Gift Aid distribution to parent

-

(1,413,618

)

(1,413,618

)

Total comprehensive income

-

1,441,053

1,441,053

Balance at 31 December 2025

5,000

36,946

41,946

1.	STATUTORY INFORMATION

FARA Enterprises Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

BASIS OF PREPARING THE FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

GOING CONCERN

The directors have not identified any material uncertainties and are not aware of any specific or general event that would place significant doubt on the company's ability to continue as a going concern. The directors' forecasts and ongoing assessment of operations, activities and reserves forms the basis of their assessment of going concern, which covers a period of at least twelve months from the date of approval of these financial statements. Accordingly they continue to adopt the going concern concept in preparing these financial statements.

FINANCIAL REPORTING STANDARD 102 - REDUCED DISCLOSURE EXEMPTIONS

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 33.7.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Inherent in the application of many of the accounting policies used in preparing the financial statements is the need for directors to make judgements, estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statement and the reporting amounts of revenues and expenses during the year. Actual outcomes could differ from those estimates and assumptions used. The accounting judgements and estimates that could have significant impact on the results of the company are set out below and should be read in conjunction with the information provided in the Notes to the financial statements:

Critical Judgements

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Management determine whether or not a dilapidations provision is required. Management determine whether the entity has a probable obligation to pay for property repairs at the end of a lease term, and if this can be reliably calculated. The judgement made by management is based on terms in individual lease agreements and historic costs paid on the termination of similar lease agreements.

>

Management determine whether leases entered into by the company either as a lessor or a lessee are an operating lease or financial lease. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

Significant Estimates

>

To determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.

>

To determine the expected dilapidations cost to be incurred on the termination of a lease contract management base their estimates on historic dilapidation costs for similar lease agreements, calculating an average cost per square metre and factoring in the rate of inflation since the historic costs were paid.

REVENUE RECOGNITION

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

Turnover consists of shop and recycling sales. Shop sales are the amounts derived from the UK sales of non-gift aided donated goods, and the fundraising charge paid by FARA Foundation (Limited by Guarantee), for acting as agent in the sales of the gift aided donated goods. Shop sales are exclusive of VAT. Recycling sales are the amount derived from the sale of used clothing, shoes, other textiles and non-textile materials that are not of a saleable condition in the shops, excluding VAT.

Rents received represents income from properties subleased on an accruals basis and this income is included within Other Income in the Statement of Comprehensive Income.

TANGIBLE FIXED ASSETS

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

Short leasehold

-

Over the length of the lease

Website

-

Straight line over 3 years

Fixtures and fittings

-

20% on reducing balance

Motor vehicles

-

25% on reducing balance

Office equipment

-

33% on reducing balance

Leasehold property is depreciated over the term of the lease, which varies from three to fifteen years.

Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The assets' residual values, useful lives and depreciation methods are reviewed, if there is concern over the carrying value of an asset, and if there is indication of a significant change since the last reporting period, they are adjusted.

PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS

The Company makes contributions into a recognised UK defined contribution scheme, whose assets are held separately from those of the company. Contributions payable to the Company's pension scheme are charged to profit or loss in the period to which they relate. Obligations for contributions to defined contribution pension schemes are recognised as an expense in the Statement of Comprehensive Income in the periods during which services are rendered by employees.

SHORT-TERM EMPLOYMENT BENEFITS

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

CASH AND BANK EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other short-term highly liquid deposits.

STOCKS

Purchased stock is valued at the lower of cost and net realisable value. Donated stock is carried at nil value, as a reliable valuation cannot be obtained at the point of donation. The cost of donated stock is recognised as expenditure when the stock is sold, and is valued at the retail selling price.

SHORT-TERM DEBTORS AND CREDITORS

Debtors and creditors receivable and payable within one year or upon demand are recorded at transaction price whether or not a rate of interest is charged on the balance. Any losses arising from impairment are recognised in the income statement in other operating expenses.

TAXATION

Turnover shown in profit or loss excludes VAT and other similar sales taxes on taxable outputs. The sale of donated goods by a charity or its trading subsidiary is zero-rated.

Expenses shall exclude recoverable VAT. Irrecoverable VAT is charged to the Statement of Comprehensive Income when incurred and is included within the expenditure category to which it relates.

FINANCIAL INSTRUMENTS

The company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

OPERATING LEASES

Rentals payable and receivable under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the term of the lease.

The aggregate benefit of lease incentives are recognised as a reduction to the expense recognised over the lease term on a straight line basis.

PROVISIONS FOR DILAPIDATIONS

Provisions represent the best estimate of the liability at the balance sheet date of probable future costs of restoring rented properties to their required condition at the end ultimate expiry of the lease. Expectations are revised at each period end until the actual liability arises, with any difference accounted for in the period in which the revision is made.

DISTRIBUTIONS TO FARA FOUNDATION

The company distributes its available profits to its parent charity under the Gift Aid scheme. Gift Aid payments are recognised as distributions to owners in equity within retained earnings where there is a legal obligation in place, or where the payment has been approved and made in accordance with the relevant statutory and tax requirements.

Where no legal obligation exists at the reporting date, any undistributed profits are retained within reserves until such time as a distribution is approved or paid. Gift Aid distributions are recognised only to the extent that the company has a present obligation at the reporting date.

3.	EMPLOYEES AND DIRECTORS

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

2025

2024

Shop staff

240

240

Development and marketing

10

10

Head office

9

9

Operations and warehouse

17

16

Management

5

5

281

280

The costs of employing those staff were:

2025

2024

£

£

Salaries and wages

6,312,677

6,151,162

National Insurance

683,144

531,472

Pension Scheme

128,209

126,389

7,124,030

6,194,046

4.	DIRECTORS' EMOLUMENTS

2025

2024

£

£

Director's remuneration

85,920

105,535

Director's pensions

6,874

7,014

Number of directors to whom benefits were accruing under money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

2025

2024

as restated

£

£

Depreciation - owned assets

67,657

55,884

Loss on disposal of fixed assets

7,195

33,833

Rent payable

731,272

668,288

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

as restated

£

£

Other interest

24,036

19,400

7.

TAXATION

No liability to UK corporation tax arose for the year ended 31 December 2025 nor for the year ended 31 December 2024.

8.

GIFT AID DISTRIBUTION TO PARENT

The profits paid to FARA Foundation (Limited by Guarantee) under the gift aid scheme amounted to £1,413,618 (2024: £1,699,341).

9.	PRIOR YEAR ADJUSTMENT

The company distributes profits to its parent charity under the Gift Aid scheme. These Gift Aid payments are recognised as distributions to owners in equity within retained earnings where there is a legal obligation to make the payment at the reporting date or where the payment has subsequently been made in accordance with the relevant statutory and tax requirements.

The company previously recognised Gift Aid payments within the income statement. The company has changed its accounting policy as a result of the Financial Reporting Council clarifying the accounting treatment for such payments in its triennial review of FRS 102. Accordingly, the prior year comparative figures have been restated to reflect this change.

This has resulted in a reduction in donations expenditure of £1,699,341 for the year ended 31 December 2024 and a corresponding increase in distributions of £1,699,341. There has been no change to the balance of retained earnings as at 1 January 2024 or 31 December 2024.

10.	AUDITOR'S REMUNERATION

The total auditor's remuneration included in the accounts amounts to £16,178 (2024: £15,231) for services as provided below:

2025

2024

£

£

Auditor's remuneration

12,406

8,903

Non-audit compliance services

3,772

6,328

Total

16,178

15,231

11.	TANGIBLE FIXED ASSETS

Fixtures

Short

and

leasehold

Website

fittings

£

£

£

COST

At 1 January 2025

90,668

16,757

870,808

Additions

57,662

-

69,010

Disposals

(26,039

)

-

(37,614

)

At 31 December 2025

122,291

16,757

902,204

DEPRECIATION

At 1 January 2025

53,445

16,757

761,868

Charge for year

14,472

-

32,374

Eliminated on disposal

(26,039

)

-

(30,615

)

At 31 December 2025

41,878

16,757

763,627

NET BOOK VALUE

At 31 December 2025

80,413

-

138,577

At 31 December 2024

37,223

-

108,940

Motor

Office

vehicles

equipment

Totals

£

£

£

COST

At 1 January 2025

22,960

130,610

1,131,803

Additions

-

11,961

138,633

Disposals

-

(39,400

)

(103,053

)

At 31 December 2025

22,960

103,171

1,167,383

DEPRECIATION

At 1 January 2025

20,661

81,054

933,785

Charge for year

575

20,236

67,657

Eliminated on disposal

-

(39,204

)

(95,858

)

At 31 December 2025

21,236

62,086

905,584

NET BOOK VALUE

At 31 December 2025

1,724

41,085

261,799

At 31 December 2024

2,299

49,556

198,018

At 31 December 2025 the company had no contractual commitments for the acquisition of tangible fixed assets (31 December 2024: £nil).