Charity Number: THE CHARLES HAYWARD FOUNDATION REPORT AND FINANCIAL STATEMENTS

Transcription

1 Charity Number: THE CHARLES HAYWARD FOUNDATION REPORT AND FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2013

2 REPORT AND FINANCIAL STATEMENTS CONTENTS PAGE Legal and administrative information 1 Report of the Trustees 2 11 Report of the auditors 12 Financial statements comprising: - Statement of Financial Activities 13 Balance sheet 14 Cash flow statement 15 Notes to the accounts List of grants 22-27

3 REPORT AND FINANCIAL STATEMENTS TRUSTEES Mrs. S. J. Heath (Chairman) Mrs. J. M. Chamberlain Sir Jack Hayward, O.B.E. Mr. R. Hayward - resigned Mr. A. J. Heath Mr. B. D. Insch Mr. J. N. van Leuven, Q.C. Mrs. Caroline Donald - appointed on ADMINISTRATOR Mrs. D. Napierala PRINCIPAL ADDRESS Hayward House, 45 Harrington Gardens, London SW7 4JU BANKERS CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4JQ SOLICITORS Stone King, 39 Cloth Fair, London EC1A 7JQ AUDITORS Crowe Clark Whitehill LLP, St. Bride's House, 10 Salisbury Square, London EC4Y 8EH INVESTMENT MANAGERS Newton Investment Management Ltd, Mellon Financial Centre, 160 Queen Victoria Street, London EC4V 4LA Ruffer LLP, 80 Victoria Street, London SW1E 5JL 1

4 REPORT AND FINANCIAL STATEMENTS LEGAL AND ADMINISTRATIVE INFORMATION The Trustees present their report with the financial statements of The Charles Hayward Foundation for the year ended 31st December Legal and Administrative information on page 1 forms part of this report. CONSTITUTION AND HISTORY OF THE FOUNDATION The Charles Hayward Foundation is a charitable trust governed by a Trust Deed dated 8 th December 1999 and registered under the Charities Act 2011, Registration No It commenced operations on 1 st January 2000, combining the activities of The Hayward Foundation and The Charles Hayward Trust, which were formed in 1961 and 1980 respectively. PRINCIPAL AIMS, ACTIVITIES AND GRANT MAKING POLICY The Charity s aims as set out in the Trust Deed are to apply the Trust Fund to or for the benefit of such exclusively charitable purposes as the Trustees may from time to time at their discretion determine. The Charles Hayward Foundation is a grant-making trust which makes awards to charities registered in the British Isles. The Foundation's activities are concentrated geographically in the British Isles but there is also an overseas category through which the trustees make grants to UK registered charities undertaking projects in the Commonwealth Countries of Africa. Grants can only be made for charitable purposes. The Foundation operates both a main and small grant programme and its grant-making policy comprises the following categories: Heritage and Conservation Criminal Justice Overseas Older people (small grant programme only) Within these categories The Charles Hayward Foundation funds project costs and capital expenditure. Generally, when funding projects, the Trustees value projects that develop, expand and replicate a tried and tested approach but are also interested in supporting creative solutions to problems which seem to be entrenched and elude resolution. They value projects that are preventative and provide early intervention. They prefer to support projects that respond to a well researched and clear need, provide intervention based on evidence of what works, are able to demonstrate value for money and have a good understanding of short-term effects and long-term impact of the intervention they propose. Category specific information and guidelines for applicants are available on the Foundation's website: 2

5 REPORT AND FINANCIAL STATEMENTS STRUCTURE GOVERNANCE AND MANAGEMENT The Foundation operates from its Hayward House offices in London with a small permanent staff. Trustees meetings are held four times a year to consider grant applications, receive reports on activities, and monitor routine operations. The Foundation s main grant programme comprises a two stage process. A grants committee which meet on a quarterly basis selects applications to be put forward to the full trustees meeting as a second and final stage of the grant making process. Decisions are made on the basis of information provided at meetings and taking into account recommendations by staff. A Finance Sub-Committee, comprising three Trustees, advises the main Trustee board on matters of finance, investment, audit and personnel. The Foundation s accounts are subject to an independent annual audit. Up to 2008 Trustees were appointed by the Board of Trustees for an initial period of five years after which they may have been reappointed. Three original Trustees were appointed for life. In November 2008 amendments were made to the Trust Deed under which Trustees would serve one term of five years after which they may be re-appointed for a further three years but serve no more than eight years in total, other than in exceptional circumstances. The Chairman is appointed by the Trustees for one year. The board regularly reviews the range of skills among Trustees. The Foundation encourages training and development of Trustees by promoting attendance at events organised by the Association of Charitable Foundations, appropriate training sessions and other topical, financial and investment seminars. New Trustees are chosen for the particular skills and experience they can bring to the table. Potential Trustees are interviewed and are provided with an information pack including the trust deed, accounts and annual report. Appointment and re-appointment of Trustees is by Trustees resolution. When new Trustees join the board, they receive minutes of Trustees meetings and other management and financial reports. The Trustees have complied with the Charities Act, having due regard for the Charity Commission guidance on public benefit when reviewing the Foundation s aims and objectives, in setting the grant making policy and in making awards. These are made only to UK registered charities, which individually have to meet the public benefit requirement. Review of the Year 2013 marked the completion of a major review of the Foundation s grant making policy. The Trustees have reformulated their grant making criteria and although their four funding categories remain unchanged, these have been refined to be more focussed. Within the Criminal Justice category there is a greater emphasis on early intervention and prevention and the Overseas category is now restricted to specific projects operating in the Commonwealth Countries of Africa. In the Heritage and Conservation category the Trustees wish to make larger grants to projects of a unique nature and of national importance while the Older People category is limited to the small grant programme with a maximum grant of 7,000. The Trustees have introduced a two stage process for their main grants and simplified the process of applying for a small grant by introducing an application form. They have taken this opportunity to launch a new website which contains detailed guidelines within specific categories and includes an eligibility quiz, all of which should make the process of applying more straightforward. The statistics for 2013 reflect the grants made under the old policy. The Trustees made 51 new offers of grants, some multiple, amounting to 1,074,700 and paid grants to 139 organisations totalling 1,091,976. They cancelled grants totalling 26,881. At the end of the year under review the Foundation had outstanding grant offers and commitments of 830,800. During the year the Foundation received over 650 formal applications and staff dealt with a similar number of telephone and enquiries. 3

6 REPORT AND FINANCIAL STATEMENTS Achievements and performance The relevance of each application and the potential outcome that an applicant proposes to achieve with help of a grant from the Foundation is assessed against the stated criteria and objectives in each category of the Trustees grant making policy. While the monitoring and evaluation of outcomes remains the responsibility of grantees, a majority of organisations are asked to send a progress report within a year of a grant being paid. With multiple grant awards a progress report is requested within a year of each payment and prior to further payments. The report is required to detail the results and outcomes of the project and the extent to which the project is meeting the objectives stated in the original application. The Trustees and staff also make their own assessment by visiting some of the recipient organisations. Overall, these processes provide evidence that the Trustees continue to meet their objectives by funding a variety of organisations which have provided benefit to the public. The report below provides details of grant distribution by a grant making category although it should be noted that a number of grants impact on more than one area. The narrative below highlights some outcomes achieved with the financial contribution from the Foundation. Grants paid were distributed as follows: - BY CATEGORY % No Criminal Justice 357, Heritage and Conservation 222, Older People 162, Overseas 133, Hospices 57, Small Grants 149, Miscellaneous 9, TOTAL 1,091, This report highlights representative grants paid during 2013: Criminal Justice The Foundation made grants towards projects which rehabilitate and give practical help to offenders and ex-offenders, maintain links between prisoners and their families, and provide alternatives to custody. Schemes which provide help for victims or to families who are suffering from domestic violence were also supported. 26 grants were made in this category in Alone in London, received the first of three 10,000 grants for their Family Connect programme which aims to re-connect young offenders and their families. The project evolved from their work with young ex-offenders who were released from prison, but were homeless, and who wanted to return home but could not engage with their families. The project aims to break the cycle of reoffending by mediating to resolve obstacles so that young people can return home, whilst working to equip the families with the skills and communication techniques needed for the young offenders rehabilitation. The project provides 13 months support engaging with the young person three months prior to release. Blue Sky Development and Regeneration, Middlesex, provides paid employment solely to exoffenders, recently released from prison, in grounds maintenance, waste management and related work through commercial contracts. Every employee is offered six months full time work and receives a package of personalised support comprising a mixture of soft and vocational skills, housing support, as well as being actively encouraged to maintain a positive relationship with their family or to reestablish contact. Since the charity was established in 2005, they have maintained a re-offending rate of less than 20%. They received 18,900 to purchase one second-hand crew-cab tipper and one ride on lawn mower with a trailer to expand and enhance their ability to win new business. 4

7 REPORT AND FINANCIAL STATEMENTS The Haven, Wolverhampton, provides temporary and emergency accommodation and support to women and dependent children affected by domestic violence and homelessness. 10,000 was granted to improve the capacity of their telephone helpline through the provision of new equipment and enabling them to recruit more volunteers to support a greater number of women. The project also introduced online and text chat facilities to ensure that women experiencing domestic violence have other options available to make contact safely and publicity materials were designed to advertise the new facilities. KeepOut, West Sussex, received the first of three 15,000 grants for the expansion of KeepOut s model to HMP Brixton. KeepOut is a crime diversion scheme, managed by civilian staff, but delivered by prisoners. Following a strict selection process, prisoners offered a place on the scheme receive nine weeks of intensive training enabling them to run intervention programmes for young people that inform, support and divert those between 13 and 17 years who are either at risk of entering the criminal justice system or are already involved in criminal activity. The workshops demonstrate the harsh reality of prison life and young people participate in a range of interactive and creative exercises and discussions, aimed at helping them to choose a life without crime. Women s Rape and Sexual Abuse Centre, Cornwall, received the first of two 14,000 grants for their Volunteer Mentoring project to support women offenders in Cornwall. A number of ex-offenders successfully supported through the Centre expressed a desire to have the opportunity to receive training in order to support other women who have committed offences and assist them in improving their lives, using their shared life experiences to demonstrate that sustainable change is possible. The project will support 10 volunteer mentors per year to maintain their non-offending status through increased skills, confidence, self-esteem and a new sense of responsibility. They will be trained in mentoring over a 12 week period and receive close supervision and on-going support. They will provide up to six months intensive mentoring to a minimum of 20 women per year. The support provided will be client led and may include navigating the Criminal Justice System, accompanying women to appointments, providing practical assistance and befriending. Heritage & Conservation The focus in 2013 was on industrial heritage, preservation of pictures, manuscripts, books and artefacts and purchase of land for use as a nature reserve. This year 10 grants were made in this category. The Friends of William Morris Gallery, London, received 10,000 towards the conservation of textiles from their collection and their display for the first time. This project is to complement the major capital redevelopment undertaken by the museum and the introduction of a new events and educational programme. The Gallery holds a rich collection of Morris and Co textiles, including a near complete set of all the printed and woven fabrics produced by the firm, both machine made and hand knotted carpets, embroideries include the complete set of the Romaunt of the Rose panels and many works by May Morris, head of the firm s embroidery department. The displays are complemented by interactive screens including audio visual material and hands on exhibits. The Gallery was re-opened in 2013 to great acclaim and subsequently has won The Art Fund Prize of Museum of the Year Award. A grant of 30,000 was made to the Natural History Museum, London, towards their Central Hall Development project. The redevelopment sought to transform the Central Hall through the creation of new gallery spaces to display highlights from their collections encouraging visitors to explore further. The project comprised of three phases and funds were awarded for their Treasurers Gallery. The gallery is positioned at the top of the staircase and houses some of the museum s most spectacular and valuable specimens. The showcases have active humidity controls, special lighting and anti reflective glass, and include touch screen interactive tablet displays providing more in-depth information on specimens and their historical and cultural context. Green Light Trust, Suffolk, received 20,000 towards the purchase of Frithy Wood to create a community woodland. The 21 acre neglected site of Special Scientific Interest, in Lawshall village near Bury St. Edmunds, will see the implementation of woodland and conservation plans and the reestablishing of a coppicing regime. The site will also provide a small operational base for the charity in order to extend their environmental training programmes. The organisation plans to provide 5

8 REPORT AND FINANCIAL STATEMENTS woodland and conservation activities for young people, including those with physical and learning disabilities. Kew Bridge Steam Engine Trust, London, received 20,000 towards their development project Aquarius. The Trust was established in the 1970s to restore as a public amenity the five historic engines at the Kew Bridge Pumping Station, the oldest waterworks in the world, and to add other steam pumping engines and to establish a museum of London s water supply. This project will improve the interpretation and understanding of the museum, its exhibits and artefacts and their relevance to everyday life. It will also develop the facilities within the museum to enhance the visitor s experience and extend the educational provision. The grant was made towards the refurbishment of The Economiser House, which was disused. It has now been developed as a new educational facility allowing the museum to enhance their learning and training programmes to include primary, secondary and further education. Older People In this category, Trustees made grants for capital costs of informal day care and social and recreational activities aiming to alleviate isolation and supported schemes which use volunteers to give practical help and assistance to support older people living in their homes. 14 grants were paid in this category this year, and at the end of 2013 this category was restricted to the Foundation s small grant programme only. Mind Havering, received the second of two 10,000 grants for their older persons health and wellbeing project which supports people with long standing mental health conditions. Many of the project beneficiaries are isolated and have lost contact with their families through years of illness and some lack any form of social contact. The project offers a structured programme of support for older people providing tailored activities planned around clients specific needs. The aim of the project is to provide coping strategies, interaction with peers and the wider community and to progress to a peer led support group. The project aims to support 80 people over the course of two years, at the end of the project s first year, 42 older people had benefitted from the programme. Volunteer Centre North West Kent, received the first of two 8,000 grants for the development of their befriending scheme. The project aims to expand on their current befriending scheme, which is delivered on a one to one basis with volunteers visiting clients in their home, to include two further strands designed to meet the diverse and increasingly complex needs of the area s ageing community. This includes group befriending, the introduction of small groups within their own village or community for the more active older person with the intention of attendees taking on responsibility of the group. The second new aspect is time limited befriending which will assist clients in need of one to one support to become a part of their community again. The target group are the recently bereaved, those who are convalescing following illness and those new to the community. The volunteer befriender will provide one to one support up to 12 months to increase confidence and introduce them to local services. Edinburgh Garden Partners received their second of three 10,000 grants for the extension of their garden sharing programme. The project was initiated from the growing number of older or disabled people who were so stressed by their increasing inability to look after their garden that they were considering moving house. On the other hand, the allotment waiting list had increased by 250% in the last couple of years and therefore the garden sharing programme was designed to create a solution; matching older people or disabled garden owners who are unable to maintain their gardens with local volunteers who want space to grow food. At the end of the first year s programme there were 44 active partnerships. A grant of 20,000 was made to Age UK North Lincolnshire to create a charity hub. Following the merger of two charities to create Age UK North Lincolnshire appropriate premises were identified as a priority for the charity s growth and development and to meet the growing needs of the local ageing population through the provision of an accessible centre. The new premises were formerly a window manufacturing industry and funding was sought for the adaption and refurbishment of the site. The hub will enhance service delivery and ensure that services and facilities are accessible to a greater number of older people. 6

9 REPORT AND FINANCIAL STATEMENTS Overseas Trustees made grants to charities operating in the Commonwealth countries of Africa, and until mid 2013 supported projects in India, Bangladesh and Pakistan. Only UK registered charities are eligible to apply and adequate local monitoring must be provided. Projects or programmes that deal with clean water and sanitation, basic health education, cure and rehabilitation from disease and disability, orphans and vulnerable children, and basic training in farming skills and income generation were considered. 13 grants were paid in this category in A grant of 10,000 was made to Target Tuberculosis, Brighton, towards enabling 700 of the poorest and most vulnerable people in Lira District, Northern Uganda, to access high-quality TB screening, diagnosis, treatment and preventative health education services. Working in partnership with International Medical Foundation, they are running a small community clinic in Lira to provide first line screening to at least 700 people with likely signs and symptoms as identified by volunteer health workers working within their own communities to raise awareness and provide accurate information to enable informed decisions. The facility provides clinical examination by skilled staff and tests will ascertain a patient s drug sensitivity to ensure that their treatment regime will commence with a greater likelihood of success. Of those 700 with a confirmed diagnosis, they will receive home based care delivered by trained Community Aids and TB Treatment Supporters who will ensure that the correct regime of antibiotics is taken and completed. They will also offer practical and emotional support to the patient and their immediate family. Sound Seekers, London, received 10,000 towards the recycling and reconditioning of hearing equipment across seven mission countries in Commonwealth Africa. Audio equipment is donated by hospitals, charitable organisations and individuals, which would otherwise be disposed of. Prisoners at HMP Frankland, a category A prison in County Durham, have been trained to clean, test, mend and sort hearing aids. Once shipped, the equipment will be used by local audiology teams to deliver both outreach and static audiology and ear disease treatment services. A grant of 13,000 was made to Emerge Poverty Free, London, for their Wash Programme in the Lira District, Uganda. Two schools were identified in need of a borehole and latrine each based on the number of beneficiaries and distance of existing water facilities. Through their work Emerge Poverty Free has found that locating boreholes at schools is a good catalyst for hygiene education and for the dissemination of information to the wider community. The facilities will be restricted to the pupils during school hours but outside of these hours the wider community will be able to access the boreholes. Their partner, All Nations Christian Care, will deliver training in community led total sanitation, participatory hygiene and sanitation techniques and train the school health clubs on hygiene practices. Local community members will receive training to maintain the facilities and the community will appoint water user committees whose role is to ensure that each borehole and its surrounding area is kept clean and to collect from each household a small nominal monthly charge to carrying out minor repairs. The committee members will receive training in the use of a bank account, how to record payments and ensuring that they are transparent with the use of funds. Twin, London, received 15,000 towards the second year of a three year project to improve food security and income of smallholder farmers in the Rwenzori Mountains in western Uganda. Working in partnership with Bukonzo Joint Cooperative, a coffee organisation with 3,800 members (80% of which are women), the project aims to train smallholder farmers in sustainable farming techniques to develop environmentally sustainable production systems which will increase yield and quality of their coffee and improve harvest of subsistence crop This will be achieved by improving erosion control and soil structure and determining best practice in sustainable smallholder farming systems to improve livelihoods. Cooperative staff and volunteer farmer trainers receive intensive training and use demonstration plots in each participating village to deliver training to other farmers. After these sessions the necessary tools and seeds are distributed amongst the farmers and they break into cells of five households working to implement the practices on their own farms and rotating amongst themselves for support. 7

10 REPORT AND FINANCIAL STATEMENTS Hospices (Discontinued category) Four hospices were paid grants this year, some grants were for extensions or re-development; other grants were for expansion or creation of new services. This category, although now closed following a review, made grants for end-of-life care and symptom relief for sufferers of terminal illnesses, not for treatment of illnesses. 10,000 was granted to Claire House Children s Hospice, Liverpool, for the redevelopment of an under-used area of the hospice to create an open plan night station to accommodate nurses, physiotherapy staff and a family support worker. The project has improved the privacy of care information and patient s records, whilst ensuring that front-line staffs are more visible and accessible to patients and their family/carers. Kirkwood Hospice, Huddersfield, received 20,000 towards the redevelopment of their in-patient unit; the design of which was placing limitations on the use of up-to-date equipment and there was little provision for privacy amongst patients and their families. The redevelopment has incorporated new facilities for visitors, including designated lounges for privacy and quiet time, more than doubled the number of single en-suite bedrooms (all of which include an overnight bed for families to stay in the patient s room), the installation of ceiling tracking to prevent falls and the upgrading of the nurse call facility to a mobile system. Small Grants In 2013 small grants up to 5,000 were made to charities operating in the British Isles with a turnover of less than 250,000 and projects costing less than 250,000. The Foundation aims to provide faster and more responsive grant making in this way and the feedback received from the organisations funded on the small grant scheme suggests that this funding is very much appreciated. 55 small grants were made on the small grants scheme in the year. Some of the grants were made towards improvements to community centres and village halls in Wales and the South West of England. This sub-category of our small grant programme is now closed. Alternatives to Violence, North Yorkshire, received 2,000 towards their workshops in prisons. A grant of 2,000 was made to St. Pancras Church, Plymouth, to convert a bus into a meeting place for the local community. The Coultershaw Trust, West Sussex, received 3,000 to conserve, revive and re-open Coultershaw industrial heritage site. A grant of 2,000 was made to Daybreak Oxford, towards their dementia day clubs. The Debt Advice Network, Cheshire, received 3,000 towards providing financial advice services to the families of women prisoners. A grant of 4,800 was made to Age UK Andover and District for a specialist benefit advisor. Little Ouse Headwaters Project, Bury St. Edmunds, received 5,000 towards the acquisition of land as part of their Thelnetham New Fen project, and St Andrew s Church, Blagdon received 3,000 for opening the church for community use. FUTURE PLANS The Trustees will continue supporting charities within their grant making policy areas by providing grants for projects and capital project funding. They will continue monitoring the financial performance of their investment portfolio with particular reference to the achievement of their longer term strategy which gives greater emphasis to the preservation and enhancement of capital. In 2014 they will implement their new grant making policy while refining their guidelines for applicants and website. They plan to embed their two stage application process for larger grants and develop appropriate tools for assessment of such applications. TRUSTEE ACTIVITIES The Trustees visited a number of charities, including the British Postal Museum, Natural History Museum, Pimlico Opera at HMP Erlestoke, The Mary Rose Museum, Sir John Soane s Museum and others. Members of the finance sub-committee and staff attended seminars on investment management and investment strategy, including the Newton/Mellon Charity Investment Conference and Sarasin s Annual Seminar. 8

11 REPORT AND FINANCIAL STATEMENTS INVESTMENT POWERS, GRANT DISTRIBUTION AND RESERVES POLICY The Trustees powers of investment, and to expend capital and income, are not restricted under the originating Trust Deed. The Charles Hayward Foundation is a grant making charity. Its assets are essential to support the activities of the Foundation and are held as investments and bank deposits. Dividend and interest income is applied to grant payments in any given year and any balance is taken into account in future years. In considering the total amount of funds available in any year for distribution the Trustees use the following criteria:- Account should be taken of the outstanding offers and commitments; Investment gains should be adequate over time to enable the value of the Expendable Endowment to be maintained in real terms, taking account of inflation; Until this year the policy of the Foundation was to expend income as it arises so that there will be minimal unspent income, or reserve funds. The reorganisation in 2009 and scaling back of activities since then has resulted in a temporary build up of unspent income which has been taken into account in the grant programme in recent years. From 2013 the Trustees operate a grant distribution policy based on a formula with an annual distribution yield of 3.2% applied to the average investment value over three years while taking into account annual running costs. This formula is likely to result in a small increase in grant expenditure in future years which will continue reducing the unrestricted income fund. INVESTMENT POLICY In accordance with the Trust Deed the Trustees have absolute discretion to invest in such shares, stocks, funds, securities and property as they see fit. The Trustees continue to monitor the application of their revised investment strategy implemented for the first time in This strategy was designed to ensure the longer term continuity of the Foundation combined with a soundly based grant programme. It is recognised that these objectives might be difficult to achieve, particularly where economic and market conditions are unsettled. FINANCIAL REPORT FOR THE YEAR The assets of the Foundation comprise fixed assets used in its operations and investments which provide its income. The net incoming resources of the Foundation for the year ended 31 st December 2013 and the financial position at that date is set out in the financial statements which follow. The financial statements show that the Foundation received ordinary income of 1,391,002 (2012: 1,484,312) in the year. Cost of grant making was 1,464,020 (2012: 1,511,954). Total resources expended amounted to 1,483,665 (2012: 1,531,948). Net outgoing resources for the year were 92,663 (2012: 47,636). The financial statements show that the total funds were 56,528,364 (2012: 49,442,242) at the end of the year, after net total investment gains for the year of 7,178,785 (2012: 2,156,268). The above figures reflect the change in accounting policy whereby investment management costs are now charged against investment gains rather than being charged to income. These costs amounted to 341,928 in 2013 (2012: 311,623). FINANCIAL PERFORMANCE 2013 was the second full year of the operation of the division of responsibility for investment management between two investment houses: Newton Investment Management Ltd and Ruffer LLP. At the end of 2013 the Newton portfolio held 81% of assets in equities and 17% of assets in bonds. The Ruffer portfolio held 56% in equities, 30% in government stocks and 8% in gold precious metals and related assets with the remainder being held in cash. 9

12 REPORT AND FINANCIAL STATEMENTS In 2013 the Newton investment fund generated a return of 22% after fees, above the benchmark, which reflected the combination of fixed interest and equity investment. Trustees regard this performance as satisfactory. The Ruffer portfolio returned 11% after fees for 2013 which was in line with Trustee expectations and reflected the defensive strategy adopted by this manager. In the year a total income of 1,391,002 was earned representing 2.5% of the year end market value of the investment portfolio of 54,577,974. Investment gains of 7,520,713 were made representing 13% of the investment portfolio value at the year end. The Trustees believe that the change in investment strategy in 2012 and re-positioning of the Foundation s assets have already contributed to the aim of maintaining the value of the endowment fund in the longer term but it remains to be seen as to whether this performance can be maintained in future years in the light of continuing economic uncertainty. The position will continue to be monitored in TRUSTEES' RESPONSIBILITIES The Trustees are responsible for preparing the Trustees Report and the financial statements in accordance with applicable law and regulations and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards). The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the Trustees are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgments and accounting estimates that are reasonable and prudent; follow applicable UK Accounting Standards and the Charities SORP, disclosing and explaining any departures in the accounts; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue to operate. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity s transactions, disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and the provisions of the charity s constitution. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of Information to Auditors Insofar as each of the Trustees of the charity at the date of approval of this report is aware there is no relevant audit information (information needed by the charity s auditor in connection with preparing the audit report) of which the charity s auditor is unaware. Each Trustee has taken all of the steps that he/she should have taken as a Trustee in order to make himself/herself aware of any relevant audit information and to establish that the charity s auditor is aware of that information. RISK MANAGEMENT The Trustees and management assess the major risks to which the charity is exposed and this process continued during the year. In the opinion of the Trustees the charity has established, and continues to operate, systems and controls to mitigate the risks to an acceptable level in day-to-day operations. 10

13 REPORT AND FINANCIAL STATEMENTS THE TRUSTEES The Trustees in office during the year were as follows: Mrs. S.J. Heath (Chairman) Mrs. J. M. Chamberlain Sir Jack Hayward, O.B.E. Mr. Rupert Hayward resigned Mr A.J. Heath Mr. B. D. Insch Mr. J.N. van Leuven, Q.C. No Trustee had any beneficial interest in any contract with the charity during the year. EQUAL OPPORTUNITY POLICY The Charles Hayward Foundation is an equal opportunities employer and will apply objective criteria to assess merit. It aims to ensure that no job applicant or employee receives less favourable treatment on the grounds of age, race, colour, nationality, religion, ethnic or national origin, gender, marital status, sexual orientation or disability. Selection criteria and procedures are reviewed to ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities. All employees are given equal opportunity and, where appropriate and possible, special training to enable them to progress both within and outside the organisation. The Charles Hayward Foundation is committed to a programme of action to make this policy effective, and has brought it to the attention of all employees. Approved by the Trustees on 29 th April 2014 and signed on their behalf by: Susan Heath 11

14 Independent Auditors Report to the Trustees of the Charles Hayward Foundation We have audited the financial statements of the Charles Hayward Foundation for the year ended 31 December 2013 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charity s Trustees, as a body, in accordance with section 154 of the Charities Act Our audit work has been undertaken so that we might state to the charity s Trustees those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity s Trustees as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditor As explained more fully in the Statement of Trustees' Responsibilities, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charity s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustees Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the charity s affairs as at 31 December 2013 and of its incoming resources and application of resources for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Charities Act Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion: the information given in the Trustees Annual Report is inconsistent in any material respect with the financial statements; or sufficient accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. Crowe Clark Whitehill LLP Statutory Auditor London 12

15 STATEMENT OF FINANCIAL ACTIVITIES Notes Unrestricted Expendable Total Total Income Fund Endowment (restated) Incoming resources Investment Income 3 1,375,272 1,375,272 1,472,311 Interest on deposits 15,730 15,730 12,001 1,391,002 1,391,002 1,484,312 Total incoming resources Resources expended Charitable Activities Grant making: Grant expenditure 12 1,207,276 1,207,276 1,265,305 Grant related support costs 5 256, , ,649 Cost of grant making 1,464,020 1,464,020 1,511,954 Governance costs 19,645 19,645 19,994 Total resources expended 1,483,665 1,483,665 1,531,948 Net incoming/outgoing resources before other recognised gains and losses (92,663) (92,663) (47,636) Other recognised gains and losses Realised and unrealised gains and losses on investment assets Investment Management costs 7,520,713 7,520,713 2,515,527 (341,928) (341,928) (311,623) 7,178,785 7,178,785 2,203,904 Net movement in funds (92,663) 7,178,785 7,086,122 2,156,268 Reconciliation of funds Total funds brought forward 577,372 48,864,870 49,442,242 47,285,974 Total funds carried forward 484,709 56,043,655 56,528,364 49,442,242 All recognised gains during the year are included in the Statement of Financial Activities. The accompanying notes form part of this Statement of Financial Activities. The notes on pages 16 to 21 form part of these accounts. 13

16 BALANCE SHEET AS AT 31 DECEMBER 2013 Notes Total Funds 2013 Total Funds 2012 (restated) FIXED ASSETS Tangible fixed assets 7 2,351,112 2,387,702 Investments 8 54,577,974 47,271,706 56,929,086 49,659,408 CURRENT ASSETS Debtors and prepayments 9 93, ,157 Short-term deposits Cash balances 170, , , , , ,801 LIABILITIES: Creditors falling due within one year , ,967 NET CURRENT LIABILITIES (224,722) (93,166) Total assets less current liabilities 56,704,364 49,566,242 Creditors falling due after more than one year 12 (176,000) (124,000) NET ASSETS 56,528,364 49,442,242 The Funds of the Charity: Total charity funds 11 56,528,364 49,442,242 Approved by the Trustees on 24 th April 2014 and signed on their behalf by Susan Heath The notes on pages 16 to 21 form part of these accounts. 14

17 CASH FLOW STATEMENT Reconciliation of net incoming resources (restated) to net cash flow from operating activities Net (outgoing) incoming resources (93,663) (47,636) Increase(decrease) in debtors 19,740 (44,186) Increase in creditors 126, ,190 Depreciation 36,590 36,590 Net cash inflow from operating activities 89,943 62,957 CASH FLOW STATEMENT Net cash inflow from operating activities 89,943 62,957 Capital Expenditure and financial investment Investment Management costs (341,928) (311,623) Payments to acquire investments (23,214,989) (20,794,300) Receipts from sale of investments 23,818,617 15,460,658 Management of liquid resources Cash withdrawn (transferred to) from short term deposits 120, ,451 Increase in cash (472,258) (5,349,496) Cash 2012 Flow 2013 Analysis of changes in cash Cash at bank and in hand 199,785 83, ,861 Cash balances held by investment management for re-investment 1,218, ,182 1,607,795 1,418, ,258 1,890,656 The notes on pages 16 to 21 form part of these accounts. 15

18 NOTES TO THE FINANCIAL STATEMENTS 1. PRINCIPAL ACCOUNTING POLICIES (a) (b) (c) Basis of preparation The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments and in accordance with applicable Accounting Standards. The Trustees have adopted the recommendations contained within the Statement of Recommended Practice "Accounting and Reporting by Charities" (SORP 2005) applicable accounting standards, the Charities Act 2011 and the Charity (Accounts and Reports) Regulations Incoming resources These comprise investment income, resources representing dividends, which are included on receipt, interest and distributions on fixed and property fund investments, and deposits, with any recoverable taxation, which are included on an accruals basis. Resources Expended Costs of generating funds represent amounts paid to the Foundation's external investment advisors. Charitable activities expenditure comprises grants and donations awarded by the Trustees in accordance with criteria set out in the Trust Deed, together with grant related support expenditure. Grants are charged to the statement of financial activities when a legal or constructive obligation arises when the other party has a reasonable expectation of receipt. Grant related support costs represent an allocation of staff and office costs on the basis of time spent in managing the grant award programme. A small proportion of support costs is allocated to governance costs. Allocations are made on an estimate of staff time spent on the two activities. (d) (e) Investments Investments are included in the accounts at mid market value at the balance sheet date and the surplus or deficit on this revaluation, together with realised gains and losses, is included within investment gains or losses on the face of the Statement of Financial Activities. Investment management costs are charged against investment gains or losses. This represents a change in accounting policy from 2012 as, in the light of the revised investment more defensive strategy, it seems more appropriate. Comparative figures for 2012 have been amended accordingly. Governance Costs These comprise all costs involving the public accountability of the charity and its compliance with regulation and good practice. These costs include costs related to the statutory audit together with an allocation of support costs. 16

19 NOTES TO THE FINANCIAL STATEMENTS 2. PRINCIPAL ACCOUNTING POLICIES - CONTINUED (f) Taxation The Foundation carries on activities which are exempt from corporation tax and income tax. It suffers some VAT which is included with the expenditure to which it relates. (g) Fixed assets Freehold property is stated at valuation in 1990 by the predecessor charity, The Hayward Foundation, less depreciation. Furniture and office equipment, including computer equipment, is stated at cost, or valuation by the predecessor charities, less depreciation. Tangible assets with costs of 2,000 or more are capitalised. Depreciation has been calculated at the following annual rates, in order to write off each asset over its estimated useful life. Buildings - 2% Furniture and office equipment - 20% on cost The furniture in the office is mainly antique and has a residual value in excess of book value. Depreciation is not therefore provided, as the amount of any depreciation charge would not be material. (h) The Trust Fund Expendable Endowment The trust deed provides that the Trustees shall hold the capital of the Trust Fund as expendable endowment and the income thereof for the benefit of such charitable purposes as the Trustees may determine. This fund as a whole therefore provides the core income of the Foundation and thereby the finance for its continuing activities. In 2013 and for future years the Trustees agreed to allocate an amount to the grant programme based on a percentage of the average fund value calculated on a three year moving average basis and taking into account annual running costs. This formula resulted in a small increase in grant expenditure this year compared with the previous years income based approach. The Fund is subject to review by the Trustees from time to time to take account of the impact of inflation and so ensure that so far as possible its value is maintained in the accounts in real terms. Unrestricted Income Fund The policy of the Trustees is to expend within a reasonable time its income from investments after deducting the costs of generating funds and administrative costs. The balance on the Fund at the end of the year will remain available for future years INVESTMENT INCOME Equities 1,091,465 1,163,910 Government stock 31, ,064 Property - 8,363 Corporate loan stock and other investment income 252, ,974 1,375,272 1,472,311 17

20 NOTES TO THE FINANCIAL STATEMENTS 4. COST OF GENERATING FUNDS These costs comprise the investment manager s fees. The Trustees are of the opinion that these relate to the generation of a total return on the investment portfolio and as such have charged the Expendable Endowment with these fees. This represents a change to the previous years accounting treatment to bring it in line with the revised investment strategy. 5. GRANT RELATED SUPPORT COSTS Establishment expenses 63,248 40,280 Personnel and pension costs 154, ,678 Audit 11,440 11,180 Other expenses 10,549 10,915 Depreciation 36,590 36, , ,643 Less: Governance costs (19,645) (19,994) 256, ,649 Included in governance costs are personnel costs 4,436 (2012: 4,429), depreciation 1,830 (2012: 1,830) attributable establishment and administrative expenditure 2,242 (2012: 2,555) and audit 11,440 (2012: 11,180) 6. PERSONNEL AND PENSION COSTS Personnel costs 122, ,816 Social security costs 11,809 13,270 Pension and other benefit contributions 20,689 18, , ,678 No. No. Average number of staff employed in year: Full time 2 2 Part time 2 2 The average number of employees during the year was four (2012: four) of which two were employed on charitable support or governance activities. Employees of the Foundation are entitled to avail themselves of a pension scheme whereby individual money purchase contributions are matched by contributions by the Foundation as a percentage of salary. Included in personnel costs are staff costs of 110,064 ( ,055) and financial advisory costs of 12,000 (2012: 12,000) included a recruitment fee of 5,760. No employee earned more than 60,000 in the year. No trustee received any remuneration for their services during the year; travelling expenses incurred on behalf of or reimbursed to Trustees amounted to 3,050 (2012: 3,839). 18