THE DESMOND FOUNDATION CHARITY REGISTERED No. 1014352 REPORT AND FINANCIAL ACCOUNTS YEAR ENDED 31 DECEMBER 2023 THE DESMOND FOUNDATION REPORT OF THE TRUSTEES YEAR ENDED 31 DECEMBER 2023 CONTENTS PAGE Referen￿ and Administration Trustees, Report and Statement of Responsibilities Independent Auditor's R8POrt to the Trustees of the Desmond Foundation Statement of Financial Activities Balance Sheet Notes to the Accounts 10- 13 THE DESMOND FOUNDATION REPORT OF THE TRUSTEES YEAR ENDED 31 DECEMBER 2023 REFERENCE AND ADMINISTRATION Trustees Mr. R.C. Desmond Northern & Shell Services Limited Northern & Shell PIC Re istered Charit Numbar 1014352 Address The Northern & Shell Building Number 10 Lower Thames Streel London, EC3R 6EN Banker SG Kleinwort Hambros Bank Limited One Bank Street Canary Wharf London E14 4SG Audito KPMG LLP 15 Canada Square London E14 5GL Le al advisor Bryan Cave Leighton Paisner LLP Governoffs House 5 Laurence Pountney Hill London EC4R OBR THE DESMOND FOUNDATION TRUSTEES, REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 The Trustees of The Desmond Foundation (the "Charity") present the report and audited financial statements for the year ended 31 December 2023. The financial statements have been prepared in accordance with the Statement of Recommended Practice.. Accounting and Reporting by Charities (Charilies SORP (FRS 102)) and the Financial Reporting Standard 102 applicable in the Unitecl Kingdom and Republic of Ireland IFRS 102) and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2015. Governlng Documents The Charity is a registered charity and is governed by declarations of trust dated 5 March 1992 and 10 December 2007. The Desmond Foundation was registered as a charity on 23 September 1992. Objectives and Actlvltles for the Public Beneflt The Trustees are satisfied that the Charily has successfully pursued its objectives for the public benefil in relief of poverty and sickness (particularly among children) and such other charitable purposes as the Trustees, In accordance wilh the Trust Deed, shall determine. The Trustees confirm that they have referred to the guidance obtained in the Charity Commission's general guidance on public benefit when reviewing the Charity's aims and objectives and in planning future activities and setting the grant making policy for the year. Organlsallonal structure and grant making policy The Trustees of the Charity are Mr R.C. Desmond, Northern & Shell SeNices Limlted and Northern & Shell Plc. New Trustees are appointed by Mr Richard Desmond and in this situation appropriate induction and Iraining would be provided, The Trustees use legal advisors for advice on regulatory issues. The Charity employs no slaff. Westferry Housing Limiled (formerly RD Crusaders Limited), a company wholly owned by Mr R.C. Desmond, was incorporaled in December 2007 with the purpose of fund raising on behalf of the Charity. On 27 February 2008 Mr R.C. Desmond signed a Declaration of Trust declaring that he holds the shares of Westferry Housing Limited on trust for the trustees of the Charlty. The Charity is usually reliant on Northern & Shell PIC for admlnistrative servlces. The value of these resources is not included in the Statement of Financial Activities because it is not possible lo quantify the value of this gift. which Includes administrative and accounting support. Applications are made to the Trust for grants. All grants are considered and where appropriate approved and authorised by the Trustees. In 2023, 47 grants lotallin9 £822,160 were made, including large donations to Barnel Youth Zone, Bloomsbury Football Foundation, Greenhouse Sporls, UCL Development Fund, Community Security Trusl, strength and Learning Through Horses, Highgate School Development Appeal, Variety Sunshine Coach, Jewish Blind and Disabled, UK Friends of Yad Yisroel, United Jewish Israel Appeal and World Jewlsh Relief. In 2022, 50 grants tolalling £520,847 were made, including large donations lo Barnet Youth Zone, Noah's Ark Childrens Hospice, Dalaicl, UCL Development Fund, Community Security Trust, Royal Academy of Music, Highgale School, Jewish Deaf Associate, Camp Simcha, Jewish 81ind and Disabled and United Jewish Israel Appeal. Achievements and performance During Ihe year to 31 December 2023, the Charity provided support to charitable work in 8ccordance with its objectives and stiategy. Cash totalling £Nil was received during the year {2022'. £2,625,000) £Nil from Mr Richard Desmond (2022. £2,100,000)- £Nil Gift Aid repayment (2022. £525,000} Funding is applied to furthering Ihe objects of the Charity and the trustees made 47 grants totalling £822,160 during the year, 12022-. £520,847}. The net movemenl in funds for the period was an outflow of £771,970. (2022.. inflow of £2,103,1721- There are no restrictions placed on income, therefore it is considered to all be unrestricted. Investment powers The investment powers are detailed in the Trust Deed. Reserves policy and rlsk management All the costs of the charity are met by its principal donor. Northern & Shell PIC has also undertaken to fund the Trust charitable commitments when necessary. Therefore, the Charity normally aims to have free reserves of £Nil, with any surplus or deficit being a timing difference. The Trustees intend to conlinue Ihis policy in the future. The Charity had £1,379,569 unrestricled reserves al 31 December 2023. Donations are funded at the point of payment rather than when pledges are made. THE DESMOND FOUNDATION TRUSTEES, REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 The Trustees consider fraud lo be the most significant risk to which the charity may be exposed during the year, and believe the18 are appropriale systems and controls in place to mitigate this risk, such as segregatlon ol duties and Bank verification of 811 transactions. Plans for future developm8nt8 In the coming year, the Charity wlll continue to provlde charltable support in accordance with its obledives. Any unrestrlcted funds held in the Charlty at the end of the year are retained to finance the Charity's policy of charitable support. Statemènt of Tru8toes' re6pon81bllltle8 In respect of the Trustees, annual report and the flnanclal statemen18 Under ch8rily law, the trustee8 are responslble for preparlng a Trustees, Annual R8POrt and financial 81alements for each nanclal year which show a Ifue and fair view of the state of affalrs of the charlty and of the excess of expendilure over Income for thal period. The Irustees hav8 elected to prepare the financlal slalements in accordanG8 wlth UK Accounling standards, includlng FRS 102 The Fln8ncial Reportlng Sf8ndard appllcable In the UK and Republic of Ireland. In preparing these financial 8latements, generally accepted accountlng pr8Ctlce entails that the trustees,. select sultsble accountlng pollcl8s and then apply Ihem conslstently; make judgements and 88￿MateS Ihat are reasonable and prudenl; state ￿ather the recommendatlons of the Statement of Recommended Practice h8va been followed, subject to any material departure8 dlsclosed and explained In the financlal statements,, state Ythether the financlal statements comply wlth the INst deed, subject to any materfal departures d18cIo8ed and explalned In the financlal statement8; assess the charity's ablllty lo contlnue as a golng ￿ncern, discloslng, as ap￿ICable, matlers related to goSrKJ concem., and Use the going concern basls ot accountlng unless they elther Intend to Ilquldate the charlty or to cease oporallons, or have no realisllc alternatlve but to do 60. The trustees ar& requlred to acl In accordance wllh the Irusi deed of the charlly, within the framework of trust law. They are responslble for keeplng proper accounllng records, sufficlent to disclose at any lime, ￿th reasonable accuracy, the financial posltlon of the charily at that tlme, and to enable tho trustees to ensure that, where any stalem8nts of accounts are prepared by them under sectlon 132{1) of the Charllies Act 2011. Ihose Statements of accounts comply wllh the requlrements of regulations under that provislon. They are responslble for such 5nternal ¢ontrol as thay determlne 1$ necessary to enable the preparatlon of fitbanclal stat8ments thal are free from materlal mlsstatement, whether due to fraud or error, and have general responsibllily for taklng such steps as are reasonably open lo them to safeguard the assets of the charlty and to prevenl and detect fraud and other irregularitles. The trusteos are responsible for the maintenance and Integrlty of the financl81 and other informatlon Included on Ihe charity's website. Legislatlon In the UK governlng the preparallon and dissemlnation of financial stal8m8nts may dlffer from legislation in other Jurisdldlons. Dlsclogurlof Informatlon to audltor The INstees who held offlce al the dale of approval of thls truste&s' report confim that, so far as they are each aware, there Is no relevanl audit informallon of whlch the Charily's auditor Is unaware: and each trustee has taken all the steps that he or she ought to have taken to make hlm or herself aware of any relevant audit information and to establish Ihat the Charit￿8 auditor Is aware of that Information. Audltor The auditor Is deemed to be reappoinled and KPMG LLP wlll therefore contlnue In office. ed on behalf of the Trustees: 2811012024 Mr. R.C. Desrnond The Northern & Shell Building Number 10 Lower Thames Street London, EC3R 6EN Dale ## **Independent auditor’s report to the Trustees of The Desmond Foundation** ## **Opinion** We have audited the financial statements of The Desmond Foundation ("the charity") for the year ended 31 December 2023 which comprise the Statement of Financial Activities, the Balance sheet, and related notes, including the accounting policies in note 1. In our opinion the financial statements: - give a true and fair view of the state of the charity's affairs as at 31 December 2023 and of its incoming resources and application of resources for the year then ended; - have been properly prepared in accordance with UK accounting standards, including FRS 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ ; and - have been prepared in accordance with the requirements of the Charities Act 2011. ## **Basis for opinion** We have been appointed as auditor under section 145 of the Charities Act 2011 (or its predecessors) and report in accordance with regulations made under section 154 of that Act. We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under and are independent of the charity in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. ## **Going concern** The trustees have prepared the financial statements on the going concern basis as they do not intend to liquidate the charity or to cease its operations, and as they have concluded that the charity’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). In our evaluation of the trustees’ conclusions, we considered the inherent risks to the charity’s business model and analysed how those risks might affect the charity’s financial resources or ability to continue operations over the going concern period. Our conclusions based on this work: - we consider that the trustees use of the going concern basis of accounting in the preparation of the financial statements is appropriate. - we have not identified and concur with the trustees’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for the going concern period. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the charity will continue in operation. ## **Fraud and breaches of laws and regulations – ability to detect** ## _Identifying and responding to risks of material misstatement due to fraud_ To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: - enquiring of personnel, as to whether they have knowledge of any actual, suspected or alleged fraud; and - using analytical procedures to identify any unusual relationships or movements. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. 5 On this audit we do not believe there is a fraud risk related to revenue recognition because revenue transactions are simple in nature and agreed to cash receipts. We did not identify any additional fraud risks. We performed procedures including: • Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual account combinations; • testing unusual or one-off transactions back to supporting evidence; and • assessing the completeness of disclosed related party transactions and verifying they had been accurately recorded within the financial statements. ## _Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations_ We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with management and discussed the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of noncompliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. The charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Whilst the charity is subject to many other laws and regulations, we did not identify any others where the consequences of non-compliance alone could have a material effect on amounts or disclosures in the financial statements. ## _Context of the ability of the audit to detect fraud or breaches of law or regulation_ Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. ## **Other information** The trustees are responsible for the other information, which comprises the Trustees’ Report and Statement of Responsibilities. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. We are required to report to you if: - based solely on that work, we have identified material misstatements in the other information; or - in our opinion, the information given in the Trustees’ Annual Report is inconsistent in any material respect with the financial statements. We have nothing to report in these respects. ## **Matters on which we are required to report by exception** Under the Charities Act 2011 we are required to report to you if, in our opinion: - The charity has not kept sufficient accounting records; or - The financial statements are not in agreement with the accounting records; or - We have not received all the information and explanations we require for our audit. We have nothing to report in these respects. 6 ## **Trustees’ responsibilities** As explained more fully in their statement set out on page 4, the trustees are responsible for: the preparation of the financial statements which give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities** 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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. ## **The purpose of our audit work and to whom we owe our responsibilities** This report is made solely to the charity's trustees as a body, in accordance with section 145 of the Charities Act 2011 (or its predecessors) and regulations made under section 154 of that 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 its trustees, as a body, for our audit work, for this report, or for the opinions we have formed. ## **Jessica Hargreaves** ## **for and on behalf of KPMG LLP, Statutory Auditor** _Chartered Accountants_ _KPMG LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006_ 15 Canada Square London E14 5GL 30 October 2024 7 THE DESMOND FOUNDATION STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2023 Notes 31 Dec 2023 31 Dec 2022 INCOMEFROM Donations Investments TOTAL INCOME 2,625,000 21,269 2,646,269 75,440 EXPENDITURE ON Charitable Activities Professional fees other expenditure (822,1601 {25,200) 150) (520,847) (22,200> (50) NET (EXPENDITURE)IINCOME (771,970) 2,103,172 RECONCILATION OF FUNDS Total funds brought fO￿ard 2,148,535 45,363 TOTAL FUNDS CARRIED FORWARD 1,376,565 2,148,535 The notes on pages 10 lo 13 form part of these accounts. All transactions relate to continuing activities. All funds are unrestricted. THE DESMOND FOUNDATION BALANCE SHEET AS AT 31 DECEMBER 2023 Notes 31 Dec 2023 31 D8G 2022 CURRENT ASSETS Cash at bank 1,401,865 2,170,835 1,401,865 2,170,835 Credltots,, amount falling due wlthln one year Accruals (25,200) (22,200> NET CURRENT ASSETS 1,376,665 2,148,635 CredltOT8: amount f8111ng due after one year Debt due to Westferry Houslng Ltd (100) (100) NET ASSETS 1 376 565 2 148535 FUNDS Unrestrided Funds 1,376,565 2,148,535 1376 565 2 148 535 The financial ststernenls were approved by the Truslees, and slgned on thelr behalf by 2811012024 hAr. R.C. Desmond Date The notes on pages 10 to13 form part of these accounts. THE DESMOND FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1. Prlnci al accountln Pollcles The financial statements have been prepared in accordance with the Statement of Recommended Practice.. Accounting and Reporting by Charilies (Charities SORP (FRS 102)) and Ihe Financial Reporting Standard 102 applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2015. A summary of the princip81 accounting policies, which have been applied consistently, is set out below. Basls of accou nting The financial statements have been prepared on a going concern basis which the Trustees consider to be appropriate for the following reasons. The business model of the charity is such that its charitable activities are limited to those which it has sufficient funds to support from the excess of funding received over the costs of administering the charity. The Trustees have considered the cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements and noted that Trust has a positive cash balance of £1,4m as at 31st December 2023 and has no specific commitments or future committed costs which indicate that the charity will have suffi'cient funds to meet its liabilities as they fall d ue for that period. The Trustees have also considered that even if no further funding is received in the next 12 months period, the charity has sufficient cash reserves to pay for all of its costs. Consequenlly, the Trustees are confident that the charity will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial stalements. Income Income is recognised when the three criteria of probable. measurement and entillement have been met. Administrative services and accounting support (as per page 3) have been granted by Northern & Shell PIC to The Desmond Foundation and Westferry Housing Ltd as its agent to assist Ihe Charity Wlth its pursuits, The Charity d08s not account for these donations as they are not considered 10 be significant and are difficult to quantify. Expendlture Grants payable are included within charitable activities in the statement of financial activities when the offer is conveyed to the recipient and the charity is committed to the grant. Governance costs include expenditure on compliance with constitutional and statutory requirements. Investments Investments are valued at the market price at the balance sheet date. Fund accounting The unrestricted funds comprise those monies which may be used towards meeling the charitable objects of the charity at the discretion of the Trustees. Cash flow stat&ment The charity qualifies as a small entity and as a consequence, it is exempt frorn the requirement to prepare a cash flow statement under Financial Reporting Standard 1 (revised) 'Cash flow FRS 102.7.1 B,. 2023 2022 2. Volunta Incoma Monetary Donations Income in Kind 2.825,000 2023 2022 3. Inve8tmonl Income Bank interest 10 THE DESMOND FOUNDATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 4. Charitable activities Grants awarded durln All Instltutlons the oar anal sedb recl lent: Noof Grants Year ended 31 Doc 2023 Chari Greenhouse Sports Barnet Youlh Zone UCL Development Bloomsbury Football Foundation UK Friends ol Yad Yisroel strength and Learning Ihiough Horses Variety Sunshine Coach Jgwish Blind and Disabled Highgale School Developm8nl Appeal Community Sg¢urily Trust World Jewi$h Relief UJIA- United Jewish Israel Appeal Lib8rèl Jewish Synagogue Camp Simcha Holocaust Educalion Trust Jewish Deal Association Liberal Judaism Mu8ic in S￿Ondary Schools Tru81 Build Up Foundation Chai Cancer Car8 Fareshare Su$$ex Jack and Ada Beattie Foundation Ozer Umagen March of the Living British Fiiends ol Ihg Bar Ilan University Vics in the Community Chi¢kon Soup Shelter Rix Thompson Roth8nb8rg Foundation Contact Chaiily Deaf Blind UK Food Lifeline Handicapped Chikjrens Action Group Insight Kol Boniach Safely Net UK Social Square UK Sunnydays The Southrnead Project Crackeljack Children'8 Trust Motor Neumne Disease Association Sayers Croft Tru$1 200.000 loo,000 75,000 50,000 50,000 48,820 42,500 30,000 27,090 25,000 25,000 20,000 15,000 10,000 10,000 10.000 10,000 10,000 5,000 5,000 5,000 5,000 5,000 5,000 3,250 3,000 2,SlX) 2,5 2,OIX) 2,000 2,000 2.000 2.000 2,000 2,000 2,000 2,000 2,000 1.000 1,000 soo Totsl Grants 47 822.160 THE DESMOND FOUNDATION TRUSTEES, REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 Grants awarded durin the ear are anal sedb sector as follows: 2023 2023 2022 No. 28 22 2022 Community Education Miscellaneous 28 18 409,750 410,410 2,000 323,107 197,740 47 822,160 50 520,847 Total charitable expenditure of £844,410 (2022: £543,097) is stated after addition of bank charges of £50 (2022. £50) and audit fees of £25,200 (2022.. £22.200). There is no committed spending. Professlonal Fees 2023 2022 Audit fee- exclusive of VAT 21,000 18,500 The Audit fee, £25,200, includes VAT for current year (2022,, £22,200). 6. Other Ex enses 2023 2022 Bank Charge 50 50 The value of facilities provided to the Charity free of charge Ihat would otherwise have had to be purchased, such as the use of office equipment and office space, have not been recognised in the statement of financial activities because their value is not easily quantifiable. 7. Staff costs and Trustees, remuneration No Staff were employed by the Charity during the year {2022.' £Nil) The Trustees received no remuneration for their services lo the Charity or any reimbursement of expenses during the year {2022.. £Nil). 8. Related art Iransactlons The Desmond Foundation is funded principally by donations and gifted services. During the year Northern & Shell PIC donated £Nil to The Desmond Foundation12022 £Nil) and has undertaken to provide sufficient funds to enable the Foundation to meet its liabilities as they fall due. At 31 December 2023, Northern & Shell PIC owed the Foundation £Nil {2022'. £Nil), in respect of donations made during the year. Mr R.C. Desmond is the chairman of Northern & Shell PIC and is also beneficially interested in the whole of the share apilal of that company. During the year Mr R.C. Desmond donated £Nil to The Desmond Foundation (2022: £2,100,000). Northern & Shell PIC provides the Foundation with adminislralion services and accounting support (as per page 3) The value of these resources is nol included in the Statement of Financial Activities because il is not possible to quantify the value of this gift. A loan of £100 from Westrerry Hausing Ltd is stated in creditors. 12 THE DESMOND FOUNDATION TRUSTEES, REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 9. Taxatlon The Desmond Foundation is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable trust for UK income tax purposes. Accordingly, the charity 18 Potentially exempt from taxation in respect of income or capital gains received within categories covered by Part 10 Income Tax Act 2007 or Section 256 of the Taxation of Chargeable Gains Acl 1992, to the extent that such income or gains are applied exclusively to charitable purposes.