THE vARRIER￿ONEs FOUNDATION (A COMPANY LIMITED BY GUARANTEEI COMPANY REGISTRATION NO 03377965 REGISTERED CHARITY NO 1064595 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022 ¢A8BQPIfj8' 03109r2022 COMPANIES FKMJSE A13 #214 THE VARRIER-JONES FOUNDATION (A COMPANY LIMITED BY GUARANTEE) Contonts Page Legal and administrab've inlormatb)n Trustees report 2-10 Report of the auditors Statement offin8n¢ial a¢b"vibes 14 Balance sheet 15 Cash flow statement 16 Noles to the financaal statements 17-25 THE VARRIER-JONES FOUNDATION IA COMPANY UMITED BY GUARANTEEI LEGAL AND ADMINISTRATIVE INFORMATION Trustees R Norton {Ch3irl D Lovrther (Vice-chair) M Alexander P Agar S Beath S Lewis C Sheasby (Hon Treasurer appointed 27 May 20211 J Bugg (Appointed 27 May 20211 D Bfowne (Appointed 27 May 20211 Company Secretary M Blake R8gistergd Office Upper Pendrill Court Ermine Street North Papworth Everard Cambridge CB23 8UY Auditors Ensors Accountants LLP WaTh*ick House Emiine Business Park Spitfire C105e Hunting(ton Cambridge PE29 6XY Banker5 Nab'onal We5tmin51er Bank PLC 92 High Street Huntingdon PE29 3DT Sollcltors Ellisons Soli(J¢(Ms Headgate Court Head Street Colchester C01 1NP Property advi5er5 8K￿￿115 LLP Trumpington Road Cambridge CB2 9LD Investment Managers Sarasin & Partr￿ LLP Juxon House 100 St Paul's Churchyard London EC4M 8BU ststu$ A ￿gIStered charity A company limited by guaranlee No. 1064595 No. 03377965 THE VARRIERJONES FOUNDATION IA COMPANY LIMITED BY GUARANTEE) TRUSTEES. REPORT INTRODUCT1014 The Trustees of The Varrier-Jones Foundab"on llhe Foundation.) have pleasure in presenling their report and the audited financial statements of the charity for the year ended 31 March 2022. The company was incorporated on 29 May 1997. The ¢ompany registralKJn number is 03377965 and the registered tharity number 1$ 1064595. The financial statemen15 comply wrth the Charrties Acl 2011. the Companies Act 20C6, the Memorandum and Articles of Asso¢iation. and A¢¢ounling and Reporting by Charities.. Statement of Recommended Pra¢ti¢e applicable to charilies preparing their accounts in accordance wrth the Financial Reporting Standard applicable the UK and Republic of Ireland IFRS 102) (effective 1 January 20JS1. DIRECTORS AMD TRUSTEES The Director5 of the ￿rnpany are the Tru51ees of the Foundation for the purpose of charity law and throughout this ￿pOrt are ¢olle¢tivety referred to as the Trustees. The Trustees serving during the yearweo as follows". R Norton (Chair) M Akxander PLAgar S Beach O L¢)wther (Vice Chairl S Le*Ms O Browne IApp(trinte. These are analysed as follows.. rve Designated funds- core capital Designated ftJnds- volatility risk General reserves Total Value £'OOOs 44.959 8,835 5,103 897 THE vARRIER￿ONEs FOUNDATION IA COMPANY Llh11TED BY GUARANTEE) TRUSTEES, REPORT Comments on events that have affected financial perforn￿nCe The total income for the year shows a signtficant reducbon from the prior year. driven by the ending of soffle tenancies, and the subsequent challenge of finding new tenants during pandemic-affecled periods, and also a significant reducb.on in investment incorne. reflerting lower distn"bub"on5, a strategic shift away from UK listed assets to protert value. and reduced options income. Where possible we have worked wlh our tenants to supporl the long-term sustainability of ongoing leases but we did have had some tenants who didn't renew leases, and we continue to hold vacant space, whith 15 proving dthwlt to let at present. No alternative income 5trearns have yet been idenb"ffied from sites previously let out to Papworth hospital. though prospects for Papworth Hall are being explored. Operational costs have shown some inuease in the year. largely property related. E5senli81 repair works weie carried out at Pendrill Court, which were not covered by servi¢e charge fees, and we have also bome the cosi of professional fees in supporting lease renewals secured for properties at the Business Park, wrth the three marn tenants all renthmng this year. Underlying operating cost5 refflain high due to the ongoing costs of maintaining and operating srtes at Papworth Hall and void units in Pendrill Court. The value of the market investment fijnds held increased by £1,303,270 representing an increase in value of 3% on the pfewous year. This growth supports the lotsl retum tsrgets of the Foundalion and allowed donalK)n levels to be maintained during the year. Investment policy The Foundation seeks to produce the best risk adjusted financial retum5 frorn it5 finanrial investments. These are inve51ed both in property assets and listed rnark￿ investments. The property assets ale actively managed, yieldsng a rental return and surplus which, together wrth income generated frorn the listed investment portfolio, is used to rneet ts ¢haritable objectives by providing grants to the Papworth Trust and lo other ¢harilies. The Trustees have di5c¥elionary powers to invest the Foundats"on's monies in the purchase of investments or property of whatever nalure. The property portfol￿ is managed to achieve a commeNal rate of retum, whilst preserving the long-lerm value of the assets. Listed investments ale managed on a Total Return basis. The investment and %Jistribuh"tsn objecb"ves. and the asset allocation parameters, are agreed by the Board. through the Investment Committee, and encapsulated in a Statement of Investment Policy, agreed with external investment advisors. The investment objective is lo maintain the real value of the assets over the long term. thus preserving the purchasing power of distributions. The Foundation increased its donation to Ihe Papworlh Trust by 2% in the year. A small number of other donations wefe made, in support of the obje¢ls of the Foundation. THE vARRIER￿ONEs FOUNDATION IA COMPANY LIMITED BY GUARANTEEI TRUSTEES. REPORT Risk Management The Foundation manages the risks that it faces by considering the key risks anticipated al each Committee meeting, escalating these lo the Board where necessary. The Foundation uses a risk register to identify the key risks faced by the Foundab"on and the methods that are employed lo mrtigate those risks. This register is reviewed at least annually by the Truslees. The Trustees retain oversight of the ath'vits'es of the Foundab'on by their day-to-day involvement in the operations of the Foundation, as required, and through a system of internal controls and delegation, designed lo manage key risks. lo give rea￿nab￿ assurance as to the accuracy offinan(ial information and to safeguard the Foundation's assets and reputation. Principal risks faced by the Foundation The Foundabon's key risks are as follows.. Risk Impact Financial uncertainty can lead to a reduction in income from the market investment and propety portfolios, and reduction in valuations acros5 our portfolio, adversely impacting our ability to mainlain donalions Mitigation The Foundation has a broad asset allocation and the Joint Investment Committee closely monrtors the performance of it5 Portfolio and market condrtionslrisks wilh help from investment professiona15. The portfolio is invested wth a vbew lo producing the desired total retum over the long term. The property portfolio is diversified, serving to protect overall valuations Steps are being taken lo ensure the retention of existing tenants, and ¢onsiderali¢n is being given to alternative uses for spaces th longer voids. Sour¢Ès of capital receipts are being explored. to yield funds to invest for a return, retaining the focus on our total retum target. Donation levels will need to be considered in line with the real return we can enerale The Board has been strengthened by the addrtion of three new Trustees in the year with complementary skills and experience. deepening the cover that we have. The Board considers governance and succession planning ￿gUlady. lo ensure that this skill set is retained. and also ensures it employs appropriate staff to support. Strategi¢ partnership5 with key adviso have been established to ensure Ihe Trustees are properly advised. The Ft>undab"on also purchases servi¢es from extemal parties to support operations, where uired. Continued global financial uncertainty. irnpacted by the Covid-19 pandemic. fallout from Brexit, the Ukraine conflict and other political disruption5 Inability to let cijrrenlly vaGanl property. Reducts"on in rentsl income generated as a ol less than target occupancy levels ¢ould result in iftsuffiuent cash generab.on to meet planned donations Loss of key S￿.11$ to manage and govern the Foundation. Failure to retain adequale resour￿ of suitably skilled Trustees and staff. as a resutt of failin9 to recruit new truslees, or to plan for stsff ver. could lead to pwr decisions on the property or market investment portfolios. sulb.ng in capital loss THE vARRIER￿ONEs FOUNDATION {A COMPANY LIMITED BY GUARANTEEI TRUSTEES, REPORT Rl$k Impact Disruptson to seryices that we do not control could lead to a failu￿ of provision, giving rise to an inability to undertake core requirements Mitigation Wrth significant reliance on exlemal systems and Ihird-party provision of services. goveming these with effective service level agreements, including perfomiance requirements. help5 to mify.gate risk. We will continue to develop infomation systems on hosted platforms to enabje wide access and In¢￿ased resilience Appropnate delegations of authority drafted, with key payments and investment in5trucb.ons approved by Trustees. Close monrtoring by management via regular management accounts and on-line access to investment reports an¢J transaction infomiation is maintained, and any issues or risks reported lo Trustees. Reliance on third party support for key SySlem5 and pro¢esses Fraud or control risk due to small numbers of staff employed, with signrficant assets under management. Material finanaal loss, impacting the value of capital held by the Foundation. Caused by the misappropriation of fijnds, resu￿"n9 in a signrficarttly reduced capital base. and therefore redijced abilty to make donat￿nS in the ftrtu Inabilrty lo generate capital receipts from developrnent land Currently held Re(luction in potential disposal value of identified development srtes. due to failure to secure planning consent, could resutt in failure to build caprtal adequately to maintsin ¢urnent donation levels Acrydent or injury 5UStained by a Trustee I staff member I member of the public resulb.ng in signthcant injury could lead to Slgnificant damagÈs I compensation daim rf we were deemèd to be negligent in our mana ement of our Recruthienl of Trustees with property experience, including developrnenl experience, coupled wrth the procurement of professional advice, positions us appropriately to mitigate thi5 risk. Public liability risk due to ownership of woodland and open spaces, along with some empty properties Risk assessment5 have teen undertaken acr055 the estste. in¢luding the woodland. and aciion plans developed and actioned lo miligale fisk. Regular inspections and patro15 are maintained to ensure that there is no material deterioration in assets. Appropriate insurance is also maintained Intemal Controls The Board utilises the support of Papworth Tnjst for management accountsng and Human Resources support, for which it pays an appropnate fee. 11 is recognised that there are inherent risks with a small 518ff team, therefore a s¢heme of delegation has been established to address the dthculty of achieving Sultable segregation of duties, and appropriate authorisatson levels. vthich also involves the participatson of the Trustees. The Tru51ee5 maintain a risk register, which Is reviewed periodically, and the Board also ￿gUlartY ceives management accounts reporting, comparing actual ￿su￿S to budget and forecasts, lo ensure appropfiate budgetary control is being maintsined. The Tnjstees have reviewed the intemal controls in operation during the penod, and are satisfied that there a￿ no issues leading to any material uncertainly regarding these financial statements. THE vARRIER￿ONEs FOUNDATION IA COMPANY LIMITED BY GUARANTEE) TRUSTEES, REPORT PLANS FOR FUTURE PERIODS In the next finanu81 ye8r. The Foundat￿￿ plans to.. Pursue planning enquiries k)cal auihorilies lo seek to bring polenb.al development siles into being Review the offering at Pendrill Court lo ub.lise currently vacant space ContinLFe the active marketing ol Papworth Hall in order to se¢ure a suiiable oxupant. Build on Ihe Business Plan and Reserves work to embed the long-term strategy for the Foundation, suitably considering relums required over the long-lerm, and the risks lo delivery of these Fomalise a dislribvlion policy that better supports the long-lem 5UStainabilty plans for the Foundats'on Mana9e the Iransition to Debbie Lowlher. as new chair. following the retirement of Richard Norton al the end of his term of offi￿, as well as recru￿"ng fvrther trustees lo maintsin the target compliment STRUCTURE. GOVERNANCE AND MANAGEMENT The Foundation is a company limrted by guarantee, governed by rts Memorandum and Articles ofAsso¢ialion. It is a registered charily the Charity Commission. The Foundatson is governed by its Board of Trustees, ¢onsistin9 of the Trustees. as ststed on page 1 of the financial stslemen15. which meets quarterly. The Trustees. a5SiSted by staff. are re¥￿￿s￿le for formulating the strategy and policies of the tharily as a wh(>le, in¢luding the approval of budgets and exercising of financial control. In addition, the Foundation commissions external advisors for support and advice in key areas of its operations including investment and property management. The Trustees also maintain Committees to oversee indiwdual elements of its operation. The Committees cuirenlly in operation are as follows.. Pro ert Committee The Property Committee oversees the propeTty portfolio of the Foundation. WQTkiny with external advisors lo sel the 51rategy, reporting perf0m￿nCe and making recommendations to the Board. The terms ofengagemenl of these advisors, and their perfornan¢e, a￿ ￿￿eWed re9ularty lo ensure the primary obje¢tives are being met. This Committee reports to the Board at each Board meeting. Investment Committee The Joint Investrnenl Cornmittee oversee5 the Investment portfolio of the Foundation, and also that of the Papworth Trust. with the fun(Js invested with similar strategies to maximise synergies and effi¢ien¢ies. The Committee works with external adwsors to set the slrategy, lo report on performance and to make ¢ommendalions to the Boaid with ￿93rd to policy and asset allo¢alion. The terms of engagement of these advisors are rewewed regularty to ensure the primary obpctives are being met. and the appointments are re- tendered periodically in line with good governance practice. The Comrnittee monrtors the performance of the advisors. and reports on investment performance to the Boafd at each Board meeting. ointments Committee An Appointments Committee manages the F￿￿Ss of recruiting new Trustees and electing ofrers for the Foundation. This meets periodically, as required, and brings recommendations to the Board for new appointments, based upon an assessment of skills required and contributions new Trustees may bring. Grant Awardin Commiltee A Committee has been established lo set the criteria and consider grant awards to organi5ations that apply lo the Foundation. This Committee meets tswce a year and consTrders appli¢ati¢)ns on their strategi¢ fit, viability and impact, and makes re￿MMendatIOnS to the Board for approval. Fundraising approa¢h The Foundation's income is generated mainly through retums on its investment and property portfolios that are appropriately managed to fully meet wth the objectives of the charitable organisation. No formal fun raising actswty is deployed lo generate income from members of the publ￿. Whilst members of the public are able to donate contribut￿n$ voluntarily ifthey $0 wsh. the Irusl does not promote fund raising. No professional fun(traisers are employed by the Foundation. THE vARRIER￿ONEs FOUNDATION IA COMPANY UMITED BY GUARANTEEI TRU5TEES' REPORT Name of the trustet who manages thè Foundatlon on a day to day basis Richard Norton is Chair of the Foundatr'on. overseeing the day to day operations. Michael Alexander oversees all property matters as Chair of the Property Committee, and Debbie LovAher oversees financial investments as Chair of the Joint Investrnenl Committee_ Chris Sheasby was appointed as Treasurer in the year, and supports the Board and Committees as appropriate. The Trustee5 are supported by employed staff. as well as outsourced governance and financial managemenl support from the Papworth Trust. Trustees. respon$ibilities The Trustees (who are also directors of The Varrier-Jone5 FoundalK)n for the purposes of company law) are responsible for preparing the Trustees, Report and the financial statements in accordan¢e with applicable law an¢J United Kingdom Accounting Standards Iuniled Kingdom Generally Accepted A¢¢ounling Practice). Company law requires the Trijstees to prepa￿ financial statements for each financial year. which give a true and fair view of the state of affair5 of the charrtable ￿MpanY and of the incoming resources and application of re50urce5, including the income and expenditure. of the charitable company for the year. In preparing these rin8n¢ial ststements, the trustees are required lo.. select suitable accounting poli¢ies and then apply them consistenty. obseNe the methods and principles in the Charitie5 SORP". make judgements and estr'mates that are reasonable and prudent", state whether applicable UK Accounting Standards have been followed, subj'ect to any material departures disclosed and explained in the finanrjal slalemenls", prepare the financial statenents on the going conttrn basis unks$ it 1$ inappropriate to presume that the ¢haritable o)mpany will continue in operation. The Trustees are responsible foi keeping adequate accounting records that disclose wrth reasonable accuracy at any time the financial p0S￿On of the charitable company and enable them lo ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hen¢e fof tsknng ￿asOnable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware. there is no relevant audit infomialion of which the charTiable cornpany's auditor is unaware." and The Trustees have taken all steps that they ought to have tsken lo make Ihernselves aware of any relevant audit infomab.on and to establish Ihal Ihe audrf(or is aware of that infom)ation. AUDITORS Ensors Ac¢ountsnts LLP were reappornted as audrtors of the charitable company and in accordance with section 485 of the Companie5 Act 2006 a resolution proposing that they be reappoinled will be put at a general meeting. OUR THANKS Finally, the Trustees would like to thank the staff for their dedi¢ation, hard work and commitment to the work of the Foundation. Registerèd offic•: By ordèr of thè Board Upper Pendrill Court Emiine Street North Papworth Evèrard C3mbridg• CB2 3UY R Norton Chair Date: 18 August 2022 10 THE VARRIER4ONES FOUNDATION {A COMPANY UMITED BY GUARANTEE) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE VARRIERJONES FOUNDATION Opinion We have audited the financial statements of The Varrier-Jones Foundation for the year ended 31 March 2021 wh￿h cornpri5e the Statement of Financol A¢b"v￿￿.e$. Balance Sheet and Cash Flow Statement and related notes. The financial ￿pOrting Iramework that has been applied in their preparation is applicable law and United Kingdom Accounting Slandards, including Financial Reporting Standard 102 The Financial Reporting Slandard applicable in the UK and RepublK of Ireland {Unrte(S Kingdom Generally Accepted Accounting Pr8¢1icel. In our opinion the financial stalements.. give a true and fair view ol the state of ihe charitable CoMpan￿S affair5 as al 31 March 2021, and of ils income and expendrture for the year then ended". have been prOpe￿Y P￿pare{l in aC￿rIance wilh Untted Kingdom Generally k¢epted Ac￿Unting Pra¢tice." and have been prepared in accordance with the requirements of the Companie5 Act 2006. Basis for opinion We conducted our audit in accordance wth International Standards on Audibng IUKI {ISAs IUKII 3n