PAUL SMITH'S FOUNDATION Registered Charity No: 1065751 Company No: 03346635 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2022 Paul Smith's Foundation Iformerly Paul Smith Foundation) Trustees Report for the year ended 30th June 2022 The trustees pre5erit their report alongwth the financial statements of the Foundation forthe year to 30th June 2022. The Foundation is a registered charity with the Charity Commission for England and WHle5 With registered charity number 1065751 and is a re815tered Company in En8land and Wales with Company number03346635. The Foundation is constituied by its Memorandum 3nd Arbcle5 Qf A55aciation. Trustee5 Sir Paul Smith Ashley Long Sean Baker James Horsley IAppointed 14 February 20231 Secretary Ashley Long Re8iStered Ofli¢e The Poplar5 Lenton Lane Notthingham, NG7 2PW Banker5 Yorkshire Bank PIC 11 Smithy Row Notthingham Atcount8Mts Moore Kin8Ston Smith LLP Chartered Accountant5 6th Floor 9 Appold Street London EC2A ?AP Objects, A£ilvltles and Publlc Benefit The objects of the Charity are to advance the education of the public in all matters concerning design, fine arts and design rnovetnent. The trustees contirm that they have complied with the rjuty In section 11 otthe Lnèritses Act iuii to have due regard tothe Charity Cotnmi55i0n'5 general guidance on public benefit including the guidance'public ber*frt.' running a charity IPB21- Appolntment of new trustees New trustees rnay be appointed by the trustees, to fill a vacancy or as an additional trustee. The Trust shall selett appropriate ¢rustee5 and provide them with an induction to ttquaint them with the governance and policies of the Trust as well aswhat is expetted of them in their new role. Additional trainingandjor information wll be provided to the trustees on an ongoinE ba51S. Achievememts. Perfoimamce and Fifianclal Review In the year, dividend income wès received of £132.68412021.. £132,684] from it5 investment in Colston Property Partners Lirnited. The programme of grants and donations in support of and for the furtherance of the object5 of the charity has continued throughout the year whilstfurther plans for developinE and promotlngthe Foundation have been put into place. During the year, the charity made grant payments and donation5 of £47,50012021.. £25,0001- All Erants were Iven in support of and for the furtherance of the objects of the charlty. Notes 3 & 4 to the finanual statements provide additional information on the 8rants committed. The Foundation'5 dedicated webslte IpaulsmSthsfoundation.coml has been further developèd to give helpful advice and showcase youn8 creatives. As well a5 the Foundation Instagram l@p3ulsmithsfoundatlonl, the Foundation is developinE new ways to give helpful advice toyoun8 creatlve people that are on the edge of the industry. Paul Smlth's Foundation (formerly Paul Smith Foundation) Trustees Report for the year ended 30th June 2022 ststement of Trustees. Responsibilitie$ The trustees (who are a150 directors of the Paul Smith Foundation) are ￿spOnSible for preparinE the Tru5tees' Report and the financial statements in accordance with applicable lèw and regulations. Company law requlres the trustee5 to prepare financial statements for eachfinanci31 year in accordance ￿th Unlted Kingdorn GenerallyActepted Accounting Practlce (United KingdDm Accounting Standards and applicable14wl. The financlal statements are required by law to give a true and fairview of the state of affair5 of the charitablÈ company and of the income and expenditure of the Trust for that period. In preparing these financial statements, the trustee5 are required to". sElect suitable accountinÈ policies and then applythem con5iStently,' observe the methods and principles in the Charities SORP-, * makejud8ments and estimare5 that are reasonable and prudent. state whether èpplicable UK Accounting Standard5 have been followed, Subject to 3ny material (Separtures disclosed and explained in the financièl statements,. and prepare the financial statements on the 80in8 concern basis unless it is inappropriate to presume that the Trust The trustees are res￿D$1b1e for keepin8 properaccountin8 records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable thern to ensure that the financial statements cornplywith the Company Act 2006, They are also responsible for safeguarding the assets of the Trust and hentefortsking reasonable 5tep5 for the prevention 8nd detection of fraud and other irregularities. Sm811 Company pro￿510n5 This report has been prepared Sn accordance with the Special prtsvision5 for small companie5 under Part 15 of the CompaniesAct 2006. Orh behalf of thÈ Trustees Ashley Lon8 Date.. I f J4JpJe tuE5 Paul Smith's Foundation (formerly Paul Smith Foundation) Trustees Report for the year ended 30th June 2022 Inve#ments Pollcy The majority of investments are shares held in a range of private companies as analysed in Note 15 to the financial statement5. The trustees have wide power5 of investment in respect of the Foundation's assets. The Foundation will invest in and hold a5setS that will-. Diredly promote of the Objects of the charity, and or., Provide a lon8 term investment return to maintsin the reserves of the Charity- The trustee5 ensu￿ the Prograrnme Related Investment IPRII strate8y is aligned with the charitsble rni55ion and objectives of the Foundation. Grant Policy The trustees review grant rèquests on a case-b¥-case basls In the light of the requested purp05e of the grarit. All grants are awarded In accordance with the objects which are to athance the educatlon of the public In all matters COn￿rnIng design. tine arts and design managemÈnt. Reserves Pollcy The trusiees aim to prowde suffioent funds to cover the existirig level of grants committed aswell as provide a long term fund from which it5 charitablp activities £an be Increased sn thefuture. Total unrestricted funds at the year-end totalled £18,259,06512021 restated.. £19,888,634). Duringthe year a net1055 on Investments of £1,446,99912021.. £6,278,374) w35 recogni5ed in respect of its investments in Paul Smith Group Holding5 Limited, the 5hare5 of which ere Eifted to it in 2017 and Colston Property Partner5 Ltd. Thi51oss on investment value was as a result of a reduction in netasset value of the invèstment followlng the companies purchase of own shares durin8 theyear as well a$10sses incurred by the group due to the Impact of the COVID19 pandemic. Free reserves are descrlbed as those reserve5, excluding tixed a55et5 which are readlly avallable for use In the operations of the charity. At yearend, unre5tritted free reservestotalled £292,44412021 restated.. £475,013>. The trustees consider the level of free reserves sufficient to fund its grant pro8ramme and cover any unplannèd Key management and remuneration policy The trustees are not remunerated and the Trust ha5 no employees. The trvstees are considered to be the key rnana8ement personnel. PrintiplÈ risks and untÈrtainties The trvstee5 have 355essed the fflajor risks to which the chèrity is Exposed, in particular those related to the investments, 0￿rationS and finances of the charity. and are Satisfied that systems and procedures are In place to rnitigate the exposure to the major risk5. The prinapal risk for the Foundation at thi5 early 5tsge in it5 development is not meeting the objects of the charity. The trustees are fully aware of thi5 and are Ènsuring that the Foundation is becoming rnore active with the launch Df its own dedicated webslte wlth reEularly vpdated archive of advice, insights and Inspiration. Future Plans Hèvin8 established the reserves of the Foundation with the initial irKome from donations received from the Paul Smith DiscretionaryTrvst. the trustees continue to increase the visibility and actNite5 of the charity with a modest level of growth in grant and donètion attivity whilst focussing on generating income from Its investments for longer term allocation to causes that fvrther its objectives. The trustees will continue to increase the level of bwarenes5 of the Foundation through its own dedit8tÈd website. Inltia51y provldine advice. insights and inspiration to 8 riew genèration of creatives. Paul Smith's Foundation (formerly Paul Smith Foundation) Statement of Financial Activities For the year ended 30June 2022 2022 Unresiricted 2021 Unrestricted asrestated Note In¢omÈ from- Investment income 132,684 132,684 Total 132.684 132.684 Empenditure on.. ChoritobleActiwties.' Grants and donations payable in furtherarKe of objett5 Insurance Website expenses Archive costs Legal & Profèssional Advert15ing cost5 49,148 2,737 164,418 94,049 io 4,892 34,714 241,966 104,734 680 14.212 Total 315,254 396,3Q6 et1055 on investment5 Is 11,446,999) 16,278,374) Net movernent IN funds 11,629,569) 16,541,996) Totsl fund5 brou8ht forward 19,888,634 26,430,630 Total funds urriedfgrward 18.259.065 19,888,634 The notes on pages 7 to 13 form part of the financi315taternents. Independent Examiner's Report to the Trustees of Paul Smith's Foundation (formerly Paul Smlth Foundation) I report to the charity trustees on rny exarnination of the account5 of the Company for the year ended 30th June 2D22. Responsibilities athd basls of report A5 thecharitvs trustees of the Company land also its director5 forthe purposes of compBnV lawl you arè responsible for the preparaiion of the accounts in accordance with ihe requirements of the Companies Act 20061'the 2006Acr'l- Havin8 satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Acr and are eligible for independent examination. I report in respect of my examination of your charitfs account5 3s carried out under Section 145 of the Charities Act 20111'the 2011 ACVI. In carryin8 out my examination I have followed the Directions Eiven bythe Charity Commi55i0n under section 145151 Ibl of the 2011 Act. Independent exarninerfs statement I have completed rny exarnination. I confirm that rbo matters have come to my attention in connection with the examination giving me cause to bèlieve.. èccountinE records were not kept in respect of the Companyas required by section 386 of the 2006 Act. or the accounts do not accord with rhose records., or 3. the accounts do not comply with the accounting requirements of section 396 of the 2006 Act otherthan 3ny requirement that the accounts glve a'true and fairview whid) is ntrt a matter considered as part of an independent exarnination,. or the accounts have not been prepared in accordance with the methods and principles of the Statemeni of Recomfflended Practice for accounting and reporting by charities lapplicable to charitie5 preparing their accounts in accordance with the Financial Reporting Standard applicèble in the UK and Republic of Ireland IFR5 10211. I have concerns and have come across no other matters in connèction with the examination to which attention should be drawn in this report in order to enable a proper understandingof the accounts to be reached. Noort k[W￿35}D￿j gfvMtL LLF 5hlvènl Kotharl, FCCA, DChA For and on behalf ol Moore K¢nESton Smith LLP 6th Floor 9 Appold Street London. EC2A 2AP Date.. 28 June 2023 Paul smith's Foundation Iformerly Paul Smith Foundation) Balance Sheet as at 30 June 2022 2022 2022 2021 a5 restated 2021 a5 restated Note Fixed Assets Int8n8ible fixed assets Inwestinents 16 15 17,966,621 19.413,620 Cvrrent Assets Cash 3t bank Otherdebtors 501.698 2,094 610,986 17 503.792 610,986 Creditor5'. Arnountsfallingdue thin onÈ yÈar 18 1211.3481 1135,9731 1211,3481 1135,9731 Net Current A55ets 292,444 475,Q13 Total Assets le55 current liabilities 18.259.065 19,888,634 Total Net Assets 18.259,065 19,888,634 Funds Unrestricted Fu￿$ 18.259,065 19.888,634 The notes on pages 7 to 13 form part olthe financlal stètements. The director5 State.. 181 For the yearended 3thh June 2022 the charitable companywa5 entitled to exemption under Section 477 of the Companie5 Act 2006. Ibl No notice frorn Trustee5 requiring an audit has been deposited under Section 476 of the Companies Act 2006. Icl The directors acknowledge their reswnsibilities for-. Ill ensuring thatthe charrtable company keeps gccountin8 records which comply with Section 386 of the Companie5 Act 2006, and lill preparin8 financial statements which Éive o true and lairview of the state of affairs of the charitable company a5 at the end of the financial year, and of its income and expenditure for the financial year, in accordance with the requiretnents of Section5 394 and 395 and which otherwise Cornplyw￿th the ￿qUireMentS of the Companies Act 2006 relating to accounts. so fir as applicable to the charitable companv. Idl The attount5 have been prepared in accordance with the special provision5 relating to small companies within Part 15 of thecompanies Act 2006 and in accordance with the provisions of the Financial Reporting Standard 102. The 3ccount5 were approved by the board and authorSsed for Issue on and signed on it5 bphalf by.. Trustee- Ashley Long Company number.. 03346635 Paul Smith's Foundation (formerly Paul Smith Foundation) Notes to the Accounts For the year ended 30 June 2022 AccountinE policies 83515 OF accounting These fin3ncial 5taternent5 are prepared on a concern basis. under the historical costconvention. as modified by the revaluation of investments beinemea5ured at féir volue through income arid expenditure within the Statement of Financial Artivitie5. The financial statements have been prepared in accordanceurith the Financial Reporting Standard applicable in the UK ond Republic of Ireland IFRS 1021- The charitable cornptny 15 a public benefit entity forthe purpose5 of FRS 102 and therefore the charitable company also prepared its financi31 statements in accordance with the Ststernent of Recommended Practice applicable to ch3ritiÈs preparingtheir attounts in attordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (The FR5 102 Charities SQRPI, the Companies Act 2CK)6 and the Charitie5 Act 2011. The financial statements are prepared in sterling, whith is the functional currency of thecharity. MonÈtary amounts in these financial ststements are rounded to the nearest pound. Costs in the prior year havÈ bÈen restated to recognlse archSve cost5 that were previously omStted. The prlor period adjustment is detailed In note 22. The principal 3ccounting policies adopted in the preparatiori of the financial statements are set out below. Golngconeern Basis The trustees have a5se55ed whether the use of the goin8 toncern basi5 is appropriate and have considered P055ible events Dr ccnditiOn5 that might castdoubt on the ability of the charity to continue as a EoinÉ concern. The tru5tee5 have made this a95e55ment for a period of at least one yearfroffl the date of approval of thÈ financial statement5. In particularthe trustees have considered the charity'5 forecasts and projections and have tsken account of pressures on donation incorne, dividènd income and the valuation of the investment portfolio ènd income 8eneratlon from the fund. After makingenquiries the trustees have concluded that there is a reasonable expectation thatthe charity hès èdequate resources to continuè in operational existence for the foreseeable future. The charity therefore continue5 to adopt the goln8 concern basis in DreDarinR its tinanclal statements. Incorne Income is credited to the Ststement of Financlal ACti￿rIeS on an accruals basis when there is entitlement to the funds, the receipt is probable and the amount can be measured reliably. Donated investtnent5 are valued at their market valuè on the d3te of transaction. Investment income and bank interest are accounied for on receivable basi5 E¥penditure Expenditure 15 charged on an accruals basis. Grants payable are included In the Statement of Financial Attl￿tIeS when approved by trustees and offered to thegr8ntee. Support costs have been apportioned acr05S expenditure relating to charitable acitivies. Investments In valuing in¥e5tment5 the trustee5 have had duÈ regard to Section 11 Para8raph 17 of the SORP. Investments are accounted at their fairvalue. Those unlisted investments forwhere fairvalve cannot be established using valuation technique are Hccounted at cost. Investments are reviewed each year for impairment with any write off included in the Statement of Financial Attivities. Realised and unrealised gains and losse5 on Investments are Included kyithin the funds. Creditors Contractual arrangements are recogni5ed a5 goud5 and serlfices are supplied. Other 8rant payments arè reco8nised when a constructive obligation arises. Paul Smith's Foundation (formerly Paul Smith Foundation) Notes to the Accounts For the year ended 30June 2022 Aetountln8 pdlcles Icontlnuedl Governance c05t5 Thi5 expenditure include5 the independent examination fee. 5ervice5 pfDvided by the charit¢s leg81 advisors and any otherexpenditure related to governance or the strateÉic direction of the charitv. LInreStrided￿ndS These resources arise from unrestricted purposes and from accumulared surplusesand deficit5 in the operationsforcharitable purpcse5 and are expendatsle at the discretion of the Trustees. Ihtanglble flxed a55ets The amort15ation policy 15 as follows.. Website 5 years straight line Cash and Cash Equlvalent5 Cash and cash È4uivalÈnts include tash at bank and in hand and short term deposits with a maturity date of three rnonih5 or le55. Financial instrument5 The Foundation has elected to apply the provi5ion5 of Section 11'8asic Financial Instruments, and Settion 12 'Other Financlal Instruments Issues, of FR5 102 to all of its flnancial Instruments. Financial Instruments are recognised in the cornpany'5 balance Sheet when the company becotlles party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial 5tatement5, when there is a legally enforceable right to Set off the reco8nised amounts and there 15 an intention to settle on a net basis or to realise the asset and settle the liability slmultaneeuslv. With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. Crftlcal accountlng estlmates and areas ofludgement Estimates and judgments are continually evaluated and are based on historical experience and other fartors. nduding expectations of future events that are beliewed to be reason3ble underthÈ Circumstances. a. Impairment and Valuatlon of Axed Asset Investments The trustees have reviewed the appropriateness of methods used in valuing the unlisted Shares of the Company'5 investment5. The tru5tee5 believe the investrnent value 15 5VPPQrted by the underlying assets held in the companies of those shares. Investrnents are impaired where there is objective evidence th3t, as 3 result of one or rnore event5 thBt occurred after the initial recognition uf the finantial asset, the estimated future cash flows have been affected. The impairment loss is recognised in the SOFA. b. Amortisation of Intangible Assets The int8neibl& assets held èrè all in repsett of website develepment costs. Therefore the trustees consider an amortlsation policy of 5 years straight line to be reasonable where it meets the criteria for capitalisation undÈr FRSIO2. Paul Smith's Foundation (formèrly Paul Smith Foundation) Notes to the Accounts For the year ended 30 June 2022 2022 Investmtnt income 2021 Dividend frotn Colston PropÈrtyPartners Llmlted 132,684 132.684 132.684 132,684 Chariiablèartlvlt￿S 2022 Arthlve Le￿1 & Ad¥ÈrtlslTr8 costs- Mte Professional. co5tS-nQte notÈ 8 Grants & donatlons- In$uraN nott S webslttr costs- natÈ 6 Total no¢* 4 Diiectchari14bleexpenditLJre 47,5(X) 2,645 158,4 90,895 io 4.728 304.682 note 10 1.648 92 5.514 3,IS4 164 10.572 49.148 2,737 164.418 94.049 io 4.892 315.254 2021 Archive Legal & AdvÈrtlsin8 costs-note Professlonal- 26,430,630 16,463,0881 Reserw carried forwHrd 18,337.973 19,967,542 The charity's re5erve5 con515ts of unrestricted general rÈ5etve5 only. 13 Paul Smith's Foundation (formerly Paul Smith Foundation) Notes to the Accounts For the year ended 30 June 2022 22 Prior period adjustment Costs in the prioryear have been restated to recogni5e archive costs that were previously omitted. Changes to the balance shÈÈt A5 previou51v ieported As restated at 30 June 2021 Adju5trnent Creditors due within a year Accruals Net assets 9,586 19 967 542 78,908 88.494 19 Funds Unrestricted funds 42 19 888 364 Changes to the SOFA As prevlouslv reported As restated at YO June 2021 Adlustmemt Empenditure Archive costs Net movement in fvnd5 25.826 6 463 088 78,908 104,734 6 541996 14