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2022-05-31-accounts

Company number: 07242976 Charity number: 1136151

Social Business Trust

Report and Financial Statements For the year ended 31 May 2022

Social Business Trust Reference and administrative details For the year ended 31 May 2022

Company number 07242976 – incorporated in the United Kingdom 07242976 – incorporated in the United Kingdom
Charity number 1136151 – registered in England and Wales
Registered office Invicta House
108-114 Golden Lane
London EC1Y 0TL
Operational Room S9/10, 2ndFloor, West Wing
address Somerset House
London WC2R 1LA
Trustees Trustees, who are also directors under company law, who served during the
year and up to the date of this report were as follows:
Larissa Joy Chair
Paul Armstrong Secretary and Vice Chair
Michael Crossan
Guy Davies
Jan Coos Geesink
James Hadley
Madeleine Hale
Simon Milton
Harry Nicholson
Kim Rihal appointed June 2022
Key management Joanne Hay Chief Executive
Personnel Jennifer Coles
Alex McAleavy
Greg Medlock
Rachel Goddard
Bankers Royal Bank of Scotland
Solicitors Russell Cooke Solicitors
2 Putney Hill,
London, SW15 6AB
Auditor Sayer Vincent LLP
Chartered Accountants and Statutory Auditor
Invicta House
108-114 Golden Lane
London EC1Y 0TL

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Social Business Trust Report of the trustees – Chair’s Report For the year ended 31 May 2022

CHAIR’S REPORT

One of the biggest highlights of this year has been seeing at close hand how the leadership teams of the charities and social enterprises in SBT’S portfolio have seized the opportunities for innovation and reinvention during Covid. The way that these organisations have re-focussed, adapted and reinvented at speed to respond to the needs of their beneficiaries in these times of extraordinary uncertainty and adversity has been inspiring and impressive in equal measure.

Equally, our SBT business partners have risen to this challenge. Collectively, we know that the need to address systemic inequities in our society has become ever greater. The work of our portfolio in supporting their beneficiaries has never been more vital as we emerge from the pandemic and are faced with inflationary pressures and a cost-of-living crisis not seen in a generation.

It has been a record year for SBT in terms of the contributions of our partners to the SBT portfolio, with over £3.2m of in kind support drawn down from our partners for the benefit of the portfolio. We are extraordinarily fortunate to have such a committed, positive and supportive group of partners in Bain & Company, Charles Russell Speechlys, Clifford Chance, EY, Permira, Permira Credit, Refinitiv an LSEG company, Schroders and Thompson Reuters. I would like to thank our partners and all their volunteers who lend their professional skills to SBT and its portfolio – in particular the senior representatives from each organisation who make up the SBT Investment Committee – for their energy and commitment this year.

This year has been an important year of transition in the executive leadership of SBT. After almost 12 years at the helm of Social Business Trust, and following a thoughtful and considered period of transition, co-founder Adele Blakebrough stepped down from the role of SBT’s CEO in April 2022. On behalf of the Board, I would like to thank Adele for her many brilliant years at the helm of SBT. As Co-founder and inaugural CEO of SBT, she has been an outstanding and dynamic leader. Adele will continue with SBT as Founder and Senior Adviser.

The Board of SBT is delighted that Joanne Hay accepted the invitation to become SBT’s new CEO from 1 May 2022. Joanne joined SBT in 2019, initially as Portfolio Director, adding further responsibilities as SBT’s Deputy CEO in 2021. Prior to SBT, Joanne enjoyed a distinguished career in government and the voluntary sector, most recently as CEO of Power2 and prior to this, spent over 3 years at Cabinet Office, supporting the development of the public sector mutuals market. Joanne’s appointment followed a selection process in which the SBT Board was supported by the leadership and talent development team at Bain & Company, and independent external recruitment advisers. We are delighted to welcome Joanne to the role of CEO.

SBT is very fortunate to have a board of trustees who show real commitment and dedication to SBT. As a highly experienced group of individuals with a wide range of skills, they are part of what makes SBT such a special organisation and I want to thank them for all their sustained support for SBT. This year, we have been pleased to welcome Kim Rihal to the Board. Kim was recruited through an open recruitment process, and brings expertise in building a successful and award-winning social enterprise in the education sector. She has recently been awarded NatWest and Pioneers Post Wise

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Social Business Trust Report of the trustees – Chair’s Report For the year ended 31 May 2022

100 Social Business Leader of the Year, recognising her work in founding and building Equal Education, which provides specialist tutoring for looked after, adopted and SEND children across the UK.

SBT will continue to tackle social inequity by helping to leverage the power of social enterprises and charities that play a crucial role in society. The work of these businesses and charities has never been more vital. In future years we plan to continue to grow and deepen the support we provide to our portfolio, to help them increase their impact, resilience and outcomes for their own beneficiaries. The opportunity for the social sector and business to join arms to achieve this and to tackle some of society’s most intractable problems has never been greater.

Larissa Joy OBE Chair

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Social Business Trust Report of the trustees – CEO’s Report For the year ended 31 May 2022

CEO’S REPORT

COVID-19 has exacerbated inequalities and continues to do so. Coming out of over a year of lockdowns against a backdrop of worsening economic conditions has caused a huge amount of disruption. Charities and social enterprises faced with continued uncertainty have worked tirelessly to find new and innovative ways of working.

The work of the Social Business Trust, our partners and volunteers has never been more needed or valued. Over the past year I am proud that we have been able to increase the level of support to our portfolio organisations by working in partnership with their leadership teams to help them build sustainable recovery plans and achieve even greater impact.

None of this could have happened without the energy, enthusiasm and commitment of our Chair, trustees, business partners, volunteers and SBT staff. I would like to thank everyone for all their time and efforts especially our chair Larissa Joy, OBE, who is a constant source of inspiration, bringing out the very best of SBT and with such dedication in support of our mission. I would also like to pay tribute to our Investment Committee for their time, expertise and unwavering commitment to driving impact during this record year of investments.

At its heart, SBT is a family of business partners using their professional skills to help scale and amplify the impact of charities and social enterprises working to build a more just and equitable society. We work with outstanding social enterprises in the UK who are having a profound impact on societal problems. We support them for the long-term to become more sustainable, grow and serve many more people. Reflecting our ambition to do more, we have had a record year for income, totalling £4.3m, a 15% increase on FY21.

It was also a record year of direct contribution to our social enterprises in both in-kind and cash support, £3.5m compared with £3.0m last year, a 16% increase. After a period of stabilisation during the pandemic, this increased investment reflects our commitment to help more young people thrive in education and employment; to support more people with their mental health and wellbeing, and to help the most vulnerable live independently. Major projects, above £250k in the year, included: Catch22, Hertfordshire Independent Living Service, London Early Years Foundation, Retail Trust, and Hestia.

Overall, our business partners delivered over one thousand days of professional support. The Investment Committee approved a significant increase in cash grants with multi-year grants of £659k in the year, up from £100k approved in FY21 (five investments in FY22 compared with three investments in FY21). In November 2021 SBT launched the Digital Impact Fund with a £150k grant from a business partner and one big goal: to help social enterprises accelerate their shift to digital. A panel of experts from SBT’s Digital Advisory Board, selected four charities with digital transformation initiatives to support, including creating a mobile platform to help young people access jobs, and the development of a digitally enabled delivery model for frontline mental health services for highly vulnerable people.

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Social Business Trust Report of the trustees – CEO’s Report For the year ended 31 May 2022

SBT had twelve charitable organisations in the portfolio with two new entrants this year. Retail Trust, a national charity supporting the mental health and well-being of people working in the retail sector, joined the portfolio in June 2021. LEAP, helping young people manage conflict in their lives, joined the portfolio in May 2022. We also supported a number of charities in our early-stage Design programme.

We operate a lean core team, drawing on support and advice from all of our corporate partners. As a result, after cost allocations, 96% of expenditure went on investing in projects up from 94% last year.

Our core team are key to ensuring SBT achieves its goals and ambitions. I am extremely proud of the way everyone has stepped up to help develop the new strategy and to support the CEO transition while working flat out to deliver our highest-ever level of volunteer activity. Strengthening the core team with a new Investment Associate and our exceptional Senior Investment Managers is already helping to increase our social impact.

During the year, we have also had the support of excellent EY secondees who have been instrumental in supporting our strategy refresh, supporting the portfolio, and developing our professional mentoring programme which continues to go from strength to strength.

The long-awaited new CRM system is up and running which will give us access to much better data, analysis and can help us to improve how we demonstrate our impact.

It has also been a year of transition for SBT. In May 2022, I was delighted to take on the role of CEO and remain indebted to Adele Blakebrough MBE for her unwavering support and to Larissa Joy, OBE, and the rest of the Board for being so generous and open with their support.

Like most organisations emerging from the pandemic, we have refreshed our strategy. Working with our partners and with expert support from Bain, we have identified priorities and planned our next steps together. The Board unanimously approved our new strategy in June 2022, and we are now implementing the recommendations. We look to the year ahead with big ambition to achieve significantly greater impact by deepening the support we provide through stronger relationships and a full potential plan. Through this deeper support, we aim to help our portfolio organisations to significantly increase their own impact, which we are open to assessing in many different ways as part of our commitment to keep learning and growing.

Joanne Hay Chief Executive

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Social Business Trust Report of the trustees – CEO’s Report For the year ended 31 May 2022

Key Performance Indicators

KPI Explanation 2021/22 Performance
Total
cash
income (£s)		 This measures the financial
support that we have received
during the year and determines
our ability to fund core costs
and to make cash grants to
social enterprises.		 Total cash income in the year to 31 May 2022
was £962k (2020/21: £762k). The main source
of increase was a restricted grant of £150k from
a business partner to fund SBT’s Digital
initiative. We continue to seek additional
sources of cash income as this will enable us to
expand our activities.
Expenditure
on core costs
(£s)		 This measure determines how
much we spend on SBT’s core
operations. We are looking to
optimise rather than minimise
this measure, as inadequate
investment in core costs is a
false economy.		 Total expenditure on core costs in the year to
31 May 2022 was £479k (2020/21: £402k). The
main increases related to further strengthening
of the core team during the year.
Number
of
investments
made		 Although
SBT’s
investment
criteria are flexible, we would
normally expect to restrict our
investments to only support
social enterprises that want to
work
with
us
to
achieve
‘transformation’. The number
of investments made in a period
should
reflect
this.
This
measure
also
indicates
the
effectiveness of our processes
for identifying and processing
suitable applicants.		 In the year to 31 May 2022, SBT’s Investment
Committee approved proposals to invest in five
social enterprises. Two of these were new to
the portfolio, post SBT Design, and three were
existing portfolio companies with exciting
growth potential. All other members of the
portfolio received expert support from SBT’s
business partners during the year, to help with
specific
functional
areas,
training
and
mentoring – as did certain members of the SBT
Network and social enterprises new to SBT in
the Design stage.
In-kind
support
drawn down
from
our
business
partners (£s)		 This amount measures both the
extent of our ability to engage
our business partners and the
value of the expertise provided
without charge to SBT and to
our investees.		 By 31 May 2022, £3,355k (2020/21: £2,995k)
of in-kind support had been drawn down from
SBT’s business partners. 96% of this amount
was provided directly to our investees.
Feedback
from our key
stakeholders		 SBT
regards
its
investors,
investees (actual and potential)
and
staff
as
its
key
stakeholders.		 We obtain regular feedback from our investors,
investees and staff. In most cases, this is
extremely positive but we also welcome
constructive criticism as this enables us to
improve our processes. During the year, we
collected feedback from volunteers on how
volunteering had impacted their professional
development and some shared insights with our

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Social Business Trust Report of the trustees – CEO’s Report For the year ended 31 May 2022

KPI Explanation 2021/22 Performance
Investment Committee. Key stakeholders gave
feedback on SBT as part of an external
consultation to inform our new strategy.

Financial overview

Total cash incoming resources for the year were £962,460 (2021/22: £762,122). After core costs of £478,994 (2020/21: £402,229), cash payments to investee social enterprises of £316,075 (2020/21: £199,400), and a reduction in working capital of £132,938 (2021: increase of £94,697), year-end cash balances increased by £300,789 from £567,457 at 31 May 2021 to £868,246 at 31 May 2022. These, together with future cash donations from our business partners, will enable us to meet our cash commitments to existing investees (valued at £574,511 at 31 May 2022) and make additional investments during 2022/23.

In addition to their cash donations, business advice with an estimated market value of £3,354,692 (2020/21: £2,995,214) was drawn down from our business partners and provided to SBT and its investees.

An analysis of our total 2021/22 core and in-kind expenditure of £4,149,761 shows that £3,901,894 or 94% of our resources (2021/21: 92%) was focused on our investees. The balance went on raising funds (3%) and on governance (3%) – with the latter being broadly defined to include strategic management of the charity, risk management, compliance with regulations and public reporting.

Reserves policy

Our reserves policy is risk based and reflects the trustees’ belief that, after taking account of existing cash commitments to portfolio companies, the charity should maintain a minimum level of unrestricted funds equivalent to approximately three months’ core costs as this would enable SBT to manage an unexpected disaster that would threaten our ability to continue as a going concern, a policy that was debated by trustees and re-confirmed during the year. At activity levels forecast for 2022/23, this implies the need to maintain a minimum level of funds of approximately £125,000 at 31 May 2022.

After deducting known cash commitments to portfolio companies, total unrestricted funds at 31 May 2022 were approximately £295,000. The excess over the minimum targeted level is regarded by the trustees as acceptable.

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Social Business Trust Report of the trustees For the year ended 31 May 2022

The trustees present their report and the audited financial statements for the year ended 31 May 2022.

For clarity and in recognition of their important roles in the governance and management of the charity, the Chair and Chief Executive have presented separate reports. These reports (for which the trustees take full responsibility) should be read as part of this report.

The reference and administrative information set out on page 1 also forms part of this report. The financial statements comply with current statutory requirements, the memorandum and articles of association and the Statement of Recommended Practice - Accounting and Reporting by Charities: SORP applicable to charities preparing their accounts in accordance with FRS 102.

Structure and objects

The organisation is a charitable company limited by guarantee, incorporated as Scale-Up on 5 May 2010 and registered as a charity on 2 June 2010. The company's name was changed to Social Business Trust on 11 November 2010.

The company was established under a memorandum of association, which established the objects and powers of the charitable company and is governed under its articles of association.

The objects of the charity, as stated in its governing documents, are to pursue any exclusively charitable objects as the trustees in their absolute discretion think fit by any means including but not limited to providing grants or other forms of financial assistance, materials or assistance in kind. The management and governance structures in place are designed to enable this to happen.

Aims, objectives and activities

Social Business Trust (“SBT”) is a partnership of leading businesses that share a common goal – to use our combined resources and experience to ensure the sustainability and help accelerate the growth of ambitious social enterprises, increasing social impact and making sustainable, positive change.

Together, SBT’s business partners invest in UK social enterprises and charities with a clear social mission, a robust business model and good leadership. Our investment consists of a combination of cash grants and expert resources provided free of charge. Initially, investees are invited to join our SBT Design Programme during which we add value by working through a structured due diligence programme designed to ensure that the fundamentals for growth are in place. Subsequently, if appropriate, we contribute to projects that the investee management team “owns” and which they regard as critical to their ability to scale-up the impact of their organisation and/or to enhance their sustainability.

In all cases, we work collaboratively with management but, in accordance with best business practice, we always insist on accountability, transparency and a focus on results. Consequently, our support is usually provided in instalments, with each instalment being conditional on the achievement of certain milestones. We monitor the social impact of our investees and attempt to

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Social Business Trust Report of the trustees For the year ended 31 May 2022

estimate the social return on our investment in terms of the key performance indicators that our investees consider meaningful.

Trustees

Trustees with appropriate functional and business skills have been appointed from SBT's business partners and elsewhere. They meet as a Board at least four times a year. Trustees automatically become members of the charity. With the exception of the Chair, all trustees serve for a three-year term, after which they are eligible for re-appointment on the recommendation of the Board on such terms and for such duration as the Board may determine.

As part of their induction, the Chair and Chief Executive each hold one-to-one meetings with new trustees to ensure that they are fully versed in SBT's objectives and procedures. Updates on developments in the social sector are provided at each trustees' meeting and additional training is available to trustees on request. The names of the trustees who held office during the year are set out on page 1.

Related party transactions and conflicts of interest

Trustees are required to disclose to the Board any direct or indirect interest in a proposed or existing transaction and any other circumstances that might give rise to a conflict or potential conflict. When any such actual or potential conflicts are identified, the trustee in question plays no part in the decision on whether or not to enter into the transaction.

Transactions in which a trustee has or may have a direct or indirect interest are referred to as related party transactions. Related party transactions involving trustees are fully disclosed in the financial statements (see Note 13).

Public benefit

The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity's aims and objectives and in planning its future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives that have been set. To ensure that SBT is acting in accordance with its objects, investments are restricted to registered charities or to other not-for-profit entities where, in the opinion of the trustees, any private benefit is incidental and insignificant.

Investment Committee

The trustees have set up an Investment Committee to act as an advisory sub-committee of the Board. The Investment Committee includes one senior representative of each of SBT's business partners. Its purpose is to consider detailed investment recommendations put forward by SBT’s core team and, if appropriate, recommend them to the Board for approval. Meetings of the Investment Committee take place at least four times a year, usually on the same day as Board meetings. The current members of the Investment Committee are: Larissa Joy (Chair)

Gemma Cotton (Bain & Company) Michael Crossan (Clifford Chance)

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Social Business Trust Report of the trustees For the year ended 31 May 2022

Andrew Walton (EY) Paul Armstrong (Permira) David Hirschmann (Permira Credit) Luke Manning (Refinitiv) Lucinda Case (Thomson Reuters) Peter Harrison/Louise Hosking (Schroders)

Fundraising

The charity is committed to observing all relevant fundraising regulations and codes. During the year, there was no non-compliance of these regulations and codes and the charity received no complaints relating to its fundraising practices.

Volunteers

SBT’s trustees, Investment Committee members and core team are extremely grateful to the many people from SBT’s business partners and other organisations who have given us and our investees the benefit of their experience and expertise during the year. SBT's accounting policies for valuing the contributions of these volunteers is set out in Note 1 to the financial statements.

Risk management

Risk exists when there is uncertainty surrounding events and their outcomes that may have a significant impact on SBT’s ability to:

Risk management is the responsibility of the Board and, in recognition of this, a schedule summarising principal risks together with mitigating factors and appropriate risk management procedures is formally reviewed by the Board every two years, including in FY22. In the Board’s opinion, SBT’s two most significant risks can be summarised as:

To a significant extent, these risks are outside the control of the Board but mitigation strategies include a relentless focus on stakeholder satisfaction, increased investment in fundraising and appropriate succession planning.

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Social Business Trust Report of the trustees For the year ended 31 May 2022

Going concern

The trustees consider that, having regard to the level of reserves and to the continuing support of SBT's business partners, there are no material uncertainties about the charitable company's ability to continue as a going concern.

Remuneration policy for key management personnel

The trustees of SBT recognise that the charity will not achieve its ambitious goals unless we are able to attract and retain a core team of key management personnel who have the experience, enthusiasm and ability to provide support and guidance to both its investee companies and to high calibre personnel from its business partners. Consequently, the ability to offer a compelling value proposition to all staff is regarded as a critical success factor.

In common with other small, entrepreneurial organisations in the charitable sector, SBT’s value proposition to staff includes flexible working, supportive teamwork and significant job satisfaction from the social impact that we are helping to generate. However, remuneration is also important and, for this element of the overall reward package, our policy is to set pay and benefits at levels that are competitive for the sector and which recognise an individual’s abilities, responsibilities and experience.

The remuneration of key management personnel is summarised in Note 6 of the financial statements. On a full time equivalent basis, SBT’s highest paid employee is the Chief Executive and, in the year to 31 May 2022, her salary was approximately 2.1 times the average full time equivalent salary paid to other employees.

Financial review

The Chief Executive's report, which is set out on pages 4 to 9, includes a commentary on SBT's performance in the year to 31 May 2022 and a financial overview.

Plans for the future

During FY22 SBT worked with many of its stakeholders to develop and refine its strategy, and to identify key objectives over the coming three years. Our overarching ambition is to achieve significantly greater impact, far beyond what we have achieved so far. We aspire to do this by significantly deepening the support we provide and by serving a slightly larger number of organisations.

Our priorities for 2022/23 include:

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Social Business Trust Report of the trustees For the year ended 31 May 2022

Statement of responsibilities of the trustees

The trustees (who are also directors of Social Business Trust for the purposes of company law) are responsible for preparing the trustees’ report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:

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

In so far as the trustees are aware:

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charity in the event of winding up. The total number of such guarantors at 31 May 2022 was 9

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Social Business Trust Report of the trustees For the year ended 31 May 2022

(2021: 9). The trustees are members of the charity but this entitles them only to voting rights. The trustees have no beneficial interest in the charity.

Auditor

Sayer Vincent LLP was re-appointed as the company's auditor during the period and has expressed its willingness to continue in that capacity.

The trustees’ annual report which includes the Chair’s and Chief Executive’s report was approved by the trustees on 6 September 2022 and signed on their behalf by:

Paul Armstrong - Secretary

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Independent auditor’s report

To the members of

Social Business Trust

Opinion

We have audited the financial statements of Social Business Trust (the ‘charitable company’) for the year ended 31 May 2022 which comprise the statement of financial activities, balance sheet, statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on Social Business Trust's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

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Independent auditor’s report

To the members of

Social Business Trust

Other Information

The other information comprises the information included in the trustees’ annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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Independent auditor’s report

To the members of

Social Business Trust

in preparing the trustees’ annual report and from the requirement to prepare a strategic report.

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ annual report, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud are set out below.

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

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Independent auditor’s report

To the members of

Social Business Trust

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Independent auditor’s report

To the members of

Social Business Trust

Use of our report

This report is made solely to the charitable company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Judith Miller (Senior statutory auditor) 26 September 2022

for and on behalf of Sayer Vincent LLP, Statutory Auditor Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

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Social Business Trust

Statement of Financial Activities (incorporating an Income and Expenditure Account)

For the year ended 31 May 2022

For the year ended 31 May 2022
Note
2
3
5
Charitable activities
Total funds carried forward
Reconciliation of funds
Donations
Bank interest and sundry
income
Expenditure on:
Investment in projects
Net income for the year and net
movement in funds
Income from:
Total income
Total funds brought forward
Total expenditure
Raising funds		 Unrestricted
£
4,159,697
455		 Restricted
£
157,000
-		 2022
Total
£
4,316,697
455		 Unrestricted
£
3,757,222
114		 Restricted
£
-
-		 2021
Total
£
3,757,222
114
4,160,152 157,000 4,317,152 3,757,336 - 3,757,336
136,782
3,857,740		 -
155,239		 136,782
4,012,979		 179,059
3,417,784		 -
-		 179,059
3,417,784
3,994,522 155,239 4,149,761 3,596,843 - 3,596,843
165,630 1,761 167,391 160,493 - 160,493
689,881 4,005 693,886 529,388 4,005 533,393
855,511 5,766 861,277 689,881 4,005 693,886

Movements in restricted funds are detailed in note 11

All of the above results are derived from continuing activities. There were no other recognised gains or losses in either year other than those stated above.

19 | P a g e

Social Business Trust

Company no. 07242976

Balance sheet

31 May 2022

31 May 2022
Balance sheet		 Company no. 07242976
Note
Tangible fixed assets
8
Debtors
9
Short term deposits
Cash at bank and in hand
Creditors: amounts due within one year
10
Unrestricted general funds
Restricted funds
11
Fixed assets
Liabilities
Net current assets
The funds of the charity
Total charity funds
Net assets
Current assets		 2022
£
3,855
18,268
250,432
617,815		 2021
£
4,316
137,379
-
567,457
886,515
(29,093)		 704,836
(15,266)
857,422 689,570
861,277 693,886
855,511
5,766		 689,881
4,005
861,277 693,886

Approved by the trustees on 6 September 2022 and signed on their behalf by:

Harry Nicholson Trustee

20 | P a g e

Social Business Trust

Statement of Cash Flows

For the year ended 31 May 2022

For the year ended 31 May 2022
Net income for the year
Depreciation
Loss on disposal of fixed assets
Decrease/(increase) in debtors
Increase in creditors
Net cash provided by operating activities
Purchase of fixed assets
Net cash used in investing activities
Cash and cash equivalents at the beginning of the year
Analysis of cash and cash equivalents
Cash at bank and in hand
Short term deposits
Total
Cash flows from investing activities:
Change in cash and cash equivalents in the year
Cash and cash equivalents at the end of the year		 At 1 June
2021
£
567,457
-		 2022
Total
£
167,391
3,201
1
119,111
13,827		 2021
Total
£
160,493
2,483
-
(95,146)
449
303,531
(2,741)		 68,279
(1,434)
(2,741) (1,434)
300,790
567,457		 66,845
500,612
868,247 567,457
Cash flows
£
50,358
250,432		 At 31 May
2022
£
617,815
250,432
567,457 300,790 868,247

21 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

1 Accounting policies

a) Statutory information

The registered office address is Invicta House, 108-114 Golden Lane, London, EC1Y 0TL.

b) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - (Charities SORP FRS 102), The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.

In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The nature of the estimation means the actual outcomes could differ from those estimates. Any significant estimates and judgements affecting these financial statements are detailed within the relevant accounting policy below.

c) Public benefit entity

The charitable company meets the definition of a public benefit entity under FRS 102.

d) Going concern

The trustees consider that, having regard to the level of reserves and to the continuing support of SBT's business partners, there are no material uncertainties about the charitable company's ability to continue as a going concern. Further details can be found in the trustees' annual report.

The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. Similarly, the trustees do not believe that they have made any key judgements which have had a significant effect on the accounts.

e) Income

Donations consist of cash donations and services provided "in-kind" (i.e. without charge) to SBT or its investees by SBT's business partners. Cash donations are included in full in the statement of financial activities when receivable and, when appropriate, include Gift Aid receivable from HMRC. In-kind donations are recognised as income when the services in question are provided and are valued by the trustees of SBT at a prudent estimate of the market value of those services.

22 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

1 Accounting policies (continued)

f) Expenditure and irrecoverable VAT

Expenditure is recognised in the period in which it is incurred and includes attributable VAT as this cannot be recovered.

SBT has the following three core processes:

1. Raising funds

Associated activities include profile raising, identifying potential business partners and/or individual donors, enlisting support from and managing relationships with those partners/donors and organising fundraising events.

2. Investment in projects

Associated activities include market research, screening applicants, detailed due diligence, project definition, project delivery and monitoring progress.

3. Governance

Associated activities include strategic management of the charity, risk management, internal control, administration, compliance with regulations and public reporting.

g) Allocation of support costs

Cash grants and the value of in-kind services provided by SBT's core team and its business partners to other organisations are allocated directly to investment in projects. All other costs are initially allocated to support costs and then re-allocated to SBT's three core processes - either directly or on the basis of the most appropriate cost driver. In the case of staff costs, the cost driver is the amount of time spent by an individual team member on a particular process. For all other indirect costs, re-allocation is based on the following percentages which themselves are derived from the trustees' estimate of the percentage of total time spent by the core team on each of the three core processes:

Raising funds 18.3% Investment in projects 66.3% Governance 15.4%

Governance costs are then reallocated to the other two processes in proportion to their total direct and indirect costs.

h) Grants payable

Cash grants payable to other organisations are charged to the statement of financial activities when conditions have been met for payment. Where grants are payable by instalments, each instalment is conditional on the organisation in question meeting SBT's requirements. Expenditure is only recognised when these conditions are met. Where conditions have not yet been met, outstanding payments are shown as future commitments.

23 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

i) Donations of gifts, services and facilities

Services provided without charge to SBT by trustees, Investment Committee members, other individual volunteers and external organisations (other than SBT's business partners) are not recognised as resources expended (or as voluntary income) but are acknowledged in the trustees' report.

j) Tangible fixed assets

Depreciation is provided at a rate calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates currently in use are as follows:

Office equipment

Items of equipment are capitalised when the purchase price exceeds £250. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use.

k) Operating leases

Rentals payable under operating leases, where substantially all the risks and rewards of ownership remain with the lessor, are charged to the Statement of Financial Activities on a straight line basis over the term of the lease.

l) Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

m) Pensions

Contributions payable by SBT to the company's defined contribution pension scheme are recognised in the period to which they relate.

n) Fund accounting

Unrestricted funds are derived from donations and other incoming resources received or generated for general charitable purposes. Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure incurred in connection with these purposes is charged to the relevant fund together, when appropriate, with a fair allocation of management and support costs.

o) Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

p) Cash at bank and in hand

Cash at bank and in hand includes cash and highly liquid investments with a maturity of three months or less from the date of opening of the deposit or similar account.

24 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

1 Accounting policies (continued)

q) Short term

Short term deposits includes cash balances that are invested in accounts with a maturity date of between 3 and 12 months.

r) Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

2 Donations

Donations
Cash donations from business partners
In-kind services provided by business partners
Cash donations from individuals and corporate entities
Total		 2022
Total
£
955,000
3,354,692
7,005		 2021
Total
£
762,000
2,995,214
8
4,316,697 3,757,222

In 2022, £150,000 of cash donations were restricted to the Digital Impact Fund, and £7,000 restricted to the HBS CEO programme.

25 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

Total expenditure (current year)
Cash paid to support social enterprises
In-kind services provided
Staff and recruitment costs (Note 6)
Property costs
Marketing and fundraising costs
Training
Subscriptions
Travel, subsistence and entertainment
Phone costs
Depreciation
Other office costs
Insurance
Professional fees
Support Costs
Governance costs
Total expenditure 2022
Total expenditure 2021		 Costs of
raising funds
£
-
-		 Investment in
projects
£
316,075
3,211,412		 Governance
Costs
£
-
-		 Support
Costs
£
-
143,280		 2022
Total
£
316,075
3,354,692		 2021
Total
£
199,400
2,995,214
-
-
-
-
-
-
-
-
-
-
-
-		 3,527,487
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-		 143,280
383,984
27,858
7,426
7,068
2,049
5,599
3,111
3,201
21,569
6,749
10,380		 3,670,767
383,984
27,858
7,426
7,068
2,049
5,599
3,111
3,201
21,569
6,749
10,380		 3,194,614
333,090
27,495
3,981
446
2,057
973
3,180
2,483
14,396
5,308
8,820
-
132,996
3,786		 3,527,487
374,407
111,085		 -
114,871
(114,871)		 622,274
(622,274)
-		 4,149,761
-
-		 3,596,843
-
-
136,782 4,012,979 - - 4,149,761 3,596,843
179,059 3,417,784 - -

Governance costs include in-kind services provided by business partners, relevant staff costs, fees payable to the charity's auditors and an appropriate share of overheads.

26 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

3b Total expenditure (prior year)

Total expenditure (prior year)
Cash paid to support social enterprises
In-kind services provided
Staff and recruitment costs (Note 6)
Property costs
Marketing and fundraising costs
Training
Subscriptions
Travel, subsistence and entertainment
Phone costs
Depreciation
Other office costs
Insurance
Professional fees
Support Costs
Governance costs
Total expenditure 2021		 Costs of
raising funds
£
-
-		 Investment in
projects
£
199,400
2,835,839		 Governance
Costs
£
-
-		 Support Costs
£
-
159,375		 2021
Total
£
199,400
2,995,214
-
-
-
-
-
-
-
-
-
-
-
-		 3,035,239
-
-
-
-
-
-
-
-
-
-
-		 -
-
-
-
-
-
-
-
-
-
-
-		 159,375
333,090
27,495
3,981
446
2,057
973
3,180
2,483
14,396
5,308
8,820		 3,194,614
333,090
27,495
3,981
446
2,057
973
3,180
2,483
14,396
5,308
8,820
-
173,789
5,270		 3,035,239
281,952
100,593		 -
105,863
(105,863)		 561,604
(561,604)
-		 3,596,843
-
-
179,059 3,417,784 - - 3,596,843

27 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

4 Investment in projects

An analysis of cash payments and in-kind services provided during the year is set out below, by status at end of FY22:

Portfolio
Brightside
Career Ready
Catch22
Challenge Partners
ICAN
LEAP
RetailTRUST
The Brilliant Club
Twining
Alumni
Bikeworks
Moneyline
Shakespeare Schools
UserVoice
Design
BELU
British Exploring Society
City Harvest
DFN Project Search
Hestia
Mind
Refetorrio Felix
TeachFirst
The Orchard Project
Hertfordshire Independent Living Service
London Early Years Foundation
Digital
Tempo Time Credits
The Fore
Project Rainbow (I and II)		 2022
£
67,257
141,271
426,176
219,110
851,917
111,852
65,263
325,898
583,038
40,955
52,903
9,270
5,224
736
59
26,191
-
9,456
48,434
42,048
282,038
36,824
-
-
-		 2021
£
62,703
248,114
639,774
145,387
213,324
46,221
48,000
204,292
6,571
676,113
139,946
17,946
95,846
-
33,843
52,174
24,286
-
-
-
-
-
19,614
17,143
6,643
3,345,920
158,186
21,027
2,354		 2,697,940
296,644
40,655
-
3,527,487 3,035,239

By the end of FY22, LEAP and RetailTRUST moved from SBT Design to Portfolio; Moneyline and User Voice joined the SBT Alumni group.

The in-kind services delivered to Hestia included the SBT Design stage and further strategy related support, that in part developed a template that will be used on future Design engagements.

Digital comprises the Digital Impact Fund in FY22 which made cash grants to Brightside, Catch22, Challenge Partners and Hestia, funded by a restricted donation from a business partner. In FY21, expenditure comprises the in-kind survey and digital diagnostic across the SBT portfolio and development of a digital toolkit.

Project Rainbow covers specific cash and in-kind services to support SBT portfolio members during COVID restrictions over the past two years.

In FY22, SBT piloted a relationship with The Fore whereby SBT sources volunteers from its business partners to support opportunities identified by The Fore.

28 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

4 Investment in projects (continued)

At 31 May, the estimated value of future commitments to provide cash grants and additional services was as follows:

Within one year
Between one and two years
Total
5
This is stated after charging:
Depreciation
Rent/workstation licence fees
Auditor's remuneration (excluding VAT):
Audit
6
Staff costs were as follows:
Salaries and fees payable
Social security costs
Pension contributions
Recruitment costs
Staff costs and numbers
Net movement in funds for the period
Trustees' remuneration
Trustees' expenses		 2022
£
790,000
650,000		 2021
£
740,000
-
1,440,000 740,000
2022
£
3,201
27,858
7,750
NIL
NIL		 2021
£
2,483
27,495
7,350
NIL
NIL
2022
£
320,882
34,650
15,552
12,900		 2021
£
294,593
28,893
9,330
274
383,984 333,090

The following number of employees received employee benefits in excess of £60,000 (excluding employer national insurance and employer pension costs) during the year between:

2022 2021
No. No.
£60,000 - £69,999 - 1
£90,000 - £99,999 1 1

The total employee benefits (including employer national insurance and employer pension contributions) of the key management personnel were £371,084 (2021: £332,816).

At 31 May 2022, SBT's core team consisted of 7.7 (2021: 5.9) full time equivalents, being 7 (2021: 6) employees and two (2021: one) secondee from EY. The average weekly number of employees (full-time equivalents) during the year was 5.4 (2021: 4.2).

29 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

7 Taxation

The charitable company is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

8 Tangible fixed assets

Tangible fixed assets
Cost
At start of the year
Additions in year
Disposals in year
At the end of the year
Depreciation
At start of the year
Charge for the year
Disposals in year
At the end of the year
Net book value
At the end of the year
At the start of the year
Prepayments
Other debtors
Rent deposit
Accrued income
Taxation and social security
Other creditors
Creditors: amounts due within one year
Debtors
All of the above assets are used for charitable purposes.		 Office
equipment
£
17,840
2,741
(3,880)		 Total
£
17,840
2,741
(3,880)
16,701 16,701
13,524
3,201
(3,879)		 13,524
3,201
(3,879)
12,846 12,846
3,855 3,855
4,316 4,316
2022
£
8,940
-
2,328
7,000		 2021
£
8,721
24,248
4,410
100,000
18,268 137,379
2022
£
13,095
15,998		 2021
£
7,655
7,611
29,093 15,266

9 Debtors

10 Creditors: amounts due within one year

30 | P a g e

Social Business Trust

Notes to the financial statements

For the year ended 31 May 2022

11a Restricted funds - current year

Restricted funds - current year
Digital impact fund
HBS Fund
Total restricted funds		 At 1 June
2021
£
-
4,005		 Income
£
150,000
7,000		 Expenditure
£
(150,000)
(5,239)		 At 31 May
2022
£
-
5,766
4,005 157,000 (155,239) 5,766

The Digital impact fund will enable immediate targeted investment in social enterprises, supporting their digital transformation so they can help more people recover from the effects of the pandemic.

The HBS Fund was established by the charity's co-founder and former Chair, Sir Damon Buffini. Its purpose is to enable senior executives from SBT's investee companies to attend a course for social entrepreneurs at Harvard Business School.

Total restricted funds at the year end (£5,766) were represented by cash. All of the charity's other assets and liabilities at 31 May 2022 represented unrestricted funds.

11b Restricted funds - prior year

Restricted funds - prior year
Total restricted funds
HBS Fund		 At 1 June
2020
£
4,005		 Income
£
-		 Expenditure
£
-		 At 31 May
2021
£
4,005
4,005 - - 4,005

12 Property commitments

Under its current arrangements at Somerset House, SBT rents a number of desks on a rolling contract with one month's notice.

13 Related party transactions

As shown in Note 4, during the year, cash and in-kind services with values of £5,224 (FY21 £95,846), £583,038 (FY21 £6,571) and £736 (FY21 £nil) were provided to Moneyline, RetailTRUST and Shakespeare Schools ("Coram SSF") respectively. Jan Coos Geesink is a trustee of Moneyline, Paul Armstrong is a trustee of RetailTRUST, and both James Hadley and Guy Davies are trustees of Coram SSF.

In accordance with SBT's normal procedures, having declared their interests, the trustees concerned took no part in the decisions to make the investments in the investee companies in which they were involved. In all cases, the remaining trustees were satisfied that the associated expenditure was appropriate and in the best interests of SBT.

14 Legal status of the charity

SBT is a company limited by guarantee and has no share capital. The liability of each member in the event of winding up is limited to £1.

31 | P a g e