OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2022-12-31-accounts

THE MCLAIN FOUNDATION LIMITED

(Registered Charity No. 1139841 and Company No. 07463093) ANNUAL REPORT OF THE TRUSTEES AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

CONTENTS

Page
Annual Report of the Trustees 1 - 6
Independent Auditor’s Report 7 - 9
Statement of Financial Activities (including Income and Expenditure Account) 10
Balance Sheet 11
Statement of Cash Flows 12
Notes to the Financial Statements 13 - 20

Page 1

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES

FOR THE YEAR ENDED 31 DECEMBER 2022

The Trustees present their report and the independently audited financial statements of The McLain Foundation Limited (“the Foundation” or “the charitable company”), for the year ended 31 December 2022. These have been prepared in accordance with the accounting policies set out on pages 13 to 15 and comply with applicable charity law.

The financial statements comply with the Charities Act 2011 and where applicable, the Charities Act 2022, the Companies Act 2006, the Memorandum and Articles of Association, and 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 United Kingdom and Republic of Ireland (FRS 102).

1. REFERENCE AND ADMINISTRATIVE DETAILS

The McLain Foundation Limited (registered charity number 1139841 and company number 07463093) is based and administered in the United Kingdom. The registered address is Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ.

Directors and Trustees:

The Directors and Trustees of the Foundation who held office during the year and continue to serve at the date of this report are:

The Trustees did not hold any beneficial interest in the Foundation at 31 December 2022 or at any time during or since that period.

Banker:

Barclays 1 Stanhope Gate, London W1K 1AF Barclays 25 Circular Road, Douglas, Isle of Man IM1 1AD

Solicitors:

Withers LLP, 16 Old Bailey, London, EC4M 7EG

Investment Custodians:

Pershing Advisor Solutions LLC, One Pershing Plaza, Jersey City, NJ 07399 Banque Pictet & Cie SA, Route des Acacias 60, 1211 Geneve 73, Switzerland

Accountants:

Rawlinson & Hunter LLP Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ

Independent Auditor:

Rawlinson & Hunter Audit LLP, Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ

Page 2

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES (continued)

FOR THE YEAR ENDED 31 DECEMBER 2022

2. STRUCTURE, GOVERNANCE AND MANAGEMENT

The Foundation is a private limited company governed by its Memorandum and Articles of Association and is registered as a charity with the Charity Commission for England and Wales.

The Trustees are resident in the United Kingdom and meet regularly to discuss and develop the Foundation’s goals and strategy and to review grant proposals and general grant requests.

The number of Trustees shall be a minimum of two at any one time and new Trustees shall be appointed by ordinary resolution by the existing Trustees. The range of skills represented on the Trustee Board will be kept under review as the Foundation develops over time.

Induction and Training

As part of their training, Trustees are given an information pack which includes the Foundation's Memorandum and Articles of Association and the Charity Commission guidance on Trustees' Responsibilities. All Trustees are aware of their legal duties and obligations in respect of the management of the Foundation, including in relation to the protection of its assets.

Statement of Trustees’ Responsibilities

The Trustees (who are also Directors for the purposes of company law) are responsible for preparing the Annual Report of the Trustees 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 the 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.

Disclosure of information to Auditor

Insofar as the Trustees are aware:

Page 3

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES (continued)

FOR THE YEAR ENDED 31 DECEMBER 2022

2. STRUCTURE, GOVERNANCE AND MANAGEMENT (continued)

Internal Controls

The Trustees have overall responsibility for ensuring that the Foundation has appropriate systems of internal controls. They are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Foundation and enable them to ensure that the financial statements follow best practice and all applicable law regulation and guidance. The Trustees are also responsible for the Foundation safeguarding its assets and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The system of internal controls is designed to provide reasonable, but not absolute, assurance against material misstatement or loss.

Risk Management & Corporate Governance

A risk assessment has been undertaken which comprises:

This continuing process will identify risk areas to which the Foundation is vulnerable and highlight any necessary safeguards that will need to be put in place. No major risks were identified at the date of these accounts.

The Trustees have signed fit and proper declarations in line with HMRC guidance.

In addition, the Trustees have taken due consideration of Good Governance – A Code for the Voluntary and Community Sector, ensuring that the seven main principles of the Code are adhered to. These are:

The Trustees recognise that good governance plays an essential part in securing the future of the Foundation and confirm that the said principles of the Code are followed by them in leading, directing and managing the Foundation.

Page 4

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES (continued)

FOR THE YEAR ENDED 31 DECEMBER 2022

3. OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT

The objects of the Foundation are such exclusively charitable purposes as the Trustees may in their absolute discretion determine. The Foundation operates as a grant-making charity, supporting charitable projects and organisations with grants of varying sizes and durations.

The Trustees have developed a solid framework for future grant-making activities and have refined their grant-making focus areas. The Trustees have pursued a broad strategy of ensuring proper due diligence in the assessment of potential grants and ensuring that grants are made subject to appropriate terms and conditions.

Statement of Public Benefit

As a grant-funder, the Foundation’s activities will provide public benefit to the individuals and communities who are beneficiaries of the Foundation’s funded projects. The Foundation’s public benefit is not limited with reference to geography or otherwise. The Trustees are aware of the Charity Commission guidance on Public Benefit and confirm that they have complied with the duty in Section 4 of the Charities Act 2011 to have due regard to it. They consider the information which follows in this annual report, about the Foundation’s aims, activities and achievements in the areas of interest that the Foundation supports demonstrates the benefit to its beneficiaries and through them to the public, that arise from those activities.

Grant Making Policies

The Trustees’ grant making policy has been to generally consider making donations by way of direct funding and also by way of grants to charitable organisations recognised as such in their respective jurisdictions for projects that are exclusively charitable under English law. The Foundation has begun to put in place sound grant arrangements so that it can continue to properly select appropriate grantees and impose prudent terms on grants, including, as appropriate, monitoring and evaluation of the way in which funds are applied by grantees.

Fundraising

The Trustees have referred to the Charities (Protection and Social Investment) Act 2016 (“the Act”) and the Guidance on Charities and Fundraising issued by the Charity Commission (“CC20”). They confirm that the Act and CC20 have no impact on the Foundation as it does not engage in any public fundraising activities.

Page 5

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES (continued)

FOR THE YEAR ENDED 31 DECEMBER 2022

4. ACHIEVEMENT AND PERFORMANCE

Investments

The assets of the Foundation consist principally of quoted investments, unquoted investments, and cash. Listed investments are recorded on the Balance Sheet at their market value on that date. Any increase or decrease over the previous years’ market value on the restatement of these values is recorded in the Statement of Financial Activities. As at 31 December 2022, the value of the Foundation’s listed investments was £15,773,619 ( 2021 - £16,440,601 ). Investment performance is monitored by Clarfeld Financial Advisors LLC and Banque Pictet & Cie SA who report their findings to the Trustees quarterly. In addition to these investments, the Foundation has also made subscriptions to HILP-C Investco LLC, Riverhawk Funding III LLC, Pacific Hotel Florida LLC and CVC Capital Partners VIII Associates L.P..

Charitable Activities

Direct charitable expenditure for 2022 totalled £1,092,801 ( 2021 - £1,072,425) which includes donations totalling £1,022,119 ( 2021 - £1,022,279 ) to a variety of organisations, based both in the UK and overseas, and charity governance costs. All grants were paid in line with the policies set out in Section 3 of this report, Objectives and Activities.

A full list of grants made during the year is shown on page 16.

The accounting treatment in respect of grants is in line with that set out in the applicable statement of recommended practice.

5. FINANCIAL REVIEW

The Statement of Financial Activities on page 10 shows total incoming resources for the year of £3,470,921 ( 2021 - £5,826,827 ) derived from donations received and gift aid thereon and income from investment assets. Governance costs amounted to £70,682 ( 2021 - £50,146) and are included within charitable activities.

The balance of reserves at 31 December 2022 is £21,022,078 ( 2021 - £18,996,895) .

Reserves Policy

The Trustees have examined the Foundation’s requirement for resources in light of the main risks to the organisation and have no outstanding commitments or cash demands which are not adequately covered by existing resources. The net assets of the Foundation are regarded as unrestricted reserves and the funds at 31 December 2022 will be retained to make grants in accordance with the Foundation’s charitable objects and any policies. The Trustees consider that the freely expendable funds are appropriate and adequate taking into account plans for grants to be awarded in future and have at present therefore not designated any specific reserves. However, the Trustees will keep this under constant review. In future years, a specific reserves policy may be required.

The ongoing conflict in Ukraine and the resulting high energy costs and other cost inflating factors have affected the global economy. Having considered the contingency plans in place and having reviewed updated cashflow forecasts, the Trustees consider the adoption of the going concern basis in preparing these financial statements continues to be appropriate.

Page 6

THE MCLAIN FOUNDATION LIMITED

ANNUAL REPORT OF THE TRUSTEES (continued)

FOR THE YEAR ENDED 31 DECEMBER 2022

6. PLANS FOR THE FUTURE

The Trustees do not propose to deviate from the current objectives and activities of the Foundation as detailed in Section 3 of this report but will further develop and refine their strategies, policies and procedures in future.

In preparing this report, the Trustees have taken advantage of the small companies exemptions provided by Section 415A of the Companies Act 2006.

7. AUDITOR

A resolution will be proposed at the Trustees’ Meeting that Rawlinson & Hunter Audit LLP be appointed as auditor of the Foundation for the ensuing year.

Approved by the Trustees and signed on their behalf by:

…………………………… …………………………… Chelsea McLain Date Trustee

Page 7

THE MCLAIN FOUNDATION LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

OF THE MCLAIN FOUNDATION LIMITED

Opinion

We have audited the financial statements of The McLain Foundation (‘the charitable company’) for the year ended 31 December 2022 which comprise the Statement of Financial Activities (including Income & Expenditure Account), the Balance Sheet, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 the charitable company'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.

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Annual Report of the Trustees and Financial Statements, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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.

Page 8

THE MCLAIN FOUNDATION LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS (continued)

OF THE MCLAIN FOUNDATION LIMITED

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 our 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 Strategic Report and the Directors’ 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:

Responsibilities of Trustees

As explained more fully in the Statement of Trustees’ Responsibilities set out on page 2, 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 is detailed below.

Our assessment of the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur, is considered to be low. This conclusion was reached after the consideration of the following:

Page 9

THE MCLAIN FOUNDATION LIMITED

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS (continued)

OF THE MCLAIN FOUNDATION LIMITED

Auditor’s responsibilities for the audit of the financial statements

We designed our audit procedures to respond to identified audit risks, including non-compliance with laws and regulations (irregularities) that are material to the financial statements. Some of the specific procedures performed to detect irregularities, including fraud, are detailed below:

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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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.

Yueling Wei (Senior Statutory Auditor) For and on behalf of Rawlinson & Hunter Audit LLP

Statutory Auditor and Chartered Accountants Eighth Floor 6 New Street Square New Fetter Lane London EC4A 3AQ

Page 10

THE MCLAIN FOUNDATION LIMITED

STATEMENT OF FINANCIAL ACTIVITIES

(INCLUDING INCOME AND EXPENDITURE ACCOUNT)

FOR THE YEAR ENDED 31 DECEMBER 2022

Unrestricted Unrestricted
Funds Funds
Page 2022 2021
£ £
Income from:
Donations (note 2) 15 3,162,823 5,629,775
Investments (note 3) 15 308,098 197,052
Total income 3,470,921 5,826,827
Expenditure on:
Charitable activities (note 4) 16 1,092,801 1,072,425
Raising funds (note 5) 16 74,178 74,650
Total expenditure 1,166,979 1,147,075
Net (loss)/gain on investments (note 13) 19 (262,372) 1,513,684
Net income 2,041,570 6,193,436
Other gains and losses
Realised loss on foreign currency transactions (16,387) (1,949)
Net movement in funds 12 2,025,183 6,191,487
Reconciliation of funds:
Total funds brought forward at 1 January 2022 18,996,895 12,805,408
Total funds carried forward at 31 December 2022 £ 21,022,078 £ 18,996,895

All amounts relate to continuing operations.

There were no recognised gains and losses for years ended 31 December 2021 and 2022 other than those included in the Income and Expenditure Account.

The notes on page 13 to 20 form part of these financial statements

Page 11

THE MCLAIN FOUNDATION LIMITED

(Registered Charity No. 1139841 and Company No. 07463093)

BALANCE SHEET

AT 31 DECEMBER 2022

Page 2022 2021
£ £
Fixed assets:
Investments and cash under management (note 13) 19 20,789,697 18,697,114
Total fixed assets 20,789,697 18,697,114
Current assets:
Cash at bank (note 14) 19 138,074 193,957
Debtors (note 15) 20 195,024 188,456
Total current assets 333,098 382,413
Current liabilities:
Creditors - amounts falling due within one year (note 16) 20 (100,716) (82,631)
Total assets less current liabilities £ 21,022,079 £18,996,896
The funds of the charity:
Share capital 1 1
Unrestricted funds £21,022,078 18,996,895
£21,022,079 £18,996,896 £21,022,079 £18,996,896

The financial statements were approved and authorised for issue by the Trustees and were signed on their behalf by:

…………… …………………………… Chelsea McLain Date Trustee

The notes on page 13 to 20 form part of these financial statements

Page 12

THE MCLAIN FOUNDATION LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
£ £
Cash flows from operating activities
Net movement in funds for the year 10 2,025,183 6,191,487
Adjustments for:
Income from investments and deposits (308,098) (197,052)
Net loss/(gain) on investment assets 262,372 (1,513,684)
(Increase)/decrease in debtors (6,568) (188,455)
Increase in creditors 18,085 29,672
Loss on foreign currency 16,387 1,949
Net cash provided by operating activities 2,007,361 4,323,917
Cash flows from investing activities
Income from investments 298,871 197,467
Deposit interest 9,227 (415)
Payments to acquire investments (3,973,419) (9,021,830)
Receipts from sales of investments 1,603,182 2,334,972
Net cash (used in) by investing activities (2,062,139) (6,489,806)
Net change in cash and cash equivalents for the year (54,778) (2,165,889)
Cash and cash equivalents at 1 January 2022 240,275 2,408,113
Loss on foreign currency (16,387) (1,949)
Cash and cash equivalents at 31 December 2022 £ 169,110 £ 240,275
Cash and cash equivalents consist of:
Cash held with investment managers (note 7) 17 31,036 46,318
Cash held at bank (note 14) 19 138,074 193,957
£ 169,110 £ 240,275

The notes on page 13 to 20 form part of these financial statements

Page 13

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

1. ACCOUNTING POLICIES

Basis of Preparation of Financial Statements

The McLain Foundation Limited (registered charity number 1139841 and company number 07463093) is based and administered in the United Kingdom, whose principal object is to support charitable purposes in whatever manner the Trustees, at their discretion, deem appropriate. The registered address is Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ.

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 United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and where relevant, the Charities Act 2022, the Companies Act 2006 and UK Generally Accepted Accounting Practice.

The Foundation constitutes a public benefit entity as defined by Charities SORP FRS 102.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

In applying the financial reporting framework, the Trustees may have to make 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. No significant estimates and judgements have been made.

The financial statements are presented in GBP which is the functional currency of the Foundation.

Fixed Asset Investments

Quoted investments are included at closing mid-market value at the Balance Sheet date. Realised gains and losses on investments are recognised on disposal on investments and any gain or loss on revaluation is taken to the Statement of Financial Activities (SOFA). The determination of any gains and losses is calculated by reference to the value of such assets at the beginning of the accounting period.

Mid-market values are provided by independent data feed rather than investment manager valuations.

Cash held for investment is included within the Fixed Assets Investments in accordance with the applicable statement of Recommended Practice.

Private equity investments are held at fair market value based on Partner’s Capital account analysis, or as returned in Schedule K-1 (Form 1065) to the Department of Treasury Internal Revenue Services, USA, with any revaluation accounted through the SOFA.

Page 14

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

1. ACCOUNTING POLICIES (continued)

Income Recognition

Investment income is derived from interest and dividends receivable from investments and is accounted for in the period in which the Foundation is entitled to receipt. Interest from bank accounts are included when receivable only.

All incoming resources, including donation income and investment income, are included in the SOFA when the Foundation is entitled to the income and the amount can be quantified with reasonable accuracy.

Gift Aid Tax Relief is recognised as a tax credit on donations and treated as income in the period in which the donations are made.

Resources Expended

All expenditure is included on an accruals basis and is recognised when there is a legal or constructive obligation committing the Trustees to the expenditure.

Charitable activities comprise grants and donations made and governance costs incurred during the year and are expended through the SOFA when the offer is conveyed to the recipient and all offer conditions are met.

Governance costs relate to the general running of the Foundation, as opposed to the management functions inherent in generating funds.

Cost of raising funds relate to the costs incurred by the Charity in managing its investments.

Status of Funds

The entire resources of the fund are unrestricted and the Trustees have complete discretion for their use in pursuance of its objectives.

Financial instruments

The Foundation only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are recognised at transaction value, except where settlement is delayed, in which case the transaction is recognised at the present value of the settlement amount.

Debtors and creditors receivable/payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised as expenditure.

Cash and cash equivalents

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the entity's cash management. Also included is cash held under management by the investment broker.

Provisions

Provisions are recognised when the Foundation has an obligation at the Balance Sheet date as a result of a past event, it is probable that an outflow of economic benefit will be required in settlement and the amount can be reliably estimated.

Page 15

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Foreign Currency

Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the Balance Sheet date. Transactions denominated in foreign currencies are converted at the rate of exchange ruling at the date of the transaction. All translation differences are taken to the Statement of Financial Activities as they arise.

Taxation

The Foundation is not subject to any taxes on its charitable activities. Irrecoverable VAT is charged to the SOFA against the category of resources expended for which it was incurred.

Going Concern

The financial statements have been prepared on a going concern basis as the Trustees believe that no material uncertainties exist. The Trustees have considered the level of funds held and the expected level of income and expenditure for twelve months from the date of signing of these financial statements. The forecast income and reserves are sufficient to cover all of the budgeted expenditure to be able to continue as a going concern.

The ongoing conflict in Ukraine and the resulting high energy costs and other cost inflating factors have affected the global economy. Having considered the contingency plans in place and having reviewed updated cashflow forecasts, the Trustees consider the adoption of the going concern basis in preparing these financial statements continues to be appropriate.

Page 2022 2021
2. DONATION INCOME £ £
Donations received 2,530,093 4,503,820
Gift Aid Tax Relief 632,730 1,125,955
10 £ 3,162,823 £ 5,629,775
3. INVESTMENT INCOME
UK and overseas securities income 298,871 197,467
Deposit interest 9,227 (415)
10 £ 308,098 £ 197,052

Page 16

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
4. CHARITABLE ACTIVITIES £ £
UK Grants Awarded:
Donmar Warehouse (Reg. Charity No. 284262) (Reg. Charity No. 284262) 60,000 100,000
Felix Project (Reg. Charity No. 1168183) (Reg. Charity No. 1168183) 45,000 30,000
Barnardo’s (Reg. Charity No. 216250) (Reg. Charity No. 216250) 10,000 25,000
West London Zone (Reg. Charity No. 1160947) (Reg. Charity No. 1160947) 10,000 20,000
V&A – Museum of Childhood (Reg. Charity No. 1144508) (Reg. Charity No. 1144508) 10,000 -
Harrow Club (Reg. Charity No. 1054757) (Reg. Charity No. 1054757) 5,000 -
Royal Opera House (Reg. Charity No. 211775) (Reg. Charity No. 211775) 1,350 5,250
Body & Soul (Reg. Charity No. 1060062) (Reg. Charity No. 1060062) - 10,000
Doctors in Distress (Reg. Charity No. 1184953) (Reg. Charity No. 1184953) - 2,500
Power 2 (Reg. Charity No. 1099782) (Reg. Charity No. 1099782) - 1,420
Women for Women/Challenge Match (Reg. Charity No. 1115109) (Reg. Charity No. 1115109) - 1,000
141,350 195,170
US Grants Awarded:
Princeton University ($1,000,000)(2021: $1,000,000) 831,601 753,636
Smithsonian Museum ($20,000)(2021: $1,000) 16,632 755
Liger Charitable Foundation ($20,000) 16,205 -
Middle East Children’s Institute ($10,000)(2021: $10,000) (2021: $10,000) 8,316 7,400
Jumble Bay ($10,000)(2021: $7,500) 8,015 5,324
Duke University Fund_($75,000)_ - 56,378
Planned Parenthood_($5,000)_ - 3,616
880,769 827,109
Total grants awarded £ 1,022,119 £ 1,022,279
Governance Costs
Administration fees 24,925 22,680
Accountancy fees 15,237 17,583
Audit fees 9,000 5,000
Financial advisors’ fees 15,020 2,294
Legal fees 6,500 2,234
Tax filing fees - 355
70,682 50,146
Total Charitable Activities 10 £ 1,092,801 £ 1,072,425
5. COST OF RAISING FUNDS
Investment management and admin fees 69,890 65,912
Internal Revenue Service (note 6) 17 4,074 8,482
Bank charges 214 256
10 £ 74,178 £ 74,650

Page 17

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
6. TAXATION £ £
Internal Revenue Service (note 5) 16 £ 4,074 £ 8,482
7. FIXED ASSET INVESTMENTS
Quoted Investments and Cash under management
Investments at market value at 1 January 2022 16,394,283 9,093,443
Additions at cost 1,748,765 8,193,246
Disposals at carrying value (1,603,181) (2,334,972)
16,539,867 14,951,717
Realised (loss)/gain on disposals (108,890) 22,782
Unrealised (loss)/gain on revaluation (688,394) 1,419,784
Net (loss)/gain on Investment Assets 19 (797,284) 1,442,566
Market value at 31 December 2022 15,742,583 16,394,283
Cash 12 31,036 46,318
Total Value at 31 December 2022 19 £ 15,773,619 £ 16,440,601
Historic costs as at 31 December 2022 £ 12,888,137 £ 13,170,414
8. RIVERHAWK FUNDING II LLC £ £
Investment value at 1 January 2022 - 549,410
Unrealised loss on currency translation - -
Transfer out - (549,410)
Net asset value at 31 December 2022 £ - £ -

During the prior year ended 31 December 2021 the Foundation’s commitment was converted from Riverhawk Funding II LLC to Riverhawk Funding III LLC (see Note 9 below).

Page 18

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
9. RIVERHAWK FUNDING III LLC £ £
Investment value at 1 January 2022 555,021 -
Transfer in - 549,410
Additions 626,545 -
Unrealised gain on currency translation 19 113,290 5,611
Net asset value at 31 December 2022 19 £ 1,294,856 £ 555,021 £ 555,021

The Foundation has committed $1,450,000. Additionally $92,729 of income has been capitalised. There are no outstanding capital commitments.

Four of the Trustees, Carina Mclain, Chloe McLain, Cameron McLain and Chelsea McLain, are also participants in the LLC.

10. HILP-C INVESTCO LLC £ £
Investment value at 1 January 2022 592,517 554,543
Additions 25,822 -
Unrealised gain on revaluation 19 113,539 37,974
Net asset value at 31 December 2022 19 £ 731,878 £ 592,517

The Foundation has committed a total of $750,000, of which $685,686 has been drawn down. The outstanding commitment is $64,314.

Two of the Trustees, Cameron McLain and Chelsea McLain, are also limited partners in the LLC.

11. PACIFIC HOTEL FLORIDA LLC £ £
Investment value at 1 January 2022 252,561 252,858
Unrealised gain/(loss) on revaluation 19 29,934 (297)
Net asset value at 31 December 2022 19 £ 282,495 £ 252,561

The Foundation has committed a total of $585,000, all of which has been drawn down.

Three of the Trustees, Cameron McLain, Chelsea McLain and Carina McLain, are also shareholders in the LLC.

Page 19

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
12. CVC Capital Partners VIII Associates L.P. £ £
Investment value at 1 January 2022 856,414 -
Additions at cost 1,572,287 828,584
Unrealised gain on revaluation 19 278,149 27,830
Net asset value at 31 December 2022 19 £ 2,706,850 £ 856,414

The Foundation has committed a total of €5,000,000, of which €2,799,963 has been drawn. The outstanding commitment is €2,200,037. No provision is made for this commitment.

Bruce Hardy McLain, a Trustee, is the co-founder of CVC Capital Partners which manages the investment. Two of the Trustees, Carina McLain and Chelsea McLain are limited partners of the investment.

13. INVESTMENT SUMMARY

Market Value
Quoted Investments and cash under management 17 15,773,619 16,440,601
Riverhawk Funding III LLC 18 1,294,856 555,021
HILP-C Investco LLC 18 731,878 592,517
Pacific Hotel Florida LLC 19 282,494 252,561
CVC Capital Partners VIII Associates L.P. 2,706,850 856,414
11 £20,789,697 £18,697,114
Gains
(Loss)/gain on quoted investments (note 7) 17 (797,284) 1,442,566
Unrealised gain on HILP-C Investco LLC (note 10) 18 113,539 37,974
Unrealised gain on CVC Capital Partners VIII (note 12) 19 278,149 27,830
Unrealised gain on Riverhawk Funding III LLC (note 9) 18 113,290 5,611
Unrealised gain/(loss) on Pacific Hotel Florida LLC (note 11) 18 29,934 (297)
10 £ (262,372) £ 1,513,684
14. CASH AT BANK
Barclays International Business Reserve Account USD ($13,899) 11,533 136,987
Barclays International Business Reserve Account GBP 86,276 45,967
Barclays International Reserve Account ($14,866) 12,336 10,970
Barclays MFL Account 27,929 33
11/12 £ 138,074 £ 193,957

Page 20

THE MCLAIN FOUNDATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page 2022 2021
15. DEBTORS £ £
Gift aid receivable 195,023 188,455
Amount owed by parent undertaking 1 1
11 £ 195,024 £ 188,456
16. CREDITORS - amounts falling due within one year
Unfunded foreign currency trading commitments 35,368 -
Administration fees 24,926 22,680
Financial advisors’ fees 15,020 13,283
Investment management fees 9,802 10,175
Audit fees 9,000 9,800
Accountancy fees 6,600 19,293
Grant commitments - 7,400
11 £ 100,716 £ 82,631
17. FINANCIAL INSTRUMENTS
Financial assets measured at fair value (a) 20,927,771 18,891,071
Financial assets measured at amortised cost (b) 195,024 188,456
Financial liabilities measured at amortised cost (c) 100,716 82,631

a) Financial assets measured at fair value through SOFA consist of the fixed asset quoted investments, private equity investments at fair value and cash under management and in hand.

18. RELATED PARTY TRANSACTIONS

One of the trustees made donations to the Foundation during the year which totalled £2,530,300 (2021: £4,503,820) on which Gift Aid Tax relief of £632,523 has been claimed ( 2021: £1,125,955 ).

£24,926 was charged by 8 Strands Ltd in respect of administration costs incurred on behalf of the Foundation ( 2021: £ 22,680). The balance remains outstanding at year end ( 2021: £nil ). 8 Strands Ltd is owned and controlled by a Trustee of the Foundation with another as a Director.

No Trustee received any remuneration during the year to 31 December 2022.

19. ULTIMATE CONTROLLING PARTY

The immediate parent undertaking is The McLain Foundation (US), formerly The McLain 8 Strands Foundation (US), a Delaware Corporation not for profit and without capital stock.

The Trustees consider that the Foundation is jointly controlled by the Trustees and that there is no ultimate controlling party.