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## **About Nesta**
We are Nesta. The UK’s innovation agency for social good. We confront challenges that affect millions of people, from inequality and ill-health to the climate crisis.
We believe that innovation offers more potential now than ever before. We see opportunities to mobilise citizens and influence behaviour. Private and public capital that can be used more creatively. A wealth of data to mine.
And so we draw on these rich resources by bringing together diverse teams. Data scientists, designers and behavioural scientists. Practitioners, academics, entrepreneurs and people with lived experience.
Together, we design, test and scale new solutions to society’s biggest problems. We partner with frontline organisations, build new businesses and work to change whole systems. Harnessing the rigour of science and the creativity of design, we work relentlessly to put new ideas to the test.
We’ll keep going until we change millions of lives, for the better.
Find out more at: www.nesta.org.uk
Layout: Green-Doe Graphic Design Ltd.
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## Annual report and accounts
## **For the year ended 31 March 2023**
||**Trustees**|**4**|
|---|---|---|
|**1.**|**Foreword: Ed Richards and Ravi Gurumurthy**|**5**|
|**2.**|**Strategic overview**|**7**|
|**3.**|**Financial review**|**13**|
|**4.**|**Objects**|**18**|
|**5.**|**Governance and management**|**19**|
|**6.**|**Independent Auditor’s Report**|**27**|
|**7.**|**Financial statements**|**30**|
|**8.**|**Reference and administrative details**|**65**|
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## Trustees
**Ed Richards Nesta’s Chair**
Managing Partner at Flint
## **Christina McComb OBE Trustee**
Senior Independent Director, Big Society Capital and Non Executive Director, Seraphim Space Investment Trust
**Ian Gomes**
**Trustee**
Board Advisor and Director to a portfolio of companies after a career with KPMG
**Liz Ditchburn Trustee**
Public sector leader and a senior policymaker
**Judy Gibbons**
**Nesta’s Deputy Chair**
Chairman of Wonderbly Books, Non-executive Director of Capri Holdings
**Heider Ridha Trustee**
Operating Partner of TDR Capital
**Catherine Brien**
**Trustee**
Partner and Managing Director at AlixPartners
**Seun Akindele**
**Trustee**
Head of Data and Innovation at Campaign Against Living Miserably (CALM)
**Professor Anthony Lilley OBE Trustee**
Director of Scenario Two Ltd
**Sarah Hunter Trustee**
Technology and Policy Expert and Non Executive Director at ARIA, the Advanced Research and Invention Agency
**Jeremy King Trustee**
CEO and Founder at Attest
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Foreword
## 1. Foreword: Ed Richards and Ravi Gurumurthy
**In 2021, Nesta set out on a new strategy focused on achieving three missions; a healthy life, a fairer start and a sustainable future. Each has a moonshot goal – halving obesity, eliminating the outcome gap between children growing up in disadvantage and the national average; and decarbonising homes.**
Our approach has focused on playing three roles. First, as an **innovation partner** , we’ve been designing and testing solutions with retailers, energy companies and other frontline organisations. So instead of embarking on policy frameworks and worrying about implementation, we’ve been starting with the practitioners. Second, as a **venture builder** , we have been building new ventures from scratch by generating new ideas for products and business models, recruiting founders and supporting their growth, as well as investing in early stage companies. Third, as a **system shaper** , we’ve been influencing the policies and institutional environments that guide innovation in these areas.
are clear: scour the field for ideas and identify ‘positive deviants’; test them in real-world settings to build evidence; make the consumer journey as simple and easy as possible and build a big coalition of partners to drive change, from consumer organisations and government to energy companies.
Our venture-building work has rapidly grown this year. Nesta Impacts Investments awarded over £4 million of financing to five new mission-aligned enterprises, and Mission Studio (a partnership between Nesta and Founders Factory) deployed around £1 million to spin out a number of new tech start-ups, including heat pump installation software company Carno and Freebird Club, a social travel and homestay community for over 50s.
Our first major success has been an intriguing one. Innovation is often associated with novel technologies, but small tweaks in human behaviour when done at scale can have dramatic effects. The Money Saving Boiler Challenge saw an estimated 3 million households turn down their boiler temperature, reducing carbon emissions by around 500,000 tonnes and saving households nearly £300M (as well as a further £157m for taxpayers by reducing spending on the Energy Price Guarantee). The lessons from the Challenge
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Foreword
This year we have placed particular emphasis on our system-shaper role, translating our emerging research and insights into policy as a key route to achieving impact. Bringing together expertise from Nesta and Behavioural Insight Team (BIT), we established a Rapid Insights Team to provide timely, evidence-based advice to UK policymakers. We created the experimental Minister for the Future, an initiative that brought together world-leading academics, scientists, campaigners and business leaders to pitch new ideas for how to tackle big social challenges, looking beyond election cycles to the long term. Taking our own advice, we established the UK 2040 Options project to bring fresh angles and insights to the defining long-term policy choices and challenges facing the UK.
This review also reflects the work of the Behavioural Insights Team (BIT), acquired by Nesta in 2021. During this second year of partnership, more and more work across the two organisations has drawn on our shared networks, skills and capabilities. Current joint activity includes the SALIENT Food Trials, a consortium designing and evaluating interventions to promote healthy eating and improve food’s environmental impact. We are also working together to explore how to reformulate food products, redesign supermarket promotions and improve the choice architecture of online takeaway platforms. Our organisations are also collaborating with the Development Bank of Wales to understand consumer attitudes towards home eco-upgrades and the financial products and services that could incentivise them.
The global span of the BIT’s work was one of the key benefits of the bringing together of our two organisations and this year has seen further examples of their international success. Highlights across the team include BIT’s work with UNICEF, delivering large trials in seven countries on increasing the uptake of COVID-19, HPV and MMR vaccinations, working with Stanford University to deliver deliberative democracy initiatives for Meta’s global user base and partnering with Unilever to run what is –
to our knowledge – the largest ever online randomised-controlled trial on the effects of social media messaging, involving over 6,000 TikTok or Instagram users. BIT also worked on encouraging commuters to switch from cars to public transport in Australia, reducing consumers’ vulnerability to online fraud in France, and reducing hotel food waste in the UAE.
In the year ahead, we’ll look to accelerate our rate of progress, redoubling our efforts to achieve positive social change. Among many other things, we’ll be bringing our expertise and capabilities to exploring the impact of family income on child development, developing the first ever tool to compare the impact of different obesity interventions, working with global food businesses to design and test a series of trials across the food sector, trialling a universal free school meal month in Wales, encouraging householders to consider sustainable heating through the Visit A Heat Pump scheme, and spinning out further tech ventures through Mission Studio. BIT will continue to work closely with partners around the world to deliver applied behavioural science and research programmes to drive positive change. Highlights for the coming year include expanding operations in Latin America, with plans to open a new operation in Colombia next year.
We will stay focused on our vision of improving the lives of millions of people by 2030. We hope our commitment to achieving practical change will ensure that we continue to grow as a vital and innovative force in the public realm, making a lasting contribution to building a future where people and the planet can thrive.
**Ed Richards, Ravi Gurumurthy,** Chair of Trustees Nesta Chief Executive
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Strategic overview
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## 2. Strategic overview
**We are now two years into our 10-year mission-driven strategy, which focuses all of our activity towards addressing three major societal challenges of a fairer start, a healthier life and a sustainable future.**
The way we deliver our three missions is through three main roles. We work as an innovation partner, working with a range of frontline organisations; as a venture builder, investing in early-stage ventures and creating new ones, and as a system shaper, ensuring that the funding, policies and institutions within our mission areas are conducive to innovation. To ensure we use intelligence about the future and new technologies to change
practice in the here-and-now, we also work through a Discovery Hub, which systematically scans for emerging trends, technologies and interventions, embedding strategic foresight at the heart of our organisation.
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Strategic overview
## **A fairer start**
Our fairer start goal is to eliminate the outcome gap between those born into deprivation and their peers by 2030. We will do this by improving the support for families of disadvantaged children – through reducing pressure on them and by supporting them to provide the best home learning environments. We also work to shape the broader context of systems and services that have an impact on reducing the achievement gap between children from poor backgrounds and their more affluent peers.
For the first three years of our strategy, we are targeting five key pathways for impact, split across two key areas of focus:
- supporting families to optimise homelearning environments: (optimising parent-child interactions, early detection and signposting for support and income support for families)
- supporting children and families via the wider system (enabling better use of data and improving measurement; and advocating for evidence-based policy).
Many of our projects this year have focused on childcare affordability – as part of our evidence-based policy work – and the scalability of reading programmes to help optimise parent-child interactions. In September 2022, we ran the biggest poll of parents since the pandemic, which was covered by the BBC and made the case
for increased support for parents across multiple fronts. In March 2023, our novel work on childcare affordability made the front page of _The Guardian_ . It highlighted how the ratio between childcare costs and wages varies across England and how much more expensive the cost of childcare is compared to other OECD countries. We also started identifying routes to scale via the Playtime with Books service, a digital book-sharing programme that has been shown to improve parenting behaviour and child outcomes in language and communication. Finally, our Discovery Hub mapped emerging digital technologies and studied venture capital trends in products relating to parenting and child development, assessing their potential applications, benefits and risks.
Not all of our work progressed as we had planned, of course. For example, we worked with Thrive at Five to jointly test an approach based on the idea of an inclusive and whole-community network of parents. We recruited and trained a first cohort of volunteer community champions to run a series of activities for other parents over the Summer of 2022 and then assess what made for successful co-creation. While the pilot provided useful lessons for future similar initiatives and the value of co-creation, the experience also revealed some of the challenges inherent in scaling these types of approaches.
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Strategic overview
## **A healthy life**
Our healthy life goal is that, by 2030, the UK will have halved the prevalence of obesity across the population from the rate in 2020. We will do this by focusing on adapting the food environment, following evidence that systemic or structural approaches are more effective and equitable than focusing on individual responsibility or agency.
For the first three years of our strategy, we are targeting five key aspects of the food environment:
**1.** reducing the amount of calories in food and drink
**2.** reducing unhealthy food and drink promotion
**3.** improving access to healthy food and drink
**4.** improving evidence on diets
**5.** shaping attitudes of decision makers.
This year, our focus has been on reducing energy content of food and drink through our reformulation research, and reducing unhealthy food and drink promotion by leading trials on food delivery apps.
Our reformulation research, published in January 2023, found that removing around 216 calories from the daily intake of people who are overweight or obese would set England on a path to halve obesity by 2030. The analysis found that we could make meaningful steps towards the mission goal using measures such as reformulation. The story ran exclusively in the news and opinion pages of _The Times_ . Our
takeaway research found various ways that delivery platforms could change their interface which could help people to make healthier choices.
Using novel methodology, our Discovery Hub analysed the impact of food technology in creating healthier food environments. Presented as Innovation Sweet Spots, the resulting report was shared extensively by key sector organisations.
This year, Nesta Impact Investments deployed two new ventures aligned to the healthy life mission: Habitual Health – a digital-first programme to reverse Type 2 diabetes – and WeWalk – manufacturers of a smart white cane to improve mobility and independence of visually impaired people. Mission Studio also spun out a new healthy life venture; FreeBird Club is a peer-to-peer social travel and homestay club for the over 50s aimed at creating social connections and tackling loneliness.
We learned a lot this year about how best to promote a view among opinion formers on obesity that focuses away from individual responsibility towards the role of the food environment. For example, we led a partnership with games technology industry leaders to develop a tool – The Nesta Playbox – to help simplify and communicate the potential impact of different policies on a local food environment. While it was valuable in testing an innovative approach to engage policymakers on a contentious issue, it ultimately wasn’t able to drive policy change at the scale we needed.
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Strategic overview
## **A sustainable future**
Our sustainable future mission goal is to reduce UK household emissions by 20 million tonnes of carbon dioxide per year by 2030. We are focussing on how to speed up adoption of heat pumps, as well as looking at opportunities to increase productivity in the transition to a netzero economy.
For the first three years of our strategy, we are targeting five areas of focus, split between heat pump adoption and efficiency of the existing heating systems:
**1.** making heat pumps more affordable
**2.** increasing the appeal of heat pumps
**3.** increasing skills and capacity in the heat pump supply sector
**4.** helping households use their heating systems more efficiently
**5.** enabling and incentivising households to use electricity flexible.
Highlights of the year include the October 2022 launch of the Money Saving Boiler Challenge, aligned to our work on helping households use their existing heating systems more efficiently. We launched a national consumer-facing campaign to encourage people to turn down their boiler flow temperature. We estimate that approximately ~3.1m households turned down their boiler over the course of the campaign, saving around 500,000 tonnes in CO2, nearly £300m for households and £157m for HM Treasury (through reduced spending on the Energy Price Guarantee). Our research and modelling on reducing heat pump costs, growing the heat pump workforce and capturing productivity gains from the net-
zero transition have also been cited widely in the press and quoted in influential policy documents, such as Chris Skidmore MP's independent review of net zero.
When it comes to green upgrades to homes, for many homeowners, affordability is a barrier. In partnership with the Development Bank of Wales, we conducted a randomised control trial involving 8,000 homeowners across the UK to explore some possible solutions to the financing challenges to help encourage and support people to make green home improvements. We shared our findings with the Welsh Government to demonstrate the essential role it will play in delivering support such as advice and quality assurance, to complement the finance product.
Nesta Impact Investments deployed three new ventures aligned to our sustainable future mission: Mixergy, which makes energy-efficient smart hot water tanks; Naked Energy, which develops solar thermal technology and AirEx, which designs and manufactures the UK’s first smart air brick technology to improve energy efficiency. Our Mission Studio spun out a new venture, Carno, which offers process automation for heat pump installers, saving 1-2 days per installation.
We have run into some roadblocks in researching how small businesses could adopt net zero measures to drive decarbonisation while also improving their productivity. We found potential measures had limited alignment with our mission of decarbonisation, and there were fewer potential routes to impact than we might have anticipated following the rapid evidence review.
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Strategic overview
## **Activities in Scotland**
The reporting period in Scotland saw a significant development of our healthy life mission, including building strong links with the Scottish Government, Public Health Scotland (PHS), Food Standards Scotland and others. We worked with the Behavioural Insights Team to research calorie labelling in takeaway apps in response to proposals to introduce labelling in Scotland. The research was subsequently quoted in the Scottish Parliament. We also began research in partnership with Public Health Scotland on the challenges out-ofhome food businesses face when improving the healthiness of their menus. We ran the second phase of the Virtual Healthy Neighbourhoods project, creating a digital twin of Glasgow that models the impact of policies on population
## **BIT**
This year, BIT launched, ran and delivered projects delivering social-impact outcomes across six continents. As well as its established centres in the UK, North America and Australia, BIT expanded its teams and behavioural science expertise in France and Latin America. Landmark BIT publications included _A Manifesto for Applying Behavioral Science,_ a guide for the future of the field over the next decade, and How to Build a Net Zero Society. Projects and achievements in the UK this year included publishing detailed evidence of what works to reduce gambling harms and launching BIT’s new Ending Youth Violence Lab in partnership with the Youth Endowment Fund and Stuart Roden
In the US and Canada, BIT partnered with UNICEF for large trials in seven countries on increasing the uptake of COVID-19, HPV and
BMI. The team also hosted a showcase event in Edinburgh attended by key stakeholders, including an address by the Public Health Minister. Our growing profile led the team to be commissioned by the Health Foundation to support its inquiry into health inequalities in Scotland. The sustainable future mission published research modelling potential heat pump market growth in Scotland and the likely shape of the installation industry. Our profile was further developed with strong coverage across Scottish media for polling on the public’s perception of calories in popular foods, polling of parents centred on the cost of living pressures for a fairer start and launching the Money Saving Boiler Challenge on BBC Scotland news.
MMR vaccinations, delivered deliberative democracy initiatives for Meta’s global user base with partners including other BIT teams and Stanford University and partnered with Unilever to run what is to our knowledge the largest online randomised-controlled trial with over 6,000 TikTok or Instagram users on the effects of social media messaging.
Around the world, projects included encouraging commuters to switch from cars to public transport in Australia, reducing consumers’ vulnerability to online fraud in France, reducing hotel food waste in the UAE, and the culmination of a five-year partnership with the Global Innovation Fund in Bangladesh, Guatemala and Indonesia across a variety of policy challenges including tax compliance, birth registration and school enrollment to improve the lives of millions of people.
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Strategic overview
## **Challenge Works – A Nesta Enterprise**
For more than a decade, Challenge Works has established itself as a global leader in the design and delivery of high-impact challenge prizes that incentivise cutting-edge innovation for social good. In the last 10 years, the team has run 87 prizes, distributed £156 million in funding and engaged with over 13,000 innovators. Prizes launched this year include the Mombasa Plastics Prize for young entrepreneurs in Kenya to tackle marine plastic waste. Three winning teams were awarded KSh 7.2 million ($60,000) which prevented 14,565kg of plastic waste from entering the ocean. Nine winners of the Afri-Plastics Challenge were awarded a total of £4.1m to innovate around plastic waste management.
We also launched the £3.42m Longitude Prize on Dementia for breakthrough technology that learns from a person living with dementia to enable longer periods of independent living. 24 international teams have now received a total of £1.9m (£80,000 each) to support the development of their solutions.
Also this year were the £25m Water Breakthrough Challenge, tackling issues such as reducing waste, preventing pollution and reducing carbon emissions; the Water Discovery Challenge, for promising innovations in the water sector, and a programme with Toyota Mobility Foundation and World Resources Institute to launch a $9m challenge enabling safe, inclusive and sustainable mobility solutions fit for the future.
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Financial review
## 3. Financial review
The Group is comprised of Nesta (the main operating charity through which all charitable activity is undertaken), the Nesta Trust (a charitable trust which holds all the investment assets invested to fund the charitable activities of Nesta in advancing the objects of the Trust), seven companies, four limited liability partnerships and one entity registered in the United States.
A number of subsidiaries have been set up to manage Nesta’s investing and fund management related activities. It enables Nesta to manage and invest funds on behalf of its investment partners in compliance with the Financial Conduct Authority’s (FCA) requirements. This structure is made up of Nesta GP Limited, Nesta GP2 Limited, Nesta PRI Limited, Cultural Impact Development Loans Limited, Nesta Partners Limited, Nesta Investment Management LLP, NII2 Special Partner LLP, Nesta Arts Impact LLP, Nesta Arts and Culture Impact LLP and Nesta US Inc. The Group also includes Nesta Enterprises Limited, incorporated as a trading subsidiary for non-primary purpose trading and Behavioural Insights Limited ('BIT'), having become a 100% owned subsidiary on 10 December 2021 (previously Nesta owned 30% and held as a joint venture). The results of the Group consolidate all subsidiary undertakings as well as the Trust and the joint venture in Mission Studio (FFN JV Limited).
Nesta Trust provided funding to Nesta of £27.1 million (2022: £39.0 million) during the year of which £20 million (2022: £36.0 million) was applied to charitable operating activities and £7.1 million (2022: £3.0 million) committed in relation to the Impact Investment Fund and other programmerelated investments.
Funding made available by Nesta Trust does not constitute a commitment until a drawdown is made. The assets of the Trust are held as an expendable endowment and the Trust is therefore able to fund charitable activity beyond the returns it generates during the year.
The categories defined by the trustees for the purposes of organisational management are – a fairer start, a healthy life, a sustainable future, central programmes and devolved nations, committed programme delivery, enterprises, investments and practices.
Total group income for the year was £46.1 million (2022: £21.6 million). Charitable income of £9.4 million (2022: £4.3 million) was recognised in addition to the £9.5 million (2022: £7.3 million) of investment income and £27.2 million (2022: £10.0 million) of other income. Charitable income is
predominantly in the form of partnership funding where Nesta’s expertise in programme design and project management is combined with the funding capacity of other typically larger organisations. Other income consists of rental income, trading income and fund management receipts. The large increase in other income is driven by BIT trading income, of which a full year was included to 31 March 2023 but only a portion of the year from 10 December 2021 was included for the previous year.
Total Group expenditure was £60.9 million (2022: £41.6 million) of which £34.9 million (2022: £33.2 million was spent on charitable activities, £25.1 million (2022: £7.5 million) on trading activities and £0.9 million (2022: £0.9 million) on managing endowment assets held by the Trust and impact investment funds held by Nesta. The increase in trading expenditure is in line with the increase in trading income, due to a full year of BIT results being included for this financial year. Grant expenditure commitments totalled £5.4 million (2022: £4.5 million) with recipients over £50,000 detailed in Note 7b.
Support costs of £14.1 million (2022: £12.2 million) relate to Communications and Corporate Services activities and are allocated to programme areas as shown in Note 7a.
Net gains on Investments for financial return decreased by £49.9m to a net loss of (£23.9 million) (2022: gain of £26.0m). This is due to losses being made in nearly all asset classes resulting from market conditions, with £11.5m specifically relating to property assets.
Total Group funds decreased by £39.3 million (2022: increased by £5.9 million) during the year. This resulted in Group funds of £471.7 million carried forward as at 31 March 2023 (31 March 2022: £511.0 million), of which £50.7 million (2022: £42.6 million) was unrestricted, £12.5 million (2022: £16.8 million) was restricted and £408.5 million (2022: £451.6 million) was in relation to the expendable endowment.
## **Going concern**
As Nesta is able to draw down cash from Nesta Trust as required within the approved funding envelope, the trustees have concluded that there is a reasonable expectation that the Group has adequate resources to continue activities for the foreseeable future and no material uncertainties have been identified in respect of going concern. They have therefore adopted the going concern basis in preparing the financial statements.
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Financial review
## **Trust investment review**
The assets of the Trust provide income and capital to be applied by Nesta as sole Trustee to further the objects of the Nesta Trust. The investment strategy balances the desire to maintain the real value of the endowment and its ability to generate the income which Nesta will require, while at the same time maximising total return to fund activities to advance the charitable objects of the Nesta Trust. The strategy aims to balance risk, return and capital preservation.
During the year ended 31 March 2023, the value of Trust investments and cash decreased by £42 million to £424 million (2022: £466 million) after annual transfers to Nesta to carry out the objectives of the Trust in line with the Trust Deed. A further breakdown of the £42 million decrease can be seen in the table below:
**----- Start of picture text -----**
Market value of Proportion of Market value of Proportion of
investment total endowment investment total endowment
assets assets assets assets
31 March 2023 31 March 2023 31 March 2022 31 March 2022
Asset class (Trust accounts only) £’000 % £’000 %
Current assets:
Cash 7,700 2 5,385 1
Fixed asset investments
Equities and private equity:
Global equities (quoted) 135,216 32 211,846 46
UK small cap (quoted) 32,351 8 37,413 8
Emerging markets (quoted) 26,592 6 28,393 6
Infrastructure equity (unquoted) 19,684 5 - -
Private equity funds (unquoted) 3,860 1 5,075 1
Fixed income and property:
Multi-asset credit (unquoted) 62,733 15 - -
Asset-backed securities (unquoted) 43,047 10 - -
Private debt (corporate) (unquoted) 2,872 1 - -
Private debt (infrastructure) (unquoted) 8,639 2 - -
Property 66,100 15 81,073 17
Fixed income (quoted) - - 40,367 9
Bonds (quoted) 23 - 39,244 8
Mixed motive investments (unquoted) 15,087 3 16,921 4
Total cash plus fixed asset investments 423,904 100 465,717 100
**----- End of picture text -----**
Actions taken during the year included the following:
## **Strategic review**
During the year, a new investment strategy was implemented, with a key strategic goal of producing a higher level of predictable cash flows. In practice, this has resulted in a reduced allocation to equities in favour of less liquid, but still high-returning, largely private market asset classes where a significant proportion of the return is derived from income such as infrastructure equity and debt, multi-asset credit and asset backed securities.
## **Fixed Asset Investment performance**
The allocation to Equities and Private Equity decreased to 52% (2022: 61%) with a corresponding increase to Fixed Income and Property to 43% (2022: 34%). This change is driven by a new investment strategic goal to invest more in asset classes that produce predictable cashflows. The long term strategy is to have an allocation of 51% towards Equities and Private Equity, a 48% allocation towards Fixed Income and Property, with the remaining 1% being held in Cash to fund day to day activities. It is not expected that the long term strategy will be met until all investment managers have fully drawn down committed funds which is likely to take a number of years.
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Financial review
The objective of the Trust’s investment strategy is to generate a total return sufficient to support the expenditure of Nesta (the Annual Draw) without the assets breaching the floor, and, to maximise the returns (net of fees) subject to meeting the Annual Draw requirement. During the year, Investment Income funded 46% of the annual draw (2022: 25%). Total return (Investment Income plus revaluation movements) was negative for the year due to volatile market conditions and so the Trust did not meet the objective set (2022: total return funded 94% of the annual draw). The Trustees continue to monitor the sustainability of the Trust.
## **Investment Fund Commitments**
During the year, new commitments of £76 million (2022: £nil) were made to investment managers of which £36 million was drawn down. Undrawn commitments of £48 million remain outstanding for investment funds as disclosed in Note 20 to these Financial Statements (2022: £3 million).
## **Maximising value from our self-managed early-stage venture portfolio**
investment strategy is to maximise the returns from the current portfolio but not to invest in any new earlystage companies or funds in the near future due to these investments being slow to generate income and being typically higher risk than other asset classes.
## **Costs of managing the assets**
Direct costs, reported by external fund managers, of the Trust’s investment assets totalled £0.78 million (2022: £0.75 million) across the Trust and include external fund manager fees and custodian fees. In addition, there are other indirect costs associated with fund management activities. Where fund manager fees are offset against the relevant fund’s value, these are grossed up and shown as fund manager fee expenditure, in the Statement of Financial Activities in accordance with normal practice, along with those fund manager fees that are invoiced and paid for in cash. The full cost of investment goes beyond the fees we are charged by managers and include, for example, transaction costs, advisory costs and staff costs. We estimate that the full costs were about £2 million (0.5%) of the average asset value over the year (2022: £2 million – 0.5%).
The early-stage venture portfolio includes equity investments in 7 (2022: 7) early-stage companies, and 2 (2022: 3) early-stage investment funds. The Trust’s
## **Investment policy**
The Nesta Trust was established by a Trust Deed dated
22 September 2011.
As the sole Trustee of the Trust, Nesta is responsible for the Trust’s investment policy. The investment strategy is delegated to the Trust Investment Committee which is responsible for strategic and tactical asset allocation, rebalancing, styles and weighting within asset classes, as well as monitoring manager, consultancy and custodial arrangements.
The Trustee holds the investment assets of the Trust without distinction between capital and income, applying them in furtherance of the Trust’s objects. These investment assets are held as an expendable endowment.
Trust assets are invested in accordance with the wide investment powers set out in the Trust Deed, which places specific conditions on the Trustee’s power to invest: “The Trustee must set the investment and spending policy for the Trust with a view to preventing the value of the Trust assets and any returns generated by the Trust assets falling below £260 million.”
The Trustee’s investment objective is to balance the current and future needs of the Trust by:
- producing a consistent and sustainable level of income to support the work of Nesta in advancing the charitable objects of the Trust
- ensuring sufficient liquidity to avoid the forced sale of Trust assets at distressed prices, while ensuring that the majority of the assets are invested in higher returning investment instruments
- maintaining if possible the value of investments in real terms
- delivering these objectives within acceptable levels of risk.
To meet these objectives the Trustee invests globally and maintains diversification across a range of asset classes to produce an appropriate balance between risk and return, believing that diversification limits the impact of any single risk.
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Financial review
## **Responsible investing**
Nesta believes that responsible investment can enhance long-term portfolio performance. The process of incorporating a more responsible approach to investment involves:
- some limited exclusion of stocks where Nesta objects on moral grounds to the activity of the company in question
- an explicit programme to monitor fund managers’ incorporation of environmental, social and governance (ESG) factors and their practice of active ownership
- adoption of the Hermes Equity Ownership Service for our index investments.
These policies have informed the Trustee’s actions, oversight and asset allocation decisions and have informed the Trust's policy on Responsible Investment and Corporate Governance. This policy remains under constant review with the last version being approved by the Board in October 2022. As far as the Trustee is aware, the only potential area where the Trust does not fully accord with its policy is in relation to historical private equity holdings which are being run down over time and have a value of £4 million (2022: £5 million).
## **Programme-related investments and grantmaking policy**
Nesta achieves its charitable objects, and the objects of the Nesta Trust, in several ways, which include providing investment, grant making, providing non-financial support and carrying out research. It also provides support in a range of different ways, depending on the nature and objectives of each programme.
In line with Charity Commission guidelines, programmerelated investments are made primarily to further the objects of the charity for public benefit and are managed in line with programme objectives. Consequently, they are, as permitted by _Accounting and Reporting by Charities: Statement of Recommended Practice (FRS 102) applicable in the UK and Republic of Ireland (effective 1 January 2019)_ , issued by the Charity Commission and included in the balance sheet at cost less any provision for impairment where there is no evidence for fair value.
There is no set allocation of the annual budget for overall grant expenditure. Rather, Nesta sets programme deliverables and determines the appropriate method of delivery within that programme’s budget. Nesta sets out specific entitlement criteria for each programme at its launch where grants are appropriate as a funding mechanism. These criteria vary from programme to programme and are made available on Nesta’s website. Applications are assessed against these criteria and awards are made taking into account the availability of funds, Nesta’s ability to deliver the objectives of the programme and the quality of applications. The period for which grants are awarded depends upon the programme but typically lasts between one and three years. Grants are monitored regularly and appropriate progress reports are required from recipients. A list of grants over £50,000 can be found on pages 43 and 44, and a comprehensive list of all grants made during the year can be found on the Nesta website.
## **Free reserves policy**
In accordance with the Trust Deed of the Nesta Trust, Nesta’s reserves policy is to provide sustainable funding to advance the charitable aims of the Nesta Trust whilst holding reserves at sufficient levels to maintain the underlying assets above a market value of £260 million.
On 31 March 2023 the reserves of the Group stood at £471.7 million (2022: £511.0 million). Nesta Trust provided funding to fulfil its charitable objects, through activities carried out by Nesta, totalling £20.0 million (2022: £18.8 million).
Nesta, as the parent charity, has no requirement to maintain its own reserves, provided that expenditure remains within the approved amount of drawdown from the Trust. The policy for drawdown was established in line with the Trust Deed and subject to the powers of the Protector of the Trust, and allows drawdowns at any time during the year as long as the approved drawdown total is not exceeded.
Cash received that is restricted in use of specific programme expenditure is held on Nesta’s own balance sheet.
This Reserves Policy will only be reviewed when there is a change in the funding relationship between the Trust and Nesta; such a change is currently not foreseeable.
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Financial review
## **Principal risks and uncertainties**
The trustees are responsible for the management of risks within the Nesta Group. These are considered both organisationally and by activity.
## **i. Organisational risk**
The monitoring and implementation of the risk management framework and consideration of organisational risk is delegated to the Audit & Risk Committee. The organisational risk register is presented at each Audit and Risk Committee meeting and is reviewed by the Board annually. The Executive Team considers both strategic and detailed operational risks on a by-monthly basis.
The key controls in place include:
- an established organisational and governance structure and lines of reporting
- detailed terms of reference for the Board and all Board committees
- comprehensive financial planning, budgeting, management reporting and monitoring
- formal written policies and hierarchical authorisation and approval levels
- internal audit services engagement with programmes selected for review which are informed by the risk register.
One of the Group’s main financial risks is the investment activity of Nesta Trust. Investment risk is managed with the support of our external investment advisors, through regular review of the Nesta Trust investment policy, management of the strategic asset allocation, regular performance reporting, diversification across a broad range of asset classes, investment managers and investment strategies, and ongoing manager reviews.
The majority of Nesta’s Trust investments are externally managed by investment managers in pooled fund vehicles.
## **ii. Activity risk**
Nesta’s mission is to bring bold ideas to life to change the world for good which requires experimentation and an element of risk-taking in its activities if it is to
succeed. Accordingly the risk appetite is for managed 'risk-taking' rather than simple 'risk aversion'. Recognising that some activities or projects may fail to a greater or lesser extent and that such failure can be an important source of learning.
Activity risks are reviewed and discussed in the same way as organisational risks. Trustees are satisfied that the major risks identified through risk management processes are being adequately managed, whilst recognising that any framework can provide reasonable but not absolute assurance. There were no material control weaknesses identified by trustees or management during the year.
The following organisational risks and uncertainties are considered the most significant:
- projects are too small in scale or are unable to scale quickly enough, inhibiting our ability to achieve demonstrable impact; the risk is mitigated by mapping our three year strategy against existing projects to understand any gaps to achieve the greatest impact
- workload is too widespread and teams are too stretched to appropriately support Nesta’s work on its missions; the risk is mitigated by effective project management
- poor investment returns due to changing external environments results in the endowment being unable to fund Nesta’s activities; the risk is mitigated by the oversight of the Trust Investment Committee and Nesta's investment advisors
- one or more projects, partners, or subsidiary activities attract public criticism which diminishes Nesta’s reputation and its ability to advance its objects; the risk is mitigated by oversight from the Nesta legal team with continued review of policies and regular training
- threat of a serious breach from a cyber attack; the risk is mitigated by antivirus/endpoint protection software, daily monitoring and bespoke training for critical staff.
## **Auditors**
Following an external tender exercise BDO LLP will step down after the approval of these accounts. RSM LLP will be appointed to undertake the audit for the year ended 31 March 2024.
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Objects
## 4. Objects
Nesta works to advance the following charitable aims for the public benefit:
**1.** To advance education, and in particular the study of innovation, by the promotion of research and the publication of the useful results thereof, in:
- science and technology
- the arts
- the efficiency of public services
- the voluntary sector and social enterprise
- relieves poverty
- relieves unemployment
- advances health
- advances environmental protection or improvement and sustainable development
- advances citizenship or community development through, or by encouraging and supporting, innovation.
Voluntary organisations are independent organisations which are established for purposes that add value to the community as a whole, or a significant section of the community and which are not permitted by their constitution to make a profit for private distribution. Voluntary organisations do not include local government or other statutory authorities.
- industry and commerce.
**2.** To advance:
- science and technology
- the arts
- the efficiency of public services;
- the voluntary sector
- industry and commerce and social enterprise which:
The voluntary sector means charities and voluntary organisations. Charities are organisations which are established for exclusively charitable purposes in accordance with the law of England and Wales.
Sustainable development means 'development that meets the needs of the present without compromising the ability of future generations to meet their own needs.'
**3.** To advance any other purpose which is recognised as exclusively charitable under the laws of England and Wales and Scotland.
## **Fundraising statement**
Section 162a of the Charities Act 2011 requires us to make a statement regarding fundraising activities. Nesta does not undertake any fundraising activities and does not use any professional fundraisers or 'commercial participators' or any third parties to solicit donations. We are therefore not subject
to any regulatory scheme or relevant codes of practice. We have not received any complaints in relation to fundraising activities, nor do we consider it necessary to design specific procedures to monitor such activities in the current year or in the prior year.
## **Public benefit statement**
The trustees confirm that, in exercising their powers and duties in relation to both Nesta and the Nesta Trust, they have had due regard to the Charity Commission’s statutory guidance on public benefit.
A copy of the Charity Commission’s guidance on public benefit is provided to each trustee. The Board considers how every proposal brought to it for approval will advance Nesta’s charitable objects for public benefit.
This report sets out some of the activities and achievements of Nesta in carrying out its charitable purposes, and the purposes of the Nesta Trust, for the public benefit over the year. Nesta confronts challenges that affect millions of people, from inequality and ill-health to the climate crisis believing that innovation offers more potential now than ever before. We
see opportunities to mobilise citizens and influence behaviour. Private and public capital that can be used more creatively. A wealth of data to mine and so we draw on these rich resources by bringing together diverse teams. Data scientists, designers and behavioural scientists. Practitioners, academics, entrepreneurs and people with lived experience.
Together, we design, test and scale new solutions to society’s biggest problems. We partner with frontline organisations, build new businesses and work to change whole systems. Harnessing the rigour of science and the creativity of design, we work relentlessly to put new ideas to the test.
The details of Nesta’s purposes and objectives, and its strategies and achievements in pursuing these purposes and objectives, are set out on pages 7 to 12.
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Governance and management
## 5. Governance and management
Nesta was established and registered as a charity in 2011 to act as successor body to the National Endowment for Science, Technology and the Arts ('NESTA'). NESTA was a non-departmental public body with a statutory remit to promote talent, creativity and innovation in science, technology and the arts, with an endowment from the National Lottery. All NESTA activities, staff, assets and liabilities were transferred on 1 April 2012 to Nesta (registered charity no. 1144091) and the Nesta Trust (registered charity no. 1144683). The Trust holds the expendable endowment and Nesta, its sole trustee, uses returns from the Trust to pursue the charitable objects of the Trust.
Nesta is a company limited by guarantee and a charity registered with the Charity Commission and the Office of the Scottish Charity Regulator. Its trustees are both directors and members of the company. For more information on the group structure and subsidiaries please see page 55.
Under company and charity law, the Board of Trustees retains overall responsibility for Nesta and its role as Trustee of the Nesta Trust. Trustees on the date this annual report is published are listed on page 65.
Ed Richards has been the Charity's Chair since 1 April 2022. The Board met seven times in the year with members of the Executive Team also present.
The Trust has a Protector appointed by the Secretary of State for Science, Innovation and Technology (formally Business, Energy & Industrial Strategy) with a fiduciary duty to ensure the integrity of administration of the Trust and the propriety of its procedures. James Sinclair Taylor, an experienced charity lawyer, was appointed as the first Protector of the Trust by the Secretary of State on 1 April 2012. His term came to an end on 31 March 2022. The process to recruit his replacement has been interrupted due to the relevant government minister changing and is still not concluded. In the interim, it has been agreed with the Secretary of State that James Sinclair Taylor shall be the governance adviser of the Trust with the same responsibilities and powers as the Protector.
Trustees receive no remuneration for acting as trustees and are appointed for an initial term of three years, renewable for another three years with Board approval. All new trustees receive a tailored induction and information about structure and governance, and their responsibilities as charity trustees, in accordance with the Charity Governance Code. The Board observes all seven principles of the Charity Governance Code and provides appropriate control, challenge and support to the Executive team.
The Board has adopted a conflicts of interest policy and processes for both staff and trustees to ensure that conflicts of interests are declared and managed appropriately, and maintains a Register of Interests. Trustees are reminded to declare relevant interests at the start of every Board and committee meeting.
The Board has appointed a Chief Executive to lead and manage Nesta by implementing the policy and strategy adopted by the trustees within the plan and budget approved by the Board. Approval for decisions up to certain financial thresholds have been delegated to the Chief Executive and other executive directors under a Scheme of Delegation. All decisions above this threshold must be approved by the Board or its committees. The Board has also reserved to itself certain important decisions, such as changes to the Articles, appointment of the Chief Executive, and approval of the long-term objectives and strategy.
Nesta's Executive team comprises the Chief Executive, plus the Group Chief Financial Officer, the Group Chief People Officer, the Group General Counsel and Company Secretary, the Chief Operating Officer, the Chief Programmes Officer, Chief Strategy Officer, Group Chief Practices Officer, Executive Director of Investments and the Group Executive Director of Communications. A full list is given on page 66.
The Board has established a number of committees to oversee aspects of Nesta's activities. Each of the Board committees have delegated authority in respect of certain functions and activities and have written terms of reference approved by the Board, and report to the Board at each Board meeting. A list of trustee members and the respective chairs for each of the Board committees is provided on page 65.
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Governance and management
Here is a list of the main Board committees:
## **Audit and Risk Committee**
which reviews management reporting and financial performance against budget, and recommends to the Board the annual budget; as well as reviewing audit and financial reporting, internal financial controls, risk management and compliance. Grant Thornton are engaged to provide internal audit services to assist the Committee to monitor the effectiveness of internal control arrangements. The Committee met four times during the year.
## **Trust Investment Committee**
whose key responsibilities are to draw up the policies and objectives governing the investment of Nesta Trust’s assets, to approve investments within ranges set by the Board, to oversee their implementation and to monitor financial performance of the Nesta Trust. The Committee met four times during the year.
## **Quarterly Investment Committee**
which manages the Trust's portfolio of interests in earlystage companies and funds transferred from NESTA, manages programme-related and mixed-motive investments, and oversees any other Nesta Investment. The Committee met four times during the year.
## **People Committee**
whose key responsibilities are reviewing and approving staff terms and conditions, and ensuring fair and appropriate remuneration and benefit policies. The Committee met four times during the year, and advised on the annual pay award which was negotiated with the Community Union and also determined the annual remuneration of the Executives. The Committee also manages the recruitment of new Trustees and oversees appointments to other committees.
## **Challenges Committee**
whose key responsibilities include regular monitoring and reviewing the performance and activities of Nesta Challenges, considering, advising, and scrutinising the scope, nature and impact of Nesta Challenges work and long-term objectives, and approval of all income and associated expenditure in Nesta Challenges above the level delegated by the Board. The Committee met once during the year. In July 2022, Nesta Challenges launched under a new brand and are now known as 'Challenge Works'.
## **Mission Committees**
in October 2022, the Board approved the introduction of a single Mission Committee to replace the three individual committees for each Mission. This is an advisory committee with no delegated authority from the Board. This Committee’s purpose is to provide advice and direction to the Missions and to actively participate in the shaping of initiatives and supporting staff to deliver the new Mission goals. The Committee met once during the year.
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Governance and management
## **Sustainability and carbon reporting**
Nesta is reporting energy and carbon emissions in compliance with The Companies (Director’s report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
||||||
|---|---|---|---|---|
|**Financial year**|April 2022 – March 2023|**Emissions (kgC02e)**
**and change**|**226.486**|10%|
|**Intensity metric**|Floor area (SqM)|**Emissions intensity**
**(kgC02e/SqM/yr)**|**39.50**|14%|
|**Reporting category**|**Year end**
**March 2023**|**Year end**
**March 2022**|**Change**|
|---|---|---|---|
|**Energy consumption used to calculate emissions (kWh)**|**1,120.407**|**967.975**|**16%**|
|Electricity|629.766|578.258|9%|
|Natural gas|490.641|389.717|26%|
|Emissions from combustion of gas (Scope 1) (kgCO2e)|89.866|79.751|13%|
|Emissions from purchased electricity (Scope 2) (kgCO2e)|136.620|126.439|8%|
|**Total gross kg CO2e emitted during the reporting period**|**226.486**|**206.190**|**10%**|
|**Intensity ratio: gross kgCO2e/SqM/yr**|**39.50**|**34.51**|**14%**|
|Emissions from purchased natural gas (Scope 1, market based) (kgCO2e)|89.866|79 751|13%|
|Emissions from purchased electricity (Scope 2, market based) (kgCO2e)|136.620|126.439|8%|
|Carbon offsets (kgCO2e)|-|-|-|
|Total annual net emissions (kgCO2e)|226.486|206.190|10%|
|Net intensity ratio (kgCO2e/SqM)|39.50|34.51|14%|
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Carbon emissions Emissions by source
250,000 4.00
3.50
200,000
3.00
150,000 2.50 40 [%]
kgCO2e 2.00 kgCO2e/
m2/m
100,000 1.50
60 [%]
1.00
50,000
0.50
0 0.00
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Electricity (kWh)
Previous FY kgCO2e Emissions Current FY kgCO2e Emissions
Previous FY Carbon Intensity Current FY Carbon Intensity Natural gas (kWh)
**----- End of picture text -----**
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Governance and management
## **Methodology and estimates**
Nesta complies with the Companies Act 2006 (Strategic Report and Director’s Report) Regulations 2013 and the Companies (Director’s Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 and the approach to reporting is based on the GHG Protocol Corporate Accounting and Reporting Standard in line with the guidance on SECR. The reporting period is for the financial year 1 April 2022 to 31 March 2023, reporting all material GHG emissions using 'Kilograms of CO2 equivalent' (kgCO2e) as the unit of measurement and reporting energy use in kWh. Included is the energy and emissions for the buildings operated and within the financial control boundary. The results are presented as Location based emissions and Market based emissions, where applicable. Location based reflect the average emissions intensity of grid supplies (using grid average emissions factors) and Market based reflects emissions from electricity and or gas where companies have opted to procure green energy or invested in renewable
generation. The methodology used to calculate total energy consumption was performed by implementing half hour data provided by the utility company serving the organization/asset. As Nesta does not occupy the whole building at 58 Victoria Embankment, consumption for areas outside of Nesta’s control has been deducted. This has been deduced through sub-meter readings. Emission levels increasing is in line with more people using the office. Energy and fuel consumption has been converted to carbon (kgCO2e) using DEFRA published conversion factors with new conversion tables using the most up to date conversion factors for each period and each fuel type. In this instance, grid electricity and natural gas conversion rates were used. The most appropriate intensity metric has been selected in line with the primary drivers of energy consumption, where possible. For this report Gross Internal Area (GIA SQM) has been selected as the most appropriate to achieve a benchmark, and calculated intensity based on kWh consumed per meter squared per year (kWh/SqM/yr).
## **The Charity Governance Code**
Nesta's Board has applied the principles set out in the Charity Governance Code (the 'Code'). In 2021 and in accordance with good practice, external specialist consultants undertook a full governance and board effectiveness review which concluded that Nesta has a "well functioning board that has led Nesta through significant
change". The recommendations in the report aimed at further improving and refining Nesta's governance have been implemented and, in addition, Nesta's governance structures are regularly reviewed internally to ensure they continue to be best practice.
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Governance and management
## **Section 172 statement**
## **Background**
As a company limited by guarantee, Nesta is required to report on how trustees have discharged their duty to promote the best interests of Nesta, while having regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. In doing so, regard (amongst other matters) must be given to:
- the likely long-term consequences of any decision;
- the interests of employees
- fostering relationships with key stakeholders
- the impact of operations on our communities and environment
## **Our stakeholders**
The Board recognises that Nesta’s relationship with its stakeholders is critical to its success. Our charitable objects, scale and impact are achieved in part through relationships and having a positive influence on public policy for public benefit.
The table below sets out our key stakeholder groups, the key considerations of each group and how we engage with them. By understanding our stakeholders, Board discussions consider the potential impact of our decisions on each stakeholder group and consider their needs and concerns.
- maintenance of our reputation for the highest standards of conduct
- the need to act fairly as between members of the company.
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Stakeholder group Key considerations How we engage
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|**Stakeholder group**|**Key considerations**|**How we engage**|
|---|---|---|
|**Beneficiaries**|Improving the lives of the people and
communities that Nesta works with.
Making sure that our work benefits a significant
section of the public.|Digital communications (website, social media, direct email).
Event appearances and media coverage.
Via our partners.|
|**Partners**|Nesta’s partners are broad with varying interests.
The nature of our partner engagement covers
anything from working as part of a coalition for
change on a particular issue, as a collaborator on
a particular research project.|Publication of research reports, articles, data stories and blogs.
Face to face meetings, or other forms of one-to-one engagement on
relevant issues.
Events and roundtables.
Partner feedback and insights sought on issues of relevance to that partner.
Newsletters, social media and other forms of marketing engagement.
Nesta events and through attending or speaking at external events.|
|**Employees**|Succession planning.
Growth, training and development.
Diversity, inclusion and equality.
Fair and appropriate remuneration, benefits and
conditions.|We receive feedback and seek to implement positive change.
Intranet, staff newsletters and all-staff meetings.
Employee engagement survey.
Learning and development through our People team.|
|**Regulators**|Maintaining strict governance procedures to
ensure compliance with all applicable regulatory
regimes.|Timely submissions of all necessary filings and returns.
Self-reporting and engagement where appropriate.
Appropriate policies and training on key compliance issues.
Oversight by the Legal team.
Prompt and comprehensive response to requests for information if
requested.|
|**Investment**
**managers**|Comprehensive view of the financial performance
and sustainability of the endowment.
Engagement on impact and ethical, social and
governance factors.
Ability to maximise the overall return of the
endowment.|Regular meetings, calls and correspondence with our investment managers.
Oversight from our Trust Investment Committee.
Via Nesta’s external appointed investment advisers.|
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Governance and management
## **Key decision in 22/23**
The table below sets out the key decision taken by the Nesta Board in 2022/2023 and how the interests of our stakeholders and the wider factors set out in section 172 of the Companies Act 2006 were taken into account.
**----- Start of picture text -----**
Key decision Reason Key considerations
**----- End of picture text -----**
|**Key decision**|**Reason**|**Key considerations**|
|---|---|---|
|**Approval of a**
**new investment**
**strategy for the**
**Nesta Trust**|In order to further the charitable objects of
both Nesta and the Nesta Trust and achieve a
financial return, the Board approved an updated
investment strategy which was driven by a need
to respond to the requirements of the charity in
pursuit of its Mission led strategy.|Long term impact on Nesta’s strategy and on Nesta’s ability to continue to
achieve its charitable objects.
Achievement of financial return for the Nesta Trust.
Achievement of Nesta’s Mission led strategy.
Impact on current and future Nesta beneficiaries.
Impact on reputation and standing with Nesta’s stakeholders.|
## **Nesta and its people**
Nesta is dedicated to fostering a diverse and inclusive workplace that values the skills and contributions of all employees, regardless of their disability. We are committed to providing equal opportunities for disabled individuals in employment, career development, training, and promotion, and to making reasonable adjustments as needed to ensure their success within our organization. By adhering to this policy, we aim to create a more accessible and inclusive work environment for all.
At Nesta, we believe that a diverse workforce leads to an organisation that is more innovative, more creative and gets better results. We want our workforce to represent the diversity of the people and communities we serve. We also want our workplace to be one where different experiences, expertise and perspectives are valued, and where everyone is encouraged to grow and develop. This means that when we are recruiting, we actively seek to reach a diverse pool of candidates. It also means that we are happy to consider any reasonable adjustments that potential employees may need to in order to be successful. We recognise the importance of a good balance between work and home life, so we do everything we can to accommodate flexible working, including working from home, compressed or part-time hours, job shares and other arrangements.
## **Providing Information to Employees**
Nesta has several internal communication channels to disseminate information to employees, including email, slack, an intranet portal, regular staff bulletins, and options
for staff to share Nesta's work through social media platforms. There are regular all-staff meetings to share organisation-wide updates and communicate important information to staff.
## **Employee Consultation**
An annual employee engagement survey is carried out to provide feedback from employees on various aspects of their work environment, policies, and practices. Employees are represented by a community union that is included in changes to pay, holidays, and working hours through collective bargaining.
## **Encouraging Employee Involvement**
The mission teams are cross-functional involving employees from different areas of methods and practices to encourage collaboration and shared decision-making. Employees are encouraged to take ownership of their work and provide them with the autonomy to make decisions within their scope of responsibility.
## **Creating Awareness of Economic Factors**
Financial information is accessible to all within legal and regulatory constraints, to help staff understand the financial performance of both the charity and the Nesta Group. Regular updates are given at all staff meetings on the charity’s performance and that of the Nesta Trust.
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## **The Nesta Executive Team**
Nesta’s Executive Team is responsible for setting our strategic direction alongside providing day-to-day operational leadership of the charity. Our Executive Team (see page 66 for details) provides advice and updates to the Board of Trustees on all strategic, operational or policy matters, the delivery of key organisational goals and communicates any issues arising from the specific functional areas for which its members are responsible.
## **Key people activities**
Throughout 2022/23 we have focused on building our people processes and employee engagement in the following areas:
- the implementation of a new performance management approach, ’Purpose Driven Performance’ to build performance and engagement at Nesta
- the introduction of succession planning to drive talent retention and build organisational resilience in Nesta and BIT
- the implementation of a new Knowledge, Learning & Development function across the Group to develop the capabilities we require to deliver our strategic goals
- the design of a new career development strategy for Nesta and BIT to aid career progression and retention.
## **People plans for 2023/24**
Looking forward for 2023/24 we will continue to build our organisational resilience and employee engagement through several people related initiatives:
- as the organisation continues to evolve, we will support staff moving into the new Nesta entities, ensuring all relevant processes and procedures are implemented to ensure a smooth transition
- following the launch of our new and improved performance management process and the launch of a training portfolio we will focus on building the performance and capability of our leaders and managers. Alongside this we’ll undertake a career paths exercise to help employees understand how their careers can develop at Nesta
- in the area of remuneration we will review our benefit offering including a review of our flexible benefits scheme, ensuring we’re offering employees a varied range of benefits that meet their needs
- and in terms of our culture, we’ll be improving our approach to feedback by introducing an online feedback platform, seeking opportunities to collaborate within Nesta and across the Group, and starting a culture project to define our future target culture.
## **Pay at Nesta**
At Nesta transparency is fundamental to all aspects of our work and we take the same approach to employee remuneration. In line with recommendations from the National Council for Voluntary Organisations inquiry into executive pay, we have detailed our approach to pay; outlined how our pay levels are defined, and we have listed the cumulative salary total of our Executive team. All pay bands are visible and available to our employees.
Our People Committee is responsible for agreeing salary levels of all executive posts upon appointment, any ex gratia or non contractual one off payments and annual pay awards for all staff. The People Committee meets at least four times a year and also supports the People team via correspondence when required.
The cumulative total for Executive salaries is disclosed in Note 8d of the accounts. Our Executive pay band has been set to ensure we attract and retain the talent we require to successfully run a complex organisation, deliver on our strategy and maintain our standing as a global leader in innovation.
Nesta is proud to be an Accredited Real Living Wage employer and funder. We ensure any work experience or interning within the organisation is also fully paid. Nesta’s annual salary review takes place each year with any changes taking effect from 1 April. A general award to salaries may be made to reflect changes in the wider labour market and levels of inflation. A general award of six per cent was made in April 2023 to reflect the economic impact of the rising cost of living (April 2022: four per cent)
Individual pay awards are in the form of a salary increase within the appropriate pay band or promotion to the next pay band and are approved by Executive Directors who meet with the People team to review and agree any proposed increases.
All increases fall within the annual remuneration review budget set aside for salaries which is signed off by the People Committee. Given emphasis on equity, diversity and inclusion we seek to ensure that above inflation awards and promotions across the organisation are proportional and representative across the protected characteristics of ethnicity and gender.
Nesta provides a mixed portfolio of financial and non-financial rewards and benefits for our employees to ensure we are able to attract and retain the most talented people to deliver our strategy.
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Governance and management
## **Statement of trustees’ responsibilities**
The trustees are responsible for preparing the strategic report, annual report and financial statements in accordance with applicable law and regulations.
Company law requires the trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and charity, and of the net income of the Group for that period. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently
- observe the methods and principles in the Charities SORP
- make judgements and estimates that are reasonable and prudent
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements
- prepare the financial statements on the going-concern basis unless it is inappropriate to presume that the Group will continue in business.
The trustees are responsible for keeping proper accounting records that are sufficient to show and explain the Group’s and charity’s transactions, and disclose with reasonable accuracy, at any time, the financial position of the Group and charity, 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 Group and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the corporate and financial information included on Nesta’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
## **Disclosure to our auditors**
As far as the trustees are aware, at the date of this report, they have taken all the steps they ought to have taken to make themselves aware of any relevant audit information of which the company’s auditor is unaware.
The trustees’ report and strategic report are approved by the Board of Trustees and authorised for issue on 29 November 2023, and signed on its behalf by:
## **Ed Richards**
Chair of the Board of Trustees of Nesta
04 December 2023 | 6:44 PM GMT
Annual report and accounts: For the year ended 31 March 2023
26
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Independent Auditor’s Report to the members and trustees of Nesta
## 6. Independent Auditor’s Report to the members and trustees of Nesta
## **Opinion on the financial statements**
In our opinion, the financial statements:
- give a true and fair view of the state of the Group’s and of the Parent Charitable Company’s affairs as at 31 March 2023 and of the Group’s incoming resources and application of resources for the year then ended
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006, as amended.
We have audited the financial statements of Nesta ('the Parent Charitable Company') and its subsidiaries ('the Group') for the year ended 31 March 2023 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement 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).
## **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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Independence**
We remain independent of the Group and the Parent Charitable Company in accordance with the ethical requirements 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.
## **Conclusions related 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 Group and the Parent 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.
Annual report and accounts: For the year ended 31 March 2022
27
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Independent Auditor’s Report to the members and trustees of Nesta
## **Other information**
The Trustees are responsible for the other information. The The Trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
## **Other Companies Act 2006 reporting**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees’ Report, which includes the Directors’ Report and the Strategic report prepared for the purposes of Company Law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic report and the Directors’ Report, which are included in the Trustees’ Report, have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatement in the Strategic report or the Trustees’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:
- Proper and adequate accounting records have not been kept by the Parent Charitable Company, or returns adequate for our audit have not been received from branches not visited by us; or
- The Parent Charitable Company financial statements are not in agreement with the accounting records and returns; or
- Certain disclosures of Directors’ remuneration specified by law are not made; or
- We have not received all the information and explanations we require for our audit.
## **Responsibilities of Trustees**
As explained more fully in the Statement of the Responsibilities of the Trustees, 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 determines 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 Group’s and the Parent 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 Group or the Parent 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**
We have been appointed as auditor under section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
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.
Annual report and accounts: For the year ended 31 March 2022
28
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Independent Auditor’s Report to the members and trustees of Nesta
## **Extent to which the audit was capable of detecting irregularities, including fraud**
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:
Based on our understanding of the Charity and the sector in which it operates, we identified the principal laws and regulations that directly affect the financial statements to be the Companies Act 2006, Charities Act 2011 and Charities and Trustee Investment (Scotland) Act 2005. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
In addition, the Charity is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: employment law, data protection and health and safety legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence if any.
- involvement of valuation specialists in the audit
- challenging assumptions made by management in their significant accounting estimates, in particular in relation to the valuation of unlisted investments, Investment property and fair value of BIT; and
- in addressing the risk of fraud through management override of controls; testing the appropriateness of journal entries and other adjustments, in particular any journals posted by senior management or with unusual accounts combinations.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s ('FRC’s') website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report.
Audit procedures performed included:
- discussions with management and internal audit, including consideration of known or suspected instances of noncompliance with laws and regulations and fraud
- reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC, the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator to identify any actual or potential frauds or any potential weaknesses in internal control which could result in fraud susceptibility
- assessing the design and implementation of the control environment to identify any areas of material weakness to focus the design of our testing
- reviewing, and considering the impact on our audit, of items included in the Group’s fraud and theft register
## **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, and to the Charitable Company’s trustees, as a body, in accordance with the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken so that we might state to the Charitable Company’s members and trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charitable Company, the Charitable Company’s members as a body and the Charitable Company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
**Fiona Condron** (Senior Statutory Auditor)
For and on behalf of BDO LLP, statutory auditor Gatwick, UK
Date: 11 December 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Annual report and accounts: For the year ended 31 March 2022
29
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Financial statements
## 7. Financial statements
## **Consolidated statement of financial activities for the year ended 31 March 2023**
**----- Start of picture text -----**
2023 2023 2023 2023 2022
£’000 £’000 £’000 £’000 £’000
Income and endowments from:
Investment income 2 271 - 9,227 9,498 7,335
Charitable activities 3 1,496 7,937 - 9,433 4,278
Other trading activities 4 26,638 - - 26,638 9,689
Other income 5 545 - - 545 4,874
Total income 28,950 7,937 9,227 46,114 26,176
- - - -
Less share of joint venture’s turnover (4,562)
Total group income 28,950 7,937 9,227 46,114 21,614
Expenditure on:
Raising funds
Trading activities 6a 25,128 - - 25,128 7,544
Investment management costs 6b 85 - 780 865 859
Total expenditure on raising funds 25,213 - 780 25,993 8,403
Charitable activities 7
A Fairer Start 1,708 - 26 1,734 1,510
A Healthy Life 283 1,351 25 1,659 1,348
A Sustainable Future 1,161 1,543 41 2,745 1,271
Central Programmes and Devolved Nations 2,770 - 43 2,813 1,399
Committed Programme Delivery 3,886 (1,183) 41 2,744 5,856
Enterprises 14,904 2,762 271 17,937 14,039
Investments in furtherance of the charity's objectives 273 - 4 277 3,257
Practices 4,444 503 77 5,024 4,528
Total expenditure on charitable activities 29,429 4,976 528 34,933 33,208
Total expenditure 54,642 4,976 1,308 60,926 41,611
Net (expenditure)/income before investment gains (25,692) 2,961 7,919 (14,812) (19,997)
Net (losses)/ gains on Investments for financial return 11 - - (23,873) (23,873) 26,005
Net (expenditure)/income (25,692) 2,961 (15,954) (38,685) 6,008
- -
Share of (losses) in joint venture (704) (704) (284)
Transfers between funds 16 34,381 (7,274) (27,107) - -
Net income/(expenditure) before other recognised gains/(losses) 7,985 (4,313) (43,061) (39,389) 5,724
Other recognised gains/(losses)
Foreign exchange gains/(losses) 111 - (9) 102 150
Net movement in funds for the year 8,096 (4,313) (43,070) (39,287) 5,874
Reconciliation of funds
Total funds brought forward 23 42,586 16,806 451,618 511,010 505,136
Total funds carried forward 50,682 12,493 408,548 471,723 511,010
Unrestricted funds Restricted funds Expendable endowment Total funds Total funds
Notes to the accounts
**----- End of picture text -----**
A summary income and expenditure account is presented in Note 18 in compliance with the Companies Act 2006.
The Group has no recognised gains or losses other than those included in the Consolidated statement of Financial activities. All activities are continuing.
The notes on pages 33 to 64 form part of these accounts.
No separate statement of financial activities has been presented for Nesta as permitted by section 408 of the Companies Act 2006.
Annual report and accounts: For the year ended 31 March 2023
30
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **Consolidated and parent charity balance sheet as at 31 March 2023**
Company number: 07706036
**----- Start of picture text -----**
Parent Parent
Notes Group Charity Group Charity
to the 2023 2023 2022 2022
accounts £’000 £’000 £’000 £’000
Fixed assets
Intangible fixed assets 9 9,474 – 10,563 –
Tangible assets 10 25,136 888 25,425 683
Investments:
Investments – quoted and unquoted 11 390,432 - 430,908 -
Programme-related investments 12a 26,065 21,698 20,655 17,094
Programme- related investment in joint venture 12b 1,796 2,500 745 1,000
– share of net assets/costs
Mixed motive investment 12c - 21,929 - 21,673
Total fixed assets 452,903 47,015 488,296 40,450
Current assets
Debtors 13 20,269 11,746 20,835 11,979
Cash and cash equivalents 20,077 6,933 24,034 12,629
Total current assets 40,346 18,679 44,869 24,608
Current liabilities
Creditors – amounts falling due within one year 14 (13,568) (9,931) (14,159) (11,344)
Net current assets 26,778 8,748 30,710 13,264
Total assets less current liabilities 479,681 55,763 519,006 53,714
Creditors – amounts falling due after one year 14 (7,958) (451) (7,996) (246)
Net assets 471,723 55,312 511,010 53,468
Charitable funds
Expendable endowment funds 16a 408,548 - 451,618 -
General funds 16a 51,640 42,821 42,840 37,027
Total charitable unrestricted funds 460,188 42,821 494,458 37,027
Restricted funds 16b 12,493 12,491 16,806 16,441
Total charitable funds 472,681 55,312 511,264 53,468
Funds retained within non-charitable joint ventures 16a (958) - (254) -
Total funds 471,723 55,312 511,010 53,468
**----- End of picture text -----**
Total income for the year of Nesta, the parent charity, was £42,911k (2022: £46,185k) and expenditure was £41,067k (2022: £35,688k).
The notes on pages 33 to 64 form a part of these accounts.
Approved by the Board of Trustees and authorised for issue on 29 November 2023 and signed on its behalf by Edward Richards, Chair of the Board of Trustees.
## **Ed Richards,**
Chair of the Board of Trustees of Nesta
04 December 2023 | 6:44 PM GMT
Annual report and accounts: For the year ended 31 March 2023
31
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **Consolidated cash flow statement for the year ended 31 March 2023**
**----- Start of picture text -----**
Group Group
2023 2022
Note £’000 £’000
Cash flows used in operating activities
Net cash used in operating activities (a) (24,151) (16,456)
Cash flows from investing activities
Net cash inflows from investing activities (b) 20,112 16,348
Cash flows used in financing activities
Net cash (outflows) from financing activities (c) (20) (12)
Change in cash and cash equivalents in the reporting period (4,059) (120)
Cash and cash equivalents at the beginning of the reporting period 24,034 24,004
Change in cash and cash equivalents due to exchange rate movements 102 150
Cash and cash equivalents at the end of the reporting period 20,077 24,034
**----- End of picture text -----**
|**Cash flows used in operating activities**
Net cash used in operating activities|**Note**
(a)|**Group**
**2023**
**£’000**
(24,151)|**Group**
**2022**
**£’000**
(16,456)|
|---|---|---|---|
|**Cash flows from investing activities**
Net cash inflows from investing activities|(b)|20,112|16,348|
|**Cash flows used in financing activities**
Net cash (outflows) from financing activities|(c)|(20)|(12)|
|**Change in cash and cash equivalents in the reporting period**
**Cash and cash equivalents at the beginning of the reporting period**||**(4,059)**
**24,034**|**(120)**
**24,004**|
|**Change in cash and cash equivalents due to exchange rate movements**
**Cash and cash equivalents at the end of the reporting period**||**102**
**20,077**|**150**
**24,034**|
|**Cash flow statement notes**
**(a) Reconciliation of net (expenditure)/ income to net cash flow from**
**operating activities**
Net (expenditure)/ income for the reporting period (as per consolidated
statement of financial activities)
Depreciation charges
Amortisation charges
Unrealised and realised losses/ (gains) from quoted and unquoted
investments
Revaluation of programme-related investments
Dividends, interest and rents from investments
Bank interest
Interest paid and bank charges
Investment management fees
Decrease in debtors
(Decrease)/ increase in creditors||(38,685)
252
1,089
23,873
(2,004)
(9,492)
(6)
20
865
566
(629)
**(24,151)**|6,008
1,858
332
(26,005)
179
(7,334)
-
12
859
1,173
6,462
**(16,456)**|
|**(b) Cash flows from investing activities**
Dividends, interest and rents from investments
Bank interest
Investment management fees
Purchase of property, plant and equipment
Purchase of quoted and unquoted investments
Purchase of programme-related investments
Acquired goodwill from purchase of subsidiary
Proceeds from sale or maturity of quoted and unquoted investments
Proceeds from sale of fixed assets
Proceeds from sale of programme-related investments
Acquisition of subsidiary investments
Movement in net assets of joint ventures||9,492
6
(865)
(744)
(147,776)
(6,625)
-
164,379
779
2,170
-
(704)
**20,112**|7,334
-
(859)
(2,084)
(43,756)
(4,751)
(10,895)
67,489
-
2,925
(40)
985
**16,348**|
|**(c) Cash flows from financing activities**
Interest paid and bank charges||(20)
**(20)**|(12)
**(12)**|
## **Analysis of changes in net debt**
||**At start**
**of year**
**£’000**|**Cashflows**
**£’000**|**Foreign**
**exchange**
**movements**
**£’000**|**At end**
**of year**
**£’000**|
|---|---|---|---|---|
|Cash and cash equivalents
24,034
**24,034**||(4,059)|102|20,077|
|||**(4,059)**|**102**|**20,077**|
Included in cash and cash equivalents of £20.0 million (2022: £24.0 million) is a balance of £5.0 million (2022: £11.1 million) which is restricted for specific projects.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **1. Accounting policies**
## **a. Basis of preparation**
The financial statements are prepared under the historical cost convention, modified by the revaluation of certain financial assets as specified below. They have been prepared on a going concern basis and in accordance and compliance with: (i) FRS 102, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland; (ii) 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) (second edition – October 2019)’ issued by the Charity Commission; and (iii) Companies Act 2006.
## **b. Going concern**
The trustees have not identified any material uncertainty in respect of using the going concern basis in the preparation of the accounts. The trustees are not aware of a specific or general event which would change the Group’s status as a going concern.
As Nesta is able to draw down cash from Nesta Trust (‘the Trust’) as required within the approved funding envelope, as well as the Group’s strong net asset position, the trustees have concluded that there is a reasonable expectation that the Group has adequate resources to continue activities for the foreseeable future and have therefore adopted the going concern basis in preparing the financial statements.
## **c. Basis of consolidation**
The consolidated financial statements incorporate the results of Nesta and all its subsidiary undertakings including Nesta Trust, from the date that control commences to the date that it ceases.
The Trust holds investment assets previously held by the NESTA which was abolished on 1 April 2012. The assets of the Trust provide income and capital to be applied by Nesta as sole Trustee to further the objects of the Trust. As the sole Trustee of the Trust, Nesta is considered to control the Trust which operationally means Nesta is responsible for the Trust’s investment policy. It is for this reason that the accounts of the Trust have been consolidated with the accounts of Nesta.
Subsidiary undertakings are consolidated on a line-byline basis using the acquisition method of accounting in accordance with Section 9 ‘Consolidated and Separate Financial Statements’ of FRS 102.
Details of Nesta’s subsidiary undertakings can be found in Note 15.
Joint ventures that are not held as part of an investment portfolio are consolidated using the Gross Equity method of accounting in accordance with Section 15 ‘Investments in Joint Ventures’ of FRS 102. Details of Nesta’s joint ventures can be found in Note 12b.
Subsidiary undertakings are consolidated on a line-byline basis using the acquisition method of accounting in accordance with Section 9 ‘Consolidated and Separate Financial Statements’ of FRS 102.
Details of Nesta’s subsidiary undertakings can be found in Note 15.
Joint ventures that are not held as part of an investment portfolio are consolidated using the Gross Equity method of accounting in accordance with Section 15 ‘Investments in Joint Ventures’ of FRS 102. Details of Nesta’s joint ventures can be found in Note 12b.
The Group applies the exemption contained in Section 15 ‘Investments in Joint Ventures’ of FRS 102 so that where joint ventures and associates are held as part of an investment portfolio, they are included within investment assets.
When a joint venture becomes a subsidiary in the period, it is accounted for as a subsidiary from the date that control commences to the date that it ceases.
No separate statement of financial activities has been presented for Nesta as permitted by section 408 of the Companies Act 2006.
## **d. Fund accounting**
The general fund consists of unrestricted funds that are available for the furtherance of the objects of the charity at the discretion of the trustees.
Restricted funds are subject to specific restrictions as applied by programme funders.
Where Nesta provides match-funding or programme support on projects, total expenditure is shown in the restricted fund and a transfer from the general fund to the restricted fund is made to account for Nesta’s share of expenditure.
The expendable endowment fund relates to the funds of the Trust. These funds are held without distinction as to capital and income and can be applied in furtherance of the objects of the Trust. The Trust makes an annual transfer to Nesta to deliver its charitable aims as detailed in the reserves policy.
Annual report and accounts: For the year ended 31 March 2023
33
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **1. Accounting policies** (continued)
## **e. Income**
Income is recognised in the consolidated statement of financial activities in the period in which Nesta is entitled to receipt and where the amount can be measured with reasonable accuracy, and where receipt is probable.
Grant income is recognised in the consolidated statement of financial activities when the Group has entitlement to the funds, it is probable the income will be received, the amount can be measured reliably and any performance conditions attached to the grants have been fully met. Where performance related conditions have only been partially met, income is recognised to that extent with the balance deferred until conditions have been satisfied.
Where there is a repayment of income that has been previously recognised or not all income has been drawn down at the end of a project, this is recognised as negative income in the relevant period.
Investment income includes interest and dividends from investment assets, deposits and a joint venture, with any associated tax credits or recoverable taxation included in the Consolidated statement of financial activities on an accruals basis.
Income from trading activities is generated on nonprimary purpose trading activities of the trading subsidiaries Nesta Enterprises Limited and Behavioural Insights Limited ('BIT', subsidiary acquired during the previous year). This represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the value of the consideration due. Where a contract has only been partially completed at the balance sheet date, income represents the value of the service provided to date based on proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within the year.
## **f. Expenditure**
Expenditure is accounted for on an accruals basis.
Expenditure on raising funds includes both trading activities and investment management expenditure. Trading expenditure is incurred on non-primary purpose trading activities of the trading subsidiaries Nesta Enterprises Limited and Behavioural Insights Limited ('BIT', subsidiary acquired during the previous year).
Investment management costs consist of investment fund manager fees paid in cash as well as those that have been grossed up where they are offset against the fund’s value rather than payable in cash, dilution levies, investment consultancy and custodian fees.
The categories defined by the trustees for the purposes of organisational management are – A Fairer Start, A Healthy Life, A Sustainable Future, Central Programmes and Devolved Nations, Committed Programme Delivery, Enterprises, investments in furtherance of the charity's objectives and Practices.
Grants payable are recognised as expenditure in the consolidated statement of financial activities on the date when a grant agreement is signed or equivalent obligation created less any awards cancelled or refunded, where there are no performance related obligations that are required to be fulfilled under the terms of the grants. Grants awarded but not yet paid are recorded as a liability in the consolidated balance sheet. Where grants paid are selected to be converted to an equity holding in the grantee organisation by virtue of grant conditions being met, on the date where there is a binding contract with investment terms agreed by both parties, grant expenditure is reversed and an investment asset is recognised and the asset valued in accordance with Nesta’s investment valuation policies.
Commitments or approvals to fund specific projects not yet signed by Nesta are disclosed by way of note (see Note 20).
Non-grant direct costs include staffing, programme delivery partner costs, workshop event costs, commissioned research and evaluation, and any other direct costs attributable to a specific activity.
Support costs include costs shared by all activities. They include the costs of the office of the CEO, communications, front of house, facilities, finance, legal, information technology, and human resources. Support costs also include the costs related to governance which are costs attributable to maintaining the public accountability of the charitable Group and ensuring compliance with regulation and good practice. Costs incurred by trustees, internal and external audit costs and legal fees are included within governance costs.
Irrecoverable VAT incurred is allocated to the expenditure category to which it relates.
Redundancy and termination payments are recognised when there is a demonstrable commitment that cannot be realistically withdrawn.
Annual report and accounts: For the year ended 31 March 2023
34
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **1. Accounting policies** (continued)
## **g. Support costs – allocation**
Support costs are allocated to each area of programme activity on bases appropriate to the activity concerned. These drivers include ratio of direct costs and headcount.
## **h. Intangible fixed assets and amortisation**
Goodwill included in intangible assets represents the excess of the cost of Behavioural Insights Limited (BIT) over the fair value of the Group’s share of the net identifiable assets of BIT at the date of acquisition, 10 December 2021.
Goodwill on acquisitions of joint ventures and associates is included in the related equity accounted investment value (Note 9).
Amortisation is calculated on a straight-line basis. As the useful life of goodwill cannot be reliably estimated, it is being written off over a period of ten years as determined by the trustees.
## **i. Tangible fixed assets and depreciation**
Property, plant and equipment are capitalised at their historic cost and stated at cost less depreciation. Assets costing less than £500 are expensed in the year of purchase.
Depreciation is calculated on a straight-line basis over the expected useful life of the assets as follows:
||> leasehold assets
over the remaining
life of the lease
> plant and machinery
seven to eighteen
years
> office equipment,
three to five years
fixtures and fittings
> computer hardware
three years
> computer software
three to five years
or the life of the
licence.|
|---|---|
|||
## **j. Investment assets – quoted and unquoted**
Investment assets include quoted and unquoted investments. Nesta holds its investment assets on trust without distinction between capital and income, applying them in furtherance of its objects. Assets held by the Nesta Trust are classed as an expendable endowment.
Cash and short-term deposits and investments to be held less than 12 months are presented in the balance sheet as current assets. All other financial assets are presented as fixed assets. Deferred investments and loans represent the portion of commitments which remain undrawn but draw down has been requested at the balance sheet date. The corresponding commitment is recognised under current liabilities.
Loans are recognised as financial assets when repayment of the loan or the option to convert to equity has not expired by the balance sheet date. The loans are included in fixed assets except where repayment is expected within 12 months of the balance sheet date, when they are included as current assets.
The carrying value of all investments is at market value except where we are unable to obtain a reliable estimate of market value. Unrealised changes in value between accounting periods are charged or credited to the statement of financial activities. For financial assets for which there is no quoted market, market value is established by using valuation guidelines as detailed below.
## I. Valuation – quoted investments
The market values of quoted investments are based on externally reported bid prices at the balance sheet date.
Equity investments, high yield bonds, and property trusts are held in pooled funds and are stated at market value, being the market value of the underlying investments held. These valuations are provided by the relevant fund manager.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **1. Accounting policies** (continued)
## **j. Investment assets – quoted and unquoted** (continued)
II. Valuation – unquoted investments
Private equity investments are held through funds managed by private equity managers. As there is no identifiable market price for private equity funds, these funds are included at the most recent valuations adjusted for any cash calls and distributions provided by the private equity managers.
Where a valuation is not available at the balance sheet date, the most recent valuation from the private equity manager is used, adjusted for cash flows between the most recent valuation and the balance sheet date.
An estimated value of unquoted investments in earlystage companies is established by using valuation guidelines produced by the British Private Equity & Venture Capital Association (BVCA):
- BVCA guidelines provide for investments to be carried at cost unless there is information indicating an impairment or sufficiently clear evidence to support an increase in valuation
- where the price of a recent funding round (within previous 12 months) is not available, investments are valued using standard valuation methodologies, as appropriate and in the following order;
- i. earnings multiple
Valuation of companies at this early stage of development is an inherently volatile and uncertain process. The valuation guidelines used are considered to be the best estimate of market value at the balance sheet date.
Loans to early-stage companies have the same valuation methodology applied as for investments in early-stage companies.
An estimated value of investments in early- stage funds is calculated as the Group’s share of partnership net asset value as stated in the last audited financial statements of each investment fund. Contributions made by the Group in any period between the date of a fund’s balance date and the Group’s own for which there is no audited valuation, are valued at cost unless there is information to determine otherwise.
Transaction costs incurred by the Group and management support costs are not included in valuations and are charged to expenditure in the period in which they are incurred.
## III. Valuation – investment property
Physical investment property assets are revalued by an independent external property valuer. The proportion of the investment property that is leased to the charity is accounted for as a leasehold asset in the consolidated accounts. Investments in an investment property fund are valued at the market values, being the externally reported bid prices at the balance sheet date.
- ii. net asset value
## IV. Treatment – unquoted investments
- iii. discounted cash flow
iv. applying BVCA valuation benchmarks.
- At the balance sheet date, management assesses whether there is objective evidence that a financial asset or a group of financial assets should be revalued. The approach, which is within the principles of the BVCA guidelines, is to review and give a ‘health’ status;
- healthy: value held at cost unless sufficiently clear evidence to support an increase in valuation; company is performing to plan, unlikely to run out of cash within 12 months
Investments, loans or contributions to funds to date are recognised in full in the balance sheet. Undrawn commitments are disclosed by way of Note 20.
Unrealised changes in value between accounting periods are reflected in the consolidated statement of financial activities.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred with all risks and rewards of ownership.
- sick: value down according to the seriousness of a number of events considered by management; company is performing off-plan, may or may not be recoverable
- terminal: value down, company is performing offplan, likely to run out of cash within six months, recovery not foreseen, no intervention planned.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **1. Accounting policies** (continued)
## **k. Investment assets – programme-related investments**
Unquoted equity and similar programme- related investments are held at cost, less any provision for diminution in value, as Nesta is unable to obtain a reliable estimate of fair value. Programme-related investments that are loans are accounted for at the outstanding amount of the loan less any provision for unrecoverable amounts. Any diminution or impairment in value is charged to the consolidated statement of financial activities under charitable activities.
## **l. Investment assets – joint venture**
Joint ventures are held at cost, less any provision for diminution in value, or uplift based on current available external information. Any change in value is charged to the statement of financial activities under charitable activities for Nesta single entity and eliminated on consolidation.
## **m. Investment assets – mixed motive**
Mixed motive investments are held at cost, less any provision for diminution in value, with fair value being reviewed annually. Any diminution or impairment in value is charged to the statement of financial activities as an investment impairment as a gain/ (loss) on investment.
## **n. Significant estimates**
The preparation of financial statements requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent liabilities and the carrying value of goodwill at the balance sheet date. Actual outcomes could differ from those estimates. This is especially the case of the valuation of the Group’s investment in early- stage companies which is an inherently volatile and uncertain process. However, the valuation guidelines applied are considered to be the best estimate of market value.
An estimated value of unquoted investments is earlystage companies is established by using valuation guidelines produced by the BVCA. BVCA guidelines provide for investments to be carried at cost unless there is information indicating an impairment or sufficiently clear evidence to support an increase in valuation.
An external valuation exercise was performed to obtain an independent valuation of Behavioural Insights Limited as at 31 March 2023. The valuation was based on expected future cash flows in accordance with FRS 102.
The revenue growth rate assumed was between 8% and 10% year on year, and the discount factor applied was 15.5%. A sensitivity analysis conducted using different cases and their relevant probabilities gave an overall weighted variance of 1% from the valuation concluded in the external report.
The investment property 58 Victoria Embankment was revalued at the year end by an independent qualified property valuer.
Investment assets are valued on an asset by asset basis, and in each case a prudent approach is taken.
Amortisation is calculated on a straight-line basis. As the useful life of goodwill cannot be reliably estimated, it is being written off over a period of ten years as chosen by the trustees.
## **o. Debtors receivable, creditors, provisions and contingent liabilities**
Debtors receivable are recognised at fair value less any provision for bad debt. A provision for bad debt is established when there is objective evidence that the debt will not be collected according to the original terms.
Creditors are recognised when Nesta has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Where there are significant obligations which do not meet the requirements for recognition as a provision set out in Section 21 ‘Provisions and Contingencies’ of FRS 102 these are disclosed as a note to the accounts (see Note 19).
The Group recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use in the next financial year. The provision is measured at the salary cost payable for the period of absence.
Annual report and accounts: For the year ended 31 March 2023
37
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Financial statements
## **1. Accounting policies** (continued)
## **p. Pension costs**
## **r. Exchange gains and losses**
The Group operates defined contribution schemes. The amount charged to the consolidated statement of financial activities in respect of pension costs and other postretirement benefits is the contributions payable in the year.
Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
## **q. Taxation**
Nesta and the Nesta Trust are charities within the meaning of Para 1 Schedule 6 Finance Act 2010. Accordingly they are potentially exempt from taxation in respect of income or capital gains within categories covered by Chapter 3 of Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
No tax charge arose in the period for Nesta and Nesta Trust.
The subsidiary companies, excluding BIT, make qualifying donations of all distributable taxable profit to Nesta. No corporation tax liability on these subsidiaries arises in the accounts.
Tax arises in the accounts of BIT, and is included within expenditure from trading activities in the statement of financial activities. Current tax, including UK corporate tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
BIT deferred tax and corporation tax arising is included within 'Other tax and social security' in Creditors in the Group balance sheet. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they were recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
The statutory financial statements are presented in pounds sterling, the functional and presentational currency. Foreign currency transactions are translated using the exchange rates prevailing at the date of settlement. Realised and unrealised exchange gains and losses are recognised in the consolidated statement of financial activities.
On consolidation of BIT, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date.
## **s. Operating leases**
Leases where the lessor retains a significant portion of the risks and rewards of ownership are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of financial activities on a straight-line basis over the period of the lease.
## **t. Related party transactions**
Transactions with related parties are disclosed in the notes to these financial statements. The Group’s policy is for all trustees, non-trustee committee members, executive directors and senior direct reports to executive directors, to declare interests and related party transactions on appointment and at least annually. Declared interests are recorded in the Register of Interests and these are reviewed by the Audit and Risk Committee.
Transactions between all group undertakings (parent charity, subsidiaries, associates and joint ventures) are also disclosed in compliance with 23.4 of The Charities SORP (FRS 102).
## **u. Financial instruments**
The Group has only basic financial instruments. These comprise fixed asset investments measured at fair value through profit or loss along with other financial assets which comprise of cash, group debtors and other debtors and financial liabilities which comprise of trade creditors and other creditors, measured at amortised cost.
## **v. Cash and cash equivalents**
Cash and cash equivalents include cash in hand and deposits with banks. Cash held by investment managers is classified as investments as it is not immediately accessible.
Annual report and accounts: For the year ended 31 March 2023
38
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **2. Investment income**
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Quoted investments:
Interest and dividends receivable 5,232 6,965
Total income from quoted investments 5,232 6,965
Unquoted investments:
Interest and dividends receivable 4,260 370
Total income from unquoted investments 4,260 370
Bank interest 6 –
Total investment income 9,498 7,335
**----- End of picture text -----**
## **3. Restricted income from charitable activities**
**----- Start of picture text -----**
2023 2023 2023 2023 2022 2022 2022 2022
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Note 3a
A Fairer Start - - 8 8 – – – -
A Healthy Life - 15 - 15 – – – -
A Sustainable Future 9 - - 9 – – – -
Central Programmes and Devolved Nations - - 15 15 – – – -
Committed Programme Delivery (940) 73 239 (628) (1,485) 140 390 (955)
Enterprises 2,802 3,228 2,729 8,759 (50) 755 3,293 3,998
Investments in furtherance of the charity's - - 80 80 - - 196 196
objectives
Practices (7) 68 267 328 - 255 279 534
Other 42 629 176 847 350 58 97 505
Total income from charitable activities 1,906 4,013 3,514 9,433 (1,185) 1,208 4,255 4,278
Funding from government bodies Funding from non-government bodies Other charitable activity income Group total Funding from government bodies Funding from non-government bodies Other charitable activity income Group total
**----- End of picture text -----**
Other charitable activity income includes income from charity consultancy services, monitoring and product sales.
Annual report and accounts: For the year ended 31 March 2023
39
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **3. Restricted income from charitable activities** (continued)
## 3a. Restricted funding from government bodies
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
-
Arts Council of England (7)
Arts Council of Wales - 225
British Council 25 -
Department for Business, Energy and Industrial Strategy (BEIS) 75 -
Department for Digital Culture Media and Sport (DCMS) 20 -
-
Department for Education (706)
Government of Canada 429 -
-
Greater London Authority (25)
Improvement Service - 32
Innovate UK 2,290 -
Surrey County Council 9 -
UKHIH Collective Crisis Intelligence 42 350
Wales Arts Health and Wellbeing Network 33 -
Welsh Government (985) (1,086)
Total restricted funding from government bodies 1,906 (1,185)
**----- End of picture text -----**
Funding from government bodies includes a £1.0m (2022: £1.1m) repayment for a project, and is a reversal of income that has previously been reported (see Note 7 for corresponding expenditure). The original project was scaled down with the onset of COVID-19 and was expected to restart again, but a decision was made to end the project. Also included is £0.03m (2022: £0.7m) reversal for grants where the funding was not fully drawn down.
## **4. Income from other trading activities**
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Rental income 1,623 1,787
Income from trading
Consultancy 491 368
Venue hire and other 2 7
Trading subsidiary income – Behavioural Insights Limited 24,522 7,527
Total income from other trading activities 26,638 9,689
**----- End of picture text -----**
2022 figure of £9,689k includes £39k restricted funds.
Trading subsidiary income above for the year ended 31 March 2022 only includes Behavioural Insights Limited income from 10 December 2021 when it became a trading subsidiary.
Annual report and accounts: For the year ended 31 March 2023
40
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Financial statements
## **5. Other income**
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Impact fund management fees 205 307
Events and workshops fees 340 5
Share of income from joint ventures – 4,562
Total other income 545 4,874
**----- End of picture text -----**
Share of income from joint venture above in 2022 was Nesta's share of Behavioural Insights Limited's income to the point when it became a subsidiary on 10 December 2021.
## **6. Expenditure on raising funds**
## 6a. Trading activities
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Trading activities expenditure – subsidiaries 25,128 7,544
Total trading activity expenditure 25,128 7,544
**----- End of picture text -----**
Trading activities expenditure above for the year ended 31 March 2022 only includes Behavioural Insights Limited expenditure from 10 December 2021 when it became a trading subsidiary.
## 6b. Investment management costs
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Investment manager fees 800 794
Custodian fees 65 65
Total investment management costs 865 859
**----- End of picture text -----**
The investment management costs are the direct fees paid to intermediaries.
Annual report and accounts: For the year ended 31 March 2023
41
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **7. Expenditure on charitable activities**
**----- Start of picture text -----**
2023 2023 2023 2023 2022 2022 2022 2022
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Note 7b Note 7a Note 7b
A Fairer Start 125 790 819 1,734 150 792 568 1,510
A Healthy Life - 868 791 1,659 - 856 492 1,348
A Sustainable Future 1 1,672 1,072 2,745 20 737 514 1,271
Central Programmes and Devolved Nations 200 1,458 1,155 2,813 - 783 616 1,399
Committed Programme Delivery * (608) 2,012 1,340 2,744 455 3,227 2,174 5,856
Enterprises 5,714 6,026 6,197 17,937 3,761 5,546 4,732 14,039
Investments ** - (310) 587 277 - 1,991 1,266 3,257
Practices 12 2,862 2,150 5,024 100 2,544 1,884 4,528
Total charitable activities 5,444 15,378 14,111 34,933 4,486 16,476 12,246 33,208
* Grant expenditure for Committed Programme Delivery includes a £1.0m decommitment for a project, and is a reversal of
expenditure that has previously been reported (see corresponding income in Note 3a).
** Negative Investments expenditure relates to upwards revaluations of investments held within Nesta Partners Limited.
7a. Support costs
Support costs have been allocated to charitable activity areas as follows:
2023 2023 2023 2023 2022 2022 2022 2022
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
A Fairer Start 478 309 32 819 294 253 21 568
A Healthy Life 467 293 31 791 243 230 19 492
A Sustainable Future 447 566 59 1,072 294 203 17 514
Central Programmes and Devolved Nations 536 560 59 1,155 389 210 17 616
Committed Programme Delivery 815 475 50 1,340 1,104 989 81 2,174
Enterprises 1,812 3,969 416 6,197 2,026 2,501 205 4,732
Investments 703 (105) (11) 587 700 523 43 1,266
Practices 1,078 971 101 2,150 1,116 710 58 1,884
Total support costs 6,336 7,038 737 14,111 6,166 5,619 461 12,246
Grant making Non-grant direct cost Allocated support costs Group total Grant making Non-grant direct cost Allocated support costs Group total
Support staff costs Premises, technology and other costs Governance Group total Support staff costs Premises, technology and other costs Governance Group total
**----- End of picture text -----**
The basis for allocation of support and governance costs is as follows:
|**The basis for allocation of support costs and governance is as follows:**|**The basis for allocation of support costs and governance is as follows:**|
|---|---|
|Support staff costs
Other support costs|Allocated based on headcount
Allocated on the ratio of direct costs of each area|
Annual report and accounts: For the year ended 31 March 2023
42
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Financial statements
## **7. Expenditure on charitable activities (continued)**
## 7b. Grants
Included in the cost of charitable activities are grants payable. Grants of £50,000 and above are detailed below. A full list of grants committed is available via Nesta’s website.
**----- Start of picture text -----**
Grants to
institutions
2023 External/Nesta
Recipient £’000 funded Programme
Green Industry Plast – Togo (Gip-Togo) 1,000 External Afri-Plastics Challenge
Chanja Datti Ltd 750 External Afri-Plastics Challenge
Chemolex 750 External Afri-Plastics Challenge
Megagas Alternative Energy Enterprise 500 External Afri-Plastics Challenge
Baus Taka Enterprise 251 External Afri-Plastics Challenge
Ecococo Homecare 250 External Afri-Plastics Challenge
Catherine Natang 250 External Afri-Plastics Challenge
Ukwenza Vr 250 External Afri-Plastics Challenge
A Fairer Start (Core) 125 Nesta Funded A Fairer Start
Toto Safi 100 External Afri-Plastics Challenge
Uganda Industrial Research Institute (Uiri) 80 External Afri-Plastics Challenge
Ecococo Homecare 75 External Afri-Plastics Challenge
Chemolex 75 External Afri-Plastics Challenge
Lwanda Biotech Ltd 75 External Afri-Plastics Challenge
She Eco Response 75 External Afri-Plastics Challenge
Toto Safi 75 External Afri-Plastics Challenge
Regenize 75 External Afri-Plastics Challenge
Dercolbags Packaging Limited Company 75 External Afri-Plastics Challenge
Well Of Science 75 External Afri-Plastics Challenge
Naza Agape Foundation 75 External Afri-Plastics Challenge
Sustainable Pioneers Cic 72 Nesta funded HARP (Health, Arts, Research, People)
Nesta Cymru
Baus Taka Enterprise 53 External Afri-Plastics Challenge
Moonshot Dynamics 50 External Afri-Plastics Challenge
Soapbox South Africa 50 External Afri-Plastics Challenge
Vhembe Biosphere Reserve 50 External Afri-Plastics Challenge
Leeds City Council 50 Nesta funded AFS Commissioning Fund
Stockport Metropolitan Borough Council 50 Nesta funded AFS Commissioning Fund
City Of York Council 50 Nesta funded AFS Commissioning Fund
Lem Ketema 50 External Afri-Plastics Challenge
Ukwenza Vr 50 External Afri-Plastics Challenge
Eco Brixs 50 External Afri-Plastics Challenge
Meeticks Africa 50 External Afri-Plastics Challenge
Association Terangagée 50 External Afri-Plastics Challenge
Catherine Natang 50 External Afri-Plastics Challenge
Ensemble Artistique Et Culturel Wakat 50 External Afri-Plastics Challenge
U-Recycle Initiative Africa 50 External Afri-Plastics Challenge
Let's Do It Ghana 50 External Afri-Plastics Challenge
Recycle Port Harcourt Limited 50 External Afri-Plastics Challenge
Sustainable Pioneers Cic 50 Nesta funded Devolved Nations (Scotland)
Grants below £50,000 (number of grants to 565
institutions 46)
Grants cancelled in the year (1,077)
Total grants 5,444
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## 7b. Grants 2022
**----- Start of picture text -----**
Grants to
institutions
2022 External/Nesta
Recipient £’000 funded Programme
Hastee 200 Nesta funded Rapid Recovery Challenge
Udrafter Ltd 200 Nesta funded Rapid Recovery Challenge
Udrafter Ltd 150 Nesta funded Rapid Recovery Challenge
Incomemax 150 External Rapid Recovery Challenge
Beam 150 Nesta funded Rapid Recovery Challenge
Turn2us 150 Nesta funded Rapid Recovery Challenge
Hastee 150 Nesta funded Rapid Recovery Challenge
Evenbreak 150 External Rapid Recovery Challenge
RAMTSILO 100 External Afri-Plastics Challenge
TakaTaka Solutions 100 External Afri-Plastics Challenge
Watamu Marine Association 100 External Afri-Plastics Challenge
Chaint Afrique Academy 100 External Afri-Plastics Challenge
Chanja Datti Ltd 100 External Afri-Plastics Challenge
Mental and Environmental Development 100 External Afri-Plastics Challenge
Initiative for Children (MEDIC)
Megagas Alternative Energy Enterprise 100 External Afri-Plastics Challenge
Full Development Agency (FDA) 100 External Afri-Plastics Challenge
Green Industry Plast – Togo (GIP-TOGO) 100 External Afri-Plastics Challenge
RECYPLAST 100 External Afri-Plastics Challenge
Greenhill Recycling 100 External Afri-Plastics Challenge
CareMe Bioplastics 100 External Afri-Plastics Challenge
eTrash2Cash (eT2C) Company Nigeria 100 External Afri-Plastics Challenge
Nelplast Eco Ghana Limited 100 External Afri-Plastics Challenge
Planet 3R 100 External Afri-Plastics Challenge
Fast Familiar (FanSHEN) 100 Nesta funded Centre for Collective Intelligence Design
University of Sussex 60 External PEC – Core Work
Leeds City Council 50 Nesta funded AFS Innovation Partnership: Leeds City Council
Stockport Metropolitan Borough Council 50 Nesta funded AFS Innovation Partnership: GMCA & Stockport
MBC
City of York Council 50 Nesta funded AFS Innovation Partnership: City of York Council
Work Advance Ltd 50 External PEC – External Research Commissioning
Grants below £50,000 (number of grants to 1,368
institutions 83)
Grants cancelled in the year (42)
Total grants 4,486
**----- End of picture text -----**
## 7c. Auditor’s fees
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
External audit 220 111
Internal audit 91 73
Other assurance services 12 27
Tax advisory services 112 55
Total auditor fees 435 266
**----- End of picture text -----**
External audit fees incurred for Nesta, the parent charity, were £74,100 (2022: £50,450) excluding VAT. External audit fees and tax advisory services were payable to external auditors.
Annual report and accounts: For the year ended 31 March 2023
44
DocuSign Envelope ID: E6C77FF0-A376-45EF-BEB8-67A893957FE2
Financial statements
## **8. Employees for parent and Group**
## 8a. Staff costs
**----- Start of picture text -----**
Group Group
2023 2022
£’000 £’000
Salaries and emoluments of directly employed staff 29,608 17,791
Social security costs 3,158 1,923
Pension costs 2,486 1,696
Agency/temporary staff costs 539 87
Other staff costs* 99 346
Total 35,890 21,843
**----- End of picture text -----**
*During the previous year, there were redundancy payments totalling £227,258 (current year: £nil) as a result of restructuring.
Included above in 2022 staff costs is £5.0m relating to post acquisition staff costs of Behavioural Insights Limited, a subsidiary acquired during the year on 10 December 2021. A full year of Behavioural Insights Limited staff costs have been included for the year ended 31 March 2023.
## 8b. Staff numbers
The following shows average headcount staff numbers during the year.
**----- Start of picture text -----**
Group Group
2023 2022
A Fairer Start 14 8
A Healthy Life 14 7
A Sustainable Future 13 8
Central Programmes and Devolved Nations 16 11
Committed Programme Delivery 24 31
Enterprises 52 57
Investments 20 20
Practices 31 31
Support 85 94
Trading 241 256
Total 510 523
**----- End of picture text -----**
The average full time equivalent for 2023 is 500 (2022: 498).
Behavioural Insights Limited counts for 244 (2022: 247) of this full time equivalent figure post acquisition, and 241 (2022: 256) Trading headcount above.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **8. Employees for parent and Group** (continued)
## 8c. Higher earners
The number of employees who earned remuneration (salaries, bonus and benefits in kind) of more then £60,000 in the year was as follows:
**----- Start of picture text -----**
Group Group
2023 2022
**----- End of picture text -----**
||**Group**
**2023**|**Group**
**2022**|
|---|---|---|
|£60,000 – £69,999
£70,000 – £79,999
£80,000 – £89,999
£90,000 – £99,999
£100,000 – £109,999
£110,000 – £119,999
£120,000 – £129,999
£130,000 – £139,999
£140,000 – £149,999
£150,000 – £159,999
£160,000 – £169,999
£170,000 – £179,999
£180,000 – £189,999
£190,000 – £199,999
£200,000 – £209,999
£210,000 – £219,999
£220,000 – £229,999|51
52
16
22
8
7
4
1
4
3
1
-
-
-
-
1
1|21
13
7
8
4
4
1
-
1
-
-
-
-
1
-
1
-|
Of staff with remuneration over £60,000, 114 (2022: 58) are members of the defined contribution pension scheme. Employer contributions to the scheme related to staff in these salary ranges during the year were £917k (2022: £522k).
## 8d. Key management personnel
The annual salaries (including benefits, termination payments and any bonuses) of the Executive team as at 31 March 2023 totalled £1,131k (2022: £1,166k). The Executive Team are considered to be key management personnel.
The Executives are entitled to the same flexible benefits and pension scheme as all staff. Nesta offers a defined contribution pension scheme with the contribution from Nesta ranging from a minimum of 8 per cent up to 12 per cent of salary, depending on the level of contributions made by the employee. Employer pension contributions for executives amounted to £120k (2022: £115k) for the year. Employer National Insurance contributions were £143k (2022: £122k).
## 8e. Pensions
Defined contribution schemes are offered across the Group. The Group's total contributions made in respect of the year, for all schemes, totalled £2,482k (2022: £1,693k), including outstanding contributions of £176k (2022: £229k) at the balance sheet date.
## 8f. Trustee remuneration
None of the trustees received remuneration for performance of their role as trustees during the year. Travel expenses of £nil (2022: £nil) were reimbursed during the year.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **9. Intangible fixed assets**
**----- Start of picture text -----**
Goodwill
£’000
Goodwill arising from new business combinations
Cost
Opening & closing balance at 1 April 2022 and 31 March 2023 10,895
Amortisation
Opening balance as at 1 April 2022 332
Amortisation 1,089
Closing balance as at 31 March 2023 1,421
Net book value 2023 9,474
Net book value 2022 10,563
**----- End of picture text -----**
## **10. Tangible fixed assets**
Group fixed assets
**----- Start of picture text -----**
£’000 £’000 £’000 £’000 £’000 £’000
Cost
Opening balance 23,817 3,405 2,082 692 705 30,701
Additions 7 - 358 99 280 744
-
Disposals (548) (153) (30) (48) (779)
Transfer (10) - - - 10 -
23,266 3,405 2,287 761 947 30,666
Depreciation
Opening balance 1,431 1,423 1,432 376 614 5,276
Charge for the year 244 238 356 131 60 1,029
-
Disposals (548) (152) (27) (48) (775)
Transfer (10) - - - 10 -
1,117 1,661 1,636 480 636 5,530
Net book value 2023 22,149 1,744 651 281 311 25,136
Net book value 2022 22,386 1,982 650 316 91 25,425
Leasehold asset Plant and machinery Computer hardware Computer software Fixtures and fittings Group total
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **10. Tangible fixed assets** (continued)
Parent charity fixed assets
**----- Start of picture text -----**
£’000 £’000 £’000 £’000
Cost
Opening balance 1,508 365 593 2,466
Additions 236 91 244 571
1,744 456 837 3,037
Depreciation
Opening balance 1,050 218 515 1,783
Charge for the year 232 85 49 366
1,282 303 564 2,149
Net book value 2023 462 153 273 888
Net book value 2022 458 147 78 683
Computer hardware Computer software Fixtures and fittings Parent charity total
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
48
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Financial statements
## **11. Investments – Group**
**----- Start of picture text -----**
Category £’000 £’000 £’000 £’000 £’000
Equities and private equity
Global Equities Quoted 211,844 - (72,974) (3,656) 135,214
UK Small Cap Quoted 37,413 5,790 (5,784) (5,068) 32,351
Emerging Markets Quoted 28,393 - - (1,801) 26,592
Infrastructure Equity Unquoted - 18,551 - 1,133 19,684
Private equity funds Unquoted 5,075 180 (1,564) 169 3,860
Total equities and private equity 282,725 24,521 (80,322) (9,223) 217,701
Fixed income and property
Multi-Asset Credit Unquoted - 65,000 - (2,267) 62,733
Asset-Backed Securities Unquoted - 43,700 - (653) 43,047
Private Debt (Corporate) Unquoted - 2,926 - (54) 2,872
Private Debt (Infrastructure) Unquoted - 11,090 (2,853) 402 8,639
Property Property 51,611 80 (3,531) (7,870) 40,290
Fixed income Quoted 40,367 30 (38,710) (1,687) -
Bonds Quoted 39,244 218 (37,921) (1,518) 23
Total fixed income and property 131,222 123,044 (83,015) (13,647) 157,604
Mixed motive investments
Investment in early stage companies Unquoted 14,173 211 - (826) 13,558
Investment in early stage funds Unquoted 2,748 - (1,042) (177) 1,529
Total mixed motive investments 16,921 211 (1,042) (1,003) 15,087
Other investments Unquoted 40 - - - 40
Total investments 430,908 147,776 (164,379) (23,873) 390,432
Market/fair value at 1 April 2022 Additions at cost Maturities, proceeds and disposals at market value Net gains and losses Group total market/fair value at 31 March 2023
**----- End of picture text -----**
Quoted investments are held at market value, unquoted investments and the investment property are at fair value.
As at 31 March 2023, total cash and investment assets held by the Nesta Trust totalled £424 million (2022: £466 million). Refer also to the Investment Review on pages 14 to 15 of this report for more detail of the investments.
The above table has been adjusted for consolidation in relation to the investment property; 51.3 per cent of the property represents investment property to the Group. The remaining 48.7% Is used by the Group and included within leasehold asset in Note 10.
The valuation of the investment property (58 Victoria Embankment) is £53.0 million (2022: £60.5m). The valuation is reviewed at each year end by an independent qualified property valuer. Property above also includes a fund with a market value of £13.1 million at the year end (2022: £20.6 million).
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **11. Investments – Group** (continued)
Investment assets consist of the following
**----- Start of picture text -----**
Market/fair Market/fair
value at value at Percentage Percentage
31 March 31 March of 2023 of 2022
2023 2022 portfolio portfolio
£’000 £’000 % %
Equities and private equity 217,701 282,725 56% 66%
Fixed income and property 157,604 131,222 40% 30%
Mixed motive investments 15,087 16,921 4% 4%
Other investments 40 40 0% 0%
390,432 430,908 100% 100%
**----- End of picture text -----**
Total gains and losses on investment assets above impacting the Consolidated statement of financial activities are summarised as follows:
**----- Start of picture text -----**
Group total Group total
loss gain
March 2023 March 2022
£’000 £’000
Quoted investments (13,730) 17,689
Unquoted investments (10,143) 8,316
(23,873) 26,005
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **12. Programme-related and mixed motive investments – Group and charity**
12a. Programme-related investments – Group and charity
**----- Start of picture text -----**
Group total value 1 Group total value
April 2022 Additions Disposals Revaluations 31 March 2023
£’000 £’000 £’000 £’000 £’000
Investment type
Equity 14,695 4,860 (2,124) 1,802 19,233
Unsecured loans 5,960 1,765 (1,095) 202 6,832
20,655 6,625 (3,219) 2,004 26,065
Parent charity total
Parent charity total value 1 April 2022 Additions Disposals Revaluations value 31 March 2023
£’000 £’000 £’000 £’000 £’000
Investment type
Equity 914 - - - 914
Unsecured loans 16,180 5,174 (2,672) 2,102 20,784
17,094 5,174 (2,672) 2,102 21,698
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
51
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Financial statements
**12. Programme-related and mixed motive investments – Group and charity** (continued) 12b. Programme-related investments in joint venture – Group and charity
**----- Start of picture text -----**
Group share Group share
Joint of net assets of net assets
Organisation Country of Class of venture Nature of 2023 2022
name registration ownership interest Year end date business £’000 £’000
FFN JV Limited UK Preference 45% 31-Dec Investing in - -
technology
start-ups
Share of net assets of joint 586 313
venture
Goodwill on acquisition of 1,210 432
joint venture
1,796 745
Group share of loss Group share of loss
in joint venture in joint venture
2023 2022
£’000 £’000
Share of loss of FFN JV Limited (640) (236)
Amortisation of goodwill on acquisition of FFN JV Limited (64) (19)
Share of loss of FFN JV Limited per SoFA (704) (255)
-
Share of (loss) of Behavioural Insights Limited up to 10 December 2021 (29)
(became 100% mixed motive subsidiary from 30% joint venture)
Share of loss in joint venture (704) (284)
Parent charity
Parent charity total total value
value 1 April 2022 Additions 31 March 2023
£’000 £’000 £’000
Equity 1,000 1,500 2,500
Total 1,000 1,500 2,500
**----- End of picture text -----**
## 12c. Mixed motive investments
**----- Start of picture text -----**
Parent charity
Parent charity total total value
value 1 April 2022 Additions 31 March 2023
£’000 £’000 £’000
Equity 21,673 256 21,929
Total 21,673 256 21,929
**----- End of picture text -----**
The mixed motive investment above relates to 100% subsidiary Behavioural Insights Limited, which was previously a 30% joint venture up to 10 December 2021.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **13. Debtors**
**----- Start of picture text -----**
Group Parent Group Parent
2023 2023 2022 2022
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 5,541 873 6,284 1,219
Amounts due from subsidiaries - 963 - 774
Accrued income 7,244 8,024 6,696 6,991
Prepayments 6,309 1,863 4,086 1,207
Other debtors 527 - 1,284 76
Deferred tax asset* 625 - 773 -
Total debtors falling due within one year 20,246 11,723 19,123 10,267
Amounts falling due after more than one year:
Accrued income 23 23 1,712 1,712
Total debtors falling due after more than 23 23 1,712 1,712
one year
Total debtors 20,269 11,746 20,835 11,979
**----- End of picture text -----**
* Deferred tax asset above arises in Behavioural Insights Limited, a trading subsidiary acquired during the previous year.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **14. Creditors**
**----- Start of picture text -----**
Group Parent Group Parent
2023 2023 2022 2022
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade creditors 1,878 1,391 1,072 519
Amounts due to subsidiaries - 28 - -
Accruals 3,369 5,244 3,233 5,719
Deferred income 6,223 919 4,202 841
Grant creditors 44 838 3,325 3,326
Other tax and social security 1,865 1,297 1,805 566
Other creditors 189 214 522 373
Total creditors falling due within one year 13,568 9,931 14,159 11,344
Amounts falling due after more than one year:
Grant creditors 451 451 246 246
Other payables, including loans 7,363 - 7,386 -
Accruals 76 - 188 -
Provisions for liabilities 68 - 176 -
Total creditors falling due after more than 7,958 451 7,996 246
one year
Total creditors 21,526 10,382 22,155 11,590
**----- End of picture text -----**
**----- Start of picture text -----**
Group Parent Group Parent
2023 2023 2022 2022
£’000 £’000 £’000 £’000
Analysis of deferred income
At 1 April 4,202 841 1,412 1,507
Prior year deferred income released during (4,202) (841) (1,412) (1,507)
the year
Income deferred in the year 6,223 919 4,202 841
At 31 March 6,223 919 4,202 841
**----- End of picture text -----**
Nesta leads a consortium of UK-wide universities via the Creative Industries Policy and Evidence Centre (PEC). The PEC aims to provide independent research and authoritative recommendations that will aid the development of policies for the UK's creative industries, contributing to their continued success. The PEC is part of the Creative Industries Clusters Programme led by the Arts and Humanities Research Council (AHRC) and funded through the Industrial Strategy Challenge Fund. During the year, Nesta administered £892k (2022: £853k) of income and expenditure on behalf of PEC which is not recognised within Nesta's statement of financial activities due to Nesta handling these funds as an agent. As at the balance sheet date, Nesta held funds totalling £3k (2022: £171k) on behalf of the consortium which is included within restricted deferred income.
Annual report and accounts: For the year ended 31 March 2023
54
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Financial statements
## **15. Subsidiaries**
**----- Start of picture text -----**
Country of registration and
registered charity/company Class of
Organisation name number ownership Parent interest Nature of business
**----- End of picture text -----**
|**Organisation name**|**Country of registration and**
**registered charity/company**
**number**|**Class of**
**ownership**|**Parent interest**|**Nature of business**|
|---|---|---|---|---|
|**The Nesta Trust**|United Kingdom charity
number 1144683|Sole corporate
Trustee||A charitable trust that holds
investment assets|
|**Nesta Enterprises Limited**|United Kingdom company
number 08580327|Ordinary|100%|A charitable trading company|
|**Nesta GP Limited**|United Kingdom company
number 08231985|Ordinary|100%|General partner in the Nesta
Impact Investments 1 Limited
Partnership Fund|
|**Nesta PRI Limited**|United Kingdom company
number 08232090|Ordinary|100%|Limited partner in the Nesta
Impact Investments 1 Limited
Partnership Fund|
|**Cultural Impact Development**
**Loans Limited**|United Kingdom company
number 11388464|Ordinary|100%|Financial support for arts
organisations|
|**Nesta Partners Limited**|United Kingdom company
number 06618114|Ordinary|100%|Partner in Nesta Investment
Management LLP and Nesta
Arts Impact LLP|
|**Behavioural Insights Limited**|United Kingdon company
number 08567792|Ordinary|100%|A social purpose
consultancy company|
|**Nesta Challenges**|United Kingdom Company
number 14045038|Ordinary|100%|(Dormant) Designs and creates
challenge prizes to help solve
the world’s biggest problems|
|**NII GP2 Limited**|United Kingdom company
number 10710378|Ordinary|100%|(Dormant) General partner|
|**Nesta Investment**
**Management LLP**|United Kingdom company
number OC338038|Limited Liability
Partnership||Investment manager funds|
|**Nesta Arts Impact LLP**|United Kingdom company num-
ber OC396102|Limited Liability
Partnership||Financial support for arts
organisations|
|**Nesta Arts & Culture Impact**
**LLP**|United Kingdom company
number OC423779|Limited Liability
Partnership||Financial support for arts and
culture organisations|
|**NII2 Special Partner LLP**|United Kingdom company
number OC416761|Limited
Liability
Partnership||(Dormant) Special partner|
|**Nesta US Inc**|United States|Sole member|100%|To engage in charitable and
educational activities within the
meaning of Section 501 (c)(3) of
the Internal Revenue Code 1986|
All of the above entities have a year end date of 31 March.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## 15. Subsidiaries (continued)
The results of the subsidiary entities consolidated are as follows:
**----- Start of picture text -----**
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Profit and Loss
for the year ended
31 March 2023/
since date of
aquisition
Income 11,734 493 173 - 56 41 25,537 665 158 93 - 38,950 19,012
Expenditure (26,552) (493) (173) - (79) (41) (24,989) (104) (81) (461) (301) (53,274) (47,705)
Other (losses)/ (27,526) - (215) (82) 2,330 111 (840) 53 - - (26,169) 25,046
gains
Partner share/ (42,344) - - (215) (105) 2,330 659 (279) 130 (368) (301) (40,493) (3,647)
(loss)/ profit for the
year
Assets 427,307 152 111 1,665 591 17,788 15,309 259 2,397 3,154 - 468,733 506,147
Liabilities (1,087) (152) (111) (4,294) (785) (14,463) (8,202) (27) (3,139) (4,162) - (36,422) (32,918)
Net assets/ 426,220 - - (2,629) (194) 3,325 7,107 232 (742) (1,008) - 432,311 473,229
(liabilities)
Opening net 468,564 - - (2,414) (89) 995 6,448 511 (872) (640) 301 472,804 476,876
reserves/
(liabilities)
Closing net 426,220 - - (2,629) (194) 3,325 7,107 232 (742) (1,008) - 432,311 473,229
reserves/
(liabilities)
Nesta Trust Nesta Enterprises Limited Nesta GP Limited Nesta PRI Limited Cultural Impact Development Loans Limited Nesta Partners Limited Behavioural Insights Team Limited Nesta Investment Management LLP Nesta Arts Impact LLP Nesta Arts & Culture Impact LLP Nesta US Inc 2023 Total 2022 Total
**----- End of picture text -----**
Entities with negative balances have continued support which is approved by the relevant Board committee. No intercompany amounts were written off in the year, and certain letters of support were given in respect of these transactions, none of which are repayable within 15 months.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **16. Funds**
## 16a. Unrestricted and endowment funds
**----- Start of picture text -----**
Funds retained
within non
charitable joint
General funds ventures Endowment funds Total
£’000 £’000 £’000 £’000
Balance at 1 April 2022 42,840 (254) 451,618 494,204
Net (expenditure)/income before investment (25,692) - 7,919 (17,773)
(losses)
- -
Unrealised (losses) on investments (23,873) (23,873)
- -
Share of operating loss in joint venture FFN (704) (704)
JV Limited
Transfers to restricted funds* 7,274 - - 7,274
Transfers from endowment to general 27,107 - (27,107) -
funds**
Foreign exchange gains 111 - (9) 102
Balance at 31 March 2023 51,640 (958) 408,548 459,230
**----- End of picture text -----**
*Where Nesta provides match-funding or programme support on projects, total expenditure is shown in the restricted fund and a transfer from the general fund to the restricted fund is made to account for Nesta’s share of expenditure.
**The expendable endowment fund relates to the funds of the Trust. These funds are held without distinction as to capital and income and can be applied in furtherance of the objects of the Trust. The Trust makes an annual transfer to Nesta to deliver its charitable aims as detailed in the reserves policy.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **16. Funds (continued) –** 16b. Restricted funds
**----- Start of picture text -----**
Balance Transfer from/ Balance
1 April 2022 Income Expenditure (to) general fund 31 March 2023
Funder Programme £'000 £'000) £’000 £’000 £'000
Arts Council of England Economic Value of Culture 129 (30) - (10) 89
Arts Council of Wales Digital Innovation Fund for the 193 - - (193) -
Arts in Wales
Austrian Research Promotion Innovation Growth Lab 41 68 - (42) 67
Agency
CERN – European Organisation Attract Next 105 - - (24) 81
for Nuclear Research
ENISA Spain Innovation Growth Lab 26 26
European Commission TalTech Twinning 132 - - (66) 66
European Commission NGI Forward 253 - - (253) -
European Commission Pro-Ethics 96 - - (17) 79
European Commission EURITO 83 - - (10) 73
Google.org FutureFit 118 - - (78) 40
Government of Canada Afri-Plastics Challenge (Ocean 7,671 429 - (7,506) 594
Plastics)
Greater London Authority Innovation Growth Lab 41 68 - (42) 67
Innovate UK Innovation Growth Lab 33 55 - (34) 54
Innovate UK (UKRI) Longitude 5,000 - - - 5,000
Innovation Norway Innovation Growth Lab 41 68 - (42) 67
Kauffman Foundation Kauffman Foundation 410 - (365) - 45
translational research
The Arts and Humanities Policy and Evidence Centre – 861 957 - (1,713) 105
Research Council (AHRC) Core
UK Humanitarian Innovation UKHIH Collective Crisis Intelli- 58 42 - (56) 44
Hub gence
University College London CAPE – Capabilities in Academic 170 - - (94) 76
Policy Engagement
University of Helsinki Nordforsk COLDIGIT 157 (37) - (67) 53
Welsh European Funding Office Y Lab – WEFO Skills and 1,144 - - (572) 572
Capacity Building
Prism the Gift Fund The Ending Youth Violence Lab - 1,039 (1,039) - -
Rosetrees Trust Challenge Portfolio: - 15 (1,054) 1,039 -
A Healthy life
Surrey County Council Surrey Heat Pump Installer - 9 (1,203) 1,194 -
Bursary support payments
Economic & Social Research ESRC Productivity Bid - 141 (11) (8) 122
Council
European Commission Impetus - 268 (24) (5) 239
European Commission AI, Data and Robotics at work - 398 (31) (10) 357
Wales Arts Health and Wellbeing People Powered Results and - 33 (1,013) 980 -
Network Wales Arts & Health Wellbeing
Network : Arts and Health
Cardiff University Y Lab – Innovate to Save - (985) 985 - -
European Commission Apps for Europe - (82) (6) 88 -
Schmidt Futures UK ARIA agency research - 87 (61) (15) 11
Argidius Foundation Argidius Evidence Accelerator - 52 (2) (8) 42
UK Research and Innovation UKRI Open Access Block Grant - 39 (376) 341 4
(UKRI)
USAID Mombasa Plastics Prize - 617 (406) (94) 117
Dream Oval Foundation DreamOval Foundation – GSTEP - 151 - (151) -
Alzheimer's Society Longitude Prize on Dementia - 4,340 (343) 343 4,340
JP Morgan Chase Foundation JPM feasiblity study: low-income - 109 (27) (35) 47
women & jobs
All values < £50k 44 86 - (114) 16
16,806 7,937 (4,976) (7,274) 12,493
**----- End of picture text -----**
Negative income and positive expenditure above relates to variations of grant income that was previously recorded which reduced the original grant value, and reversal of balances that have not been drawn down.
In many cases, restricted income is received for programmes for which there is part or match-funding by Nesta (either in cash or in kind). The expenditure shown as restricted is the total expenditure of the programme funded by both Nesta and the external donor. A transfer from the general fund represents the portion of the programme funded by Nesta. A transfer to the general fund represents the portion of funding that Nesta is able to retain to cover overheads.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **17. Analysis of net assets between funds**
**----- Start of picture text -----**
Expendable
Unrestricted funds Restricted funds endowment Group total funds
2023 2023 2023 2023
£’000 £’000 £’000 £’000
Fund balances are represented by:
Intangible assets 9,474 - - 9,474
Tangible fixed assets 1,244 - 23,892 25,136
Investment assets 27,861 - 390,432 418,293
Current and long-term assets 27,853 12,493 - 40,346
-
Current and long-term liabilities (15,750) (5,776) (21,526)
Total 50,682 12,493 408,548 471,723
Expendable
Unrestricted funds Restricted funds endowment Group total funds
2022 2022 2022 2022
£’000 £’000 £’000 £’000
Fund balances are represented by:
Tangible fixed assets 10,563 - - 10,563
Investment assets 1,057 - 24,368 25,425
Current and long-term assets 21,400 - 430,908 452,308
Current and long-term liabilities 31,721 16,806 (3,658) 44,869
Total 42,586 16,806 451,618 511,010
**----- End of picture text -----**
## **18. Summary consolidated income and expenditure account for the year ended 31 March**
The summary income and expenditure account is presented in order to ensure compliance with the Companies Act 2006.
The major difference in the figures presented from those in the Consolidated statement of financial activities is that unrealised gains and losses on investment assets are not recognised.
**----- Start of picture text -----**
Group 2023 Group 2022
£’000 £’000
Gross income:
Income 10,855 48,712
Income of non-charitable subsidiaries 26,031 9,370
36,886 58,082
-
Less: share of joint venture turnover (4,562)
36,886 53,520
Gross expenditure:
Expenditure 30,392 39,360
Depreciation of fixed assets 1,029 730
Amortisation of intangible assets 1,089 332
32,510 40,422
Share of (loss) in joint ventures (704) (283)
Foreign exchange gains 111 28
Net income for the year 3,783 12,843
Reconciliation to consolidated statement of financial activities
Net income for the year 3,783 12,843
Movement on endowment funds (43,070) (6,969)
Net (expenditure)/ income (39,287) 5,874
**----- End of picture text -----**
Annual report and accounts: For the year ended 31 March 2023
59
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Financial statements
## **19. Contingent liabilities**
There were no contingent liabilities at the balance sheet date (2022: nil).
## **20. Commitments**
Investments, loans or contributions to funds that have been contracted but not yet drawn down, and grant agreements not yet signed by Nesta by the balance sheet date, are shown as commitments below.
**----- Start of picture text -----**
Parent
Parent charity and
charity and
Group total
Group total
at 31 March
at 1 April
2022 Additions De-committed Drawdowns 2023
£’000 £’000 £’000 £’000 £’000 Funded from
Investments, loans, contributions
to funds:
Private equity secondaries 2,743 75,546 - (29,894) 48,395 Endowment
fund
Programme-related investments 6,055 - - - 6,055 General fund
Grant agreements not yet signed 198 - (39) (159) - Restricted and
by Nesta general fund
Total 8,996 75,546 (39) (30,053) 54,450
**----- End of picture text -----**
Commitments will be primarily funded by the liquidation of equity investments.
## **21. Operating lease commitments**
At 31 March 2023 the Group was committed to total payments during the next year in respect of operating leases which are due within the following periods.
**----- Start of picture text -----**
Group 2023 Group 2022
£’000 £’000
Due within one year 626 857
Due within two to five years 297 128
Due in more than five years 1 -
Total 924 985
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At 31 March 2023 the Nesta parent charity had entered into agreements with organisations to lease part of 58 Victoria Embankment. The rental payments due to the parent charity are:
**----- Start of picture text -----**
Parent 2023 Parent 2022
£’000 £’000
Buildings – 58 Victoria
Embankment
Due within one year 439 1,326
Due within two to five years 1,142 5,024
Due in more than five years - 591
Total 1,581 6,941
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Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **22. Related party transactions**
The Nesta Trust ('the Trust') was established by a Trust Deed dated 22 September 2011. The Trust holds investment assets previously held by the NESTA which was abolished on 1 April 2012. The assets of the Trust provide income and capital to be applied by Nesta as sole Trustee to further the objects of the Trust. As the sole Trustee of the Trust, Nesta is considered to control the Trust which operationally means Nesta is responsible for the Trust’s investment policy.
The Trust is a registered charitable trust which is classified by the Office of National Statistics as within the public sector boundary. Nesta has had transactions with government departments and bodies during the year as part of its ordinary course of business. As the Trust is not involved in the operational decisions of Nesta, any transactions between government departments/bodies and Nesta are not considered to be related party transactions.
The related party transactions that require disclosure between Nesta and its related companies are as follows:
**----- Start of picture text -----**
Opening Receivable/ Cash paid by/ Closing net
net debtor/ (payable) by (received by) (creditor)/
(creditor) charity charity debtor
Entity Connection £'000 £'000) £’000 £’000 Notes
**----- End of picture text -----**
|**Entity**|**Connection**|**Opening**
**net debtor/**
**(creditor)**
**£'000**|**Receivable/**
**(payable) by**
**charity**
**£'000)**|**Cash paid by/**
**(received by)**
**charity**
**£’000**|**Closing net**
**(creditor)/**
**debtor**
**£’000**|**Notes**|
|---|---|---|---|---|---|---|
|Nesta Trust|Subsidiary undertaking|11|(3,377)|3,366|-|Nesta recharged the Trust for salary costs totalling
£122,220 (2022: £120,522).
Nesta charged Nesta Trust £7,108,343 (2022:
£2,959,970) in relation to PRI Investments. Nesta
refunded Nesta Trust £1,876,425 (2022: £1,536,088)
in relation to PRI Investments.
Nesta Trust has transferred £20,000,000 (2022:
£35,980,737) to its Trustee Nesta in support of its
charitable objects.
Nesta Trust charged Nesta £2,505,535 (2022:
£2,505,535) for rental of 58 Victoria Embankment.|
|Nesta Enterprises
Limited|Subsidiary undertaking|547|231|(645)|133|Nesta Enterprises Limited gift aided its profits to
Nesta £197,350 (2022: £541,402).|
|Nesta Arts Impact LLP|Subsidiary undertaking|4|30|(27)|7|Nesta charged Nesta Arts Impact LLP loan interest
expense totalling £20,634 (2022: £30,000).
Nesta charged Nesta Arts Impact LLP
management fees totalling £32,275 (2022: £61,513).|
|Cultural Impact
Development Loans
Limited|Subsidiary undertaking|37|44|(73)|8|Nesta charged Cultural Impact Development
Loans Limited management fees totalling
£60,618 (2022: £118,848).|
|Nesta Arts & Culture
Impact LLP|Subsidiary undertaking|-|(2)|(3)|(5)|Nesta Arts & Culture Impact LLP owes Nesta at 31
March 2023 for invoices paid on its behalf.|
|Nesta Investment
Management LLP|Subsidiary undertaking|-|(3)|(3)|(6)|Nesta received distributions from Nesta Invest-
ment Management LLP of £390,184 (2022: £566,814)
for prior year profit and an interim distributions of
£450,000 (2022: £250,000) against this year's profit.|
|Nesta Partners Limited|Subsidiary undertaking|30|71|(25)|76|Nesta Partners Limited gift aided its profits to
Nesta of £41,147 (2022: £24,629).|
|Behavioural Insights
Limited|Subsidiary undertaking|25|1,147|(449)|723|Behavioural Insights Limited received income
from Nesta for staff secondments of £486,527
(2022 (from becoming a subsidiary 10 December
2021): £nil), and other fees totalling £529,253 (2022,
from becoming a subsidiary: £586,569) and paid
Nesta £152,467 (2022, from becoming a subsidiary:
£53,468) for consultancy services.
Behavioural Insights Limited is part of the Nesta
VAT group and at 31 March 2023 owed Nesta
£625,208 (2022: £nil) relating to this.|
Nesta's trustees are drawn from among its key stakeholders, and staff may at times have links to stakeholder organisations and therefore it is in the nature of Nesta's business to have some transactions which are classified as related. All transactions are entered into the ordinary course of business and on an arm's length basis, consistent with Nesta's policy on potential conflicts of interest.
Ex-gratia payments totalling £157k (2022: £193k) were made in the year to other departing staff as part of compensation packages.
Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **23. Comparative consolidated statement of financial activities**
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Unrestricted Restricted Expendable Total
funds funds endowment funds
2022 2022 2022 2022
£’000 £’000 £’000 £’000
Income and endowments from:
Investment income 302 - 7,033 7,335
Charitable activities 3,001 1,277 - 4,278
Other trading activities 9,650 39 - 9,689
Other income 4,874 - - 4,874
Total income 17,827 1,316 7,033 26,176
- -
Less share of joint venture's turnover (4,562) (4,562)
Total Group income 13,265 1,316 7,033 21,614
Expenditure on:
Raising funds
Trading activities 7,529 15 - 7,544
Investment management costs 111 - 748 859
Total expenditure on raising funds 7,640 15 748 8,403
Charitable activities
A Fairer Start 1,490 - 20 1,510
A Healthy Life 1,330 - 18 1,348
A Sustainable Future 1,254 - 17 1,271
Central Programmes and Devolved Nations 1,380 - 19 1,399
Committed Programme Delivery 1,877 3,902 78 5,856
Enterprises 7,076 6,777 186 14,039
Investments in furtherance of the charity's 3,214 - 43 3,257
objectives
Practices 3,849 619 60 4,528
Total expenditure on charitable activities 21,469 11,298 441 33,208
Total expenditure 29,109 11,313 1,189 41,611
Net (expenditure)/income before (15,845) (9,997) 5,844 (19,997)
investment (losses)/gains
- - 26,005 26,005
Net gains on Investments for financial return
Net (expenditure)/income (15,845) (9,997) 31,849 6,008
- -
Share of (losses) in joint venture (283) (283)
Transfers between funds 36,655 2,285 (38,940) -
Net income/(expenditure) before other 20,527 (7,712) (7,091) 5,724
recognised gains/(losses)
Other recognised gains
Foreign exchange gains 28 - 122 150
Net movement in funds for the year 20,555 (7,712) (6,969) 5,874
Reconciliation of funds
Total funds bought forward 22,031 24,518 458,587 505,136
Total funds carried forward 42,586 16,806 451,618 511,010
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Annual report and accounts: For the year ended 31 March 2023
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Financial statements
## **24. Comparative funds**
24a. Comparative unrestricted funds
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Funds
retained within
non-charitable
General Endowment subsidiaries or joint Total
funds funds ventures funds
2022 2022 2022 2022
£’000 £’000 £’000 £’000
Balance at 1 April 2021 20,019 2,012 458,587 480,618
Net (expenditure)/income before (15,845) - 5,844 (10,001)
investment (losses)/gains
Unrealised gains on investments - - 26,005 26,005
- -
Share of operating loss in joint venture FFN (254) (254)
JV Limited
- -
Share of operating loss in joint venture (29) (29)
Behavioural Insights Limited to the point of
becoming a subsidiary
Joint venture to subsidiary – Behavioural 1,983 (1,983) - -
Insights Limited
Transfers to restricted funds* (2,285) - - (2,285)
Transfers from endowment to general 38,940 - (38,940) -
funds**
Foreign exchange gains 28 - 122 150
Balance at 31 March 2022 42,840 (254) 451,618 494,204
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Financial statements
## **24. Comparative funds** (continued)
## 24b. Comparative restricted funds
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Balance Transfer from/ Balance
1 April 2021 Income Expenditure (to) general fund 31 March 2022
Funder Programme £'000 £'000) £’000 £’000 £'000
Amazon Amazon Longitude Explorer Prize - 340 (161) (179) -
Arts Council of England Economic Value of Culture 141 - (12) - 129
Arts Council of Wales Digital Innovation Fund for the 239 225 (328) 57 193
Arts in Wales
Austrian Research Promotion Innovation Growth Lab 75 1 (96) 60 41
Agency
Cardiff University Y Lab – Innovate to Save 1,097 (1,088) - (9) -
CERN – European Organisation Attract Next - - - 105 105
for Nuclear Research
Department for Education EdTech Innovation Fund 396 (356) (401) 362 -
Department for Education Career Tech Challenge Fund 301 (250) (243) 192 -
Department for Education Career Tech Challenge Fund 111 (82) (2) (27) -
Dream Oval Foundation DreamOval Foundation – GSTEP - 136 (57) (79) -
ENISA Spain Innovation Growth Lab 49 1 (62) 39 26
European Commission TalTech Twinning 166 - (27) (7) 132
European Commission NGI Forward 458 - (174) (32) 253
European Commission Apps for Europe 73 - (91) 19 -
European Commission Pro-Ethics 103 - (5) (1) 96
European Commission EURITO 91 - (52) 44 83
Google.org FutureFit 432 - (250) (65) 118
Government of Canada Afri-Plastics Challenge (Ocean 10,964 - (3,119) (174) 7,671
Plastics)
Greater London Authority Innovation Growth Lab 75 1 (96) 60 41
Improvement Service People Powered Results - 842 (1,012) 169 -
Innovate UK Innovation Growth Lab 60 1 (77) 48 33
Innovate UK (UKRI) Longitude 5,000 - (306) 306 5,000
Innovation Norway Innovation Growth Lab 75 1 (96) 60 41
Institute of Energy and Innovation Growth Lab 50 1 (63) 40 27
Sustainable Development
JPMorgan Chase Foundation Rapid Recovery Challenge 421 - (1,637) 1,216 -
Kauffman Foundation Kauffman Foundation 514 2 (18) (88) 410
translational research
National Lottery Community Accelerating Ideas - - (68) 68 -
Fund
Scottish Government Healthier Lives Data Fund 159 - (165) 6 -
The Arts and Humanities Policy and Evidence Centre – 1,647 903 (1,934) 245 861
Research Council (AHRC) Core
UK Humanitarian Innovation UKHIH Collective Crisis - 350 (277) (15) 58
Hub Intelligence
University College London CAPE – Capabilities in - 256 (71) (15) 170
Academic Policy Engagement
University of Helsinki Nordforsk COLDIGIT 193 - (33) (3) 157
Welsh European Funding Office Y Lab – WEFO Skills and 1,469 - (325) - 1,144
Capacity Building
All values < £50k 159 32 (61) (117) 13
24,518 1,316 (11,313) 2,285 16,806
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Reference and administrative details
## 8. Reference and administrative details
## **Trustees and Main Board Committee Members**
## **Trustees**
**Ed Richards** (Chair)
**Judith Gibbons**
**Heider Ridha**
**Christina McComb**
## **Liz Ditchburn**
(appointed 01 October 2022)
**Seun Akindele**
**Imran Khan** (resigned 31 August 2022)
**Anthony Lilley**
**Moira Wallace** (resigned 19 October 2022)
**Sarah Hunter**
**Jimmy Wales** (resigned 30 June 2023)
**Ian Gomes**
(appointed 01 October 2022)
**Jeremy King** (appointed 01 October 2022)
**Catherine Brien** (appointed 01 October 2022)
## **Audit and Risk Committee**
**Ian Gomes** (Chair)
**Liz Ditchburn**
## **Trust Investment Committee**
**Christina McComb** (Chair)
**Ian Gomes**
## **People Committee**
**Judith Gibbons** (Chair)
**Catherine Brien**
**Christina McComb**
**Judith Gibbons**
**Seun Akindele**
**James Sinclair-Taylor** (attendee) **Tony Thomas** (non-trustee)
**Sally Bridgeland** (non-trustee) **James Sinclair-Taylor** (attendee)
**Hurol Inan** (BIT non-executive Director)
## **Challenge Prizes**
**Ravi Gurumurthy** (Chair)
**Judith Gibbons**
**Sarah Hunter Jimmy Wales**
## **Missions (non-Board)**
**Ravi Gurumurthy** (Chair)
**Ed Richards**
**Jeremy King Catherine Brien Liz Ditchburn Sarah Hunter**
**Christina McComb** (optional)
**Ian Gomes** (optional)
**Judy Gibbons** (optional) **Seun Akindele** (optional) **Jimmy Wales** (optional)
**Protector of the Nesta Trust**
**James Sinclair Taylor**
Annual report and accounts: For the year ended 31 March 2023
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Reference and administrative details
## **Executive Team**
|**Ravi Gurumurthy**|Chief Executive|
|---|---|
|**Trevor Richards**(left 22 April 2022)|Chief Financial Officer|
|**Susan McDonald**(22 April 2022 to 30 January 2023)|Interim Executive Director of Finance|
|**Emily Bushby**(from 30 January 2023)|Group Chief Financial Officer|
|**Lisa Barclay**|Executive Director of Investments|
|**Vicki Sellick**(left 19 April 2022)|Chief Partnerships Officer|
|**Sean Croghan**|Chief Operating Officer|
|**Matthew Seden**|Chief Strategy Officer and Interim Chief Practices Officer|
|**Jenny Gibson**(until 13th June 2022)|Chief Scientist|
|**Elspeth Kirkman**(from 6 May 2022)|Chief Programme Officer|
|**David Brown**(maternity cover to 6 May 2022)|Interim Chief Programmes Officer|
|**Jacqueline Lewis**|Group General Counsel & Company Secretary|
|**Tatham Crawford-Lennox**(left 29 April 2022)|Executive Director of People and Organisational Development|
|**Ann Paul**(from 13 July 2022)|Group Chief People Officer|
|**Ella White**|Executive Director of Communications|
## **Administrative details of the charity**
**Registered name** Nesta changed from ‘Nesta Operating Company’ on 22 July 2013) **Companies House registered number** 07706036 (registered 15 July 2011) **Charity Commission registered number** 1144091 (registered 30 September 2011)
**Office of the Scottish Charity Regulator registered number** SC042833 (registered 30 December 2011) **Registered Office** 58 Victoria Embankment, London EC4Y 0DS
**Independent Auditor** BDO LLP, 2 City Place, Beehive Ring Road Gatwick, West Sussex, RH6 0PA **Internal Auditor** Grant Thornton UK LLP, 30 Finsbury Square, London, EC2A 1AG **Principal Bankers** Lloyds Bank plc, 25 Gresham Street, London, EC2V 7HN **Nesta Trust Investment Advisors** Momentum Global Investment Management, 2nd Floor, The Rex Building, 62 Queen Street, London, EC4R 1EB
Annual report and accounts: For the year ended 31 March 2023
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58 Victoria Embankment London EC4Y 0DS
+44 (0)20 7438 2500 information@nesta.org.uk @nesta_uk nesta.uk www.nesta.org.uk
Nesta is a registered charity in England and Wales with company number 07706036 and charity number 1144091. Registered as a charity in Scotland number SCO42833. Registered office: 58 Victoria Embankment, London EC4Y 0DS.