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2020-03-31-accounts

Registered number: 09894859 Charity number: 1165055

NIAB EMR

Trustees' Report and Financial Statements

For the Year Ended 31 March 2020

NIAB EMR

Contents

Page
Reference and administrative details of the Charity, its Trustees and advisers 1
Trustees' report 2 - 9
Independent auditors' report on the financial statements 10 ‐ 12
Statement of financial activities 13
Balance sheet 14
Notes to the financial statements 15 ‐ 31

NIAB EMR

Reference and Administrative Details of the Charity, its Trustees and Advisers For the Year Ended 31 March 2020

Trustees Dr N W KerbyMBE,Chair
Dr T L BarsbyOBE,NIAB Chief Executive
Professor P J Gregory
Company registered
number
09894859
Charity registered number
1165055
Registered office
93 Lawrence Weaver Road
Cambridge
CB3 0LE
Company secretary
S C Masson
NIAB Chief executive
NIAB EMR Managing
Director
Dr T Barsby OBE
Dr M Caccamo
Independent auditors
Crowe U.K. LLP
Statutory Auditors
55 Ludgate Hill
London
EC4M 7JW
Bankers
Barclays Bank PLC
1 Churchill Place
Canary Wharf
London
E14 5HP
Solicitors
Birketts LLP
22 Station Road
Cambridge
CB1 2JD
Thomson Snell & Passmore LLP
3 Lonsdale Gardens
Tunbridge Wells
Kent
TN1 1NX

Page 1

NIAB EMR | Annual Report and Accounts | March 2020

TRUSTEES’ REPORT INCORPORATING THE STRATEGIC REPORT

STRATEGIC REVIEW

Background

NIAB EMR was incorporated in November 2015 and commenced activities when it bought the business and assets of East Malling Research on 9[th] February 2016.

NIAB EMR is a wholly owned subsidiary charity of NIAB. As part of the NIAB Group, NIAB EMR’s expertise in horticultural and environmental science, including expertise in advanced plant breeding, soil science, water resource use efficiency and biological pest control, complements the strengths of the parent organisation in genetics and pre-breeding, variety evaluation, agronomy research, precision farming and informatics, bringing together the scientific expertise required to support progressive crop production.

Mission and Vision

Our mission is to conduct high-quality strategic and applied research in horticultural and environmental sciences, and to deliver knowledge, products and services that benefit public and private customers.

Our vision is to consolidate NIAB EMR’s position as global leader in strategic and applied research, development and innovation in horticulture, with a particular emphasis on perennial and protected edible crops.

Strategy

The strategy of NIAB EMR is to be an integral part of the strategy of the wider NIAB Group, bringing resilience and greater impact to the group as a whole.

The aim of NIAB EMR’s innovative applied science and research is to support the production of horticultural crops, delivering knowledge, products and services to UK and international growers, industries, and public bodies and consumers. We focus on translating science into practice to meet the practical needs of growers: one of the original objectives of research at East Malling and a principle focus for over 100 years.

NIAB EMR’s research activities are focused on increasing production and profitability of growers/producers who are experiencing a more variable and changing climate. We plan to enhance the provision of other ecosystem services, increase the efficiency of resource use, reduce waste across the food system, and minimise greenhouse gas emissions.

Our research is delivered through three scientific research departments: Genetics, Genomics and Breeding; Pest and Pathogen Ecology; and Crop Science and Production Systems.

Public Benefit

NIAB EMR seeks to:

The Trustees are satisfied they have complied with their duty in section 4 of the Charities Act 2011 to have due regard to public benefit guidance published by the Charities Commission. Based on this guidance, and as described in this Trustees’ report, the Trustees’ believe the activities of NIAB EMR to be charitable in nature.

Page | 2

NIAB EMR | Annual Report and Accounts | March 2020

Performance

In order for NIAB EMR to continue to deliver its charitable objects, the charity must operate from a sound financial position, and hence the main focus of the year was the alignment of resources to ensure that it can provide a selfsustainable science base to continue its research, training and dissemination of knowledge.

Our performance against the specific 2019/20 objectives is highlighted in the table below:-

Objectives Performance
Develop a five year plan and strategy for 2020 to 2025. A five year plan has been developed for NIAB EMR, and this
has been consolidated into an overall five year strategy for
NIAB.
Continue to seek capital funding to support the infrastructure
at East Malling with a focus on areas of priorities (e.g.
glasshouse and polytunnels)		 With the support of the East Malling Trust who have pledged
financial support, a bid was submitted to the UK government’s
Strength in Places Fund (SIPF). The award of an £18m SIPF grant
was confirmed in April 2020. This award will support the
development of a cluster led by NIAB EMR that brings together
local businesses and universities. A proposal was also
submitted to the South East LEP (SELEP) Local Growth Fund.
Subsequently the award of this £1.68M grant was confirmed
by the SELEP in July 2020.
These successes combined will lead to a renewal of the
facilities at East Malling and provide renewed scope for
stakeholder engagement and impact from the research at NIAB
EMR.
Continue the development of NIAB EMR’s viticulture research
to meet the UK wine growers’ practical needs. Introducing the
red Divico grape variety into the UK grower market.		 During the year the research vineyard continued to be
developed in consultation with the East Malling Viticulture
Consortium group organised through NIAB EMR. This
consortium supports the activities and development of the
research vineyard. The membership covers more than 60% of
the UK’s vine growers and wine makers. In partnership with
the East Malling Trust, a successful proposal was submitted to
SELEP Growing Places Fund scheme with the purpose of
developing a Wine Innovation Centre at East Malling.
Protect and release 2 new varieties Plant variety rights applications were filed for a new early
plum variety and an everbearer strawberry variety.

Objectives

NIAB EMR is looking to address the following objectives in the forthcoming year:-

  1. Towards the end of the March 2020 Covid-19 arrived as a global pandemic. The principle objective for the period then became ensuring business continuity and employee wellbeing.

  2. Implement development of new facilities at East Malling, delivering on the objectives of the SIPF and the SELEP scheme

  3. Apply for Plant Variety Rights for two new fruit varieties.

  4. Seek to merge NIAB EMR fully into NIAB. When NIAB took on the activities of NIAB EMR those activities were placed into a subsidiary charity, NIAB EMR. The reasons for doing this are no longer relevant.

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NIAB EMR | Annual Report and Accounts | March 2020

FINANCIAL REVIEW

Income

The total incoming resources for the period was £5,761k (2019: £5,188k). This income is derived from a mixture of research grants and contracts, as well as recharges to East Malling Services, a subsidiary organisation.

Expenditure

The total outgoing ordinary expenditure totalled £5,421k (2019: £5,313k). Of that amount £2,404k (2019 £2,387k) was related to staff costs for staff either directly employed by NIAB EMR or employed by NIAB but working on NIAB EMR projects with amounts being charged to NIAB EMR for their time.

Capital Expenditure

The charity funded the capital purchases from unrestricted income. £330k (2019: £176k) was spent on fixed assets.

Business Review and Key Performance Indicators

NIAB EMR is considering the most appropriate Key Performance Indicators by which the development, performance or position of the various elements of its operations can be effectively measured.

The following are considered among the Key Performance Indicators:-

The primary objective was to maintain income and the quality, relevance and impact of our research, whilst achieving the targets within a 3 year plan developed prior to acquisition of the activities from East Malling Research. NIAB EMR met the target for its 3 year plan.

Subsidiaries and related parties

NIAB EMR is part of the NIAB Group of companies; NIAB (Charity No: 1064230) controlling NIAB EMR through its membership of the charity. The results of NIAB EMR and those of East Malling Services Limited are consolidated within NIAB’s financial statements. The results of East Malling Services are not consolidated into the financial statements of NIAB EMR. The trading subsidiary made a profit for the year £339k (2019: £638k), in part as a result of royalty income from Plant Variety Rights of £878k (2019 £874k).

Reserves Policy

The total charity reserves show a negative £151k (2019: negative £491k). The Board are mindful of their commitment to repay the loan from the NIAB Trust within 10 years, and along with NIAB have set a target level of positive general reserves equivalent to between 2 and 4 months expenditure.

Performance Indicators:-
2020 2019
Charitable Income £5,761k £5,188k
Expenditure £5,421k £5,313k
Average Staff Numbers 68 67
Turnover per annum per head
£85k		 £77k

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NIAB EMR | Annual Report and Accounts | March 2020

Going Concern

The Trustees have acknowledged the guidance on going concern and financial reporting published by the Financial Reporting Council in 2016.

The ultimate parent undertaking is NIAB (charity no: 1064230). It is the intention of both NIAB and NIAB EMR to merge into a single charity on a going concern basis within 12 months of the date of these accounts.

The charity is expected to continue to generate positive cash flows on its own account and as part of the merged charity.

The Trustees have reviewed the cash flows and management accounts supporting its own and NIAB’s activities for the next two years.

The Trustees have considered the following in arriving at their conclusions on going concern: -

  1. The cash flow forecast and latest management accounts, which give confidence that the charity can continue to pay its debts as they fall due. This is supported by NIAB confirming its continued

financial support for the charity for at least twelve months from the date of these accounts.

  1. The NIAB TRUST’s continued support to NIAB group through the provision of facilities and funding support.

  2. The NIAB TRUST’s joint responsibility to fund future Pension Scheme Recovery Plan payments

After making enquiries and considering the uncertainties described above the directors therefore have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future being at least twelve months from the date of approval of these financial statements , and are not aware of any other material uncertainties which may adversely affect the organisation. Accordingly, the financial statements continue to be prepared on the going concern basis

Accounting Period

The financial year end is 28 March 2020, however the financial statements continue to be prepared to 31 March 2020 as permitted by section 390(3) of the Companies Act 2006.

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NIAB EMR | Annual Report and Accounts | March 2020

RISK ASSESSMENT AND MANAGEMENT

The Board of Trustees is responsible for ensuring there are effective and adequate risk management and internal control systems in place to manage the major risks to which the Charity is exposed. The Board reviews the risk register at each meeting.

Principal Risks and Uncertainties

Risk Area Risk Management
Covid-19 •
On site infection of staff or visitors
•
Loss of income
•
Access to property to carry out activities
•
Loss of key staff		 •
The Trustees adopted a policy covering
hygiene and social distancing
•
Monitoring of government guidelines and
implementation of local rules regarding
hygiene and social distancing
•
Use of government furlough scheme
•
Early and ongoing discussion with key
funders
•
Regular and frequent Executive meetings
and staff communications.
•
Risk assessments for utilisation of buildings
and carrying out of activities and for return
to work by employees
•
Change in delivery of activities e.g. in the
field, running on line seminars and events
•
Buildings remaining open but with flexibility
(opening times, one way system, provision
of PPE, cleaning facilities, risk assessments)
•
Support of remote working
Governance and
Trust issues		 •
Failure of the strategic relationship with the
East Malling Trust		 •
Maintain momentum regarding
collaborations. Formation of Joint Trust
Working Group.
Business Strategy •
Failure of the business strategy		 •
CEO, MD and Executive team remain
focussed on actions required to deliver the
Business Strategy.
Business process
and internal
controls		 •
Resilience of IT systems
•
Major outbreak of plant/livestock disease
•
Loss of water supply for irrigation		 •
Integration with Cambridge IT. New
investment in server infrastructure and
Office 365 underway. Disaster recovery
plan to be reviewed annually.
•
Maintenance of protocols. Threat of Xyella
reviewed on a regular basis.
•
Regular maintenance and compliance with
extraction licence monitored in conjunction
with EML. Working with the East Malling
Trust to maintain the underground system.

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NIAB EMR | Annual Report and Accounts | March 2020

Financial Risks •
Insufficient reserves to repay the NIAB
TRUST loan
•
Strain on working capital given cash flow
uncertainties over timing of income and
expenditure.
•
Negative impact of BREXIT		 •
Review progress against cash flow budget.
•
Reserves policy.
•
Regular review.
•
Monitor the impact on customers and staff.
External and
environmental
factors		 •
Intruders, theft
•
Major IT or communication issue		 •
Monitor security services provided by
landlord.
•
Improve coordination across sites.

Page | 7

NIAB EMR | Annual Report and Accounts | March 2020

TRUSTEES’ REPORT

STRUCTURE, GOVERNANCE and MANAGEMENT

Members and Board of Trustees

NIAB is the sole member of NIAB EMR.

Board of Trustees

The Board of Trustees comprises the Chair and up to four additional Trustee directors. The following Trustees have served during the period:-

Dr. N W Kerby MBE, Chairman Professor P J Gregory Dr. T L Barsby OBE

Recruitment, induction and training of Trustees

NIAB EMR recruits Trustees with the relevant skillset to support the charity’s activities. An induction programme has been put in place for newly appointed Trustees and is kept under review and updated where appropriate. In addition, Trustees are in regular contact with the Managing Director and executive team, and receive updates on key areas of activity.

Organisation and governance

NIAB EMR is incorporated in England and Wales and is a company limited by guarantee (registered number 09894859) and a registered charity (number 1165055). It is governed by its Memorandum and Articles of Association adopted on 30 November 2015.

The financial statements have been prepared in accordance with the Charities Act 2011, the Companies Act 2006 and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2015).

Trustee Remuneration

Decision making and key management

The Board of Directors (Trustees) administer the company, and meet quarterly.

The key management personnel are appointed by NIAB’s Chief Executive. To facilitate effective operations, a Managing Director is appointed to manage the day to day operations at East Malling, and has delegated authority for all operational matters. As NIAB EMR forms part of a larger group it is managed on a group basis.

The NIAB group nominations and remunerations committee consider the pay for key management personnel in the context of the overall NIAB EMR pay award, and the benchmarking of similar roles.

The average number of employees for the year was 68 (2019 - 67). A policy of equal opportunity is pursued throughout, including the treatment of applications for employment from people who may be disabled, taking account only of the qualifications and abilities of each individual. Should any employee become disabled during the course of employment every effort would be made to retain that person's services and to provide necessary retraining.

Continuing education and training is regarded as vital for the continuance of the company's work and assistance to this end is provided to a significant number of employees.

Liability Insurance

The Trustees have effected liability insurance as permitted by the company’s articles. This insurance does not provide cover in the event that a Trustee is proved to have acted fraudulently or dishonestly.

NIAB EMR does not remunerate its Trustees.

Page | 8

NIAB EMR | Annual Report and Accounts | March 2020

STATEMENT OF TRUSTEES’ RESPONSIBILITES IN RESPECT OF THE ANNUAL AUDIT REPORT AND FINANCIAL STATEMENTS

The Trustees (who are also directors of NIAB EMR for the purposes of company law) are responsible for preparing the Trustees Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom general accepted accounting practise (United Kingdom accounting standards and applicable law), including FRS102, the financial reporting standard applicable in the UK and Republic of Ireland. Under company law the Trustees must not approve the financial statements unless that they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Trustees are required to:

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

Independent Auditors

A resolution to reappoint Crowe U.K. LLP, Chartered Accountants, will be put to the members at a General Meeting, in accordance with section 485 of the Companies Act 2006.

The Trustees approve the Trustees Report incorporating the Strategic Report and financial statements

Signed on behalf of the Board of Trustees of NIAB EMR

Dr T L Barsby OBE

Date: 8 December 2020

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

The Trustees confirm that:

Page | 9

NIAB EMR

Independent Auditors' Report to the Members of NIAB EMR

Opinion

We have audited the financial statements of NIAB EMR for the year ended 31 March 2020 which comprise the Statement of Financial Activities, the Balance sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

Page 10

NIAB EMR

Independent Auditors' Report to the Members of NIAB EMR (continued)

Other information

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 Auditors' 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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report including the Strategic Report.

We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:

Page 11

NIAB EMR

Independent Auditors' Report to the Members of NIAB EMR (continued)

Responsibilities of trustees

As explained more fully in the Trustees' responsibilities statement set out on page 8, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.

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

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Naziar Hashemi (Senior statutory auditor)

for and on behalf of Crowe U.K. LLP Statutory Auditors 55 Ludgate Hill London EC4M 7JW

Date: 18 December 2020

Page 12

NIAB EMR

Statement of financial activities (incorporating income and expenditure account) For the Year Ended 31 March 2020

Note
Income from:
Charitable activities
3
Investments
4
Total income
Expenditure on:
Charitable activities
5
Total expenditure
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2020
£000
5,148
518
5,666
5,326
5,326
340
(491)
340
(151)		 Restricted
funds
2020
£000
95
‐
95
95
95
‐
‐
‐
‐		 Total
funds
2020
£000
5,243
518
5,761
5,421
5,421
340
(491)
340
(151)		 Total
funds
2019
£000
5,093
95
5,188
5,313
5,313
(125)
(366)
(125)
(491)

The Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 15 to 31 form part of these financial statements.

Page 13

NIAB EMR Registered number: 09894859

Balance Sheet As at 31 March 2020

Note
Fixed assets
Intangible assets
11
Tangible assets
12
Current assets
Debtors
13
Cash at bank and in hand
Creditors: amounts falling due within one year
14
Net current liabilities
Total assets less current liabilities
Creditors: amounts falling due after more than
one year
15
Net liabilities
Total net assets
Charity funds
Restricted funds
16
Unrestricted funds
16
Total funds		 1,526
45
1,571
(2,002)		 2020
£000
835
985
1,820
(431)
1,389
(1,540)
(151)
(151)
‐
(151)
(151)		 869
556
1,425
(2,152)		 2019
£000
923
897
1,820
(727)
1,093
(1,584)
(491)
(491)
‐
(491)
(491)

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

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

Dr T L Barsby OBE

Date: 8 December 2020

The notes on pages 15 to 31 form part of these financial statements.

Page 14

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

1. General information

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015) – (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The particular accounting policies adopted in the preparation of the financial statements are set out below and have been applied consistently.

NIAB EMR meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).

2. Accounting policies

2.1 Basis of preparation of the accounts

The charity has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. This information is included on a consolidated basis only

The charity is not preparing group accounts as the results of NIAB EMR and those of its subsidiary East Malling Services Limited are consolidated in its parent company NIAB.

2.2 Fund accounting

General unrestricted funds

General unrestricted funds represent income which is expendable at the discretion of the Board in the furtherance of the objects of the charity. Such funds may be held in order to finance both working capital and capital investment.

Restricted funds

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purpose.

2.3 Incoming resources

All incoming resources are included in the Statement of Financial Activities when the charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. The following specific policy is applied:

Incoming resources from charitable activities are accounted for in the year in which the service is provided.

Page 15

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

2. Accounting policies (continued)

2.4 Accrued and deferred income

Income from charitable activities includes income received under contract or where entitlement to grant funding is subject to specific performance conditions and is recognised as earned (as the related services are provided). This may mean accruing for invoices not yet raised, and deferring payments received in advance of work done.

2.5 Resources expended

Liabilities are recognised as resources expended as soon as there is a legal or constructive obligation committing the charity to the expenditure. Expenditure is allocated as follows:

Support costs

Support costs which include central office functions such as general management, finance, information technology and human resources are allocated across categories of expenditure. The basis of the cost allocation has been explained in note 6 to the accounts.

Governance costs

Expenditure incurred in running and administering the charity which is not directly attributable to charitable activities.

All expenditure is inclusive of irrecoverable VAT.

2.6 Research and development

All research and development costs are written off as incurred.

2.7 Foreign currencies

Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the Statement of Financial Activities.

The Charity’s functional and presentational currency is GBP.

Page 16

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

2. Accounting policies (continued)

2.8 Intangible assets and amortisation

Purchased goodwill

Goodwill representing the excess of the purchase price compared with the fair value of net assets acquired is capitalised and amortised evenly over 5 years as in the opinion of the Trustees this represents the period over which the goodwill is expected to give rise to economic benefit. Goodwill is reviewed for impairment at the end of the first financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

P lant variety rights

Plant variety rights are recognised at their fair value at acquisition and are amortised evenly over the period which the rights expire, as in the opinion of the Trustees this represents the period over which the rights are expected to give rise to economic benefit. Plant variety rights are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable.

Amortisation is provided on intangible assets at rates calculated to write off the cost of each asset on a straight‐line basis over its expected useful life.

2.9 Tangible fixed assets and depreciation

All tangible assets are stated at historical cost.

Depreciation is provided on cost over the estimated lives of the assets.

Depreciation is provided on the following bases:

‐ Agricultural and motor vehicles 3‐10 years straight line ‐ Apparatus and equipment 3‐10 years straight line

2.10 Investments

Investments in subsidiaries are stated at cost. To the extent that the carrying value exceeds the recoverable amount, an impairment loss is recognised. The performance of East Malling Services, a wholly owned subsidiary of NIAB EMR, is reviewed on a regular basis to monitor the financial performance of the commercial activities

2.11 Debtors

Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid.

2.12 Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition or the balance sheet date and that are readily convertible to known amounts of cash with insignificant risk of change of value.

Page 17

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

2. Accounting policies (continued)

2.13 Creditors

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

2.14 Financial instruments

The Charity only has financial assets and financial liabilities which qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

2.15 Pensions

NIAB EMR operates a money purchase scheme, in addition to making contributions into employees’ personal pension schemes. For these, the pension costs charged in the financial statements represent the contributions payable by the company during the period.

2.16 Redundancy payments

Redundancy payments are recognised as a liability and an expense only when the event is demonstrably committed to by either:

Page 18

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

2. Accounting policies (continued)

2.17 Going concern

The trustees have acknowledged the guidance on going concern and financial reporting published by the Financial Reporting Council in 2016.

The ultimate parent undertaking is NIAB (charity no: 1064230). It is the intention of both NIAB and NIAB EMR to merge into a single charity on a going concern basis within 12 months of the date of these accounts.

The charity is expected to continue to generate positive cash flows on its own account and as part of the merged charity.

The Trustees have reviewed the cash flow and management accounts supporting its own and NIAB’s activities for the next two years.

The Trustees have considered the following in arriving at their conclusions on going concern: ‐

  1. The cash flow forecast and latest management accounts, which give confidence that the charity can continue to pay its debts as they fall due. This is supported by NIAB confirming its continued financial support for the charity for at least twelve months from the date of these accounts.

  2. The NIAB TRUST’s continued support to NIAB group through the provision of facilities and funding support.

  3. The TRUST’s joint responsibility to fund future Pension Scheme Recovery Plan payments

After making enquiries and considering the uncertainties described above, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

2.18 Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Page 19

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

3. Income from charitable activities

4.

Laboratory and research
Other activities
Total 2020
Laboratory and research
Other activities
Total 2019
Investment income
Gift aid received from subsidiary
Gift aid received from subsidiary		 Unrestricted
funds
2020
£000
5,023
125
5,148
Unrestricted
funds
2019
£000
2,582
104
2,686		 Restricted
funds
2020
£000
95
‐
95
Restricted
funds
2019
£000
2,407
‐
2,407
Unrestricted
funds
2020
£000
518
Unrestricted
funds
2019
£000
95		 Total
funds
2020
£000
5,118
125
5,243
Total
funds
2019
£000
4,989
104
5,093
Total
funds
2020
£000
518
Total
funds
2019
£000
95

Page 20

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

5. Analysis of expenditure on charitable activities

Summary by fund type

Laboratory and research
Laboratory and research		 Unrestricted
funds
2020
£000
5,326
Unrestricted
funds
2019
£000
2,906		 Restricted
funds
2020
£000
95
Restricted
funds
2019
£000
2,407		 Total
funds
2020
£000
5,421
Total
funds
2019
£000
5,313

Page 21

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

6. Analysis of expenditure by activities

Laboratory and research
Laboratory and research
Analysis of support costs		 Activities
undertaken
directly
2020
£000
4,257
Activities
undertaken
directly
2019
£000
4,161		 Support costs
2020
£000
1,164
Support costs
2019
£000
1,152		 Total
funds
2020
£000
5,421
Total
funds
2019
£000
5,313
Management
Finance
Information Technology
Human Resources
Governance		 Total
funds
2020
£000
605
292
116
50
101
1,164		 Total
funds
2019
£000
566
302
109
77
98
1,152

Central support costs have been allocated to cost categories on a basis consistent with use of resources e.g. staff costs by the time spent and other costs by their usage.

Page 22

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

7. Auditors' remuneration

2020 2019
£000 £000
Fees payable to the Charity's auditor and its associates for the audit of the
Charity's annual accounts 6 6

8. Staff costs

Wages and salaries
Social security costs
Contribution to defined contribution pension schemes		 2020
£000
2,043
179
182
2,404		 2019
£000
2,014
176
197
2,387

The average number of persons employed by the Charity during the year was as follows:

Technical and scientific
Support staff		 2020
No.
55
15
70		 2019
No.
56
11
67

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

2020 2019
No. No.
In the band £60,001 ‐ £70,000 1 1
In the band £70,001 ‐ £80,000 1 1

The key management personnel are:

Professor M Caccamo (Managing Director) Dr T L Barsby (CEO of NIAB) S C Masson (CFO of NIAB)

All of the above are employed by and paid through NIAB, this charity's parent charity.

Page 23

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

9. Trustees' remuneration and expenses

No Trustees received any remuneration or other benefits during the year and no Trustee expenses were incurred during the year (2019 ‐ £Nil and £Nil).

10. Taxation

NIAB EMR is a registered charity and is thus exempt from tax on income and capital gains falling within section 505 of the Income and Corporation Taxes Act 1988 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objectives. No tax charges have arisen in the Charitable Company.

There is no provision for deferred tax on fair value adjustments because any chargeable gains are applied to charitable objectives so no tax liability arises.

11. Intangible assets

Cost
At 1 April 2019
At 31 March 2020
Amortisation
At 1 April 2019
Charge for the year
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019		 Plant variety
rights
£000
1,100
1,100
216
68
284
816
884		 Goodwill
£000
100
100
61
20
81
19
39		 Total
£000
1,200
1,200
277
88
365
835
923

Page 24

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

12. Tangible fixed assets

Cost or valuation
At 1 April 2019
Additions
At 31 March 2020
Depreciation
At 1 April 2019
Charge for the year
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019		 Agricultural
and motor
vehicles
Apparatus and
equipment
£000
£000
34
1,274
‐
329
34
1,603
29
382
3
238
32
620
2
983
5
892		 Total
£000
1,308
329
1,637
411
241
652
985
897

Page 25

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

13. Debtors

Due within one year
Trade debtors
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income		 2020
£000
405
873
1
247
1,526		 2019
£000
407
68
47
347
869

14. Creditors: Amounts falling due within one year

Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Other creditors
Accruals and deferred income
Deferred income at 1 April 2019
Resources deferred during the year
Amounts released from previous periods		 2020
£000
191
730
45
186
850
2,002
2020
£000
75
384
(75)
384		 2019
£000
111
1,167
48
478
348
2,152
2019
£000
221
71
(217)
75

Page 26

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

15. Creditors: Amounts falling due after more than one year

Loan
Other creditors		 2020
£000
1,500
40
1,540		 2019
£000
1,500
84
1,584

Other creditors relate to restructure costs. In 2017 the Company implemented a new strategic model to align its resources with stakeholder expectations.

The Company has a loan, bearing interest at market rate, from the National Institute of Agricultural Botany Trust, a related party of NIAB EMR’s ultimate parent NIAB, which is repayable within 10 years from January 2016. The loan is secured on the assets of the charity. Interest payable in the year on this loan amounted to £41k (2019: £40k).

Page 27

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

16. Statement of funds

Statement of funds ‐ current year

Unrestricted funds
General Fund
Restricted funds
Restricted Funds ‐ all funds
Total of funds
Statement of funds ‐ prior year
Unrestricted funds
General Fund
Restricted funds
Restricted Grants Fund
Total of funds		 Balance at 1
April 2019
£000
(491)
‐
(491)
Balance at
1 April 2018
£000
(366)
‐
(366)		 Income
£000
5,666
95
5,761
Income
£000
2,781
2,407
5,188		 Expenditure
£000
(5,326)
(95)
(5,421)
Expenditure
£000
(2,906)
(2,407)
(5,313)		 Balance at 31
March 2020
£000
(151)
‐
(151)
Balance at
31 March
2019
£000
(491)
‐
(491)

Page 28

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

17. Analysis of net assets between funds

Analysis of net assets between funds ‐ current period

Tangible fixed assets
Intangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
Total		 Unrestricted
funds
2020
£000
985
835
1,571
(2,002)
(1,540)
(151)		 Total
funds
2020
£000
985
835
1,571
(2,002)
(1,540)
(151)

Analysis of net assets between funds ‐ prior period

Tangible fixed assets
Intangible fixed assets
Current assets
Creditors due within one year
Creditors due in more than one year
Total		 Unrestricted
funds
2019
£000
897
923
1,425
(2,152)
(1,584)
(491)		 Total
funds
2019
£000
897
923
1,425
(2,152)
(1,584)
(491)

Page 29

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

18. Operating lease commitments

At 31 March 2020 the Charity had commitments to make future minimum lease payments under non‐cancellable operating leases as follows:

Not later than 1 year
Later than 1 year and not later than 5 years		 2020
£000
383
275
658		 2019
£000
383
594
977

The following lease payments have been recognised as an expense in the Statement of financial activities:

Operating lease rentals
Land and buildings
Motor vehicles		 2020
£000
432
4
436		 2019
£000
433
4
437

19. Members' liability

The charitable company is incorporated as a company limited by guarantee having no share capital and, in accordance with the Memorandum of Association, every member is liable to contribute a sum of £1 in the event of the company being wound up. At 31 March 2020 there was 1 (2019: 1) member (being the parent charity NIAB). The member has full voting rights.

20. Related party transactions

The charitable company has taken advantage of the exemption conferred by Financial Reporting Standard 102 not to disclose any transactions with its parent undertaking and wholly owned subsidiary undertakings. No transactions have been undertaken with key management personnel during the period.

NIAB EMR has obtained a loan of £1,500,000 from National Institute of Agricultural Botany Trust, a related party of the Company’s ultimate parent NIAB. This loan is secured by a first fixed and floating charge on the assets of NIAB EMR and, while there is no fixed repayment timetable, it is repayable within 10 years. Interest is charged at 2% above the Bank of England base rate, which is considered to be a market value. Interest payable in the year on this loan amounted to £41k (2019: £40k).

Page 30

NIAB EMR

Notes to the Financial Statements For the Year Ended 31 March 2020

21. Immediate and ultimate parent undertaking

The immediate and ultimate parent undertaking of this company is NIAB which is incorporated in England and is a registered charity. The consolidated accounts of NIAB are available from its registered office at 93 Lawrence Weaver Road, Cambridge CB3 0LE.

Page 31