OHN'S OUNDATION EST.1174 11 INLLIUI , Annual Report And consolidated financial statements for the year ended 31 December 2022 **.. REGISTERED CHARITY 201476 CONTENTS Trustees, annual report Independent auditor's report 46 Consolidated statement of financial activities 50 Consolidated balance sheet 51 Charity balance sheet 52 Consolidated statement of cashflows 53 Notes to the financial statements 54 St John's Foundation Est. 1174 TRUSTEES, ANNUAL REPORT The Trustees present their annual report and consolidated financial statements. This includes the financial results of St John's Foundation Est. 11741'St John's, or'the Charity'l and its subsidiary, St John's Hospital Trading Company Ltd for the year ended 31 December 2022. This report is prepared in line with the Charities Act 2011 and SORP IFRS 1021. As one ofthe UK'S oldest and most respected community charities, St John's Foundation supports people in need throughout the Bath and North East Somerset area. The objects ofthe Charity comprise the provision of almshouse accommodation and the relief ofthose who are in need by reason of age, ill-health, disability, financial hardship or other disadvantage within Bath and the surrounding area. Whilst primarily an almshouse charity. St John's also focuses support on young people aged 0-12 years, adults overthe age 55, and people experiencing financial crisis. Understanding that we need to worktogetherto ensure everyone has fair and equal opportunity, we take a holistic approach to our charitable work. We choose to work with local partner organisations for their specific knowledge and expertise, as well as their ability to help implement our initiatives and programmes to support positive social change. St John's Foundation Est. 1174 We invest ourfunds wisely. to maximise returns and generate the income we require to ensure we can implement our charitable activities. now and long into the future. This financial independence enables us to invest in forward-thinking social initiatives and partnership programmes, as well as honouring our founding principles of offering high-quality almshouse accommodation. Founded in Bath on Christian principles by Bishop Reginald Fitzjocelyn in 1174. St John's Hospital, now St John's Foundation, is- and always has been- a thought-leader and a pioneer, often challengingthe status quo. identifyingwhere systems in society are broken or failing, and seeking solutions to fix them. To extend the reach and social impact of our charitable work, we share our experiences and learning with like-minded organisations throughout the UK and beyond. It is our duty as a charity supportingour local communityto remove inequalities from society. At the beginning of2020. St John's launched an ambitious ten-year strategy with the vision for our funding activities of ensuring every child in Bath and North East Somerset grows up to live a happy, healthy, educated life. This change in our strategic direction moved us away from being a generalist funder and saw us focus our efforts and resources on our Foundation Fund. Extensive research was undertaken to determine the issues effecting children within our communities - specifically, why a disproportionately wide educational attainment gap exists in Bath and North East Somerset. The findings of our research influenced ourfocus, and our manifesto aims, which are.. ensuring all children have access to safe places and nutritious providing additional support with foundational reading, writing, oracy, and mathematics. and the provision of support for emotional and behavioural development. St John's Foundation Est. 1174 The Foundation Fund sits alongside St John's almshouse provision and older adults, seNice. In 2021 our former Independent Living SeNice and Chaplaincy were amalgamated to create the Good Living Service. The overarching ambition of this service is to provide opportunities for people to live purposeful and fulfilling lives in their later years. No matter a person's age, most people want to make their own decisions, support themselves financially and take care of their own physical and emotional needs throughout their adult lives. Conscious that our previous service was too paternalistic, the Good Living Service encourages independent living, and signposts to external support services where necessary. All of us want the ageing process and living on one's own to be a positive experience, offering ongoing opportunities to enjoy life. In creating the Good Living Service. our mission was to make this a reality- St John's also offers a lifeline for those who have reached a point of crisis in their lives. Through our Crisis Programme, we provide financial support to families arid individuals in Bath and North East Somersetwho are struggling to make ends meet. We fund the most essential needs, such as beds, white goods, furniture. counselling, debt support and basic employment skills and training. Every aspect of St John's work is built upon ourvalues of trust, kindness and courage and is inspired by our purpose.. To change lives. For good. St John's Foundation Est. 1174 We received the first academic year's reportfrom our evaluation partner ImpactEd, for the Primary Empowerment Programme. Whilst it is early in the context ofour 10-year strategy, the report and anecdotal evidence from teachers and professionals show the programme is starting to make real and lasting change for under-setved young people. We were also honoured with a vislt from our patron. HRH The Former Duchess ofcornwall, in February. The Duchess is passionate about improving oracy and literacy in children, as well as championing women's rights. Hervisit comprised a trip to Roundhill Primary School to see the work ofthe Primary Empowerment Programme, and then to VOICES, a domestic abuse charity supported by St John's. Our plan to diversify our investment portfolio, which includes reducing reliance on direct property holdings. has progressed at pace. The sale of our properties will rebalance our investment portfolio, ensuring St John's receives the returns required to continue delivering charitable work for a further 850 years. Our Trading Company officially opened the House of St John's in February 2022. Following a successful year ofevents and a growing membership base. the House won the Bath Life Property'one to Watch, Award, in November. St John's Foundation Est. 1174 The Good Living Service Almshouses 2022 was an extra-ordinaryyear forthe Good Living Setvice- we sadly said goodbye to several residents and welcomed 15 new members into the alms-community. Emergence from the pandemic saw many of the older adults we work with suffering with feelings of isolation and loneliness. However, as we progressed through the year, we saw their confidence and theirengagement across our alms-community returning. Activities and advice service The Good Living service ran a variety of 57 active learning classes in 2022. These classes were attended by over370 older adults from across Bath and North East Somerset. St John's Foundatlon E5t. 1174 biPartnership working A successful relationship with the community group Bathshed was established. The group was seeking a new venue to run classes for members to learn carpentry and other skills. As well as being a class for older adults to finesse their skills. it also offers a safe space for members to talk through problems and socialise. We have been in the position to offer the group a permanent . residence in our mai ntenance workshop and the group is thriving. As well as meeting weekly, ' the group holds monthly events including demonstrations from professional upholsterers. We have been working alongside the University of Bath on a bid forfunding fortwo Active Ageing projects. If successful. these projects will enable the university to work with our alms- residents to develop strategies for older people to live independently for longer. Working with Connecting Generations. students from the University of Bath offerfree technology supportto our alms-residents, who are encouraged to bringtheir phones. iPads, laptops and devices for impartial help and advice. This has been a successful endeavour with residents and students enjoying the opportunity to socialise with each other. ThroLJgh a donation of £20,000, the Good Living SeNicewas able to supportthe set-up ofthe Ageing Well Network in BaNES.The Good Living Service has been working with AGE UK, Citizen's Advice. BaNES Council, Natwest. and other bodies to support our residents and the public to find out about benefits and entitlements. scams, care and support, and other much needed information they may have difficulty accessing. The Foundation Fund We established the Foundation Fund in 2020 to level the playing field across Bath and North East Somerset and help provide all children with the same chances to live happy healthy and educated lives. Since the launch, we have worked in partnership with other organisations and funded programmes to provide children aged 0-12 with the best opportunities to contribute to our community for generations to come. St John's Foundatlon Est. 1174 Early Years In September 2022 the Early Nurture Service IENSI was launched to complement the work of the Language for Life project in local pre-school settings. ENS is run by the Bath based organisation Brightei Futures which supports children with their social, emotional, and mental health needs. The number of children being identified as having significant mental health concerns across our region is increasing year on year. Brighter Futures is working with Early Years practitioners to enable them to meet this demand. An initial pilot project will run until July 2024. Launched in 2021, the Language for Life project has proved very successful. hundreds of pre- school children are being assessed for speech and language needs across 25 settings. A red, amber, green system is used to identify the level of understanding a child has against a national benchmark. Many children coming through the programme are progressing well, with children identified within the pupil premium band showing the biggest improvements. The Perinatal Emotional Wellbeing Partnership {PEWPI is continuing to improve the mental health of new parents across Bath and North East Somerset. Many ofthe projects are reporting an i ncrease in complex cases, that must be referred to specialist services. Funding has been agreed until 2024. Nutritious Food Four programmes supporting access to affordable food and services across our region were also funded, these were- Bath and North East Somerset Council - funding for the role of public health officer in relation to food insecurity- Bath and North East Somerset Council- supporting the local authority to carry out bi- annual health and wellbeing surveys across all local primary and secondary schools. Fareshare South West- supplying nutritious food to many affordable food projects run by charities across Bath and North East Somerset. Hope House Surgery- a new Community Centre in Radstock this is a partnership between the local GP surgery. the local authority and voluntary sector organisations. St John's funded part ofthe community kitchen. St John's Foundation Est. 1174 In the last quarter of 2022, the Board of Trustees agreed to release funding to provide all children across the seven Primary Empowerment Schools. who are not eligible for free schools meals, a hot meal every day at school. This initiative went live in January 2023 and will run until the Primary Empowerment Programme closes in July 2024. Primary Empowerment Programme The Primary Empowerment Programme entered its second yearof a three-year pilot in . September 2022. The delivery partners working across the seven schools are now fully embedded and reporting strong relationships with each school. Several ofthe schools were able to take up further provision offered through the Primary Empowerment Programme. 'JThe total cost ofthe Primary Empowerment Programme in 2022 was £750,248. This pilot is due to end in July2024. The Prirnary Empowerment Schools are: Castle Primary School, Keynsham Roundhill Primary School, Southdown. Bath St Keyna Primary School, Keynsham St Martin's Garden Primary School, Odd Down, Bath St Mary's School, Writhlington St Michael's Junior Church School. Twerton. Bath Twerton Infants School, Twerton. Bath Big Education St John's partnered with Bath and North East Somerset Council to embark on a joint project to support schools across the region with the persistent attainment gap. The aim of this project is to improve educational outcomes for under-served pupils. 10 St John's Foundation Est. 1174 Big Education. an organisation with extensive experience in working with education providers to effect change, was successfully appointed as project lead. Theventure will see Big Education analyse local needs and data fordifferent approaches adopted by schools across the region. This will help formulate a new strategy to deliver the best outcomes for under-served pupils across the region. Ajoint report detailing findings on the disadvantage gap in Bath and North East Somerset will be published early in May 2023. Once published, Big Education will work with Multi- Academy Trusts to implementthe report's recommendations. This is a three-year project with four separate phases- Phase I: Data and Discovery Phase 2- Action research and development of best practice Phase 3.. Recommendation and next steps Phase 4.. Impact Evaluation ImpactEd In December our external evaluation partner ImpactED presented a report on the educational outcomes achieved in the first year ofthe Primary Empowerment Piogramme. The report highlighted the significant progress made in the seven schools, with results that were favourable compared to national results. Given the impact ofthe pandemic and the huge pressures placed on the schools during this time, the improvements shown for pupil premi um pupils were positive. The number of pupil premium children moving closer to their age-related expectations is increasing and children across the early years settings who require additional speech and la nguage support are now more likely to be identified and helped. prior to transitioning i nto reception. The number of pupil premium children receiving emotional and behavioural support suggests that this targeted intervention is working. 2023 will see a review ofthe evaluation framework and an adapted annual report. 11 St John's Foundation Est. 1174 Crisis Programme In 2022, 551 applications to the Crisis Programme were received. 400 ofthem were awarded support totalling £243,400 ofthe overall £320,000 budget. Ofthese applications. 198 supported single people, 134 were to support families who had children underthe age of 12 years old and the remai ning 68 were for families with children over 12 years old and couples without dependent5. The total number of applications continued to remain below the levels seen prior to the pandemic, partly due to Bath and North East Somerset Council's Welfare Support Scheme havi ng an increased legacy budget from the pandemic and in response to the cost-of-living crisis. However, there was a noticeable increase in application numbers towards the end of the year, coinciding with Welfare Support scaling back on grant allowances, to a level more consistent with 2020. Project funding The third year offunding was released to continue the provision oftwo debt caseworkers based at Bath and North East Somerset Citizens Advice. The School Kit Project ISKIPI was awarded £5,000 to continue to piovide under-served children with school uniforms. Fundingtotalling £30,000 was awarded to Curo's pilotfurnished tenancy programme- Cosy Start. This programme will ensure 20 homes will no longer be let as'empty shells, but instead will be housed with white goods and furniture. This programme will target those most in need. namely care leavers and people moving in to their firsttenancy from temporary accommodation or homelessness. Evidence provided by End Furniture Poverty IEFPI has highlighted the harm that living without sufficient furniture can have on an individual or family's mental health and self-esteem. as well as showing that moving into a furnished tenancy results in a reduced likelihood of people getting into debt. Financial Wellbeing As part of the drive to maximise the impact ofthe Crisis Programme, the team is focusing on mapping out the current financial support being delivered across the region and seeki ng opportunities to collaborate and enhance the offer ofsupport. 12 St John's Foundation Est. 1174 Property and investments When St John's launched its current strategy in February 2020, a strategic asset review was undertaken to assess the investment portfolio allocation. This concluded that the Charity should reduce its reliance on property investments. This will enable St John's to re-invest the funds in other classes of investment assets. It will help achieve a more balanced mix of investments and therefore generate the income St John's requires to continue implementing its ambitious programme of charitable activities, as well as maintainingthe financial health of the Charity for future generations. In late 2022, the Charity commenced a programme of marketing selected properties for sale- this process will continue over the next five years. 13 St John'5 Foundation Est. 1174 Over the seven years remaining of its current ten-year strategy, St John's will manage its investments to meet the aims of. Building communities where every child under 12 is supported to grow into a healthy, happy, and educated member ofthe community, courtesy of the Foundation Fund. Enabling older adults to live well independently, courtesy of the Good Living Service. Providing funding for individuals in crisis, courtesy of the Crisis Programme. The length of St John's tenure is testament to the Charity's ability to move with the times and continue to deliver a wide range of services that address the changing needs of our community. The Charity will continue to review the impact of the Foundation Fund and will continue to work with its partners to deliver our aims and shape future work. 14 St John's Foundatlon Est. 1174 511 11 111 11 'Iiiw'- 4¥ The Trading Company is IOOO/o owned by the Charity. Revenue is generated by the Trading Company through the letting ofseNiced apartments at St Catherine's Hospital and the provision of serviced offices and event space at the House of St John's. The Trading Company is a social enterprise which aims to gift as much of its taxable profits to the Charity as possible. Ultimately. it aims to gift 10086 of profits to the Charity. st Catherine's Hospital Originally part ofthe almshouse provision, St Catherine's narrow doorways and hallways made it unsuitable for older people with limited mobility- Therefore in 2018. the Grade I I listed building was transformed into ten luxury apartments. It is situated just behind Bath's Thermae Spa and only 50 metres from the Roman Baths. The ten one-bedroomed maisonettes and apartments all face into the original courtyard garden, creating a truly tranquil sanctuary in the heart of the city of Bath. 15 St John's Foundation E5t. 1174 House of St John's No. l Queen Square was gifted to St John's in 1953 and the buildingwas let as offices for more than 60 years. In 2019, St John's began an extensive renovation programme on the property, which is Grade I listed. Working with local experts in the field, St John's completed its sympathetic renovation at the end of 2021. Once returned to its former glory, the building was named the House of St John's and opened its doors to Bath in February 2022. Itoperates as a versatile workspace, powered by social purpose. It houses a variety of private offices, co-working lounges, dedicated desks, meeting rooms and a stylish event space. In 2022, the House of St John's has sold all but one of its private offices. all dedicated desks became fully occupied, 45 co-working memberships were sold and almost 200 businesses booked meeting rooms. As the House of St John's charity partner all profits are gifted to St John's, specifically to be used forthe Foundation Fund. 16 St John's Foundation Est. 1174 STRUCTURE, GOVERNANCE AND MANAGEMENT Legal structure St John's Hospital Trustee Limited St John's Foundation Est. 1174 (the Charity) is controlled by a trustee company, St John's Hospital Trustee Limited {registration 081880661. The trustee company has a board of unpaid directors, who are effectively the trustees of the Charity. COMPANY Board of Directors I'the Trustees'l st John's Foundation Est. 1174 The Charity is an unincorporated Charity registered in England and Wales {reference 2014761. It is governed by a Charity Commission Scheme dated 25 September 2012 as amended on 8 February 2017. CHARITY St John's Hospital Trading Company Limited St John's Hospital Trading Company Limited (registration 086324531 is the trading arm of the Charity and is a wholly owned subsidiary. TRADING COMPANY 17 St John's Foundation Est. 1174 GOVERNANCE The Charity Governance Code The Code (published i n 20171 sets out seven principles of good governance, includ ing.. Organisational Purpose Decision making, risk and control Leadership Integrity Board effectiveness Equality, diversity and inclusion Openness and accountability The Trustees recognise that effective governance is essential in enabling the Charity to meet its aims and have reviewed the Charity's governance against the Code. The findings of this review were that St John's has an effective, well-governed board and that the new strategy u nderpins ma ny elements that are fundamental to the spirit of the Code i ncludi ng transparency, collaboration a nd strategic drive. There were no significant concerns or risks identified as part of the review but in line with continuous improvement a list of recommendations has been adopted for implementation. All Trustees have signed a Code of Conduct based upon the Charity Governance Code. Our current governance arrangements are set out in the report. 18 St John's Foundation Est. 1174 HOW OUR VALUES TRUST SUPPORT EFFECTIVE GOVERNANCE We embrace our organisational values of Courage, Kindness and Trust and apply these values to everything we do and in how we treat one another. COURAGE The breadth ofst John's work necessitates a diverse workforce and each one of the Trustees and the employees help to make our organisation an uplifting and cohesive place to work. We actively encourage the sharing of ideas and promote continuing personal development. KINDNESS 19 St John'5 Foundation Est. 1174 In line with the Articles of Association of St John's Hospital Trustee Limited I'the Articles'l, the Board ofTrustees must compromise between 10 and 14 members. Trustees are each appointed for a term ofthreeyears and may be re-appointed to serve for up to nine years. Decision-making The Board held four formal meetings and two developmentdays during 2021 to determi ne strategy, approve financial plans and consider key policies. The Board has delegated authority for certain decisionsto committees. which are made up of Trustees with relevant experience andlor qualifications. Professional advisois attend these committees when necessary to add their insight. The Board and the Committees review their performance annually. This is carried out through discussion and has been supported using surveys to gain insight into trustee opinions on effectiveness. An appraisal of the Chair is conducted regularly by the Senior Independenttrustee with the next one concluding in 2023. As one ofthe recommendations arising from the Corporate Governance Code review, the trustees are considering whether to undertake external evaluations of performance and how individual trustee performance will be reviewed in the future. 20 St John's Foundation Est. 1174 COMMITTEES Committee Purpose Charitable Delivery and Impact ICDIC) To assure the Board thatthere is an adequate system in place to measure strategic charitable delivery and impact ofthe organisation. While CDIC'S primary function is assurance, its purpose also includes supporting continuous improvement in the way impact is measured and demonstrated. To assure the Board that there is an adequate system of risk management in place for the activitie5 ofthe Charity and which ensures effective delivery of all its services, including compliance with all relevant regulations that relate to the Charity's activities. Audit and Risk Committee (ARC) Investment Committee To recommend the investment strategy forthe Charity and to assure the Board that there is an adequate system of processes and controls in place to ensure all the Charity's investment portfolios, including the property portfolio are appropriately managed to deliverthe agreed investment objectives. (INV) Remuneration & Nominations Committee To oversee the trustee appointment process and to ensure that St John's has effective remuneration, nomination and Board recruitment policies and procedures in place. which are fair and transparent, adhere to all relevant legislation and support the strategy, objectives and values of the Charity. IREM) 21 St John's Foundation Est. 1174 Committee membership, alongwith a list ol professional advisors. is available in the 'Legal and administrative information, and 'Advisors section below. The Trustees have delegated day-to-day management of the Charity to the Executive team and the employees of St John's. Remuneration ofthe ExecutiveTeam The Remuneration and Nominations committee is responsible for setting remuneration policies for the Executive team. based on individual contributions and the prevailing market. This includes the annual salary, contractual terms ofemployment and any severance arrangements. For the Charity to meet its strategic goals, it must recruit and retain highly skilled employees. The salaries offered to the Executive team are competitive both locally and within the charitable sector. The Remuneration and Nominatior)s committee. taking advicefrom the Chief Executive. determines the salaries of the rest of the Executive team. An over-riding factor in salary setting is always affordability i n the context of the whole organisation's budget. 22 St John's FoundatSon Est. 1174 TRAININ The Remuneration and Nominations Committee determines the appointment procedures for new trustees including how the vacancies will be advertised. This is through social media and an external recruitment agency, this ensures the Charity can recruit trustees from diverse professional backgrounds. The Remuneration and Nominations Committee agree the terms and conditions ofappointment and any interview process, which will involve a minimum of 2 existing trustees. It then nominates candidates for approval by the Board. Once appointed new trustees are provided with training through an induction pack. This includes a trustee handbook which is reviewed and updated regularly and shared with all trustees. Further training may be offered where needs are identified. Throughout the year the Charity updates trustees using seminars and briefings. A formal trai ning schedule was adopted 2022 and opportunities forcontinued professional development offered on a voluntary basis to the Board. In 2023. this will continue and trustees will feed back on the skills they wish to focus on developing. A budget exists for to payfortrustees to attend individual, and skill based CPD events. 23 St John's Foundation Est. 1174 During 2022, the Charity received zero complaints with regard5 to fundraising practices 12021.. zero). It does not activelyfund raise but sometime5 generates fundsfrom the public through events. The primary purpose is not fund-raising but awareness raising. In 2022, some employees and members of the public sought sponsorship for events to raise funds for St John's Foundation. This is via donation pages, such as Just Giving. Due to the nature of these events no pressure is put on individuals to donate. There is very little perceived risk to vulnerable people or other members of the public in relation to fundraising. We never use an external partner to raise funds. The Trading Company will be operated as a social enterprise to raise funds for the Charity. Communications and actions taken in relation to using the Charity to promote for commercial advantage is compliant with the Charities (Protection and Social Investment) Act 2016, an Act which the Charity is also compliant with. 24 St John's Foundation E5t. 1174 Legal and Administrative Information Registered office- Telephone- Email-. Website: Charity reference.. Trustee.. 415 Chapel Court, Bath, BAI ISQ 01225 486400 info@stjohnsbath.org.uk www.stjohnsbath.org.uk 201476 St John's Hospital Trustee Limited (08188066} HM The Queen Patron.. 25 St John's Foundation Est. 1174 OUR DIRECTORS Directors of St John's Hospital Trustee Limited ('The Trustees,) & Committee Membership CDIC ARC INV REM Ben Fletcher (Chairl Ashley Ayre Jamal Benmiloud H arriet Bosnell Moira Brennan Richard Brown Rev Roger Driver Je rey Hayes Nicholas Hunt John Lakin Karen MacGregor Ken Scott Carole Stott to: 24 March 2023 to: 23 June 2022 to: 30 March 2023 26 St John's Foundation Est. 1174 .. *"3•'11li' _' Directors of St John's Hospital Trading Company Ltd. Ashley Ayre Caroline Bee Jamal Benmiloud Moira Brennan Louise Harvey David Hobdey Karen Macgregor Ken Scott A Trustee of the Charity A Director of the Charity A Trustee of the Charity A Trustee of the Charity A Director of the Charity Chief Executive of the Charity A Trustee of the Charity A Trustee of the Charity (to 24 March 20231 Executive Team David Hobdey Louise Harvey Caroline Bee Chief Executive Executive Director of the Foundation Fund Director of Finance To find out more about the skills and experience of ourteam please vi51t https=Ilstjohnsbath.org.uk/aboutlour- teaml 27 St John's Foundatlon E5t. 1174 OUR PROFESSIONAL ADVISORS External Crowe U.K. LLP 4th Floor, St James House. St James, Square, Cheltenham, GL50 3PR kers: Handelsbanken PIC 7 Henry St, Bath, BAI IJR Hampdens & Co PIC 9 Charlotte Square. Edinburgh, EH2 4DR Solicitors: Thrings LLP 2 Queen Square, Bath, BAI 2HQ Stone King LLP Upper Borough Court, Upper Borough Walls. Bath BAI IRG Investm nagers: Evelyn Partners Investmeent Management LLP Portwall Place, Portwall Lane. Bristol, BSI 6NA Schroder& Co Ltd trading as Cazenove Capital. l London Wall Place, London EC2Y SAU Charities Property Fund Savills Investment Management, 33 Margaret Street, London, WIG OJD hartered S Jones Lang Lasalle Ltd 31 Great George St. Bristol, BSI 5QD Martin Blake Associates Ltd 8a Bartlett St, Bath. BAI 2QZ Carter Jonas 5-6 Wood St, Bath, BAI 2JQ Jennings Estate Agents and Chartered Surveyors Suite 1, 25 The Tyning. Widcombe, Bath, BA2 6AL 28 St John's Foundatlon Est. 1174 The consolidated income for 2022 was £5.3m. This is the same as in the previous year,however, the composition has changed with more income from dividends and less income from property. 2% Trading income 11% Financial investments Idividendsl 22% Almshouse & older people income 15% Property investments Irentl 50% 29 St John's Foundation Est. 1174 Charitable Activities Income from charitable activities, which includes income from almshouses and residential care, decreased by £35k14%1 in 2022 from 2021. Almshouse income fell by £20k12.60/0l due to a higher number of vacancies than expected. There was also a fall in care income following the deregulation with the Care Quality Commission ICQCI and cessation of personal care part way through 2021. Donations and legacies A grant of £70,000 was received towards the end ofthe yearfrom the Julia and Hans Rausing Trust, to mark the accession of Her Majesty the Queen. The funds were provided forcore costs of the organisation and have been treated as unrestricted income. In the previous year a donation of£40k was received from the Joseph Matthews Foundation to support community outreach activities for those in Bath over 75 years of age. Investment income Investment income in 2022 was £3.9m. This is £169k lower than in 2021 and reflects a fall in property income of IIWo1£340k} year on yearwhich has been offset by an increase in dividend income on financial investments of17%1£172kl compared to 2021. The reduction in rental income is largely due to a decline in the value of the property market. The level of vacancies has reduced in theyear but there has been several rent-free period incentives offered to tenants and rental values have declined in the commercial sector. In addition, to this, the decision to reduce the property holdings has led to some properties being held vacant pending sale. Trading activities As discussed above, the Trading Company saw an increase in income across both St Catherine's and the House of St John's. Whilst there was 3 4 % growth in the income from the holiday apartments1£16kl, the market remained competitive and sustaining growth will be required in 2023 to meet increasing costs. The House of St John's opening in the yearwith income generated from office rental, event space hire and co-working memberships. The business operated at a loss which was anticipated as it was the first year of trading. 30 St John's Foundation Est. 1174 Expenditure Total expenditure in 2022 wa5 £6.5m12021: £6.4m). After consolidation adjustments. costs forthe Trading Company were £674k in 202212021.. £396kl- the increase was due to the opening ofthe House ofst John's. Charitable Delivery Expenditure on charitable deliverywas £548k lower in 2022 than in 2021 lincluding a £58k reduction in allocated central overheads) and £149k lower than budgeted. 2022 was the first full operational year of the Good Living Service. The previousyear included one-off costs associated with the service review (including deregulation from the Care Quality Commission {CQCI}. Spend on Funding and Impact in 2021 was also higher as it included the final tranche of multi-year awards committed to prior to the implementation ofthe new strategy. Funding of the nutritious food element of the strategy was £32k lower than in 2021. as there was greater collaboration with other funding partners but a significant increase in spend on this area is planned for 2023 and 2024, as the Charity has agreed to fund school meals across seven local primary schools forthose not are not entitled to free school meals under the government scheme. Further information on charitable activities is provided above and in Note 7 below. The direct estates costs of running the almshouses (excluding staff) was £31k lower than last year despite being budgeted to increase (actual costs were £59k lower tha n budget). This was largely due to repairs planned for 2022 being deferred into 2023. Significant repairs and capital costs on the almshouses are planned for 2024 as part ofthe cyclical maintenance ofthe buildings. 31 St John's Foundation Est. 1174 Costs of Raising Funds The increase in costs of raising funds in 2022 compared to 2021 is due to increased expenditure associated with the property investment portfolio. Before allocation of central overheads. spending on property management costs rose by £182k to £1.2m12021'. £1.Oml which includes one-off costs associated with the new investment strategy, including professional advice on disposal strategies. There was also a significant increase in planned maintenance costs on the residential estate compared to 2021. Such repair costs fluctuate year on year and are programmed over a 30- year property plan. Inflationary increases in the year meantthe cost of building repairs. insurance. computersoftware, licensing and general consumables became more expensive. Gas and electricity costs remained stable and did not rise in line with market prices, due to a pre- existing long-term agreement for both utilities. The electricity contract is due for renewal in 2023 and the gas contract in 2024. It is anticipated that this will lead to significant unit cost increases which is being bkjilt into financial plans. Finance costs rose in year as the Bank of England raised its base rate and overdraft levels increased. Volunteers The CharitySUPPOrts many people in 8ath and North East Somersetwith the valued help ofvolunteers who work with the Good Living Service. We are therefore incredibly grateful for the time and effort of the volunteers who support the activities of the Charity. The financial benefit of volunteers is small and therefore not reflected in these accounts. 32 St John's Foundation Est. 1174 Annual Deficit Overall, the operating deficit for 2022 was £1.145m 12021: £1.046ml before gains and losses on investments. Valuation losses on both listed investments and the propety portfolio have created a negative net movement in funds of £13.Om compared to a positive net return of £6.6m in 2021. This reflects a decrease in the fi nancial markets affecting both equities and property prices as at 31 December2022. Property valuations were also affected by a decision to amend the valuation assumptions on the majority of the residential property portfolio. The trustees have agreed that it is in the Charity's best interest to sell a significant proportion of the residential estate on a portfolio basis with tenants in situ. This approach would lead to a lower marketvalue being achieved on sale than if the properties were sold on an individual basis with vacant possession (the basis usually used in the financial statements to determine fair valuel. The trustees are of the view that the fair value of these properties should reflect the decisions made at year end and agreed to reduce the fair value to a portfolio basis with tenants in situ for those properties being marketed as such at the yeai end. 33 St John's Foundation Est. 1174 UR The Charity adopted a total return method of accounting from the 1st ofJanuary 2013. On this date the initial value of the unapplied total return was £45.5m and the core capital endowment was valued at £35.Om. In arriving at these values, the trustees used the indexed values of the permanent endowment at l January 1995 to represent the preserved value ofthe original gift. Calculating our inflation +4%target: The Board recognises that market volatility could cause the value of its investments to fluctuate each year. However, given the Charity's overall financial strength, the longer-term view is more important. The target is therefore measured as an average over a rollingfive-yeai period. .Investment management costs, like fees charged by investment managers, are deducted within the calculation. This means that the whole CPl+40/o return is avai lable to support charitable activities. 34 St John's Foundatlon Est. 1174 From this date the Charity has set a target to achieve a 'total return. from its investments of inflation +40/0 on average each year. 'Total return, is the sum of valuation gains and income le.g-, dividends or rent). Why CPI +4Oh? CPI (the Consumer Prices Index) is a measure of inflation. The use of an appropriate measure of inflation is important. The Retail Prices Index IRPII has historically been used by the Charity but following careful consideration. the trustees agreed to move to CPI from I January 2021. By ensuring the investments grow in line with inflation, the value of investments is protected to support the needs offuture generations. In 2021 the permanent endowment was increase by £4.765m for CPI12020= £2.325m CPI). The Charity also relies on income from its investments to fund its charitable activities today. The 4 % return more than inflation is used to support our existing beneficiaries. In 2022 £3.5m of unapplied total return was allocated to income12021'. £2.8ml. 35 St John's Foundation Est. 1174 Atthe year end, the Charity held £106.6m of investments12021'. £119.3ml. Ofthis, £62.8m159%1 was property in Bath12020: £70.2m160Wol. The Investment Committee has agreed a target strategic allocation of assets li.e. mix of different types of investments), designed to create the highest return at an acceptable level of risk. A review of the property portfolio was commissioned in year and reports previously commissioned from two independent investment managers to establish an appropriate target. This led to a change in the Investment Policy and a new strategic asset allocation. The need to rebalance the investment portfolio (by buying and selling assets) is assessed at least annually with a detailed plan in place to achieve any identified need to rebalance the portfolio. Other investments lincluding a social loan, and cash balances) have not been included, as these make up less than 0.596 ofthe total value. 70% 60% 50 40 30% 2096 io TIiEtt5e'.tr nt th￿nIrt1￿* Financial investments 36 St John'5 Foundatlon Est. 1174 A few notes on our Investment Policy: There is no limit on investment in individual assets. but the I nvestment Committee actively monitors any asset which make5 up more than 5 % ofthe value ofthe porttolio. The Investment Policy allows for investment in any type of asset, with the exception of derivatives (unless for the purpose of hedging) and individual investments may be excluded where there is conflict with the Charity's objectives. The Charity can invest in mixed motive and social investments where they align with the Cha rity's objects. It currently holds a small social investment representing two concessionary loans to a carer's centre. the purpose ofwhich aligned to the Charity's object of assisting those in need. These do not form a material part of the Charity's charitable or investment activities. 37 St John's Foundation Est. 1174 Responsible Investing The trustees recognise the importance of responsible investment {Rll and during 2021 the Investment Policy was amended to better reflect the values of the Charity. The UN Sustainable Development Goals IUNSDGs1 were recognised as a good indicatorofthis for investments and the following goals have been adopted as the Charity's investment values: UNSD Goal l- No povety UNSD Goal 2- Zero hunger UNSD Goal 3- Good health and well-being UNSD Goal 4- Quality education UNSD Goal 10- Reduced inequalities UNSD Goal 11- Sustainable cities and communities The trustees do not impose any strictexclusion criteria in relation to the investment values (though appointee investment managers may themselves have theirown baseline exclusions). The investmentvalues should provide a guiding contextfor investment decision making as they are important to the Charity- The trustees also seek continuou5 improvement in how the Charity's investments can be better aligned to its investment values whilst still providing the best financial return within an acceptable level of risk. In the first instance the trustees expect the following in relation to Rl considerations: Investment managers must be signatories ofthe UN Principles of Responsible Investment IPRII and report annually to the trustees on their performance against the UN PRI. Investment managers are required to report to thetrustees on any baseline level of investment exclusions applied by them to the Charity's Portfolios and the trustees are to be kept appraised of any developments in exclusion policy by the investment managers. 38 St John's Foundatlon Est. 1174 Where investment managers place the Charity's funds with 3rd party managers, the investment managers must ensure that the third-paty managers are also signatories of the UN PRI, and they must evaluate their perfomiance in relation to this. Annual reports are to be provided to the trustees showing how the Charity's managed portfolios are performing in relation to Rl considerations and where possible, this should be reported in relation to the Charity's investmentvalues. The trustees acknowledge that this reportingwill be emergent but expects it to become more mature overtime to enable the trustees to track how well the Charity's investments are aligned to the Charity's values. It is expected that investment managers will report to the trustees on a quarterly basis on any conduct breach ofthe UN Global Compact by companies within our investment portfolio. I ndividual i nvestments may be excluded if seen to conflict with the investment values. 39 St John's Foundation Est. 1174 Most ofthe Charity's reseNes are held as investments. The income from these investments is needed to support today's beneficiaries, as well as future generations. The trustees therefore protect a significant proportion of reseNes for future use. At the end of 2022, total charity reserves were £112.9m12021: £126.7ml. 3Charity only Invested endowment 97.9 Functional endowment 12.3 Operational assets (excluding endowtdl Commitments Restricted funds 'Free reserves" otal reservès 40 St John's Foundation Est. 1174 At the year-end there were zero'free, resetves held as in 2021 the trustees reviewed and revised the Reserves Policy forthe Charity- The Charity now adopts a zero free Reserve Policy, drawing down funds from the unapplied total returns into unrestricted reserves only as requi red to meet operational expenditure in any given year. The trustees consider this to a be a reasonable approach asthe Charity adopts a total return approach and holds significant unapplied total returns which can be expended as required. As shown in the calculation above. not all the unrestricted fund is relevant in calculating free reserves and a zero 'free' reserves policy does not mean that the unrestricted fund is zero. The following are still held in the unrestricted fund and excluded in calculating the 'free' reserves as they are not readily available for spending: Any operational fixed assets not already excluded from unrestricted funds through the functional endowment le.g., head office) of £1.5m12021.' £1.4ml. Committed awards or building contracts. not included as a liability in the accounts of £l.Im (except those already excluded from unrestricted funds through the functional endowment) 12021: £2.2ml. The level of unapplied total returns Is managed carefully to ensure that the Charity has fina ncial resilience but also maximises the charitable impact by not holding surplus funds. This is achieved through long term financial planning to ensure that investments are maintained at a level which will produce sufficient retuins to fund the almshouses, the Good Living SeNice and funding awards for future generations and protects the spending power of this by inflation. Unapplied total returns in excess of this are expendable on the Foundation Fund and other subsequent strategies and can be released for expenditure by resolution of the Board. As a long-term approach is taken, the level of unapplied total returns in any one year is expected to fluctuate but the average position is considered and taken i nto financial planning to determine spending plans and budgets. 41 St John's Foundation Est. 1174 Within the Charity, each team actively manages its own risk register to ensure mitigating actions are carried out and scoring is up to date. High-scoring risks li.e., those with significant likelihood and impact) are included on the Corporate Risk Register. TheAudit and Risk Committee reviews the Corporate Risk Registerfourtimes a yearand may suggest further actions to reduce the likelihood or impact of a risk. The key risks St John's manages can be 5ummarised into charitable impact, economic and people related risks as follows- Charitable impact risk: failure to achieve andlor demonstrate charitable impact to the extent intended. Mitigating actions: Robust due diligence processes are in place for established charitable work throughout the crisis programme and alms-houses. The 2020- 2030 strategy, covering all aspects of charitable delivery including its ambitious goal to reduce the attainment gap in Bath and North East Somerset, is supported by evaluation and delivery partners. and a system of capabilities to drive continuous improvement. 42 St John's Foundation Est. 1174 Economic Risk: Failure to achieve the targeted total return which impacts the incomel capital required to pursue strategic aims. Mitigating actions: St John's takes a long-term view on its investments, and it uses professional investment managers for the financial portfolio to enable recovery and future growth, and to mitigate short-term impacts. The direct property portfolio is proactively managed with agents, advice. The long-teim financial plan is regularly refreshed and guides discussion. planning and decision making at Investment Committee and Board. The new i nvestment strategy and divestment of properties is a mitigating action to this risk by better diversifying the portfolio. On an operational level. employees are supported to regularly engage with budget/ forecasting exercises. actively manage contracts, and consider costs throughout projects to ensure financial efficiency in delivering strategic aims. People related risk: A poor organisational culture results in ineffective operational delivery* there is a high staff turnover andlor there is a failure to build the capabilitie5 that will enable St John's to deliver its strategy. Mitigating actions: Quarterly pulse suNeys are circulated to all employees to receive feed back with additiona l ad hoc staff events. Regular internal communications ensure employees feel i nformed and understand how their role contributes to the wider strategy. Senior managers are asked to report against the capability system and are invited to explore concerns through coaching and I:Is, with support given for training as needed. Going Concern The Charity considers that it has adequate resources to continue in operational existence for the foreseeable future and has adopted the going concern assumption in preparing these fi nancial statements. The trustees actively plan for the Charity to exist for many years, and this is reflected i n the approaches taken to both long-term planning of investments and reserves, detailed above. These approaches (including the planned level of unapplied total returns held by the Cha rity and the discretion that it has over its expenditure) mean that whilst heavily reliant on investment returns, the trustees consider the Charity to be resilient to shorter-term volatility in its investments and plans are in place to remain adequately resourced to meet the need of both present and future beneficiaries. To provide ample headroom, overdraft faci lities are in place which cover a reasonable worst-case scenario for cash flow and if required, the financial investments could be liquidated. 43 St John's Foundation Est. 1174 The Trustee is responsible for preparing the Trustee's Annual Report and the financial statements in accordance with applicable law and United Kingdom GenerallyAccepted Accounting Practice (United Kingdom). The law applicable to charities in England and Wales requires the Trustee to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and the group and of the incoming resources and application of resources of the Charity and the group for that period. In preparing these financial statements. the Trustee is required to: Select suitable accounting policies and then apply them consistently. Observe the methods and principles in the Charities SORP. Makejudgments 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. and Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue in business. 44 St John's Foundatlon Est. 1174 The Trustee is responsible for keeping proper accounting records that are sufficient to show and explain the Charity's transactions, that disclose with reasonable accuracy at any time the fi nancial position of the Charity and enables it to ensure that the financial statements comply with the CharitiesAct 2011. the Charity {Accounts and Reports) Regulation5 2008 and the provisions of the trust deed. It is also responsible for safeguarding the assets of the Charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustee is responsible for the maintenance and integrity of the financial information included on the Charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Crowe LLP have been appointed as auditors in the period. A resolution for the reappointment of Crowe U.K. LLP as auditors forthe Charitywill be proposed at the forthcomingAnnual General Meeting. Approved by the Trustee on 26 September 2023 and signed on its behalf by.. IlLPr (￿-r4rd Name: Signature= Name.. Signature: St John's Foundation Est. 1174 45 St John's Foundation Est. 1174 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ST. JOHN'S FOUNDATION EST. 1174 Opinion We have audite I'the group'l for vities, Consolidated he financial stateme has been applied in their prepara Financial Reporting ard 102 'ted Kin 741.the ity'l and its s lidated ment offina ed state of cash flows and notes financial reporting framework that ccounting Standard uding leinth nd Rep iary giv andoftheg forthe year re, ted Acc an have b tsofth 2011. Basi5 for opinion ucted ble law. ibilities forthe audit of th in accordance with the ethic UK, including the FR h these requirem vide a basis for o IUKII a itor's res section levant t ofthe group statements in the rdance riate to sufficient and a Conclusions relatingto going concern uditingthe financial accounting in the prepa Based eworkweh conditi individ contin authorised for i 's use of late. any material uncertainties gnificant doubt charity, Ive months from thefin isof ofthe rforme nti ie o events or p s ability to 15tatements are con 46 Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report. ## **Other information** The trustees are responsible for the other information contained within the annual report. 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ## **Matters on which we are required to report by exception** We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion: - the information given in the financial statements is inconsistent in any material respect with the trustees' report; or - sufficient and proper accounting records have not been kept by the parent charity; or - the financial statements are not in agreement with the accounting records and returns; or - we have not received all the information and explanations we require for our audit. ## **Responsibilities of trustees** As explained more fully in the trustees' responsibilities statement set out on page 44 the trustees 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 group's and the parent charity'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 charity 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 151 of the Charities Act 2011 and report in accordance with the Acts and relevant regulations made or having effect thereunder. **47** **St John's Foundation Est. 1174** Our objectives are to obtain reasonable assurance about whetherthe 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 IVKI 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 decision5 of users tsken on the basis ol these financial statements. Details oFthe extent to which the audit was considered capable of detecting irregularities, Including fraud and non-compliance with laws and regulations are Set out below. A further description of our responsibilities for the audit of the financial 5tJtements is located on the Financial Reporting Council's website at.. www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risk5 of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks. including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. We obtained an understanding of the legal and regulatory frameworks within which the charity and group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Charities Act 2011 together with the Charities SORP IFRS 1021. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. n addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity's and the group's ability to operate orto avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity and the group for fraud. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustee5 and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements From irregularities, including fraud. to be within investments (investment property and listed investments more specifically) and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of joijrnals, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission. and reading minutes of meetings of those charged with governance and designing audit procedures over both types of investment listed previously. 48 St John's Foundation Est. 1174 Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non­ compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. 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. ## **Use of our report** This report is made solely to the charity's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's 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 charity and the charity's trustees as a body, for our audit work, for this report, or for the opinions we have formed. Crowe U.K. LLP Statutory Auditor Fourth Floor St James House St James Square Cheltenham GLSO 3PR Date: 28 September 2023 Crowe U.K. LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006. **49** **St John's Foundation Est. 1174**