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2022-09-30-accounts

Annual Report and Financial Statements for the year ended 30 September 2022

Registered Charity Number 266220

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Contents

Reference and administrative details ............................................................... 3 Annual Report.....................................................................................................5 Independent auditors’ report to the Trustee of the Thalidomide Trust ......... 17 Statement of financial activities for the year ended 30 September 2022 ....... 21 Balance sheet as at 30 September 2022......................................................... 22 Notes to the financial statements for the year ended 30 September 2022 .... 24

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Reference and administrative details

Registered Name The Thalidomide Trust Charity number 266220 Registered address 1 Eaton Court Road Eaton Socon St Neots Cambridgeshire PE19 8ER Corporate Trustee The Thalidomide Trust Company (incorporated on 19 January 2018 with Company Number 11160424, registered address as above)

Directors of the Corporate Trustee Company

The Directors of The Thalidomide Trust Company during the year and up to the date of approval were:

Mark Spofforth OBE BSc FCA CTA FRSA (Chair of Trustees) Sir Robert Nelson QC Professor Tim Briggs CBE MD(Res) MCh(Ort) FRCS – resigned 16 March 2022 Kevin Wesbroom MA MA FIA – resigned 31 December 2022 Mark Benstead MA MBA David Body MA Solicitor of Senior Courts of England & Wales Professor Adrian Charles Newland CBE Professor William Andrew Owens MD FRCS(CTh) Professor Rosemary Varley Ruthe Isden Shan Abdullah – appointed 1 September 2022 Dame Caroline Swift – appointed 1 January 2023 Senior Management Team Deborah Jack - Executive Director Katy Sagoe - Director of Health & Wellbeing Suzanne Lluch - Finance Director Medical Advisers Dr Dee Morrison MB ChB Dr Susan Brennan MBChB MRCGP Dr Helen Smith MBChB MRCGP Chair of NAC Rowland Bareham

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Investment Managers BlackRock TwentyFour Asset Management
12 Throgmorton Avenue 8thFloor
London The Monument Building
EC2N 2DL 11 Monument Street
London EC2R 8AF
Schroders Investment Management Limited
1 London Wall Place
London Wall
London
EC2Y 5AU
Legal & General Investment Management
One Coleman Street
London
EC2R 5AA
Investment Consultants Hymans Robertson
45 Church Street
Birmingham
B3 2RT
Solicitors Withers Hewitsons
20 Old Bailey Shakespeare House
London 42 Newmarket Road
EC4M 7AN Cambridge
CB5 8EP
Actuaries Hymans Robertson
20 Waterloo Street
Glasgow
G2 6DB
Bankers Lloyds Bank
39 Threadneedle Street
London
EC2R 8AU
Independent auditors Saffery Champness LLP
Westpoint
Peterborough Business Park
Lynchwood
Peterborough PE2 6FZ

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Objectives and activities

The Thalidomide Trust (“the Trust”) was established to provide ‘relief and assistance’ to individuals with disabilities caused by their mothers taking, during pregnancy, a preparation distributed by The Distillers Company (Biochemicals) Limited in the United Kingdom containing the drug known as thalidomide in the late 1950s and early 1960s.

Our aims

All our beneficiaries are now in their late 50s and early 60s and most are feeling the impact of using their bodies in ways for which they were never designed. In addition, as they get older they are experiencing a wide range of age-related health problems that are exacerbated by their original thalidomide damage. This seriously impacts on their quality of life and their ability to remain fully independent. A small number have experienced a cognitive decline alongside the deteriorating physical health and this has resulted in very complex care needs.

The Trust meets the increasingly complex needs of the beneficiary community through the provision of financial support – in the form of annual grant payments – and a range of information, advice and advocacy services. To underpin this, we gather evidence on the needs and experience of our beneficiaries and undertake more detailed research on topics that are of greatest relevance to them.

The Trust has a Vision and five Strategic Goals which were jointly developed – and recently reviewed and updated - by the Trustees, staff and National Advisory Council (NAC) of beneficiary representatives:

Our Vision is that …. each and every beneficiary of the Trust has access to the resources and support they need to live their best life for the longest time.

Our five strategic goals are…….

GOAL 1: To ensure the Trust’s income is secure, financial risk is effectively managed
and adequate funding is available to meet the increasing needs of
beneficiaries as they age.
GOAL 2: To apply the Trust’s resources strategically, effectively and equitably (in
order to achieve our vision).
GOAL 3: To ensure that all beneficiaries have access to the best possible
information, advice, advocacy, services and support – both within and
outside the Trust – as they age and their physical and mental health needs
increase.
GOAL 4: To ensure effective (two-way) sharing of knowledge and learning for the
benefit of the beneficiary community and for wider public benefit.
GOAL 5: To ensure that the individual beneficiary’s needs remain paramount, even
when third parties (families, carers, representatives) have a role in acting
on their behalf.

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Public Benefit

Although the Trust is very much focussed on the needs of a small, discrete community of beneficiaries, we also take steps to deliver a broader public benefit by sharing our research and learning with other thalidomide organisations around the world and, where relevant, with the broader disability community.

The Trust supports an agreed programme of campaigning activities undertaken by the beneficiary-led Campaigns Team. This is designed to achieve clear agreed outcomes, one of which is increasing public understanding of the thalidomide scandal - to help prevent similar failures occurring - and to highlight the ongoing needs and challenges affecting the Trust’s beneficiaries.

The Trust is increasingly aware of the benefit of sharing lessons learned from almost fifty years of supporting this unique community with other groups of individuals living with disabilities and the organisations that support them and is currently exploring ways of doing this.

Structure, Governance and Management

Structure

The Thalidomide Trust was set up in 1973 - originally as the Thalidomide Children’s Trust - and is a charitable discretionary Trust registered with the Charity Commission for England and Wales.

With the consent of the Charity Commission, on 29 January 2018 a new company limited by guarantee, The Thalidomide Trust Company (incorporated on 19 January 2018, Company Number 11160424), was appointed as sole Corporate Trustee of the Trust, replacing the individual Trustees. The Corporate Trustee will be referred to in this document as the Trustee.

The Trustees at the date of incorporation became the Directors of the Company. However, although legally Directors, in recognition of the fact that they function as Trustees and operate within the legal frameworks and guidance of the Charity Commission, they continue to be referred to as Trustees. To reflect this, they are referred to as Trustees (as opposed to the Trustee above) throughout this Annual Report.

During 2019/20, we set up a new company limited by guarantee as a subsidiary of the Thalidomide Trust, with the consent of the Charity Commission. The valiDATE Trust (registered in England and Wales, with company number 12144047) operates on a not-forprofit basis. It was established specifically to oversee the maintenance and development of an online tool to be used by qualified clinicians to screen individuals using detailed medical data in order to assess the likelihood of Thalidomide Embryopathy (TE). This Diagnostic Algorithm for Thalidomide Embryopathy was one of the key outputs of a meeting of international thalidomide experts organised by the World Health Organisation (WHO) and is designed to be used worldwide to ensure consistent diagnosis of TE, based on the latest international evidence.

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Trustees (formally Directors of the Trustee Company)

The Trust is governed by a small, skilled Board who bring a wealth of experience and expertise to the charity including medical, legal, research, governance, health and social care policy, financial management and investment.

Trustees are appointed through a structured recruitment process which focusses on the skills required to meet the current and future needs of beneficiaries. The recruitment process is overseen by the Trust’s Chair and there is direct beneficiary involvement in all trustee appointments.

The Trust has a well-defined and comprehensive programme of induction for new Trustees and all new Trustees are offered a mentor from within the existing trustee Board.

The Trustees are legally responsible for the overall management and control of the Trust and meet as a full Board at least three times a year. One of these three meetings is an Awayday which enables the Trustees and the Trust’s Senior Management Team to spend dedicated time focussing on long term strategic issues.

The Trust has two key Standing Committees - the Health & Wellbeing Committee and the Finance Committee - which met two and four times respectively during this year. Both Committees are attended by representatives from the Trust’s National Advisory Council (NAC). The Health & Wellbeing Committee is jointly-chaired by a Trustee and a beneficiary chosen by the NAC.

There are two additional Committees which met on an ad hoc basis during 2021/22. They are:

Staff Team

The day to day running of the Trust is delegated to the Executive Director, supported by a small, dedicated and skilled staff team.

The majority of staff are focussed on supporting beneficiaries in relation to their health and wellbeing in order to maximise their independence and quality of life.

Remuneration Policy

The Trustees are responsible for the Trust’s remuneration policy as well as agreeing annual pay increases for the staff team. Trustees take account of market conditions and the pay practice of other comparable charities and employers in the geographic area.

National Advisory Council (NAC)

The Trust Deed makes provision for the appointment of a beneficiary National Advisory Council to advise Trustees on a range of issues.

The NAC is currently comprised of 10 beneficiaries who are elected by the beneficiary community to represent their views and needs. Elections are held each February when three members are currently elected for a four-year term of office. The NAC elects a chair

from among the elected members. The Trustees have responsibility for making regulations relating to the election and removal of members of the NAC.

There were two meetings of the NAC during the year, which were attended by Trustees and staff representatives. Agendas for these meetings are circulated to all beneficiaries in advance to enable them to feed in their views. In addition, summary notes and minutes of the meetings are shared with the beneficiary community after the meeting and there is an opportunity for beneficiaries to participate in an interactive discussion, via Zoom, with selected NAC members.

Beneficiary representatives from the NAC attend meetings of the Board, Finance Committee, Health & Wellbeing Committee and Research Committee to represent the views of the beneficiary community to inform the Trust’s decision-making.

During the year, the NAC published regular newsletters to keep the beneficiary community informed of its, and the Trust’s, activities. They also individually produced an ‘annual report’ – in both written and video format - highlighting their activities and achievements over the previous 12 months..

NAC representatives attended all Trust events, which provided opportunities for them to meet with the beneficiary community to share information and seek feedback.

Volunteers

A number of beneficiaries generously volunteer their time and expertise to support the Trust and, through it, the broader beneficiary community.

In the last 12 months over 40 beneficiaries volunteered their time in a wide range of roles including: providing (practical and emotional) peer support; hosting virtual discussions/events for beneficiaries; membership of the NAC; sitting as beneficiary representatives on Trust Committees; attending meetings with the four UK Health and Social Care Departments and contributing to various Trust projects.

Beneficiaries

The Trust has responsibility for assessing new applications to become beneficiaries of the Trust and has established a robust procedure for assessing new applications, drawing on international evidence and utilising the diagnostic algorithm, valiDATE, which was one of the key outputs of the WHO conference on Thalidomide Embryopathy held in early 2014.

During the year, the Trust received 31 completed applications from individuals who thought they may be entitled to become beneficiaries. Two individuals were accepted as beneficiaries in the twelve-month reporting period.

It is with regret that the trustees report the deaths of eleven beneficiaries during the year.

At 30 September 2022 there were 438 beneficiaries (2021: 447).

The following charts provide a breakdown of beneficiaries by gender, age and country of residence as at 30 September 2022.

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Gender of Beneficiaries Male, 48Yo Female, 52/ Age of Beneficiaries 2YJ 212 2(K) 115 i(K) 65 50 28 15 57 58 59 60 61 62 63 Country of Residence Wales, 31 Scotland, 49 Overseas, 38 Northern Ireland, 17 ng and, 30

Risk Management

A key role of Trustees is to identify and manage risk and they discharge this duty by means of a Risk Register. The full Risk Register is reviewed by Trustees annually. The most significant risks are reviewed by the Finance Committee on a quarterly basis. This year, the Trustees have satisfied themselves that adequate systems and procedures are in place to manage all of the identified risks.

The principal risks and uncertainties identified by Trustees in their 2022 risk review continued to be the security of future funding and of the Trust’s IT systems (including the risk of data security breaches or potential fraud, theft of funds and breaches of beneficiary confidentiality). In addition, continued high levels of inflation, and the impact of this on beneficiaries, was identified as a new risk. Plans to mitigate these risks as far as possible are regularly reviewed and updated by the Trustees.

We continue to review and strengthen our IT security arrangements by improving our data back-up procedures, providing regular cyber security awareness training for staff, Trustees and NAC members and undertaking external penetration testing and phishing simulation campaigns. We have also recently undertaken an external GDPR Review to check that we remain compliant and up to date with our data protection policies and processes.

We have continued to gather robust evidence on the evolving and increasing needs of our beneficiaries and to share this with our funders, together with information on how their funding is improving beneficiaries’ quality of life. Our agreements with both Diageo and the four UK Health and Social Care Departments link the level of funding provided each year to inflation measures. In March 2021, the Chancellor of the Exchequer, announced the government’s commitment to providing funding for beneficiaries living in England for the rest of their lives and comparable commitments were made by the Scottish and Welsh Governments during 2022. Discussions with the Northern Ireland Government are ongoing.

The Trustees treat safeguarding of our beneficiaries as an important priority and have a robust safeguarding policy in place. Sadly, during the 12-month reporting period, in four cases safeguarding concerns involving family members or carers were identified and reported to external bodies (Local Authority Safeguarding leads and/or the police).

Achievements and Performance

We continue to provide a wide range of ongoing support to our beneficiaries, tailored to meet their individual needs and, as they reach their 60s and experience the usual health issues associated with ageing, their needs are becoming increasingly complex and multilayered.

Over the 12-month period, 253 individual beneficiaries (over 55% of the beneficiary community) had contact with our Health & Wellbeing Team, many on multiple occasions. The most common issues that beneficiaries require support with are health issues, care and carers, benefits and mental health/emotional support – these issues account for over 80% of contacts with the Health & Wellbeing Team.

In addition to providing day-to-day support, at the start of the year we identified a number of ambitious goals for 2021/22. These are set out below together with an overview of the progress made over the last 12 months:

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We said we would… **We … **
… conduct a comprehensive Beneficiary
Feedback Survey.		 … circulated a feedback survey to all
beneficiaries in January 2022, shared the
results with both our Trustees and national
Advisory Council in May and wrote to all
beneficiaries in July with a summary of the
findings and told them what action we
would be taking in response to these.
…. hold an event for new beneficiaries to
encourage them to feel more part of the
Trust.		 ...arranged a small, informal event for new
beneficiaries at our offices in St Neots in
October 2021 and received
overwhelmingly positive feedback from
attendees.
…create tailored resources for social care
assessors and front-line care staff to
increase their understanding of
thalidomide damage and the impact it has
on daily life.		 …. are close to finalising the resources for
social care assessors and have begun work
on the resources for frontline care staff.
Both will be completed and go live in 2023.
….undertake a review of our Emergency-
card, including feedback from users.		 … have recently completed the review and
will be discussing the findings with our
partner myliferaft in order to identify ways
to make it more user-friendly and increase
take-up.
…..produce a report of the recently-
concluded Upper Limb Research Study.		 .. have produced a report and shared it
with beneficiaries who participated in the
clinic study but are currently unable to
circulate it more widely as the research has
been submitted for publication to the
Lancet.
….. deliver an online event to provide
information, advice and guidance to
professionals supporting beneficiaries who
lack capacity.		 .. held an event for professionals
supporting our beneficiaries who lack
capacity in February 2022 and, on the basis
of the positive feedback provided, plan to
hold similar events in the future.
…. recruit additional members to our
Clinical Network with expertise
rehabilitation, pain management and
mental health.		 … have continued to grow our Clinical
Network, including recruiting specialists
with expertise in mental health (including
trauma), pain management and
rehabilitation.

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Plans for the Future

In the next 12 months, the Trustees, staff and members of the NAC will continue to work

together to implement our new, jointly owned Strategic Plan. Our plans include:

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Financial Review

During the year the Trust allocated grants totalling £32.1m (2021: £30.4m) to its beneficiaries. The Trust received donations from Diageo plc totalling £15.1m (2021: £13.3m).

Health Grant funding from the four Health and Social Care Departments of the United Kingdom totalled £12.6m (2021: £11.6m). As Health Grant funding is provided for specific, agreed health and wellbeing purposes, these are accounted for by the Trust as funds restricted for these purposes.

The Trust is committed to managing its resources effectively and achieving value for money. It operates a robust budget management system which involves regular review of activity and expenditure by budget holders, oversight by the Management Team and regular reporting of variances to the Trust’s Finance Committee. The Trust does not actively fundraise and 100% of its resources are utilised for charitable purposes, including charity governance. During 2021/22, 93% of outgoing resources were in the form of Grants to our beneficiaries. Of the remaining 7% of expenditure, 73% (excluding investment management fees) was spent on providing health and wellbeing support and financial guidance directly to our beneficiaries by our staff and volunteers. The balance of resources was utilised to administer beneficiary Grants, assess new claims, ensure effective governance of the Trust, and deliver agreed campaigning activities.

Investment Objectives

The principal objective of the investment policy is to generate sufficient income and capital return to enable the Trustees to pay Annual Grants for the entire lives of the beneficiaries.

The environmental, social and governance (ESG) nature of Trust investments has been considered at length by the Trustees. The Trustees believe that ESG-related risks, including climate change risks, are financially material and an important component of investment risk. The Trustees believe that organisations that soundly manage ESG-related risks are more likely to be financially sustainable over time, and therefore deliver better long-term risk-adjusted returns. Trustees currently hold £34.7m of funds in an ESG fund with Legal & General Investment Management (LGIM).

As all of the Trust investments are held within pooled funds, the decisions regarding the selection of investments is entrusted to the investment managers, who each act within agreed guidelines. Trustees regularly ask investment managers to explain how ESG factors are incorporated into their decisions regarding the selection of investments.

In line with the 2018 Covenant with Diageo, the Trustees adopted an investment policy which will reduce the investment risk of the portfolio over the lifetime of the Trust.

In order to achieve this, from 2017 to 2022 the Trustees will continue to try to achieve higher returns with a given amount of risk, managed through diversification and active management of the investment assets. From 2022 to 2037 trustees expect to smoothly reduce the investment risk of the portfolio.

The current benchmark against which performance between 2017 and 2022 is represented by a portfolio comprising of 75% global equities and 25% bonds.

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Investment Strategy and Performance

The investment strategy is currently implemented through a combination of investments and managers as set out in the table below, together with the ranges within which the policy is managed, in line with the Statement of Investment Principles dated December 2020.

Portfolio Manager Central Allocation
(% of Assets)		 Target Ranges
(% of Assets)
Active Global Equities Schroders 33.5 20-40
Passive Global Equities BlackRock and LGIM 50.7 40-60
Bond Portfolios BlackRock and 24AM 15.1 10-30
Cash Lloyds and RLAM 0.7 0-20

Cash deposits are held with a variety of banks and investment managers.

The total annual return on the Trust’s investments for the year was -5.8% (2021: 29.4%) which is higher than the benchmark of -6.2%. This negative return has been due to the impact on the global markets of soaring inflation and higher borrowing costs.

Over the last three years the average rate of return has been 4.8% pa, which is slightly higher than the benchmark of 4.3%.

Significant Investments

At the year end, the following investments represented 5% or more of the total market value of investments:

£000s %
Schroders Global Recovery Fund 43,103 25
Legal and General Future World ESG Fund 34,742 20
BlackRock North America 34,033 20
Schroders Charity Equity Fund 13,973 8
BlackRock Fixed Income Global Opportunities Fund 13,315 8
Vontobel –24AM Strategic Income Fund 12,383 7

Derivative Instruments

The Trustees have authorised Schroders to use financial contracts, known as derivatives, to help manage investment portfolio risk. At the year end the open derivatives position was a net liability of £0 (note 9) (2021: £0).

Diageo Covenant

A Deed of Covenant is in place, signed by the Trustees and Diageo plc (successor to The Distillers Company), which sets out Diageo’s commitment to long-term support for Thalidomide Trust beneficiaries and to underwrite the investment policy of the Trust. The Covenant enables the Thalidomide Trust both to maintain the programme of Annual Grants to its beneficiaries and deliver ongoing support in response to their evolving and growing health and wellbeing needs.

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The Deed of Covenant is reviewed by the Trustees, the NAC and Diageo periodically. In January 2018, an updated Deed of Covenant was agreed which reflects an increased level of support from Diageo.

Government Health Grants

In addition to the assets held by the Trust and the income from Diageo, the UK government supports the Trust by way of Health Grant funding agreements in place with the four UK Health and Social Care Departments since 2009. This money has helped beneficiaries to respond to their growing needs as they age – in order to maximise their independence and quality of life, minimise further deterioration and improve their overall health and wellbeing. The existing 10 year Health Grant agreements come to an end in 2023 (with the last grant payments made to beneficiaries in June 2022). In March 2021, the Chancellor, Rishi Sunak, announced a commitment to lifetime funding of the Health Grant to beneficiaries living in England and during 2022 both Wales and Scotland announced the same commitment. Discussions are still underway with the Northern Ireland government over a similar renewal commitment for beneficiaries living in Northern Ireland but the absence of a National Executive has impeded progress.

Grant Making and Reserves Policy

Beneficiaries receive an Annual Grant, based on their level of disability, from funds that come from Diageo each year in line with the Covenant and the Trust’s reserves, including the interest and investment growth accrued.

The Trustees’ distribution policy continues to provide individual Annual Grants to beneficiaries for the whole of their lives. The Trustees have to set a policy which will ensure reserves are not depleted whilst beneficiaries are in need of funding, whilst at the same time ensuring all assets are utilised by the time of the death of the last beneficiary. The total unrestricted funds at 30 September 2022 stood at £157m (2021: £175m) whereas the Restricted Fund had a balance of £0.5m at the year-end (2021: -£0.1m).

Statement of the Corporate Trustee’s Responsibilities

The Trustee is responsible for preparing the Trustee’s Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 of the incoming resources and their application for that period.

In preparing these financial statements, the Trustee is required to:

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The Trustee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable it to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. The Trustee is also responsible for safeguarding the assets of the charity 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 charity and 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.

Signed on behalf of the Corporate Trustee:

Mark Spofforth Chair of the Board of the Thalidomide Trust Company 25 January 2023

1 The going concern basis means that the charity has the resources to continue in operations for a minimum of

12 months from the date of signing these financial statements

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Independent auditors’ report to the trustee of The Thalidomide Trust

Report on the audit of the financial statements

Opinion

We have audited the financial statements of The Thalidomide Trust for the year ended 30 September 2022 which comprise the balance sheet as at 30 September 2022; the statement of financial activities for the year then ended; cashflow statement for the year and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

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

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

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Other information

The Trustee is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

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 require us to report to you if, in our opinion:

Responsibilities of Trustee

As explained more fully in the Trustee’s Responsibilities Statement set out on page 15, the Trustee is 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 Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustee is responsible for assessing the 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 Trustee either intends to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

We have been appointed as auditors under the Charities Act 2011 and report in accordance with regulations made under that Act.

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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.

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

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the charity’s financial statements to material misstatement and how fraud might occur, including through discussions with the Trustee, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the charity by discussions with the Trustee and updating our understanding of the sector in which the charity operates.

Laws and regulations of direct significance in the context of the charity include the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and guidance issued by the Charity Commission for England and Wales.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the charity’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the charity’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

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There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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

Use of our report

This report is made solely to the charity’s Trustee, 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 Trustee 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 Trustee as a body, for our audit work, for this report, or for the opinions we have formed.

Saffery Champness LLP Chartered Accountants and Statutory Auditors Westpoint, Peterborough Business Park, Lynchwood, Peterborough, PE2 6FZ

Date:

Saffery Champness LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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Statement of financial activities for the year ended 30 September 2022

Note
Income from:
Diageo donations
3
Health Department grants
5
Investment income
2
Other income
Total
Expenditure on:
Raising funds (solely
investment management
fees)
6
Charitable activities
6
Total
Net gains/(losses) on
investments
9
Net income (expenditure)
Reconciliation of funds
Fund balances brought
forward
11
at 1 October 2021/2020
Fund balances carried
forward
at 30 September 2022/2021
11		 Unrestricted
funds
£000s
15,054
-
3,136
210
18,400
(415)
(21,700)
(22,115)
(13,793)
(17,508)
174,752
157,244		 Restricted
funds
£000s
-
12,638
1
-
12,639
(2)
(11,955)
(11,957)
-
682
(116)
566		 Total funds
2022
£000s
15,054
12,638
3,137
210
31,039
(417)
(33,655)
(34,072)
(13,793)
(16,826)
174,636
157,810		 Total funds
2021
£000s
13,338
11,601
2,166
90
27,195
(447)
(32,407)
(32,854)
39,506
33,847
140,789
174,636

All activities are continuing. All gains and losses recognised in the year are included in the Statement of Financial Activities.

21

Balance Sheet as at 30 September 2022

Note
Fixed assets
Tangible assets
8
Investments
9
Current assets
Debtors and prepayments
15
Advance of grants
15
amounts falling due within one year
amounts falling due after one year
Cash at bank and in hand
Creditors: amounts falling due
within one year
Beneficiary nominee accounts
12
Creditors and accruals
16
Net current assets
Total assets less current liabilities
Net assets
Trust funds
General fund
11
Beneficiary memorandum accounts
11,12
Restricted fund
11		 Total funds
30/09/2022
£000s
324
170,591
170,915
111
574
1,046
8,097
9,828
(22,646)
(287)
(22,933)
(13,105)
157,810
157,810
153,642
3,602
157,244
566
157,810		 Total funds
30/09/2021
£000s
330
186,134
186,464
100
625
1,338
8,248
10,311
(21,908)
(231)
(22,139)
(11,828)
174,636
174,636
171,499
3,253
174,752
(116)
174,636

The financial statements on pages 21 to 40 were approved by the Board on 25 January 2023 and signed on behalf of the Corporate Trustee by:

Mark Spofforth Mark Benstead Director Director

22

Cash flow statement for the year ended 30 September 2022

Note
Cash flows from operating activities:
Net cash provided by (used in) operating activities
Cash flows from investing activities
Dividends, interest and rents from investments
Purchase of tangible fixed assets
8
Proceeds from sale of tangible fixed assets
Purchase of investments
9
Proceeds from sale of investments
9
Net cash provided by (used in) investing activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents as 1 October 2021
Cash and cash equivalents as at 30 September 2022
Cash held for investment
9
Cash at bank and in hand
Cash as at 30 September 2022
Reconciliation of income/(expenditure) to net
cash (outflow) from operating activities
Net income/(expenditure) for the reporting period
as per the statement of financial activities)
Adjustments for:
Depreciation & profit on disposals
(Gains)/losses on investments
Dividends, interest and rents from investments
Increase/(decrease) in creditors due within one year
(Increase)/decrease in debtors
Net cash provided by (used in) operating activities		 Total funds
2022
£000s
(5,026)
3,137
(26)
15
(65,401)
67,610
5,335
308
9,054
9,362
1,265
8,097
9,362
(16,826)
18
13,793
(3,137)
794
332
(5,026)		 Total
funds
2021
£000s
(5,073)
2,166
(12)
-
(40,954)
45,463
6,663
1,590
7,464
9,054
806
8,248
9,054
33,847
24
(39,506)
(2,166)
2,316
412
(5,073)

23

Notes to the financial statements for the year ended 30 September 2022

1. Accounting policies

Basis of preparation

The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 and the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2015.

The financial statements have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The Trust, which is an unincorporated discretionary charitable trust, constitutes a public benefit entity as defined by FRS 102. The sole trustee is the Thalidomide Trust Company, which is an incorporated trustee company. The financial statements have been prepared on a going concern basis (that is to say, that the charity has the resources to continue in operations for a minimum of 12 months from the date of signing these financial statements) and accounting policies have been applied consistently.

The undertaking by Diageo plc in their 2018 Deed of Covenant is to make annual donation payments until 2037, with a commitment thereafter to ensure funding is sufficient to maintain grants for the lifetime of beneficiaries. The Health Grant funding agreements that are in place until April 2023 have been formally extended to a lifetime commitment by England, Scotland and Wales (similar discussions are ongoing with Northern Ireland, however long-term decision-making is currently on hold while there is no functioning National Executive in place there). These agreements support the conclusion that the charity is a going concern.

The financial statements are prepared in sterling, which is the functional currency of the Trust, and rounded to the nearest £000. The date for authorisation of the issue of the financial statements was 25 January 2023.

The Thalidomide Trust has taken advantage of the exemption under section 24.13A of the Charities SORP not to prepare consolidated accounts. The financial statements present information about the Trust as an individual entity and not about its group.

Fund accounting

Unrestricted Funds

Unrestricted funds are expendable at the discretion of the Trustees in the furtherance of the objects of the Thalidomide Trust. The Trust’s level of reserves is maintained in order to meet the anticipated future grant allocations.

The General Fund and Beneficiary Memorandum Accounts are derived from funds provided by Diageo plc and its predecessors, and investment returns.

24

Notes to the financial statements for the year ended 30 September 2022 (continued)

1 Accounting policies (continued)

Restricted Funds

Restricted income funds are funds whose use is restricted to specific purposes according to the terms on which the funds were received. Where income is received for purposes specified by the donor that income is shown as restricted in the Statement of Financial Activities. Expenditure for the specified purposes is shown as restricted expenditure. Any unexpended balance at the balance sheet date is carried forward as a restricted income fund.

Restricted Funds are derived from the Health and Social Care Departments in England, Scotland, Wales and Northern Ireland as detailed in note 5.

Tangible fixed assets

As an unincorporated association, the Trust was not able to hold property in its own name and so in prior years the property was held in the names of the individual trustees. In January 2018, following the establishment of the sole corporate trustee, the Thalidomide Trust Company, title for the property transferred to the Thalidomide Trust Company, which is an incorporated trustee company. Beneficial ownership, and in substance control, remains with the Trust and the building is therefore disclosed in the financial statements of the Trust.

The cost of tangible fixed assets is their purchase cost, together with any incidental costs of acquisition. Depreciation is calculated so as to write off the cost of tangible fixed assets on a straight-line basis over the useful economic lives of the assets concerned.

The principal depreciation rates used are as follows:

Motor vehicles - 25% per annum
Furniture and equipment - 20% per annum
Buildings - 2% per annum
The Trust has a capitalisation threshold of £2,500.

Tangible fixed assets are written down to their realisable value if it is considered there has been a permanent diminution in their value.

Investments

Unquoted unit trust investments are stated at the market value as established by the administrators of the unit trust. Market value is based upon the buying and selling price of the underlying securities in the relevant market with allowances made for cash, accrued income and costs within the unit trust fund.

Derivatives are initially recognised at transaction value and subsequently measured at their settlement value.

25

Notes to the financial statements for the year ended 30 September 2022 (continued)

1 Accounting policies (continued)

Income from investments

Income from investments is recognised when its receipt is probable and the amount receivable can be measured reliably. Any realised and unrealised gains and losses on revaluation or disposals are combined in the statement of financial activities.

Other incoming resources

Other income consists of fee income charged to beneficiaries, which is recognised upon the issuance of Advances on future grants to beneficiaries. These Advances are intended to assist with major property, mobility and health related purchases. The fee level is based on the cost to the Trust of making the Advances, which includes a contribution towards the loss of income generated by the Trust’s cash and investments as a result of withdrawing the cash to be advanced to the beneficiary.

Income from rent

Income from rent is recognised on a straight line basis over the period in which the service is provided.

Diageo donation

The Diageo donation is paid under the terms of a Deed of Covenant dated 23 January 2018 which sets out an undertaking to make annual payments until 2037 and with a commitment thereafter to ensure funding is sufficient to maintain grants for the lifetime of beneficiaries.

The income is recognised when there is evidence of entitlement, receipt is probable and the amount can be measured reliably. For the Diageo donation, this is upon the receipt of the cash.

Income from Health and Social Care Departments

The UK Government supports the Trust by way of Health Grant funding agreements in place with the Health and Social Care Departments in England, Scotland, Wales and Northern Ireland up until 2022. In March 2021, the Chancellor, Rishi Sunak, announced a commitment to lifetime funding of the Health Grant to beneficiaries living in England. During the year 2022, the governments of Wales and Scotland also announced a lifetime commitment to the beneficiaries residing in those countries. Discussions with the Northern Ireland government regarding the lifetime commitment of Health Grant funding are ongoing.

The income is recognised when there is evidence of entitlement, receipt is probable and the amount can be measured reliably. For the Health and Social Care Departments Grants, this is upon the receipt of the cash.

Pension arrangements

The Trust operates a defined contribution pension scheme for employees. Contributions are paid into the group scheme, the assets of which are held in an independently administered fund. Contributions are charged to the statement of financial activities as they become payable. The Trust provides no other post-retirement benefits to its employees.

26

Notes to the financial statements for the year ended 30 September 2022 (continued)

Accounting policies (continued)

Charitable expenditure

All charitable expenditure is accounted for on an accruals basis and has been classified under the category headings, which aggregate all costs related to each category, as shown in note 6. Where costs cannot be directly attributed to particular headings they have been allocated in proportion to the time spent by staff on work under each heading.

Grant-making

Grants payable are accounted for in full as liabilities of the charity when approved by the trustees.

Non-financial support costs

Beneficiary support costs comprise the direct costs, including staff, attributable to delivering the Trust’s wide range of financial and non-financial support to beneficiaries.

Governance

Governance costs cover expenditure on maintaining the constitutional and policymaking framework of the Trust and compliance with statutory requirements.

Irrecoverable VAT

Any irrecoverable VAT is charged to the statement of financial activities, or capitalised as part of the cost of the related asset, where appropriate.

Judgements 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 the recognition of incoming donations and grants, and value of the Advances of Grants amounts falling due within, and after, one year.

The value of incoming grants and donations are agreed on an annual basis with both Diageo plc and the four Health and Social Care Departments in the UK to reflect the level of support needed for current beneficiaries. Future receipts are not anticipated within the financial statements as there is uncertainty as to the level of the receipts.

Advances of Grants are recovered by the Trust through deductions from future grants allocated to beneficiaries. Where possible, the Trust places a charge on property as security for the Advance and has further reduced the risk of the non-repayment of an Advance through an insurance policy held by the Trust. Based on these actions, in the judgement of the Trust’s management the Advances as at the year-end are fully recoverable.

27

Notes to the financial statements for the year ended 30 September 2022 (continued)

2. Investment income

Unrestricted
Global Unit Trusts (Equities)
Global Unit Trusts (Fixed Income)
UK Charity Funds (Equities)
Directly Held Equities
Cash Holdings
Restricted fund
Cash Holdings
Total per Statement of Financial Activities		 2022
£000s
1,405
1,035
694
0
2
3,136
1
3,137		 2021
£000s
694
1,006
438
26
1
2,165
1
2,166

3. Diageo plc donation

On 23 January 2018 Diageo plc entered into a Deed of Covenant with the Thalidomide Trust which replaced earlier covenants executed by Guinness plc in 1995 and Diageo plc in 2000 and 2005 and 2012.

Under this Covenant future increases in the Annual Grant paid to beneficiaries will be in line with the Retail Price Index (RPI.)

4. Investment management fees

The Investment Managers charge a fee for their services based upon an agreed percentage of the market value of the investments under management and a performance related fee.

The Investment Managers’ fees charged for the year amounted to £371,000 (2021: £392,000).

In addition to the Investment Managers’ fees, Trust costs relating to investment management were £46,000 (2021: £55,000), which comprised of unrestricted costs of £44,000 and restricted costs of £2,000. This is made up of £38,000 of investment consultancy services and £8,000 of staff time.

28

Notes to the financial statements for the year ended 30 September 2022 (continued)

5 Grant-making

Unrestricted Funds: General Grants

The trustees’ grant-making policy has been:

For beneficiaries with capacity to manage their financial affairs

The trustees maintain a non-interest bearing nominee account for each beneficiary.

An Annual Grant is paid into the nominee account. A beneficiary has absolute entitlement to the balance in his or her nominee account and the balance is recognised as a liability of the Trust. Beneficiaries can instruct the Trust to make payments up to the balance in their nominee accounts from which they have entire discretion over the amount and frequency of the payments.

The Annual Grant is calculated with reference to the financial position of the Trust and each beneficiary’s degree of disability, in accordance with the criteria applicable to distributions set out in the Diageo Deed of Covenant. The trustees reserve the right to amend the method of calculating the Annual Grant.

In addition to the Annual Grant, the trustees will consider requests for Major Advances (normally relating to significant one-off costs to meet mobility and housing needs), ShortTerm Advances (to enable beneficiaries to make a transition in their housing arrangements where there are complex needs) and Emergency Advances (to meet unanticipated costs in the short term).

Where a Major, Short-Term or Emergency Advance has been made, future Annual Grants will be reduced by the amortisation of the Advance and an agreed annual fee to reflect the costs associated with making the Advance and the reduction in the Trust’s investment assets as a result of the Advances. Major Advances will normally result in a reduction to the Annual Grants for a number of years whereas Short-Term and Emergency Advances will normally result in a reduction to the following year’s Annual Grant.

In addition, the Trustees have established a small Exceptional Needs Fund which allows beneficiaries with exceptional health and wellbeing needs which cannot reasonably met from their existing income to apply for an additional one-off grant.

For beneficiaries who lack capacity to manage their financial affairs

The trustees make payments to meet the needs of the beneficiary following discussion with the beneficiary’s deputy or attorney officially registered with the Court of Protection to manage the beneficiary’s financial affairs. Once funds have been transferred to the deputy or attorney for the benefit of the beneficiary, control of these funds passes absolutely out of the Trust. However, in line with Trust’s policy on beneficiaries who lack capacity, there is a requirement for regular reporting on how these funds are utilised to meet the needs of the beneficiary and professional oversight.

Until such time as beneficiaries who lack capacity have a professional deputy in place, or where the appointed deputy has not fully complied with the regular reporting requirements, their Annual Grants are held in Beneficiary Memorandum Accounts as designated funds.

29

Notes to the financial statements for the year ended 30 September 2022 (continued)

5 Grant-making (continued)

All payments will always remain at the discretion of the trustees and will be allocated in accordance with the principles set out in the Trust Deed and in line with the Trust’s policy on beneficiaries who lack capacity.

Beneficiaries with capacity to
manage their financial affairs
Beneficiaries who lack capacity
to manage their financial
affairs
Total of Grants		 2022
2021
Number of
beneficiaries
Value of
grants
Number of
beneficiaries
Value of
grants
£000s
£000s
421
19,321
437
18,337
21
1,291
13
907
442
20,612
450
19,244

Restricted Funds: Departments of Health and Social Care Grants

The four UK Health and Social Care Departments provide funding for the Health Grants under an agreement for the period 2013 to 2022. A commitment to lifetime funding of the Health Grant has been announced by the governments in England, Scotland and Wales, and discussions with Northern Ireland are ongoing.

Health Grant funding is distributed in accordance with the Trust’s existing distribution policy. The costs associated with administering the scheme are met from the funding. Details of Health Grant direct and indirect costs are set out in note 6. The level of costs charged has been determined by reference to factors such as the time spent on Health Grant related work (both administering and monitoring /reporting activities).

Trust staff and beneficiary representatives meet with each of the Health and Social Care Departments on an ongoing basis. One of the key objectives of these reviews and the related negotiations is to actively manage the level of support requested from the four UK Health and Social Care Departments and the level and nature of the Health Grant fund expenditure such that there are no long term deficits, or surpluses, on the restricted Health Grant funds.

Health Grants by Country

£000s
Fund balances as at 1 October 2021
Incoming Health Grants
Health Grants Allocation
Interest income
Health Grant - Direct costs
Health Grants – Indirect costs
Fund balances as at 30 September
2022		 England
Scotland
Wales
N. Ireland
Total
£000s
175
72
(319)
(44)
(116)
9,080
1,684
1,237
637
12,638
(8,736)
(1,400)
(858)
(542)
(11,536)
1
-
-
-
1
(47)
(31)
(3)
(3)
(84)
(264)
(42)
(20)
(11)
(337)
209
283
37
37
566

30

Notes to the financial statements for the year ended 30 September 2022 (continued)

6 Trust costs and net income

2022
2021
Unrestricted
Restricted
Total
Unrestricted
Restricted
Total
Note
£000s
£000s
£000s
£000s
£000s
£000s
Expenditure on raising funds:
Investment management fees
4
371
-
371
392
-
392
Support costs (see below)
44
2
46
52
3
55
415
2
417
444
3
447
Charitable activities:
Grants
5,12
20,612
11,536
32,149
19,244
11,112
30,356
Net decrease in memorandum
account balances
11,12
(349)
-
(349)
549
-
549
20,263
11,536
31,800
19,793
11,112
30,905
Costs of grant making (see below)
136
36
172
94
32
126
Beneficiary support costs (see
below)
898
290
1,188
736
327
1,063
Support costs (see below)
403
93
496
242
71
313
21,700
11,955
33,655
20,865
11,542
32,407
2022
Staff
and
other
HR costs
Admin and
running
costs
Legal,
Professional
and Audit
fees
National
Advisory
Council
Campaigning
Costs
Research &
Development
Total
Restricted
costs
allocation
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
Expenditure on raising
funds:
Investment management
5
1
38
-
-
-
44
2
Expenditure on
charitable activities:
Costs of grant-making
70
29
37
-
-
-
136
36
Beneficiary support costs
599
271
3
8
-
17
898
290
Other costs:
- Governance & admin
123
144
55
31
-
-
353
- New claims
19
13
-
-
-
-
32
- Campaigns
4
-
-
-
13
-
17
Total other costs
146
157
55
31
13
-
403
93
Total unrestricted costs
820
459
133
39
13
17
1481
Restricted costs
Beneficiary support costs
- Health Grant recharged
257
138
25
-
-
-
421
421
Total costs – 2022
1077
596
158
39
13
17
1,901
Total costs - 2021 (see
below)
994
386
93
29
2
51
1,555		 2022
2021
Unrestricted
Restricted
Total
Unrestricted
Restricted
Total
Note
£000s
£000s
£000s
£000s
£000s
£000s
Expenditure on raising funds:
Investment management fees
4
371
-
371
392
-
392
Support costs (see below)
44
2
46
52
3
55
415
2
417
444
3
447
Charitable activities:
Grants
5,12
20,612
11,536
32,149
19,244
11,112
30,356
Net decrease in memorandum
account balances
11,12
(349)
-
(349)
549
-
549
20,263
11,536
31,800
19,793
11,112
30,905
Costs of grant making (see below)
136
36
172
94
32
126
Beneficiary support costs (see
below)
898
290
1,188
736
327
1,063
Support costs (see below)
403
93
496
242
71
313
21,700
11,955
33,655
20,865
11,542
32,407
2022
Staff
and
other
HR costs
Admin and
running
costs
Legal,
Professional
and Audit
fees
National
Advisory
Council
Campaigning
Costs
Research &
Development
Total
Restricted
costs
allocation
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
Expenditure on raising
funds:
Investment management
5
1
38
-
-
-
44
2
Expenditure on
charitable activities:
Costs of grant-making
70
29
37
-
-
-
136
36
Beneficiary support costs
599
271
3
8
-
17
898
290
Other costs:
- Governance & admin
123
144
55
31
-
-
353
- New claims
19
13
-
-
-
-
32
- Campaigns
4
-
-
-
13
-
17
Total other costs
146
157
55
31
13
-
403
93
Total unrestricted costs
820
459
133
39
13
17
1481
Restricted costs
Beneficiary support costs
- Health Grant recharged
257
138
25
-
-
-
421
421
Total costs – 2022
1077
596
158
39
13
17
1,901
Total costs - 2021 (see
below)
994
386
93
29
2
51
1,555		 2021
Unrestricted
Restricted
Total
£000s
£000s
£000s
392
-
392
52
3
55		 2021
Unrestricted
Restricted
Total
£000s
£000s
£000s
392
-
392
52
3
55
444
3		 447
19,244
11,112
549
-		 30,356
549
19,793
11,112
94
32
736
327
242
71		 30,905
126
1,063
313
20,865
11,542		 32,407
Restricted
costs
allocation
£000s
2
36
290
93
- Governance & admin
- New claims
- Campaigns		 123
144
55
31
-
-
353
19
13
-
-
-
-
32
4
-
-
-
13
-
17
Total other costs
Total unrestricted costs
Restricted costs
Beneficiary support costs
- Health Grant recharged
Total costs – 2022
Total costs - 2021 (see
below)		 146
157
55
31
13
-
403
820
459
133
39
13
17
1481

257
138
25
-
-
-
421
421
1077
596
158
39
13
17
1,901
994
386
93
29
2
51
1,555

31

Notes to the financial statements for the year ended 30 September 2022 (continued)

6 Trust costs and net income (continued)

Comparative
2021
Expenditure on raising
funds:
Investment management
Expenditure on
charitable activities:
Costs of grant-making
Beneficiary support costs
Other costs:		 Staff
and
other
HR costs
Admin and
running
costs
Legal,
Professional
and Audit
fees
National
Advisory
Council
Campaigning
Costs
Research &
Development
Total
£000s
£000s
£000s
£000s
£000s
£000s
£000s
5
8
38
-
-
-
52
66
14
14
-
-
-
94
507
172
1
6
-
51
737		 Restricted
costs
allocation
£000s
3
32
324
72
- Governance & admin
- New claims
- Campaigns		 131
24
23
23
-
-
201
27
9
-
-
-
-
36
3
-
-
-
2
-
5
Total other costs
Total unrestricted costs
Restricted costs
Beneficiary support costs
- Health Grant recharged
Total costs - 2021
Total costs - 2020		 160
33
23
23
2
-
242
739
227
76
29
2
51
1124

255
159
17
-
-
-
431
431
994
386
93
29
2
51
1,555
943
267
53
22
23
140
1,448

Net income for the year is stated after charging/crediting:

2022 2021
£000s £000s
Depreciation 25 24
Audit Fees 28 26
Profit on disposal of fixed assets (7) -

32

Notes to the financial statements for the year ended 30 September 2022 (continued)

7 Trustee and employee information

The monthly average number of persons employed by the Trust during the year was 19 (2021: 18).

Staff costs (for the above persons)
Gross salaries and wages
Social security costs
Employer pension contributions
Other employee benefits		 2022
£000s
2021
£000s
758
720
87
78
75
70
33
32
953
900

The number of employees whose total emoluments (i.e. salary and taxable benefits) exceeded £60,000 were:

ceeded £60,000 were:
2022 2021
Number Number
£60,001 - £70,000 1 1
£70,001 - £80,000 1 1
£80,001 - £90,000 1 1
£110,001 - £120,000 1 1

No remuneration was paid to the trustees of The Thalidomide Trust Company Ltd (2021: £nil). Travel and subsistence expenses of £6,000 (2021: £2,500) were reimbursed to 4 (2021: 4) trustees of The Thalidomide Trust Company Ltd during the year.

The total remuneration and benefits received by the Trust’s key management personnel was £294,000 (2021: £270,000) for 3 employees (2021: 3).

33

Notes to the financial statements for the year ended 30 September 2022 (continued)

8 Tangible assets

Tangible assets comprise the following:

Cost
At 1 October 2021
Additions
Disposals
At 30 September 2022
Accumulated depreciation
At 1 October 2021
Charged
Disposals
At 30 September 2022
Net book value
At 30 September 2022
At 30 September 2021		 Motor
Furniture &
Building
Total
Vehicles
equipment
£000s
£000s
£000s
£000s
52
12
465
529
26
-
-
26
(24)
-
-
(24)
54
12
465
531
23
1
175
199
13
2
10
25
(17)
-
-
(17)
19
3
185
207
35
9
280
324
29
11
290
330

All tangible fixed assets are unrestricted.

9 Investments

Unlisted investments
Global Unit Trusts
(Equities)
Global Unit Trusts (Fixed
Income)
UK Charity Funds
Cash held for investments
(including accrued investment income)
Total per Balance Sheet		 2022
2021
£000s
£000s
127,794
137,236
25,698
30,631
15,834
17,461
1,265
806
170,591
186,134

All investments are held as unrestricted funds.

34

Notes to the financial statements for the year ended 30 September 2022 (continued)

9 Investments (continued)

The movement on investments in the year was as follows:

Market value b/fwd 1 October 2021
Less: Disposal proceeds/ share exchanges
Add: Purchases at cost/share exchanges
Realised and unrealised gains/(losses)
Increase/(decrease) in cash held for
investment
(including accrued investment income)
Market value at 30 September 2022
Historical cost at 30 September 2022		 2022
2021
£000s
£000s
186,134
151,765
(67,610)
(45,463)
65,401
40,954
(13,793)
39,506
459
(628)
170,591
186,134
157,336
142,189

The market value of investments has recovered this year, after dropping considerably the previous year due to the effect of the pandemic on the stock markets.

The trustees believe that the carrying value of the listed investments is supported by the underlying net assets.

10 Subsidiary

ValiDATE Trust was established on 7 August 2019 as a Private Limited Company by guarantee. The Thalidomide Trust has taken advantage of the exemption under section 24.13A of the Charities SORP, and not consolidated the results of ValiDATE Trust in the Group financial statements.

All costs associated with the establishment of the company were incurred by the Trust and recharged to the company.

At the 30 September 2022, ValiDATE Trust owed the parent company, The Thalidomide Trust, £35,000 (2021: £33,000).

The results of ValiDATE Trust for the period ended 30 September 2022 are shown below. Audited Accounts are filed with the Registrar of Companies.

Turnover and other income
Cost of sales and expenses
Profit for the year
Profit and loss reserves		 2022
£
25,560
(20,879)
4,681
(14,948)

35

Notes to the financial statements for the year ended 30 September 2022 (continued)

11 Trust Fund including comparatives

Unrestricted funds
Designated
Beneficiary
General		 Restricted Total
Memorandum
Fund		 Fund Trust
Accounts Funds
£000s
£000s		 £000s £000s
Balance as at 1 October 2021 3,253
171,499		 (116) 174,636
Net incoming/(outgoing) resources - (17,508) 682 (16,826)
as per Statement of Financial Activities
Adjustment for net increase 349
(349)		 - -
in beneficiary memorandum accounts
(note 12)
Balance as at 30 September 2022 3,602
153,642		 566 157,810
Note 12 Note 5
Fixed Assets
Tangible
Investments
Current Assets
Debtors and Prepayments
Advance of Grants
Cash at Bank and in Hand
Creditors: amounts falling due
within one year
Beneficiary nominee accounts
Creditors and accrued expenses
Balance as at 30 September
2022		 Unrestricted funds
3,602
153,642
566
157,810
Note 12
Note 5

36

Notes to the financial statements for the year ended 30 September 2022 (continued)

11 Trust Fund including comparatives (continued)

Comparatives
Balance as at 1 October 2020
Net incoming/(outgoing) resources
as per Statement of Financial
Activities
Adjustment for net increase in
beneficiary memorandum
accounts
Balance as at 30 September 2021		 Unrestricted funds
Beneficiary
General
Memorandum
Fund
Accounts
£000s
£000s		 Restricted
Total
Fund
Trust
Funds
£000s
£000s
3,802
137,160		 (173)
140,789
-
33,790
(549)
549		 57
33,847
-
-
3,253
171,499		 (116)
174,636
Note 12
Note 5
Comparatives
Fixed Assets
Tangible
Investments
Current Assets
Debtors and Prepayments
Advance of Grants
Cash at Bank and in Hand
Creditors: amounts falling due
within one year
Beneficiary nominee accounts
Creditors and accrued expenses
Balance as at 30 September 2021		 Unrestricted funds
Beneficiary
General
memorandum
Fund
Accounts
£000s
£000s
-
330
2,732
183,402
-
100
-
1,963
521
2,742
-
(16,807)
-
(231)		 Restricted
Total
Fund
Trust
Funds
£000s
£000s
-
330
-
186,134
-
100
-
1,963
4,985
8,248
(5,101)
(21,908)
-
(231)
3,253
171,499		 (116)
174,636
Note 12
Note 5

37

Notes to the financial statements for the year ended 30 September 2022 (continued)

12 Beneficiary accounts

Beneficiary
memorandum
accounts
£000s
As at 1 October 2021
Balance Sheet- Beneficiary Nominee Accounts
Balance Sheet- Beneficiary
Memorandum Accounts
3,253
Annual Grant Allocations
2,206
Health Grant Allocations
Payments from Beneficiary Accounts
(2,333)
Transfers between Nominee and
Memorandum Accounts
476
Adjustment for net decrease/
(increase) in Beneficiary Memorandum Accounts
As at 30 September 2022:
Balance Sheet-
Beneficiary Nominee Accounts
Balance Sheet-
Beneficiary Memorandum Accounts
3,602
Note 11		 Beneficiary
memorandum
accounts
£000s
As at 1 October 2021
Balance Sheet- Beneficiary Nominee Accounts
Balance Sheet- Beneficiary
Memorandum Accounts
3,253
Annual Grant Allocations
2,206
Health Grant Allocations
Payments from Beneficiary Accounts
(2,333)
Transfers between Nominee and
Memorandum Accounts
476
Adjustment for net decrease/
(increase) in Beneficiary Memorandum Accounts
As at 30 September 2022:
Balance Sheet-
Beneficiary Nominee Accounts
Balance Sheet-
Beneficiary Memorandum Accounts
3,602
Note 11		 Beneficiary Beneficiary
Total
Total
nominee
Health
Grant
2022
2021
accounts
accounts
£000s
£000s
£000s
£000s
16,807
5,101
21,908
19,418
18,407
20,613
19,244
11,547
11,547
11,112
(17,731)
(11,009)
(31,073)
(28,415)
(476)
(349)
549
17,007
5,639
22,646
21,908
3,602
Note 11

Beneficiary Memorandum Accounts are all designated funds and include: accounts for beneficiaries who lack capacity to manage their financial affairs (as detailed at note 5) and backdated grants allocated to new beneficiaries accepted by the Trust. On the death of a beneficiary, any funds held in Memorandum Accounts revert to the General fund to be used for the benefit of the wider community.

Beneficiary nominee accounts include the grant funds to which a beneficiary has absolute entitlement and which have not been requested by beneficiaries at the year-end (as detailed in note 5).

Beneficiary Health Grant accounts include the Health Grant funding made available, but not requested by beneficiaries (as detailed in note 5).

13 Taxation

The Trust is a registered charity, and as such is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charity's primary objectives, if these profits and surpluses are applied solely for charitable purposes.

During the current and prior years, all distributions to beneficiaries were paid under the terms of Statutory Instrument 2004 No 1819, which allows distributions from the Trust to be paid free of income tax, and therefore no income tax liability arose.

38

Notes to the financial statements for the year ended 30 September 2022 (continued)

14 Pension obligations

Defined contribution scheme

Permanent staff are eligible to receive a pension provision equivalent to 10% of gross salary under a defined contribution scheme. During the year employer contributions to this scheme amounted to £75,000 (2021: £70,000).

At the end of the year other creditors and accruals included £10,700 (2021: £8,900) payable in respect of employer pension contributions.

15 Debtors

Advances of Grants
amounts falling due within one year
amounts falling due after one year
Other debtors
Prepayments and accrued income
Total		 Total funds
2022
£000s
Total funds
2021
£000s
574
625
1,046
1,338
35
32
76
68
1,731
2,063

As set out in note 5, the Trustees will consider requests for Major Advances and Emergency Advances. The Advances consist of Major Advances and Emergency Advances balances as at 30 September 2022. Advances are recoverable from future Annual Grant allocations. Emergency Advances are recoverable within one year, Major Advances are recoverable up to a maximum of ten years.

16 Creditors

Creditors: amounts falling due within one year
Beneficiary nominee accounts (note 12)
Other creditors and accruals
Total		 Total funds
2022
£000s
Total funds
2021
£000s
22,646
21,908
287
231
22,933
22,139

39

Notes to the financial statements for the year ended 30 September 2022 (continued)

17 Net Debt Disclosure

17 Net Debt Disclosure
At 1 October Cash-flows Other non- At 30 September
2021 cash changes 2022
£ £ £ £
Cash 8,248 (151) - 8,097
Cash held for investment 806 459 - 1,265
Total 9,054 308 - 9,362

18 Related Party Transactions

Other than expenses paid to Trustees (see note 7), there were no related party transactions during the year.

During the period, the charity made payments for expenditure of its subsidiary, ValiDATE Trust of £2,000 (2021: £8,000).

At the year end, the Trust was owed £35,000 (2021: £33,000) from the valiDATE Trust. This balance is presented within other debtors.

There is no parent undertaking. The ultimate controlling party is The Thalidomide Trust Company Ltd.

19 Comparatives for Statement of Financial Activities

Comparatives
Note
Income from:
Diageo donations
3
Health Department Grants
5
Investment income
2
Other income
Total
Expenditure on:
Raising funds (solely investment
management fees)
6
Charitable activities
6
Total
Net gains/(losses) on investments
9
Net income (expenditure)
Reconciliation of Funds
Fund balances brought forward
11
At 1 October 2020
Fund balances carried forward
at 30 September 2021
11		 Unrestricted
Funds
£000s
13,338
-
2,165
90
15,593
(444)
(20,865)
(21,309)
39,506
33,790
140,962
174,752		 Restricted
Funds
£000s
-
11,601
1
-
11,602
(3)
(11,542)
(11,545)
-
57
(173)
(116)		 Total Funds
2021
£000s
13,338
11,601
2,166
90
27,195
(447)
(32,407)
(32,854)
39,506
33,847
140,789
174,636

40