Financial Review
In addition to grants paid, the Trustees also had, as at 5 April 2008, over £21 million of forward commitments, including the £15 million to Oxford University. Of these, however, £3 million had already been accounted for in earlier years. This is in accordance with the policy that grants are recognised in the statement of financial activities when approved by the Trustees and communicated to the recipients, irrespective of the future period over which payments are to be made, and the obligations outstanding at the year end are recognised as creditors. The figure for forward commitments also reflects the release or expiry during the year of earlier forward commitments, including the £2.5 million commitment made to Stonehenge on the basis that the project could not proceed as planned.
The Foundation was a remainder beneficiary under the terms of a non-charitable trust also established by Mr W Garfield Weston. The Trustees have agreed with the life tenant of that trust to a partitioning of the trust assets based upon a proper actuarial valuation and, as a consequence, became entitled during the year to a 59.6% share in a Bermudian company called Clarendon Limited which had a value of £7.2m. The company is in the process of liquidation and the Trustees regard the cash to be received in due course as expendable capital.
Reserves
The Trustees’ policy of keeping income reserves of around half a year’s income has enabled them to make the lead grant to the Bodleian Library this year and, at the same time, maintain their more general levels of grant-making. Following that payment, and taking into account the forward commitment to Oxford, the Trustees are mindful that their income reserves, at least in accounting terms, have been reduced substantially below their target figure. The Trustees will therefore carefully monitor income and expenditure over the next few years in order to replenish those reserves.
Investment objectives
The Trustees’ investment objectives as set out in the policy statement are to preserve the absolute value of the capital, whilst maintaining its ‘real’ value. The managers are instructed to adopt a relatively conservative investment strategy investing in a balanced portfolio without geographical, currency or sector restriction, subject to the terms of a Charity Commission Order dated 19 September 2001. The Trustees reviewed their investment performance benchmark during the course of the year, and increased this to RPI plus 4% over a rolling three year period. They recognise, however, that market conditions may result in that benchmark not being met immediately.
The Trustees do not have any ethical investment policy. However, Associated British Foods and other companies within the Wittington Investments Limited Group have ethical business practices.
Trustees’ responsibilities for the financial statements
Charity law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the charity’s incoming resources and application of resources during the year and of its state of affairs at the end of the year. In preparing those financial statements the Trustees are required to
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards and statements of recommended practice 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 operation.
The Trustees are responsible for keeping proper records which disclose with reasonable accuracy the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 1993. They are also responsible for safeguarding the charity’s assets and hence taking reasonable steps for the prevention and detection of fraud and breaches of law and regulations.