Trustees' report and financial statements 2013-2014

Trustees’ annual report and financial statements for the year ended 31 March 2014 The Duke of Edinburgh’s International Award Foundation

Company number: 3666389 Registered charity number: 1072453 A company limited by guarantee

Contents Chair’s introduction 4 Our aims, objectives and impact 6 The current state of the award 8 Resourcing 10 Operations 14 Communications 16 Sustainable infrastructure 18 Structure, governance and management 20 Financial review 26 Independent auditors’ report to the members of The Duke of Edinburgh’s International Award Foundation 30 Consolidated statement of financial activities (incorporating the income and expenditure account) for the year ended 31 March 2014

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Consolidated and charity balance sheet at 31 March 2014

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Notes to the financial statements for the year ended 31 March 2014

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Trustees’ commitment 50 Thank you 50 Appendix - structure, governance and management

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The Duke of Edinburgh’s International Award Foundation

Our vision Our vision is to reach more young people from diverse backgrounds and equip them as individuals to succeed in life.

Our ambition Our long term ambition is that by 2026, when The Duke of Edinburgh’s International Award celebrates 70 years, every eligible young person will have the opportunity to participate in the Award.

Our values Our values are to be progressive and empowering, to ensure we are connected throughout our network to enable more collaborative working and to be diverse in our approaches to engaging with people and in encouraging challenging activities.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

The Trustees present their report and the audited financial statements of the company limited by guarantee for the year ended 31 March 2014.

In preparing this report the Trustees have complied with the Charities Act 2011, the Companies Act 2006, the Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) (“SORP”), applicable accounting standards and the provisions of the Memorandum and Articles of Association for The Duke of Edinburgh’s International Award Foundation (also referred to as the Foundation).

This report has been prepared in accordance with the Companies Act 2006 and also with regard to Charity Commission guidance on public benefit.

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Chair’s introduction

I

am delighted to introduce this year’s Trustees’ annual report for The Duke of Edinburgh’s International Award Foundation. This year, our founder, HRH The Duke of Edinburgh presided over his 500th Award presentation at St James’s Palace. Since its inception in 1956, the Award has grown to become the world’s leading youth achievement award, bringing together practical experiences and life skills to create committed citizens of the world and equipping young people for life. We continue to see a year on year increase in participation, with nearly 1 million young people taking part in Award activities over the last twelve months. We have a presence in more than 140 countries and territories, making us a truly worldwide organisation.

Investing in the future Five years ago we made a decision to invest in the future of the Award by setting aside some of our reserves to fund the development of a set of new tools that would allow us to meet increasing demand and need. We created a new visual identity, which has been adopted over the last twelve months by Award operators the world over. We modernised our licensing and quality assurance processes, to ensure that the roles and responsibilities of Award Operators are clearly spelt out and that our operational standards are consistently applied. This

year, the validation of those licenses has begun and Award Operators report a growing professionalism within the worldwide family. We have also developed an Online Record Book, empowering young people to take more control of their Award programme. This year, we began making the Record Book available to Award operators and, to date, more than 40,000 young people have registered online. In March 2014, HRH The Duke of Edinburgh approved the first online Gold Award when he, accompanied by HM The Queen, visited the newly refurbished Award House in London.

On the financial front, the cost of our investment in the development of the Award, including the One Award Alliance and Online Record Book (£989,000), coupled with the buy-out of our pension scheme liability (£747,000), result in a large reported deficit this year. However, our core operations were broadly in line with budget. My fellow Trustees and I are confident that our strategic investments and the buy-out of the pension scheme liability will help ensure the financial stability of the Foundation.

The continued successful delivery of both the Foundation’s core operations and the One Award Alliance strategy has resulted in the ongoing strengthening and growth in the Award. This success can be seen in the following measures:

1,200,000

Number of participants

1,000,000

800,000

600,000

400,000

200,000

Awards gained New entrants Participants

2011 4

2012

2013

The Duke of Edinburgh’s International Award Foundation

Regardless of a young person’s background or circumstances, every participant tailors their own Award programme to their own individual requirements and interests. That means they end up with the life skills and practical experiences which they need to embrace the challenges and opportunities the future throws at them.

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Young people need all the help they can get to be prepared for life and work. They also need the resilience not to be defeated by the first set-backs of adulthood.

Valued support

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My fellow Trustees and I continue to be truly grateful and humbled by the resilience, commitment and passion of our donors, volunteers, partners and staff who work tirelessly to ensure that as many young people as possible have the access and opportunity to undertake the Award. They have done a magnificent job of increasing the reach and impact of what we do in what continues to be a difficult global marketplace for the not-for-profit sector.

I would also like to thank my fellow Trustees for their time and dedication and in particular HRH The Earl of Wessex who chairs the International Council, supporting committees and attends a significant number of Award events around the world each year.

My sincere thanks also go to our Founder, HRH The Duke of Edinburgh for his continuing, unwavering support.

Young people need all the help they can get to be prepared for life and work. They also need the resilience not to be defeated by the first set-backs of adulthood. We look forward to reaching out to many more young people over the coming years and helping them to realise the positive impact that the Award can have on their lives and their future.

We remain indebted to our many supporters around the world who, despite the challenging economic climate, have continued to contribute financially to our work, enabling the Award to transform the lives of hundreds of thousands of young people worldwide. The World Fellowship has flourished with the addition of a record number of new members and our events programme has been extremely well supported. My thanks go to Harry Collins, Chairman of the World Fellowship, for the tremendous expertise and commitment he gives to the Fellowship on an almost daily basis.

Our Global Benefactor, Margaret Fountain, has once again proved to be an amazing supporter of our work. When Margaret spoke about the impact of the Award to an assembled gathering of highly influential people in South Africa, during a visit in November 2013, you could have heard a pin drop.

Margaret lives the Award. If you get the opportunity to hear her, you should certainly take it.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

Gregory Belton CVO KCHS Chair

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Our aims, objectives and impact

T

he Duke of Edinburgh’s International Award is the leading youth achievement award for young people, bringing together practical experiences and life skills to create committed global citizens.

We equip young people regardless of their backgrounds, circumstances and abilities for whatever challenges or opportunities that lie ahead, helping them succeed in life.

As a charity we are ambitious for young people, in particular those between 14 and 24, and believe that non-formal education is a critical part of a young person’s development and not just an occasional add-on. We believe that what young people do and learn outside the classroom, often in their own time, should receive adequate recognition and appreciation.

The Award provides a framework of experiential learning and non-formal education that helps young people learn skills for life and provides worldwide recognition for their achievements.

The Award is: • Open to all young people aged 14-24, regardless of their background and circumstances.

• About personal development and individual challenge: it is a non-competitive, enjoyable, voluntary and balanced programme, which requires sustained effort over time.

• A non-formal educational framework which can complement formal education or offer a substitute where formal opportunities are not available.

• Comprised of three levels: Bronze, Silver and Gold – each progressively more challenging.

• Consists of four sections: Service, Skills, Physical Recreation and Adventurous Journey, and includes a Residential Project at Gold level.

The Award defines what good non-formal education looks like; provides a tried and tested framework for its delivery in any context where young people might be gathered; and allows achievement to be recognised in a way that is consistent worldwide, so giving young people internationally recognised accreditation of their experiences.

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The Award provides a common platform for dialogue and sharing of experiences between groups of young people from different backgrounds and cultures; it allows donors to contribute to the development of new cohorts of empowered, forward thinking young people across the world; it allows those working with young people to use a tried, tested and globally relevant non-formal education tool.

For those who already have some access to nonformal education, the framework of the Award helps to ensure the development of well rounded character, rather than just a focus on academic results. For those young people who are neither intellectually gifted, nor academically slow – such experiential learning provides the opportunity to discover talents that often don’t show up in the classroom and thereby develop untapped leadership potential. For marginalised and at risk young people, the effects can be truly transformational – providing opportunities, through genuinely life-changing experiences, to climb out of poverty, break cycles of deprivation, gain concrete experience and build the skills, behaviours and attitudes needed for a new and different life.

Equipping young people for life What young people get from their Award experiences – the skills to think in different ways, confidence and enthusiasm, interpersonal skills, a set of values that build character and a sense of purpose, resilience; and practical (often vocational) skills – is exactly what employers and educational institutions look for when distinguishing candidates from each other in the worldwide fight for talent. The Duke of Edinburgh’s International Award equips young people for life.

The benefits or outcomes for young people include increased confidence, personal and social skills.

The positive impact on the community includes higher levels of educational attainment, improved employability, increased participation in civic life and improved health and well-being.

The Duke of Edinburgh’s International Award Foundation

Trustees’ Report and Financial Statements for the year ended 31 March 2014 7

The current state of the award

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he Award is acknowledged and respected for the impact and outcomes it has on young people and their communities. The Award has spread from the United Kingdom to over 140 countries and territories; some seven million young people have gained an Award and nearly one million are involved each year.

With several countries now entering their fourth decade and a few entering their fifth decade, the credibility and relevance of the Award is no longer in question, but its reputation and value must now be sustained and broadened.

• Growth of existing and new income streams via an enlarged events programme, a rejuvenated Independent Award Centre network and improved management of branded material sales.

• Widening our pool of generous donors, including the recruitment of 25 new Fellows, raising nearly £488,000 from Fellows on behalf of National Award Operators.

In 2013/14 our key outcomes included: • Implementation and delivery of the devolved licensing model for the Award worldwide, using the best practice of experienced and successful National Award Operators, passing control of delivery to Award Operators.

• Adoption of our new global identity and brand, assisting us in managing the consistency of message and identity and enabling us to transfer the maximum value of a young person’s efforts and achievements into something with global recognition, especially among employers and universities.

• Implementation of our quality assurance programme for Award Operators ensuring standards are maintained and providing a basis for clearer support services to those Operators most in need and with the greatest potential to help young people develop.

• Further development, initial rollout and user training of our Online Record Book to five pilot countries and our Independent Award Centre network, registering close to 15,000 participants during this initial rollout phase and enhancing our ability to enable access to the programme for more young people.

• Development and rollout of the first phases of the Online Award Leader Training programme enabling more leaders to be trained to a high standard cost efficiently.

• Further development of our research strategy including an outcomes framework, helping us to prepare to move from just measuring outputs to reporting on real impact on young people and their communities.

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The Trustees consider that these results provide considerable public benefit, notably to the advancement of citizenship and community development, to education and to working with groups of disadvantaged young people. These are three of the areas which the Charity Commission uses to determine charitable purpose and the Trustees are therefore satisfied that the charity complies with the Charity Commission guidance on reporting on public benefit (section 4 of the Charities Act 2011).

The Duke of Edinburgh’s International Award Foundation

New Entrants

Bronze Silver Gold Total

2012 341,078 107,045 49,420 497,543

New Entrants

NAO IAC

484,548 12,995

585,403 13,969

21% 7%

Total

497,543

599,372

20%

Awards Gained

Bronze Silver Gold Total

168,135 64,871 21,969 254,975

177,525 86,442 25,097 289,064

6% 33% 14% 13%

Awards Gained

NAO IAC Total

249,880 5,095 254,975

282,213 6,851 289,064

13% 34% 13%

Awards Gained

Male Female Total

123,902 131,073 254,975

140,209 148,855 289,064

13% 14% 13%

Awards Gained

Male Female

49% 51%

49% 51%

22,458

24,337

Number of Units

2013 379,324 156,591 63,457 599,372

% Growth 11% 46% 28% 20%

Trustees’ Report and Financial Statements for the year ended 31 March 2014

8%

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Resourcing

T

he aims of our resourcing activities are to secure the financial resources needed to fund our core, project and development operations, ensure that we have a skilled and capable human resource team and that we develop and deliver appropriate support resources for our stakeholders.

Our fundraising activities seek to secure the financial resources needed to fund our continuing core operations, to undertake major development initiatives and to support the work of specific targeted communities undertaking the Award worldwide through our Special Projects.

We look to raise funds through a number of sources.

The World Fellowship remains the bedrock of our income, providing the opportunity for high-net-worth individual donors to contribute to our work; we hold fundraising events; and we solicit funding from businesses and charitable foundations.

Our objectives for 2013/14 were to: • Increase the number of World Fellows and Young Fellows • Significantly grow our fundraising events income • Develop relationships with businesses as yet not engaged in funding • Increase available funding for Special Projects • Deliver income that results in a balanced budget

Long-term engagement This year our Global Benefactor, Margaret Fountain (pictured right), donated her second annual £500,000 instalment as part of her three-year commitment. The continued relationship with our Global Benefactor is invaluable and presents an opportunity for longer-term engagement. Margaret’s generous financial contributions enable us to create real and measurable positive as well as sustainable impacts on the communities supported by the Award.

In the 26th year of the World Fellowship, we set ourselves the challenge of recruiting 25 new World Fellows. We achieved this target and also recruited two new Benefactors, two upgrades from World Fellow to Benefactor; and three upgraded World Fellows from Member/Young Fellows.

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The World Fellowship is an exclusive network of high net worth individuals who are committed to The Duke of Edinburgh’s International Award Foundation and who are scattered across the globe. During the year, World Fellows are invited to an Anniversary Dinner – in the presence of either HRH The Duke of Edinburgh or HRH The Earl of Wessex – and a variety of events that showcase the work of the Award and present exciting experiences for attendees.

The World Fellowship is also a ‘gateway’ into our global philanthropic work and a wonderful starting point to focus conversations into major gifts of a transformational nature.

Capacity building The year witnessed the continued success and strengthening of our revenue-share model with National Award Operators, in relation to donations derived from new and existing World Fellows. The revenue-share model raised £488,000 for National Award Operators as part of our commitment to capacity building, nearly triple the level achieved in the previous year. The revenue-share model is exciting and mutually beneficial to both National Award Operators and the Foundation, since new World Fellows can stipulate that they wish for up to 50% of their donation to be directed to a National Award Operator of their choosing. This approach incentivises National Award Operators to identify and attract new World Fellows. The Czech Republic is a case in point, where over the year they secured £105,000 from World Fellows and Benefactors to help finance the development of the Award in the Republic.

Our corporate fundraising focussed on maintaining and developing relationships with existing partners and building relationship with private high net worth individuals, and the corporate and foundation organisations with which they are engaged.

The relationship with the Royal Bank of Canada (RBC) presented an opportunity for the Foundation to act as a conduit for philanthropic income for the benefit of three of our National Award Operators.

RBC has very generously committed to support National Award Operators in the United Kingdom, United States and Canada.

The Duke of Edinburgh’s International Award Foundation

New experiences

Our events are often driven by multiple objectives.

During some events, income generation is the primary objective. At other times, such as the World Fellowship Welcome Lunches, which take place twice-yearly, the key objective is donor engagement.

Unique events that expose attendees to new and exciting experiences often serve to attract new World Fellows.

In October 2013, a successful World Fellowship Tour of South Africa was undertaken to celebrate the

30th Anniversary of the President’s Award for Youth Empowerment – the name by which the Award is known in South Africa.

Fourteen current and prospective World Fellows visited Soweto, various schools and some were able to see the Award in action within a correctional facility. The event raised £118,000 from the attendees. A Gold Award Ceremony was held in Cape Town and Awards were presented by Their Royal Highnesses The Earl and Countess of Wessex and His Excellency President Jacob Zuma of South Africa.

25 new World Fellows

Trustees’ Report and Financial Statements for the year ended 31 March 2014

£488,000 raised to support Award operators

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Resourcing

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The Duke of Edinburgh’s International Award Foundation

Special Projects Our Special Projects fund was established to spearhead the development of the Award around the world. It aims to help extend the reach of the Award and give more young people the opportunity to participate in the Award. The Foundation funds initiatives and partnerships that target young people who are marginalised and at risk. The Award can offer these young people a unique opportunity to build a sense of identity and establish a positive role for themselves in society. Every project is subject to careful appraisal before money is granted, as well as six-monthly reports and evaluation visits.

Their Royal Highnesses The Earl and Countess of Wessex hosted the annual Special Projects dinner at Bagshot Park. Over £300,000 was raised for Special Projects during the year.

In addition to philanthropic income generation the Foundation started to develop and enhance our fee income generating activities. We revised our licence fees and services for Independent Award Centres and introduced an income stream for the Online Record Book from participants.

As detailed in the Financial Review later in this report, the Foundation fell short of achieving its objective of delivering sufficient income to result in a balanced budget. Core operational expenditure exceeded income by £259,000 or by £70,000 when investment gains are included. Income from individuals was broadly unchanged on the previous year and strong net income growth was achieved from our fundraising events. The investments in the One Award Alliance strategy, particularly the development of the Online Record Book and the buyout of the pension scheme liability are expected to help ensure that the above objective is achieved in the medium term.

In 2014/15, our fundraising aims are to continue to grow our World Fellowship and events programmes and raise sufficient funds to support our Special Projects. New initiatives will include developing major gifts funding, enhanced prospect research capability and the launch of a legacy programme, which will encourage donors to remember the Foundation in their will. Donor recognition efforts will involve a Donors’ Wall at our London offices and a new Donors’ Report. Global collaboration in fundraising will also be pursued, by facilitating closer engagement between the fundraising functions of National Award Operators around the world.

Towards the end of 2014/15, initial exploration will commence on developing an alumni programme – the advent of the Online Record Book and use of digital technology will be of use as we embark on this initiative.

We will also implement our new licensing and participant fee business models, work with National Award Operators to develop their own sustainable financial models and implement our Online Learning Hub.

£300,000 raised for Special Projects supporting at-risk and marginalised young people

We have also been developing an increasing number of online and hard copy support publications and resource materials for our stakeholders, enhancing the overall value of the Award as a framework for non-formal education.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

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Operations

O

ur operations activities seek to grow the awareness of the Award, provide support for and grow the number of Independent Award Centres, support the development of the Award worldwide and use our Special Project grants to increase the number of marginalised and at risk young people Award entrants.

identity and brand centre; Online Record Book and other digital tools; sub-licensing and growth.

The aims of our advocacy are to grow the awareness of the Award with key policy makers and influencers in individual nations and across national boundaries, in order to reach out to new and underserved markets, so helping achieve our ambition that every eligible young person aged 14 to 24 in the world will have the opportunity to participate in the Award.

Ensuring quality

Our objectives for 2013/14 were to: • Devolve more of our advocacy and development activity to regional directors and their networks of staff and volunteers.

• Facilitate the ability of the Secretary General to engage with key policy makers and influencers in individual nations and regionally.

• Build on the success that we have had in training Award Leaders by developing learning modules for adults with other roles in the Award, particularly those involved in management and governance.

• Target countries where specific support is required and help facilitate that support, increasingly using the expertise of the whole Award family to provide it.

Improving our services Throughout the year every opportunity has been taken to devolve previously central activity out to regional networks. This has been focussed on improving service to various National Award Operators rather than specifically on advocacy work.

Four successful regional conferences were held between July and October 2013. Attendance levels were high at all conferences, with a mixture of directors and trustees from National Award Operators at most events. All conferences had a core agenda that focussed on further development of the work agreed at the Malta 2012 Forum: licensing and quality assurance; fundraising services; visual 14

During the year the Secretary-General visited 16 countries to ensure buy-in from high level stakeholders to our revised working practices and to lobby for support and promote the Award at specific national levels.

By the end of the year, 53 out of 69 existing National Award Operators had signed licences. The re-issuing of Independent Award Centre licences progressed in a positive manner with 222 organisations signing one of the new licence types. We also undertook 15 validation visits as part of our quality assurance programme, both ensuring standards are maintained and determining future support needs.

Support for countries to run their own training continued with a review of the ‘Train the Trainer’ course and courses run in four locations across our network between April and October 2013.

In support of the adoption of the new licence standards we have focussed on publicising the range of available support materials and templates and are making good progress in producing new management manuals for National Award Operators and Independent Award Centres. These will be complemented by guidance on best practice in pricing policies and trustee recruitment that are being compiled in a service friendly manner for use by the whole network.

The social platform of the Online Learning Hub has been built and tested internally. Following an extended period of consultation with Regional Offices and National Award Operators, the Learning Skills Matrix has been finalised, which will determine content of forthcoming courses for the training of volunteers and staff. Course content for two key courses, ‘Introduction to the Award’ and ‘Online Record Book’ has been developed. These will be launched to the Award network as a key digital tool during 2014/15. This is seen as a critical piece of work to support the rollout of the new Independent Award Centre management framework as well as supporting the roll out of the Online Record Book.

The Duke of Edinburgh’s International Award Foundation

In 2014/15 we intend to increase the number of Independent Award Centres, provide them with more direct support via regional Operations Officers, relaunch the Award in Nigeria and work with a number of National Award Operators, especially those who

have completed their licence validation process to support their development plans. We will review our Special Projects process with a view to increasing the number of marginalised and at risk young people new Award entrants.

222 Independent Award Centre licences signed

Trustees’ Report and Financial Statements for the year ended 31 March 2014

53 National Award Operator licences signed

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Communications

T

he aims of our communications activity are to gain global awareness of the Award, to promote the benefits of the Award, to ensure that members of the Award family have the support to deliver effectively, and to showcase and promote the Award internationally.

During March 2014 a draft Public Relations and Promotions strategy was reviewed by the Trustees and a public relations consultancy was engaged to assist with further development and refinement of this strategy. The strategy is due to be finalised during 2014/15.

Our objectives for 2013/14 were to:

Developing our website

• Continue rolling out our new brand internationally.

• Focus on raising the awareness of the Award worldwide, particularly within the general public.

• Further develop our website including a Search Engine Optimisation strategy to reach new groups.

Phase 2 of the website development has been completed – there have been major template changes across the site during 2013/14, including a new homepage and navigation menu. Launch of Phase 2 took place at the International Council 2013.

Further development of the digital communications strategy is ongoing, alongside Search Engine Optimization plans and this is linked to the launch of the overall Digital Enabling Strategy. Comparing website statistics from April-May 2013 with those from April-May 2014, we have seen some very encouraging results: visits to the site are up 63.5%; visitors to the site up by 84.9%; page views on the site up by 51.5%; number of new visitors to the site up by 7.9%.

Managing our visual identity Since the launch of the new visual identity and the licences that protect the intellectual property of the Award, 58 National Award Operators have had national logos drafted for them. We have continued work to develop the online Brand Centre, providing free design and construction of promotional materials. There are over 40 active templates on the brand centre, which is assisting us in managing the consistency of message and identity.

The focus in 2013/14 was on developing a consistent brand identity to aid future promotion. Revised versions of our ‘Style Guide’ and ‘Glossary of Terms’ were published during the year. In March 2014 Award House welcomed HM The Queen and HRH The Duke of Edinburgh to open the refurbished offices.

This generated huge amounts of positive media coverage in the UK and overseas. Our twitter activity relating to this very special visit was ‘retweeted’ to an audience of almost 900,000 people and between 4th March (the announcement of the visit) and 13th March (the day after the visit) we had 6,453 visits to our website compared with 3,122 in the same period the previous year.

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More than templates on our Brand Centre

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In 2014/15 we want to continue to raise awareness of the value of non-formal education and the profile of the Award worldwide, particularly with policy makers and the general public. We intend to further develop and enhance our brand including increased support and tools for National Award Operators and will also commence planning for our 60th Anniversary programme.

Website visitors up

84.9%

The Duke of Edinburgh’s International Award Foundation

Trustees’ Report and Financial Statements for the year ended 31 March 2014

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Sustainable infrastructure

T

he aims of our sustainable infrastructure activities are to develop the infrastructure and delivery ability of National Award Operators and Independent Award Centres around the world.

Our objectives for 2013/14 were to: • Develop a new set of resource materials to support our new licensing arrangements, helping equip people to manage the ‘business’ of being a national Award body.

• Continue supporting work to develop a sustainable presence for the Award in a number of key markets.

• Further develop and then pilot the Online Record Book.

Developing new resources The development of resource materials and tools is a relatively new stream of work that will grow further in 2014/15. Work in 2013/14 has ensured that tools for use by all levels of the Award family have been introduced including development of the Online Learning Hub and the Online Record Book.

In addition, following the 15 licence ‘validation’ visits undertaken during 2013/14, organisational improvement plans have been agreed with 12 National Award Operator and actions are being undertaken. These have also resulted in the sharing of good practice between countries to facilitate further improvement.

The Online Record Book empowers Award participants to take more control of their Award programme by going online. It transforms the former paper-based record of a participant’s activities and achievements into a dynamic, fully interactive experience. It also provides the tools for a National Award Operator to transform the way it manages the Award. During 2013/14 we successfully piloted the Online Record Book with a number of National Award Operators and incorporated their feedback into further development of the system. We also commenced its roll out across our network of Independent Award Centres. During 2014/15 the Record Book will undergo additional development and roll out will be extended to further National Award Operators and Independent Award Centres.

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Internally the Foundation brought its finance and human resource functions in-house, with a view to improve effectiveness and to extend the level of support to both the Foundation and to National Award Operators. Additionally, the refurbishment of Award House in London was completed in early March 2014 and acted as a focal point for the Royal visit on 12th March 2014.

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The Online Record Book empowers Award participants to take more control of their Award programme by going online.

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In 2014/15 there will be a continued drive to validate our existing members with full licences, support them via agreed improvement plans and enhance their ability to grow the number of participants and to measure growth more accurately with further development and take up of the Online Record Book - extending the country take up into double figures.

Internally the focus will include moving to a virtual ‘cloud-based’ IT infrastructure, development and implementation of Salesforce business support system, development of our Outcome and Impact Framework, preparation of a long term strategy and a three year operational and financial plan and implementation of new pension arrangements.

The Duke of Edinburgh’s International Award Foundation

Trustees’ Report and Financial Statements for the year ended 31 March 2014

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Structure, governance and management Reference and Administration Details The Founder, the Trustees and Secretary General are listed on pages 52-53 together with advisers to the charity and details of registered company and charity numbers and the registered office.

Structure of the Foundation The Duke of Edinburgh’s International Award Foundation was originally established and registered as a United Kingdom-based charitable trust on 10 November 1986. On 6 November 1998 it transferred its assets and business to this limited company, which is regulated by its Memorandum and Articles of Association.

The Founder of the Foundation is His Royal Highness The Duke of Edinburgh KG KT. There is a maximum of ten Trustees. The charity has two Trustees in common with The Duke of Edinburgh’s Award, the United Kingdom National Award Operator.

Relationship with National Award Operators (NAOs) The Foundation has responsibility for facilitating the worldwide development of The Duke of Edinburgh’s Award. In those countries where the Award runs on a substantial basis, the Foundation licences NAOs to run and maintain the operation of the Award. In other countries the Award may be run by licenced Independent Award Centres (schools or organisations operating in a country where no NAO exists).

The Duke of Edinburgh’s International Award Association The Duke of Edinburgh’s International Award Association (the Association) is a separately constituted unincorporated association of which all NAOs are members. The Association meets in Forum every three years to discuss membership issues. The Foundation provides support to the Forum through the development of the Forum agenda and discussion papers and the provision of administrative support.

As at 31 March 2014 there were 69 National Award Operators in the Association.

The International Council Between one Forum and the next, the International Council (IC) acts on behalf of the Association and 20

is responsible for the international development and operational policy of the Award. Membership of the IC comprises the Trustees of the Foundation, three representatives of each of the four Award regions (Africa, Americas, Asia Pacific and Europe, Mediterranean & Arab States), eight Youth Forum representatives, the Founder and the Deputy Chair of the Association as well as the Secretary General as an ex-officio member.

The hosting and participant costs for Association meetings including Regional meetings, the Forum and the International Council are met by the individual members themselves. The Foundation bears the participant costs for its staff, trustees and guests and the costs directly relating to its support activities.

The Joint Funding Board An advisory committee with representation from The Duke of Edinburgh’s Award (the National Award Operator in the UK) and The Duke of Edinburgh’s International Award Foundation operates to ensure that fundraising initiatives organised by the two organisations do not compete with each other.

Trading Subsidiaries Intaward Limited is the Foundation’s wholly owned subsidiary undertaking, which was incorporated to carry out fundraising events on behalf of the charity. The company has not yet traded and, due to its immateriality, is not consolidated with the Foundation’s financial statements.

During the year the Foundation also had management and operational control of two other subsidiaries: The Duke of Edinburgh’s International Award Foundation (Canada) and The Duke of Edinburgh’s Award International (USA), Ltd. The results of these bodies have been consolidated with the Foundation’s financial statements. As of 1 January 2014 control of the latter passed to a third party and after that date it was not consolidated with the Foundation’s financial statements.

Governance The Foundation is a registered charity whose Board of Trustees takes all decisions collectively. All Trustees are equal in the duties and responsibilities that they owe to stakeholders, and accordingly they The Duke of Edinburgh’s International Award Foundation

work together as one body within which the Chair takes the lead.

Membership of these committees is set out on page 52.

The Trustees are responsible for determining all important matters of policy. They meet at least twice each year and also whenever necessary at more frequent intervals to carry out their responsibilities.

They review strategy and performance annually and approve budgets and operating plans in line with strategy. In addition to the main Board meetings, governance over the Foundation is exercised through a number of committees which hold responsibility for specific areas of governance activity as follows:

The corporate governance of the Foundation is monitored against guidelines for best practice as set out by the Charity Commission in their framework for sound governance and accountability (Hallmarks of an Effective Charity). It is the Trustees’ practice to develop the corporate governance procedures whenever appropriate.

• The Audit and Investment Committee manages the charity’s relationship with the external auditors, determines the integrity of the financial statements, and reviews the business risk management framework including compliance and internal controls. It also manages the Foundation’s external relationship with the investment managers, reviews the investment strategy and monitors the performance of the investment portfolio.

• The Development Committee co-ordinates the strategy for all forms of fundraising and external communication.

• The Nomination Committee makes recommendations to the Board for senior appointments, including new Trustees, after considering a wide variety of possible candidates. It meets when circumstances require.

• The Alliance Steering Committee (disbanded May 2013) supported Trustees and management in maximising the potential of the development of specific digital tools that formed part of the One Award Alliance programme.

• The Digital Steering Committee (formed April 2013) supports Trustees and management in maximising the potential of the digital tools that form part of the operations of the Foundation.

• The Remuneration Committee sets the Secretary General’s salary and approves his or her recommendation on staff salaries.

• The Property Committee oversees the maintenance of the Foundation’s headquarters and is responsible for negotiating the terms of leases for suitable office accommodation.

Each Trustee is a member of the company, with a limited guarantee of £1 per member. Trustees have no rights to any distribution on dissolution of the company.

With two exceptions, Trustees serve for a maximum period of twelve years continuous service. The Chair of the International Council has no limit to his or her term and the Chair of the Foundation can serve for a period of up to ten years, regardless of prior service as a Trustee. Retirement age is 70.

Trustees are all non-executive, have no beneficial shares or options and receive no remuneration or other benefits. The independence of the Trustees and their willingness to act in the best interests of the charity are not impaired by their gifts of time and in some cases financial support to the charity.

Induction and Training of Trustees The Nomination Committee identifies candidates to be future Trustees. The Trustees, as a body, are responsible for their appointment. The induction and familiarisation process of new Trustees may start years before their appointment, depending on their background and experience of the Foundation or of the context in which the Foundation operates.

The induction process when a new Trustee is appointed contains certain common elements, including information about the Foundation and about the responsibilities of Trustees, but the extent of development and familiarisation is necessarily flexible. Further induction and training is provided for Trustees during their term of office as necessary.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

21

Structure, governance and management Statement of Trustees’ Responsibilities The Trustees (who are also directors of The Duke of Edinburgh’s International Award Foundation for the purposes of company law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

In so far as the Trustees are aware:

Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to:

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

• select suitable accounting policies and then apply them consistently; • observe the methods and principles in the Charities SORP; • make judgments and estimates that are reasonable and prudent; • state whether applicable UK 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 charitable company will continue in business.

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

22

• there is no relevant audit information of which the charitable company’s auditor is unaware; and • the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Management The Trustees review strategy and performance annually and approve budgets and operating plans in line with the strategy. Authority to implement the strategies and policies on behalf of the Trustees and to conduct the day-to-day operations of the Foundation is delegated to the Secretary General.

The Secretary General is accountable to the Trustees for the efficient running of the Foundation with the help of the Senior Management Team and the four regional directors. As well as implementing the Trustees’ approved strategy for the Foundation, the Secretary General is responsible for promoting the benefits of the Award to the widest possible audience, ensuring the operational efficiency of the Foundation, raising the funds necessary to support the Association, administering the charity’s finances and making the Trustees aware of the need for any changes to the main principles or conditions of the Award’s international licensing arrangements.

The Foundation operates on a regional basis with a regional director in each of the Americas, Europe, Mediterranean & Arab States, Africa and Asia Pacific regions. Reporting to the Secretary General they guide and advise those responsible for the operation of the Award within their region to ensure consistency of approach by those to whom the Award is licensed, to promote and develop the Award to new organisations and different groups of young people, and to maintain and enhance the quality of delivery of the Award.

The Duke of Edinburgh’s International Award Foundation

The Foundation, which licenses the Award internationally, had 36 employees at the year end.

The bodies to which the Award is licensed and who deliver the Award to young people work with Foundation staff as well as employ their own people to fulfil the purpose. In the delivery of the Award to young people, over 220,000 volunteers are engaged in various capacities by the bodies to which the Award is licensed.

The Foundation carries out quality assurance tests on the National Award Operators and Independent Award Centres but is not responsible for their employees or for the volunteers.

Risk Management The Trustees have reviewed the major strategic, business and operational risks to which the charity is exposed to ensure that systems have been established, in addition to the existing internal control procedures, to manage those risks. Periodic reviews are carried out to ensure that these systems are effective and still meet the needs of the charity.

The Trustees consider the main operational and reputational risks for the Foundation to be ensuring the NAOs’ adherence to the objectives, philosophy and standards of the Award and their ability to deliver the Award in their individual countries. This is managed through regular contact with the NAOs via the Foundation’s regional structure together with regular staff conferences where strategy and new developments are discussed. Part of the success of bringing the brand closer together is an increase in reputational risk in terms of the behaviours of licensed operators around the world. The Trustees and senior management are working to develop an improved risk management process which will include the quality assurance protocols that have been put in place for all licensees. In addition, the Trustees are aware of the risks associated with maintaining the relevance of the Award to today’s society and this is managed through maintaining the profile of the Award in the arena of youth development while being aware of global developments in this field.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

23

Structure, governance and management The main financial risks for the Foundation are to maintain income from donors to fund current levels of activity and provide for continuing growth. As explained in the Financial Review, the Foundation incurred an overall deficit in the year to March 2014 of £1,806,000 (2013: £743,000) and a core operating deficit of £259,000 (2013: £141,000).

Of the overall deficit of £1,806,000, the one off costs of withdrawing from the pension scheme were £747,000 and a further £989,000 (2013: £1,076,000) had been designated by the Trustees as planned organisational development investments.

The Trustees and senior management monitor the Foundation’s financial performance on a regular basis. They are confident that, based on agreed three year income growth plans and the decision to buy-out the pension scheme deficit, in the medium term the Foundation will return to a surplus.

In order to develop long lasting and mutually beneficial relationships with its donors the charity’s fundraising team maintain close contact with all donors, involving many with the work undertaken by the Foundation and promote the benefits the Award delivers to the lives of young people. Fundraising activity is overseen and supported by the Board’s Development Committee. Other financial risks of the Foundation and the actions taken to manage these risks include the following: Investment The Foundation holds significant investments and the values of these are inevitably subject to market movements. In order to manage the risk of a sustained fall in the value of its investment portfolio the Audit and Investment Committee monitors the performance of the charity’s investments with advice from its investment managers and structures the investment portfolio for long term sustainability.

Expenditure The main expenditure for the Foundation is salaries and related staff costs. Changes in salaries are proposed by the Secretary General for approval by the Remuneration Committee and communicated to staff during the formal annual review of salaries.

24

Liquidity The Foundation has no long term borrowings and its financial plans do not project any change in this position.

Interest rate The Foundation places any surplus funds on short term deposit with its bankers and seeks to optimise the returns as well as minimise risks from holding these deposits.

Exchange rate The Foundation generates significant income in the USA and Canada and has operations in Australia, Kenya and Jamaica. We receive income and incur expenditure in the currencies of the above countries. Exchange risks associated with budgeting in currency are mitigated by purchasing currencies in advance and matching material currency receipts with payments where possible.

Employee Involvement and Employment of People with Disabilities The Foundation continues to develop its human resource policies and procedures to ensure compliance with best practice. In accordance with the Foundation’s equal opportunities policy, we operate fair employment practices in the recruitment, selection, retention and training of staff with disabilities. Employees are consulted on issues of concern to them by means of regular staff meetings and are kept informed on specific matters directly by management. The charity has developed its appraisal process and carries out exit interviews for all staff leaving the organisation.

During the year the Foundation undertook a staff survey. All staff were invited to participate in the survey and the findings have been shared with all staff. There were no significant matters raised in the year and the Foundation’s management team are addressing the key points identified in the survey.

The Duke of Edinburgh’s International Award Foundation

Social Responsibility The Foundation is committed to ensuring that it is a socially responsible organisation. As part of this commitment the Foundation seeks to integrate social and environmental concerns in its business strategy and operations. The Foundation addresses its social responsibility in six key areas; employees, environment, stakeholders, use of resources, community and suppliers as follows:

Use of resources The Foundation acknowledges that all money received is to help young people gain a positive experience in working towards achieving their Awards. The Foundation, therefore, aims to minimise support service expenditure and so maximise the resources available to extend access to the Award in all parts of the community.

Employees The Foundation aims to offer a workplace that encourages development, allows for free communication and provides a positive work life balance. The Foundation has clear and accessible employee policies relating to equal opportunities, maternity leave, paternity leave, lone working, grievances etc and all employees are encouraged to act in a socially responsible manner and respect the environments in which they operate.

To this end, management ensures that all staff are aware of the financial procedures and all monies are accurately accounted for by the Foundation. Together with its investment managers, the Foundation aims to maximise the returns on its resources whilst periodically considering the social, environmental and ethical implications of the types of investments it holds.

Community The Foundation operates on an international scale and the regional structure of its operations helps to develop strong ties in local communities throughout the areas in which it operates.

Environment The Foundation actively seeks ways to reduce the impact of its activities on the environment through recycling and energy reduction. It has an established recycling programme for all waste paper, uses the Freecycle website for unwanted furniture and encourages all employees to be aware of their use of resources.

It works closely with its maintenance supplier to keep up to date with energy saving initiatives. It is developing a policy that will restrict air travel to essential business having considered other options as well as focusing on measuring and reducing our carbon, water and waste footprints.

Stakeholders The charity’s stakeholders are the young people who participate in the Award, its donors, volunteer network, its Founder, its employees and its Trustees. To all these groups the Foundation aims to be an organisation that is open, responsive and aware of their particular interests and needs. To achieve this it encourages participation by way of consultation, provides feedback through regular publications and ensures the charity website (www.intaward. org) is kept up to date and accessible to all.

Suppliers Where possible the Foundation purchases Fair Trade and recycled products. However, it recognises that further work needs to be done in this area including making more use of local suppliers to reduce transport pollution, reviewing existing suppliers to ensure compliance with social responsibility and developing an ethical purchasing policy.

Independent Auditors A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the company will be proposed at the Annual General Meeting.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

25

Financial review

I

n 2013/14 the Foundation continued to invest in its One Award Alliance strategy and particularly in the development of the Online Record Book as well as its implementation

by Association members. In addition during the year the trustees agreed to withdraw from The Pensions Trust’s Growth Plan and to buy-out the exit liability. The impact of these strategies is reflected in our financial performance for the year ended 31 March 2014 with expenditure exceeding income by £1,806,000 (2013: £743,000) in this period.

Incoming Resources Core Resources Expended Net Core Outgoing Resources Expenditure on Development Projects Pension buy-out – exceptional item Net Outgoing Resources Gains on investment assets Net Movement in Funds

2014 £000

2013 £000

3,463

3,430

(3,722) (259)

(3,571) (141)

(989)

(1,076)

(747)

-

(1,995) 189 (1,806)

(1,217) 474 (743)

Of the above deficit, £747,000 relates to the pension scheme buy-out and its associated costs and £989,000 (2013: £1,076,000) of investment in the One Award Alliance strategy, including the Online Record Book. Core operational expenditure exceeded income by £259,000 (2013: £141,000), a small increase on the previous year. Via a combination of continued growth in our current income sources, particularly World Fellows and events, and developing new income streams, specifically licence and Online Record Book participant fee income, core income is expected to exceed expenditure in future years. The above developments should enable the charity to manage its finances within the constraints set by the Trustees and agreed with the Charity Commission.

26

Incoming Resources Voluntary income is received from individual and corporate donors and from grant making trusts and foundations. Total voluntary income of £2,425,000 (2013: £2,902,000) was a reduction of £477,000 on the previous year due to reduced donations in kind and lower trust income. Donations from our World Fellowship donors and Benefactors were in line with the previous year and we welcomed 25 new World Fellows and two new Benefactors. Our World Fellowship donors and Benefactors also donated a further £488,000 directly to a number of National Award Operators.

Our activities for generating funds comprise fundraising event income, fees paid by delegates attending our International Council/Forum, licensing activity income, Online Record Book participant fee income and sales of materials to support the delivery of the Award programme. At £959,000 (2013: £408,000), our income from the above sources was £551,000 higher than that received in 2013. The increased number and scale of our fundraising events helped grow year on year income by £409,000 with the largely new licence and Online Record Book participant fees adding a further £126,000 in 2014.

Investment income of £79,000 was £41,000 lower than 2013 and is the result of our decision during 2012/2013 to transfer the Foundation’s investment portfolio from income generating investments into total return funds.

Resources Expended The costs of generating funds increased by 32% (£330,000) in the year reflecting the higher levels of fundraising and event activities. Overall the increased number and scale of our fundraising events helped grow year on year net income by over £200,000.

Expenditure on charitable activities – core activities at £2,173,000 in 2014 was a decrease of £118,000 on the previous year. The lower expenditure on advocacy and development reflects savings in advocacy costs and the scale of research work undertaken in 2012/13 into the impact of the Award as a youth development tool. We have maintained the level of work we undertake to support new and developing National Award Operators.

The Duke of Edinburgh’s International Award Foundation

The £61,000 decrease in governance costs relates largely to savings made this year compared with the costs of the International Forum held in November 2012.

Investment Policy and Performance Our constitution contains general powers for the Trustees to invest funds at their discretion. The Trustees’ policy is to protect and, over the long term, increase the value of the investment portfolio in real terms whilst at the same time generating funds that may be used to support the charity’s operations.

In early 2013 our investment portfolio was transferred into three total return funds and a long term objective set that these funds deliver annual average growth of inflation plus 5%. In the year to 31 March 2014 the three total return funds produced growth of 1.5% and although this is somewhat disappointing the funds continue to meet their long term objectives. The charity receives monthly updates on the funds’ performance and the Audit and Investment Committee regularly meets with the investment managers to discuss performance and volatility.

The value of the charity’s investment portfolio at 31 March 2014 was £12,137,000 (2013: £13,448,000), a decrease in the year of £1,311,000 (2013: £688,000). Net withdrawals totalling £1,500,000 have been made to fund our operations and investment programmes. The impact of these withdrawals has been partly offset by portfolio gains totalling £189,000.

Net Current Assets Net current assets at the year-end were £1,402,000 (2013: £1,236,000), an increase of £166,000 in the year. Cash and bank balances at the year-end totalled £757,000 (2013: £1,324,000) and debtors totalled £992,000 (2013: £332,000). The reduction in the cash and bank balances and increase in debtors largely relates to funds held in our former subsidiary, The Duke of Edinburgh’s Award International (USA), Ltd. The majority of the amount owing was paid to the Foundation shortly after the year ended.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

27

Financial review Reserves and Reserves Policy At 31 March 2014 the unrestricted reserves stood at £12,889,000 (2013: £14,640,000). Of these reserves, £9,288,000 (2013: £10,176,000) has been designated by the Trustees to support development projects and to support the grant making activities of the Foundation, undertaken through the Special Projects fund. The Foundation’s unrestricted general reserves of £2,443,000 (2013: £3,320,000) represent just under 9 months (2013: 12 months) of general expenditure.

The Trustees regularly review the reserves policy and monitor the level of reserves and have concluded that the current level of unrestricted general reserves is appropriate in the short term. However, they believe it is important that the Foundation maintains its long term financial security to be able to complete the programmes it undertakes and that currently the appropriate long term level of unrestricted general reserves to assure this is approximately 12 months of expenditure and further, that total reserves should not fall below £10 million.

The above reserves policy is consistent with the constraints agreed with the Charity Commission and by generating future income growth the Trustees are committed to returning the level of unrestricted general reserves to the agreed level in the medium term. Once this is achieved the reserves policy will be reviewed.

The Trustees confirm that, given the planned introduction of new income streams and the overall level of reserves, the Foundation remains a going concern for the foreseeable future. However, we continue to face a number of challenges in what remain difficult economic circumstances. Of primary importance is the need to deliver on our income projections, particularly the projected growth in licence fees, Online Record Book participant fees and other income streams.

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Subsidiary Undertakings The Foundation has a wholly owned subsidiary company, Intaward Limited, which was formed to undertake commercial activities in support of the charity. Intaward Limited is a dormant company and has not traded in the past year.

To support our fundraising activities, the Foundation had operational and management control of The Duke of Edinburgh’s International Award Foundation (Canada) for the whole of the year and operational and management control of The Duke of Edinburgh’s Award International (USA), Ltd for the period 1 April 2013 to 31 December 2013.

This year the Foundation has continued to prepare consolidated financial statements that reflect the above changes in circumstances and control over entities. Full details of the consolidation are included in the financial statements and in note 1.

For and on behalf of the Trustees:

Andrew Smith Trustee Date:1 November 2014

Registered office: Award House 7-11 St Matthew Street London SW1P 2JT Company Number: 3666389

The Duke of Edinburgh’s International Award Foundation

Trustees’ Report and Financial Statements for the year ended 31 March 2014

29

Independent auditors’ report to the members of The Duke of Edinburgh’s International Award Foundation Report on the financial statements Our opinion In our opinion the financial statements, defined below: • give a true and fair view of the state of the group’s and of the parent charitable company’s affairs as at 31 March 2014 and of the group’s and parent charitable company’s incoming resources and application of resources, including its income and for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006.

This opinion is to be read in the context of what we say in the remainder of this report.

What we have audited The group financial statements and parent charitable company financial statements (the “financial statements”), which are prepared by The Duke of Edinburgh’s International Award Foundation, comprise: • the group and parent charitable company balance sheet as at 31 March 2014; • the group and parent charitable company statements of financial activities and the group and parent charitable company summary income and expenditure account for the year then ended; • the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

30

In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: • whether the accounting policies are appropriate to the group’s and the parent charitable company’s circumstances and have been consistently applied and adequately disclosed; • the reasonableness of significant accounting estimates made by the trustees; and • the overall presentation of the financial statements.

In addition, we read all the financial and nonfinancial information in the Trustees’ Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

The Duke of Edinburgh’s International Award Foundation

Other matters on which we are required to report by exception

Responsibilities for the financial statements and the audit

Adequacy of accounting records and information and explanations received Under the Companies Act 2006 we are required to report to you if, in our opinion:

Our responsibilities and those of the trustees As explained more fully in the Trustees’ Responsibilities Statement, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

• we have not received all the information and explanations we require for our audit; or • adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent charitable company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Trustees’ remuneration Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of trustees’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.

Entitlement to exemptions Under the Companies Act 2006 we are required to report to you if, in our opinion, the trustees were not entitled to: prepare financial statements in accordance with the small companies’ regime; take advantage of the small companies’ exemption in preparing the Trustees’ Annual Report; and take advantage of the small companies exemption from preparing a Strategic Report. We have no exceptions to report arising from this responsibility.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the charity’s members and trustees as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Kevin Lowe (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London Date: 7 November 2014

Trustees’ Report and Financial Statements for the year ended 31 March 2014

31

Consolidated statement of financial activities (incorporating the income and expenditure account) for the year ended 31 March 2014 Note Incoming resources from generated funds Voluntary income Activities for generating funds Investment income Total Incoming Resources

2 3 4

Resources expended Costs of generating funds 5 Charitable activities – 5 development projects Charitable activities – core activities 5 Governance costs 5 Pension buy-out 10 & 17 exceptional item Total Resources Expended 5 Net (outgoing) resources before other recognised gains and losses Other recognised gains/losses Gains on investment assets 7 Net movement in funds Reconciliation of Funds Total funds brought forward at 1 April Total funds carried forward at 31 March 12

Unrestricted general fund £000

Restricted fund £000

Total 2014 £000

Restated total 2013 £000

2,358 957 79 3,394

67 2 69

2,425 959 79 3,463

2,902 408 120 3,430

(1,349) (989)

-

(1,349) (989)

(1,019) (1,076)

(2,049) (200) (747)

(124) -

(2,173) (200) (747)

(2,291) (261) -

(5,334) (1,940)

(124) (55)

(5,458) (1,955)

(4,647) (1,217)

189 (1,751)

(55)

189 (1,806)

474 (743)

14,640 12,889

390 335

15,030 13,224

15,773 15,030

All the above results are derived from continuing activities. All gains and losses recognised in the year are included above; therefore, a separate statement of recognised gains and losses has not been prepared.

There is no difference between the net income for the year stated above and the historical cost equivalent.

The £189,000 gain on investments comprises £180,000 realised gains and £9,000 unrealised gains (2012/13: realised losses of £670,000 and unrealised gains of £1,144,000). The results for the Charity are disclosed in note 1.

Comparatives have been restated to be consistent with the current year.

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The Duke of Edinburgh’s International Award Foundation

Consolidated and charity balance sheet at 31 March 2014 Company number 3666389

Fixed assets Tangible assets Investments Current assets Debtors Cash at bank and in hand Current liabilities Creditors: amounts falling due within one year Net current assets Provision for liabilities and charges Total assets less current liabilities The funds of the charity Restricted income funds Unrestricted income funds: • General funds • Designated funds • Revaluation reserve Total unrestricted income funds Total charity funds

Note

2014 £000

2013 £000

6 7

418 12,137 12,555

346 13,448 13,794

9

992 757 1,749

332 1,324 1,656

10

(347) 1,402 (733) 13,224

(420) 1,236 15,030

12

335

390

12 12

2,443 9,288 1,158 12,889 13,224

3,320 10,176 1,144 14,640 15,030

10

The consolidated Balance Sheet includes £516,000 of cash at bank in relation to The Duke of Edinburgh’s International Award Foundation (Canada). Details are shown in note 1.

The financial statements set out on pages 32 to 49 were approved by the Trustees on and signed on their behalf by:

Andrew Smith Trustee Date: 1 November 2014

Trustees’ Report and Financial Statements for the year ended 31 March 2014

33

Notes to the financial statements for the year ended 31 March 2014 1: Accounting policies

(c) Incoming resources

(a) Basis of preparation of financial statements

Income, including income from investments, is recognised when the charity is legally entitled to it.

World Fellowship subscriptions are accounted for when received. All other income is accounted for when received or when it is assured with reasonable certainty.

The annual report and financial statements for the year ended 31 March 2014 have been prepared on a going concern basis, under the historical costs convention, in compliance with the Companies Act 2006, the Charities Act 2011, the Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) (SORP), and with applicable accounting standards in the United Kingdom. The principal accounting policies, which have been applied consistently throughout the year, except for changes arising on the adoption of new accounting standards, are set out below.

As detailed in the trustees’ reports, the trustees have reviewed the future activities and planned performance of the Foundation and confirm that it remains appropriate to prepare the financial statements on the going concern basis.

The financial statements do not include the financial statements of any National Award Operators or Independent Award Centres as these are independent of the charity and, in some cases, are charities in their own right. (b) Fund accounting Funds held by the charity are either: Unrestricted general funds – These are funds which can be used in accordance with the charitable objects at the discretion of the Trustees.

Unrestricted designated funds – These are funds set aside at the discretion of the Trustees for specific purposes.

Restricted funds – These are funds that can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes. Details are set out in Note 12.

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Voluntary income includes donations, gifts and grants receivable. The specific bases used for recognition of such income are as follows: • Donation income and legacies are recognised where there is entitlement, certainty of receipt and measurability.

• Donated facilities and services are included at the value to the charity where this can be quantified and a third party is bearing the cost.

An equivalent expenditure amount is included in the financial statements at the same time as the income is recognised. No amounts are included in the financial statements for services donated by volunteers.

• Donated assets are included in incoming resources and fixed assets at an estimate of their value to the charity at the date of receipt.

• Grants are recognised when the entitlement to the grant is confirmed.

Income generated through activities for generating funds includes licence fee income, participant fee income, delegate fees and income from fundraising events. Fundraising income is shown gross of any associated expenditure. Income received in advance of an event is deferred until entitlement to that income has arisen, at which time it is credited to the SOFA. Where income is raised through fundraising events held jointly with other charities, only the share of that income which is attributable to the charity is recognised.

Following changes in the operating structure of the Foundation, the historic analysis and classification of voluntary income and activities for generating funds has been reviewed and revised. The revisions have also resulted in the 2012/13 comparatives for these incoming resources being restated so that the results are reported on a consistent basis in both years.

The Duke of Edinburgh’s International Award Foundation

(d)

Resources expended

Expenditure is recognised when it is incurred and is reported gross of related income on the following bases: • Costs of generating funds relates to costs associated with attracting voluntary income and supporting the fundraising events. Such costs comprise primarily the salaries of the fundraising department together with direct costs associated with fundraising events.

• Charitable expenditure including expenditure associated with long-term contracts comprises direct expenditure, including direct staff costs, attributable to its activities. Where costs cannot be directly attributed, they have been allocated to activities on a basis consistent with the use of resources, including time spent.

• Governance costs of the charity include those incurred in the governance of its assets and are associated with constitutional and statutory requirements.

Following changes in the operating structure of the Foundation, the historic analysis and classification of costs of generating funds, charitable expenditure and governance costs has been reviewed and revised. The revisions have also resulted in the 2012/13 comparatives for these resources expended being restated so that the results are reported on a consistent basis in both years. (e) Gains and losses on foreign exchange Monetary assets and liabilities denominated in foreign currencies are translated to sterling at the rate ruling at the balance sheet date. Income and expenditure items in foreign currencies are translated at an average rate over the year using market rates set quarterly. All gains and losses on exchange, realised and unrealised, are reflected in the SOFA. (f) Tangible fixed assets and depreciation Tangible fixed assets costing more than £1,000, including incidental expenses of acquisition are capitalised at cost. Tangible fixed assets costing

under £1,000 are expensed in the year the expense is incurred.

Computer software, hardware and infrastructure, including replacement systems, are capitalised on initial purchase at cost. Replacement parts are expensed.

Investment properties are held at open market value.

Depreciation of fixed assets is charged on a straight line basis, commencing in the month of purchase, on cost or valuation as follows: • Leasehold property: Straight-line basis over the remaining life of the lease.

• Fixtures, fittings and furniture: 10% per annum.

• Computer systems, software and infrastructure: 33% per annum or economic life of asset, whichever is shorter.

• Motor vehicles: 25% per annum (g) Investments Listed investments are held at market value at the balance sheet date and the SOFA includes the realised and unrealised investment gains/losses for the year. Realised gains and losses on investments, calculated as the difference between the sales proceeds and their market value at the start of the year, or subsequent cost, are credited or charged to the SOFA in the year of gain or loss. Unrealised gains and losses representing the movement in market values during the year are credited or charged to the SOFA in the year of the gain or loss. (h) Pension costs Throughout the year the Foundation contributed to The Pensions Trust Growth and Ethical Plans. The Pensions Trust Growth Plan is a defined benefit pension scheme. However, because the scheme is a multi-employer scheme, historically it was not possible for the Foundation to identify its share of the underlying assets and liabilities. Therefore the scheme was accounted for as a defined contribution scheme, in accordance with FRS17 – Retirement Benefits and costs were charged to the SOFA.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

35

Notes to the financial statements for the year ended 31 March 2014 On 11 November 2013 a decision was taken by the trustees to withdraw from The Pensions Trust Growth Plan scheme. As of 31 March 2014 the Foundation withdrew from the scheme and agreed with The Pensions Trust to buy-out the exit liability as determined by an actuarial valuation. The estimated cost of this exit liability has been fully provided for (Note 10) and charged to the SOFA as a one off cost.

Details are set out in Note 17.

On 1 April 2014 the Foundation began contributing to The Duke of Edinburgh International Award Foundation Group Personal Pension Plan. This is a defined contribution pension scheme operated by Scottish Widows. (i) Consolidation The wholly owned subsidiary Intaward Limited is not required to be consolidated under FRS2 on the grounds of immateriality.

(j) Operating leases Rental paid under operating leases is charged to the SOFA on a straight line basis. (k) Irrecoverable VAT Income and expenditure is recorded gross of VAT as the Foundation has not recovered any VAT. (l) Cash Flow Statement The Foundation qualifies as a small company under the terms of Section 383 of the Companies Act 2006. As a consequence it is exempt from the requirement to publish a cash flow statement under the provisions of FRS1.

The Financial Statements of the Foundation’s subsidiary, The Duke of Edinburgh’s International Award Foundation (Canada), are consolidated with the financial statements of the Foundation on a line-by-line basis. This entity only included at the year end cash at bank of £516,000 and incoming resources of £516,000.

The Financial Statements of the Foundation’s subsidiary, The Duke of Edinburgh’s Award International (USA), Ltd were consolidated with the financial statements of the Foundation on a line-byline basis for the period 1 April 2013 to 31 December 2013. As of 1 January 2014, The Duke of Edinburgh’s Award International (USA), Ltd ceased to be a subsidiary of the Foundation and its Financial Statements for the period 1 January 2014 to 31 March 2014 have not been consolidated.

The Charity’s result, being the net movement in funds of the Foundation excluding the incoming resources and resources expended of the above subsidiary entities, was £2,947,000 incoming resources and £2,322,000 net deficit for the year.

36

The Duke of Edinburgh’s International Award Foundation

2: Voluntary income (a) Voluntary income

Donations - Individuals and Companies Donations - Trusts and Foundations Donations in kind

Unrestricted general fund £000 2,115 243 2,358

Restricted fund £000 60 7 67

Total 2014 £000 2,175 7 243 2,425

Restated total 2013 £000 2,201 130 571 2,902

Donations – Individuals and Companies includes £516,000 in relation to The Duke of Edinburgh’s International Award Foundation (Canada).

(b) Donations in kind Material donations in kind received during the year are estimated to be valued as follows:

Office accommodation Investment management Legal and advisory services Travel, accommodation, other Refurbishment costs

2014 £000 125 60

2013 £000 61 22 487

8

1

50

-

243

571

A further donation in kind of £0 (2013: £8,000) relating to investment management fees has been received as a fee rebate.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

37

Notes to the financial statements for the year ended 31 March 2014

3: Activities for generating funds

NAO/IAC licence fees ORB participant fees Training and other fees Sale of literature and other goods Fundraising and other event income Operational/other income

Unrestricted funds £000 71 61 55 17 747 6 957

Restricted funds £000 2 2

2014 Restated 2013 £000 73 61 55 17 747 6 959

£000 8 40 15 338 7 408

4: Investment income

Investment income arises from: UK fixed interest unit trust – Charinco UK equity unit trust – Charishare UK equity unit trust International equity unit trust UK property unit trust Interest on other cash balances Dividend income

2014 Restated 2013 £000 £000 20 42 7 5 12 1 9 78 25 79

38

120

The Duke of Edinburgh’s International Award Foundation

5: Total resources expended a)

Directly charged 2014 £000

Staff costs 2014 £000

Allocated overheads 2014 £000

2014 £000

Restated total 2013 £000

709

437

203

1,349

1,006

709

437

203

1,349

13 1,019

726

-

-

726

727

263

-

-

263

349

989

-

-

989

1,076

Charitable activities core activities Advocacy and development

12

479

254

745

821

Communication

24

515

274

813

797

132

315

168

615

673

168

1,309

696

2,173

2,291

151 747

49 -

-

200 747

261 -

2,764

1,795

899

5,458

4,647

Cost of generating funds Cost of generating voluntary income Investment management fee

Costs of charitable activities Charitable activities development projects Online Record Book One Award Alliance Programme

Capacity building

Governance costs Pension buyout exceptional item Total resources expended

Total

Charitable activities – development projects, is a long term development strategy that is funded by reserves that the Trustees designated during 2011/12. The strategy includes the development and roll out of the Online Record Book and a series of other projects that in total constitute the One Award Alliance Programme.

Staff costs include those posted directly to a channel and some allocated centrally on the basis of staff time. Overhead costs not directly charged to a channel are allocated using the same staff time proportions.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

39

Notes to the financial statements for the year ended 31 March 2014

(b) Net income before investment gains is stated after charging: Depreciation

2014 £000 40

2013 £000 54

Audit fee Tax advice Operating leases Foreign exchange gains/(losses)

26 13 72 (103)

32 7 60 16

(c) Staff costs

2014 £000 1,377

2013 £000 1,507

146 121 151 1,795

152 93 92 1,844

2014 Number 6

2013 Number 7

Charitable activities Governance Average monthly full time equivalent number of staff in the year

27 1 34

25 1 33

(e) Staff whose emoluments (excluding pension contributions) were in excess of £60,000

2014 No.s 1

2013 No.s 1

0 1 0 0 1 3

1 1 1 1 1 6

£000 30

£000 45

Wages and salaries Social security costs Pension costs Other staff costs

(d) Staff numbers Generating funds

£60,001 - £70,000 £70,001 - £80,000 £80,001 - £90,000 £90,001 - £100,000 £100,001 - £110,000 £110,001 - £120,000

Pension contributions in respect of the above members of staff

40

The Duke of Edinburgh’s International Award Foundation

6: Tangible fixed assets Motor vehicles

Total

£000 151 108 259

Computer systems, software and infrastructure £000 93 4 97

£000 56 56

£000 532 112 644

(19)

(44)

(86)

(37)

(186)

(4)

(15)

(7)

(14)

(40)

Accumulated depreciation at 1 March 2014

(23)

(59)

(93)

(51)

(226)

Net book value at 31 March 2014

209

200

4

5

418

Net book value at 31 March 2013

213

107

7

19

346

Cost at 1 April 2013 Additions Cost at 31 March 2014 Accumulated depreciation at 1 April 2013 Depreciation charge

Leasehold property

Fixtures, fittings and furniture

£000 232 232

The Foundation holds a donated property in Portugal, shown above as leasehold property. Small amounts of rent and related expenditure are generated by it each year. The property is held at the value on transfer less applicable depreciation. The Trustees believe this to be a fair approximation of the open market value of the property. A full valuation will be carried out in 2014/15 in accordance with SSAP 19.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

41

Notes to the financial statements for the year ended 31 March 2014 7: Fixed asset investments Investment portfolio

2014 £000 13,448

2013 £000 14,136

189

2,492 (12,740) (3,164) (675)

Market value of equity holdings at 31 March

13,637

49

Reinvestment in total return funds Net investment gains Drawdown from portfolio Total investment portfolio at 31 March

(1,500) 12,137

12,750 1,149 (500) 13,448

2014 Total £000 51

2013 Total £000 49

Cash held with Ruffer Standard Life Global Absolute Return Fund Barings Dynamic Asset Allocation Fund Ruffer Absolute Return Fund

500 4,135 3,658 3,793

4,010 4,581 4,808

Investment portfolio at 31 March

12,137

13,448

Investment portfolio at 1 April Additions at cost – Institutional cash Disposals proceeds – Equities Disposals proceeds – Institutional cash Net investment gains/(losses)

Blackrock Absolute Return Unit Trust

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

The original cost of these investments was £10,299,000.

42

The Duke of Edinburgh’s International Award Foundation

8: Investment in subsidiary The Foundation’s wholly owned subsidiary, Intaward Limited, is registered in England. The cost of this investment is £2. Intaward Limited has been created to be available for any trading activity of the Foundation. Intaward Limited is dormant, never having traded since being set up, the only asset being the £2 subscribed for the share capital.

No consolidation has been prepared under the exemption allowed in the Companies Act 2006.

(Canada), is registered in Canada. The cost of this investment is nil.

The Foundation’s former subsidiary, The Duke of Edinburgh’s Award International (USA), Ltd was registered in the United States of America. As of 1 January 2014, The Duke of Edinburgh’s Award International (USA), Ltd ceased to be a subsidiary of the Foundation. The cost of this investment and the proceeds on disposal were nil.

The Foundation’s subsidiary, The Duke of Edinburgh’s International Award Foundation

9: Debtors Trade debtors Amount owed by connected charity Other debtors Accrued income Prepayments

2014 £000 97

2013 £000 15

654 147 94 992

20 26 171 100 332

2014 £000 87

2013 £000 3

36 121 103 347

123 115 179 420

10: Current liabilities and provisions (a) Creditors: Amounts falling due within 1 year Trade creditors Amount owed to connected charity Other creditors Accruals Deferred income

Trustees’ Report and Financial Statements for the year ended 31 March 2014

43

Notes to the financial statements for the year ended 31 March 2014 (b) Deferred income Balance at 1 April

2014 £000 179

2013 £000 160

Released to the SOFA during the year Deferred during the year Balance at 31 March

(179) -

(160) 179 179

(c) Provisions for liabilities Balance at 1 April

2014 £000 -

2013 £000 2

Released to the SOFA during the year Provision during the year Balance at 31 March

(733) (733)

(2) -

The provision relates to the buyout of The Pensions Trust’s Growth Plan (see note 17). The liability is likely to fall due within one year.

11: Taxation The tax charge for ordinary activities is £nil (2013: £nil). The charity 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 the furtherance of the charity’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.

12: Funds (a) Movement

Balance at 1 April 2013 Other net (outgoing) resources Unrealised gains on investments Realised gains on investments Pension buyout Balance at 31 March 2014

44

Unrestricted £000 14,640 (1,193) 9 180 (747) 12,889

Restricted development projects £000 390 (55) 335

Total funds £000 15,030 (1,248) 9 180 (747) 13,224

The Duke of Edinburgh’s International Award Foundation

(b) Net assets

Unrestricted

Restricted development projects £000 335 335

£000 418 12,137 1,067 (733) 12,889

Tangible assets Investment portfolio Net current assets Provision for liabilities Net assets at 31 March 2014

Total funds £000 418 12,137 1,402 (733) 13,224

(c) Designated funds Included in unrestricted funds are funds set aside by the Trustees to provide support for National Award Operators and Independent Award Centres. These funds are therefore not readily available for other purposes. As at 31 March 2014 funds set aside for these purposes amount to £9,288,000 (2013: £10,176,000).

Online Record Book One Award Alliance Special Projects Support Funds Development Fund Balance at 31 March

1 April 2013 £000 1,204 429 2,735 51 5,757 10,176

Incoming resources £000 1 318 1 320

Trustees’ Report and Financial Statements for the year ended 31 March 2014

Outgoing resources £000 (727) (262) (202) (17) (1,208)

Transfer of funds £000 122 (122) -

31 March 2014 £000 477 290 2,851 35 5,635 9,288

45

Notes to the financial statements for the year ended 31 March 2014 (d) Restricted funds Amounts received from donors that have restrictions placed on them are held as restricted funds. Funds are primarily restricted by geographical area or a particular purpose. The Foundation held 15 restricted funds at the end of the year (2013: 15 Funds).

Restricted fund movements

Initiative Africa Award Dulverton Trust Ono Photography Bursary Anglo American Brazil Fund Special Projects Fund Peter Cruddas Internships Tanaka Funds Other restricted funds

1 April 2013 £000 79 17 45 100 38 5 82 24 390

Incoming resources £000 21 33 15 69

Outgoing resources £000 (18) (17) (45) (5) (21) (18) (124)

31 March 2014 £000 61 45 100 14 94 21 335

13: Connected charity The charity has two Trustees (2013:2) in common with The Duke of Edinburgh’s Award. During the year the two charities shared accounting and other administrative services but are not under common control. In the opinion of the Trustees it is not appropriate to aggregate the financial statements of The Duke of Edinburgh’s Award and The Duke of Edinburgh’s International Award Foundation as the activities of the two charities are quite separate.

The Foundation encourages the establishment and administration of the Award worldwide, whilst The Duke of Edinburgh’s Award administers the Award in

46

the UK. As such separate financial statements have been prepared for The Duke of Edinburgh’s Award and are available from the Company Secretary, Gulliver House, Madeira Walk, Windsor, Berks SL4 1EU. During the year the Foundation paid £90,000 to The Duke of Edinburgh’s Award in management fees and £25,000 as a Special Project grant. At 31 March 2014 the Foundation had an outstanding creditor balance of £36,000 with The Duke of Edinburgh’s Award.

The Duke of Edinburgh’s International Award Foundation

14: Related party transactions Four Trustees or companies connected with Trustees are fully paid Members, Fellows or Corporate Fellows of the World Fellowship. During the year five Trustees made donations of £18,710 (2013: Four Trustees £116,887).

Trustees do not receive any remuneration for their service as Trustees and no monetary value is included in these financial statements for time spent

by Trustees on the affairs of the Foundation.

year, expenses of £3,539 were reimbursed to two Trustees, to cover travel and other costs (2013: Three Trustees £2,360).

The Trustees have reviewed the related party connections of themselves, their close families and other connected persons and report that no disclosable transactions, other than those described above, arose during the year from these connections.

Out of pocket expenses incurred by Trustees while carrying out their duties are reimbursed by the Foundation when claimed. During the

15: Leases Commitments under operating leases to pay rentals during the year following the year of these financial statements.

2014 £000

2013 £000

• Expiring within 1 year • Expiring 2 to 5 years

8 18 26

59 59

Total rentals under operating leases charged as an expense in the SOFA

55

60

Land and buildings:

16: Contingent liabilities There were no contingent liabilities as at 31 March 2014 (2013: nil).

Trustees’ Report and Financial Statements for the year ended 31 March 2014

47

Notes to the financial statements for the year ended 31 March 2014 17: Pension schemes Throughout the year to 31 March 2014, jointly with the Duke of Edinburgh’s Award, the Foundation participated in The Pensions Trust’s Growth Plan (the Plan). The Plan is funded, is not contracted out of the state scheme and is a multi-employer pension plan.

As of 31 March 2014 the Foundation withdrew from the Plan and agreed with The Pensions Trust to buyout the exit liability as determined by an actuarial valuation.

Contributions paid into the Plan up to and including September 2001 were converted to defined amounts of pension payable from Normal Retirement Date.

From October 2001 contributions were invested in personal funds which have a capital guarantee and which are converted to pension on retirement, either within the Plan or by the purchase of an annuity.

The rules of the Plan allow for the declaration of bonuses and/or investment credits if this is within the financial capacity of the Plan assessed on a prudent basis. Bonuses/investment credits are not guaranteed and are declared at the discretion of the Plan’s Trustee.

The Trustee commissions an actuarial valuation of the Plan every three years. The purpose of the actuarial valuation is to determine the funding position of the Plan by comparing the assets with the past service liabilities as at the valuation date.

Asset values are calculated by reference to market levels. Accrued past service liabilities are valued by discounting expected future benefit payments using a discount rate calculated by reference to the expected future investment returns.

The rules of the Plan give the Trustee the power to require employers to pay additional contributions in order to ensure that the statutory funding objective under the Pensions Act 2004 is met. The statutory funding objective is that a pension scheme should have sufficient assets to meet its past service liabilities, known as Technical Provisions.

48

If the actuarial valuation reveals a deficit the Trustee will agree a recovery plan to eliminate the deficit over a specified period of time either by way of additional contributions from employers, investment returns or a combination of these.

The rules of the Plan state that the proportion of obligatory contributions to be borne by the Member and the Member’s Employer shall be determined by agreement between them. Such agreement shall require the Employer to pay part of such contributions and may provide that the Employer shall pay the whole of them.

The Foundation paid contributions at the rate of between 6% and 16% during the year. Members paid employee contributions of between 3% and 5% during the year. Some members also paid additional voluntary contributions at their own discretion.

As at the balance sheet date there were nine active members of the Plan employed by the Foundation.

On 31 March 2014 the Foundation ceased to offer membership of the Plan to its employees. There was also one active member of The Pensions Trust Ethical Plan.

Historically it was not possible in the normal course of events to identify on a reasonable and consistent basis the share of underlying assets and liabilities of the Plan belonging to individual participating employers. The Growth Plan is a multi-employer scheme where the scheme assets are co-mingled for investment purposes, and benefits are paid from total scheme assets. Accordingly due to the nature of the Plan, the accounting charge under FRS17 represented the employer contribution payable.

For the year to 31 March 2014 the Foundation incurred both an accounting charge representing the employer contribution payable in the year and a further charge being the estimated buy-out exit liability.

The Pensions Act 2011 altered the definition of Series 3 of The Pensions Trust’s Growth Plan so that a liability arises to employers from membership of any series except Series 4. The debt is due in the event of the employer ceasing to participate in the Plan or the Plan winding up.

The Duke of Edinburgh’s International Award Foundation

The debt for the Plan as a whole is calculated by comparing the liabilities for the Plan (calculated on a buyout basis i.e. the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of the Plan.

If the liabilities exceed assets there is a buy-out debt.

The leaving employer’s share of the buy-out debt is the proportion of the Plan’s liability attributable to employment with the leaving employer compared to the total amount of the Plan’s liabilities (relating to employment with all the currently participating employers). The leaving employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect of previously participating employers. The amount of the debt therefore depends on many factors including total Plan liabilities, Plan investment performance, the liabilities in respect of current and former employees of the employer, financial conditions at the time of the cessation event and the insurance buy-out market.

Following the Foundation’s withdrawal from the Plan, The Foundation has been notified by The Pensions Trust of the estimated employer debt on withdrawal from the Plan. Based on the financial position of the Plan as at 31 December 2013 and the expectation that Series 3 liabilities will be included in the debt, the joint debt of the Foundation and the Duke of Edinburgh’s Award has been estimated at £2,720,896.

The Pensions Trust has advised that the above estimate is only a guide to the likely withdrawal debt that would have applied at 31 December 2013.

The actual withdrawal debt will be calculated by an actuary based on individual member data as at the withdrawal date and may be higher or lower than the approximate amounts indicated. The withdrawal debt will also be sensitive to the assumptions used by the actuary to assess the cost of insuring the Growth Plan’s liabilities. These will depend upon market conditions (e.g. gilt yields) at the date of withdrawal and the actuary’s view of the cost of insuring liabilities.

Our professional advisors have estimated that the joint debt would have increased to approximately £3,100,000 by 31 March 2014, including actuarial fees and professional fees. The Foundation’s share of this debt would be £733,000.

The Pensions Trust has also advised that as a result of the change in the definition of Money Purchase contained in the Pensions Act 2011, Growth Plan Series 3 will switch from being a Money Purchase arrangement to a defined benefit arrangement once transitional regulations come into force. This is currently expected to be in 2014. Employers withdrawing from the Growth Plan are required to pay the higher of the debt calculated including Series 3 liabilities and the debt calculated excluding Series 3 liabilities. Any employer that has withdrawn from the Growth Plan on or after 28 July 2011 will be notified after the regulations come into force of any refund due or any outstanding amount still payable.

Based on The Pensions Trust’s debt estimate detailed above and our professional advice, the trustees are of the opinion that the Foundation should provide £733,000 for the Plan buy-out exit liability. This has been charged to the SOFA as a one off cost.

On 1 April 2014 the Foundation began contributing to The Duke of Edinburgh International Award Foundation Group Personal Pension Plan. This is a defined contribution pension scheme operated by Scottish Widows. There were no contributions to this scheme during the year to 31 March 2014.

18: Status of company and members The company is a company limited by guarantee.

The members of the company are the Trustees named on page 52. They have no entitlement to distribution on dissolution of the company and they each have a limited liability up to £1.

Trustees’ Report and Financial Statements for the year ended 31 March 2014

49

Trustees’ commitment The Trustees confirm that these financial statements have been produced in accordance with relevant legislation. Each Trustee confirms that: a) Insofar as the Trustees are aware, there is no relevant audit information of which the charity’s auditors are unaware; and b) The Trustee has taken all the steps that he/ she ought to have taken as a Trustee in order to make himself/herself aware of any relevant audit information and to establish that the charity’s auditors are aware of that information.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Thank you Thank you to all our supporters and staff We are sincerely grateful to all our donors for their tremendous support for our work and continued confidence in our efforts.

We are grateful to all those individuals and organisations who have provided pro bono assistance over the past year. The Trustees would also like to thank all staff for their continuing hard work, loyalty and support.

Andrew Smith Trustee Date: 1 November 2014 Registered office: Award House 7-11 St Matthew Street London SW1P 2JT Company Number: 3666389 50

The Duke of Edinburgh’s International Award Foundation

Trustees’ Report and Financial Statements for the year ended 31 March 2014 51

Appendix - structure, governance and management Founder: His Royal Highness The Duke of Edinburgh KG, KT

1 = Audit and Investment Committee Member 2= Development Committee Member 3 = Nomination Committee Member 4 = Remuneration Committee Member 5 = Digital Steering Committee Member 6 = Property Committee Member 7 = Alliance Steering Committee Member

Trustees: The trustees of the charity who were in office during the year and up to the date of signing the financial statements were:

52

Gregory Belton CVO KCHS (Canada) (Chair) 1, 2, 3

His Royal Highness The Earl of Wessex KG GCVO ADC* (UK) 2, 3, 5, 7

Alan Jones OBE (UK) 1 (to 11 November 2013) 4, 6

Andrew Smith (UK) 1, 4, 5, 7

The Lord Paul Boateng PC DL (UK) 3, 5, 7

Garth Weston (China/UK) 1, 2 (from 11 November 2013), 6

Paul Bell (UK/South Africa) 2, 4, 5, 7

Muna Issa (Jamaica) (from 11 November 2013) 3, 6

Adebayo Olawale Edun (Nigeria) 4 (from 11 November 2013)

Kwek Leng Joo (Singapore) (from 4 May 2013) 1 (from 11 November 2013), 6 (from 11 November 2013) The Duke of Edinburgh’s International Award Foundation

Secretary General: John May Company Secretary: Kenneth Coppock (to 9 May 2014) Gary Davis (from 9 May 2014) Company Number: 3666389 Registered Charity Number: 1072453 Registered Office: The Duke of Edinburgh’s International Award Foundation Award House 7-11 St Matthew Street London SW1P 2JT Investment Managers: BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue London EC2N 2DL

Independent Auditors: PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT Solicitors: Bates Wells & Braithwaite London LLP Scandinavian House 2-6 Cannon Street London EC4M 6YH Bankers: Lloyds Bank plc 8 – 10 Waterloo Place London SW1Y 4BE Foundation Trustees on The Duke of Edinburgh’s Award Board: HRH The Earl of Wessex Andrew Smith

Ruffer LLP 80 Victoria Street London SW1E 5JL Standard Life Investments Limited 1 George Street Edinburgh EH2 2LL Baring Assets Management (London) 155 Bishopsgate London EC2M 3XY

*© 2013 The Royal Household Bagshot Park/Image by Millie Pilkington only to be reproduced with permission

Trustees’ Report and Financial Statements for the year ended 31 March 2014

53

The Duke of Edinburgh’s International Award Foundation Trustees’ annual report and financial statements Registered charity in England and Wales number 1072453 Company limited by guarantee number 3666389 The Duke of Edinburgh’s International Award Foundation Award House 7-11 St Matthew St London SW1P 2JT United Kingdom +44(0)20 7222 4242 info@intaward.org www.intaward.org © 2014 The Duke of Edinburgh’s International Award Foundation

IAF_AR_201410