Reference and administrative details and audit report

The annual report (which comprises pages 1-39 and the list of trustees, staff and advisers) and financial statements are prepared on a combined basis for: The Paul Hamlyn (1987) Foundation (the Trust) established on 15 April1987 by Trust Deed which has been amended in subsequent years. Registered charity number 327474.Paul Hamlyn Foundation (the Company), formed on 3 February 2004as a charitable company limited by guarantee and not having a share capital. Company number 5042279 (registered in England and Wales) and registered charity number 1102927. During the year the Company name was changed from The Paul Hamlyn Foundation. On 6 May 2004, the Trustees of the Trust transferred the activities and all (except £5.2 million) of the assets of the Trust to the Company. On 31 March 2008 the Trust continued to retain assets to the value of £4.8 million. The principal office of both the Trust and the Company is 18 Queen Anne’s Gate, London, SW1H 9AA, which is also the registered office of the Company.

Structure, governance and management

The Board of Trustees, comprising not less than three and not more than nine members, meets at least four times a year to agree the broad strategy and areas of activity of the Foundation, including consideration of grant-making, investment, reserves and risk management policies and performance. The Board considers applications above £75,000.The principal committees, which all report to the Board of Trustees, are: Arts, Education and Learning and Social Justice Programme Committees (each comprising three trustees and up to four external advisory members) and the India Programme Committee (comprising three trustees) meet at least quarterly to consider applications up to £75,000. Decisions on applications to the UK programmes up to£10,000 may also be taken by staff committees and are reported through the Programme Committee to the Board of Trustees. Finance and Investment Committee, comprising five trustees and two external advisory members, meets quarterly to consider investment strategy, manager appointment and performance, and twice a year to consider financial matters. Remuneration Committee, comprising the Chair and the Chairman of the Finance and Investment Committee, meets at least once a year. The day to day management of the Foundation is delegated by the Board of Trustees to the Director. The Board keeps the skill requirement for Trustees under review. The Trustees create a long list of appropriate people to meet identified gaps. A sub-committee interviews a short list of candidates. Trustees are initially appointed only until the next following AGM by the Appointor provided for in the Articles of Association. The renewal of appointments (for a period of up to three years) is made by all trustees acting as members of the company. The current Appointor is Jane Hamlyn, who was designated so under Paul Hamlyn’s will. The induction process for any newly appointed trustee comprises a meeting with the Chair, and meeting(s) with the Director and other staff, together with receipt of a

pack containing copies of the Memorandum and Articles of Association, the annual report and accounts, board and committee minutes and Charity Commission guidance notes. Trustees have identified and considered the major strategic, operational and financial risks to which the Foundation is exposed. They are satisfied with the procedures which have been established to review these risks regularly, and with the actions taken to mitigate exposure to them.

Audit Report

We have audited the financial statements of the Paul Hamlyn Foundation for the year ended 31 March 2008 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. These financial statements have been prepared under the accounting policies set out therein.

Respective responsibilities of trustees and auditors.

The responsibilities of the trustees (who are also the directors of the Paul Hamlyn Foundation for the purposes of company law) for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Trustees’ Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the charitable company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, 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.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Trustees’ Report is consistent with the financial statements.

In addition we report to you if, in our opinion, the charitable company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding trustees’ remuneration and other transactions is not disclosed.

We read the Trustees’ Report and consider the implications for our report if we become aware of any apparent misstatements within it.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the charitable company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

 Opinion

In our opinion:

• the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the charitable company’s affairs as at 31 March 2008 and of its incoming resources and application of resources, including its income and expenditure and cash flows, for the year then ended.
• the financial statements have been properly prepared in accordance with the Companies Act 1985.
• the information given in the Trustees’ Report is consistent with the financial statements.

Pricewaterhouse Coopers LLP

Chartered Accountants and Registered AuditorsLondon

26 June 2008

Statement of trustees’ responsibilities in respect of the Annual Report and the financial statements

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

The trustees are responsible for preparing financial statements for each financial year which give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the trustees are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards 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 company will continue in business.

The trustees confirm that they have complied with the above requirements in preparing the financial statements.

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985, the Statement of Recommended Practice ‘Accounting and Reporting by Charities 2005’ and the governing document. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website.

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

Statement of Disclosure of Information to Auditors

So far as each trustee is aware, there is no relevant audit information of which the Company’s auditors are unaware, and he has taken all the steps they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of the information.