Annual Report and Accounts for the year ended 31 March 2015 ANNUAL REPORT The trustees have pleasure in presenting their annual report and audited accounts for the year to 31 March 2015. This comprises a science report from our Director, Dale Sanders, a report from the Trustees and the audited financial statements.
Stuart Holmes Chairman
Contents
Introduction 3 Research Programmes 4 - 5 Strategic report 6 - 14 About JIC 15 Looking forwards 16 Financial review 17 - 18 Risk assessment and management 19 Trustees’ report 20 Structure, governance and management 21 - 23 Statement of governors’ responsibilities in respect of the annual report and financial statements 24 Independent auditor’s report to the members of John Innes Centre 25 Financial statements 26 Consolidated statement of financial activities 27 Note of consolidated operating surplus on a historical cost basis 28 Consolidated and charitable company balance sheets 29 Consolidated cash flow statement 30 Reconciliation of net cash flow to movement in net funds 30 Notes to the accounts 31 - 45 Reference and administrative details 46
John Innes Centre (“JIC”) is a company limited by guarantee and a registered charity. The Annual Report provides information on the legal purposes of the charity, the activities it undertakes and its main achievements. The Trustees’ Report and Financial Statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities (“SORP 2005”), applicable United Kingdom accounting standards, the Charities Act 2011 and the Companies Act 2006. 3
Introduction to the Annual Report
The last financial year has been an exceptional year for the John Innes Centre, with scientific discoveries in areas that underpin understanding in plant and microbial science, and address global food security and human health.
The scientific quality and success of our four Institute Strategic Programmes was recognised and endorsed in a mid-term review by our primary funder, the Biotechnology and Biological Sciences Research Council (BBSRC). Over the financial year we have had an exceptionally strong success rate in winning competitive grant income.
We have strengthened our science base with appointments of exceptional new project leaders. Our scientists have been recognised for their scientific excellence, career achievements and As we consider a new five-year scientific funding contributions to women in scientific careers. cycle, we opened a public dialogue to engage people on those areas the public would like us The strength of JIC’s scientific research, teamed to take into account when planning our science with our long track record of training outstanding programmes. BBSRC and the Sciencewise are graduate students in life sciences, were key partnering the John Innes Centre in the dialogue. factors in the award of a £12.5m Doctoral Training Partnership for the biosciences institutes on the We start the next financial year as we leave this one Norwich Research Park. JIC was the lead partner – with a healthy and robust science programme, a in the bid for the scheme, which will fund 125 PhD vibrant community of early-career and experienced students over the next five years. researchers and a highly-skilled team delivering excellent results for the UK and internationally. We have strengthened scientific partnerships between the UK and China by establishing an Dale Sanders FRS international Centre of Excellence for Plant Science Director, John Innes Centre and Microbiology in Shanghai and Beijing. At the Centre, scientists will collaborate to investigate challenges in agriculture and human health. The Centre is a partnership between the John Innes Centre, the Shanghai Institute of Plant Physiology and Ecology and the Institute of Genetics and Developmental Biology in Beijing, both Chinese Academy of Sciences Institutes, developed with support from the BBSRC.
ANNUAL REPORT I MARCH 2015 4
Biotic Interactions For Crop Productivity (BIO) The scientific challenge: The strategic challenge: To understand the complex interplay that occurs in To reduce crop losses caused by pests and interactions between plants and other organisms pathogens and to enhance the use of beneficial and to define how this leads to symbiosis, disease symbionts in sustainable agriculture or resistance
Growth and Development Underpinning Yield (GRO) The scientific challenge: The strategic challenge: To enhance our understanding of plant To improve the yield and adaptability of crop plants growth and development within a diverse and sustainable environment
ANNUAL REPORT I MARCH 2015 5
Strategic Cross-Institute Research Programme for Wheat Improvement (WISP) The scientific challenge: The strategic challenge: To enhance the exploitation of diversity in wheat To construct experimental crosses, genotyped breeding by developing pre-breeding germplasm and phenotyped to facilitate genetic dissection of characterised for key traits and identifying markers target traits for selection
Understanding and Exploiting Plant and Microbial Metabolism (MET) The scientific challenge: The strategic challenge: To discover and understand the control of To apply this new knowledge for the benefit of pathways of primary metabolism and synthesis of agriculture, bio-based industries and human health valuable natural products
ANNUAL REPORT I MARCH 2015 6 STRATEGIC REPORT OUR SUCCESS RATE WITH COMPETITIVE RESEARCH GRANT APPLICATIONS TO BBSRC REMAINED HIGH AT by number
JIC CONTRIBUTES £ 11. 9 9 BACK TO THE UK ECONOMY FOR EVERY £1 INVESTED
ANNUAL REPORT I MARCH 2015 Science Spotlights 7
Global surveillance on cereal killers Scientists can now track Yellow Rust — one of the world’s most devastating wheat diseases — across continents with a new surveillance method to analyse the DNA of field samples of the pathogen. Dr Diane Saunders and Dr Cristobal Uauy’s method REPORT lets scientists rapidly generate data on the spread of different strains of the pathogen. The John Innes Centre, The Sainsbury Laboratory and The Genome Analysis Centre are working collaboratively to tackle rust fungi. The new Norwich Rust Group brings together seven scientific teams from these leading institutes and works with 52 collaborators across 23 countries.
Biosynthesis of anti-cancer compounds Professor Sarah O’Connor successfully engineered one of the longest chemical pathways into yeast to make Strictosidine, an intermediary to the anti-cancer compounds Vinblastine and Topotecan. Professor O’Connor aims to make yeast capable of producing Strictosidine more efficiently and cheaply than current plant production methods.
Pathogen sensing ‘antenna’ gene transferred to wheat Wild relative gene exchange Scientists successfully transferred a receptor to The genetic mechanism controlling wheat recognise bacteria from the model plant Arabidopsis breeding has been uncovered by a team of thaliana to wheat. The receptor is capable of scientists led by Professor Graham Moore. triggering a defence response in wheat and confers The team discovered how the Ph1 region of the increased resistance to bacterial disease. Dr Chris wheat genome controls genetic exchange. This Ridout led the research, which took place at John discovery could lead to ways for breeders to Innes Centre, the National Institute of Agricultural temporarily ‘turn off’ Ph1. Botany and The Sainsbury Laboratory.
Mother plants pass season memory to seeds Dr Steve Penfield has found that ‘mother’ plants remember the seasons and use this memory to teach their seeds the time of year, telling them when they should germinate. He found that the mother plant plays an important role in sensing temperature and forms a long term temperature memory which enables seeds to determine time of year and ensure that their growth and development is coordinated with the seasons.
ANNUAL REPORT I MARCH 2015 8 Science Spotlights
New research offers clue for ‘the abominable mystery’ Professor Lars Østergaard and Dr Laila Moubayidin have discovered an unusual role for the plant hormone auxin in the development of the female organs of the flower. Two genes directly affecting auxin distribution control a transition from radial symmetry to bilateral symmetry in early embryo development.
Why flowers bloom earlier in warmer climate Scientists at the John Innes Centre have discovered why the first buds of spring come increasingly earlier as the climate changes. Dr Steven Penfield found that plants have an ideal temperature for seed set. They flower at a particular time of year to make sure their seed develops just as the weather warms to this ‘sweet spot’ temperature.
Sporulation mystery solved Scientists in Professor Mark Buttner’s group, studying how Streptomyces bacteria produce spores, identified the mystery signalling molecule that orchestrates the process of sporulation and also the unique way in which it works. The signalling molecule is also essential to the bacteria’s development. Streptomyces are soil-dwelling bacteria that give rise to half the world’s antibiotics in use today.
Scientists Wild grass mine plant targets genomes for wheat for valuable and barley chemicals breeding Professor research Anne Osbourn Dr Paul Nicholson’s led research lab has made to scour a breakthrough the genome sequences of 17 plant species to that could lead to find genes that could help produce high-value new, high-yielding, chemicals called terpenes on a large scale. Many disease-resistant terpenes have important uses in industry and crop varieties. Their research suggests that the wild medicine, including widely prescribed cancer grass Brachypodium distachyon is an ideal model drugs and anti-malarials. In the future this may for studying disease resistance traits in wheat and lead to significantly cheaper production of these barley, as it acts as a host to many of those crops’ important compounds. fungal pathogens.
ANNUAL REPORT I MARCH 2015 New Appointments 9
Dr Christine Faulkner’s research focuses on intercellular communication, addressing questions of how plant cells communicate when under attack from a pathogen. Her work will lead to new strategies to enhance plant defence responses.
Dr Steven Penfield is using molecular, genetic and computational approaches to understand the role of seed behaviour in seasonal life history generation. He aims to use this knowledge to engineer crop seeds to be less sensitive to the seed production environment, and is working with industrial partners to achieve this.
Dr Yiliang Ding’s research focuses include the role of RNA structure in the post-transcriptional regulation of gene expression and exploring how RNA structures alter in response to environmental changes. Her lab developed two novel and powerful platforms to study RNA structure in vivo.
Dr Xiaoqi Feng will aim to dissect the mechanisms by which genetic and epigenetic factors shape the function and fate determination of the male sexual lineage. This work is vital for our understanding of sexual reproduction in plants, as well as of how a specialised lineage of cells develops. Her work has important implications for improving crop fertility and yield.
Dr Brande Wulff is studying various structured populations of wheat to identify genes restricting the causal agents of wheat stem rust and Septoria tritici blotch, two major fungal diseases of wheat. He seeks to translate this knowledge into practical solutions for genetic disease control in agricultural systems in the UK and worldwide.
Dr Scott Boden begins a five-year research fellowship. His work will focus on developmental pathways of flowering and plant morphology in wheat and barley. He is particularly interested in the development of wheat spikelets. If the architecture of the spikelets can be optimised, along with the duration of inflorescence development, grain yield can be increased.
ANNUAL REPORT I MARCH 2015 10 New Appointments
Postdoctoral researchers Dr Philippa Borrill and Dr Sebastian Eves-van den Akker have been awarded BBSRC Anniversary Future Leader Fellowships. Dr Borrill aims to understand the process of senescence throughout the plant: from the dying leaves to the developing grain. Dr Eves-van den Akker will work on the functional interactions between nematode pathogen effectors and their host plant targets.
Geraldine Platten joins the External Relations team with significant experience in press and strategic communications. Her background includes communicating science on behalf of Defra, the Department for International Development, and the Department for Education and Skills. Her experience includes communicating the UK’s policy on Africa and the media handling of GM issues.
Science Communication
The Innes Lecture: Mendel the Fraud? Professor Gregory Radick, Director of the Leeds Humanities Research Institute and Professor of History and Philosophy of Science at Leeds University, gave the 2015 Innes Lecture on Gregor Mendel’s famous garden pea experiments. In 1865 Mendel presented his ‘Experiments on Plant Hybridization.’ Mendel’s story gives an insight into the collective nature of truth-telling and The Lamb lecture: Food & knowledge-making in science. Civilization with Professor Nina Fedoroff In the 2015 Lamb Lecture, Professor Nina Fedoroff, former science and technology adviser to the US Secretary of State and the US agency for international development, took a historical view of food production over human history and a glance at current trends. Professor Fedoroff asked what we need to do to produce enough food for the more than 10 billion expected for dinner before the century’s end. Professor Fedoroff is a recipient of the US National Medal for Science in Biological Sciences, the US’s highest award for lifetime scientific achievement.
Antibiotic Hunters Antibiotic Hunters from JIC and the University of East Anglia were out in force at the Big Bang Fair talking to some of the 75,000 visitors. They also took their exhibit to the BBSRC’s Great British Bioscience Festival with its 6,500 visitors. A game simulating the hunt for new antibiotics in sand, sea and soil proved popular with younger visitors.
ANNUAL REPORT I MARCH 2015 Awards 11
Thompson Reuters highly cited scientists Three scientists from the John Innes Centre in Norwich have been named in the top 1% of highly cited scientists across the world: Professor Alison Smith, Professor Caroline Dean and Professor Giles Oldroyd.
Professor Caroline Dean wins BBSRC Award for Excellence in Bioscience and EMBO | FEBS Women in Science Award The BBSRC award recognises Professor Caroline Dean’s illustrious plant science career. In particular, she is celebrated for her pioneering role in the uptake and development of Arabidopsis thaliana as a model species for plant research to advance understanding in the field of epigenetics. In March, Professor Dean gave the BBSRC Excellence in Bioscience Award Lecture to mark her award. She spoke on how plants know when it is spring. The talk covered how plants sense and remember winter and how this type of regulation impacts on our lives. The separate EMBO | FEBS Women in Science award recognises Professor Dean’s outstanding contributions to plant biology, in particular for her work to understand how changes in temperature affect the molecular events that control the timing and duration of flowering in plants.
Professor George Lomonossoff is awarded the 2015 Colworth Prize Lecture Professor Lomonossoff was recognised for his work on developing the ‘hyper-translatable’ Cowpea Mosaic Virus expression system, or CPMV-HT for short. This technology, which exploits a Dr Anne Edwards is awarded the British modified version of part of a plant Empire medal virus genome, turns plants into Dr Anne Edwards was named in the Queen’s New Year’s ‘factories’ capable of producing Honours List for services to the environment and the public commercially important proteins understanding of science. on an industrial scale.
ANNUAL REPORT I MARCH 2015 12 JIC International
Dr Wendy Harwood awarded Visiting Professorship from Chinese Academy of Sciences The Visiting Professorship was awarded during Dr Wendy Harwood’s visit to the Northwest Institute of Plateau Biology, in Xining, where she delivered a training course on wheat and barley transformation.
How plants erase memories of winter Professor Caroline Dean’s research group, working with the Chinese Academy of Sciences, uncovered how plants erase ‘memories’ of winter, so that each generation of seedlings must feel winter before they can flower. This is achieved by production of a protein that acts as a brake to flowering.
Progress toward sustainable biological nitrogen fixation Professor Ray Dixon has been working with Chinese scientists to genetically engineer E. coli to provide a biologically sustainable source of nitrogen for crops to reduce farmers’ reliance on industrial nitrogen fertilisers. This research marks a first step towards new N-fixing bacteria that could be used in synthetic microbial-plant symbioses.
Collaboration with Indian institutes with BBSRC funding The BBSRC has awarded grants for two projects for JIC scientists to collaborate with researchers in India. Professor Cathie Martin and Professor Trevor Wang will lead a project on grass peas to develop varieties with reduced toxicity. Dr Brande Wulff, with colleagues at The Sainsbury Laboratory, will lead a project on potato and wheat disease. The projects are designed to enhance and safeguard food production overseas and in the UK.
ANNUAL REPORT I MARCH 2015 JIC International 13
Chris Darby joins the JIC to develop international strategy Chris Darby was appointed as Director of International Strategy and Liaison. His work ensures that both the excellence and impact of science at the John Innes Centre are strengthened by international engagement. The appointment of a Director of International Strategy and Liaison and progress with key scientific collaborations and agreements have strengthened the John Innes Centre’s work globally. With the Chinese Academy of Sciences, JIC is developing a new Centre of Excellence in Plant and Microbial Science, with a planned 10 new project leaders working across the two counties and based in China. JIC has also deepened and broadened its relationship with Biosciences for East and Central Africa (BECA) enabling scientific collaborations and capacity building, and also launching the Science for Africa fundraising campaign for students from Africa to complete a PhD at JIC.
Science for Africa Science for Africa is a JIC initiative to build collaborations with scientists in sub-Saharan Africa and develop scientific projects with relevance to sub-Saharan agriculture. This includes recruiting and training a PhD student from sub-Saharan Africa at the JIC, to promote knowledge exchange and build capacity. Professor Sir Gordon Conway, Dr Juliet Colman and Professor Calestous Juma are patrons of the initiative, and confirmed sponsors include Panasonic, Conviron and Destinations Travel.
Science for Africa aims to raise funds for a PhD student programme, giving promising students from Sub-Saharan Africa a chance to undertake a PhD here at the John Innes Centre, on a subject of relevance to African agriculture. Donate online with VirginMoneyGiving To make a donation online, head to the Science For Africa campaign page on VirginMoneyGiving http://uk.virginmoneygiving.com/fund/scienceforafrica Donate by text with JustTextGiving You can donate £3, £5 or £10 via text via JustTextGiving. To donate, text SCFA15 plus the amount, to 70070. For example, to donate £3, text “SCFA15 £3” to 70070 Donate through EasyFundraising.org.uk All you have to do is: 1. Go to http://www.easyfundraising.org.uk/causes/johninnescentre 2. Sign up for free 3. Get shopping - your donations will be collected by easyfundraising and automatically sent to Science for Africa. Shop online at your favourite store, and raise money at no cost to you. Retailers will give us a commission on your purchases.
ANNUAL REPORT I MARCH 2015 14 Funding and Investment
JIC-led studentship programme receives £12.5m investment The successful bid will support the training of 125 PhD students across the Norwich Research Park. Five partners across the NRP made the application: JIC, which led the bid, The Sainsbury Laboratory, The Genome Analysis Centre, the Institute of Food Research and the University of East Anglia. An additional £3.5m from the five partners will boost the number of students further to a total of 161.
Human Frontier Science Program funding A recent HFSP grant will allow Professor Saskia Hogenhout to examine complex interactions between parasites, insect vectors, and hosts. The grant will allow her to use an Agri-Tech partnership interdisciplinary approach and multi-scale modelling framework, The John Innes Centre has become from molecular to ecological one of the first academic partners to scale. Professor Hogenhout’s join Agri-Tech East – a membership lab is one of the few worldwide based organisation led by JIC to study this triangular alumnus Dr Belinda Clarke that ecological and evolutionary brings together crop growers with interdependence. scientists, technologists, entrepreneurs, and investors in the East of England. In response to the Government’s agritech strategy, JIC led one application, were partners on another and provided support for a third expression of interest for an Agriculture Innovation Centre. This saw JIC building networks with new partners in the imaging, informatics and avionics sectors.
Enterprise funding for barley beer brewing Scientists are developing a new business concept based on expertise in growing heritage lines of barley for brewing quality beers. Crop geneticist Dr Sarah de Vos was awarded a BBSRC/Royal Society of Edinburgh Enterprise Fellowship to develop the idea.
A vision for science in the future A vision for JIC science for the next 25 years has driven thinking behind future funding applications for new research facilities. The discussions considered the opportunities for JIC science offered by emerging technologies, and how to integrate scientific disciplines to meet challenges facing food security and antimicrobial resistance.
ANNUAL REPORT I MARCH 2015 ABOUT 1511 JIC JIC COLLABORATIONS
GERMANY Chinese Academy 64 of Sciences SWITZERLAND RUSSIA JIC has established a Centre of NETHERLANDS 10 6 Excellence in partnership with the 18 Chinese Academy of Sciences. The Centre will have 10 new project leaders BELGIUM working in both China and the UK. 32 AUSTRIA 7
FRANCE NORWAY 2 58 IRELAND KAZAKHSTAN 2 4 SWEDEN 23 CANADA HUNGARY 6 7 DENMARK 33 ROMANIA 2 KOREA PORTUGAL UK POLAND 7 1 14 1140 CZECK REP 11 UNITED BULGARIA 1 SERBIA 5 STATES TURKEY 3 76 ITALY 5 SLOVAKIA 3 GREECE 2 CHINA 18 SPAIN JAPAN 9 MEXICO 41 ISRAEL 5 7 ETHIOPIA 2 OMAN TAIWAN 8 COLUMBIA 1 THAILAND 2 KENYA 2 1 PAKISTAN INDIA 1 23 Brazil India A major crop in São BRAZIL Grass pea is an insurance Paulo is sugarcane. One 12 obstacle to improving crop in many countries, including India. It is protein- the crop is its complex SOUTH and large genome. JIC AFRICA rich and resilient to drought, research on other plants 2 but contains a toxin that can CHILE cause paralysis if consumed with complex genome, 1 such as wheat, acts in large quantities. AUSTRALIA Researchers at JIC are 9 as a source of ideas to ARGENTINA overcome the challenges 3 collaborating with Indian of sugarcane genetics. institutes to reduce levels of the toxin. NEW ZEALAND 1 Biosciences for Eastern and Central Africa BECA Nitrogen Fixation for Wheat This research programme aims to exploit our knowledge of how peas interact with nitrogen-fixing bacteria to work towards the long-term goal of transferring this capability to cereals. This would dramatically reduce need for fertiliser, increase yields, and improve food security for nearly half a billion people.
ANNUAL REPORT I MARCH 2015 16
LOOKING FORWARD
Mission case to apply for funding opportunities for new JIC’s mission is to generate knowledge of plants research facilities to support this vision. and microbes through innovative research; to apply 4. To scope out 5 year research programmes knowledge to benefit agriculture, the environment, for the 2017-2022 BBSRC Institute Strategic human health and well-being; to train scientists for Programme Grant funding bids. the future; and engage with policy makers and 5. To develop a strategy for diversification the public. of income. 6. To develop further our International Strategy by; Strategy - Recruiting new Project Leaders to work at JIC’s key strategic aims are: the Centre for Excellence of Plant and i. To deliver world-leading research and to develop Microbial Sciences (CEPAMS). opportunities for innovative and long-term - Furthering the agreement with Bioscience for research in plant and microbial sciences. A East and Central Africa (BECA), and central principle of JIC’s research is the use progressing the fundraising campaign for the of genetics, continuing the long and prestigious benefit of Sub-Saharan Africa history of genetics at the JIC. - Progressing the formulation of an EU Strategy ii. To translate research in the areas of yield and Signing a MOU with the Chinese Academy of quality in crop plants, the use of microbial and Agricultural Sciences (CAAS) plant products to promote human health and the 7. To install Phenospex on the NRP to provide use of plants and microbes in biotechnology. a plant phenotyping platform to support JIC iii. To use novel genetic approaches to generate crop science. new varieties and strains of plants and microbes that can be used to further knowledge and to Public benefit enhance productive and biotechnological In reviewing JIC’s aims, objectives and planning capacity. future activities, the Trustees have taken into iv. To apply modern biotechnology to agriculture in account the Charity Commission’s general an environmentally-sustainable context. guidance on public benefit. v. To use a wide range of contemporary The expertise of JIC scientists has made important approaches to develop dialogue with policy contributions to industry and society in the UK makers and the public. and world-wide. These include: the discovery and vi. To train the scientific leaders of the future in a application of conserved gene order in grasses broad range of scientific and transferable skills. for cereal improvement; the characterisation of the dominant dwarfing phenotype that Objectives for 2015/16 underpins improved wheat crop productivity; the JIC’s principal objectives for the year ended 31 understanding and application of flowering time; March 2016 are as follows: contributing to the first sequencing of a plant 1. To continue a world-leading research genome and the development of genomic systems programme by publishing our scientific for exploiting Streptomyces, the principal source of research, winning research funding and anti-infectives for human health. retaining the brightest and the best It has been independently estimated that JIC Project Leaders. research into wheat yield improvements and 2. To further develop the JIC long term science reducing cereal diseases could be worth £8.7bn vision, seeking and reflecting public opinion into per annum at a global level. science strategy. 3. To socialise the ‘JIC Vision – Next Generation (Source: Brookdale Consulting, June 2013) Infrastructure’ ahead of developing a business
ANNUAL REPORT I MARCH 2015 17
FINANCIAL REVIEW
Income Capital expenditure Total incoming resources for the year were £46.3m Capital expenditure in the year was £10.3m (2014: (2014: £40.3m). The increase in the year was due £2.7m). Investment has been made in areas to higher grant income (up £1.5m) and additional related to health and safety compliance, well-found capital funding (up £5.2m). laboratory provision, plant growth facilities, field trials Income excluding capital funds was £33.9m capabilities and strategically important investments (£34.2m), down slightly on the prior year due to in state-of-the-art scientific equipment. lower repairs & maintenance funding (down £1.6m). Investment in field trials research capabilities An analysis of grant income by principal sponsor includes the purchase of land at Church Farm, is included in the notes to the financial statements. Bawburgh from the John Innes Foundation in March JIC’s principal sponsor is the Biotechnology and 2015. This investment secures JIC’s crop research Biological Sciences Research Council (BBSRC), programme for the foreseeable future and provides a which contributed 80% of total incoming platform on which to build JIC’s science and develop resources (2014: 78%). Other major sources new technologies for application in agriculture. of funding were the European Union, charitable organisations and DEFRA. Cash Group cash at March 2015 was £30.7m (2014: Expenditure £32.5m). The reduction in the year reflects the Recurrent expenditure for the year amounted to working capital outflow in the year of £4.8m. £35.9m (2014: £33.2m). Staff costs accounted for JIC deposits its cash with UK registered financial £14.1m (39%) (2014: £12.9m; 39%) of expenditure. institutions that meet its credit rating policy and subject to agreed counter-party limits. Investment Net Movement in Reserves income from cash deposits in the year was JIC recorded a net increase in unrestricted £330,000 (2014: £237,000). reserves of £1.4m (2014: £4.6m). The reduction compared to the prior year was due to lower repairs Reserves position & maintenance funding (down £1.6m), higher staff Total group reserves increased by £12.5m in the costs and lower share of associates’ results. year to £82.2m (2014: £8.5m to £69.7m). Restricted reserves increased by £11.1m (2014: Restricted reserves increased by £11.1m to £58.2m, £3.9m). The increase in restricted reserves is of which £9.5m relates to a designated capital principally due to £11.3m of capital funding reserve in connection with funding received from (2014: £6.1m). BBSRC to be used for agreed future capital projects and insurance income received in advance of Subsidiaries and Related Parties capital purchases. Subsidiary companies contributed a profit of Unrestricted reserves increased by £1.4m in the £63,000 before gift aid payments (2014: £78,000), year to £23.9m (2014: £22.5m), of which £9.1m while JIC’s share of associates’ results was a relates to a designated capital reserve for planned profit of £19,000 (2014:£361,000). The share of capital investments and £6.1m to general reserves. associates’ results in the year relates to JIC’s 33% interest in Plant Bioscience Limited.
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 18
Reserves policy JIC’s reserves are held to support financial solvency, manage uncertainty and fund future activities. The level of reserves required by JIC is therefore determined by reference to: Future operational and capital expenditure requirements in the 5-year Business Plan; Potential financial risks identified in the Business Plan and Risk Register; Potential funding required for strategic investments not included in the Business Plan; Working capital / liquidity requirements. Unrestricted reserves that have been designated by the Governing Council for specific purposes are shown in separate designated reserves. As at March 2015, £9.1m of unrestricted reserves have been designated in relation to planned capital investment in the 5-year Business Plan. General unrestricted reserves at March 2015 were £6.1m, in line with the minimum general reserves target of £6.0m set by the Trustees.
Key Performance Indicators JIC’s key performance indicators are: publications in high impact /relevant scientific journals submission levels and success rates for research grant proposals annual research income unrestricted reserves
Grant proposals During the year, JIC researchers submitted grant proposals with a sponsor value of £48.2m (2014: £46.4m) and were awarded grants with a value of £16.1m (2014: £13.0m).
Going Concern In light of the continued pressure on public sector funding, the Governors have reviewed whether it is still appropriate for the financial statements to be prepared on a going concern basis. Having considered financial forecasts for the period to March 2020, supported by confirmation from BBSRC of the level of strategic funding to March 2016, the Governors have concluded that it remains appropriate to prepare the financial statements on a going concern basis.
ANNUAL REPORT I MARCH 2015 19
RISK ASSESSMENT AND MANAGEMENT
The Governing Council is responsible for ensuring there are effective and adequate risk management and internal control systems in place to manage the major risks to which the Charity is exposed. The Audit Committee agrees an annual risk-based internal audit plan which covers major risks identified by management and Trustees. It receives reports from internal auditors on the effectiveness of internal controls, progress against the internal audit plan and progress on recommendations made in reports. The Governing Council reviews a full risk report annually, including a ‘heat map’ tracking major risks. The Science and Impact Advisory Board (SIAB) also assess the science quality and vision section of the risk register.
Principal risks and uncertainties
Risk area Description of Risk Management of Risk Future BBSRC research BBSRC strategic funding is reduced as a result Regular monitoring of scientific performance, funding of poor performance or public sector spending including consideration from the Science and pressures. Impact Advisory Board. Regular communication with BBSRC to report performance and ensure strategic alignment of research programmes. Monitoring of performance of competitive grant submissions. Discussion at annual SIAB meetings.
Staff retention and JIC is unable to retain or attract suitably Strategy and action plans in place, monitored by recruitment skilled staff to enable it to sustain its scientific Strategic Human Resources Group. performance. Career development programmes in place to In addition to scientific impact, this risk area support high potential staff. could also have an impact on the level of Performance Management processes in place. funding the institute is able to attract. Recruitment strategy and processes in place, including attractive support arrangements.
Estates JIC’s ageing estate facilities do not adequately 10-year Estates Strategy in place. support the delivery of its scientific objectives. 5-year Business Plan includes significant Funding is inadequate to sustain and improve expenditure on Estates to support Estates Strategy. facilities necessary to support scientific Regular communication with BBSRC on Estates objectives. Strategy and potential funding requirements. Estates maintenance and infrastructure costs Facilities management systems are being are too high, threatening long-term financial enhanced. sustainability and the competitiveness of Energy usage data is being enhanced and an JIC’s science. energy efficiency plan being implemented.
Technology investment JIC is unable to keep pace with developments Long term Technology Strategy being developed. in technology underpinning its science. Funding opportunities identified and pursued for Funding is inadequate to sustain and improve technology investments. technology facilities necessary to support NRP technology facilities group established to scientific objectives. enhance sharing and utilisation of capabilities.
Compliance with sponsor JIC fails to comply with sponsor grant JIC is subject to regular reviews of its grant funding requirements requirements resulting in a material financial compliance processes from sponsors and the impact. Research Councils UK internal auditors.
Major site incident A major incident disrupts scientific research Disaster recovery plans in place and tested programmes or administrative systems. periodically. Review of compliance with health & safety and relevant regulations from government agencies and internal auditors. Appropriate insurance arrangements in place.
ANNUAL REPORT I MARCH 2015 20 TRUSTEES’ REPORT INTERNATIONAL ORIGINS OF JIC STAFF
84 147 EUROPE 52 UK ASIA 10 NORTH 3 AMERICA AFRICA
2 SOUTH AMERICA 5 AUSTRALASIA
LANGUAGES SPOKEN ONSITE 21BY JIC STAFF
Snapshot figures reflecting those 303 staff who declared their country of origin, excluding visiting workers 21
STRUCTURE, GOVERNANCE AND MANAGEMENT
Members Organisation and governance The Members of JIC are: JIC is a company limited by guarantee (registered Biotechnology and Biological Sciences number 00511709) and a registered charity (number Research Council (“BBSRC”); 223852). JIC is governed by its Memorandum and John Innes Foundation (“JIF”); and Articles of Association, adopted 27 September 2011, University of East Anglia (“UEA”). and its Institute Grant Agreement with BBSRC by whom it is strategically funded. The Members each have the right to nominate one Governing Council member and appoint one “observer” to attend Governing Council meetings. Governing Council Details of member appointments are provided in the The Governing Council comprises of at least the table below. Chair, three science and three non-science Trustees. The Members are all guarantors of JIC, a company The Trustees who served during the year and up to limited by guarantee and a registered charity, of the date of signing these financial statements were an amount not exceeding £1, and for a year after as follows: resignation.
Trustees Appointment status Role Changes during period At date of Annual Report: Mr S L Holmes Independent Chair - Prof H G Dickinson Independent Science - Prof P M Gilmartin UEA appointment Science - Prof I A Graham Independent Science - Mr K R Norman JIF appointment Non-science - Mr D R White Independent Non-science - Dr D J Keith Independent Science Appointed on 12 May 2015 Mr R J Maskell Independent Non-science Appointed on 22 July 2015 Served during the year: Sir A B N Gill CBE JIF appointment Non-science Died on 8 May 2014
Governing Council development of new scientific funding The Governing Council has the ultimate responsibility opportunities to support the development of the for the strategy of JIC. Strategy is developed under JIC Science Programmes. advice from SIAB and the JIC Strategy Committee. Recruitment, induction and training of Governors The Governing Council is supported by an Audit Committee to oversee financial management and Governing Council vacancies are advertised risk and a Remuneration Committee to consider as necessary. The Institute will also approach senior staff remuneration. The full Governing individuals thought to have the right skills. Council meets five times a year, the Audit Committee New Governing Council members are invited to twice a year and the Remuneration Committee at spend time with members of the Executive Team. least once a year and otherwise as required. This is a chance to learn about the Institute and The Governing Council is also supported by identify opportunities to become more involved the Science and Impact Advisory Board which with JIC’s work. comprises international experts in science and In addition to the five formal meetings, all Governors application of science, chaired by Prof Ian Graham. receive regular presentations from JIC’s scientists The Science and Impact Advisory Board is and briefings on key issues facing the organisation. responsible for providing strategic and scientific Trustee remuneration advice to the Director of JIC and the Governing None of the Governors received any remuneration in Council on issues relevant to the JIC’s Mission and the year in respect of their role as trustee directors. Science Programme. This includes ensuring that the During the year, Prof Ian Graham, a Governor of JIC, JIC Science Programme maximises JIC’s potential received £5,000 (2014: £5,000) as chair of JIC’s for knowledge transfer, outreach and engagement Science and Impact Advisory Board. with research users, stakeholders and the general public in addition to helping in the identification and
ANNUAL REPORT I MARCH 2015 22
Decision making BBSRC Deployed Employees The Trustees delegate management of the day All staff employed by JIC on 1 October 2011 (“the to day activities of the charitable company to the Deployed Employees”) became BBSRC employees Director of the Institute, Professor Dale Sanders, and and were deployed back to the Institute on 1 the executive Strategy Committee. December 2011 under conditions set out in the Deployment Agreement. The employees were Strategy Committee previously employed by JIC and subject to BBSRC JIC’s executive Strategy Committee advises the terms and conditions. The agreement ensures that Director at strategic and operational levels on JIC staff affected by this change remain with the major issues that affect the Institute with respect to Institute on an exclusive and full-time basis and that research, appointments, new initiatives, business day-to-day direction and line management of the plan and infrastructure, particularly where such Deployed Employees are delegated to JIC, subject issues involve more than one of these areas. to the terms of the BBSRC Employment Contract. Its membership is as follows: JIC retains responsibility for paying employment Director (Chair); costs in relation to the Deployed Employees, Institute Strategic Programme Leaders; including basic pay and allowances, contractual Heads of Department Representative; payments, tax, Nl and pension contributions. Finance Director; JIC does not have any liability for pensions for Head of HR; the Deployed Employees other than for monthly Head of Facilities and Risk Management; employer contributions, the rate of which are Head of Contracts; determined by the Government Actuary’s Knowledge Exchange & Department on a periodic basis. Commercialisation Director; External Relations Director; Institute Employees Science Operations Manager; JIC has recruited all new staff from October 2011 Head of Directorate; on its own terms and conditions, covering basic pay Faculty Representative Project Leader. and allowances, contractual payments, tax, Nl, and liabilities for pension contributions and redundancy. Strategy Committee is supported by a number of other executive committees and groups including: Equality and Diversity Research Committee; Finance Committee; Heads of It is the Charity’s policy to provide equal Departments Committee; KEC Committee; External opportunities to job applicants and employees Relations Steering Group; Strategic HR Committee; of any race, nationality, ethnic origin, marital Equality & Diversity Committee; and Health & status, religion or belief, gender, disability, sexual Safety Committee. orientation, age or employment status. The Employees Charity does not condone or tolerate any form of discrimination in its recruitment or employment JIC is a dynamic, multinational community of about practices. All employees and applicants are treated 400 scientists and post graduate students. JIC’s on merit, fairly, with respect and dignity, recognised reputation for scientific excellence is international as individuals and valued for the contribution they and it attracts some of the best scientists and make, provided fair and equal access to training, brightest students internationally. JIC is committed development, reward and progression opportunities to the training of the next generation of scientists. and are accountable for the impact of their own Activities include an undergraduate summer behaviour and actions. All the Charity’s policies school (jointly with The Sainsbury Laboratory and follow these principles. The Genome Analysis Centre) that gives students the unique opportunity to spend the summer on JIC is aware of its statutory duty to support the site. There are two different routes to a PhD: the employment of disabled persons where possible, prestigious rotation studentships and the NRP both in recruitment and by retention of employees Doctoral Training Programme. We host Post- who become disabled whilst in the employment of Doctoral scientists and independent Fellows from the charitable company, as well as generally through around the world. training and career development.
ANNUAL REPORT I MARCH 2015 23
In 2014, JIC became the first research institute to infrastructure and technology investments. The be awarded a ‘Silver’ Athena SWAN award and principal terms and conditions under which BBSRC became one of just five institutional Silver Award provides its funding is set out in the Institute Grant holders. The Athena SWAN charter recognises Agreement. Key conditions include: and celebrates good practice in recruiting, retaining BBSRC and the Institute shall meet at least and promoting women in science, technology, annually to review and discuss the engineering, maths and medicine (STEMM) in implementation and progress of the Institute’s higher education. business, including strategic and financial plans. This award recognises JIC’s culture that embraces The Institute shall submit a draft Business the principles of flexibility that provide for family- Plan, covering a period of at least five years, friendly working practices, while at the same for discussion. time demonstrating a commitment to career The Institute will demonstrate appropriate plans advancement for all employees. JIC’s ability for the maintenance, renewal and development to attract the best researchers and students of the estate through a rolling 10 year Institute internationally creates a vibrant, dynamic and Estates Strategy covering capital projects, long intellectually nurturing environment for both training term and routine maintenance. and scientific discovery and is a primary driver of our scientific effectiveness. JIC recognises the John Innes Foundation value of a diverse workforce and, although Athena The John Innes Foundation (“JIF”) is a member of SWAN is focused on gender equality, we believe the charitable company. JIC occupies land and that a fair and equitable working environment is key buildings which are owned by JIF, with the principal to both a productive workforce and delivery of JIC research buildings leased at a peppercorn rent. In strategy, and that initiatives put in place to address addition, JIF also sponsors the training of a number gender inequality ultimately benefit all staff. of students. Studentship grants in the year were During the year, regular communications to £332,000 (2014: £345,000). Further details are employees have been provided on matters affecting provided in note 22 to the financial statements. them, including factors affecting the Charity’s progress, and they have been consulted on Plant Bioscience Limited decisions affecting them. JIC owns one third of the share capital of Plant Bioscience Limited (“PBL”). PBL manages the Related Parties intellectual property rights of the charitable Subsidiaries company and other organisations. JIC’s subsidiaries in the year were as follows: NBI Partnership Limited John Innes Enterprises Limited JIC has a 25% interest in NBI Partnership Limited (contract research); (“NBIP”). NBIP supplies support and administrative Norwich Biosciences Limited (intellectual services to JIC and the three other research property management); organisations based on the Norwich Research Norwich Research Limited (dormant); Park (The Institute of Food Research, The Genome JIC NRP Capital Limited (dormant); Analysis Centre and The Sainsbury Laboratory). IDNA Genetics Limited (contract research). Norwich Research Partners LLP During the year, JIC disposed of its 61% holding in JIC became a member of Norwich Research IDNA Genetics Limited. Further details are provided Partners LLP on 7 August 2012 through its 100% in note 11 to the financial statements. subsidiary, JIC NRP Capital Limited. JIC is entitled to receive a share of certain profits generated by BBSRC NRP LLP, however it has no liability for losses or in BBSRC is a member of the charitable company. the event of insolvency. NRP LLP has not yet JIC is strategically funded, along with seven other generated any profits. institutes, by BBSRC. BBSRC supports JIC via strategic 5-year funding programmes, competitively won project grants and capital funding for
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 24
STATEMENT OF GOVERNORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The Governors (who are also directors of JIC for The Governors confirm that: the purposes of company law) are responsible for so far as each governor is aware, there is no preparing the Governors’ Annual Report and the relevant audit information of which the charitable financial statements in accordance with applicable company’s auditor is unaware; and law and regulations. the Governors have taken all steps that they Company law requires the Governors to prepare ought to have taken as governors in order financial statements for each financial year. Under to make themselves aware of any relevant audit that law the Governors have elected to prepare information and to establish that the charitable the financial statements in accordance with United company’s auditor is aware of that information. Kingdom Generally Accepted Accounting Practice The governors are responsible for the maintenance (United Kingdom Accounting Standards and and integrity of the corporate and financial applicable laws). Under company law the Governors information included on the charitable company’s must not approve the financial statements unless website. Legislation in the United Kingdom they are satisfied that they give a true and fair view governing the preparation and dissemination of of the state of affairs of the charitable company financial statements may differ from legislation in and the group and of the incoming resources and other jurisdictions. application of resources, including the income and expenditure, of the charitable group for that Insurance disclosure period. In preparing these financial statements, the Governors are required to: The Institute maintains liability insurance for its trustees, with an annual aggregate cover limit for all select suitable accounting policies and then claims against them in that capacity. The trustees apply them consistently; have also been granted a qualifying third party observe the methods and principles in the provision under section 233 of Companies Act Charities SORP; 2006. Neither the Institute’s indemnity nor insurance make judgements and accounting estimates provides cover in the event that a trustee is proved that are reasonable and prudent; to have acted fraudulently or dishonestly. state whether applicable UK Accounting Standards have been followed, subject to any Public benefit material departures disclosed and explained in The Governors are satisfied they have complied the financial statements; and with their duty in section 4 of the Charities Act prepare the financial statements on the going 2011 to have due regard to public benefit guidance concern basis unless it is inappropriate to published by the Charities Commission. Based on presume that the charitable group will continue this guidance, and as described in this Governors’ in business. report, the Governors believe the activities of JIC to The Governors are responsible for keeping be charitable in nature. adequate accounting records that are sufficient to show and explain the charitable company’s Independent auditor transactions and disclose with reasonable accuracy Grant Thornton UK LLP have been appointed as at any time the financial position of the company auditor and a resolution has been passed by the and enable them to ensure that the financial Board, concerning their appointment as auditors. statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for On behalf of the Governing Council taking reasonable steps for the prevention and Stuart Holmes, Chairman detection of fraud and other irregularities. 9 November 2015
ANNUAL REPORT I MARCH 2015 Independent auditor’s report 25
TO THE MEMBERS OF JOHN INNES CENTRE
We have audited the financial statements of John Opinion on financial statements Innes Centre for the year ended 31 March 2015 In our opinion the financial statements: which comprise the consolidated statement give a true and fair view of the state of the of financial activities, the note of consolidated group’s and the parent charitable company’s operating surplus on a historical cost basis, the affairs as at 31 March 2015 and of the group’s consolidated and charitable company balance incoming resources and application of sheets, the consolidated cash flow statement and resources, including its income and expenditure, the related notes. The financial reporting framework for the year then ended; that has been applied in their preparation is applicable law and United Kingdom Accounting have been properly prepared in accordance Standards (United Kingdom Generally Accepted with United Kingdom Generally Accepted Accounting Practice). Accounting Practice; and This report is made solely to the charitable have been prepared in accordance with the company’s members, as a body, in accordance with requirements of the Companies Act 2006. Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we Opinion on other matters prescribed might state to the charitable company’s members by the Companies Act 2006 those matters we are required to state to them in In our opinion the information given in the Strategic an auditor’s report and for no other purpose. To the Report and Trustees’ Report for the financial year fullest extent permitted by law, we do not accept for which the financial statements are prepared is or assume responsibility to anyone other than the consistent with the financial statements. charitable company and its members as a body, for our audit work, for this report, or for the opinions we have formed. Matters on which we are required to report by exception Respective responsibilities of We have nothing to report in respect of the following Governors and auditors matters where the Companies Act 2006 requires us to report to you if, in our opinion: As explained more fully in the Statement of Governors’ responsibilities set out on page 24 adequate accounting records have not been the Governors (who are also the directors of the kept by the parent charitable company, or charitable company for the purposes of company returns adequate for our audit have not been law) are responsible for the preparation of the received from branches not visited by us; or financial statements and for being satisfied that they the parent charitable company financial give a true and fair view. statements are not in agreement with the Our responsibility is to audit and express an opinion accounting records or returns; or on the financial statements in accordance with certain disclosures of Governors’ remuneration applicable law and International Standards on specified by law are not made; or Auditing (UK and Ireland). Those standards require we have not received all the information and us to comply with the Auditing Practices Board’s explanations we require for our audit. (APB’s) Ethical Standards for Auditors.
Anders Rasmussen Scope of the audit of the financial Senior Statutory Auditor statements for and on behalf of Grant Thornton UK LLP A description of the scope of an audit of financial Statutory Auditor, Chartered Accountants statements is provided on the Financial Reporting Norwich Council’s website at 9 November 2015 www.frc.org.uk/auditscopeukprivate.
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 26 FINANCIAL STATEMENTS
HIGH IMPACT SCIENCE In the 2014 - 2015 financial year JIC scientists published
peer-reviewed 88 articles,with
18appearing in Nature, Cell, PNAS, PLOS ONE and Current Biology
ANNUAL REPORT I MARCH 2015 27
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2015
Incorporating an income and expenditure account
ANNUAL REPORT I MARCH 2015 28
NOTE OF CONSOLIDATED OPERATING SURPLUS ON A HISTORICAL COST BASIS FOR THE YEAR ENDED 31 MARCH 2015
ANNUAL REPORT I MARCH 2015 29
CONSOLIDATED AND CHARITABLE COMPANY BALANCE SHEETS AS AT 31 MARCH 2015
JIC includes in its financial statements leasehold land and buildings owned by third parties, that it occupies and enjoys through extended peppercorn leases, at their full value. The Governors consider that in substance, the risks and rewards of ownership of the assets have passed to the Institute, and as such a policy of recognising the assets on the balance sheet reflects its continuing occupancy of these assets for the foreseeable future. The financial statements on pages 27 to 45 were approved by the Governing Council on 9 November 2015 and were signed on its behalf by:
Stuart Holmes, Chairman Company registration number: 00511709
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 30
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2015
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS FOR THE YEAR ENDED 31 MARCH 2015
ANNUAL REPORT I MARCH 2015 NOTES FOR 31 ACCOUNTS
JIC BUSINESS COLLABORATIONS
INDUSTRIAL PHARMACEUTICAL AGRI-TECH BIOTECH BIOTECH AND FOOD 16 18 52
MARINE BIOTECH PLANT SCIENTIFIC AND AQUACULTURE BREEDING SERVICES 1 17 10
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 32 Notes to the accounts
1. ACCOUNTING POLICIES
a. Basis of preparation academic institutions and other services. Revenue is The group financial statements have been prepared under recognised in the year in which the obligation is fulfilled. the historical cost convention subject to the revaluation of Trading income, which includes rent, other letting income land and buildings and applicable accounting standards. and other income, relates to the non-charitable services They have also been prepared in accordance with the undertaken by Norwich Biosciences Limited, JIC NRP Statement of Recommended Practice: Accounting and Capital Limited (formerly Norwich Innovation Centre Reporting by Charities (“SORP 2005”) issued in March Limited), IDNA Genetics Limited and John Innes 2005, applicable United Kingdom accounting standards, Enterprises Limited, subsidiary companies of JIC, and the Charities Act 2011 and the Companies Act 2006. is recognised in accordance with the terms of the contracts The principal accounting policies adopted in these entered into, reflecting the point at which the obligations of financial statements, which have been consistently applied, the companies have been satisfied. are as follows: Capital grants are recognised in the consolidated statement of financial activities (“SoFA”) when b. Basis of consolidation entitlement passes. The consolidated financial statements incorporate the financial statements of JIC and all its subsidiary e. Resources expended undertakings in accordance with Financial Reporting Charitable activity expenditure represents the full cost of Standard (“FRS”) 2 “Accounting for Subsidiary the research performed. It includes the cost of direct staff, Undertakings”, and associated entities which are consumable stocks and indirect costs apportioned on the accounted for using the equity method. basis of use. Associates are entities over which JIC has significant Cost of generating funds represents the cost of obtaining influence but not control. Under the equity method, the funds for research. The cost of obtaining funds includes investment is initially recognised at cost, and the carrying an estimate of the time/salary cost of project leaders amount is increased or decreased to recognise JIC’s share preparing and reviewing grant application forms. of the profit or loss of the associate after the date Governance costs represent the necessary cost of of acquisition. JIC’s share of post-acquisition operating compliance with statutory and constitutional requirements result is recognised in the statement of financial activities. and any other costs which are not direct charitable Determination is made at each balance sheet date whether expenditure. there is any evidence that the investment in the associate Support costs have been allocated to charitable activity is impaired. If this is the case, the amount of impairment is expenditure, costs of generating funds and governance calculated as the difference between the recoverable costs based upon activity or headcount as indicated in amount of the associate and its carrying value, and this note 4 to the financial statements. amount is recognised adjacent to share of operating result of associates in the statement of financial activities. Other resources expended relate to expenditure maintaining capital assets that does not meet the The financial statements of all group undertakings and capitalisation policy. associates are made up to 31 March 2015. Trading expenditure relates to the costs of undertaking the A separate income and expenditure account has not non-charitable services performed by subsidiary been presented for JIC as this is exempted by Section 408 companies of JIC, and is recognised in the period in which of the Companies Act 2006. The surplus of JIC was it is incurred. £12,451,000 (2014: £8,027,000). f. Restricted funds c. Going concern Where research at JIC is funded by grants with conditions In light of the continued pressure on public sector funding, attached to them, these are shown as restricted. Capital the Trustees have reviewed whether it was still appropriate grants received and receivable together with other for the financial statements to be prepared on a going restricted funds received and receivable and used to concern basis. Having considered financial forecasts purchase tangible assets are included within for the period to March 2020, and the level of unrestricted restricted funds. reserves, the Trustees have concluded that it remains A restricted fixed assets reserve has been established appropriate to prepare the financial statements on a going representing the net book value of fixed assets purchased concern basis. from capital grants. d. Incoming resources Restricted reserves include a designated capital Charitable grant income represents grants received and reserve of £9,474,000 (2014: £4,350,000) in connection receivable in the year from outside granting bodies. with funding received from BBSRC, which is to be used Grants that provide core funding are recognised in the year on future capital projects to be agreed with BBSRC, and in which entitlement passes. Grant funding received to insurance income received in advance of capital train students and undertake research is recognised purchases. in the year in which the obligation is fulfilled. Grant g. Unrestricted funds funding is released to match expenditure incurred during Research grants that do not contain conditions for the the year together with any related contributions towards final receipt of funds have been treated as unrestricted. overhead costs. Funds received for non-specified purposes have also been Other charitable income represents non-grant revenue included as unrestricted. from providing scientific research services to other
ANNUAL REPORT I MARCH 2015 33
A fixed assets reserve has been established within m. Debtors unrestricted reserves representing the net book value of Debtors are non-interest bearing and are stated at their fixed assets funded from unrestricted reserves. nominal value, as reduced by appropriate allowances for Unrestricted reserves that have been designated by the estimated irrecoverable amounts. Governing Council for specific purposes are shown in n. Cash balances held as grant co-ordinator separate designated reserves. Cash balances held on behalf of the European Union in h. Capital transfers the charitable company’s capacity as grant co-ordinator A transfer from restricted to unrestricted reserves equal to are included within cash on the charitable company’s the depreciation charge for assets purchased from balance sheet, and are disclosed in note 23 to the financial unrestricted reserves is made as a capital transfer. statements.
i. Tangible assets and depreciation o. Trade creditors Tangible assets are shown at cost or valuation less Trade creditors are non-interest bearing and are stated at accumulated depreciation. The cost of tangible assets their nominal value. is their purchase cost, together with any incidental costs p. Loans of acquisition. Depreciation is calculated using the straight Loans are stated on the balance sheet at amortised cost. line method to write off the cost or valuation of assets, less any estimated residual value, over their estimated useful q. Provisions lives at the following rates: A provision is recognised in the financial statements where Leasehold land and buildings - over lease term or useful there is a legal or constructive obligation to transfer life, if shorter; economic benefit to a third party. Plant, machinery and equipment –estimated economic life; Scientific equipment - 5 to 15 years straight line; r. Staff and Pensions Computer equipment - 3 years straight line; All staff employed by JIC on 1 October 2011 were Motor vehicles - 4 years straight line; transferred to BBSRC on that date were deployed back Combined heat and power scheme - 20 years straight line. to the Institute under conditions set out in the “Agreement The leasehold buildings have been depreciated over their for the deployment of staff employed by the BBSRC” estimated economic life. The Governors have determined dated 1 December 2011. The employees were previously that land is not subject to depreciation. Assets in the employed by JIC and subject to BBSRC terms and course of construction are not depreciated until the asset conditions. The agreement ensures that JIC staff affected is in full use. by this change remain with the Institute on an exclusive and full-time basis and that day-to-day direction and line JIC includes in its financial statements leasehold land and management of the Deployed Employees are delegated buildings owned by third parties, which it occupies and to JIC, subject to the terms of the BBSRC Employment enjoys through extended peppercorn leases, at their full Contract. JIC retains responsibility for paying employment value. The Governors consider that in substance, the risks costs in relation to the Deployed Employees, including and rewards of ownership of the assets have passed to the basic pay and allowances, contractual payments, tax, Nl Institute, and as such follow a policy of recognising the and pension contributions. Deployed employees are assets on the balance sheet reflects its continuing members of the Research Councils’ Pension Scheme, occupancy of these assets for the foreseeable future. a defined benefit scheme for multiple employers. JIC does not have any liability for pensions other than j. Revaluation of tangible fixed assets for monthly employer contributions, the rate of which is Leasehold land and buildings are revalued by an external determined by the Government Actuary’s Department on a surveyor on a depreciated replacement cost basis every periodic basis. five years. The valuation is updated in the interim period using indexation tables. Gains on revaluation are credited JIC staff who joined after 1 October 2011 are eligible to to the revaluation reserve. Losses, except in cases of join a defined contribution scheme. a clear consumption of economic benefit, are charged to the operating result for the period, to the extent they are not s. Operating leases offset by previous gains. In cases of a clear consumption Rental costs are charged to the statement of financial of economic benefit, losses are charged to unrestricted activities on a straight line basis over the life of the lease. reserves, irrespective of whether they are offset by t. Foreign currency transactions previous gains. Transactions in foreign currencies are recorded at the rate k. Fixed asset investments of exchange ruling at the date of the transaction. Assets The consolidated balance sheet includes the group’s share and liabilities denominated in foreign currencies are of each associate’s gross assets and liabilities. The share translated at year end exchange rates. All gains and losses of each associate’s net income is reported in JIC’s are taken to the statement of financial activities in the year consolidated statement of financial activities. to which they relate.
l. Stocks u. Financial instruments Stocks are stated at the lower of cost and net realisable Financial assets and financial liabilities are recognised value. Provision is made, where necessary, for slow moving upon becoming a party to the contractual provisions of or obsolete stock. the instrument.
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 34 Notes to the accounts
2. ANALYSIS OF INCOMING RESOURCES
ANNUAL REPORT I MARCH 2015 35
3. ANALYSIS OF RESOURCES EXPENDED
4. ALLOCATION OF SUPPORT COSTS
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 36 Notes to the accounts
5. TAXATION
John Innes Centre (“JIC”) is an exempt charity within the meaning of the Charities Act 2011 and as such is a charity within the meaning of section 506(1) of the Income and Corporation Taxes Act 1988 and is not subject to corporation tax in respect of its charitable activities. The trading activities of the subsidiary companies are subject to corporation tax; however sufficient brought forward losses are available to offset any taxable profits of the year. As such the consolidated corporation tax charge for the period is £nil (2014: £nil). Unutilised losses of £79,000 (2014: £133,000) have been carried forward within the subsidiary companies for offset against future taxable profits. A deferred tax asset has not been recognised due to uncertainty over utilisation of these losses.
6. OPERATING SURPLUS Operating surplus is stated after charging:
7. NET INCOME FROM TRADING ACTIVITIES OF SUBSIDIARIES
Administrative expenses include £48,845 (2014: £46,561) in relation to Gift Aid payments to the charitable company. The charitable company has committed to provide financial support to John Innes Enterprises Limited (“JIE”) and Norwich Biosciences Limited (“NBL”), and not demand repayment of amounts due to it, in order to enable JIE and NBL to meet their liabilities as they fall due. Support is to be provided only to the extent that money is not otherwise available to the company to meet such liabilities for a period of at least 12 months from the signing of the financial statements of JIE and NBL for the year ended 31 March 2015. * Norwich Innovation Centre Limited changed its name to JIC NRP Capital Limited on 13 May 2014.
ANNUAL REPORT I MARCH 2015 37
8. REMUNERATION OF MEMBERS OF THE GOVERNING COUNCIL
None of the members of the Governing Council received any remuneration from the group during the current or prior year for their duties as Governors. During the year, Professor I A Graham, a Governor of JIC, received £5,000 (2014: £5,000) as chair of JIC’s Science Impact Advisory Board (“SIAB”). Attendance expenses incurred by 5 (2014: 6) Governors whilst carrying out their duties amounted to £2,572 during the year (2014: £5,940).
9. EMPLOYEE INFORMATION The monthly average number of persons employed by or deployed to the group and charitable company during the year, analysed by category, was as follows:
The number of staff with emoluments greater than £60,000 who were also members of the Research Councils’ Pension Schemes was 21 (2014: 21). Five staff (2014: two) with emoluments greater than £60,000 are members of a defined contribution pension scheme. Staff that joined prior to 1 October 2011 are subject to BBSRC terms and conditions of service. JIC is expected to meet all staff costs arising from normal activities, however the legal liability for employment rests with BBSRC. Staff that joined after 1 October 2011 are employed under JIC terms & conditions. The Director of the Institute, Prof D Sanders, received total emoluments of £184,900 (2014: £171,600) including contributions to the Research Councils’ pension scheme which amounted to £36,800 (2014: £34,100).
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 38 Notes to the accounts
10. TANGIBLE ASSETS
Assets under construction represent capital items which are not yet in full economic use. JIC includes in its financial statements land and buildings owned by third parties, which it occupies and enjoys through extended peppercorn leases, at their full value. The Governors consider that in substance, the risks and rewards of ownership of the assets have passed to the Institute, and as such a policy of recognising the assets on the balance sheet reflects its continuing occupancy of these assets for the foreseeable future. The group and charitable company’s leasehold land and buildings were revalued by an external surveyor (Powis Hughes Chartered Surveyors, RICS) on a depreciated replacement cost basis at 31 March 2011. This valuation has been updated to 31 March 2015 using indexation tables. Leasehold land and buildings on an historical cost basis would be recorded at a net book value of £38,383,000 (2014: £37,364,000). All of the charitable company’s assets at 31 March 2015 are used for direct charitable purposes.
ANNUAL REPORT I MARCH 2015 39
11. INVESTMENTS
Subsidiaries The following are the operating subsidiary undertakings in which the charitable company has an interest:
At 31 March 2014, the charitable company had a direct holding of 61% of the ordinary share capital and a further indirect interest of 13% through Plant Bioscience Limited. The company disposed of its interest in the share capital of IDNA Genetics Limited on 15 May 2014. The charitable company’s investment in subsidiary undertakings at cost amounts to £1,248 (2014: £183,305) and accumulated impairment of £243 (2014: £141,216) has been recognised against cost. The movement in the value of investments during the year was as follows:
Associates The charitable company has an investment in Plant Bioscience Limited (“PBL”), a company registered in England and Wales, representing 33% (2014: 33%) of the ordinary £1 issued share capital. Plant Bioscience Limited manages the intellectual property rights of the charitable company and other organisations. This company is deemed to be an associate of the group and has therefore been included in the consolidated financial statements on that basis.
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 40
11. INVESTMENTS (CONTINUED)
12. STOCKS
There is no material difference between the valuation of stock and its replacement cost.
13. DEBTORS
Grants receivable from government bodies includes £3,959,000 in relation to capital funding receivable from BBSRC (2014: £870,000). The 2014 balances have been restated to move £889,000 owed by BBSRC in relation to grants receivable from amounts owed by related parties to grants receivable from government bodies.
ANNUAL REPORT I MARCH 2015 41
14. CASH AT BANK AND IN HAND
15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
16. RECONCILIATION OF MOVEMENT IN GRANTS RECEIVABLE
17. PROVISIONS FOR LIABILITIES AND CHARGES
The restructuring provision relates to future compensation payments due under the redundancy scheme in connection with the restructuring of science programmes and the administration and support functions. Although the restructuring provision has not been discounted, it is stated at the present value of future amounts payable since inflationary increases linked to the redundancy settlements have similarly been excluded from the provision. The provision will be utilised over the period to March 2017.
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 42
18. ANALYSIS OF NET ASSETS BETWEEN FUNDS
The unrestricted fixed assets reserve relates to the net book value of fixed assets purchased from unrestricted funds. The restricted fixed assets reserve relates to the net book value of fixed assets purchased from capital grants. The designated capital reserves are not endowment funds. The unrestricted designated capital reserve relates to funds designated by Governing Council for use in relation to planned capital investments in the financial projections to March 2020. The restricted designated capital reserve relates to funding received from BBSRC to be used in connection with future estates rebuild costs with the agreement of BBSRC and insurance proceeds received in advance of purchases.
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19. ANALYSIS OF FUNDS MOVEMENT
Where research at JIC is funded by grants with performance conditions attached to them these are shown in the Restricted general fund. When the conditions have been met the remaining contribution to core funding is transferred to general reserves, shown in other transfers above. Capital transfers relate to fund movements in connection with fixed assets and depreciation; ensuring assets are appropriately reflected in separate reserves. The revalue depreciation transfers have been made to reflect differences in the historical cost and revalued depreciation costs. The unrestricted designated capital transfer relates to funds designated by Governing Council for use in relation to planned capital investments in the financial projections to March 2020. The restricted designated capital transfer relates to funding received from BBSRC to be used in connection with future estates rebuild costs with the agreement of BBSRC and insurance proceeds received in advance of purchases.
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20. COMMITMENTS
21. PENSION SCHEMES Details of the company pension schemes are provided in note 1 r. Staff and Pensions. The total pension charge for the year was £2,035,128 (2014:£1,995,202), with outstanding contributions at the year- end of £52,983 (2014: £29,108).
22. RELATED PARTY TRANSACTIONS The charitable company has taken advantage of the exemption under FRS8, not to disclose transactions and balances with its wholly owned subsidiaries BBSRC JIC is strategically funded by BBSRC. During the year, BBSRC charged JIC £187,034 (2014: £182,806) in respect of Wakeham Efficiency costs. Grants received from BBSRC are detailed in note 2. At 31 March 2015, BBSRC owed JIC £6,694,575 (2014: £889,035). During the year BBSRC paid JIC £nil (2014: £33,364) compensation for redundancy and salary costs incurred in restructuring. BBSRC also paid £nil (2014: £144,836) of redundancy related payments on behalf of JIC in connection with the science restructuring programme, which were then recharged to JIC. At 31 March 2015 JIC owed BBSRC £308,665 (2014: £nil). Plant Bioscience Limited PBL is 33% directly owned by JIC. PBL has been accounted for as an associate within the consolidated financial statements. Services provided to JIC by PBL in the year to 31 March 2015 amounted to £4,579 (2014: £3,297). During the year, PBL paid JIC £33,260 (2014: £32,464) in rent and £36,234 (2014: £36,281) in student sponsorship and research grants. At 31 March 2015, PBL owed JIC £12,900 (2014: £10,191).
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22. RELATED PARTY TRANSACTIONS (continued)
NBI Partnership Limited JIC is one of the four guarantors of NBI Partnership Ltd (“NBIP”), a company limited by guarantee. JIC has provided short-term loans to NBIP to enable NBIP to manage its cash requirements. At 31 March 2015, JIC had a loan balance with NBIP of £327,000 (2014: £265,000). JIC was charged £4,199,756 (2014: £3,657,301) for services by NBIP under a cost sharing agreement. As at 31 March 2015, JIC owed NBIP £497,529 (2014: £379,388). NBIP paid JIC £109,737 (2014: £94,544) for services and, as at 31 March 2015, NBIP owed JIC £18,795 (2014: £23,105). University of East Anglia UEA is a member of the charitable company and it nominates one Governor to the Governing Council. The majority of PhD students carrying out research at JIC are registered with UEA. During the year UEA provided student services of £814,457 (2014: £583,653) and other services amounting to £189,407 (2014: £80,587) to JIC. At 31 March 2015, JIC owed UEA £641,920 for student fees (2014: £583,653) and £2,426 for other services (2014: £4,689). During the year, JIC received £290,130 (2014: £282,368) in student fee payments from UEA and provided £29,429 (2014: £59,322) of other services. At 31 March 2015, UEA owed JIC £543,247 (2014: £647,432) for student fees and services. John Innes Foundation JIF is a member of the charitable company and it nominates one Governor to the Governing Council. JIC. The following transactions took place during the year:
23. CASH HELD AS EUROPEAN GRANT CO-ORDINATOR JIC holds cash of £1,355,000 (2014: £2,079,000) on behalf of the European Union in its capacity as project co-ordinator on a number of projects. JIC acts as an intermediary only and does not control the risks and rewards associated with the cash.
24. ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY The Governors consider that there is no ultimate parent undertaking and controlling party. JIC is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements.
25. CONTINGENT LIABILITY JIC receives grant income from funding bodies, such as the BBSRC and the European Union, that routinely undertake retrospective financial audits of costs claimed. Such audits may from time to time give rise to adjustments to grant income receivable. No general provision is made for such potential audit adjustments in the financial statements.
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REFERENCE AND ADMINISTRATIVE DETAILS
Directors and Governors Mr S L Holmes Chair – Governing Council & Remuneration Committee Prof I A Graham Chair – Science Impact and Advisory Board Prof H G Dickinson Mr K R Norman Prof P M Gilmartin Mr D R White Dr D J Keith Mr R J Maskell
Director of the Institute Prof D Sanders
Company Secretary Mr D Foreman
Registered charity number 223852
Registered company number 00511709
Registered office and principal office of the charity Norwich Research Park Colney Lane Norwich NR4 7UH
Independent auditor Grant Thornton UK LLP Chartered Accountants and Statutory Auditors Kingfisher House 1 Gilders Way St James Place Norwich NR3 1UB
Bankers Barclays Bank Plc 54 Lombard Street London EC3V 9EX
Solicitors Mills and Reeve 1 St James Court Whitefriars Norwich NR3 1RU
Birketts Kingfisher House 1 Gilders Way Off Barrack Street Norwich NR3 1UB
ANNUAL REPORT I MARCH 2015 JIC PhD STUDENTS 79
OF WHICH NEW STUDENTS IN THE FINANCIAL 22 YEAR 2014-15
2015 2 International Students 17 UK Nationals 3 EU Nationals
ANNUAL REPORT I MARCH 2015 ANNUAL REPORT I MARCH 2015 Unlocking Nature’s Diversity
John Innes Centre John Innes Centre, Norwich Research Park, Norwich, Norfolk, NR4 7UH, UK t: (+44) 1603 450000 f: (+44) 1603 450045 [email protected]
www.jic.ac.uk
© John Innes Centre, November 2015
The John Innes Centre is supported by the John Innes Foundation www.johninnesfoundation.org.uk
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