REVIEW OF THE YEAR (Annual Reports and Accounts are available from the Executive Director on request)

CHAIRMAN’S REVIEW OF THE YEAR

I am delighted to report on my first year as Chairman of the Foundation, and to take this opportunity to pay tribute to the dedication and hard work of the Foundations throughout the year.

The results for the year are shown in the financial statements on pages 16 to 28.

In January 2009, following a period of turmoil in the capital markets, Lloyds TSB Group plc acquired HBOS plc resulting in the enlarged Lloyds Banking Group. Subsequent illiquidity in capital markets and the need to strengthen its balance sheet, resulted in the Lloyds Banking Group embarking upon a number transactions to raise equity funding. Our right to participate in these transactions ultimately resulted in a one off credit to the Foundation's statement of financial activities of £573,414, further details of which are included in note 6.
The reference in the accounts and note 9 of the accounts to "Compensation” relates to the Placing and Compensation offer made by LBG in May 2009 where the Bank agreed that the Foundations as holders of non voting shares were entitled to the relevant amount of compensation if not taking up the share placement.  This amounted to £331,076.00 for the Channel Islands Foundation.

The covenanted income to the Foundation for 2009 was £890,198 compared to that of £1,141,528 in 2008. The number of grant applications which were evaluated was 27 as compared with 51 in 2008.

Due to the reduction of Lloyds Banking Group profitability and the way in which our funding is received, our income level for 2009 was significantly reduced and the doubt for future funding meant that we were significantly disadvantaged in the value of new grants which we were in a position to make.  Due to doubts in funding, we had to set aside sums for those charities to whom we have agreed support over two and three year periods.

Notwithstanding this, in a year in which the Foundation completed 25 years of supporting charities in the Channel Islands, the Trustees approved donations totalling £151,000.  A list of the charities which the Trustees supported can be found in note 15 on pages 27 and 28, together with a brief description of the purpose to which the money was granted. 

I am further pleased to advise that after significant discussions with Lloyds Banking Group, we are delighted that they have agreed to guarantee funding for the Channel Islands Foundation for years 2010, 2011, 2012 and 2013.  At the end of this period, it is hoped that Group profitability will have returned to a more normal level and our funding for the future will be maintained at a satisfactory level.  

The staff of the Lloyds Banking Group in the islands have continued to raise funds for their favourite charities with the support of the Foundation’s Matched Giving Scheme. I am pleased that £29,051 was raised by staff during 2009 aided by Matched Giving grants and for the first time for many years the budget for Matched Giving was exceeded.

We are an independent Foundation, very proud of our relationship with Lloyds Banking Group and especially Lloyds TSB Offshore in the Channel Islands and its management team. I thank the management and staff for their interest and support for our work in the islands.
 
We enjoy a close relationship with our sister Foundations and in particular the Foundation for England and Wales, and I record my grateful thanks for their continued help and support.

As mentioned above, the Foundation’s operations have been significantly affected by the current economic downturn, a result of the deed of covenant with the Lloyds Banking Group being based on a three year average of the Group’s profits.  The Foundation has been working with those charities it supports on the Islands, communicating this message and supporting them in seeking alternative funding, wherever possible. We will continue our commitment to Channel Island Charities, enabling them to help change people’s lives for the better. The commitment to International Grant Giving will be retained in principle but due to reduced income levels it is unlikely that previous levels will be maintained.

Finally may I thank my fellow Trustees for their support during a challenging year. Our Executive Director, John Hutchins worked closely with the Executive Director of the England & Wales Foundation, Linda Kelly, in the discussions with Lloyds Banking Group to which I have already referred.  I am most grateful to them for all their work and support which lead to a successful conclusion to the funding issue.