HEART OF THE NATIONAL FOREST FOUNDATION

HEART OF THE NATIONAL FOREST FOUNDATION(Limited by Guarantee)

Company Number: 3468753

ANNUAL REPORT

YEAR ENDED 31 DECEMBER 2008

HEART OF THE NATIONAL FOREST FOUNDATION

(Limited by Guarantee)

COMPANY INFORMATION

Directors S H Woolfe

A V AstlingM BallantyneS E BlazaK S BradleyS ChurchillA D MortimerI S SmithD A SprasonA S WebsterP WilliamsJ C Nicholls (appointed 18/09/2008)

Secretary M Ballantyne

Company Number 3468753

Charity Number 1073891

Registered Office The GatehouseBath YardMoira, SwadlincoteDerbyshireDE12 6BD

Auditors PKF (UK) LLPPannell House159 Charles StreetLeicesterLE1 1LD

Solicitors Harvey Ingram LLP20 New WalkLeicesterLE2 6TX

Bankers Alliance & Leicester Commercial Bank plcMidland Business Centre5th Floor, Permanent HouseHorsefair StreetLeicesterLE1 5BJ

HEART OF THE NATIONAL FOREST FOUNDATION (Limited by Guarantee)

CONTENTS

Page

DIRECTORS' REPORT 1 - 7

STATEMENT OF DIRECTORS' RESPONSIBILITIES 8

INDEPENDENT AUDITORS' REPORT 9

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES 11

CONSOLIDATED BALANCE SHEET 12

BALANCE SHEET 13

CONSOLIDATED CASH FLOW STATEMENT 14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15 - 25

HEART OF THE NATIONAL FOREST FOUNDATION (Limited by Guarantee)DIRECTORS' REPORT


The directors submit their report and the consolidated financial statements for the year ended31 December 2008.

Heart of the National Forest Foundation is a company limited by guarantee (number 3468753) and aregistered charity (number 1073891). The principal and registered office address is The Gatehouse, BathYard, Moira, Swadlincote, Derbyshire, DE12 6BD.

The report outlines the Foundation’s Objectives and Activities; Structure, Governance and Management;Achievements and Performance; Financial Activities; Plans for Future Periods and concludes with theFoundation’s Public Benefit report.

Structure, Governance and Management

The Foundation’s constitution is set out in its Memorandum and Articles of Association and provides forthe directors of the company to be appointed by the members of the company. Directors can either bemembers of the company or can be co-opted in recognition of their special expertise being valuable to thework of the Board and as far as possible reflects the geographical area in which the Foundation is active,subject to a maximum of six co-opted directors.

The subscribers to the Memorandum and Articles of the Foundation are its initial members. Additionalmembers can be approved by the Board.

At every AGM one third of the directors and all the co-opted directors retire from office but are all eligiblefor re-election provided that no director shall serve on the Board for longer than a consecutive period ofnine years (after a gap of one year such a director can be re-elected). This does not apply to a directorwho is also an officer of the company.

The Foundation seeks to ensure that its directors have the appropriate mix of skills to properly guide thework of the Foundation and has put in place succession arrangements for the ongoing development of theBoard.

New Board Members are inducted by the Chairman and by the Project Director who ensure that eachBoard Member understands his/her role on the Board and their responsibilities as Board Members.

During the year the Board reappointed John Nicholls as a Board Member following a year’s absence.Additionally Lewis Peake, whose company was the County and Regional Young Enterprise Winner in2008, as an adviser to the Board.

The Foundation has a very small executive team and except for the day to day decisions on spendingwithin the administrative budget there are no delegations to staff.

The directors have examined the major strategic, business and operational risks which the Foundationfaces and confirm that systems have been established to enable regular reports to be produced so thatthe necessary steps can be taken to lessen these risks. Issues addressed include successionarrangements, funding for day to day management costs and for the development of facilities, contingencyplanning for the operation of CONKERS, marketing and public relations, and health and safety mattersarising on the sites being developed by the Foundation.

The Foundation has two wholly owned subsidiaries to assist in the delivery of its strategy. ForestExperience Limited manages CONKERS on behalf of the Foundation and Heart of the National ForestPark Developments Limited leads on the creation of the Forest Park.

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Objectives and Activities

The Foundation’s objects, as set out in its Memorandum and Articles of Association, are

• To promote for the benefit of the public any charitable purpose connected with forestry inEngland and Wales and in particular in the areas of Leicestershire, Derbyshire andStaffordshire, and

• To hold and develop land in its ownership or occupation for the benefit of the public forrecreational and leisure occupations and in the interest of the social welfare of the public.

The main activities the Foundation is undertaking in furtherance of its objects being

• The development of CONKERS as a major indoor and outdoor visitor experience interpretinglife in British Woodland, the rationale and concept of The National Forest and addressingglobal environmental issues.

• The acquisition and transformation of at least 1,000 acres of derelict land into the Heart of theNational Forest Park to provide an environmental, educational and recreational resource forthe benefit of the public.

• The development of facilities including nature trails, walks, bridle paths, cycle tracks, andfootpaths, parklands, car parks and visitor accommodation in order to facilitate the enjoymentof woodlands as a public amenity.

• To provide extensive opportunities for voluntary participation by individuals, schools, groups,companies and their employees.

• To contribute to the overall development of The National Forest and its charitable aims.

The Foundation has adopted a 20 year strategic framework and master plan for the creation of the Heartof the National Forest Park. The strategy is designed to ensure that income generators are created toensure that the long term cost of maintaining a high quality forest park can be met.

The master plan has provided a wonderful platform for the inspiration of potential sponsors and thecommunity alike and the Foundation remains confident that, in spite of the current economic crisis, it willcontinue to make significant progress over the next two years with the achievement of its vision.

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Achievements and Performance

The Foundation commenced activities in June 1998 as the designated delivery vehicle for the MillenniumCommission supported CONKERS project (previously known as the National Forest Millennium DiscoveryCentre) to be developed on the former Rawdon Colliery site, Moira.

CONKERS was officially opened by HRH The Princess Royal on 21 March 2001 and opened to the publicon 6 April 2001.

CONKERS has had an extremely successful opening period and by the end of 2008 visitor numbersexceeded 1,700,000. Over 280,000 children have now participated in educational visits to CONKERS

All trading activities at CONKERS have been carried out under the auspices of The Forest ExperienceLimited, a wholly owned subsidiary of the Foundation.

In spite of an early and wet Easter period visitor numbers remained at the high levels achieved in 2007.This plus a continued high level of Gift Aid donations resulted in a net revenue financial contribution fromCONKERS to the Foundation’s activities of £545,950.

During the year The Forest Experience Limited and the Foundation jointly reappointed Planning SolutionsLimited as operator of CONKERS till the end of 2013.

The year also saw significant progress being made with the Foundation’s short term targets

• 9km of the CONKERS Circuit – a multi user recreational trail around various sites within the Heartof the Forest – were created during the year. This was funded by the Leicester Shire EconomicPartnership, the National Forest Company, Derby Derbyshire Economic Partnership, Ennstone plcand the Maud Elkington Charitable Trust.

• With funding provided by Leicester Shire Economic Partnership and the National ForestCompany, the Foundation appointed Edward Cullinan Architects, Arups and Grant Associates toproduce outline designs for the proposed CONKERS Aerial Walkway. After a period ofconsultation a planning application for the project was submitted in November. The planningpermission was granted early in January 2009.

• The Foundation held its ten year celebration dinner in the Foundling Museum in London. Theevent was hosted by David Wilson, one of the Foundations founder board members and a patron.The key speaker was the Rt Hon Sir John Major who is also a Foundation patron. The event wasattended by Board level representatives of several major UK businesses. All attendees wereimpressed with the Foundation’s vision and the progress made to date and all offered to helpsupport our fund raising campaign.

• Continued progress was made with negotiations for Premier Supporter agreements with long termsupport being secured from the Midlands Cooperative Society and Vaillant plc during the year.

• The reclamation of the Rawdon East compound was completed in December 2008 with fundingprovided by East Midlands Development Agency. What was a derelict and contaminated eyesorehas been transformed into a pleasant woodland area with a new wetland area and a network ofsurfaced paths linking to the adjoining Maybury Wood site.

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Review of Financial Activities

During the period, the Foundation continued to seek further sponsorship and grant support to fund futuredevelopment of CONKERS, to allow for the development of the Forest Park and, in the longer term, toestablish reserves to meet the costs of refreshing CONKERS and of maintaining the Park. TheFoundation remains confident that its funding targets are achievable.

Funds received in the year totalled £1,979,775. This was made up of grants and donations from Allianceand Leicester plc, Aggregate Industries plc, Derbyshire Building Society, Derbyshire County Council,emda, Ennstone plc, Forestry Commission, Leicester Shire Economic Partnership, Maud ElkingtonCharitable Trust, The National Forest Company, Next plc, North West Leicestershire District Council,Toyota Motor Manufacturing (UK) Limited and YHA.

The Company expended £2,045,746 on the development of the CONKERS Discovery Centre Project, theredevelopment of CONKERS Waterside, fund raising and publicity.

The company's net assets at 31 December 2008 were £8,093,662 and its net current liabilities at the endof the period were £308,204 – compared to £275,923 at the start of the year.

Plans for Future Periods

The Foundation has set the following short term targets in line with its 20 year strategic framework:

• Completion of the CONKERS Circuit and related landscape enhancements in 2009.

• Secure funding for the development of the CONKERS Aerial Walkway so that a start of construction can be made during 2009.

• Review during 2009 the viability of providing additional visitor accommodation.

• General sponsorship of at least £200,000 will be secured during 2009.

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Public Benefit

The Charities Act 2006 introduced the requirement that charities must demonstrate, explicitly, that theiraims are for the benefit of the public. In January 2008, the Charity Commission published its statutorygeneral guidance ‘Charities and Public Benefit’ which explained what charity trustees should consider inorder to show that their charity’s aims are for the public benefit.

This section of the Directors’ Report sets out how the Foundation’s aims have been carried out for thepublic benefit and confirms that the Directors will have regard to the Commission’s guidance in how itplans its future activities.

The Commission has established two key Principles of Public Benefit and within those principles, someimportant factors that must be considered.

• Principle 1 – There must be an identifiable benefit or benefits

• Principle 2 – Benefit must be to the public, or section of the public

The Foundation’s objects and the activities it is undertaking to further those objects are set out earlier inthis report. The Directors consider that it is clear that public benefits are delivered. In particular the publicbenefits from the following activities which are all related to the objects of the Foundation.

• The transformation of derelict sites ravaged by coal mining and mineral extraction into anaccessible forest park which can be used for recreational and leisure purposes.

• The creation of CONKERS, on the site of two former coal mines, which in addition to being arecreational and leisure resource provides for education about the creation of the National Forestand its importance in the global environment – with particular emphasis on raising the public’sawareness of climate change and on what individuals can do to reduce its impact.

• The development of affordable visitor accommodation in conjunction with the YHA and theCamping and Caravan Club which makes it easier for people to visit the area to enjoy thewoodlands and the National Forest as a public amenity.

The Directors consider that there are no significant or detrimental effects of the Foundation’s activities andworks closely with ROSPA and other professionals to ensure that the health and safety of visitors to itsfacilities is properly addressed.

As regards Principle 2, the Directors consider that, as stated in its Memorandum and Articles, theopportunity to benefit from the Foundation’s activities is open to all people in England and Wales althoughit is expected that people who live nearer to its facilities are most likely to benefit. Over 200,000 peopleevery year visit CONKERS and the number of visitors to the surrounding forest park is increasing year onyear.

The Foundation places no restrictions on who can benefit from its activities although it is aware fromnational research that various groups of people do not tend to visit the countryside and are therefore lesslikely to benefit from the Foundation’s activities. The Foundation has worked with the local CVSorganisations to seek to understand this issue and has identified potential ways this could be addressed. The Foundation continues to seek specific funding for the development of intitatives to make it easier forall people to benefit from it's activities.

The Foundation is also aware that its facilities are located in an area that is very poorly served by publictransport. It has raised this issue with the local authorities in the area and is supporting the lobby for thereintroduction of passenger services on the National Forest rail line which would significantly increase theaccessibility of its facilities to people who have no access to a car.

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The Directors consider that people in poverty are not excluded from the opportunity to benefit from theFoundation’s activities. Access to the woodlands and footpaths created by the Foundation are free ofcharge. Additionally, whilst there is a charge to enter CONKERS, the Foundation ensure that The ForestExperience Limited, its wholly owned subsidiary that operates CONKERS, does so in line with theFoundation’s commitment to the Millennium Commission, that it will have Full Community Access –defined as Access

• Without charge or subject to such reasonable charges as do not exceed the charges levied bysimilar facilities in the locality

• At all reasonable times of the day including such times as similar facilities in the locality are openand available to the public

• To all sections of the community without distinction as to race, religion, age or otherwise, and

• To both able bodied and disabled alike by the provision of the appropriate facilities.

Admission prices to CONKERS have been set at a level below that charged by other visitor facilitiesoperated in the locality by local authorities and other charities.

The Directors consider that these charges are affordable and therefore the fees do not prevent peoplefrom accessing its facilities.

Finally the Directors confirm that they are not aware of any non-incidental private benefits that have beenprovided to individuals or organisations.

Directors

The directors who served during the year were:

S H Woolfe A V Astling M Ballantyne S E Blaza K S Bradley S Churchill A D Mortimer I S Smith D A Sprason A S Webster P Williams

J C Nicholls was appointed as a director on 18 September 2008.

The company is limited by guarantee and has no share capital. The liability of each member of thecompany is limited to an amount not exceeding £10.

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Provision of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmedthat:

• so far as that director is aware, there is no relevant audit information of which the company'sauditors are unaware, and

• each directors has taken all the steps that ought to have been taken as a director in order to beaware of any information needed by the company's auditors in connection with prepaing theirreport and to establish that the company's auitors are aware of that information.

This report was approved by the board on and signed on its behalf.

M BallantyneSecretary

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(Limited by Guarantee)

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the annual report and the financial statements in accordancewith applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that lawthe directors have elected to prepare the financial statements in accordance with United KingdomGenerally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Thefinancial statements are required to give a true and fair view of the state of affairs of the company andgroup and of the surplus or deficit of the group for that period. In preparing these financial statements thedirectors are required to:

- select suitable accounting policies and then apply them consistently;- make judgments 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;- prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the company will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonableaccuracy at any time the financial position of the company and the group and enable them to ensure thatthe financial statements comply with the Companies Act 1985. They are also responsible for safeguardingthe assets of the group and hence for taking reasonable steps for the prevention and detection of fraudand other irregularities.

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INDEPENDANT AUDITORS' REPORT TO THE MEMBERS OFHEART OF THE NATIONAL FOREST FOUNDATION

We have audited the group and parent entity financial statements ('the financial statements') of Heart ofthe National Forest Foundation for the year ended 31 December 2008 which comprise the consolidatedstatement of financial activities, the consolidated and entity balance sheets, the consolidated cash flowstatement and the related notes. The financial statements have been prepared under the accountingpolicies set out therein.

This report is made solely to the company's members, as a body, in accordance with section 235 of theCompanies Act 1985. Our audit work has been undertaken so that we might state to the charity'smembers those matters we are required to state to them in an auditors' report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than thecharity and the company's members, as a body, for our audit work, for this report, or for the opinions wehave formed.

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the annual report and the financial statements in accordancewith applicable law and United Kingdom accounting standards ("United Kingdom Generally AcceptedAccounting Practice") are set out in the statement of directors' responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatoryrequirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view and havebeen properly prepared in accordance with the Companies Act 1985. We also report to you whether inour opinion the information given in the directors' report is consistent with the financial statements.

In addition we report to you if , in our opinion, the company has not kept proper accounting records, if wehave not received all the information and explantions we require for our audit, or if the informationspecified by law regarding directors' remuneration and other transactions is not disclosed.

We read the directors' report and consider the implications for our report if we become aware of anyapparent misstatements within it.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issuedby the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant tothe amounts and disclosures in the financial statements. It also includes an assessment of the significantestimates and judgments made by the directors in the preparation of the financial statements, and ofwhether the accounting policies are appropriate to the group's and company's circumstances,consistently applied and adequately disclosed.

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

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INDEPENDANT AUDITORS' REPORT TO THE MEMBERS OFHEART OF THE NATIONAL FOREST FOUNDATION

Opinion

In our opinion:

• the financial statements give a true and fair view, in accordance with United Kingdom GenerallyAccepted Accounting Practice, of the state of the group's and the parent entity's affairs as at 31December 2008 and of the group's incoming resources and application of resources, including itsincome and expenditure, for the year then ended;

• the financial statements have been properly prepared in accordance with the Companies Act 1985;and

• the information given in the directors' report is consistent with the financial statements.

PKF (UK) LLPRegistered auditorsLeicester, UKDate:

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CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES(Incorporating an Income and Expenditure Account)


2008 2007Unrestricted Restricted Total Total

Funds Funds Funds FundsNotes £ £ £ £

Incoming Resources

Incoming resources fromgenerated funds:Voluntary income Grants 3 - 1,340,384 1,340,384 1,529,802 Donations 560,891 78,500 639,391 935,402

Activities for generating fundsSponsorship income 100,000 40,000 140,000 50,000

Investment income - interest 2,332 - 2,332 11,074

Incoming resources fromcharitable activitiesRental income 45,230 - 45,230 30,846Income generated by tradingsubsidiary 86,028 - 86,028 129,183

Other incoming resources - 75

Total incoming resources 794,481 1,458,884 2,253,365 2,686,382

Resources Expended

Costs of generating funds 32,583 31,129 63,712 57,092

Costs of generatingvoluntary income 54,158 - 54,158 47,819

Charitable activities 4 602,727 1,290,578 1,893,305 1,136,584

Governance costs 66,960 - 66,960 77,628

Total resources expended 756,428 1,321,707 2,078,135 1,319,123

Net income 6 38,053 137,177 175,230 1,367,259Funds brought forward at1 January 2008 832,484 7,679,112 8,511,596 7,144,337

Funds caried forward at31 December 2008 14 870,537 7,816,289 8,686,826 8,511,596

The statement of financial activities includes all gains and losses recognised in the year.All incoming resources and resources expended derive from continuing activities.

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CONSOLIDATED BALANCE SHEET31 DECEMBER 2008

2008 2007 Notes £ £

FIXED ASSETSTangible 9 9,200,399 9,004,718

CURRENT ASSETSDebtors 11 642,541 480,046

642,541 480,046CREDITORS: amounts falling duewithin one year 12 (958,281) (755,337)

NET CURRENT LIABILITIES (315,740) (275,291)

TOTAL ASSETS LESS CURRENT LIABILITIES 8,884,659 8,729,427

CREDITORS: amounts falling dueafter more than one year 13 (197,833) (217,831)

NET ASSETS 8,686,826 8,511,596

REPRESENTED BY:Unrestricted funds 14 870,537 832,484Restricted funds 14 7,816,289 7,679,112

8,686,826 8,511,596

The financial statements were approved and authorised for issue by the board and were signed on itsbehalf on .

S H Woolfe Director

I S Smith Director

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BALANCE SHEET31 DECEMBER 2008

2008 2007 Notes £ £

FIXED ASSETSTangible 9 8,599,695 8,805,266Investments 10 4 4

8,599,699 8,805,270CURRENT ASSETSDebtors 11 560,560 360,065

560,560 360,065CREDITORS: amounts falling duewithin one year 12 (868,764) (635,358)

NET CURRENT LIABILITIES (308,204) (275,293)

TOTAL ASSETS LESS CURRENT LIABILITIES 8,291,495 8,529,977

CREDITORS: amounts falling dueafter more than one year 13 (197,833) (217,831)

NET ASSETS 8,093,662 8,312,146

REPRESENTED BY:Unrestricted funds 871,304 832,376Restricted funds 7,222,358 7,479,770

8,093,662 8,312,146

The financial statements were approved and authorised for issue by the board and were signed on itsbehalf on .

S H Woolfe Director

I S Smith Director

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CONSOLIDATED CASH FLOW STATEMENTYEAR ENDED 31 DECEMBER 2008

2008 2007 £ £

Reconciliation of operating profit to net cash inflow fromoperating activitiesNet incoming resources 175,230 1,367,259Depreciation of tangible fixed assets 374,103 339,123Increase in debtors (162,495) (148,418)Increase/(decrease) in creditors 279,866 (160,307)

Net cash inflow from operating activities 666,704 1,397,657

CASH FLOW STATEMENT (note 17)Net cash inflow from operating activities 666,704 1,397,657Capital expenditure (569,784) (2,030,659)

96,920 (633,002)Financing (19,288) 243,209

Increase/(decrease) in cash 77,632 (389,793)

Reconciliation of net cash flow to movement in net debt (note 18)Increase/(decrease) in cash in the year 77,632 (389,793)Cash inflow from increase in debt financing 19,288 (243,209)

Change in net debt 96,920 (633,002)Net debt at 1 January 2008 (392,188) 240,814

Net debt at 31 December 2008 (295,268) (392,188)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 DECEMBER 2008

1 ACCOUNTING POLICIES

(a) Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention and inaccordance with the Statement of Recommended Practice - Accounting and Reporting byCharities (SORP 2005) issued in March 2005, applicable accounting standards and theCompanies Act 1985.

The financial statements of the company and its group undertakings have been consolidated to31 December 2008, on a line by line basis. The Statement of Financial Activities of the companyis not presented as permitted by Section 230 of the Companies Act 1985 and paragraph 397 ofthe SORP.

(b) Incoming resources

All incoming resources are recognised once there is entitlement to the resources, certainty ofreceipt and the amount can be measured with sufficient reliability.

(c) Donations

Donations are accounted for on a receivable basis.

(d) Gifts-in-kind

Gifts-in-kind in the form of tangible fixed assets are included in the financial statements at theirvalue to the charity and accounted for immediately as restricted funds, where it is clear the donorintended the continuing use of the asset. Assets given for use by the charity are recognised inthe Statement of Financial Activities as incoming resources when received. Non monetary giftsof services are not valued.

(e) Resources expended

Expenditure is recognised when a liability is incurred.

• Costs of generating funds are those incurred in trading activities and raising funds.

• Charitable activities include expenditure associated with land feasibility studies, depreciationand include direct costs and support costs relating to these activities.

• Governance costs include those costs incurred in the governance of the charity, which relateto the general running of the charity as opposed to the direct management costs inherent ingenerating funds. These costs include costs related to statutory audit together with anapportionment of overhead and support costs.

• Support costs have been allocated between charitable activity, governance and cost ofgenerating funds according to staff time spent on each area.

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1 ACCOUNTING POLICIES (continued)

(f) Tangible fixed assets

Tangible fixed assets costing more that £500 are capitalised and included at cost including anyincidenttal costs of acquisitions

Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is providedat rates calculated to write off the cost or valuation of fixed assets, less their estimated residualvalue, over their expected useful lives on the following bases:

CONKERS Waterside Centre 2% per annum straight lineCONKERS Waterside Centre exhibits and equipment 33% per annum straight lineCONKERS Discovery Centre 2% per annum straight lineCONKERS Discovery Centre exhibits and equipment 2%-33% per annum straight lineOffice Equipment and furniture 33% per annum straight line

Freehold land is not depreciated.

(g) Investments

Investments are stated at cost at the balance sheet date.

(h) Fund accounting

Unrestricted funds comprise those funds which the directors are free to use in accordance withthe charitable objects.

Designated funds comprise unrestricted funds that have been set aside by the directors forparticular purposes. The aim and use of each designated fund is set out in the notes to thefinancial statements.

Restricted funds are those funds which have been given for particular purposes and projects.

(i) Pensions

The company contributes to a portable pension plan for the executive director, the assets ofwhich are held seperately from those of the company. The contributions are charged in theStatement of Financial Activities as they arise.

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2 NET INCOME FROM TRADING ACTIVITIES OF SUBSIDIARIES

The Charity has two wholly owned subsidiaries which are incorporated in Great Britain. The ForestExperience Limited operates the CONKERS visitor attraction, whilst Heart of the National Forest ParkDevelopments Limited holds and is preparing land for the Heart of the National Forest Park. Asummary of their trading results is shown below. Audited accounts will be filed with the Registrar ofCompanies.

Heart of the National Forest Park The ForestDevelopments Limited Experience Limited2008 2007 2008 2007£ £ £ £

Profit and loss accountTurnover - 17,228 86,028 129,183Cost of sales - - (89,471) (112,322)

- 17,228 (3,443) 16,861

Administrative expenses (6,363) (17,228) (1,248) (16,861)Other operating income 3,516 - - -

(2,847) - (4,691) -

Balance sheetCurrent assets - 2 85,984 129,185Creditors: amounts fallingwithin one year (2,845) - (90,673) (129,183)

Net assets (2,845) 2 (4,689) 2

Aggregate share capital andreserves (2,845) 2 (4,689) 2

3 GRANTS RECEIVED

2008 2007 £ £

National Forest Company 160,443 30,000

Leicester Shire Economic Partnership 708,834 -

East Midlands Development Agency 456,316 1,349,972

North West Leicestershire District Council 11,200 -

WREN - 50,000

Other 3,591 99,830

1,340,384 1,529,802

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4 ANALYSIS OF CHARITABLE ACTIVITIES

Activities undertaken Support

directly costs Total £ £ £

Unrestricted:Foundation Activities 590,173 12,554 602,727Restricted:Millennium Project 321,395 - 321,395Diana, Princess of Wales Memorial Woodland 250 547 797Rawdon East Reclamation 454,280 7,645 461,925Conkers Circuit 293,489 30,034 323,523Donington Island Tender Scheme 6,516 5,456 11,972Youth Hostel 53,792 7,475 61,267Conkers Aerial Walkway 95,314 14,385 109,699

1,815,209 78,096 1,893,305

5 ANALYSIS OF SUPPORT COSTS

Cost ofTotal Charitable generating Basis of

allocated Governance activities funds apportionment£ £ £ £

Staff costs 138,507 34,460 57,300 46,746 Staff timeEmployee expenses 1,798 447 744 607 Staff timePremises costs 24,962 6,211 10,327 8,425 Staff timeOffice costs 23,509 5,849 9,725 793 Staff time

188,776 46,967 78,096 56,571

6 NET INCOME

Net income is stated after charging:2008 2007 £ £

Depreciation of tangible fixed assets:

- owned by the charity 374,103 339,123

Operating lease rentals:

- plant & machinery 997 -

Audit fees 13,000 11,250

Auditors' remuneration - other non-audit services 3,800 4,750

The net outgoing resources for the year of the parent company amounted to £218,482 (2007£1,367,258 net incoming resources).

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7 DIRECTORS' EMOLUMENTS AND BENEFITS

2008 2007 £ £

Directors' emoluments 95,700 95,700Contributions to money purchase pension schemes 13,750 16,250

The number of directors accruing benefits under pensionschemes were:

No No Money purchase schemes 1 1

8 STAFF COSTS

Staff costs, including directors' emoluments, were as follows:2008 2007 £ £

Wages and salaries 111,830 111,869

Social security costs 12,929 12,988

Other pension costs 13,750 16,250

138,509 141,107

The average monthly number of employees, including executive directors, during the year was:No No

Between £0 - £60,000 1 1

Between £90,000 - £100,000 1 1

2 2

Four directors were reimbursed expenses amounting to £2,281 during the year (2007 - £674).

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9 TANGIBLE FIXED ASSETS

GroupOffice

Freehold land, equipmentbuildings and and

fitting out furniture Total £ £ £

Cost

At 1 January 2008 13,524,030 11,605 13,535,635Additions 569,504 280 569,784Disposals - (639) (639)

At 31 December 2008 14,093,534 11,246 14,104,780

Depreciation

At 1 January 2008 4,519,872 11,045 4,530,917Charge for year 373,603 500 374,103On disposals - (639) (639)

At 31 December 2008 4,893,475 10,906 4,904,381

Net book amount

At 31 December 2008 9,200,059 340 9,200,399

At 31 December 2007 9,004,158 560 9,004,718

CompanyOffice

Freehold land, equipmentbuildings and and

fitting out furniture Total £ £ £

Cost

At 1 January 2008 13,324,578 11,543 13,336,121Additions 168,252 280 168,532Disposals - (639) (639)

At 31 December 2008 13,492,830 11,184 13,504,014

Depreciation

At 1 January 2008 4,519,872 10,983 4,530,855Charge for year 373,603 500 374,103On disposals - (639) (639)

At 31 December 2008 4,893,475 10,844 4,904,319

Net book amount

At 31 December 2008 8,599,355 340 8,599,695

At 31 December 2007 8,804,706 560 8,805,266

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9 TANGIBLE FIXED ASSETS (continued)

Group and companyIncluded within freehold land, buildings and fitting out is land and buildings for the CONKERSWaterside Centre which were donated as a gift-in-kind, and have been included at a valuation carriedout by Leicestershire County Council on 7 January 1999 of £565,000 on an open market basis,including land at £19,000, together with exhibits which were donated as a gift-in-kind, by E.On, duringthe year ended 31 December 2007, at a cost of £130,000.

GroupIncluded within freehold land, buildings and fitting out is the Princess of Wales Memorial Woodlandsite and Donnington Island land which were donated to the group in 2003 as a gift-in-kind at £nil costand have been included at a valuation carried out by Leicestershire County Council on 7 April 2004 of£14,000 and £26,500 respectively, on an open market basis.

10 FIXED ASSET INVESTMENTS

Company£

Cost

At 1 January 2008 and

31 December 2008 4

Investments comprise a 100% shareholding in the ordinary shares of The Forest Experience Limitedand Heart of the National Forest Park Developments Limited both companies being incorporated inGreat Britain. Details of subsidiary undertakings are given in note 21.

11 DEBTORS

Group Company2008 2007 2008 2007 £ £ £ £

Due within one year

Trade debtors 198,218 144,718 112,234 15,536

Amounts due from groupundertakings - - 4,003 9,201

Other debtors 65,947 27,906 65,947 27,906

Prepayments & accruedincome 378,376 307,422 378,376 307,422

642,541 480,046 560,560 360,065

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12 CREDITORS

Group Company2008 2007 2008 2007 £ £ £ £

Amounts falling due withinone year

Bank loans 26,088 25,378 26,088 25,378

Overdraft 71,347 148,979 71,301 141,319

Trade creditors 175,830 24,887 175,830 24,887

Other creditors 540,459 548,093 450,988 435,774

Accruals and deferred income 144,557 8,000 144,557 8,000

958,281 755,337 868,764 635,358

Bank loans are secured by way of first legal charge over certain freehold property.

13 CREDITORS

Group Company2008 2007 2008 2007 £ £ £ £

Amounts falling due aftermore than one year

Bank loans 197,833 217,831 197,833 217,831

197,833 217,831 197,833 217,831

Bank loans are secured by way of first legal charge over certain freehold property.

Creditors include bank loans not wholly repayable within five years amounting to £93,481.

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14 STATEMENT OF FUNDS

NetAt incoming/ At 31

1 January (outgoing) December2008 resources Transfers 2008 £ £ £ £

GENERAL FUNDS 812,484 58,053 - 870,537

DESIGNATED Exhibition Renewal Fund 20,000 (20,000) - -

TOTAL UNRESTRICTEDFUNDS 832,484 38,053 - 870,537

RESTRICTED FUNDS 7,679,112 137,177 - 7,816,289

TOTAL FUNDS 8,511,596 175,230 - 8,686,826

The general funds represent the free funds of the charity which are not designated for particularpurposes.

The Exhibition Renewal Fund has been designated by the directors for the renewal of exhibits withinthe CONKERS visitor attraction.

Restricted funds are funds which have been given for particular purposes and projects and arereduced, over a period of time, in line with the associated capital expenditure and depreciation. In theFoundation's case the balance on restricted funds reflects the amount of capital expenditure financedby restricted funds but not yet charged to the statement of financial activities as depreciation.

The restricted funds received to date by the Foundation must be used for the development of theCONKERS visitor attraction, the development of the Diana Princess of Wales Memorial Woodland,the Rawdon East Feasibility Study, the Living Landmarks Application, the Youth Hostel, theCONKERS Circuit and the development of Donington Island.

15 ANALYSIS OF NET ASSETS BETWEEN FUNDS

Restricted Designated Generalfunds funds funds Total£ £ £ £

Fund balances at 31December 2008 arerepresented by:Tangible fixed assets 8,260,046 - 940,353 9,200,399Current assets 378,375 - 264,166 642,541Current liabilities (624,299) - (333,982) (958,281)Long term liabilities (197,833) - - (197,833)

7,816,289 - 870,537 8,686,826

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16 SHARE CAPITAL

The company is limited by guarantee and has no share capital. The liability of each member of thecompany is limited to an amount not exceeding £10.

17 GROSS CASH FLOWS

2008 2007 £ £

Capital expenditure

Payments to acquire tangible fixed assets 569,784 2,030,659

-

Financing

New secured loans - (250,000)

Repayment of loans 19,288 6,791-

19,288 (243,209)

18 ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1 January Cash Other At 31 December2008 flows changes 2008£ £ £ £

Overdraft (148,979) 77,632 - (71,347)Debt due within 1 year (25,378) (710) - (26,088)Debt due after 1 year (217,831) 19,998 - (197,833)

Net funds/(debt) (392,188) 96,920 - (295,268)

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19 TRANSACTIONS WITH RELATED PARTIES

KPMG LLP, were engaged by the directors during the year for the provision of services totalling £695(2007 £660). I S Smith, a director of the company, is a partner in KPMG LLP.

Harvey Ingram LLP, Solicitors, were engaged by the directors during the year for the provision ofservices totalling £18,106 (2007 £38,804). S Woolfe, a director of the company, is a partner inHarvey Ingram LLP. At the year end there was a balance outstanding of £NIL (2007 £Nil) to HarveyIngram LLP.

20 LANDFILL TAX CREDIT SCHEME

The Foundation is an approved environmental body under the above scheme. During the year nocontributions (2007 £NIL) were received from landfill operators. An amount of £8,000 (2007 £NIL)was received from other environmental bodies.

21 SUBSIDIARY UNDERTAKINGS

Country of Loss Shareholders NatureCompany incorporation for the year funds/(deficit) of business

The Forest Experience Operation of Limited Great Britain £4,691 £(2,845) CONKERS

Heart of the National Forest Holding and Park Developments Limited Great Britain £2,847 £(4,689) preparing land

for the Heart of the NationalForest Park

Heart of The National Forest Foundation owns 100% of the ordinary share capital of the abovecompanies.

22 OPERATING LEASES

Net obligations under opearating leases fall due as follows: Group Company2008 2007 2008 2007 £ £ £ £

Between one and five years 997 - 997 -

23 CAPITAL COMMITMENTS

Company and groupAt 31 December 2008 the company had entered into contracts for capital expenditure not providedfor in these accounts amounting to approximately £115,459 (2007 - £NIL).

24 CONTROLLING PARTIES

In the opinion of the directors, given the structure of the company, there is no ultimate

controlling party.

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(Limited by guarantee)STATEMENT OF FINANCIAL ACTIVITIES


2008 2007 Unrestricted Restricted Total Total

funds funds funds Funds £ £ £ £

Incoming ResourcesVoluntary income 660,891 1,458,884 2,119,775 2,515,204

Investment income 2,333 - 2,333 11,074

Incoming resources from charitable activities 41,714 - 41,714 47,026

Other incoming resources - - 75

704,938 1,458,884 2,163,822 2,573,379

Resources Expended

Costs of generating funds 32,583 31,129 63,712 57,092

Costs of generating voluntary income 54,158 - 54,158 47,819

Charitable activities 513,004 1,685,167 2,198,171 1,023,581

Governance 66,265 - 66,265 77,628

TOTAL RESOURCES EXPENDED 666,010 1,716,296 2,382,306 1,206,120

Net incoming/(outgoing) resources 38,928 (257,412) (218,484) 1,367,259

Funds brought forward 832,376 7,479,770 8,312,146 6,944,887

Funds carried forward 871,304 7,222,358 8,093,662 8,312,146

Approved by the board on

S H Woolfe )

) Directors

I S Smith )

This page does not form part of the financial statements.

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(Limited by guarantee)STATEMENT OF FINANCIAL ACTIVITIES


2008 2007 Unrestricted Restricted Total Total

Funds Funds Funds Funds £ £ £ £

DONATIONS AND SPONSORSHIP

Next plc 10,000 - 10,000 -Maud Elkington Charitable Trust - 50,000 50,000 -Derbyshire County Council - 20,000 20,000 -Aggregates Industries 25,000 - 25,000 -Toyota Motor Manufacturing UK Ltd 50,000 - 50,000 30,000Midlands Cooperative Society 25,000 - 25,000 -Gift aid donations 433,916 - 433,916 479,942Gift aid tax reclaimed 116,725 - 116,725 112,660National Forest Company - 160,443 160,443 30,000WREN - - - 50,000Leicester Shire Economic Partnership - 708,834 708,834 -Ennstone - 20,000 20,000 20,000Alliance and Leicester plc - 20,000 20,000 50,000East Midlands Development Agency - 456,316 456,316 1,349,972Forestry Commisssion - 3,591 3,591 2,200Edith Murphy Trust - - - 5,000Youth Hostel Association - 500 500 90,800Camping and Caravan Club - - - 32,000Clear Skies - - - 37,630John Hobley Trust - - - 25,000Leicestershire County Council - - - 60,000E-On - - - 130,000Marks and Spencer plc - - - 10,000Severn Trent - 8,000 8,000 -North West Leicestershire District Council - 11,200 11,200 -Round Leicestershire Ride 150 - 150 -Derbyshire Building Society 100 - 100 -

660,891 1,458,884 2,119,775 2,515,204The Forest Experience Limited - - - 16,291

660,891 1,458,884 2,119,775 2,531,495

This page does not form part of the financial statements.-27-

HEART OF THE NATIONAL FOREST FOUNDATION

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