The circuit around VR1 to me looks like a protection guard against overcurrent consumption. There's a photocoupler watching the +5 V output line, so I assume that IC1 will shut down the power supply if too much current is flowing in the +5 V output line. The current adjustment is probably the maximum current tolerated by that guard circuit. Anyway that's my guess after looking at that circuit for a minute, maybe someone else who is a power supply expert can confirm or correct me.
Bye,
Matteo