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2022-12-31-accounts

REGISTERED CHARITY NUMBER: 1064522

REPORT OF THE TRUSTEES AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

THE ARMY DEPENDANTS' TRUST

Hysons Accountants LLP, Statutory Auditor 14 London Street Andover Hampshire SP10 2PA

THE ARMY DEPENDANTS' TRUST

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

Page
Report of the Trustees 1 to 8
Report of the Independent Auditors 9 to 12
Statement of Financial Activities 13
Balance Sheet 14
Cash Flow Statement 15
Notes to the Cash Flow Statement 16
Notes to the Financial Statements 17 to 25
Detailed Statement of Financial Activities 26 to 27

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

The trustees present their report with the financial statements of the charity for the year ended 31 December 2022. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The main object of the Charity is the promotion of the efficiency of the Army through the relief of persons who are in a condition of immediate financial need, hardship or distress and who are the dependants or next of kin of a deceased soldier or officer. In so far as the trustees cannot apply the income for this main object, they apply it in making grants to ABF The Soldiers' Charity (registered Charity number 211645) for its general purposes.

Significant activities

Since 2013, the Charity has met its objects through 2 mechanisms: The making of grants to beneficiaries of members (from January 2022, up to £20,000 per death, increased from up to £15,000 per death); and, the making of a major grant to the ABF (2022: £831,000), to fulfill all other objects of the Charity, on the Charity's behalf. Trustees review this approach on an annual basis and decided in December 2021 to revert to the practice of granting to ABF in the spring following the end of an accounting year, instead of in the December of each accounting year. This practice better allows Trustees to determine the appropriate value of the grant that can be made and to fully consider other options for the disbursement of funds.

Public benefit

In considering the activities that have been undertaken in the past year, the trustees have paid due regard to the guidance on public benefit published by the Charity Commission. Trustees continue to look at whether there are other groups of potential beneficiaries that could be reached by extending eligibility criteria in line with the Charity's objectives. It is the opinion of the trustees that the Charity satisfies the criteria for public benefit.

Grantmaking

The object of the charity is the promotion of the efficiency of the Army through the relief of dependants of deceased soldiers or officers in the following order of priority: The dependants of deceased members of the charity; the dependants of deceased soldiers or officers.

The trust may assist dependants through the provision of immediate grants or, for the relief of dependants in financial hardship, sickness or disability, the trust may provide grants, loans, gifts, pensions or otherwise.

If and in so far as the trust's income is not required to meet the above objects, trustees may apply it to: Make grants to the ABF for its general purposes; or for the benefit of persons who are serving or have served in the British Army, or their dependants, in any charitable ways.

Page 1

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

ACHIEVEMENT AND PERFORMANCE

Charitable activities

The Charity's key effort throughout the year continued to be grant making to the dependants of soldiers, officers and some retired members, who died during the year. Since its primary activity is dependent upon deaths, which are of course unforeseen, the objective is not to maximise grant making but instead to react evenhandedly, efficiently and effectively to dependants' needs when a death does occur. The trustees consider that they have achieved this objective as best as practically possible.

Whether in times of peace or conflict, the precise future demand on the Trust's resources is something largely beyond the trustees' control. Liquidity planning is based on the expected level of discretionary grants which is, in turn, based on a statistical average number of fatalities. However, in times of conflict or a mass casualty event, the number of deaths will often be beyond the statistical average and planning is thus made more difficult than normal. For this reason trustees maintain significant liquidity, to the approximate value of 3 times the typical annual average expenditure of individual grants. This enables the Trust to respond rapidly if required in an emergency situation.

During the year the trust was notified of 60 deaths (2021: 74). The trust awarded 55 (2021: 68) grants to dependants of 55 (2021: 67) personnel. In 5 cases no award was made (2021: 7). 44 awards were made to regular or full time reservist soldiers, officers and retired members in 2022. 11 awards were made to members of the Army Reserve in 2022, none on the basis Regular Reserve liability. None of these awards were made to non-members. The 5 year average number of deaths where a benefit was paid is 58 (2021: 58).

Grants were made, according to needs, to the beneficiary nominated by the deceased, usually being the spouse or a parent, or sometimes to other family dependants where the trustees considered there was need. Grants made to individuals during the year totalled £1,100,000 compared to £1,020,000 in 2021.

Individual Grantmaking

As far as is possible the trustees aim to make any grant within 4 working days of the date of a death being made known to them. Where a beneficiary requests payment by cheque, the trustees aim to post such correspondence within 4 working days of the date of death. In practice, individual grants are usually received by beneficiaries well within these time frames, sometimes in a matter of hours. The Secretary will make suitable enquiries into the circumstances and follows a system of practice and precedent to make grants on behalf of trustees. In exceptional circumstances the Secretary seeks advice from trustees before making a grant.

Cooperation with ABF The Soldiers' Charity

In 2022, Trustees continued to rely heavily upon ABF, The Soldiers Charity, in dispersing the funds of the Trust in accordance with its objects and aims. Whilst recognising the coherence this provides to the sector, Trustees equally remain vigilant to the governance and risk management implications of such a methodology for grant making. With this in mind trustees annually review this approach to working with The Soldiers Charity, to ensure the objects of the trust are both best met and properly overseen.

Page 2

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

ACHIEVEMENT AND PERFORMANCE

Fundraising activities

The Charity's principal fund raising objective is to raise sufficient funds to meet the average grant need, based on normal expectations of members' mortality rates, and this is achieved through a combination of subscriptions from members and investment income. Subscriptions are paid at a rate of £8.75 per year - this has remained the same for the past 14 years. Where possible, subscriptions are collected through payroll giving to enable tax efficiency for members, but cheque payments and bank transfers are also accepted. Eligible retired officers continue to pay their subscription of £10 per year through standing orders.

The trustees encourage all Regular and Reserve soldiers and officers to become members of the scheme. Judged by any practical measure, the membership of eligible Regular personnel continues to be as high as achievable. The only gaps in this occur when individuals may re-join the Regular component, or transfer into it from the Reserve. This is a negligible figure but the trust is pursuing methods to eliminate these gaps nonetheless. In the event of a death, care is taken to ensure that where there has been an administrative error, this does not disadvantage the dependants of eligible personnel. Take-up of membership amongst Reservists remains more challenging. In 2022, Reservist membership was approximately 55% (2021: 50%). Of reservist members, approximately 30% experienced membership payment difficulties (2021 30%). In 2021, Trustees approved the acquisition of new MIS that will much better enable membership payments for reserve personnel and reduce the impact on members and units accordingly. However, the integration of the new system with Defence security protocols is still ongoing and the new MIS had not achieved operating capability by the end of 2022. Work still continues into 2023 to achieve this.

Trustees agreed in December 2017 to extend eligibility, at no cost, to all ex-Regulars with a Regular Reserve (RR) liability for the period of their RR liability; thus increasing potential beneficiaries by approximately 25,000. The practicalities of effecting this change were addressed in 2019, as the first beneficiaries under this category were supported. Trustees continue to monitor the broader implications for awareness, potential liabilities and the parity of offer to all eligible personnel across the scope of the charity.

As in previous years, the Trust did not experience significant impact as a result of Covid 19.

FINANCIAL REVIEW

Incoming resources

Subscription income from members totalled £899,357 (2021: £915,748), investment income was £1,053,611 (2021: £989,289) and £2,081 (2021: £602) was received in donations. The reduction in member donations is within tolerance for fluctuating membership numbers, especially in terms of regular or full time reserve personnel. The fluctuation in investment income is within tolerance for the market conditions prevailing in 2022.

Resources expended

Grants awarded totalled £1,100,000 (2021: £1,020,000). The cost of fundraising was £28,176 (2021: £24,777), the cost of making grants and carrying on other charitable activities, but excepting the grants themselves, was £40,230 (2021: £34,596), and governance costs totalled £19,118 (2021: £14,015).

The method of allocating costs is explained in note 1 of the financial statements. Excluding grants, the total costs of the Charity were £87,524 (2021: £72,888). The ratio of annual running costs as a proportion of total income for 2021 was 4.47% (2021: 3.82%).

Page 3

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

FINANCIAL REVIEW

Investment policy and objectives

The majority of the Charity's funds are invested in the Armed Forces Charities Growth & Income Fund (AFCGIF) (formerly the Armed Forces Common Investment Fund). This fund is shared with other Armed Forces charities and is currently managed by BlackRock Investment Management (UK) Limited. The investment is unitised and may be held in Income Units in which the income is distributed or in Accumulation Units where the gross income is automatically reinvested. The lead Investment Manager is BlackRock Investment Management (UK) Limited who are appointed by the Advisory Board of AFCGIF, which comprises senior City individuals and representatives of the major investing charities.

The investment in AFCGIF is currently held in income units as this best meets the objective of generating income to cover grants and costs and, at the same time, allow the opportunity for capital growth. The asset allocation of AFCGIF is against a composite benchmark and, as at 31 December 2022, was made up of UK Equities, Global Equities, Fixed Income Bonds, Property, Alternatives, and Cash. The primary performance objective of AFCGIF is to seek to outperform the composite benchmark set by the Advisory Board by 1% per annum. The income paid during 2022 amounted to 8.15 pence per unit (2021: 7.90p). During the year under review the actual yield of the investment, based on the market value of the investment at the year end, was 3.78% (2021: 3.15%). The investment in AFCGIF decreased in value by 13.95% (2021: 9.62% increase) giving rise to an unrealised loss of £3,112,019 (2021: £1,958,000 gain). In addition, income of £725,300 was paid in 2022 (2021: £703,100).

In addition to this primary investment, and on the basis of advice taken by the Trustees, the Charity has other investments consisting of the Mayfair Property Income Trust for Charities and The M&G Equities Investment Fund for Charities (M&G Charifund).

The Property Income Trust for Charities (PITCH) is managed by Mayfair Capital Investment Management Limited and the fund administrator is Saltgate (UK) Limited. In October 2016 the Mayfair Capital was acquired by Swiss Life Asset Managers; however, day to day management of the PITCH has remained with the current team. This investment was made to diversify the portfolio and increase the yield whilst maintaining the potential for some capital growth in real terms. The PITCH objective is to invest in commercial property throughout the UK. It aims to deliver an income yield of around 6% p.a., whilst at least growing the capital value in real terms. Income is now distributed, gross, monthly. The Fund operates both ethical and environmental policies and seeks to be a socially responsible investor. The value of the Charity's holding in this fund decreased by 16.89% during the year giving rise to an unrealised loss of £88,307 (2021: £77,495 gain). Income of £23,369 was received which is equivalent to an annual 12 month rolling yield of 5.38% (2021: 4.93%).

Page 4

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

FINANCIAL REVIEW

The M&G Charifund is designed to provide a high and growing income, while at the same time protecting its capital from the erosive effects of inflation. The Charifund portfolio comprises approximately 100 stocks. The fund invests in a well-diversified portfolio of mainly high yielding UK stocks with the objective of generating a high income and increasing the annual distribution. The aim is to provide a level of income that is significantly higher than that of the FTSE All-Share Index. Over the year the value of this holding has decreased by 5.57% (2021: 13.4% increase) giving rise to unrealised loss of £309,397 (2021: £655,452 gain). In addition, income of £296,261 (2021: £264,137) was received which is equivalent to a yield at 31 December 2022 of 5.65% (2021: 5.39%).

3 year % performance comparison of the equity investments


2020
2021
2022		 Combined Combined Combined
Fund Growth Yield Growth Yield Growth Yield Total
growth		 Average
yield
AFCGIF 4.81% 3.41% 9.62% 3.15%
-13.95%		 3.78% 0.16% 3.45%
PITCH -5.91% 4.61% 17.40% 4.93%
-16.89%		 5.38% -1.80% 4.97%
M&G
-17.30%		 4.88% 13.40% 5.39%
-5.57%		 5.65% -3.16% 5.31%

As well as these investments, and in order to maintain a necessary amount of cash reserves to meet unpredictable demands, the Trust has funds on deposit with clearing banks and with the COIF Charities Deposit Fund administered by CCLA Investment Management Limited.

Reserves policy

The policy of the Charity continues to be to generate sufficient funds through subscriptions and investment income to meet its primary object - the granting of awards to dependants or next of kin of deceased soldiers or officers. This is the core object of the Charity and is the primary requirement for operational reserves. It is impossible to predict with accuracy the number of fatalities that will occur in the year ahead, but use of historical date was agreed as the most appropriate guide. Following a study of historical data, it was agreed that the most appropriate figure for future planning was the 20 year average fatality data. Using this figure for annual fatalities, and assuming a 3.5% return on investments as previously, would give rise to an Operational Reserve requirement of approximately £15m.

In addition, trustees have felt the Trust should hold reserves available to meet both the commitment against a single major accident, such as a plane crash or ship sinking, and also against casualties from a short-term, major conflict. Trustees agreed that a separate reserve fund - a Mass Casualty Reserve - of £5m should be established for this.

To meet its normal operational need and have cover for the unexpected events above, the trustees deem that an appropriate level of reserves to cover both requirements is £20m. Noting that current investments continue to exceed this, Trustees have decided to pursue a total returns approach from 2022 onwards, treating the investment as a virtual endowment. Trustees envisage this will better enable the Trust to meet its objectives. The Reserves policy was due to be re-written in 2022 but this has been deferred until 2023.

Page 5

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

FUTURE PLANS

In 2021, Trustees commissioned an external review of the Trust's scheme, in order to reflect changing charity law, practice and precedent. This was conducted by Wilson's Solicitors, in the spring and summer of 2022. Following the review, the ADT scheme will be slightly amended. This amendment will remove the specific reference to ABF within the current articles as well as increasing the the number of independent, co-opted trustee roles, vice a reduction in ex-officio trustees . The revised articles will be submitted for Charity Commission approval in 2023.

Trustees also intend to conduct an investment review in 2023, considered in conjunction with the revision of the reserves policy. Trustees will develop a revised investment policy aligned to both risk management and investment thinking, as well as making clear the Trust's responsible investment position. Trustees also intend that further work is conducted with ABF, The Soldier's Charity, and others, to ensure that ADT grant making is achieving the objects of the Trust's revised scheme. This will include working with HQ Army to identify potential areas of need currently unfunded by Defence and not met by ADT. As ever, this work is driven by the core object of the Trust: The promotion of the efficiency of the Army through the relief of persons who are in a condition of immediate financial need, hardship or distress and who are the dependants or next of kin of a deceased soldier or officer.

On an operational level, the Trust will integrate a new MIS system in 2023, that will significantly improve the Trust's ability to work with members and with Defence Business Services and Charities Trust, in the management of donations and beneficiary nominations. The system will also offer alternative donation methods for Reserves, who often are unable to donate through the core payroll giving scheme.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The Charity is governed by a Charity Commission Scheme dated 19th February 2009 and this replaced the previous scheme dated 1st September 1999. The new scheme comprises the present constitution of the Charity.

Management

Of our six trustees, five are appointed because of their particular knowledge of personnel and welfare issues in the Army; in addition, the trustees have appointed one co-opted trustee. The co-opted trustee, who serves for a term normally not exceeding five years, is chosen for their expertise in specialised areas pertinent to the Charity's operations, or as a representative of member groups eg Army Reservists. The trustees meet at least once, but usually twice, each year in order to manage and monitor the Charity's affairs. The trustees delegate the day to day responsibility for operating the Charity to the Secretary/Treasurer, who is assisted by a part time member of staff. However, trustees are on hand at all times to sanction important decisions particularly concerning the assessment of needs of beneficiaries of discretionary grants.

The trustees are chosen so as to bring to the executive function persons whose roles in the British Army are most relevant and appropriate to the aims and objectives of the Charity. Primarily these involve matters of welfare and family support, but the individuals chosen have a wide range of experience as well as multiple skills and very significant academic, military and other qualifications making them most suited to the position.

The trustees are conscious of their significant responsibilities and undertake training where appropriate, including attendance on at least one training day every two years. They have also appointed a legal adviser with specific expertise in charities to assist them in meeting their responsibilities. The trustees believe that these procedures ensure that they are properly equipped to fulfil their role efficiently and effectively.

Page 6

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

STRUCTURE, GOVERNANCE AND MANAGEMENT Risk management

The trustees have examined the major governance, business, financial and operational risks that the Charity faces. Due to the nature of the Charity and modus operandi of the Charity the risks are fairly consistent, and are listed on a Risk Register which identifies impact, likely-hood of occurrence, and any mitigating action taken. This is monitored regularly by the CE and at least once a year formally by the trustees who ensure that control actions and procedures are in place wherever possible to minimise these risks.

REFERENCE AND ADMINISTRATIVE DETAILS Registered Charity number

1064522

Principal address

PO Box 5545 Westbury Wiltshire BA13 9BZ

Trustees

Mr B Alvin Brigadier C M B Coles Major General P Griffiths Colonel M P Sykes

Co-opted trustees

Colonel N R W Astbury

CE/Secretary and treasurer

Mr D G Middleton

Auditors

Hysons Accountants LLP, Statutory Auditor 14 London Street Andover Hampshire SP10 2PA

Bankers

Lloyds Bank plc 7 Pall Mall London SW1Y 5NA

Solicitors

Wilsons Solicitors LLP Steynings House Summerlock Approach Salisbury Wiltshire SP2 7RJ

Page 7

THE ARMY DEPENDANTS' TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2022

REFERENCE AND ADMINISTRATIVE DETAILS Investment managers

BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue London, EC2N 2DL

CCLA Investment Management Limited Senator House 85 Queen Victoria Street London, EC4V 4ET

M&G Securities Limited Mayfair Capital Investment Management Ltd Laurence Pountney Hill 2 Cavendish Square London, EC4R 0HH London, W1G 0PU

STATEMENT OF TRUSTEES' RESPONSIBILITIES

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

The law applicable to charities in England and Wales, the Charities Act 2011, Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charity for that period. In preparing those financial statements, the trustees are required to

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Approved by order of the board of trustees on ............................................. and signed on its behalf by:

.......................................................... Major General P Griffiths - Trustee

Page 8

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF THE ARMY DEPENDANTS' TRUST

Opinion

We have audited the financial statements of The Army Dependants' Trust (the 'charity') for the year ended 31 December 2022 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Page 9

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF THE ARMY DEPENDANTS' TRUST

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees are responsible for the preparation of the financial statements which give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

Page 10

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF THE ARMY DEPENDANTS' TRUST

Our responsibilities for the audit of the financial statements

We have been appointed as auditors under Section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the charity’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

Page 11

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF THE ARMY DEPENDANTS' TRUST

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.

Use of our report

This report is made solely to the charity's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees 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 the charity and the charity's trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Hysons Accountants LLP, Statutory Auditor 14 London Street Andover Hampshire SP10 2PA

Date: .............................................

Page 12

THE ARMY DEPENDANTS' TRUST

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2022

Notes
INCOME AND ENDOWMENTS FROM
Donations and legacies
3
Investment income
4
Other income
Total
EXPENDITURE ON
Raising funds
5
Charitable activities
6
Grants to dependants and ABF The
Soldiers' Charity
Total
Net gains/(losses) on investments
NET INCOME/(EXPENDITURE)
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 2022
2021
Unrestricted
Total
fund
funds
£
£
901,438
916,350
1,053,497
989,289
5,000
4,000
1,959,935
1,909,639
28,176
24,277
1,990,348
1,068,611
2,018,524
1,092,888
(3,509,723)
2,690,947
(3,568,312)
3,507,698
31,263,421
27,755,723
27,695,109
31,263,421		 2022
2021
Unrestricted
Total
fund
funds
£
£
901,438
916,350
1,053,497
989,289
5,000
4,000
1,959,935
1,909,639
28,176
24,277
1,990,348
1,068,611
2,018,524
1,092,888
(3,509,723)
2,690,947
(3,568,312)
3,507,698
31,263,421
27,755,723
27,695,109
31,263,421
1,909,639
24,277
1,068,611
1,092,888
2,690,947
3,507,698
27,755,723
31,263,421

The notes form part of these financial statements

Page 13

THE ARMY DEPENDANTS' TRUST

BALANCE SHEET

31 DECEMBER 2022

Notes
FIXED ASSETS
Tangible assets
14
Investments
15
CURRENT ASSETS
Debtors
16
Cash at bank
17
CREDITORS
Amounts falling due within one year
18
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
NET ASSETS
FUNDS
19
Unrestricted funds
TOTAL FUNDS		 2022
2021
Unrestricted
Total
fund
funds
£
£
108
130
24,880,230
28,389,953
24,880,338
28,390,083
2,076
705,158
2,839,143
2,173,283
2,841,219
2,878,441
(26,448)
(5,103)
2,814,771
2,873,338
27,695,109
31,263,421
27,695,109
31,263,421
27,695,109
31,263,421
27,695,109
31,263,421

The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by:

............................................. Major General P Griffiths - Trustee

............................................. Brigadier C M B Coles - Trustee

The notes form part of these financial statements

Page 14

THE ARMY DEPENDANTS' TRUST

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2022

Notes
Cash flows from operating activities
Cash generated from operations
1
Net cash used in operating activities
Cash flows from investing activities
Interest received
Dividends received
Property investment income
Net cash provided by investing activities
Change in cash and cash
equivalents in the reporting
period
Cash and cash equivalents at the
beginning of the reporting period
Cash and cash equivalents at the
end of the reporting period		 2022
£
(387,637)
(387,637)
8,517
1,021,611
23,369
1,053,497
665,860
2,173,283
2,839,143		 2021
£
(1,820,011)
(1,820,011)
104
967,237
21,948
989,289
(830,722)
3,004,005
2,173,283

The notes form part of these financial statements

Page 15

THE ARMY DEPENDANTS' TRUST

NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022

1. RECONCILIATION OF NET (EXPENDITURE)/INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net (expenditure)/income for the reporting period (as per
the Statement of Financial Activities)
Adjustments for:
Depreciation charges
Losses/(gain) on investments
Interest received
Dividends received
Property investment income
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Net cash used in operations		 2022
£
(3,568,312)
22
3,509,723
(8,517)
(1,021,611)
(23,369)
703,082
21,345
(387,637)		 2021
£
3,507,698
64
(2,690,948)
(104)
(967,237)
(21,948)
(704,152)
(943,384)
(1,820,011)

2. ANALYSIS OF CHANGES IN NET FUNDS

Net cash
Cash at bank
Total		 At 1.1.22
£
2,173,283
2,173,283
2,173,283		 Cash flow
£
665,860
665,860
665,860		 At 31.12.22
£
2,839,143
2,839,143
2,839,143

The notes form part of these financial statements

Page 16

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1. STATUTORY INFORMATION

The Army Dependants' Trust is an unincorporated charity registered with the Charity Commission for England and Wales (no.1064522). The principal address is PO Box 5545, Westbury, Wiltshire, BA13 9BZ.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charity, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Charities Act 2011. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value, as modified by the revaluation of certain assets.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Grants payable are payments made to third parties in the furtherance of the charitable objectives of the Trust. The grants are accounted for where the trustees have agreed to pay the grant without condition and the recipient has a reasonable expectation that they will receive a grant.

Raising funds

The cost of raising funds are set out in note 5 and consist of those costs relating to collecting subscriptions. The charities investments are comprised primarily in the Armed Forces Charities Growth & Income Fund (AFCGIF), a charity in its own right managed by BlackRock Investment Managers (UK) Limited and in the M&G Charifund. The costs for these Funds are taken from the Fund itself and are reflected in the price of the Fund's units. These costs constitute approximately 0.48% (AFCGIF) and 0.47% (M&G Charifund) of the average value of the Fund over the year.

Charitable activities

Costs of charitable activities include grants made and an apportionment of other costs as shown in notes 7 to 10 and on the basis of the apportionment referred to above.

Page 17

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

2. ACCOUNTING POLICIES - continued

Governance costs

Governance costs are set out in note 9 and comprise all costs involving the public accountability of the Charity and its compliance with regulation and good practice. These costs include costs related to statutory audit and legal fees together with an apportionment of other costs as referred to above.

Taxation

The charity is exempt from tax on its charitable activities.

Pension costs and other post-retirement benefits

The charity operates a defined contribution pension scheme. Contributions payable to the charity's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Allocation and apportionment of costs

Costs are allocated specifically to the activity to which they relate wherever possible. Some costs, mostly staff costs but including some administrative, establishment and finance costs relate to all three main activities of the Charity and these costs have been allocated as to 35 per cent to the cost of generating funds, 50 per cent to charitable activities and 15 per cent to governance. Other costs relate to generating funds and charitable activities only and these costs are split 41 per cent and 59 per cent respectively.

The cost allocation has always been determined by considering the time spent on each activity by the Charity's staff and calculating the resulting percentage of total staff costs that is attributable to each of those activities. This is reviewed annually and was last changed with effect from 1 January 2010 following changes in the method of collecting subscriptions which led to a significant reduction in the time spent on generating funds.

Tangible fixed assets

All assets costing more than £250 are capitalised and all assets are valued at cost less depreciation. Depreciation is charged on office equipment which is written off on a reducing balance basis at the rate of 33 per cent per annum which reflects their estimated useful life.

Fixed asset investments

Investments are stated at market value as at the balance sheet date.

All gains and losses are taken to the statement of financial activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and either the market value at the start of the year or the purchase date if purchased during the year. Unrealised gains and losses are calculated as the difference between the market value at the year end and either the market value at the start of the year or the purchase date if purchased during the year.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Page 18

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

3.
DONATIONS AND LEGACIES
Members' subscriptions
Donations
4.
INVESTMENT INCOME
Property based investment income
Dividend income
Interest on cash deposits
5.
RAISING FUNDS
Raising donations and legacies
Staff costs
General insurance
Printing, postage, stationery, telephone and internet
Sundries
Travelling
Books and software
Repairs and renewals of equipment
Depreciation		 2022
£
899,357
2,081
901,438
2022
£
23,369
1,021,611
8,517
1,053,497
2022
£
27,052
241
508
82
171
83
17
22
28,176		 2021
£
915,748
602		 2021
£
915,748
602
916,350
2021
£
21,948
967,237
104
989,289
2021
£
23,034
448
559
39
-
133
-
64
24,277

Page 19

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

6. CHARITABLE ACTIVITIES COSTS

Grant
funding of
Direct
activities
Costs (see
(see note
note 7)
8)
£
£
Grants to dependants and ABF
The Soldiers' Charity
40,230
1,931,000
7.
DIRECT COSTS OF CHARITABLE ACTIVITIES
Staff costs
General insurance
Printing, postage, stationery, telephone and internet
Sundries
Travelling
Books and software
Repairs, renewals and office equipment
8.
GRANTS PAYABLE
Grants to dependants and ABF The Soldiers' Charity
The total grants paid to institutions during the year was as
follows:
ABF The Soldiers' Charity
The total grants paid to individuals during the year was as
follows:
Beneficiaries of deceased members		 Support
costs (see
note 9)
Totals
£
£
19,118
1,990,348
2022
2021
£
£
38,646
32,905
345
640
732
805
117
56
246
-
119
190
25
-
40,230
34,596
2022
2021
£
£
1,931,000
1,020,000
2022
2021
£
£
831,000
-
2022
2021
£
£
1,100,000
1,020,000		 Support
costs (see
note 9)
Totals
£
£
19,118
1,990,348
2022
2021
£
£
38,646
32,905
345
640
732
805
117
56
246
-
119
190
25
-
40,230
34,596
2022
2021
£
£
1,931,000
1,020,000
2022
2021
£
£
831,000
-
2022
2021
£
£
1,100,000
1,020,000		 Support
costs (see
note 9)
Totals
£
£
19,118
1,990,348
2022
2021
£
£
38,646
32,905
345
640
732
805
117
56
246
-
119
190
25
-
40,230
34,596
2022
2021
£
£
1,931,000
1,020,000
2022
2021
£
£
831,000
-
2022
2021
£
£
1,100,000
1,020,000		 Support
costs (see
note 9)
Totals
£
£
19,118
1,990,348
2022
2021
£
£
38,646
32,905
345
640
732
805
117
56
246
-
119
190
25
-
40,230
34,596
2022
2021
£
£
1,931,000
1,020,000
2022
2021
£
£
831,000
-
2022
2021
£
£
1,100,000
1,020,000
2021
£
32,905
640
805
56
-
190
-
34,596
2021
£
1,020,000		 2021
£
32,905
640
805
56
-
190
-
34,596
2021
£
-
2021
£
1,020,000		 2021
£
-

The total grants paid to individuals during the year was £1,100,000 (2021: £1,020,000).

Page 20

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

9. SUPPORT COSTS

9. SUPPORT COSTS
Governanc
costs
£
Grants to dependants and ABF The
Soldiers' Charity 19,118
Support costs, included in the above, are as follows:
2022 2021
Grants to
dependants
and ABF
The
Soldiers' Total
Charity activities
£ £
Wages 10,400 8,927
Social security 1,104 854
Pensions 90 91
Auditors' remuneration 3,360 2,880
Insurance 699 211
Legal fees 2,400 -
Subscriptions 1,029 995
Books and software 36 57
19,118 14,015
10. AUDITORS' REMUNERATION
2022 2021
£ £
Fees payable to the charity's auditors for the audit of the
charity's financial statements 3,360 2,880

11. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 December 2022 nor for the year ended 31 December 2021.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 December 2022 nor for the year ended 31 December 2021.

Page 21

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

12. STAFF COSTS

2022 2021
£ £
Secretary's salary 44,279 37,784
Other staff salaries 25,054 21,731
Social security 7,360 5,691
Secretary's pension contributions - -
Other staff pension contributions 599 605
77,292 65,811

No employees received emoluments in excess of £60,000.

The average monthly number of employees during the year calculated on a full time equivalent basis was 2 (2021: 2).

13. TOTAL RUNNING COSTS

The total running costs of the Charity for the year were £87,524 (2021: £72,888).

14. TANGIBLE FIXED ASSETS

TANGIBLE FIXED ASSETS
Office
equipment
£
COST
At 1 January 2022 and
31 December 2022 1,470
DEPRECIATION
At 1 January 2022 1,340
Charge for year 22
At 31 December 2022 1,362
NET BOOK VALUE
At 31 December 2022 108
At 31 December 2021 130

Page 22

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

15. FIXED ASSET INVESTMENTS

MARKET VALUE
At 1 January 2022
Revaluations
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021		 Unlisted
investment
£
28,389,953
(3,509,723)
24,880,230
24,880,230
28,389,953

The investments comprised holdings in a common investment fund, and unit trusts, with market values at the end of the year as follows:

2022 2021
£ £
The Armed Forces Charities Growth & Income Fund 19,200,282 22,312,300
Mayfair Property Income Trust for Charities 434,622 522,930
M&G Equities Investment Fund for Charities 5,245,326 5,554,723
24,880,230 28,389,953

The investments are held primarily to provide an investment return for the Charity and were held in the UK.

16. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Members subscriptions due
Other debtors
Prepayments		 2022
£
972
-
1,104
2,076		 2021
£
947
703,100
1,111
705,158

Page 23

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

17. CASH AT BANK

Clearing bank account
Charities deposit account
Total
18.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Grants payable
Social security and other taxes
Other creditors
Accrued expenses
19.
MOVEMENT IN FUNDS
At 1.1.22
£
Unrestricted funds
General fund
31,263,421
TOTAL FUNDS
31,263,421		 2022
2021
Total
Total
funds
funds
£
£
1,957,633
1,300,290
881,510
872,993
2,839,143
2,173,283
2022
2021
£
£
20,000
-
-
2,223
208
-
6,240
2,880
26,448
5,103
Net
movement
At
in funds
31.12.22
£
£
(3,568,312) 27,695,109
(3,568,312) 27,695,109

Net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
TOTAL FUNDS		 Incoming
resources
£
1,959,935
1,959,935		 Resources
Gains and
Movement
expended
losses
in funds
£
£
£
(2,018,524)
(3,509,723)
(3,568,312)
(2,018,524)
(3,509,723)
(3,568,312)

Page 24

continued...

THE ARMY DEPENDANTS' TRUST

NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2022

19. MOVEMENT IN FUNDS - continued

Comparatives for movement in funds

Unrestricted funds
General fund
TOTAL FUNDS		 At 1.1.21
£
27,755,723
27,755,723		 Net
movement
At
in funds
31.12.21
£
£
3,507,698
31,263,421
3,507,698
31,263,421

Comparative net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
TOTAL FUNDS		 Incoming
resources
£
1,909,639
1,909,639		 Resources
Gains and
Movement
expended
losses
in funds
£
£
£
(1,092,888)
2,690,947
3,507,698
(1,092,888)
2,690,947
3,507,698

20. RELATED PARTY DISCLOSURES

Major General P Griffiths is a trustee of ABF The Soldiers' Charity. The Charity has power, in its Scheme, to make grants to ABF The Soldiers' Charity. A grant of £831,000 (2021: £Nil) was made to ABF The Soldiers' Charity during the year.

21. ULTIMATE CONTROLLING PARTY

The Charity was controlled throughout the year by the Trustees.

Page 25

THE ARMY DEPENDANTS' TRUST

DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2022

INCOME AND ENDOWMENTS
Donations and legacies
Members' subscriptions
Donations
Investment income
Property based investment income
Dividend income
Interest on cash deposits
Other income
Employers N.I. allowance
Total incoming resources
EXPENDITURE
Raising donations and legacies
Wages
Social security
Pensions
General insurance
Printing, postage, stationery, telephone
and internet
Sundries
Travelling
Books and software
Repairs and renewals of equipment
Office equipment depreciation
Charitable activities
Wages
Social security
Pensions
General insurance
Printing, postage, stationery, telephone
and internet
Carried forward		 2022
£
899,357
2,081
901,438
23,369
1,021,611
8,517
1,053,497
5,000
1,959,935
24,266
2,576
210
241
508
82
171
83
17
22
28,176
34,667
3,680
299
345
732
39,723		 2021
£
915,748
602
916,350
21,948
967,237
104
989,289
4,000
1,909,639
20,830
1,992
212
448
559
39
-
133
-
64
24,277
29,758
2,845
302
640
805
34,350

This page does not form part of the statutory financial statements

Page 26

THE ARMY DEPENDANTS' TRUST

DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2022

Charitable activities
Brought forward
Sundries
Travelling
Books and software
Repairs, renewals and office equipment
Grant to ABF The Soldiers' Charity
Grants awarded to dependants
Support costs
Governance costs
Wages
Social security
Pensions
Auditors' remuneration
Insurance
Legal fees
Subscriptions
Books and software
Total resources expended
Net (expenditure)/income before
gains and losses
Unrealised gains and losses
Gains/(losses) on investments
Net (expenditure)/income		 2022
£
39,723
117
246
119
25
831,000
1,100,000
1,971,230
10,400
1,104
90
3,360
699
2,400
1,029
36
19,118
2,018,524
(58,589)
(3,509,723)
(3,568,312)		 2021
£
34,350
56
-
190
-
-
1,020,000
1,054,596
8,927
854
91
2,880
211
-
995
57
14,015
1,092,888
816,751
2,690,947
3,507,698

This page does not form part of the statutory financial statements

Page 27