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2024-08-31-accounts

ROYAL ACADEMY TRUST

Registered Charity No. 1067270

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 AUGUST 2024

Royal Academy Trust Reference and Administrative Details

Trustees in the financial year and at the date of signing:

Batia Ofer (Chair) (appointed 11 December 2023) Lady Myners (Chair) (retired 11 December 2023) Sally Tennant OBE (appointed Deputy Chair 11 December 2023) Robert Suss (Deputy Chair) (retired 26 September 2023) President of The Royal Academy of Arts (Ex officio) - Rebecca Salter PRA Treasurer of The Royal Academy of Arts (Ex officio) - Prof Peter St John (Adam Caruso and Peter St John RA) Secretary and Chief Executive of The Royal Academy of Arts (Ex officio)

Secretary and Chief Executive (Interim) of The Royal Academy of Arts (Ex officio) - Natasha Mitchell (appointed 1 November 2024) Clara Amfo Stefan Bollinger Aryeh Bourkoff Varun Chandra (retired 23 September 2023) Melanie Clore Martin Ephson OBE (appointed 7 June 2024) Pesh Framjee Clive Humby OBE Dame Vivian Hunt DBE (resigned 7 May 2024) Nicole Junkermann Sébastien Mazella di Bosco (appointed 2 October 2024) Dame Carolyn Julia McCall DBE Scott Mead Siobhan Moriarty-MacDonnell Paulo Pereira Lisa Reuben (appointed 13 March 2024) Bianca Roden (appointed 2 January 2024) Elbert O’Neal Robinson Ina Sandmann Katy Wickremesinghe The Hon William Yerburgh

Emeritus and Honorary Trustees

Lord Aldington Susan Burns Sir James Butler CBE DL Sir David Cannadine FBA Sir Richard Carew Pole Bt OBE DL Varun Chandra (appointed 11 December 2023) Sir Trevor Chinn CVO John Coombe Elizabeth Crain Lord Davies of Abersoch CBE Maryam Diener nee Sachs Sir Lloyd Dorfman CBE Ambassador Edward E Elson John Entwistle OBE Michael Gee HRH Princess Marie-Chantal of Greece

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Royal Academy Trust Reference and Administrative Details

Emeritus and Honorary Trustees (continued)

C. Hugh Hildesley Anya Hindmarch CBE Susan Ho Lady Lever Sir Sydney Lipworth KC The Rt Hon The Lord Luce, GCVO DL Philip Marsden Sir Keith Mills GBE DL Ludovic de Montille Lady Myners (appointed 24 January 2024) John Raisman CBE Sir Simon Robertson Lord Rose of Monewden Richard Sharp David Stileman Robert Suss (appointed 26 September 2023) Peter Williams

Executive Committee

Batia Ofer (Chair) (appointed 11 December 2023) Lady Myners (Chair) (retired 11 December 2023) Sally Tennant OBE (appointed Deputy Chair 11 December 2023) Robert Suss (Deputy Chair) (retired 26 September 2023) Prof Peter St John (Adam Caruso and Peter St John RA) Natasha Mitchell (appointed 1 November 2024) Axel Rüger (resigned 31 October 2024) Rebecca Salter PRA Pesh Framjee The Hon William Yerburgh (retired 19 September 2024)

Investment Sub-committee membership in the financial year and at the date of signing:

Sally Tennant OBE (Chair) Heinrich Merz (appointed 26 September 2023) Stephen Nelson Alice Ryder Robert Suss (retired 26 September 2023) Nigel Thomas Andrew Threadgold The Hon William Yerburgh

Registered Office

Burlington House Piccadilly London W1J 0BD

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Royal Academy Trust Reference and Administrative Details

Advisers:

Auditors

Moore Kingston Smith LLP 6th Floor 9 Appold Street London EC2A 2AP

Bankers

Lloyds Bank Plc 4th Floor 25 Gresham Street London EC2V 7HN

Solicitors

Macfarlanes LLP 20 Cursitor Street London EC4A 1LT

Withers LLP 16 Old Bailey London EC4M 7EG

Investment Managers

Partners Capital LLP 5th Floor 5 Young Street London W8 5EH

Sarasin & Partners LLP Juxon House 100 St Paul's Churchyard London EC4M 8BU

Evenlode Investment Management Limited The Long Barn Chalford Park Barns Oxford Road Chipping Norton Oxfordshire OX7 5QR

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Royal Academy Trust Trustees’ Report For the year ended 31 August 2024

The trustees present their report and financial statements for the year ended 31 August 2024.

CONSTITUTION AND CHARITABLE OBJECTIVES

Constitution

Royal Academy Trust (“the Charity” or “the Trust”) was established under a Trust Deed dated 11 February 1981 to serve the public benefit by providing funds for the support of The Royal Academy of Arts (“the Royal Academy” or “the Academy”). The Trust became separately registered as a charity on 8 January 1998. The Trust Deed has been amended several times, including in June 2019, to change the name of the Trust from Royal Academy Development Trust to Royal Academy Trust and to amend term limits for appointed trustees (see below under “Governance and management”).

Governance and management

The Charity is governed by trustees, who are men and women of distinction from business and the wider community.

The maximum number of trustees is 35 at any one point in time. The trustees consist of the President, Treasurer and the Secretary and Chief Executive of the Royal Academy, ex officio , and other trustees who shall serve a three year initial term, after which they are eligible for a three year renewal term, and in exceptional circumstances further terms each of no more than three years.

The trustees and officers who served during the year ended 31 August 2024 and at the date of signing are shown on pages 1 and 2 of the annual report and financial statements.

The management of the funds and distributions to the Royal Academy up to £1.25m per annum has been delegated to the Charity’s Executive Committee, chaired by the Chair of the Trust. The Charity’s Executive Committee has further delegated authority to manage distributions to the Royal Academy from the anonymous donor fund, which comprises both a permanent endowment element and a restricted fund for a future capital project. Other distributions to the Royal Academy for more than this must be approved by the full Trustee Board. The timing and execution of such distributions may be delegated to the Charity’s Executive Committee.

The trustees are responsible for approving adequate arrangements for induction and training for new trustees and to this end a programme has been arranged to include formal inductions by the Chair, key Royal Academy Officers and executive staff, and by the Royal Academy General Counsel, together with an informative welcome pack and an introductory tour. Key documents and information are re-circulated to current trustees on an annual basis.

The trustees have a risk management process. Risks are recorded in a Risk Register and mitigating actions implemented and monitored. The major risk for the Charity is exposure to a volatile financial market. This is mitigated by the frequent monitoring and broad spread of the funds to managed investments. This risk, along with any other is considered by the trustees and is part of the Risk Register reviewed by the Charity’s Investment Sub-committee and Executive Committee on at least an annual basis.

The main investment portfolio is managed by the trustees, through the Investment Sub-committee, based on advice from Partners Capital LLP (“Partners Capital”). Further investment funds are held with Sarasin & Partners LLP (“Sarasin”) and Evenlode Investment Management Limited (“Evenlode”). These managers are similarly overseen by the Investment Sub-committee.

The Investment Sub-committee advises the board of trustees on investment policy and risk. The Investment Subcommittee comprises trustees with investment experience and non-trustees chosen for their experience of investment management.

Charity Governance Code

The Charity and its trustees take good governance seriously and are aware of the Charity Governance Code, including its seven main principles.

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Royal Academy Trust Trustees’ Report For the year ended 31 August 2024

During the financial year the Charity:

The Charity continued to work to specific policies and procedures which apply across the Royal Academy, such as those relating to gift acceptance based on recommendations from the dedicated Ethics Advisory Group.

OBJECTIVES, ACTIVITIES AND PUBLIC BENEFIT

The object of the Charity is the maintenance, development, advancement and preservation of the Royal Academy, a legally separate charity based in London, through which the arts of design are promoted by its charitable objects, which are stated as:

It should therefore be noted that the object and therefore the remit of the role of the trustees does not extend to the responsibility for the Royal Academy itself and its day to day running, for which the Council of the Royal Academy is responsible, as the governing body of The Royal Academy of Arts.

Current activities and objectives

Future plans

In setting these objectives, the trustees confirm that they comply with their duty in section 17 of the Charities Act 2011 to have regard to the guidance on public benefit published by the Charity Commission in exercising their powers and duties.

FINANCIAL REVIEW, ACHIEVEMENTS AND PERFORMANCE

Financial review

Income for the year ended 31 August 2024 totalled £1.5m (2023: £1.5m). There were donations of £0.2m in support of Royal Academy cultural activities (2023: £0.5m). There was also £1.3m of investment income (2023: £1.0m). Net gains on investments were £2.7m (2023: losses of £0.6m).

Donations to the Royal Academy of £1.9m (2023: £3.7m) were made up of £1.7m (2023: £1.7m) in support of revenue projects; £nil (2023: £2.0m) as emergency support funding to mitigate the ongoing financial impact to the Royal Academy of the pandemic; and £0.2m (2023: £nil) in respect of Phase III of the Burlington Project. The former comprises £1.7m (2023: £1.7m) as an annual donation. £1.2m (2023: £1.0m) of the annual donation relates to designated/restricted funds, whilst £0.5m (2023: £0.7m) relates to a just under 4% distribution from

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Royal Academy Trust Trustees’ Report

For the year ended 31 August 2024

unrestricted and general-purpose endowment/restricted funds broadly in line with the target annual distribution rate of 4% set by the trustees for year ended 31 August 2020 and future financial years.

During the year the investment portfolio increased from £50.0m to £52.2m. The portfolio returned £4.0m (c.7.7%), with drawdowns of £1.8m to fund donations to the Royal Academy. As at 31 August 2024, Sarasin were managing £5.3m in a Liquidity Fund set up for restricted funds for Phase III of the Burlington Project. Of the remaining funds of £46.9m, Partners Capital were managing c. 64% of assets under management, with Sarasin managing c. 26% and Evenlode c. 10%. Cash at bank held with Lloyds Bank Plc. increased from £0.2m to £0.3m during the year, with income from donations and legacies of £0.2m less expenditure on raising funds and drawdowns to fund donations to the Royal Academy totalling £0.1m.

Included in the above amounts are funds donated for the Royal Academy to be held in investments by the Charity. These funds are held by the Charity until they are required for specific projects of the Royal Academy and are invested by the Charity to provide future funding for the charitable objects of the Royal Academy. These are treated as assets of the Charity and are held for the maintenance, development, advancement, and preservation of the Royal Academy.

Investments

Since November 2008, management of the Charity’s investment portfolios has operated under agreements with Partners Capital. Since June 2014, this has operated under a Discretionary Management Agreement.

During the year ended 31 August 2018, the remaining $17.2m (£13.2m) of a $23.0m pledge from a donor, who wished to remain publicly anonymous, was received; $5.8m (£4.0m) having been received in the year ended 31 August 2016. Of the £17.2m ($23.0m) received, £12.2m is being held as a permanent endowment; with £5.0m as a restricted fund to be made available to the Royal Academy when required for Phase III of the Burlington Project.

From November 2016 two further investment managers, Sarasin, and Troy, were engaged to initially manage the anonymous donor funds. Due to the size and nature of the endowment, the Investment Sub-committee took the opportunity to further diversify the Charity’s overall investment portfolio and its counter-party risk. In January 2020, following a review of the overall strategic asset allocation of the portfolio, the Investment Sub-committee decided to divest from Troy’s Trojan Fund, a diversified multi-asset fund, and Trojan Income Fund, a UK equity fund, in order to reinvest with an active global equity manager, Evenlode, who were appointed following a due tender process, and further rebalanced the overall asset allocation by trimming the level of investment with Sarasin and reinvesting these funds with Evenlode.

During the year ended 31 August 2023, the Charity set up a separate Liquidity Fund as a sub-account of its main mandate with Sarasin and £3.7m was divested from Sarasin’s existing endowment portfolio and reinvested in this Liquidity Fund. A further £1.3m was transferred from Partners Capital funds. The Liquidity Fund invests in Certificates of Deposit of up to 12 months and a sterling liquidity fund. This £5.0m mandate is in respect of the restricted fund to be made available to the Royal Academy when required for Phase III of the Burlington Project. It is currently forecast that these funds will be needed by the Royal Academy during 2024 and 2025 with the construction phase of the Project expected to commence in the second half of 2025. £0.2m was distributed to the Royal Academy during the year ended 31 August 2024.

In addition to establishing this Liquidity Fund, the Investment Sub-committee also made changes to the overall strategic asset allocation for the remainder of the portfolio and the relative asset holdings of its three investment managers during the year ended 31 August 2023. Excluding the Liquidity Fund, the portfolio has c.75% of its assets in global equities (including c.20% in private equity) and c. 25% in other investment classes (including just under 10% in private debt).

The overall investment strategy is seeking to provide a reasonable level of return, while ensuring that the “real” value of the capital is maintained, such that the trustees will be able to continue similar distributions in the future. Distributions for restricted and unrestricted designated funds are in accordance with specific restrictions and distribution rates, at various rates up to 4%. The trustees have set an annual target distribution rate of 4% for unrestricted and general-purpose permanent endowment funds. To achieve this, a long-term investment objective of inflation plus 4% has been identified as appropriate. Whilst it is the intention to create an investment solution that meets this long-term objective, it is recognized that there will be periods when lower returns will be expected.

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Royal Academy Trust Trustees’ Report

For the year ended 31 August 2024

The primary purpose of the Partners Capital investment portfolio is to support the long-term operating and capital needs of the Royal Academy. To this end, the overall portfolio is managed to maximise the long-term total return of the portfolio, subject to maintaining a reasonable level of risk of loss. The main investment portfolio supports the operating and capital needs of the Royal Academy through an annual spending rate, which is reviewed periodically to ensure the spending rate is sustainable over the long-term.

The Trust’s objective from the Partners Capital investment portfolio is to preserve and, if possible, to enhance the purchasing power of its assets, after annual spending and all costs and expenses, over rolling three-year periods. This objective implies a minimum time-weighted net return target for the Trust more than the RA’s estimated cost inflation (estimated at 3.0%, based on forecast long run UK inflation of 3.0%) plus the spending rate (as defined above of 4% per annum). This equates to a minimum annual return of 7.0% p.a. Actual returns will need to be more than this minimum target to cover the costs of portfolio management and to provide a cushion over the longer-term.

The Charity’s investment portfolio with Sarasin operates under a Discretionary Client Agreement signed in November 2016. The aim of the portfolio is to enhance the capital value over the longer term, whilst generating sufficient income to meet the Charity’s requirements, for which a “real return” of 4% per annum has been targeted. The Charity’s investments are held in the Sarasin Endowments Fund and the Sarasin Climate Active Endowments Fund; the objective of both these funds is to achieve long-term capital and income growth.

Since January 2020, the Charity has invested in the Evenlode Global Income Fund, which aims to produce attractive long-term total returns, with an emphasis on income. The fund aims to grow dividend income by a conservative 6% per annum, or about 3% real in the long-term. The fund further targets capital growth (excluding dividend income referred to above) of over 6% per annum or 3% real.

Endowments

The Charity has five permanent endowments. These are managed by the trustees on a total return basis. This means that the funds are invested to maximise the total return on investment without regard to whether that return is in the form of income from dividends or interest or capital appreciation. The trustees decide each year how much of that return is released to restricted income funds for spending and how much is retained for investment. The allocation is made on an equitable basis to balance the need to fund annual levels of distribution and the maintenance over time of the real value of the endowment. Until transferred, the unapplied total return remains invested as part of the permanent endowment.

The trustees have noted the value of the gift for each of the five permanent endowments received, since each fund was established. This provides the baseline value of the gift component of each endowment to which any subsequent gift of endowment is added. The difference between the total of the endowment fund and the value of the gift component represents the balance of unapplied total return. Having considered their obligations as outlined above, the trustees decided to make transfers from unapplied total return to restricted income funds for the year ended 31 August 2024 of £0.0m (2023: £0.1m) for the Ivor Rey scholarship fund to support the annual award to enable students of the Royal Academy Schools to visit Paris, France for the purpose of studying art; £0.2m (2023: £nil) from the Paul Mellon endowment fund to support Royal Academy revenue projects; £0.1m (2023: £0.1m) from the McAulay Scholarship Fund endowment to support students in the Royal Academy Schools; £0.0m (2023: £nil) from the Armando Garza Sada Sr. Memorial fund, which was established in 2022; and £0.6m (2023: £0.6m) for the anonymous donor fund. In making these decisions the trustees have taken account of the investment climate, the return on investment for the year, previous levels of allocations from the unapplied total returns and the income needs of the Charity.

Responsible Investment Policy

The Charity is committed to investing its funds on a socially responsible basis. In June 2021, the trustees approved the Charity’s Ethical Investment Policy (“the Policy”). In May 2022, the Policy was reviewed by the Investment Sub-committee with minor amendments, including a change in the Policy name to the Responsible Investment Policy. This better reflects the objectives and principles contained in the Policy. This amended Policy was approved by the Trust Executive in September 2022, with an update provided to the full Trustee Board in September 2022. The Policy is now reviewed annually and is published on the Royal Academy’s website, with last year’s update including reference to the values set out in the Royal Academy’s Strategic Plan 2023-2028. This states that “in everything we do and everyone we engage with we are guided by a strong ethical compass. We

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Royal Academy Trust Trustees’ Report For the year ended 31 August 2024

take our responsibility towards the environment, social justice, and proper governance very seriously. In our work we meet fundamental principles in the areas of human rights, labour, the environment, and anti-corruption.” The Policy has been developed with the intention of active promotion of investment in companies and investment funds which demonstrate policies and practices that are in line with the Charity’s values of strong ethical principles. The Policy applies to the full scope of the investments held by the Charity. The Charity believes that to accord with its values when investing its funds, regard must be made to Environmental, Social and Governance (“ESG”) issues.

The Investment Sub-committee monitors the operation and the effectiveness of the Policy and provides the trustees with an annual update. The third annual ESG review and report from the Investment Sub-committee in respect of the period to 31 August 2024 was presented to the full Trustee Board in October 2024. The Investment Sub-committee was pleased to report the progress made over the past year but hoped to see further improvements over the following 12 months. An ESG Sub-Group of the Investment Sub-committee was formed in early 2024 to undertake a deeper dive into ESG matters and will report its findings to the Investment Subcommittee in early 2025.

The Charity has identified two sets of principles which accord with its values and aspirations in this area, one relating to the operations of its fund managers and the other to setting appropriate standards for all its investments. Firstly, The United Nations Principles for Responsible Investment (“UNPRI”): these six principles have been developed, inter alia, to “better align investors with the broader objectives of society”. The Charity therefore expects that its fund managers will be signatories of the UNPRI and follow its principles in the way they operate. Secondly, The United Nations Global Compact: The Charity supports the ten principles of the United Nations Global Compact, which stem from the acceptance that, as with the Charity itself, corporate sustainability starts with an entity’s value system and a principled approach to the way it operates. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment, and anti-corruption.

In managing its investments, the Charity therefore expects its appointed investment managers to encourage good behaviour and discourage poor behaviour through the screening of investments (using the principles above or an equivalent framework) and through the direct engagement with the companies in which they invest. In doing so, they should promote sustainability, good business ethics, good employment practices and the transition to a low carbon economy.

The Charity is particularly concerned about the following ESG issues and will continue to adopt investment strategies that seek to minimise or, ideally, eliminate investments in companies with corporate behaviour leading to: environmental degradation and climate change; the manufacture of controversial weapons, including cluster munitions, landmines, biological and chemical weapons, nuclear and depleted uranium weapons; tobacco production, cultivation, and manufacture; and adult entertainment (pornography) production, distribution, retail, and ownership. Such investment strategies are not in line with the Charity’s values and may damage the Charity’s reputation and impact fundraising and so are not in the Charity’s best interest.

During the two financial years to 31 August 2022, the Charity invested £5.0m in the Sarasin Climate Active Endowments Fund. The Charity further approved in February 2022 a commitment of c.£0.5m ($0.7m) to the 2022 vintage of the Partners Capital 15 degrees Fund, representing 50% of the annual £1.0m Private Equity commitment. In February 2024, the Charity approved a further c. £0.8m ($1.0m) commitment in the 15 degrees Fund II, representing 50% of the annual £1.6m Private Equity commitment. This fund will similarly focus on investments in technological innovation and advancing solutions which tackle pressing environmental and social challenges.

Related party transactions

Related party transactions are disclosed in note 20 to the financial statements.

Reserves policy

The Charity holds its free reserves as investment funds from which it can generate income and capital gains for the future support of the Royal Academy. The current statement of investment principles and the distribution policy recognise the objective of delivering financial support for the Royal Academy that will be sustainable for

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oval Academy Trust Trustees. Report For the year ended 31 August 2024 the foreseeable future. The trustees have not establlshed a mlnlmum or maxlmum level of free reserves as thev wish to be able to balance the need to respond to immediate special needs of the Royal Academy and to ensure sustalned support. As at 31 August 2024, the Charlty held total funds of £52.3m12023,' £50.2ml, of whlch £16.8m (2023: £15.9ml were unrestricted funds for which £10.3m (2023: £9.7m} is both unrestricted and not designated; £22.Im12023.' £20.8ml endowment funds; and £13.4m (2023: £13.5m) restrlcted funds. FUNDRAISING The Charlty has a cost of ralslng funds In the flnanclal statements In relatlon to Investment fund manager fees and staff costs for administerin8 legacies to generate funds on behalf of the Royal Academy. The Charity does not actlvely fundralse and any approach to fundralsSn8 would tske account of the Code of Fundralslng Practlce Issued by the Fundralsln8 Re8ulator. The Royal Academy Is registered wlth the Fundralsln8 Regulator, submlts annual complalnts returns to the Regulator and provldes statements on partlcular areas of fundralslng Ilncludlng complaints) In Its annual report. These complaints returns and statements Include actlvltles whlch mlght technlcally fall under the remlt af the Charity. The Regulator has approved thls arrangement and conflrmed that the Charlty Is not requlred to malntaln a separate re8lstratlon wlth the Re8ulator. STATEMENT OF TRUSTEES, RESPONSIBILITIES The trustees are responslble for preparlng the trustees, report and the flnanclal Statements In accordance wlth the appllcable law and the Unlted Klngdom Accountlng Standards {UnSted Kln8dom Generally Accepted Accountlng Practlcel. The law appllcable to charltles In En8land and Wales requlres the trustees to prepare flnanclal statements for each flnanclal year whlch glve a true and falr vlew of the state of the affalrs of the charlty and of the Incomln8 resources and appllcatlon of resources of the charlty for that perlod. In preparlng these flnanclal statements, the trustees are requlred to: Select sultable accountln8 polScles and then apply them conslstently,. Make ludqments and estlmates that are reasonable and prudent; State whether appllcable UK Accountln8 Standards have been followed, subject to any materlal departures dlsclosed and explalned In Ihe flnanclal statements; Prepare the flnanclal statements on the golng concern basls unless It Is Inapproprlate to presume that the charlty wlll contlnue In buslness; Observe the methods and prlncSples In the Charltles SORP. The trustees are responslble for keeplng proper accountlng records that dlsclose wlth reasonable accuracy at any tlme the flnanclal posltlon of the charlty and enable them to ensure that the flnanclal statements comply wlth the Charltles Act 2011, the Charlty (Accounts and Reports) Regulatlons 2008 and the provlslons of the trust deed. They are also responsible for safeguardlng the a55ets of the charlty and hence for takln8 reasonable steps for the preventlon and detectlon of fraud and other Irregularltles. Audlt Inform•tlon So far a5 each of the trustees at the time the trustees, report Is approved is aware.. there Is no relevant Informatlon of whlch the audltors are unaware,, and they have taken all relevant steps they ou8ht to have taken to make themselves aware of any relevant audlt Informatlon and to establlsh that the audltors are aware of that Informatlon. On behalf of the Board a Ofer. Chalr Date: Page: 9

Royal Academy Trust Independent Auditors' Report to the Trustees of Royal Academy Trust

Opinion

We have audited the financial statements of the Royal Academy Trust ("the Charity") for the year ended 31 August 2024 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 "The Financial Reporting Standard Applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).

Opinion on the financial statements

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 other information comprises the information included in the annual report, other than the financial statements and our auditors' report thereon. The trustees are responsible for the other information contained within the annual report. 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.

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Royal Academy Trust Independent Auditors' Report to the Trustees of Royal Academy Trust (continued)

Other information (continued)

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 course of 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 there is 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out on page 9, the trustees are responsible for the preparation of the financial statements and for being satisfied that they 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.

Auditors' responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act.

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 an auditors' report 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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Royal Academy Trust Independent Auditors' Report to the Trustees of Royal Academy Trust (continued)

Auditors' responsibilities for the audit of the financial statements (continued)

As part of an audit in accordance with ISAs (UK) we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the Charity.

Page: 12

Royal Academy Trust Independent Audltors, Report to the Trustees of Royal Academy Trust (continuedl Explanatlon as to what extent the audlt was consldered capable of detectln8 Irregularltles, Includlns fraud Icontlnued) Our approach was as follows: we obtained an understanding of the legal and regulatory requirements applicable to the Charity and considered that the most significant are the Charities Act 2011, the Charity SORP, and UK financial reporting standards as Issued by the Financial Reportin8 Council; we obtained an understanding of how the Charity complies with these requirements by discussions with management and those charged wlth governance. we a5ses5ed the rlsk of materlal mlsstatement of the flnancial statements, includlng the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance; we inquired of management and those charged with governance as to any known Instances of non- compliance or suspected non-compliance with laws and regulations; based on this under5tandingi we designed specific appropriate audit procedures to identify Instances of non-compllance with law5 and regulations. This included making enqulrles of management and those charged with governance and obtainin8 additional corroborative evidence as required. There are Inhe￿nt Ilmltations In the audit procedures described above. We are less likely to become aware of Instances of non-compllance wSth laws and regulation5 that are not dosely related to events and transactions reflected In the flnanclal statements. Also, the risk of not detecting a material misstatement due to fraud Is higher than the rlsk of not detecting one resultln8 from error, as fraud may involve deliberate concealment bv, for example, forgery or intentional misrepresentations, or through collusion. Use of our report This report is made solely to the Charity's trustees, as a body& in accordance wlth Chapter 3 of Part 8 of the Charities Act 2011. Our audit work has been undertaken so that we might state to the Charitvs trustees those matters we are required to state to them in an auditors, report and for no other purpose. To the fullest extent pemiitted by law, we do not accept or assume responsibility to any party other than the Charity and Charlty's trustees as a body* for our audit work, for thls report, or for the opinion we have formed. li P.L_£,,k LLP .)TrQ Moore Kln8ston Smlth LLP statutory Auditor D•te: 6th Floor 9 Appold Street London EC2A 2AP Moore Klngston 5mlth LLP 15 eligible to act a5 auditor in term5 of Section 1212 of the Companies Act 2006. Page: 13

Royal Academy Trust Statement of Financial Activities For the year ended 31 August 2024

Note
Income and endowments from:
Donations and legacies
5
Investments
6
Total income
Expenditure on:
Raising funds
8
Charitable activities
Annual donation to the Royal Academy
7
Other donations to the Royal Academy
7
Total charitable activities
Total expenditure
Net gains / (losses) on investments
11
Net income / (expenditure)
Transfers between funds
15,16
Total funds brought forward
Total funds carried forward		 Total
Total
funds
funds
2024
2024
2024
2024
2023
£
£
£
£
£
209,691
-
-
209,691
493,172
330,090
441,969
537,090
1,309,149
988,681
Unrestricted
funds
Restricted
funds
Endowment
funds
* see note 4 for
comparatives
539,781
441,969
537,090
1,518,840
1,481,853
(190,757)
-
(13,028)
(203,785)
(124,589)
(196,529) (1,480,555)
-
(1,677,084) (1,729,819)
-
(200,000)
-
(200,000) (2,000,000)
(196,529) (1,680,555)
-
(1,877,084) (3,729,819)
(387,286) (1,680,555)
(13,028) (2,080,869) (3,854,408)
727,902
246,931
1,747,181
2,722,014
(550,427)
880,397
(991,655)
2,271,243
2,159,985
(2,922,982)
-
926,436
(926,436)
-
-
15,914,516
13,485,668
20,794,762
50,194,946
53,117,928
16,794,913
13,420,449
22,139,569
52,354,931
50,194,946

All gains and losses arising in the year are included in the Statement of Financial Activities and arise from continuing operations.

The notes on pages 17 to 31 form part of these financial statements.

Page: 14

Royal Academy Trust Balance Sheet as at 31 August 2024 Note 2024 2023 Flxed assets Investments li 52,165.701 50,029,525 Current assets Debtors Cash at bank and in hand 12 36,S66 276,755 95,198 207,254 Total current Issets 313,321 302,452 Llabllltl•s Creditors- amounts falling due within one year 13 (124,091) {137,031) Net current •Ssets 189.230 165,421 Net •ssets 52,354,931 50,194,946 The funds of the charltv: Endowment funds 15 22,139,569 20,794,762 Restricted funds 16 13,420,449 13,485,668 Unrestrlcted funds: Deslgnated Other 17 6N63,666 10,331,247 6,234,418 9,680,098 Total unrestricted funds 16,794,913 15,914,516 Total chlrlty funds 52,354,931 50,194,946 Approved by the Trustees and authorised for Issue on ..... ... Batla Ofer. Chalr Page: 15

Royal Academy Trust Statement of Cash Flows For the year ended 31 August 2024

Note
Net cash used in operating activities
14
Cash flow from investing activities
Dividends and interest from investments
6
Fund manager fees
8
Payments to acquire fixed asset investments
11
Proceeds from investment disposals
11
Net movement in cash held in the investment portfolio
11
Net cash provided by investing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 2024
£
(1,715,283)
1,309,149
(110,203)
(16,230,675)
16,464,621
351,892
1,784,784
69,501
207,254
276,755		 2023
£
(3,309,350)
988,681
(36,373)
(11,957,658)
14,974,522
(726,581)
3,242,591
(66,759)
274,013
207,254

Page: 16

Royal Academy Trust Notes to the Financial Statements

For the year ended 31 August 2024

1 General information

Royal Academy Trust ("the Charity") is a registered charity established to serve public benefit by providing funds for the support of The Royal Academy of Arts ("the Royal Academy"). The registered office is Burlington House, Piccadilly, London.

2 Summary of significant accounting policies

The financial statements have been prepared under the historical cost convention as modified by the revaluation of investments to market value and in compliance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" ("FRS 102") and the Charities Act 2011.

The financial statements are prepared in sterling which is the functional currency of the Charity. Monetary amounts in these financial statements are rounded to the nearest pound.

The Charity is a Public Benefit Entity as defined by FRS 102.

a. Basis of preparation

The financial statements have been prepared on a going concern basis.

The principal accounting policies applied in the preparation of these financial statements are set out in the notes below. These policies have been consistently applied to all the years presented, unless otherwise stated.

b. Going concern

The trustees consider that there are no material uncertainties affecting the Charity's ability to continue as a going concern for at least twelve months from the date of approval of the accounts.

c. Total return investment accounting

The trustees have elected to adopt the total return approach for the investment of its permanent endowments. Under this approach, the permanently endowed funds are invested to produce an investment return without regard to whether that return is in the form of income or capital appreciation; the investment return forms a component of the endowment fund called the unapplied total return. The trustees periodically determine how much of the unapplied total return is released to income for spending and how much is retained for investment. This allocation is made equitably to balance the need for income to meet current requirements and to hold funds as part of the endowment to produce investment returns for the future.

d. Funds structure

Where there is a legal restriction on the purpose to which a fund may be put, the fund is classified either as a restricted fund or an endowment fund.

Restricted funds are those where the donor has provided for the donation to be spent in furtherance of a specified charitable purpose.

Page: 17

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

2 Summary of significant accounting policies (continued)

d. Funds structure (continued)

Endowment funds arise when the donor has expressly provided that the donation is to be invested and only the income of the fund may be spent. These funds are sub analysed between those where the trustees have the discretion to spend the capital, an expendable endowment, and those where there is no discretion to expend the capital, a permanent endowment.

Those funds which are neither endowment nor restricted income funds, are unrestricted income funds which are sub analysed between designated funds where the trustees have set aside amounts to be used for specific purposes or which reflect the non-binding wishes of donors and unrestricted funds which are used at the trustees' discretion in furtherance of the general objectives of the Charity, including the general fund which represents the Charity's reserves. The major funds held in each of these categories are disclosed in notes 15 to 17.

e. Income

All income is recognised once the Charity has entitlement to the resources, it is probable (more likely than not) that the resources will be received and the monetary value can be measured reliably.

Investment income, including the related tax credit, and interest on bank and short-term deposits are accounted for on a receivable basis.

Donations are accounted for when received.

Legacies are accounted for as income where there is clear entitlement; the amount can be measured reliably; and receipt is probable.

Receipt is probable when:

Measurement is based on the value listed in the will for pecuniary gifts, provided the estate has sufficient funds, and on the estate accounts for residuary gifts.

h. Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to each category of expense shown in the Statement of Financial Activities ("SOFA").

i. Raising funds

The costs of raising funds are those costs attributable to generating income for the Charity. These represent the legacy manager's salary costs, investment management fees and governance costs. Governance costs are primarily concerned with constitutional and statutory requirements.

Page: 18

Royal Academy Trust Notes to the Financial Statements

For the year ended 31 August 2024 (continued)

2 Summary of significant accounting policies (continued)

j. Charitable activities

Costs of charitable activities comprise the donations made to the Royal Academy. Generally, donations are accounted for when paid. However, where the Royal Academy has incurred expenditure on a major capital project on the basis of a commitment from the Charity to reimburse costs, any costs not covered by donations paid in the year are provided for.

k. Investments

Listed investments are stated at market value at the year end. The market value of securities is based on the bid market quotation on the relevant stock exchange and investments that are held in units are stated at the average of the unit bid and offer prices. The SOFA includes any realised or unrealised gain / loss during the year.

The main form of financial risk faced by the Charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.

l. Realised gains and losses

All gains and losses are taken to the SOFA as these arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and opening carrying value or later purchase price. Unrealised gains and losses are calculated as the difference between the market value at the year end and opening carrying value or later purchase price.

m. Foreign currencies

Investment transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Assets and liabilities denominated in foreign currencies are retranslated at the rate ruling at the balance sheet date.

n. Financial instruments

Financial instruments are recognised in the Charity's balance sheet when it becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Charity after deducting all of its liabilities.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost less any impairment.

Page: 19

Royal Academy Trust Notes to the Financial Statements

For the year ended 31 August 2024 (continued)

2 Summary of significant accounting policies (continued)

n. Financial instruments (continued)

Other financial assets

Other financial assets, including investments in equity instruments, are initially measured at fair value which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in the SOFA.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as "debtors". Debtors are measured at amortised cost less any impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through the SOFA, are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in the SOFA.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Other financial liabilities

Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in the SOFA in finance costs or finance income as appropriate. Hedge accounting is not currently applied.

3 Critical accounting judgments and estimation uncertainty

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Page: 20

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

4 Prior year comparatives by type of fund

Income and endowments from:
Donations and legacies
Investments
Total income
Expenditure on:
Raising funds
Charitable activities
Annual donation to the Royal Academy
Other donations to the Royal Academy
Total charitable activities
Total expenditure
Net losses on investments
Net income / (expenditure)
Transfers between funds
Total funds brought forward
Total funds carried forward		 2023
2023
2023
£
£
£
407,424
85,748
-
242,261
142,157
604,263
Unrestricted
funds
Restricted
funds
Endowment
funds		 Total
funds
2023
£
493,172
988,681
649,685
227,905
604,263		 1,481,853
(120,815)
-
(3,774)
(682,564)
(1,047,255)
-
(2,000,000)
-
-		 (124,589)
(1,729,819)
(2,000,000)
(2,682,564)
(1,047,255)
-		 (3,729,819)
(2,803,379)
(1,047,255)
(3,774)		 (3,854,408)
(251,502)
(8,937)
(289,988)		 (550,427)
(2,405,196)
(828,287)
310,501
-
690,624
(690,624)
18,319,712
13,623,331
21,174,885		 (2,922,982)
-
53,117,928
15,914,516
13,485,668
20,794,762		 50,194,946

5 Income from donations and legacies

General
Revenue projects:
Schools
Total revenue projects
Total		 Total
2024
2024
2024
2024
£
£
£
£
158,650
-
-
158,650
Unrestricted
funds
Restricted
funds
Endowment
funds		 Total
2023
£
425,803
51,041
-
-
51,041		 67,369
51,041
-
-
51,041		 67,369
209,691
-
-
209,691		 493,172

Page: 21

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

6 Income from investments

Listed investments
Bank interest
Total		 Total
2024
2024
2024
2024
£
£
£
£
313,864
434,345
520,799
1,269,008
16,226
7,624
16,291
40,141
330,090
441,969
537,090
1,309,149
Unrestricted
funds
Restricted
funds
Endowment
funds		 Total
2023
£
972,365
16,316
988,681

7 Analysis of expenditure on charitable activities

In the current year, the Charity made donations of £1,877,084 (2023: £3,729,819) to the Royal Academy, representing £nil (2023: £2,000,000) to the Coronavirus Emergency Support Fund; £200,000 (2023: £nil) for Burlington Project - Phase III; £nil (2023: £1,648) for the cataloguing project; £180,000 (2023: £92,500) for the Heinz Architecture Programme; £319,497 (2023: £282,497) for the Royal Academy Schools; £6,410 (2023: £6,410) for the Library; and £5,000 (2023: £5,000) for the Casson Drawing Prize in the Summer Exhibition, with the balance donated in support of the general activities of the Royal Academy.

Total
2024
2024
2024
2024
£
£
£
£
Annual donation to the Royal Academy
196,529
1,480,555
-
1,677,084
Royal Academy revenue projects:
General
-
-
-
-
Total revenue projects
-
-
-
-
Royal Academy capital projects:
Burlington Project - Phase III
-
200,000
-
200,000
Total capital projects
-
200,000
-
200,000
Total
196,529
1,680,555
-
1,877,084
8 Analysis of expenditure on raising funds
Total
2024
2024
2024
2024
£
£
£
£
Fund manager fees
97,175
-
13,028
110,203
Staff costs
68,292
-
-
68,292
Auditors' remuneration
23,159
-
-
23,159
Bank charges
92
-
-
92
Exchange rate losses
87
-
-
87
Miscellaneous
1,952
-
-
1,952
Total
190,757
-
13,028
203,785
Unrestricted
funds
Restricted
funds
Endowment
funds
Unrestricted
funds
Restricted
funds
Endowment
funds		 Total
2023
£
1,729,819
2,000,000
2,000,000
-
-
3,729,819
Total
2023
£
36,373
66,107
19,019
95
213
2,782
124,589

Page: 22

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

9 Trustees' remuneration, benefits and expenses

The President, the Treasurer, and the Secretary and Chief Executive of the Royal Academy, who are exofficio legal trustees of the Charity and members of its Executive Committee, are paid remuneration by the Royal Academy, for which no recharge is made to the Charity. It is not possible to make a reasonable apportionment of their remuneration in respect of their services to the Charity. Accordingly, the disclosures regarding remuneration for key management personnel of the Charity include no amounts in respect of the President, the Treasurer, and Secretary and Chief Executive of the Royal Academy. Remuneration excluding pension contributions was paid by the Royal Academy as follows: the President - £70,000 (2023: £70,000); the Treasurer - £40,000 (2023: £40,000); and the Secretary and Chief Executive - £237,190 (2023: £230,134). In addition, the Secretary and Chief Executive received pension contributions totalling £23,719 (2023: £20,921). The President and the Treasurer did not receive any pension contributions (2023: same).

The Charity's other trustees give their time freely and receive no remuneration for the work that they undertake as trustees. However, they can claim expenses to reimburse them for costs that they incur in fulfilling their duties.

No trustee, or person related or connected by business to them, has received any remuneration from the Charity during the current or prior year. No expenses were reimbursed to trustees for travel to attend committee meetings of the Charity during the current or prior year.

10 Analysis of staff costs

The trustees have concluded that the Executive Committee comprise the key management personnel of the Charity. No remuneration was paid to key management personnel (2023: £nil). However, as disclosed in note 9 above, the President, the Treasurer, and the Secretary and Chief Executive of the Royal Academy, who are members of the Executive Committee, are paid remuneration by the Royal Academy.

Salaries and wages
Social security costs
Employers pension contribution
Total		 2024
£
57,721
4,799
5,772
68,292		 2023
£
55,070
5,509
5,528
66,107

Salary costs represent the cost of staff employed by the Royal Academy and recharged to the Charity. The average number of permanent staff engaged by the Charity in 2024 was 1 (2023: 1).

Page: 23

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

11 Investments

Movement in market value of investments
Market value brought forward
Additions to investments at cost
Proceeds on disposal
Net gains / (losses) on investments
Market value of investments at 31 August
Market value of investments by type
Bonds
Property
Global equities
UK equities
Hedged equities
Absolute return
Alternative investments
Liquid assets
Total market value of investments
Cash holdings
Total
Investments under management were:
Partners Capital LLP
Sarasin & Partners LLP
Evenlode Investment Management Limited
Total
[Historic cost of investments £38,146,802 (2023:
£37,821,762 )]		 2024
£
49,133,054
16,230,675
(16,464,621)
2,722,014
51,621,122
2024
£
3,477,572
1,369,131
21,333,989
9,303,378
1,619,634
3,713,712
943,514
9,860,192
51,621,122
544,579
52,165,701
29,672,100
17,644,539
4,849,062
52,165,701		 2023
£
52,700,345
11,957,658
(14,974,522)
(550,427)
49,133,054
2023
£
3,257,462
1,461,124
18,784,906
9,752,246
1,498,142
3,417,024
1,018,932
9,943,218
49,133,054
896,471
50,029,525
29,001,919
16,428,118
4,599,488
50,029,525

All investments are carried at their fair value.

Significant investment holdings as a % of total investment portfolio based on market value at 31 August were:

Sarasin Endowments Fund
Sarasin Liquidity Fund
Sarasin Climate Active Endowments Fund
Evenlode Global Income Fund
Partners Capital Phoenix Fund II Ltd
Partners Capital The Master Portfolio (C) Ltd
Vanguard ESG Developed World
Partners Capital Harrier Fund (C) Ltd
Partners Capital Greyhawk Fund, LP
Partners Capital Condor Fund XII
Total		 2024
13.08%
10.25%
10.17%
9.30%
7.41%
7.16%
5.03%
4.67%
4.15%
3.28%
74.50%		 2023
12.09%
10.21%
9.26%
9.19%
7.95%
6.46%
4.22%
4.51%
3.80%
3.28%
70.97%

Page: 24

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

12 Debtors
Amounts due from R.A. Enterprises Limited
Accrued income
Total
13 Creditors - amounts falling due within one year
Amounts due to the Royal Academy
Accruals
Total
14 Notes to the statement of cash flows
Net income / (expenditure)
Adjustments for:
- (Gains) / losses on investments
- Dividends and interest from investments
- Fund manager fees
- Decrease / (increase) in debtors
- (Decrease) / increase in creditors
Cash flow used in operating activities
Amounts owed by related undertakings are unsecured, interest free, have
are repayable on demand.		 2024
2023
£
£
35,609
95,198
957
-
36,566
95,198
2024
2023
£
£
54,777
96,752
69,314
40,279
124,091
137,031
2024
2023
£
£
2,159,985
(2,922,982)
(2,722,014)
550,427
(1,309,149)
(988,681)
110,203
36,373
58,632
(56,072)
(12,940)
71,585
(1,715,283)
(3,309,350)
no fixed date of repayment and		 2023
£
95,198
-
95,198
137,031
2023
£
(2,922,982)
550,427
(988,681)
36,373
(56,072)
71,585
(3,309,350)

Page: 25

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

15 Analysis of endowment funds


The Ivor Rey scholarship fund:
a
- Trust for investment
- Unapplied total return
Paul Mellon endowment fund:
b
- Trust for investment
- Unapplied total return
Anonymous donor fund:
c
- Trust for investment
- Unapplied total return
McAulay Scholarship fund:
d
- Trust for investment
- Unapplied total return
Armando Garza Sada Sr. Memorial fund:
e
- Trust for investment
- Unapplied total return
Total		 £
£
£
£
404,400
-
-
404,400
328,774
45,504
(14,532)
359,746
3,039,283
-
-
3,039,283
-
188,630
(188,630)
-
12,229,042
-
-
12,229,042
2,954,401
1,922,982
(640,000)
4,237,383
1,265,918
-
-
1,265,918
197,944
90,853
(60,000)
228,797
375,000
-
-
375,000
-
23,274
(23,274)
-
Balance at
2023
Balance at
2024
Investment
returns less
fund
manager
fees
Unapplied
total return
allocated to
income
20,794,762
2,271,243
(926,436) 22,139,569

The anonymous donor fund is primarily invested with Sarasin & Partners LLP (“Sarasin”) and Evenlode Investment Management Limited (“Evenlode”), with the balance invested with Partners Capital LLP ("Partners Capital").

a. The Ivor Rey scholarship fund

In March 2013, £361,303 was received from the estate of Ivor Rey to establish the Ivor Rey scholarship fund which is held as a permanent endowment and is being accounted for on a total return basis. A further £43,097 was received in December 2016. The purpose of the fund is to provide an annual award from investment returns to enable students of the Royal Academy of Arts Schools ("Royal Academy Schools") to visit Paris, France for the purpose of studying art.

b. Paul Mellon endowment fund

The Paul Mellon endowment fund was established in 2000 by a $5,000,000 / £3,039,283 legacy from Paul Mellon. It is held as a permanent endowment and is being accounted for on a total return basis. The terms of the bequest restrict the investment returns arising from it to the general purpose of the Royal Academy.

c. Anonymous donor fund

A donor, whose identity is known to the Charity, but who wished to remain publicly anonymous pledged $23,000,000 in October 2015, to be paid in eight equal annual instalments from December 2015, but with the donor having the right to accelerate any one or more of such instalments. $15,333,333 (£10,000,000 based on the exchange rate at date of pledge) is to be held as a permanent endowment and is being accounted for on a total return basis, with investment returns generated being available to the Royal Academy for unrestricted revenue projects from June 2022, with the remaining $7,666,667 (£5,000,000 based on the exchange rate at date of pledge) being available to the Royal Academy for a restricted capital project, Burlington Project - Phase III.

Two instalments were received ($5,750,000 / £3,966,198) in the period to 31 August 2016. Payment of the remaining instalments was accelerated, with the balance received during the year ended 31 August 2018. £12,229,042 ($15,000,000) is included in the endowment funds above (including a £2,229,042 realised foreign exchange gain), with £5,000,000 included in restricted funds - Burlington Project III (see note 16).

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Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

d. McAulay Scholarship fund

A donation of $1,323,364 / £1,066,455 was received from the McAulay family in August 2020 to support two full scholarships for students at the Royal Academy Schools in perpetuity. The donor's expressed intention was for these funds to "top up" the existing fund established in 1998 to provide fees and maintenance for a student at the Royal Academy Schools. The fund is held as a permanent endowment and is being accounted for on a total return basis, with the investment return being used to fund the scholarships.

e. Armando Garza Sada Sr. Memorial fund

A donation of £375,000 was received from Brenda Garza in April 2022 to support an annual symposium in memory of Armando Garza Sada Sr. which will focus on an artist, or artists, that have been significantly underrepresented within art history. The fund is held as a permanent endowment and is being accounted for on a total return basis, with the investment return being used to fund the symposium.

16 Analysis of restricted funds

Analysis of restricted funds
Income and Unapplied
fund total return
Balance at growth in Utilised in from Balance at
2023 year year endowments 2024
£ £ £ £ £
Heinz Architecture fund 16.a 4,502,074 268,246 (180,000) - 4,590,320
Salaman-Seelig art fund 16.b 79,452 4,497 (7,000) - 76,949
The Ivor Rey scholarship fund 15.a 24,708 632 (14,532) 14,532 25,340
Paul Mellon endowment fund 15.b 546,938 1,362 (525,000) 188,630 211,930
Anonymous donor fund 15.c 620,000 - (620,000) 640,000 640,000
McAulay Scholarship fund 15.d 50,000 - (50,000) 60,000 60,000
Armando Garza Sada Sr. Memorial fund 15.e 11,148 - (11,148) 23,274 23,274
Greenham fund 16.c 218,062 13,130 (6,510) - 224,682
The Starr Fellowship 16.d 1,328,329 80,661 (28,685) - 1,380,305
Weiss fund 16.e 22,509 1,354 (680) - 23,183
Burlington Project - Phase III 16.f 5,274,547 271,172 (200,000) - 5,345,719
The Thorogood Smith Scholarship 16.g 656,515 39,195 (25,000) - 670,710
James Paradise Annual Giving Fund 16.h 151,386 8,651 (12,000) - 148,037
Total 13,485,668 688,900 (1,680,555) 926,436 13,420,449

The Burlington Project - Phase III fund is invested with Sarasin in a Liquidity Fund. All other funds are invested with Partners Capital.

a. Heinz Architecture fund

The Heinz Architecture fund comprises a major donation received in 1993 to support the development of the architecture programme of the Royal Academy. The trustees make a donation each year to support the costs of the programme.

b. Salaman-Seelig art fund

The Salaman-Seelig art fund was established in 2016 by a £71,550 legacy from Auriol Seelig. The purpose of the fund is to make an annual award to a 2nd year student of the Royal Academy Schools. It is anticipated that the award will be made for 12 consecutive years.

c. Greenham fund

The Greenham fund was established in 1992 through donations from trusts, private individuals and an auction of donated works. The purpose of the fund is to provide a three year bursary for a student of the Royal Academy Schools, selected by the Keeper of the Royal Academy Schools.

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Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

16 Analysis of restricted funds (continued)

d. The Starr Fellowship

The Starr Fellowship was established in 1987, with subsequent donations in 1998, 1999, 2000, 2001 and 2004. The fund is used to support an annual fellowship for American nationals with a contemporary art practice with a bursary of £28,685 and to support the Royal Academy Schools general running costs that allow the fellowship to be offered.

e. Weiss fund

f. Burlington Project - Phase III

g. The Thorogood Smith Scholarship

The Thorogood Smith Scholarship was established in 2022 by a legacy of £550,000 from Janet Smith. A further £85,748 was received in November 2022. The purpose of the fund is to provide a scholarship to one student of the Royal Academy Schools, with the investment returns being used to cover the cost of tuition and to provide an annual bursary to the student. If a suitable student can be found with the necessary talent, the scholarship will be given to a Mouth and Foot Painting Artist from the charity MFPA (registered charity number 328151).

h. James Paradise Annual Giving Fund

The James Paradise Annual Giving Fund was established in 2022 by a donation of £150,000 from James Paradise. The purpose of the fund is to provide two annual prizes of £3,000 each to two students of the Royal Academy Schools for their works in the annual Premiums show.

Page: 28

Royal Academy Trust Notes to the Financial Statements

For the year ended 31 August 2024 (continued)

17 Analysis of designated funds

The trustees have designated the funds detailed below out of unrestricted funds:

General
a
Sir Roger de Grey Memorial Fund
b
Casson Award
c
Eranda Professor
d
Cheneviére Travel Award
e
Schools Portfolio Fund
f
Patricia Turner Award
g
The Pauline Sitwell Bursary Fund
h
Maintenance Fund
i
Total		 £
£
£
£
1,844,942
(52,730)
111,232
1,903,444
158,014
(3,529)
9,588
164,073
390,975
(5,000)
23,955
409,930
172,414
(5,170)
10,380
177,624
191,651
(5,740)
11,538
197,449
172,784
(5,180)
10,402
178,006
395,456
(11,850)
23,808
407,414
469,292
(14,060)
28,254
483,486
2,438,890
(93,270)
196,620
2,542,240
Utilised in year
Income and
fund growth in
year
Balance at
2023
Balance at
2024
6,234,418
(196,529)
425,777
6,463,666

a. General

In 1998, the Charity received £1,359,212 from the Royal Academy in respect of several small trusts. These trusts represent funds donated in support of scholarships and prizes in the Royal Academy Schools; maintenance of the Royal Academy Collections; and the general purposes of the Royal Academy. The Charity Commission gave permission for these funds to be transferred to the Charity on the basis of the improvements to investment performance and administration likely to ensue. These funds have been treated as designated funds that have been set aside out of the unrestricted funds by the trustees for specific purposes.

b. Sir Roger de Grey Memorial Fund

The fund was launched in 1996 to establish a source of funds to provide student maintenance grants for students at two independent institutions with which Sir Roger was associated: the Royal Academy Schools and the City & Guilds of London Art School. Sir Roger was President of the Royal Academy from 1984 to 1993 and Principal of the City & Guilds from 1973 until his death in 1995. Funds totalling £80,000 were invested on the understanding that annual maintenance grants would be made to each fine art school (split evenly between them).

c. Casson Award

The fund was created in 2001 to establish a prize for drawing to be awarded during the Summer Exhibition with initial funds totalling £107,000. The fund was increased in 2013 and 2015 through bequests of £88,482 and £20,152 respectively received from the estate of Mrs Anne Marjorie Crosthwait.

d. Eranda Professor

The fund was created in 2001 to establish a professorship in the Royal Academy Schools. An initial donation of £120,000 from the Eranda Foundation was earmarked for investment by the Charity on the understanding that this would fund a professor in the Royal Academy Schools. Further funds of £20,000 were donated in 2012 by the Trustees of the Eranda Foundation.

e. Cheneviére Travel Award

The fund was launched in 2001 to establish a source of funds to provide a travel bursary for a student in the Royal Academy Schools. Funds totalling £144,000, raised by the Cheneviére family, were earmarked by the trustees and invested on the understanding that a travel award would be made each year to a student in the Royal Academy Schools.

Page: 29

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

17 Analysis of designated funds (continued)

f. Schools Portfolio Fund

The fund was created in 2001 to establish a source of funds providing maintenance for students at the Royal Academy Schools.

g. Patricia Turner Award

In November 2001 the Charity earmarked £200,000 of donations to establish a fund to provide a grant to a graduating student in 3D media.

h. The Pauline Sitwell Bursary Fund

In May 2012, £250,000 from Pauline Sitwell's bequest to the Royal Academy, as a whole group, was paid directly to the Charity to establish the Pauline Sitwell Bursary Fund. The purpose of the fund is to provide an annual bursary award to assist students of the Royal Academy Schools with living costs. The annual award was set at £7,500 per annum, but is subject to annual review by trustees of the Charity. The current level of the bursary is £14,060.

i. Maintenance Fund

The fund was created in 2004 to provide maintenance for students at the Royal Academy. In addition to investment returns, a total of £51,041 has been added to this fund during 2024 (2023: £67,369), arising from fundraising activities.

An annual donation is made from each designated fund to the Royal Academy in line with the wishes of each fund. This will continue until each fund has been fully drawndown.

Analysis of net assets between designated funds
General
Sir Roger de Grey Memorial Fund
Casson Award
Eranda Professor
Cheneviére Travel Award
Schools Portfolio Fund
Patricia Turner Award
The Pauline Sitwell Bursary Fund
Maintenance Fund
Total
Analysis of net assets between funds
Endowment funds
Restricted funds
Unrestricted funds:
Designated
Other
Total		 Investments
£
£
1,903,444
-
164,073
-
409,930
-
177,624
-
197,449
-
178,006
-
407,414
-
483,486
-
2,441,789
100,451
Net current
assets		 £
1,903,444
164,073
409,930
177,624
197,449
178,006
407,414
483,486
2,542,240
Total net
assets
6,363,215
100,451		 6,463,666
Investments
£
£
22,139,569
-
13,420,449
-
6,363,215
100,451
10,242,468
88,779
Net current
assets		 £
22,139,569
13,420,449
6,463,666
10,331,247
Total net
assets
52,165,701
189,230		 52,354,931

18 Analysis of net assets between funds

Page: 30

Royal Academy Trust Notes to the Financial Statements For the year ended 31 August 2024 (continued)

19 Financial instruments

The financial statements include the following in respect of items held at fair value at 31 August:

Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
Financial assets measured at fair value through the SOFA		 2024
£
36,566		 2023
£
95,198
124,091 137,031
52,165,701 50,029,525

20 Related party transactions

The Charity donated £1,877,084 (2023: £3,729,819 ) to the Royal Academy to support various campaigns. At the year end £54,777 was outstanding and included within creditors (2023: £96,752).

R.A. Enterprises Limited made a donation of £35,609 (2023: £56,073) to the Charity for future funding of the Royal Academy Schools. At the year end £35,609 (2023: £95,198) was outstanding and included within debtors.

Page: 31