cla55ification- Internal THE NFU MUTUAL CHIUUTABLE TRUST TRUSTEES, ANNUAL REPORT & FINANCIAL STATEMENTS FOR THE YEILR ENDED 31 DECEMBER 202 Company Registered Number: 03618736 Registered Charity Number: 1073064 Cla55ification= Internal PAGE Trustees, Report Statement of Trustees, Responsibilities Independent Auditor's Report Statement of Financial activities (including Income & Expenditure account) 14 Balance Sheet 15 Cashllow Statement 16 Notes to the Financial Statements 17 cla55ification- Internal THE NFU m[￿AL CHARrrABLE TRUST RT R THE YEAR ENDED I DECEMBER 20 The Trustees, who are also the directors of the Company. submit their annual report and the audited financial statements ofThe NFU Mutual Charitable Tn￿t for the year ended 31 December 2023. The Financial Statements have been prepared in accordance and compliance with current statutory requirements, the requirements of the Charity's governing document, The Companies Act 2006. The Statement of Recommended Practice applicable to charities (the Charities SORP) in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and The Charities Act 2011. The full name of the Trust is The NFU Mutual Charitable Trust and it is incorporated in the United Kingdom and registered in England and Wales. Its governing document is its Articles of Association. The Trust is a company limited by guarantee and, as a registered charity, is exempt from using the word limited" in its name. The Tn￿t'S charity registration number is 1073064 and its company registration number is 03618736. The registered office and operation address is Tiddington Road, Stratfordwupon-Avon. Warwickshire, CV37 7BJ. The Secretary to the Trustees is Mrs S.E. Johns. The names and addresses of the Trust's adrAsers are: Bankers Barclays Bank plc, Market Cross, StratfoTd-upon-Avon, CV37 6AP licitor Addleshaw Goddard LLP, 3 Sovereign Square. Sovereign Street, Leeds, ISI 4ER Inde endent Auditor Deloitte LLP Four Brinclley Place, BI 2HZ EM The Trustees of the Trust, who are also directors of the company were in office during the year and up to the date of si￿1ng the financial Statements, these were: J.C. McLaren (Chairman) Dr H. C. Kennedy M. D. Raymond N.J. Turner M.C. Kennedy A. Jones D. Brown resign￿1 26th June M. B. Batters resigned 26th June W. Irvine appointed 26th June T. W. Bradshaw appointed 26th June The above Trnstees were appointed bytheTrust for three year tern￿ which are individually reviewed at the end of each period for a new term of three years. When appointing new Trustees, the Trustees look for individuals within the agricultural andinsurance industries and related charities to ensure that the Trustees as a whole provide a mix of experience and knowledge including business skills. agricultural and insurance industry experience. It is believed that the mix of skills and experience is appropriate for the needs of the Foundation. cla55ification- Internal THE NFU m[￿AL CHAR￿ABLE TRUST TEE ' REPORT ntinue R THE YEAR ENDED I DECEMBER 202 STRUCTURE AND WJTAGEMENT Continued Four Trustees are appointed by The National Farmers Union Mutual Insurance Society Limited ("NFU Mutual"). Two Trustees are appointed by The National Farmers Union of England and Wales, one is appointed by NFU Scotland and one is appointed by Ulster Farmers, Union. The day to day management of the Trust is delegated to NFU MutuaL New Trustees are provided with guidance on the role and duties of a Trustee, details of the Charitable Trust's airns and objectives and guidance to Lssist with the grant making process. Trustees are provided with regular updates and guidance on their role as a TTh￿tee of the Charitable Trust. The Articles contain no specific restrictions on the way in which the Trust can operate. The investment powers derived from the Articles include power to: invest in any manner after taking appropriate advice and having regard to the suitability of investments and the need for diversification; to delegate the management of investments to an organisation authorised under the Financial ser￿Ces Act; and to arrange for title to investments to be held by a suitable custodian. NFU Mutual has put in place deeds of indemnity for the benefit of the Directors and Company Secretary of NFU Mutual and of its associated companies, including The NFU Mutual Charitable Trnst. The deeds of indernnity are qualifying third paty indemnity provisions in accordance with the Companies Act 2006. These deeds of indemnity were in place throughout the year and coniinue to be in place at the date of ihis report. The Trustees are responsible for management of risk within the Trust. The Trustees have made an assessment of the principal risks to which the Trust is exposed, including operational and financial risks and have put in place a risk management tramework, which documents controls that manage and reduce identified risks. This framework is regularly reviewed by the Tntstees. The Trustees are satisfied that the Company's reserves are sufficient to allow it to absorb any short-term falls in revenue caused by a reduction in investment value as seen in recent years. Further details ofprincipal risks can be found on page 6 and 7 of the Trustees report. GOING CONCEPN The Trustees have reviewed the Trust's activilies, financial position, principal risks and financial commentary as set out in the Trustees Report on pages 2 to 7 and its liquith'ty and operational resilience. As a result of this review the Trustees consider that the Trust has adequate resources and cash flow based upon its available fimds, including receiving additional fLmding in January 2024 of £ 1,000,000 to continue in operational existence for at least 12 months from the date that the financial statements are approved. For this reason they continue lo adopt the going concern basis in pieparing the financial statements. cla55ification- Internal E NFU M[￿UAL CHAR￿ABLE TRU TEE ' REPORT ntinue R THE YEAR ENDED I DECEMBER 20 OB c￿Es The objectives. as set out in the Articles of Association, are the promotion and support of charitable purposes in the areas of agriculture, rural development and insurance in the United Kingdom - including education, the relief of poverty. social welfare and research - and any other charitable purposes. The Trustees have decided that to provide the best value for the support it gives to organisations, the Trust will focus on initiatives which fall within the objectives and will have a significant impact on the rural community. As a result, the Trustees focus their support on initiatives with a wide reaching impact rather than local initiatives. The Trust will aim wherever possible to encourage organisations to work together in a cohesive manner to ensure that the rural community as a whole is supported. The Trust is overseen by a Board of eight Trustees, who meet at least tiNice a year. Each request for funding is considered on its merits and a majority decision is reached. Every donation made must meet the objectives of the Trust. The Trust is supported by admi￿trative staff employed by a subsidiary of NFU Mutual who carry oul work for the Trust alongside their regular duties. No charge is made by NFU Mutual for these services (see accounting policy Ic), and no Trustee receives any remuneration or expenses from the Trust. PUBLIC BENEFrr The Trust refers to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing its objeciives and in planning its future activities. tn particular, the Trustees consider how planned activities will contribute to the aims and objectives they have set within the rural community. Further details of how some of the Trusi's donations are being used for the public benefit and how they fit in with the Trust's objectives can be found below in the Operational Review. The Trustees have taken into account the Charity Commission gwdance on Pubknc Benefit. FtNANCIAL REVIEW During the year the Trust made grants totalling £1,000,500 (2022: £1,021,849) to a total of 26 (2￿2. 25) oiganisations. Many of the recipients were directly connected with agriculture, but a number of other organisations were included. These also included the bursaries awarded from the Centenary fund. In 2023 the Trust received fL]nding of £1,000,000 (2022: £1,000.000) trom NFU Mutual. At the year end, the cash balance of £32.320 (2022: £445.302) was held in deposit accounts. Funds of £203.156 (2CY22: £204.846) have been invested on a short-term basis to maximise the future funds available for fulfilling the charity's objectives. Suth"cient funds remain available on deposit or readily realisable trom our unquoted unit trust investment to deal with current donations and commitments. The Trust's investment policy. adopted in 2006. was reviewed by the Trustees during the year and considered to remain fit for pu￿OSe. To ensure that the operational needs of the Trust can be met when required. the Current Account and Deposit account are reviewed on a regular basis. sU￿]us fLmds are generally held in either the Ch￿itIeS Official Investment Fund (COIF) Deposit Fund or the COIF Investment Fund. cla55ification- Internal THE NFU m[￿AL CHARrrABLE TRUST TEE ' REPORT ntinue R THE YEAR ENDED I DECEMBER 20 Continued Under the policy the aim is that between So % and 80 % of the Trust's total reserves should be held in the COIF tnvestment Fund to gain maximum benefit trom the Investment Fund's aims ofproviding long term capital and income growth. Holding the majority of the reserves in this Fund allows the Trust efficient access to a wide range of investments at a low admI￿tratIve cost. The Fund, portfolio is invested mainly in equities but also includes fLxed interest securities, property and other assets. These funds are revalued on a yearly basis to reflect market value. The gain or loss on revaluation is allocated between restricted and unrestricted reserves, the total revaluation reserve currently stands at £146,290 (2022: £139,012). Jn 2023 the fund had an unrealised gain of 11.4% (21Y22 loss: 8.9% ). The Trustees consider that the investment policy remains appropriate with regard to the prevailing stock market conditions but this will be kept under review. The Trustees believe that the Trust should generally maintain minimum unrestricted reserves of around £IOO,000. It is felt that this is an appropriate level of reserves to fund any unanticipated events and to give the Trustees the flexibility to support initiatives at short notice. The level of reserves set is less than the current annual income but would help the Charitable Trust to maintain a reasonable level of coramitments if its income were to reduce suddenly. Reserves relating to the unrestricted fund at the year end amounted to £109,168 (2022: £101,881) and the reserves relating to the restricted fund at the year end amounted to £1(￿,060 (2022: £119,589). The reserves policy allow8 the Trustees to use its reserves to fund unanticipated events which have a significant impact on the agricultural industry or farming community. Compliance with the reserve policy is monitored twice a year by the Trustees. The policy itself is renewed annually. The Trustees consider the Trust's financial position in relation to its future plans and commitments to be satisfactory. The Trust has no connected charities or subsidiary companies. OPERATIONAL REVIEW During the year the Trusiees have continued io make donations in accordance with the Trust's objectives to promote and support in particular the ￿eaS of education and relief of poverty in agriculture, and rural development. The Trustees assess the Trust's perforniance by considering the range of organisations supported and the potential impact of those organisations and any specific initiatives supported. The Trustees are satisfied that the donations made in the year support the Trust's objectives and strategy to target organisations and initiatives with a si￿lfIcant impact on the rural community. A list of the organisations to whom donations were made by the Trustees can be found in note 5 to the financial statements on pages 19 and 20. The donations cover a variety of organisations and types of requests for fLmding. Further details of some of the charities supported by the Trust during the year are given below. The Trust provided a donation of £19,000 to Farmstrong Scotland which is an initiative to help farmers, crofters and their families to cope with the ups and downs of farniing and crofting. It is a peer to peer led programme aiming to provide tools and skllls to take control and care of their own wellbeing and build Mental resilience. cla55ification- Internal E NFU m[￿AL CHAR￿ABLE TRUST TEE ' REPORT ntinue R THE YEAR ENDED I DECEMBER 202 OPERATIONAL REVIEW Continued The Trustees remain conunitted to supporting education and the relief of poverty within agriculture and the rural community and therefore a donation of £50,000 was provided to NFU Education who aim to connect both students and teachers with the farniing industry through curriculum-based projects and activities. They work with a number of schools across England and Wales to convey the importance around food, farming and nutrition. In addition, the Trustees continue to support the national Young Fanners, Clubs with donations during the year to the National Federation of Young Fanners Clubs, YFC Ulster and Wales YFC. These donations contributed towards education. training and mentoring programmes within Young Farniers Clubs across the country. The Trustees will continue to encourage charities to work together in a cohesive manner to ensure that the rural community as a whole is supported. The Trnstees will continue to focus their support on initiatives which will have a significant impact on the rural community, and therefore will predominantly support organisations with a national or very large regional remit. Donations will continue to be made which, in the opinion of the Trustees, meet the objectives of the Trust. Al all times the Trustees will bear in rnind the level of reserves available to the Trust and the likely future demand for donations. In 2023, the Charitable Trust continued to support The NFU Mutual Charitable Trust Centenary Award. The Centenary Award gives annual bursaries of up to 75°/0 of the Course fees for selected postgraduate students in agriculture. Tluee bursaries were awarded in 2023 (2022: three). The award focuses on students studying one of following themes: The application of science and innovative technologies to enhance productivity, efficiency, and profitability for UK farming businesses, Building resilience and safeguarding the physical and menta] wellbeing of those living and working in the UK agricultural industry, Tackling the risks of climate change, whilst maintaining food security, to improve the sustainability of UK agriculture, Identifying opportunities for supporting nature and biodiversity in the development of farming and land management practices in the UK. The Trustees intend to coniinue to make donations to other charitable organisations and initiatives in line with the Trust's objectives and strategy with particular focus on education and relief of poverty in agriculture and rural areas. It will also continue to award postgraduate bursaries through the Centenary Award for agriculture students. cla55ification- Internal E fqFU m[￿AL CHAR￿ABLE TRUST TEE ' REPORT ntinue R THE YEAR ENDED I DECEMBER 202 F￿ANc The Trust is exposed to financial risk through its financial assets and financial liabilities. In particular, the key risks relate to cashllow risk, market risk and interest rate risk. The risk is that current assets are insufficient to pay grants as they are approved. This position is managed by ensuring that sufficient funds are available from short-tenn notice deposit accounts to pay the ￿antS as they are appioved. Market Risk The Trust invests in an unquoted unit trust. There is a risk that the value of this investment can go down. The risk is managed by ensuring that surplus funds are spread be￿een such investments and deposit accounts. The Trust*s are satisfied that the Company'5 reserves are sufficient to allow it to absorb any short4enn falls in revenue caused by a reduction in investment value as seen in recent years. Interest Rate Risk The Trust holds funds in a COIF deposit account. There is a risk that the rate of interest earned on the level of the Trust's deposits will reduce. The risk is managed by ensuring that surplus fLmds are spread between this and the Barclays Bank deposit accounts. RELATED PARTIE The Trust received a £l.000,000 donation from NFU Mutual which it has used for charitable purpose8 (21rd2: £1,000,000). This amount has been paid in full to the Charitable Trust by NFU Mutual. Four Trustees are appointed by NFU Mutual Insurance Society Limited. Mr Raymond is a director of the Royal Countryside Fund. grants totalling £60,000 (2022: £70,000) were approved to this organisation during the year, of which £nil were outstandmg at the end of the year (21Y22: £nll). EPENDE￿ A The auditors Deloitte LLP, have indicated their willingness to continue in office. A resolution that they be reappointed will be proposed at the Annual General Meeting. In preparing this report, the directors have taken advantage of the srnall companies exemptions provided by Part IS of the Cornpanies Act 2006 to not prepare a Strategic Report. By order of the Board N.J. Turner 26 June 2024 cla55ification- Internal THE NFU m[￿AL CHAR￿ABLE TRUST sTATEMEr￿ OF TRUSTEES, RESPONSIBIL FOR THE YEAR ENDED 31 DECEMBER 2023 The Trustees (who are also directors of the NFU Mutual Charitable Trust for the purposes of company law) are responsible for preparing the Trustees, Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland" Company law 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements. the trustees are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Ch￿itIeS SORP; make judgments and estimates that are reasonable and prudent: state whether applicable UK Accounting Standards have been followed . and prepare the fmancial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business. The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsthle for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the trnstees are aware: there is no relevant audit information of which the charitable company's auditor is unaware; and the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit inforniation and to establish that the auditor is aware of that information. The trustees are responsible for the maintenance and integrity of the corpoiate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. By order of the Board N.J. Turner 26 June 2024 cla55ification- Internal THE NFU m[￿AL CHAR￿ABLE TRU INDEPENDENf AUDrroR'S REPORT TO THE MEMBERS OF THE NFU MtThAL CHAR￿ABLE TRUST R THE YEAR ENDED I DECEMBER 2 Report on the audit of the fmancial statements Opinion In our opinion the financial statements of NFU Mutual Clwitable Trust (the 'charitable company,): give a true and fair view of the state of the Charitable Company's affairs as of 31 December 2023 and of its income and resources and application of resources. including its income and expenditure for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": and have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements which comprise: the statement of fmancial activities. the balance sheet. The cash flow. the related notes I to 14. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UIQ (1&4s (UK)) and applicable law. responsthilities under those standards are further descrthed in the auditor'8 responsibilities for the audit of the financial statements section of our report. We are independent of the charitable Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council's (the 'FRC's') Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirernents. 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 perfonned, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable Company's ability to continue as a going concern for a period of at least twelve months trom 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. cla55ification- Internal INDEPENDEiif AUD￿OR's REPORT TO THE MEMBERS OF THE NFU m[￿AL CHARITABLE TRUST continued R THE YEAR ENDED I DECEMBER 2 Other infonnation The other information comprises the infonnation included in the annual report. other than the financial statements and our auditor's 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 infonnation and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other infonnation and, in doing so, consider whether the other information is materially inconsistent with the fmancia] 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have perfornied, we conclude that there is a material misstatement of thi's other information, we are required to report that fact. We have nothing to report in this regard. Responslbllltles of trnstees As explained more fully in the trustees, responsthilities statement, the trusiees (who are also the directors of the charilable company for the purpose of company law) are responsthle for the preparation of the financial statements and for being satisfied that they give a true and fa￿ view, and for such internal conirol as the trustees detennine is necessary to enable the preparation of linancial statements that are tree from material misstatement, whether due to traud or error. In preparing the financial statements, the trustees are responsible for assessing the charitable company's abllity to continue as a going concern, th'sclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liqwdate the charitable company or to cease operations. or have no rea￿'StIC alternative but to do so. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material rnisstatement, whether due to fraud or e￿0[, and to issue an auditor's 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 tSAs (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 staternents. A further description of our responsibilities for the audit of the financial statements is located on the FIIC'S website at: wMv.trc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. 10 cla55ification- Internal THE NFU m[￿AL CHAR￿ABLE TRU INDEPENDEiif AUD￿OR's REPORT TO THE MEMBERS OF THE NFU M[￿UAL CHARITABLE TRUST continued R THE YEAR ENDED I DECEMBER 2 23 Extent to which 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 traud. The extent to which our procedures are capable of detecting irregularities. including fraud is detailed below. We considered the nature of the charitable Company's industry and its control environment and reviewed the Charitable Company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management, internal audit and the trustees about their own identification and assessment of the risks of irregularities, including those that are specific to the Company's business sector. We obtained an understanding of the legal and regulatory frameworks that the charitable company operates in, and identified the key laws and regulations that: had a direct effect on the deterniination of material amounts and disclosures in the linancial statements. These included UK Charities Act, UK Companies Act, and tax legislation; and do not have a direct effect on the financial statements but comphance with which may be fundamental to the charitable company's ability to operate or to avoid a material penalty. These included the Charity Commission for England and Wales regulations, Fundraising regulations. and environmental regulations. We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. As a result ofperfonning the above, we identified the greatest potential for fraud or non