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2024-03-31-accounts

BRE TRUST

(A COMPANY LIMITED BY GUARANTEE)

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2024

Company Registration Number: 03282856 Charity Registration Number in England and Wales: 1092193 Charity Registration Number in Scotland: SCO39320

BRE TRUST

FINANCIAL STATEMENTS For the year ended - 31 March 2024

INDEX PAGE
Trustees’ and strategic report 3 - 18
Statement of trustees’ responsibilities 19
Independent auditor’s report to the trustees and members of BRE Trust 20 - 22
Consolidated statement of financial activities
(incorporating the company income and expenditure account) 23
Consolidated and company balance sheets 24
Consolidated cash flow statement 25
Notes to the financial statements 26 - 48

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FINANCIAL STATEMENTS For the year ended - 31 March 2024

BRE TRUST

Registered office: Bucknalls Lane Garston Watford Hertfordshire WD25 9XX Bankers: Barclays Bank PLC 1 Churchill Place London E14 5HP Independent Auditors: Crowe U.K. LLP Fourth Floor St James House St James Square Cheltenham GL50 3PR

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BRE TRUST

TRUSTEES’ ANNUAL REPORT For the year ended 31 March 2024

BRE Trustees report

The Council of Trustees has pleasure in presenting its report together with the Audited Financial Statements for the year ended 31 March 2024.

Objects and activities

As a charity all the Trust’s activities must at all times conform with the statement of ‘objects’ given in the governing documents, the Articles of Association.

The Trust’s objects are for the public benefit:

The Trustees confirm that they have referred to the general guidance on public benefit issued by the Charity Commission. During the year the Trustees undertook a major review of the governance structure of the Trust and subsidiaries. An investment committee has been set up to ensure the public benefit requirements are met and BRE Trust continue to sponsor several students for their projects on the built environment.

Structure, governance and management

BRE Trust (the “Trust”) is a company limited by guarantee (Company number 03282856) and is registered as a charity in England and Wales (No 1092193) and in Scotland (No SCO39320). The Trust was established to provide independent, non-sectorial ownership of the Building Research Establishment, an Executive Agency of the Department of the Environment, when it was transferred to the private sector in March 1997. The Trust is governed by its most recent Articles of Association which were approved by a meeting of members on 6[th] March 2019. In addition, the Trust provides independent ownership of BRE Group Limited (‘BRE Group’) which in turn is the owner of businesses resulting from the privatisation of the Building Research Establishment. The Trust protects the independence of BRE Group to ensure that its advice and research remain objective and free from bias. BRE Group continues to have a strong reputation, both nationally and in the international arena, as an impartial and respected consultancy, science and research organisation.

BRE Group Limited is the holding company for Building Research Establishment Limited, BRE Global Limited which are established in England and Wales and BRE Global Assurance (Ireland) Limited, a company established and resident in the Republic of Ireland. These subsidiaries in turn are owners of other trading companies in the UK and the People’s Republic of China.

This ownership structure means that:

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BRE TRUST

TRUSTEES’ ANNUAL REPORT For the year ended 31 March 2024

Trustees and Officers of the Charity

The governing body of the Trust is its Council of Trustees which comprises at least five and no more than ten Trustees at any one point in time. The Directors of the company are its Trustees for the purposes of charity law and throughout this report are collectively referred to as the “Trustees”.

The term of office for a Trustee is three years and Trustees may serve for three terms. New Trustees are familiarised with the workings of the Trust, its policies, procedures and governance through an induction programme consisting of visits to the head office, meetings with key personnel and officers of BRE Group together with more formal training including ongoing training and support.

The Trustees and Officers serving during the year and up to the time of signing these accounts were as follows:

Trustees Appointed Resigned
Philip Wilbraham (Chairman) 7 June 2018
Ashley Hook 18 March 2020
Gary Mills 29 March 2023
Prof. Vicky Pope 3 June 2019
Jonathan Rickard 3 June 2019
David Reid 30 June 2023
Kelly Bream 30 June 2023
Linda Chandler 6 July 2023
Company Secretary
Dr Paul Conroy 30 October 2023
Ashley George Thompson 30 October 2023

Board Tenure, Gender Diversity and Meetings

As at 31 March 2024, the tenure and diversity of the Trust board was as follows:

Tenure Gender Diversity
< 1 Year 44% Female 33%
1-3 Years 12% Male 67%
3-6 Years 44%

The Board met 4 times in 2023/24, on the 24 April 2023, 24 July 2023, 30 October 2023 and 29 January 2024.

Executive Staff

The Trustees have delegated certain operational management of the Trust’s affairs to Gillian Charlesworth, the CEO of BRE Group who in turn delegates all operational functions to the BRE Group. BRE Group continues to provide support to the Trust to assist in the day-to-day management of its activities. Paul Conroy provides legal and governance support to the Trustees.

Governance Framework

The Trust has adopted the Charity Governance Code for Larger Charities as the basis for its governance. The Code sets the principles and recommends good governance for charities. The Trust measures itself against the seven principles and the recommendations and guidance they provide to ensure the continuous improvement and highest standards of governance.

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BRE TRUST

TRUSTEES’ ANNUAL REPORT For the year ended 31 March 2024

Governance Framework (cont.)

The Board of Directors of BRE Group is made up as follows:

Director Position Appointed Resigned
Philip Wilbraham NED (Chair) 1 April 2022
Gillian Charlesworth CEO 21 May 2019
Vinodha Soysa Wijeratne CFO 15 December 2022
Paul Hetherington NED 16 May 2022

Director appointments to the BRE Group Board are made by both the Trustees and BRE Group, the majority of the Directors at any one time being those appointed by the Trust. The BRE Group Board meets at least 4 times each year and has two established committees, the Risk and Audit Committee and the Remuneration and Nomination Committee to assist in the governance of the Group.

Standing Committees

The BRE Trust Council delegates some of its work to committees and the committees report to the Council their discussion, actions and recommendations. There are three committees of BRE Trust at the time of signing this report:

In addition, BRE Group which is a wholly owned subsidiary of BRE Trust has two standing committees, a Risk and Audit committee and a Remunerations and Nominations committee. These committees are now more closely aligned with the BRE Trust committees, details of which are set out below.

BRE Trust Risk and Audit Committee and BRE Group Risk and Audit committee:

The Trust’s Risk and Audit Committee supports the Trust Board’s responsibility for oversight of risk management, the control environment, policy review and the integrity of financial statements and reporting. It seeks assurance from the BRE Group Board on the sound management of its investments. The committee membership consisted of Paul Hetherington, Linda Chandler, Jonathan Rickard and Gary Mills and includes at request attendance from members of the Group Board.

BRE Group Risk and Audit committee is responsible for oversight of both the external audit work as well as looking at the internal financial controls, internal controls, and risk management system across BRE Group.

The BRE Group Risk and Audit Committee met 4 times during the year, on 20 March 2023, 21 July 2023, 2 October 2023, and 15 January 2024.

BRE Trust Investment Committee:

The Investment Committee was formed in February 2023 and approves the funding for research projects and provides direction and governance for future activities of commissioned work and ensures its dissemination is effective and wide reaching. The key activities are the review of progress with the programmes, review of the operations processes, review of the relevant risks and communications and promotions of the programme.

The Investment Committee membership consisted of Vicky Pope (Chair), Ashley Hook, Linda Chandler, Kelly Bream, Phil Wilbraham, Paul Hetherington, Jonathan Rickard, David Reid and Gary Mills. The Committee met 4 times during the year on 24 April 2023, 24 July 2023, 30 October 2023 and 29 January 2024.

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BRE TRUST

TRUSTEES’ ANNUAL REPORT For the year ended 31 March 2024

BRE Remuneration and Nominations Committee:

The BRE Remuneration and Nominations Committee manages the appointment of new trustees and reviews the roles and responsibilities of both Trustees and the Chair of Trustees and is responsible for determining the remuneration and conditions of the executive directors of the Group. In determining appropriate levels of remuneration for the executive directors, the Remuneration and Nominations Committee aims to provide packages that are competitive in the marketplace and will attract and retain high quality executives capable of achieving the BRE Group’s objectives and ultimately those of the Trust. Executive pay is externally benchmarked using Korn Ferry Hay PayNet data. Our remuneration approach is to aim to pay market salaries whilst considering the total cash compensation for executive roles which balance affordability with attracting and retaining the right talent that we need.

The committee members during the financial year were Ashley Hook (Chair) and Paul Hetherington. A third committee member, Kelly Bream, was appointed during Financial Year 23/24.

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STRATEGIC REPORT For the year ended 31 March 2024

BRE TRUST

Introduction

BRE Trust is the leading independent charity dedicated to improving the built environment for the benefit of society. BRE Trust supports this aim by bringing the benefits of applied research – in the form of digital products, standards, testing and certification, training and qualifications – to key sectors in the built environment.

BRE Group provides services that fund the BRE Trust. The work of the BRE Group is focused on the safety, security and sustainability of buildings. BREEAM and LPCB are two of the most significant services that BRE offers. BREEAM is a world-renowned sustainable building benchmarking scheme. LPCB is internationally recognised for its standards around security and safety of construction products and systems. BRE Group also provides systems to monitor health, safety and construction waste, as well as training through the BRE Academy. The Group has provided research and data modelling services to UK government for many years and continues to do so for housing data and methodologies that support the standard assessment procedure underpinning Energy Performance Certificates (EPC’s). The Group continues to deliver a wide range of research – and it is this, and innovation, that will form the basis of the Group’s future strategic direction.

Purpose

BRE exists to contribute to a thriving and sustainable world by developing science-led solutions to built environment challenges

Our vision is that we want to be:

The world-leading innovation, science, and data hub for the built environment

We continue to work with governments and commercial markets who increasingly recognise the value of our products and services. Our focus is on increasing our reach as an innovative, science-led organisation with a focus on our capabilities in collecting, verifying and modelling data.

Achievements and performance

External climate

ESG priorities are undeniably a driver for our commercial clients. There is an increasing understanding of the value of ESG issues and the need to comply with a raft of regulatory and legislative requirements, many of which ESG data supports. Global standards, largely but not exclusively led by the financial sector, compete to measure the value, performance and potential of individual properties and portfolios.

Building and product safety legislation and regulation is evolving in the UK with the Building Safety Act making significant changes to context in which buildings will be designed, constructed and managed. We continue to assess where our expertise in testing and training can make the most valuable contribution to making buildings safer in the future.

BRE Group is continuing to deepen relationships with all key stakeholders including the UK Government. With issues like climate change, healthy homes and building safety receiving significant public and media attention as the next general election approaches, we will continue to share our research with all interested parties in order to ensure future policy is well informed and evidence based.

BRE Trust Achievements and performance

The BRE Trust uses its reserves and any income received both through gift aid donated by BRE Group and from other external resources to fund new research and education programmes. During the year several students were sponsored by the Trust.

BRE Trust did not undertake any fundraising activity requiring disclosure under S162A of the charities Act 2011.

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BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

BRE Group achievements in the year and future opportunities:

Financial Review

The consolidated results for the BRE Trust show a net surplus before tax of £3.8m (2023: £2.8m) for the year on income from charitable activities of £57.4m (2023: £57.9m). Income from charitable activities reduced slightly by 0.9% compared to the previous year, there were increases in our Building Performance Services division but an equivalent reduction due to the completion of the CIH grant work and delays in some contracts with government in the year. There was a smaller reduction in total income of 0.2% while minimising cost increases but general inflation, energy costs and additional legal costs have led to an 1.4% increase in expenditure on charitable activities.

The site has undergone a desktop review of the site valuation at the year end. This resulted in a loss on investment properties of £0.5m as there was a small decrease in the market value of the investment properties. The property held as fixed assets for BRE’s use has increased in value by £0.9m.

We have also seen an increase in the deficit on the BRE and LPC Pension Scheme. As of 31 March 2024, the scheme actuaries valued the deficit at £34m compared to £30.0m in the previous year. The main factors contributing to the deterioration are that the actual investment return achieved was lower than that required to match the expected increase in obligations and the actual inflation over the year was higher than previously assumed, however this is partially offset by the contributions paid by the company over the year. There was no full actuarial valuation in this year.

Overall, the movement on funds includes net income of £3.6m, the gain on revaluation of the site of £0.9m and the actuarial loss of £5.7m means that BRE Trust now has funds of £8.9m as at 31 March 2024 decreasing the funds available from 31 March 2023 of £10.0m.

Building Performance Services (BPS)

Building Performance Services (BPS) is a portfolio of products and services incorporating BREEAM, SmartWaste, YellowJacket, Sustainable Products and the BRE Academy. All are the subject for further development as part of the digital transformation that is taking place across our portfolio of products and services. Revenue for the BPS for 2024 was £28.6m (2022/23 £24.4m).

BREEAM is well regarded as being based on science, and rigorous in its approach. The BREEAM revenue at the year to 31 March 2024 was £21.6m (2023: £17.2m). the financial year 24/25 will see the launch of a digital platform for BREEAM as well as Version 7 of BREEAM (V7) both of which will improve the customer experience of the schemes, enable enhanced data collection and reporting and provide a platform for further enhancements.

The BRE Academy is a well-known, well-respected part of BRE. It has a long-standing reputation and has been a consistent contributor to organisational revenue and profits.

The year 2023/24 has seen a consolidation of the services and training offered by the Academy, the appointment of a new leader and the development of a number of key areas for the future including Building Information Management (BIM). The academy achieved an income of £3.5m for 2023/24 (2022/23 £3.8m).

The Academy will strengthen its position in the market during 24/25 by providing more, high quality and better targeted courses delivered both in person and virtually. A new website and Learning Management System, and ecommerce function will all be deployed during 24/25.

Assurance Services

The Assurance division is made up of 4 business units with specialisms in Fire, Security, Built Environment and Audit.

Fire Detection & Electronic Testing (FDET) and the Passive team are the highest revenue earners.

The main source of revenue generation is through our extensive range of test laboratories and our LPCB certification schemes. Revenue for our Assurance division was £21.5m (2022/23 £23.0m).

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STRATEGIC REPORT For the year ended 31 March 2024

BRE TRUST

Innovation

The role of the Innovation division is to lead our research and innovation activities, ensuring that BRE provides impactful thought leadership in pursuit of our purpose. The research and innovation strategy is key to the achievement of our objectives as per our purpose. The revenue for 2023/24 was £6.5m (2022/23 £10.1m).

Income from the Innovation team will now be largely derived from Housing and Energy, and Strategic Advisory teams. Our Energy and Housing teams work with governments internationally to deliver a range of technical services for national net zero policy compliance methodologies This includes research for current and future regulatory compliance for the energy efficiency of buildings.

The Housing and Energy teams, part of our research and innovation division, have focussed on core activity with government departments of DESNZ and DLUHC with the continued delivery of the multi-year English Housing Survey and Standard Assessment Procedure (SAP) programmes. The Housing and Health team continued to secure work delivering modelling for local authorities indicating residential dwellings areas most closely linked with ill health, work that will continue throughout the coming year. 2023 saw the publication by BRE of a follow up report on ‘Ignoring the Cost of Poor Housing’ which highlighted remediating England’s poorest housing could provide £135billion in societal benefits.

Strategic Advisory (Consultancy) is a binding part of the BRE business, building relationships and engaging (internally and externally) to provide a range of solutions largely built around the mitigation of climate change.

International Activities

BRE currently provides services in 90 countries selling mainly BREEAM and LPCB services as well as some advisory products. The target markets for BREEAM are Commercial Real Estate, Construction, Public Sector, Manufacturing and Finance. Those for LPCB are fire, security, and construction product manufacturers, as well as Construction and Infrastructure companies, construction product installers and government contracts.

BRE has 3 satellite offices; in San Francisco covering North America, in Shanghai covering China, and in Dublin covering Ireland and Europe.

Our channel framework includes partners covering Norway, Sweden, Spain, Germany and the Netherlands known as our National Scheme Operators. There are plans to consider expanding this network during 24/25. Assessor relationships and other partnerships are managed by our newly created Customer Experience team who are adopting a key account approach to enable and enhance customer experience and repeat business.

Responsible business

Responsibility is at the heart of our purpose, and we seek to apply a responsible business ethos to every aspect of our business, whether by setting challenging energy performance goals for ourselves, contributing our expertise to the development of public policy, playing our part in our local community, or ensuring that equity, diversity and inclusion are embedded in all our practices. Over the forthcoming three-year plan we will set annual goals, culminating, we hope, in achieving B Corp status. As part of this we will measure the impact we’re making, and impact targets will be included in the strategic KPIs of our balanced score card and in our reporting.

Employee engagement and development

Our people are integral to the success of the Group, and we are proud of the commitment and wide-ranging expertise and skills of our colleagues across the business. This year has seen a focus on retaining talent, evidenced by our attrition rate reducing to 8% by the end of the year.

Our resourcing strategy combines the re-deployment and upskilling of existing members of the team with the recruitment of new roles. This has enabled a more sustainable approach to skills development and progression, 18% of vacancies were filled by internal candidates during the year.

For the first time we offered an exceptional pay review at the half year as part of our reward and retention strategy. We remain committed to benchmarking our salaries to the market as part of our value proposition for colleagues.

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BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

Employee engagement and development (cont.)

We have made good use of our Talent and Development expertise again this year, building on the success of our behavioural framework, an extensive engagement exercise has taken place to design the technical and operational frameworks. The combined frameworks make up our Profession Builder tool, enabling colleagues to have visibility of potential career paths, understand the levels of competence required access the development opportunities available to them. This complements our established Learning and Development initiatives and will further inform content for leadership development and technical development pathways.

We continue to focus on creating an inclusive environment where we can attract, retain and motivate the very best people. We have been able to utilise the EDI data collected last year to enable us to develop pay gap reports for race, neurodiversity, disability and sexual orientation alongside our gender pay gap report. We will use this data to close any gaps identified. Our EDI forums continue to provide useful insights as we meet with them on a quarterly basis.

BRE Sustainability

At the end of this financial year, we launched our new Sustainable Built Environment Strategy. This strategy outlines our environmental ambitions to 2030 not only for ourselves but for our customers, partners, suppliers, and our wider community. We want to help amplify positive impact from built environment activities and eliminate and reduce harms to our environment. We want to help overcome barriers to the adoption of safe and sustainable construction practices and improve our ability to adapt the built environment to changing conditions.

Our holistic approach continues to reflect the topics covered in our sustainability assessment certifications for master planning, buildings and infrastructure -BREEAM- to comprehensively capture the attributes that define high performing assets. Our goals to 2030 are:

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BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

BRE Sustainability (cont.)

Our responsible business team, supported by all areas of the business, monitors and reports on the impact of our operations. Beyond our built environment work with customers and our wider community, our main operational sustainability activities and achievements over the last year include:

Streamlined energy and carbon reporting (SECR)

The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Reporting) Regulations 2018 (“the 2018 Regulations”) require us to disclose our annual energy use and greenhouse gas emissions. We have always carefully monitored our energy use and taken steps to reduce our use of energy and minimise our greenhouse gas (GHG) emissions.

We commissioned an independent report from a building services consultancy to analyse the energy and emissions data from our UK activities for the 12 month period to 31 March 2024 and compare results with previous periods. The methodology used is based on the Greenhouse Gas Protocol Corporate Standard 2015. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are indirect emissions (not included in scope 2) that occur in the value chain. Carbon calculations are made from energy usage data and business travel activity (employee expenses claims for miles travelled). Conversion factors are applied using the most recent update of the UK Government GHG Conversion Factors for Company Reporting.

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BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

Streamlined energy and carbon reporting (SECR) (cont.)

Table 1 - Energy use and greenhouse gas emissions data

2023/24 2023/24 2022/23 2022/23 2021/22 2021/22
Emissions Source MWh tCO2 MWh tCO2 MWh tCO2
Scope 1 Natural gas and fuel used in transport1 5,202 952 6,034 1,101 6,607 1,210
Scope 2 Purchased electricity 2,840 588 3,970 768 4,346 923
Scope 3 Business
travel
and
electricity
transmission and distribution losses		 325 129 503 190 219 136
Total scope 1 and 2 8,042 1,540 10,004 1,869 10,953 2,133
Total scope 1, 2 and 3 8,367 1,618 10,507 2,029 11,172 2,269
Floor area (m2) 27,036 27,036 31,214
EmIR (kgCO2e/m2) 61.7 76.2 72.7
EIR scope 1 and 2 (kWh/m2) 297.4 370.0 350.9
EIR scope 1, 2 and 3 (kWh/m2) 309.5 388.6 357.9

1One company-owned plug-in hybrid electric vehicle

Intensity ratios can be used to compare overall emissions data with an appropriate business metric, such as revenue or floor area, to further enable comparison over time and create benchmarks. As most of our energy is used in the buildings that we occupy, we have selected an energy intensity ratio of kWh/m[2] . BRE Science Park consists of numerous buildings occupied by BRE and tenants. Tenanted spaces were deducted from the overall floor area giving a total of 27,036m[2] .

We have seen fluctuations in our EIRs over the previous years due to the significant impact of the COVID-19 pandemic. Our ratios this year are around 20% lower than the last financial year. Relevant activity over the last year is presented in the previous section on ‘BRE Sustainability’. In addition to our main sustainability activities, we will continue to monitor our new ways of working to better understand building occupancy levels, equipment usage, business travel, and commuting to implement the most effective energy conservation strategies.

Pension Scheme

The FRS102 pension scheme deficit relates to the BRE and LPC Pension Scheme which is the former defined benefit pension scheme operated by Building Research Establishment Limited (BRE Ltd) a subsidiary of the Group. The deficit increased during the year to £34.0m (2023: £30.0m) further details of which are set out in note 19 to the financial statements. This increase in the scheme deficit is in part due to the actual return achieved on assets being lower than required to match the expected increase in the defined benefit obligations and the actual inflation over the year being higher than was previously assumed. The Directors of BRE Ltd consider that since the Company is able to meet all of its short and medium term liabilities, and the nature of the pension scheme deficit is long term, that this does not impact on the Trust as a going concern.

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STRATEGIC REPORT For the year ended 31 March 2024

BRE TRUST

Reserves Policy

BRE Trust has a reserves policy which requires it to maintain reserves at a level equivalent to total committed contract value plus three months of operating costs. This enables the BRE Trustees to manage financial risk and short-term income volatility. Free reserves available for use exclude restricted funds and the fixed assets held as unrestricted funds. Free reserves also exclude any long-term liabilities, and any deficit reported on the pension scheme. Should other funding not be received, the cash reserves should be used to pay committed contracts incurred defined by the notice period of the contract.

At 31 March 2024, committed contract value was £44k and three months operating costs were forecast at £nil which total £44k. BRE Trust has cash of £4.6m to meet these commitments and the excess cash of £4.6m is reflected in net reserves meaning that minimum reserves were being maintained. An investment committee approves the funding for research projects and provides direction and governance for future activities of commissioned work and ensures its dissemination is effective and wide reaching.

The BRE Trustees will review the group reserves each year to assess the value of the reserves required to be held in cash and cash equivalents that are not restricted to any particular purpose. During the year, the Trustees reviewed the total reserves, the operating costs of the Trust and the commitments under long term contracts and have ceased to enter into new long-term commitments pending a full review of the BRE Trust structure and governance model. The Investment Committee approves the funding for research projects and provides direction and governance for future activities of commissioned work and ensures its dissemination is effective and wide reaching. The key activities are the review of progress with the programmes, review of the operations processes, review of the relevant risks and communications and promotions of the programme.

Free reserves 2024
£’000		 2023
£’000
Total unrestricted funds 8,452 9,588
Add: Pension liability 34,021 29,956
Net unrestricted funds 42,473 39,544
Less: Unrestricted fixed assets (19,308) (18,536)
Total free reserves 23,165 21,008
Represented by:
Net current and intangible assets 16,499 14,024
Investments 8,522 8,983
Provisions (1,856) (1,999)
Total free reserves 23,165 21,008

The net movement in unrestricted funds in the year was a decrease in the unrestricted funds of £0.8m (2023: increase of £4.8m). This due to an increase in the pension liability of £4.1m (2023: decrease of £1.6m) and a gain on revaluation of fixed assets of £0.9m (2023: £1.1m) and net income of £3.6m (2023: £2.6m). The BRE reserves policy is to maintain reserves at a level equivalent to total committed contract value plus three months of operating costs (2024: £16.4m), therefore the reserves are within policy.

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STRATEGIC REPORT For the year ended 31 March 2024

BRE TRUST

Future developments

BRE is continuing to invest heavily in digital development both for our products and our systems and processes. This will significantly enhance customer satisfaction, our growth strategy and the speed at which we can continue to improve our products and services to meet market demand.

Going Concern

BRE Trustees have carefully reviewed the financial position of the Trust and its subsidiaries taking account of the significant improvement in the level of reserves, excluding pension impact, and the net surplus of £3.6m generated in the financial year as well as its systems of financial and risk management. This review has included a detailed analysis of the forecasts for the current financial year, as well as the budgets for 2025 and 2026 and the cashflow projections for the Trust and BRE Group.

The management team have reviewed the current financial position and the business planning document including budget for the next 3 years. The various revenue streams have been analysed to identify the secured income from committed contracts, run rate of repeated business, price increase, growth ambitions and new strategies. As part of this review the management team have undertaken an assessment of the different income streams in the business, identifying the level of risk to income by analysing revenue secured through committed contracts, revenue from ongoing long-standing client relationships and where the revenue is more uncertain.

The cost base has also been analysed to consider risk around inflation, staff related cost increases and overheads. We are closely monitoring our cost and procurement is reviewing our sourcing to make it more cost effective and efficient. Details of the BRE Group’s pension fund obligations are set out earlier in this report and a clear strategy exists to manage the deficit, which includes a deficit reduction plan designed to get the scheme to self-sufficiency by 2037.

The management team have undertaken a sensitivity analysis under three different scenarios to understand the risk and opportunities in the budget and to ensure the financial position being projected is robust.

BRE’s Group cash position of £10.8m at the end of March 24 is a decrease of £0.3m on March 23 of £11.1m due to significant investment in digitalisation and lab improvement program which is being funded by the operation.

There continues to be day-to-day focus on working capital management and cashflow forecasts are reviewed on a regular basis. The overdraft facility with Barclays Bank remains in place. This facility, along with the cash reserves held by the Group will ensure that sufficient working capital exists to fund the ongoing activities of BRE Trust and BRE Group over the next 12 months and in the medium term.

The forecasts for the current financial year and the budgets for 2025 and 2026 have been set out as the base case for the organisation. They include the impact of known capital expenditure as well as provision for some potential risks of assets needing replacement. The review has included sensitivity analysis around the income streams to ensure that in the event of a downturn in the economy the Company would still be able to operate sustainably for the foreseeable future.

Taking all this information together, the BRE Trustees therefore have a reasonable expectation that the organisation has sufficient resources to continue in operational existence for the foreseeable future and believe that there are no material uncertainties that call into doubt the ability of BRE Trust and its subsidiaries to continue as a going concern. The BRE Trustees consider the main risks to be those set out in the Risk Management section of this report.

Creditors’ payment policy

The Group operates normal trading terms of payment within 45 days of the date of the invoice when making payments to its creditors.

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STRATEGIC REPORT For the year ended 31 March 2024

BRE TRUST

Risk management

There has been a conscious effort to continue to transform risk management within the Group. There is both a principal risk register (owned by the Board) and an operational risk register (owned by the Executive Team). Each employee has an opportunity to feed into the latter. Additionally, the principal risk register has individual risk reports, tabled (deep dives) at the Risk and Audit Committee meetings on a rotational basis.

Further to the above, risk appetite has been formally defined this year. Additionally, a risk management framework has been developed. The coming financial year will focus on the rollout of this framework in addition to embedding it effectively within the organisation.

It is accepted that such a system of risk management can provide only reasonable and not absolute assurance against material misstatement and loss and that the system is designed to provide the Trustees with reasonable assurance that problems are identified on a timely basis and dealt with appropriately and that systems exist to mitigate those risks.

The key principle risks are those identified below with reasons for inclusion and key mitigations.

Key
Strategic
Risks		 Reason for inclusion Key Mitigation(s)
Governance
mechanism/
structure (new)
Charitable status
considerations and the need
for strong governance.
Aligned governance structure between the
Trust and Group Board mechanism.

Quarterly Risk and Audit Committee.
Long term
financial stability
A focus on financial metrics is
critical to ensuring there is a
profit for purpose.
Robust
annual
business
planning,
budgeting, monthly forecasting reviews and
cash management.

Maintenance
of
overdraft
facility
as
mitigation
to
short
term
cash
flow
challenges.

Regular dialogue with pension trustees to
maintain options with Escrow funding or
reduced pension payments.
Cyber security
This is a continuous threat that
is ever changing and needs
constant mitigation as this risk
continues to grow with new
methods of attack and
increased regulation.
Next generation firewalls and Anti-virus,
Anti Malware systems in place.

Security Operations Centre fully functional to
monitor key IT infrastructure 24/7.

Web application and secure email gateway in
place to reduce attempted phishing attacks.

Annual penetration testing and maintenance
of Cyber Essentials Plus certification.

Requirement for third party IT suppliers to
have formal certification such as ISO 27001
or CREST.

Systems are continually updated with the
latest software patches.

Multi Factor Authentication for user sign-ins
and protection against identity theft.

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BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

Risk Management (cont.)

Key
Strategic
Risks		 Reason for inclusion Key Mitigation(s)
Ineffective talent
attraction/retention
People and talent are the
cornerstone to success, hence
the strategic focus.
A Wellbeing offering is in place to support
colleagues with mental, physical and
financial wellbeing. Additionally flexible
and remote working options available where
circumstances allow.

Regular meetings of the EDI group and
Colleague Forum.

Enhanced diversity and inclusion training
for people managers and colleagues.

Improved engagement with employees
including the continuous performance and
development
reviews
aligned
with
operational
goals
with
management
oversight.

Relevant policies for employees such as
promotions
(support
competency
development and career progression) and
remuneration (fairness and transparent
approach).
Regulatory non-
compliance
A critical part of BRE
operations
is
compliance
activity.
Independent SHE (Safety, Health and
Environmental) and Quality and Compliance
departments.

A central group management system in place
for policies, processes and procedures.

Independent
Risk
and
Internal
Audit
Department.

Legislation register in place.

Top X Safety Health and Environmental
(SHE) risk register to bring increased focus to
management of the most significant BRE
Health and Safety risks.

16

BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

Risk Management (cont.)

Key
Strategic
Risks		 Reason for inclusion Key Mitigation(s)
Reputation and
brand strength
BRE’s success is hugely
dependent
on
reputation,
particularly with the advent of
the Grenfell enquiry.
Constant press monitoring by Director of
Corporate Affairs and Third-Party Press
Support.

Pre-prepared statements on likely scenarios
and defined internal communication process.

All scientific output follows a clear internal
review process before issue.

Grenfell inquiry proceedings are monitored
closely and BRE has provided a significant
volume of information to assist the inquiry
and continues to do so.
Challenges to
operational
delivery
Efficient
and
effective
operations are imperative to
achieve strong productivity
and
high
standards
of
customer service.
External assessments and prompt follow
up/resolution of actions.

Independent
Quality
and
Compliance
department to assess and validate compliance
to our ISO standards.

Measuring and analysing productivity and
performance through improved resource
utilisation to identify improvements to
increase output and better serve customers.
Customer complaints/compliments process
with escalation points for issues.

Digital transformation programme underway.
Responding to
long term trends
and issues
including climate
change and ESG
changes
This is a key focus of BRE’s
vision.
Development of a research and innovation
strategy.

Product roadmaps developed with industry
insight and knowledge by the Product
Management team to drive improvements in
existing product areas.

Product Innovation Team established to help
drive new ideas for products and services.

17

BRE TRUST

STRATEGIC REPORT For the year ended 31 March 2024

Statement by the Trustees in performance of their statutory duties in accordance with s172(1) of the Companies Act 2006.

The BRE Trustees consider that both individually and together that they have acted in the way they consider, in good faith, would be most likely to promote the success of BRE Trust for the benefit of its stakeholders as a whole (having regard to the matters set out in s172(1)(a-f) and S172(2) of the Act) in the decisions taken during the year ended 31 March 2024. The following paragraphs summarise how the Trustees fulfil the key elements of these duties.

Business planning and risk management

The BRE Trustees maintain its strategic plan for funding world class research in the built environment and consider long term planning as a critical part of how they ensure they understand the long-term consequences of their decisions. The Trustees recognise the nature of the safety critical services provided by BRE Group to its customers and the need to continue to evolve our approach to the risk management.

Our people

Our people are integral to the success of BRE Group and BRE Trust and we are proud of the passion and wideranging expertise and skills of our colleagues across the business. This year, we have invested in programmes and initiatives to mitigate the people impact of the changes in the business and to continue to provide an environment in which our colleagues can contribute, thrive and develop. Further details of which are set out in the Strategic Report under the section on Employee engagement and development.

Business and stakeholder relationships

The success of the organisation is dependent on our relationships with all of our stakeholders which include partners for BRE Trust, our customers for BRE Group as well as all our suppliers and staff. At BRE Trust we have focused heavily on building a network of like-minded organisations to improve research, education and practice in the built environment further details of which are set out in the Strategic Report under the section on Achievements and performance. BRE Group has focused on business development bringing in new commercial resources to work across the product portfolio to gain insight into markets and customers so that we are better able to serve the needs of all our stakeholders.

Community and Environment

The BRE Trustees recognise that the way we construct and manage homes, workplaces and other built assets can have hugely positive impacts on our wellbeing, economic performance and the sustainability and resilience of our built environment. Critical to this and the BRE Trust’s core focus is the development of improved products, processes and tools to enhance economic and environmental impacts.

Disclosure of Information to Auditor

Insofar as each of the BRE Trustees of the Group and Charity at the date of approval of this report is aware there is no relevant audit information of which the group and company’s auditors is unaware. Each Trustee has taken all the steps that they ought to have taken as a Trustee in order to make themselves aware of any relevant audit information and to establish that the group and company’s auditor is aware of that information.

Auditor

Pursuant to section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed and Crowe U.K. LLP will therefore continue in office.

18

STATEMENT OF TRUSTEES’ RESPONSIBILITIES For the year ended 31 March 2024

BRE TRUST

The Trustees (who are also Directors of BRE Trust for the purposes of company law) are responsible for preparing the Trustees’ annual report, Strategic report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable Company and the Group and of the incoming resources and application of resources, including the income and expenditure, of the charitable Group for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charitable Company’s transactions, 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, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the Charity’s constitution. They are also responsible for safeguarding the assets of the Charity and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees’ Report, under the Charities Act 2011 and Companies Act 2006, was approved by the Council of Trustees’ on 29[th] July 2024 including approving in their capacity as company directors the strategic report contained therein, and is signed as authorised on its behalf by:

lA vA

Philip Wilbraham Chair

Company Registration Number: 03282856 Charity Registration Number in England and Wales: 1092193 Charity Registration Number in Scotland: SCO39320

19

BRE TRUST

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF BRE TRUST

Opinion

We have audited the financial statements of BRE Trust for the year ended 31 March 2024 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Charity Balance Sheet, the Consolidated Cash Flow Statement 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 company’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 directors with respect to going concern are described in the relevant sections of this report.

Other information

The Trustees are responsible for the other information contained with the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements or a material misstatement of the other information. 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.

20

BRE TRUST

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF BRE TRUST

Opinions on other matters prescribed by the Companies Act 2006

In our opinion based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and the charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report included within the Trustees’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 require us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Trustees’ responsibilities statement set out on page 20 the Trustees (who are also the directors of the charitable company for the purposes of company law) 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 group’s or the charitable company’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 charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with the Acts and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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 ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and discussed these between our audit team members. We then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

21

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF BRE TRUST

BRE TRUST

We obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006 and The Charities and Trustee Investment (Scotland) Act 2005 together with the Charities SORP (FRS102) 2019. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the Group for fraud. The only other laws and regulations we considered in this context are;

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Board and management and inspection of regulatory and legal correspondence, if any.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of grant income, stage payments income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, designing and implementing audit procedures over income, detailed testing of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Companies House, Charity Commission, OSCR, HMRC, the ICO, Health and Safety Executive (HSE), United Kingdom Accreditation Service (UKAS), Lloyd's Register Quality Assurance (LRQA), the review of internal audit reports and reading minutes of meetings of those charged with governance.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of part 16 of the Companies Act 2006, and to the charitable company’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company, the charitable company’s members as a body and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Tara Westcott Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor Cheltenham

29 July 2024

22

BRE TRUST

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING THE COMPANY INCOME AND EXPENDITURE ACCOUNT)

For the year ended 31 March 2024

Note
Income from
Charitable activities
2
Other trading
activities
3
Interest receivable
Total
Expenditure on
Charitable activities
4
(Loss) on investment
property revaluation
Net income before
tax
Taxation
8
Net income
Transfers between
funds
Other recognised
gains/(losses)
Gain on revaluation
of fixed assets
10
Actuarial (loss) on
defined benefit
pension scheme
19
Net movement in
funds
Reconciliation of
funds
Total funds brought
forward
16
Total funds carried
forward		 Restricted
Funds
2024
£’000
351
-
-
351
(353)
-
(2)
-
(2)
-
-
-
(2)
409
407		 Unrestricted
Funds
2024
£’000
57,044
1,868
662
59,574
(55,352)
(461)
3,761
(113)
3,648
-
939
(5,723)
(1,136)
9,588
8,452		 Total
Funds
2024
£’000
57,395
1,868
662
59,925
(55,705)
(461)
3,759
(113)
3,646
-
939
(5,723)
(1,138)
9,997
8,859		 Restricted
Funds
2023
£’000
2,902
-
-
2,902
(2,784)
-
118
-
118
(3,201)
-
-
(3,083)
3,492
409		 Unrestricted
Funds
2023
£’000
55,009
1,716
153
56,878
(52,132)
(2,111)
2,635
(123)
2,512
3,201
1,058
(256)
6,515
3,073
9,588		 Total
Funds
2023
£’000
57,911
1,716
153
59,780
(54,916)
(2,111)
2,753
(123)
2,630
-
1,058
(256)
3,432
6,565
9,997

The accompanying notes on pages 26 to 48 form an integral part of these financial statements.

23

BRE TRUST

CONSOLIDATED AND COMPANY BALANCE SHEETS For the year ended 31 March 2024

Note Group Group Charity Charity
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 8,185 1,682 - -
Tangible assets 10 19,317 18,545 - -
Investments 11 8,522 8,983 5,000 5,000
36,024 29,210 5,000 5,000
Current assets
Debtors 13 17,918 19,547 - 4
Cash 10,791 11,087 4,632 3,553
Creditors: amounts falling due within one 14 (19,997) (17,892) (106) (638)
year
Net current assets 8,712 12,742 4,526 2,919
Total assets less current liabilities 44,736 41,952 9,526 7,919
Provisions for liabilities 15 (1,856) (1,999) - -
Net assets excluding pensions liabilities 42,880 39,953 9,526 7,919
Defined benefit pension scheme liability 19 (34,021) (29,956) - -
Net assets including pension liabilities 8,859 9,997 9,526 7,919
Funds of the Group
Unrestricted funds:
General fund 16 34,266 32,276 9,388 7,781
Revaluation reserve 16 8,207 7,268 - -
Pension reserve 16 (34,021) (29,956) - -
Restricted funds:
Other reserve 16 9 9 - -
Income fund 16 398 400 138 138
Total funds 8,859 9,997 9,526 7,919

The total income for the year of the Charity dealt with in the financial statements was £1,642k (2023: £2,722k) and total expenditure was £35k (2023: £87k).

The accompanying notes on pages 26 to 48 form an integral part of these financial statements. These financial statements were approved by the Trustees on 29[th] July 2024.

AJ vA

Philip Wilbraham Chairman Company Registration Number: 03282856 Charity Registration Number in England and Wales: 1092193 Charity Registration Number in Scotland: SCO39320

24

BRE TRUST

CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 March 2024

Note
Net cash from operating activities
17
Cash flows from investing activities
Interest received
Acquisition of tangible fixed assets
10
Acquisition of intangible fixed assets
9
Net cash used by investing activities
(Decrease)/Increase in cash and cash equivalents in the year
18
Cash and cash equivalents at the beginning of the reporting
period
Cash and cash equivalents at the end of the reporting period		 2024
£’000
7,178
662
(1,623)
(6,513)
(7,474)
(296)
11,087
10,791		 2023
£’000
4,326
153
(2,363)
(1,739)
(3,949)
377
10,710
11,087

The accompanying notes on pages 26 to 48 form an integral part of these financial statements.

25

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

1 Accounting policies

Charity information

BRE Trust is a company limited by guarantee in England and Wales (registered number 03282856) and is registered as a charity in England and Wales (No. 1092193) and in Scotland (No. SCO39320). The registered office is Bucknalls Lane, Garston, Watford, Hertfordshire, WD25 9XX.

Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. BRE Trust meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).

Basis of consolidation

The Group financial statements consolidate the financial statements of the Charitable Company and its subsidiary undertakings drawn up to 31 March each year. With the exception of BRE China the financial statements of subsidiaries are prepared for the same reporting year as the Trust using consistent accounting policies. Even though BRE China has a 31 December reporting date the consolidated accounts include its results for the 12 months to 31 March 2024. The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated statement of financial activities from the date of acquisition or up to the date of disposal.

Details of the principal subsidiary undertakings are shown in note 12. Transactions or balances between BRE Trust Group entities have been eliminated on consolidation and are not reported.

Critical accounting judgements and estimation uncertainty

Preparation of the accounts requires the Trustees and management to make significant judgements and estimates which could differ from actual outcomes. The items in the financial statements where these judgements and estimates have been made are:

Going concern

BRE Trustees have carefully reviewed the financial position of the Trust and its subsidiaries taking account of the significant improvement in the level of reserves, excluding pension impact, and the net income of £3.6m generated in the financial year as well as its systems of financial and risk management. This review has included a detailed analysis of the forecasts for the current financial year, as well as the budgets for 2025 and 2026 and the cashflow projections for the Trust and BRE Group. As part of this review the management team have undertaken an assessment of the different income streams in the business, identifying the risks to income by looking at where the revenue is secure through committed contracts, where there are ongoing long-standing client relationships and where the revenue is more uncertain.

26

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

1 Accounting policies (cont.)

Going concern (cont.)

The cost base has also been analysed to consider risk around inflation, high energy prices, staff related cost increases. The business plan has considered risks such as uncertainties in the external market including the energy crises made worse by the political climate of Ukraine and Russia. The procurement team is reviewing our sourcing to make it more cost effective and efficient. Details of the BRE Group’s pension fund obligations are set out earlier in this report and a clear strategy exists to manage the deficit, which includes a deficit reduction plan designed to get the scheme to selfsufficiency by 2037.

There continues to be day-to-day focus on working capital management and cashflow forecasts are reviewed on a regular basis. The overdraft facility with Barclays Bank remains in place. This facility along with the cash held by the Group will ensure that sufficient working capital exists to fund the ongoing activities of BRE Trust and the Group over the next 12 months and in the medium term.

Taking all this information together the Trustees therefore have a reasonable expectation that the organisation has sufficient resources to continue in operational existence for the foreseeable future and believe that there are no material uncertainties that call into doubt the ability of the Group to continue as a going concern.

Income

Income is recognised when the Group has entitlement to the funds, any performance conditions attached to the item of income has been met, and where it is probable that the income will be received, and the amount can be measured reliably.

Income from government and other grants is recognised when the Group has entitlement to the funds, any performance conditions attached to the grants have been met and where it is probable that the income will be received, and the amount can be measured reliably.

Profit is recognised on long term contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover reflecting the proportion of work completed to date on the project.

Funds

All funds of the Charity and the Group are unrestricted funds, with the exception of a number of individual grant funded projects, which are restricted. Unrestricted funds are available for the Trustees to apply to research activities that are in accordance with the objects of the Trust. Restricted funds are used for research governed by any conditions accepted at the time the funds are received.

Expenditure

All expenditure is accounted for on an accruals basis. Overheads and other costs not directly attributable to particular functional activity categories are apportioned over the relevant categories on the basis of management estimates of the amount attributable to that activity in the year on a basis consistent with use of the resources. The irrecoverable element of VAT is included with the item of expense to which it relates.

Support costs are allocated to the different categories of activities. This is based on a judgement of the percentage the specific activity represents in relation to the total non-support expenditure. Support costs include processing and administration, human resources, information technology and facilities costs.

Governance costs are included within support costs and include strategic planning costs for the Trust’s future development, external audit and all costs of complying with constitutional and statutory requirements, such as costs of Board and Committee meetings and for preparing statutory financial statements and satisfying public accountability.

Redundancy and settlement payments are recognised at the leaving date of the member of staff and measured at the best estimate of expenditure required to settle the obligation at the reporting date.

27

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

1 Accounting policies (cont.)

Operating Leases

Operating leases and the payments made under them are charged to the statement of financial activities on a straight-line basis over the lease term. The Group also lets some of its property on short term leases of five years or less which are classified as operating leases. Lease income is recognised on a straight-line basis over the lease term.

Research and development

All research expenditure is charged to the statement of financial activities in the period in which it is incurred. The development costs incurred in the creation of new software products and tools are capitalised under intangibles.

Taxation

BRE Trust is a registered charity and as such is entitled to certain tax exemptions on income and profit from investments and surpluses on trading activities carried out in the furtherance of the Charity’s primary objectives if these profits and surpluses are applied solely for charitable purposes.

Deferred tax is recognised on all timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The Trust’s UK subsidiary companies give all their taxable profits to the Charity, normally resulting in no liability to corporation tax. Tax is payable by overseas subsidiaries in accordance with local regulations.

Intangible assets

Purchased goodwill is capitalised and amortised over its useful economic life, which is determined on a case-by-case basis but does not exceed 5 years.

Expenditure incurred in the development or purchase of software and the purchase of licence agreements is capitalised and written off over the useful economic life of the asset and will not exceed 20 years.

Tangible fixed assets and depreciation

Tangible fixed assets are capitalised and stated at cost or valuation less depreciation. The fair value of land and buildings is determined from a market-based appraisal undertaken by a professionally qualified valuer every three years and the latest full valuation was undertaken in the year ended 31 March 2022. Assets are reviewed annually for any impairment in value, and as a result of this review a desktop valuation was undertaken this year.

Depreciation is provided at rates calculated to write off the cost of each asset over its expected useful life on a straightline basis, as shown below:

Leasehold Improvements 8 years Freehold buildings 5-20 years Plant and machinery 3-10 years Fixtures and fittings 7 years Motor vehicles 3-10 years

No depreciation is provided on freehold land.

Investment property

Property that is held for long-term rental or is being developed for future rental is classified as investment property. The fair value of land and buildings is determined by a market-based appraisal undertaken by a professionally qualified valuer every three years and the next full valuation will be undertaken in 2025. Changes in fair value are recognised in the Statement of Financial Activities. Assets are reviewed annually for any impairment in value, and as a result of recent economic conditions, including turbulence within the property market, a desktop valuation was commissioned to assist with the assessment of valuation at the year end.

28

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

1 Accounting policies (cont.)

Provisions

Provisions are recognised when there is a present legal or constructive obligation as a result of a past event, it is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Within provisions is an amount for enhanced redundancy benefits where some employees over 50 years of age can translate part of their redundancy entitlement into an annual compensation payment. A provision is made for the future amounts payable over the estimated life expectancy of the ex-employees.

Cash

Cash balances are part of the Group’s working capital and are kept on current account or short-term deposit.

Basic financial instruments

Debtors

Debtors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses. If the arrangement constitutes a financial transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate for a similar debt instrument.

Creditors

Creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate for a similar debt instrument.

Investments in subsidiaries, jointly controlled entities and associates

Investments in subsidiaries, jointly controlled entities and associates are carried at cost less impairment.

Foreign currencies

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Any exchange differences are dealt with through the Statement of Financial Activities.

The statement of financial activities, assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates. Gains and losses arising from the translation of opening balances and long-term loans are taken to the Statement of Financial Activities.

Post – retirement benefits

Building Research Establishment Limited operated defined benefit pension schemes providing benefits based on final pensionable pay. The BRE Pension Scheme was closed to future accrual at 28 February 2007 and the LPC Scheme at 31 March 2009. The two schemes were merged together during 2016 forming the BRE and LPC Pension Scheme. The assets of the scheme are held separately from those of the Trust and the trading subsidiaries.

Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability.

29

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

1 Accounting policies (cont.)

Post – retirement benefits

The defined benefit obligations as at 31 March 2025 for this FRS102 valuation represent an update of the previous year’s FRS102 liabilities with allowance made for benefits paid out to members for the year and price inflation over the year. All other experience is assumed to be in line with the assumptions at the start of the year. An adjustment has then been made to the value of the defined benefit obligations for changes in the assumptions as set out in note 19.

The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full. The movement in the scheme surplus/deficit is split between operating charges, finance items and, in the statement of total recognised gains and losses, actuarial gains and losses.

Building Research Establishment Limited also operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Trust and its subsidiaries in an independently administered fund. The pension costs charged against net income are the contributions payable to the scheme in respect of the accounting period.

2 Income

Advisory services on building performance, construction and fire safety
Provision of third-party assurance services
Services delivered to government		 2024
£’000
13,806
43,238
351
57,395		 2023
£’000
16,012
38,650
3,249
57,911

Included in services delivered to government are amounts totalling £351k (2023: £3,249k) which are government grants for undertaking research projects for which there are no unfulfilled conditions.

3 Other trading income

Other rental income
Other trading income
Tax credits		 2024
£’000
1,441
167
260
1,868		 2023
£’000
1,200
516
-
1,716

30

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

4 Expenditure

Charitable activities

nalysis of support costs
Commercial
Activities
£’000
Activities undertaken
directly
900
Grant funding of
activities
-
Support costs
617
1,517
Commercial
Activities
£’000
Legal and professional
143
IT
141
HR
46
Marketing
51
Facilities
128
Other
85
594		 Advisory
Services

£’000
7,727
25
5,315
13,067
Advisory
Services

£’000
1,478
1,453
476
524
1,327
885
6,143		 Third Party
Assurance

£’000
24,207
-
16,594
40,801
Third Party
Assurance

£’000
3,533
3,474
1,137
1,254
3,171
2,115
14,684		 Services to
Government
£’000
190
-
130
320
Services to
Government
£’000
297
292
96
105
267
178
1,235		 2024
Total
£’000
33,024
25
22,656
55,705
2024
Total
£’000
5,451
5,360
1,755
1,934
4,893
3,263
22,656		 2023
Total
£’000
32,650
87
22,179
54,916
2023
Total
£’000
6,218
4,010
1,649
2,196
4,026
4,080
22,179

Analysis of support costs

Included within Support costs are the following governance costs:

Included within Support costs are the following governance costs:
2024 2023
£’000 £’000
Auditor’s remuneration:
Audit of Group and subsidiary financial statements 93 82
Amounts receivable by auditor and associates in respect of:
Services relating to taxation 14 13

Expenditure on research and development recognised as an expense totalled £937k (2023: £1,698k).

31

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

5 Staff costs and numbers

Staff costs and numbers

Group staff costs during the period amounted to:
Wages and salaries
Social security costs
Other pension costs
Operating costs of the defined benefit pension scheme		 2024
£’000
27,902
2,727
4,245
526
35,400		 2023
£’000
25,151
2,570
3,847
668
32,236

Included in other pension costs are contributions made by Building Research Establishment Ltd of £3,068k (2023: £2,778k) to the closed BRE and LPC defined benefit Pension Scheme.

During the year redundancy and termination payments totalling £134k (2023: £288k) were made in agreement with the employees, who were provided with independent legal advice, to compensate them for loss of employment arising from their employment with the Group ceasing.

The executive team (who are considered key management personnel) consisting of 4 individuals were paid a total of £687k (2023: 4 individuals were paid £792k).

The average number of employees (including directors) during the year was as follows:

Research staff
Support staff		 2024
483
110
593		 2023
480
91
571
The number of regular employees whose pay and taxable benefits exceeded £60,000 fell within the following bands: The number of regular employees whose pay and taxable benefits exceeded £60,000 fell within the following bands: The number of regular employees whose pay and taxable benefits exceeded £60,000 fell within the following bands:
Salary band 2024 2023
£60,000 - £69,999 34 28
£70,000 - £79,999 25 22
£80,000 - £89,999 10 5
£90,000 - £99,999 3 3
£100,000 - £109,999 5 2
£110,000 - £119,999 4 3
£120,000 - £129,999 2 1
£130,000 - £139,999 - 1
£140,000 - £149,999 1 1
£150,000 - £159,999 3 1
£170,000 - £179,999 - 3
£180,000 - £189,999 1 -
£200,000 - £209,999 1 -
£210,000 - £219,999 1 -
£220,000 - £229,999 - 1
£270,000 - £279,999 - 1

32

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

5 Staff costs and numbers (cont.)

The total employer contributions in the year for provision of money purchase pension benefits for higher paid employees were £350k (2023: £271k). The number of higher paid employees (i.e. greater than £60k) to whom pension benefits are accruing under money purchase schemes was 79 (2023: 64).

6 Trustees’ remuneration and expenses

No Trustee earned any remuneration in either 2024 or 2023. Out of pocket expenses incurred by 1 (2023: 2) Trustees in the furtherance of their duties are reimbursed at cost and totalled £84 (2023: £426). The whole of this amount related to travel and out of pocket expenses.

7 Other finance costs

Other finance costs
Expected return on pension scheme assets
Interest on pension scheme liabilities
Past service cost (incl. curtailments)		 2024
£’000
3,256
(4,608)
(58)
(1,410)		 2023
£’000
2,594
(3,439)
(46)
(891)

8 Taxation

BRE Trust is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable Company for UK corporation tax purposes. Accordingly, the Charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

The tax charge for the period is lower than the standard rate of corporation tax in the UK of 25%. The differences are explained below.

Current tax
UK corporation tax on profit for the year
Adjustment in respect of previous year		 2024
£’000
-
113
113		 2023
£’000
86
37
123

33

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

8 Taxation (cont.)

Tax reconciliation
Profit on ordinary activities before tax
Tax using the UK corporation tax rate of 25%
Effects of:
Expenses not deductible for tax purposes
Other permanent differences
R&D expenditure credits
Consolidation adjustments
Adjustment in respect of prior periods
Deferred tax not recognised
Total tax charge
9 Intangible fixed assets
Group
Cost
At 1 April 2023
Additions
Disposals
Reclassification
At 31 March 2024
Amortisation
At 1 April 2023
Charge for the year
On disposals
At 31 March 2024
Net book value
At 31 March 2024
At 31 March 2023		 (2023: 19%)
Software
£’000
6,026
487
(3,411)
74
3,176
6,008
10
(3,411)
2,607
569
18		 Assets under
construction
£’000
1,664
6,026
-
(74)
7,616
-
-
-
-
7,616
1,664		 2024
£’000
3,759
940
158
(382)
(65)
15
113
(666)
113
Other
Intangibles
£’000
497
-
-
-
497
497
-
-
497
-
-		 2023
£’000
2,753
523
402
-
-
71
37
(910)
123
Total
£’000
8,187
6,513
(3,411)
-
11,289
6,505
10
(3,411)
3,104
8,185
1,682

The Group had capital commitments for software of £2,681k (2023: £551k).

34

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

10 Tangible fixed assets

Group
Cost
At 1 April 2023
Additions
Disposals
Revaluation gain
At 31 March 2024
Depreciation
At 1 April 2023
Charge for year
On Disposals
At 31 March 2024
Net Book Value
At 31 March 2024
At 31 March 2023		 Freehold
Land and
Buildings
Assets under
construction
Plant and
Machinery
Fixtures
and
Fittings
Motor
Vehicles
Total
£’000
£’000
£’000
£’000
£’000
£’000
25,332
-
12,556
1,192
67
39,147
39
198
998
388
-
1,623
(2,760)
-
(7,854)
(366)
(28)
(11,008)
939
-
-
-
-
939
23,550
198
5,700
1,214
39
30,701
£’000
£’000
£’000
£’000
£’000
£’000
9,455
-
10,346
761
40
20,602
643
-
993
148
6
1,790
(2,760)
-
(7,854)
(366)
(28)
(11,008)
7,338
-
3,485
543
18
11,384
16,212
198
2,215
671
21
19,317
15,877
-
2,210
431
27
18,545

Freehold land is not depreciated. As at 31 March 2024, freehold land and buildings is held at the revalued amount of £16.2 million. The comparable cost and net book value at that date determined under the historical cost accounting rules would have been £9.9m and £7.2m respectively. A full valuation was performed on 23 March 2022 by Christian Glazier (MRICS) of BNP Paribas Real Estate. The valuation was prepared in accordance with Professional Standard 2 of the RICS Valuation – Global Standards 2021 effective 31 January 2022, the International Valuation Standards and the UK National Supplement 2018, effective 14 January 2019. The value is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

The directors revalued the freehold land and buildings at 31 March 2024 following a desktop valuation undertaken by BNP Paribas Real Estates.

All tangible fixed assets are used in the commercial trading organisations. The land and buildings let to third parties has been transferred to investment properties.

No tangible fixed assets are owned by the Trust.

35

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

11 Fixed asset investments

1 Fixed asset investments
At 1 April 2023
Loss on revaluation
At 31 March 2024		 Group
Investment
Properties
£’000
8,983
(461)
8,522		 Charity
Interest in subsidiary
undertakings
£’000
5,000
-
5,000

As at 31 March 2024, group investment properties were held at the revalued amount of £8.5m . The directors revalued the investment properties at 31 March 2024 following a desktop valuation undertaken by BNP Paribas Real Estates as detailed in note 10.

36

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

11 Fixed asset investments (cont.)

The trading results of the operating subsidiaries of the Group are:

Building BRE Constructing Ceequal BRE BRE
Research Global Excellence Limited China Ireland
Establishment Limited Limited
Limited
2024 2024 2024 2024 2024 2024
Summary profit and £’000 £’000 £’000 £’000 £’000 £’000
loss account
Turnover 14,108 43,794 255 51 467 389
Operating costs (36,028) (41,352) (409) (22) (384) (385)
Other operating 24,750 - - - - 21
income
Loss on revaluation of (461) - - - - -
investment property
_______ _______ _______ ____ ____ ____
Operating profit/(loss) 2,369 2,442 (154) 29 83 25
Interest receivable 547 - - - - -
Interest payable (3) - - - - -
Other finance costs (1,410) - - - - -
Actuarial gain/(loss) (5,723) - - - - -
on defined benefit
pension
Revaluation of land 939 - - - - -
and buildings
_______ _______ _______ ____ ____ ____
Net result (3,281) 2,442 (154) 29 83 25
Taxation 166 (272) - (7) - -
_______ _______ _______ ____ ____ ____
Retained in the (3,115) 2,170 (154) 22 83 25
subsidiary
_______ _______ _______ ____ ____ ____
Assets and liabilities
of the subsidiary
Fixed assets 34,407 2,599 - - - -
Current assets 16,540 26,920 135 997 657 107
Creditors falling due (30,116) (9,407) (272) (60) (1,417) (154)
within one year
_______ _______ _______ ____ ____ ____
Total assets less 20,831 20,112 (137) 937 (760) (47)
current liabilities
Provision for liabilities (1,856) - - - - -
Pension scheme (34,021) - - - - -
liabilities
Deferred capital grant (185) - - - - -
_______ _______ _______ ____ ____ ____
Total funds (15,231) 20,112 (137) 937 (760) (47)
_______ _______ _______ ____ ____ ____

37

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

12 Subsidiary and associate undertakings

The undertakings in which the Group’s interest at 31 March 2024 was more than 20% were as follows:

Interest in Activity ordinary share capital Trading Companies: BRE Group Limited (02704081) 100% Management of subsidiary company operations Building Research Establishment Limited 100% Advisory services and information on (03319324)[ α] building 100% performance, construction and fire safety BRE Global Limited (08961297)[α] Testing and certification of materials and products, and certification of personnel, Buildings, process, systems and supply chains Building Research Establishment 100% Sustainability and training Shenzhen Limited (91440300358776938Y) Ceequal Limited (04568928)[+] 100% Methodologies for sustainable infrastructure projects Constructing Excellence Limited N/A Co-ordination of member led performance (04641522)[>] improvement network BRE Global Assurance (Ireland) Limited 100% Testing and certification of materials and (602123)[α] products, and certification of personnel, Buildings, process, systems and supply chains Non-Trading Companies: BRE Certification (03548352)[+ #] 100% BRE International Limited (01915620)[#] 100% BRE Canada Inc (2279888)[ #] 100% EFSG Limited (02971676) [ #>] N/A The Loss Prevention Certification Board 100% Limited (01907862)[#] Building Performance Group Limited 100% (01573939)[ #] BRE America Holdings Inc (5984258)[#] 100% Holding company

αHeld through BRE Group Limited

Dormant company > Company limited by guarantee

All of the subsidiaries and associates are registered in England and Wales with the exception of BRE America Holdings Inc, which is registered in the United States, BRE Canada Inc which is registered in Canada, Building Research Establishment Shenzhen Limited which is registered in China, BRE Global Assurance (Ireland) Limited which is registered in Ireland.

38

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

13 Debtors

2024
£’000
Group
Trade debtors
8,115
Amounts recoverable on contracts
1,027
Other debtors
4,760
VAT and other taxes recoverable
2,002
Prepayments
2,014
17,918
4 Creditors: amounts falling due within one year
2024
£’000
Group
Deferred income
8,312
Trade creditors
4,108
Amounts due to group undertakings
-
Social security and other taxes
1,812
Corporation tax
-
Other creditors
974
Accruals
4,791
19,997
Deferred income movement:
Balance at 1 April 2023
Amount released in the year
Amount deferred in the year
Balance at 31 March 2024		 2024
£’000
Charity
-
-
-
-
-
-
2024
£’000
Charity
-
-
81
-
-
-
25
106		 2023
£’000
Group
10,760
1,477
4,644
963
1,703
19,547
2023
£’000
Group
9,251
2,530
-
1,816
-
857
3,438
17,892
Group
£’000
9,251
(5,531)
4,592
8,312		 2023
£’000
Charity
-
-
-
4
-
4
2023
£’000
Charity
-
-
590
-
-
-
48
638
Charity
£’000
-
-
-
-

14 Creditors: amounts falling due within one year

Deferred income movement:

Deferred income arises where services have been invoiced but the performance conditions in relation to part of the amount invoiced have not yet been met.

39

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

15 Provision for liabilities

Future amounts payable
relating to:
Group:
At 1 April 2023
Utilised in the year
Charge to the Statement of
Financial Activities
At 31 March 2024		 Former
Directors’
Future liabilities
£’000
203
-
(35)
168		 Restructuring
£’000
96
(73)
188
211		 Post retirement
future liabilities
£’000
1,700
(138)
(85)
1,477		 Total
£’000
1,999
(211)
68
1,856

The post retirement future liabilities is a provision made to reflect a liability to make future payments to some exemployees who were made redundant when over the age of 50 and have translated part of their entitlement into an annual compensation payment payable for life.

Former directors’ future liabilities is a provision made in respect of two previous directors of the Group who were provided with post-retirement benefits to match benefits received by other executives in the company who were on an enhanced executive category pension arrangement.

The timing of the cash outlays in respect of these provisions is uncertain but should not exceed £135k in the next financial year.

40

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

16 Reserves

6 Reserves
General Pension Revaluation Total Other Income Total
Fund Reserve Reserve Unrestricted Reserves Reserve Restricted
Unrestricted Unrestricted Unrestricted Reserves Restricted Restricted Reserves
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 April 32,276 (29,956) 7,268 9,588 9 400 409
2023
Net income 2,451 1,658 - 4,109 - (2) (2)
for the year
Gain on - - 939 939 - - -
revaluation
of tangible
fixed assets
Actuarial - (5,723) - (5,723) - - -
loss
recognised
in defined
benefit
pension
Loss on (461) - - (461) - - -
revaluation
of
investment
properties
___ ___ ___ ___ ___ ___ ___
At 31 March 34,266 (34,021) 8,207 8,452 9 398 407
2024
___ ___ ___ ___ ___ ___ ___

41

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

16 Reserves (cont.)

General Pension Revaluation Total Other Capital Income Total
Fund Reserve Reserve Unrestricted Reserve Reserves Reserve Restricted
Unrestricted Unrestricted Unrestricted Reserves Restricted Restricted Restricted Reserves
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 April 19,705 (31,587) 14,955 3,073 9 3,083 400 3,492
2022
Net income 625 1,887 - 2,512 - 118 - 118
for the year
Transfer 3,201 - - 3,201 - (3,201) - (3,201)
between
funds
Gain on - - 1,058 1,058 - - - -
revaluation
of tangible
fixed assets
Actuarial - (256) - (256) - - - -
loss
recognised
in defined
benefit
pension
Transfer 8,745 - (8,745) - - - - -
investment
properties
revaluation
___ ___ ___ ___ ___ ___ ___ ___
At 31 March 32,276 (29,956) 7,268 9,588 9 - 400 409
2023
___ ___ ___ ___ ___ ___ ___ ___

The transfer between funds in the year ended 31 March 2023 (£3.2m) relates to assets under the LEP and CIH grants.

The general fund is the amount of unrestricted funds after allowing for total fixed assets, any commitments not recognised in the accounts and all designated funds. The revaluation reserve is the value of unrestricted funds represented by the freehold land and buildings owned and used by the Group and its subsidiaries on an ongoing basis.

Charity

At 1 April 2023
Net funds for the year
At 31 March 2024		 Unrestricted
Funds
£’000
7,781
1,607
9,388		 Restricted
Funds

£’000
138
-
138		 Total
Funds
£’000
7,919
1,607
9,526

42

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

16 Reserves (cont.)
Charity

At 1 April 2022
Net funds for the year
At 31 March 2023		 Unrestricted
Funds

£’000
5,146
2,635
7,781		 Restricted
Funds

£’000
138
-
138		 Total
Funds
£’000
5,284
2,635
7,919

The net funds for the year of the Charity dealt with in the financial statements was £1,607k (2023: £2,635k).

Restricted funds are used to promote sustainable approaches to relief, recovery and reconstruction after a natural disaster. Other restricted reserves relate to the PIA (payment in advance) on grant projects. Income restricted reserves relate to the accumulated Statement of Financial Activities funds held by the individual Trust entity.

Analysis of Group net General Pension Revaluation Other Income Total
assets between funds Fund Reserve Reserve Restricted Restricted
Reserve Reserves
2024 2024 2024 2024 2024 2024
£’000 £’000 £’000 £’000 £’000 £’000
Intangible 8,185 - - - - 8,185
Tangible 11,101 - 8,207 9 - 19,317
Investments 8,522 - - - - 8,522
Net current assets 8,314 - - - 398 8,712
Provisions (1,856) - (1,856)
Pension scheme liability - (34,021) - - - (34,021)
_ _ _ _ _ _
34,266 (34,021) 8,207 9 398 8,859
_ _ _ _ _ _
2023 Comparative
Analysis of Group net General Pension Revaluation Other Income Total
assets between funds Fund Reserve Reserve Restricted Restricted
Reserve Reserves
2023 2023 2023 2023 2023 2023
£’000 £’000 £’000 £’000 £’000 £’000
Intangible 1,682 - - - - 1,682
Tangible 11,268 - 7,268 9 - 18,545
Investments 8,983 - - - - 8,983
Net current assets 12,342 - - - 400 12,742
Provisions (1,999) - - - - (1,999)
Pension scheme liability - (29,956) - - - (29,956)
_ _ _ _ _ _
32,276 (29,956) 7,268 9 400 9,997
_ _ _ _ _ _
43

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

17 Cash flows from operating activities

Net income before tax
Adjustments for:
Interest receivable
Depreciation, amortisation and impairment
Loss on revaluation of investment properties
Loss on disposal of fixed assets
Taxation
Pension and other finance costs
Pension deficit funding contributions
Movement in working capital:
Decrease / (increase) in debtors
Increase / (decrease) in creditors (exc. taxation)
Decrease in provisions
Taxation paid
Net cash from operating activities		 2024
£’000
3,759
(662)
1,800
461
-
(113)
1,410
(3,068)
1,629
2,305
(143)
(200)
7,178		 2023
£’000
2,753
(153)
2,232
2,111
497
(123)
891
(2,778)
(106)
(87)
(204)
(707)
4,326

18 Analysis of change in net funds

Cash at bank
Cash and cash equivalents		 At
1 April 2023
£’000
11,087
11,087		 Cash flow
£’000
(296)
(296)		 At
31 March
2024
£’000
10,791
10,791

19 Pensions

The Group established a defined contribution stakeholder scheme for employees who commenced employment after 1 January 2002. The Group contributes up to 5% of salary so long as the members do the same. However, members can contribute a higher amount if they wish to do so. Contributions to the stakeholder scheme amounting to £237k (2023: £200k) were payable at 31 March 2024 and are included in creditors. The assets of the stakeholder scheme are invested with Scottish Widows.

The Group formerly operated two funded defined benefit pension schemes, one for the employees who transferred from LPC (the LPC Scheme) and one for other employees of the Trust and its subsidiaries who commenced employment before 31 December 2001 (the BRE Scheme). The BRE Pension Scheme was closed to future accrual at 28 February 2007 and the LPC scheme at 31 March 2009. The two schemes were merged together during the year ended 31 March 2016 forming the BRE and LPC Pension Scheme. Members of the BRE and LPC Pension Scheme have also been offered membership of the Groups defined contribution stakeholder scheme on the same terms as other members.

44

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

19 Pensions (cont.)

The pension cost for the year represents contributions payable by the Group to the BRE and LPC Pension Scheme and amounted to £3,068k (2023: £2,778k). All the pension costs relate to unrestricted funds and have been allocated between activities based on the level of income for the year. The assets of the defined benefit schemes are managed by Aon Fund Managers held separately from those of the Group, being invested with Ruffer, Schroders, BGO, AIL and the DRC Fund.

Management charges of £528k (2023: £547k) were incurred in respect of the BRE and LPC Pension Scheme. Contributions to this scheme amounting to £268k (2023: £247k) were payable at 31 March 2024 and are included in creditors. Monthly contributions to the schemes are determined by a qualified actuary on the basis of triennial valuations using the projected unit method.

Under a ‘recovery plan’ agreed with the pension trustees (and submitted to the Regulator) the deficit on the BRE and LPC Pension Scheme is partially secured by a direct charge over the Garston site in favour of the pension fund.

The major assumptions used by the actuary were:

Combined Combined Combined
Scheme Scheme Scheme
2024 2023 2022
%pa %pa %pa
Rate of increase in salaries 2.70 2.70 2.80
Discount rate for calculation
of benefits 4.90 4.80 2.80
Inflation (RPI) 3.10 3.10 3.50
Inflation (CPI) 2.70 2.70 2.80

In valuing the liabilities of the pension fund at 31 March 2024, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting an individual, on retirement, to live for a number of years as follows:

The BRE and LPC Pension Scheme

The assumptions used by the actuary are the Group’s best estimates chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily be borne out in practice.

The asset valuations of the scheme at 31 March 2024 amounted to £63,122k (2023: £68,623k) for the BRE and LPC Pension Scheme. These amounts were sufficient to cover 65% (2023: 70%) of the benefits that had accrued to members.

45

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

BRE TRUST

19 Pensions (cont.)

The fair value of the scheme’s assets, which are not intended to be realised in the short term and may be subject to significant change before they are realised, and the present value of the scheme’s liabilities, which are derived from cash flow projections over long years and thus inherently uncertain, were:

Present value of funded defined benefit obligations
Fair value of assets
Net deficit
Movements in present value of defined benefit obligation
At 1 April
Interest on obligation
Actuarial (gain)
Benefits paid
Past service cost (incl. curtailments)
At 31 March
Movements in fair value of assets
At 1 April
Expected return on assets
Actuarial (loss) / gain
Contributions by employer
Benefits paid
At 31 March		 2024
£’000
(97,143)
63,122
(34,021)
2024
£’000
98,579
4,608
(894)
(5,208)
58
97,143
2024
£’000
68,623
3,256
(6,617)
3,068
(5,208)
63,122		 2023
£’000
(98,579)
68,623
(29,956)
2023
£’000
125,010
3,439
(25,537)
(4,379)
46
98,579
2023
£’000
93,423
2,594
(25,793)
2,778
(4,379)
68,623

Amounts recognised in the Consolidated Statement of Financial Activities

mounts recognised in the Consolidated Statement of Financial Activities
Interest on defined benefit obligations
Expected return on assets
Past service cost (incl. curtailments)
Resources expended (included in other finance costs)		 2024
£’000
(4,608)
3,256
(58)
(1,410)		 2023
£’000
(3,439)
2,594
(46)
(891)

46

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

19 Pensions (cont.)

9 Pensions (cont.)
Actual return less expected return on assets
Experience gain on liabilities
Change in assumptions underlying the present value of the liabilities
Actuarial (loss)/gain		 2024
£’000
(6,617)
(2,933)
3,827
(5,723)		 2023
£’000
(25,793)
(6,677)
32,214
(256)

Assets

Actual return on the scheme assets during the year:

Return on assets excluding interest
Interest income on assets
Actual return on scheme assts		 2024
£’000
(6,617)
3,256
(3,361)		 2023
£’000
(25,793)
2,594
(23,199)

In relation to the FRS102 disclosure no deferred tax has been provided on the net deficit of the scheme as no tax liabilities or benefits are expected to arise for the foreseeable future.

The Group expects to contribute approximately £3,358k to the defined benefit scheme in the next financial year.

20 Leases

At 31 March 2024 the Group had future minimum lease payments under non-cancellable operating lease arrangements as follows:

During the year £384k was recognised as an expense in the Statement of Financial Activities in respect of operating leases (2023: £334k)

Plant and machinery expiring:
Not later than one year
Later than one year and not later than five years		 2024
£’000
67
143
210		 2023
£’000
38
68
106

47

BRE TRUST

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2024

20 Leases (continued)

Land and Buildings expiring:
Not later than one year
Later than one year but not later than five years
Later than five years		 2024
£’000
276
826
-
1,102		 2023
£’000
208
711
176
1,095

At 31 March 2024, the Group had expected future minimum lease receipts under non-cancellable operating leases as follows:

Future anticipated Lessor income
Not later than one year
Later than one year and not later than five years
Later than five years		 2024
£’000
361
312
144
817		 2023
£’000
360
590
158
1,108

21 Related party transactions

Trustees and directors

Due to the nature of the Trust's operations and the composition of the Trustees (holding other executive and nonexecutive roles) from time-to-time transactions will take place with organisations in which a member of the Trustees may have an interest. All transactions involving organisations in which a member of the Trustees may have an interest are conducted at arm’s length and in accordance with the Trust’s financial regulations and normal sales or procurement procedures. Trustees are required to complete a declaration of interest each year.

J N Solutions Limited is not a related party in 2024, however in 2023 transactions with the company totalled £173,000. Andrew Herbert is a director of J N Solutions. The amount outstanding at 31 March 2023 was £nil. There are no other related party transactions that require disclosure.

At 31 March 2024, there were intercompany payables from the Trust amounting to £81k (2023: payables from the Trust: £590k) outstanding between the Trust and its subsidiaries.

48