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2022-06-30-accounts

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THE
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The Gurkha Welfare Trust Annual Report & Accounts 1 July 21 - 30 June 22

CONTENTS

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THE
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THE GURKHA WELFARE TRUST Annual Report & Accounts Year ended 30 June 2022

Company Limited by Guarantee Number: 5098581 Registered Charity Number: 1103669 Registered in England

SECTION

SECTION
Page
Welcome from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trustees’ Report incorporating the Strategic Report . . . . . . . . . . . 4-32
Statement of Trustees’ Responsibilities . . . . . . . . . . . . . . . . . . . . . . . 33
Trustees, Ofcials and Advisors to the Trust . . . . . . . . . . . . . . . . . . . 34-35
Auditor’s Report to the Members and Trustees . . . . . . . . . . . . . . . . 36-38
Consolidated Statement of Financial Activities . . . . . . . . . . . . . . . . . 40-41
Consolidated and Charity Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . 42-43
Consolidated Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Notes to the Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46-72

Registered Address:

PO Box 2170 22 Queen Street Salisbury SP2 2EX www.gwt.org.uk info@gwt.org.uk 01722 323 955

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 1

WELCOME

FROM THE CHAIRMAN

As the globe adjusted to a post-pandemic world in 2021/22, so too did our teams both in Nepal and here in the UK.

Here we found ourselves gripped by news of conflict in Ukraine and a cost-of-living crisis which continues to affect the lives of millions.

In Nepal there were similar economic concerns added to which a third wave of COVID-19 in January 22 meant that at one point over 24% of our team had tested positive, and local and national lockdowns were being reintroduced.

The operational contexts in both countries and the effects of changing monsoon patterns necessitated changes in the way we operate, just as COVID had affected change in the year before. If there is one thing, however, I am continually in awe of with this organisation, it is the way our dedicated teams are able adapt, regroup and go again; working together to achieve their ultimate goal of supporting our Gurkha veterans and their communities.

In Nepal, support for our most vulnerable beneficiaries never ceased – group SMS services, remote working and telephone consultations ensured that none of our Gurkha pensioners ever felt isolated and the team continued to ensure that veterans and widows got the vital funds, medication and support they needed.

You will read in the pages ahead some of the numbers involved, but as a precis of this period there were: over 4,000 beneficiaries in receipt of the Welfare Pension or Disability Support Grant, 1,300 hardship grants provided by Welfare Officers to our most vulnerable pensioners and 101 earthquake resilient homes built, over 100,000 medical consultations within GWT clinics and a further 9,000 home visits by medical staff to housebound pensioners. Astonishing statistics, all delivered in one of the most impoverished, mountainous and unpredictable environments in the world. I commend the entire Nepali team for their herculean efforts over the year.

Of course, none of this would be possible without the equally diligent work of the UK team and their support in governing and fundraising for the cause. They are to be commended for their dedication and success in a challenging environment, as too are the Trust’s amazing supporters who continue to place the Gurkha cause firmly in their hearts.

Inevitably, there are more challenging times ahead of us, but given the incredible manner in which we have responded over the last few years, I believe we are well set to deal with whatever the future holds. I know with our dedicated teams, our Board and crucially our supporters – we remain steadfast in our mission.

This organisation began over 50 years ago as a means to support Gurkha veterans who didn’t qualify for a pension on their departure from the British Army and faced limited prospects on their return to Nepal. A campaign was launched by a number of illustrious Field Marshals and such was the British public’s affection for the indomitable Gurkhas, they responded with gusto, donating over £1m (£11m in today’s money) to the cause. The Secretary for that original appeal was the late Field Marshal Sir John Chapple GCB CBE DL.

I would like to finish my introduction to this year’s Annual Report & Accounts with a tribute to the ‘Field Marshal’ as he was known colloquially, following his passing in March. A Gurkha veteran himself, he was so passionate about our cause (serving as Vice-Patron) and about the Gurkhas in general – his enthusiasm, and his support will be sorely missed. His legacy will live on through the GWT.

Jai Gurkha!

Lieutenant General Richard Wardlaw OBE Chairman, The Gurkha Welfare Trust

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The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 3
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2 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

TRUSTEES’ REPORT

TRUSTEES’ REPORT

FOR THE YEAR ENDING 30 JUNE 2022

This report is drawn up in accordance with applicable accounting standards, including the Charities (Accounts and Reports) Regulations 2008 and the requirements of the Charities Statement of Recommended Practice (SORP) (FRS102), second edition 2019 and the Companies Act 2006.

STRUCTURE, GOVERNANCE AND MANAGEMENT

TRUST GOVERNANCE

The Trust was established by Trust deed in November 1969 for the relief of hardship and distress among Gurkha ex-servicemen of the British Crown and their dependants. It was re-constituted, also by trust deed, in 1994. In April 2004 the Trust became a Charitable Company Limited by Guarantee (CCLG). These accounts amalgamate those of the unincorporated trust in compliance with the Charity Commission’s uniting direction.

TRUST STRUCTURE

The Gurkha Welfare Trust’s (GWT or Trust) headquarters is in Salisbury, Wiltshire.

In Nepal, the GWT is located in Pokhara, West Nepal. It oversees and directs the activities of the Trust’s network of 19 Area Welfare Centres (AWCs) sited in key locations throughout areas of traditional Gurkha recruitment in Nepal, one Centre in Darjeeling, India and two permanently manned smaller patrol basis. These AWCs provide the platform for the delivery of all Trust welfare programmes as well as providing a permanent footprint across the country to Gurkha communities. The AWC network has been restructured along geographical lines to create clusters based around five ‘key’ AWCs. These selfsupporting clusters enable the multi-disciplinary Pensioner Support Teams (PST) to operate and support beneficiaries with the proactive and mobile delivery of both welfare and medical assistance. It also allows them to respond swiftly to requests for support and to react quickly to situations such as natural disasters.

The development and execution of Trust policies is the responsibility of a Board of Trustees that meets three times each year. Their agenda is supported by a number of subordinate committees that consider investment, governance, audit and finance matters. The Board of Trustees are responsible for setting the strategic aims of the Trust.

The Finance Committee, a sub-committee of the Board with approval to make decisions on the Board’s behalf is, among other responsibilities, tasked with setting salary levels of key personnel. In setting these salary levels consideration is given to benchmarking with equivalent roles in the wider industry.

TRUSTEE SELECTION

GWT includes the consolidation of the Ex Servicemen and Families Support Society, a not for profit company registered in Nepal for the legal ownership of land assets purchased by GWT Nepal.

The Governance committee, currently comprising a Chairman and three Members, is responsible for oversight of Trustee selection.

In the UK the Gurkha Welfare Advice Centre, Salisbury (GWAC) provides advice on statutory entitlements and guidance on welfare support available to ex-Gurkhas in UK who find themselves in need. A subsidiary office is located at Aldershot in support of a major ex-Gurkha settlement.

In accordance with Charity Commission guidance on Trustee tenure, there is a steady turnover of Trustees. When a vacancy arises, a specialist recruitment organisation is engaged to invite suitably qualified candidates which are then shortlisted by a GWT selection panel and the final candidate selected by panel interview. The appointment is then reviewed and confirmed by the Board. All Trustees follow a generic training package to induct them into the work of the Trust and further role-specific training is sought for

The Trust has a wholly owned trading subsidiary, GWT Trading Limited, whose accounts are consolidated in the group financial statements.

those that require it. This also includes visiting our infrastructure and work in Nepal.

This process of Trustee recruitment has been further defined and clarified with regard to Independent Trustee-Directors by the Chair of the Governance committee in line with the Charity Commission’s view that:

“The Board has a key impact on whether a charity thrives. The tone of the Board sets through its leadership, behaviour, culture and overall performance is critical to the charity’s success. It is important to have a rigorous approach to trustee recruitment, performance and development, and to the Board’s conduct. In an effective team, Board members feel it is safe to suggest, question and challenge ideas and address, rather than avoid, difficult topics.”

Details of Trustee retirements and recruitment may be found on page 34.

KEY MANAGEMENT PERSONNEL

The Trust’s CEO is responsible for the day-to-day operation of the Trust. He directs and coordinates the work of the Salisbury headquarters and oversees the work of the Gurkha Welfare Trust (Nepal) and the Gurkha Welfare Advice Centres.

The Director of the GWT(N) provides assurance on authority, responsibility and accountability for the delivery of welfare support in Nepal in accordance with Trust policies, as well as insight into the political dynamics of Nepal. In addition, he acts as an interface between the Trust and the veteran community in Nepal.

The Field Director of the GWT(N) in Nepal is responsible for daily operational management of the GWT(N) and implementing welfare support in accordance with Trust policies.

The Medical Director oversees the Trust’s medical and healthcare system in Nepal. The role is based at HQ GWT(N) in Pokhara, Nepal.

The Head of Fundraising and Communications leads the fundraising and marketing team in the UK.

IMPLEMENTING PARTNERS

Many of our services in Nepal are delivered in partnership with other organisations.

The Trust builds rural water and sanitation projects

in Nepal assisted by an annual grant provided by the British Government’s Foreign, Commonwealth and Development Office (FCDO).

The Ministry of Defence (MOD) continues to provide an annual Grant in Aid (£3.3M) towards staff and administration costs of the GWT(N) in support of welfare delivery. This enhances value for money for donors as it allows, in conjunction with investment income, donations to be spent directly on welfare projects.

The MOD also provides £2.5M annually as a contribution in support of the Trust’s healthcare provision for veterans in Nepal.

In Nepal, the Trust continues to work closely with the Kadoorie Agricultural Aid Association (KAAA), which concentrates on community aid and development, including bridge construction, the provision of potable water supplies, hydroelectricity projects and employment training schemes.

Additionally, the Trust works in partnership with CAIRN in providing a holistic approach to supporting education through the provision of teacher and librarian training.

In the UK, the Trust works with the relevant Government departments and key service charities to enable the delivery of statutory and welfare advice to ex-Gurkhas and their dependants seeking settlement.

VOLUNTEERS

People volunteer for the Trust in a number of different ways. Often members of the public raise funds on our behalf (community fundraisers), others offer to help at Trust challenges and events. Some gain experience in the UK office by assisting with fundraising and marketing efforts and others maintain a relationship with us owing to their own longstanding association with the Brigade of Gurkhas. Their individual and collective effort and dedication, often over many years, is appreciated enormously by the Trust. We do not recruit volunteers to directly work on project delivery in Nepal, apart from a few exceptional cases where it is part of a funding commitment.

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TRUSTEES’ REPORT

TRUSTEES’ REPORT

PUBLIC BENEFIT

The Trustees have given due regard to the Charity Commission’s guidance on reporting public benefit when planning the charity’s activities and are satisfied that the Trust is fully compliant with the Charities Act 2011.

Benefit to our beneficiaries can be assessed in two distinct areas – individual and community aid:

Individual Aid, in the form of the welfare pension, winter allowance, disability support grants, welfare grants and our earthquake resilient homes, is provided perennially to ensure that our core beneficiaries and those most vulnerable are able to live with dignity. Enhanced support is provided to beneficiaries living in our two Residential Homes. In addition, free primary medical care is provided to all eligible individuals as well as subsidised secondary healthcare treatment. Details may be found on pages 14-18.

Community Aid is provided in the form of schools, accessible drinking water and medical camps. The impact of these activities can be found on pages 1821. The primary beneficiaries of these activities are the general public.

OBJECTS AND ACTIVITIES

The Trust’s Objects are:

The Trust’s Vision is: “Gurkhas living with dignity”. Welfare support is delivered against the following priorities:

The Trust raises funds in support of welfare programmes involving individuals and communities in Nepal and also in an advisory capacity in support of ex-Gurkhas in UK.

FUTURE PROSPECTS

The Trustees are confident that there is a demonstrable need for activities delivered by the Trust and that it can continue as a going concern. While the threats of inflation, rate of exchange fluctuations and income pressures are expected to continue throughout FY2022/23, measures have been promulgated to mitigate, as far as possible, the risks emanating from them.

A 10-year income and expenditure analysis has been conducted to provide forecasting of the Trust’s activities and its ability to fund them. This provides the Finance and Investment committees with clear direction on the level of growth required to ensure sustainability.

A new fundraising strategy, to continue from the end of the existing strategy from July 23, has been approved by the Board.

An expenditure analysis of the Trust’s charitable activity versus cost overheads has been conducted to provide trustees with greater visibility and assurance of charitable expenditure over time.

Our Investment strategy and portfolio composition is regularly reviewed to ensure the greatest possible resilience to extant economic pressures.

The Trust’s core beneficiaries, the Welfare Pensioners (WP), numbered 3,453 as at 30 June 2022 with this figure reducing by approximately 10% per year. A fully funded Constructive Obligation (CO) exists to ensure the continuing provision of a welfare pension to all recipients until this obligation ceases.

Management) during FY2021/22. Transitioning from a database to a new cloud-based platform (ThankQ, run by The Access Group) this will help reduce the risk of cyber-attack and data fraud.

The Strategic Review conducted and presented to the Board on 16 September 2020 has identified a continuing requirement for the Trust’s welfare services to veterans in Nepal for the next 20 – 30 years.

Upgrade of Nepal IT infrastructure and enhancement of cyber security. This robust programme of both hardware and software roll out throughout our Nepal based infrastructure was successfully completed, including necessary training for staff, albeit it is recognised that this area requires ongoing maintenance and support.

The MOD’s commitment of £2.5M annually as a contribution in support of the Trust’s medical services to Nepal based veterans extends until 2029.

A five-year accountable grant agreement with FCDO (£19M) commencing 1 July 2021, for the provision of Water, Sanitation and Hygiene and Emergency Preparedness has successfully concluded its first year. As a partnership, the Trust will support the programme with up to £4.5M over the five years.

Enhancement of GWT’s Disaster Resilience (DR) capabilities and long-term resilience of AWC infrastructure.

A three-phase process for retrofitting was initiated in this financial year.

THE STRATEGIC REPORT

TRUST STRATEGY

  1. Seismic Vulnerability Assessment (SVA). External contractor (Earthquake Safety Solutions Sainbu, Bhaisepati, Lalitpur Kathmandu) as the Project Cell doesn’t employ seismic engineers. The contract team checks the buildings for compliance and against the original design. A report is produced and additional geological surveys may be recommended (Khandbari and Diktel). This has been completed for all AWCs.

The Trust defines it priorities in five-yearly increments, setting parameters within which the Trust can best respond to the needs of exservicemen and their dependants. The most recent Strategic Review was presented to the Board on 16 September 2020 and extends to 2025.

The priorities identified for capital expenditure in FY2021/22 were:

  1. Detailed Design. SVA reviewed and detailed design drawings produced by contractor. These are due at 8x AWCs (retrofit works due FY 2023/24+).

Enhancement of the security and accuracy of personal data through a new cloud-based CRM.

  1. Retrofit Works. Construction work carried out by a dedicated Project Supervisor under DPE’s supervision. External contractors will assure the works. 6 x AWCs due FY 2022/23 and 8 x AWCs due FY 2023/24+.

To enable the Trust to be more strategic with its fundraising campaigns and ensure that the data it holds on supporters is both secure and accurate, the GWT migrated its CRM (Customer Relationship

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AWC Tehrathum
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TRUSTEES’ REPORT

TRUSTEES’ REPORT

FUTURE PLANS

The following objectives have been identifi ed for FY2022/23:

ACHIEVEMENTS AND PERFORMANCE

STRATEGIC SUMMARY

This was another challenging year which initially saw the continued opening-up following COVID-19 in both UK and Nepal enabling some physical fundraising events and challenges to take place. However, with the emergence of the Omicron variant in December elements of fundraising were once again curtailed. Throughout this period the delivery of welfare and medical services continued in Nepal, with all the planned homes and community school projects being delivered.

FY2021/22 was the fi rst year of the new RWEPP agreement with FCDO, for which it was awarded an A+ rating in FCDO’s annual review in August 22.

As global economies began to open, the eff ects of supply chain challenges were felt through delays and rising infl ation. The war in Ukraine exacerbated these pressures with rising infl ation forecast to continue through the next FY 2022/23, signifi cant pressures on the cost of living and fl uctuations in global markets. There is evidence that some fundraising income streams will reduce as individuals feel the eff ects of the fi nancial pressures which will need to be carefully monitored throughout FY2022/23.

NEPAL

EXECUTIVE SUMMARY

As at 30 June 2022, Nepal has recorded over 900,000 COVID cases and almost 12,000 COVID related deaths. Last year’s report was writt en in the midst of a 2[nd] COVID wave. This had a severe country-wide impact, but GWT(N)’s freedom of movement was maintained with support from the British Embassy and we were able to maintain operations, albeit at a

reduced tempo. A 3[rd] wave hit Nepal in mid-January and there were localised lock-down measures. Concurrently, boosters became available for staff and benefi ciaries – some were provided by the UK, but the majority were provided by the Government of Nepal.

IMPACT ON GWT

The 3[rd] wave did have an impact on operations with, at the peak, over 120 staff infected at the same time and more than half the AWCs closed to visitors. Support, however, never stopped and reduced help, such as telephone consultations, did continue. Again, GWT(N) resilience was tested and benefi ciaryfocussed support continued to be delivered despite a challenging context. COVID remains a factor to be considered when conducting activity and the protection of benefi ciary health remains a primary concern. Lessons learned from previous waves and good-practice protected staff and the dedication and eff orts of all staff enabled operations to continue.

The HQ staff in Pokhara worked largely from home during the 2[nd] and 3[rd] waves, and all elements of the organisation have continued to use online tools and conferencing facilities to coordinate their eff orts and the delivery of our integrated services. We have made extensive use of our various social media platforms and group SMS service to keep benefi ciaries informed and to provide advice. And for the many benefi ciaries who do not use social media, the AWCs have invested much time in maintaining telephone contact.

GWT’S RESPONSE

INDIVIDUAL AID

Welfare and Pensions

GWT maintained its programme of welfare pension payments throughout the crisis. Over 80% of our welfare pensioners are now paid through the bank, which guarantees the payment and gives the pensioner bett er access to their pension. For those who are still cash-paid, their pensions have either been collected on a quarterly basis from the AWC as normal, but AWCs have delivered the pension to their homes if they were unable to reach the AWC because of the travel restrictions.

During the year, we rebuilt 101 new homes for welfare pensioners and pro-actively provided

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Kalu Gurung received rehab
at our Kaski Residential Home
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hardships grants to repair or improve homes, build toilets or provide essential household items or services. Last year’s monsoon and other natural disasters damaged 13 pensioners’ homes, which were all rebuilt or repaired using central funding from the Disaster Relief fund.

Medical

In spite of the 2[nd] COVID wave lasting well into September 2021 and a 3[rd] wave in January 2022, GWT’s medical services returned to more or less normal operation in this FY. Medical advice to benefi ciaries and COVID protocols for our staff were under constant review and revision, applying the lessons we had learned from the previous year.

COVID vaccinations were provided by the government of Nepal, and GWT also received some vaccines via the British Gurkhas, mainly to vaccinate staff and residential home pensioners.

During the year, 104,321 consultations took place in GWT clinics and patrol bases; GWT medical staff made 9,088 home visits to homebound pensioners and dealt with 44,829 telephone calls; 2,598 phlebotomy visits were registered and over 7,000 pensioners received an infl uenza vaccine. Clinics also started off ering cervical screening and additional nurse appointments for managing chronic diseases, like diabetes and chronic obstructive pulmonary disease (COPD).

In addition, rehabilitation services and palliative care were provided for pensioners in GWT clinics, RHs and pensioners’ homes. For the most vulnerable pensioners, the trusts provided 40 hospital beds and

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Kalu’s home
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76 oxygen concentrators.

To deal with the increased volume of activity, GWT employed 14 additional medical staff in various professional groups.

As the pandemic situation improved, more patients were also referred for hospital care, and we dealt with over 14,000 secondary care claims.

The two-year contractual agreement, from January 2020, with International SOS for medical services in Darjeeling has been extended to February 2024.

Residential Homes

In spite of very strict infection prevention protocols, both residential homes again experienced outbreaks of COVID in the Omicron wave in January 2022, with sadly one additional death. For the rest of this year, COVID numbers were very low in Nepal and the residential homes could resume social activities like outings with the residents to beauty spots and celebrating various festivals.

Both residential homes are now delivering a fullyfl edged rehabilitation programme, with usually four rehab patients admitt ed in each RH at any one time – 20 pensioners in total throughout the year. The most common reasons for admission are: rehabilitation aft er stroke or hip fracture, or aft er hospital admission for COPD / pneumonia; and, nutrition rehabilitation for those who have lost weight for a variety of reasons.

Both residential homes have had a number of new admissions throughout the year, some of these were rehabilitation patients who then decided to stay.

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TRUSTEES’ REPORT

GWT FUNDRAISERS TAKE ON EPIC CHALLENGES

COMMUNITY AID

Rural Water and Sanitation

Despite the constraints of the COVID pandemic, GWT has continued to deliver essential water and sanitation projects, and in the first year of the new grant agreement completed the delivery of 76 water supply projects benefitting 30,812 population in 5,652 households with 5,883 tap stands. Sanitation, hygiene promotion and awareness training was delivered to a population of over 35,100 (see also pages 18-23).

Medical Camps

GWT was able to conduct three Medical Camps this year, in Humla, Solukhumbu and Khotang, with 1,701 patients registered in total. We continued to offer cataract surgeries, hearing-aid and eye treatments and the provision of prosthetics and mobility aids as well as referrals for selected patients, and were also able to provide dental treatments again in Solukhumbu and introduce ear surgery in the Humla camp. One camp which was planned for June had to be postponed due to Nepal’s local elections, but is due to take place in September (after the peak of the monsoon season). In addition to the specialist camps, we also trialled a school camp model in a school for disabled children, where all 21 children received dental, vision and hearing test and basic treatments, and four were referred for further treatment.

SUPPORT TO GOVERNMENT

Thanks to additional donations specifically for COVID relief, GWT was able to continue its medical contribution to the Government. A donation from GCSPF continued this work to alleviate local shortages of critical medical equipment and improve capacity to deal with the current crisis in remote areas. GWT distributed medical equipment and supplies to where there was the greatest need.

RWEPP COVID-19 INTERVENTION SUPPORT

RWEPP staff continued to deliver immediate and practical support to protect the population and health workers. As part of this response, GWT also provided sanitation awareness training and advocacy, hygiene kits, and sanitary pads to

maintain personal hygiene and privacy. A total of 36,649 people (17,573 females and 19,076 males) benefitted in FY 21/22. During this FY, the programme supported 78 Health Care Facilities (HCFs), 6 Isolation centres, 23 local government institutions, three orphanages, and 75 schools across six Provinces.

SUMMARY

GWT has continued to operate successfully on a quasi-operational footing throughout the year and has weathered the storm of a particularly aggressive and impactful second wave and then a lesssevere third wave. Its support to beneficiaries and communities alike has remain undimmed and largely unaffected. Services were provided, targets were largely met, and all projects were completed on time and to scope and cost. Furthermore, the increased support that we have provided to the Government in remote areas has substantially enhanced our standing and reputation in Nepal and has cemented the bond between the Area Welfare Centres and the local communities. A year on from the last Annual Report Nepal is no longer in crisis, and GWT’s beneficiaries and communities remain at the heart of the GWT operation and we have every confidence that they will continue to receive the best possible support in the future.

FUNDING THE CAUSE IN THE UK

GWT’s individual supporters were still in a position to give generously during the COVID pandemic. However, for many their circumstance changed in the latter half of FY 2021/22. Emergency appeals launched for those caught in the Ukraine conflict deserved attention, and many supporters also found themselves with substantially less disposable income and facing uncertainty over future energy prices.

Nevertheless, those who could, continued to give generously. Donations from community initiatives and events recovered to a degree but still have some way to go to return to pre-COVID levels. Trailwalker returned (having been cancelled the previous year) meaning a substantial boost to income (c.£217k). There were also large unsolicited gifts from both charitable trusts (£450k) and corporate partners (£50k) which helped the fundraising income exceed its target for the year.

Last year we saw hundreds of supporters take on a range of races and endurance events to raise funds for the Trust. Our challengers ran marathons, climbed mountains, cycled the length of the country, trekked to Everest Base Camp, and more.

One of our most intrepid supporters is 62-year old Jim Morton, who started his walk around the coast of mainland Great Britain in April 2021 and just kept on going! Jim finally finished his incredible journey in September 2022 having walked over 9,000 miles and raised over £30,000.

THE DOKO CHALLENGE 2022

TRAILWALKER 2021

Trailwalker 2021 saw a great turnout of participants ready to take on the gruelling 100km trek across the South Downs. In total, 1,256 individuals joined 314 teams to take on the ultimate endurance challenge. Gurkha pipers were on hand to encourage teams across the start and celebrate their arrival at the finish line.

In June we welcomed a crowd of around 100 supporters to Wimbledon Common to take on the mighty Doko Challenge. Based on the traditional Gurkha Recruitment Doko race in Nepal, the challenge saw participants run 5km on a hilly crosscountry route, carrying a traditional doko basket weighing either 5kg, 10kg or 15kg.

We welcomed a fantastic group of supporters - walkers, joggers and those racing to beat the Gurkha recruitment time of 46 minutes. We had experts on hand to fit the doko baskets and deliver an invigorating warm-up routine.

Teams were challenged to run or walk the 100km course and finish in 30 hours or less. The fastest team from the Queen’s Gurkha Signals crossed the finish line in an incredible 10 hours and 19 minutes. Ex-Gurkha Chris Green, aged 75, completed his fourth Trailwalker in a personal best time of 24 hours and 12 minutes.

The event was a huge success with everyone completing the course, the leader crossing the finish line in an incredible 19:30.

Huge thanks to everyone who supported the event which raised over £500,000. We also owe a big ‘thank you’ to our mighty team of volunteers, who cheered on challengers and kept everyone fed all weekend.

Our Ambassador Hari Budha Magar gave a rousing speech at the send-off and was on hand to present medals to participants at the finish line.

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TRUSTEES’ REPORT

Most notable over the year was the significant increase in legacy income received, with the majority (c.80%) coming from GWT’s existing supporter-base – highlighting just how much the Gurkha and Nepali cause means to them.

The increase in legacy income can be explained, in part, by COVID processing delays being addressed but there are other factors to be considered:

AMBASSADORS

Our Ambassadors work in partnership with us to help widen our appeal, reach new audiences and promote our cause.

Hari Budha Magar

Hari became our first Ambassador in February 2022. Hari is a former 1 RGR Corporal who lost both legs in Afghanistan, and is now a recordbreaking mountaineer. In 2017, Hari climbed Mera Peak, becoming the first double above knee amputee to climb a mountain taller than 6,000m. His next goal is to climb Mount Everest in 2023, and he will be the first ever double above knee amputee to attempt this summit.

Over the course of his life, Hari has had to overcome immense hardship and adversity. He was born in a small, remote village in Western Nepal, and grew up in a civil war that killed more than 17,000 people. Hari joined the British Army at 19 years old and served 15 years with The Royal Gurkha Rifles. In 2010, he was injured while

• An increase in the value of charitable estates (as a result of asset values rising since the March 2020 drop). Property and investments are important components of residuary (% based) entitlements.

Acquisition accounted for the majority of fundraising expenditure across the year – with the aim of introducing new supporters to the Trust’s work. Total expenditure was below forecast at 79% (£1.3M) which was largely as a result of a number of cancelled or delayed initiatives.

A new five-year strategy has been drafted and approved for delivery by the Board of Trustees which begins FY2023/24. The document focusses on building resilience across all of GWT’s income streams – seeking to ensure that the organisation’s funding can develop consistently and sustainably over the next five years no matter what external challenges arise.

serving in Afghanistan and lost both of his legs above the knee.

Despite this adversity, Hari was determined to challenge himself and trained hard to climb mountains across the world. Hari inspires people to aim for the best, encouraging them to take on new challenges and follow their dreams.

Johnny Fenn

Johnny is a former British Army Officer with 25 years of service, including 16 years with the Brigade of Gurkhas. His Gurkha service took him to East Timor and Iraq, before being posted back to the UK as Deputy Chief of Staff for the Brigade of Gurkhas. On promotion to Lieutenant Colonel, Johnny was appointed British Military Advisor to ECOWAS in Nigeria, before completing his military service as the Field Director of The Gurkha Welfare Trust in Pokhara, Nepal. He is now a professional photographer and explorer, and he has travelled the globe on photographic adventures. We were delighted to welcome Johnny as a new Ambassador in 2022.

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12 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

TRUSTEES’ REPORT

MAY YOU NOT TRIP WHEN YOU WALK – A WIDOW’S STORY

OUR FINANCIAL AID

This year we committed to continue the provision of financial aid to Welfare Pensioners and recipients of the Disability Support Grant during 2021/22. At 1 July 2021 there were 3,812 Welfare Pensioners in receipt of a pension of NPR 13,100 per month, and 225 recipients of the Disability Support Grant. At the 30 June 2022, there were 3,453 Welfare Pensioners and 232 recipients of the Disability Support Grant.

We committed to a Winter Allowance in the form of the provision of winter hats, gloves and a muffler to all Pensioners distributed prior to end of 2021.

We committed to the provision of financial support for family members required to provide full time care to our Welfare Pensioners through the Home Care Allowance, and for the immediate support to Welfare Pensioners and their families in times of hardship through Hardship Grants and a Funeral Grant.

Welfare Pensions

We pay a pension to thousands of impoverished Gurkha veterans or widows in Nepal who aren’t eligible to receive a British Army pension. The rate is calculated each year using a ‘shopping basket’ of basic goods such as rice, vegetables and firewood. For many people, this is their only source of income. In addition to the food basket, the Trust now utilises the Government of Nepal’s statistical data used to define the minimum wage as another relevant benchmark.

At the beginning of the reporting period there were 3,812 individuals in receipt of a Welfare Pension from the Trust. They were each paid a Welfare Pension equating to 13,100 NPR per month. In response to the economic crisis following the pandemic and rising food prices, an additional NPR4,000 was paid to all Welfare Pensioners in January 2022.

During the period 438 WPs were recorded as ceased of which 35 ceased due to their move to UK. 79 new welfare pensions were authorised including 45 returning from UK and 61 pensions were transferred to widows. Eleven pensions were ceased due to the beneficiaries moving into the Residential Homes and in receipt of the residential home allowance.

As at 30 June 2022 the number of Welfare Pensioners had reduced to 3,453.

For 2022/23 Trustees agreed an increase of 10.7% to the rate of welfare pension from NPR 13,100 to NPR 14,500 per month (NPR 174,00 pa). In addition, Trustees agreed the annual festival allowance of

NPR2,000. With inflation in Nepal at over 8%, this increase maintains the rate at 100% of the food basket used to determine a pensioner’s monthly requirement for essential items. In 2021/22 the cost of the Welfare Pension programme was £5,016,000 (2020/21: £5,577,000) which represents 25% of total charitable expenditure (prior to movement in the constructive obligation).

Almost 80% of WPs are now paid through the bank on regular monthly basis; all Darjeeling pensioners receive their pension directly through their designated bank accounts.

Winter Allowance

Our Winter Allowance is an additional annual gift distributed to all of our pensioners to ensure that they are equipped to endure the colder months of winter.

The allowance was previously paid in cash however, in line with the Trust’s policy of avoiding cash payments in favour of payment in-kind, this reporting period saw all of our Welfare Pensioners issued with thermos-type flasks.

The direct cost of the Allowance in 2021/22 was £22,000 (2020/21: £47,100)

Disability Support Grant

For disabled children of our core beneficiaries, we offer a regular monthly grant similar to the Welfare Pension. Without this financial support, and in the absence of a developed-world health system, disabilities can pose an insurmountable obstacle in Nepal.

As at 30 June 2022, there were 232 beneficiaries in receipt of the grant (2020/21: 225). The total cost of delivering these grants in 2021/22 was £284,000 (2020/21: £282,000). In response to the economic crisis following the pandemic and rising food prices, an additional NPR4,000 was paid to all DSG beneficiaries in January 2022. An annual festival allowance of NPR2,000 is also payable to DSG beneficiaries.

Home Carers Allowance

Sometimes, family members of our Pensioners care for them full-time. When this happens, they are able to apply for a grant from us to support them as they are unable to work.

In 2021/22 302 people received this grant (2020/21: 405). The total cost of these grants in 2021/22 was £93,000 (2020/21: £108,000).

Widow Deukumari Chhetri lives in Tanchowk village in the remote Annapurna region of Nepal. At the age of 95 she is remarkably independent, and still able to support her family thanks to the pension she receives from The Gurkha Welfare Trust.

Since the death of her husband, Deukumari’s pension has been a lifeline – for herself and her family. She currently lives with the youngest of her three sons, 60-year old Sherbahadur, and his family.

“As we got older, it was difficult to work the land. The youngest son that I live with is uneducated and is a farmer – we couldn’t have been dependent on him. We couldn’t have survived without the pension.”

Our Pensioner Support Team travelled for over to two hours to reach Deukumari’s home to deliver her pension, complete a routine health check and provide her with medicines.

The pension enables Deukumari to buy essentials, mainly food items and clothes. She can also afford to treat her grandchildren with sweets at festival time.

Duekumari’s husband, the late Rifleman Jagatbahadur Chhetri, was enlisted in India, served with the Gurkhas in Burma, and was discharged from Malaysia in 1947. When he returned home after being discharged from the army, it was difficult for Jagatbahadur to provide for his family.

At the end of the visit Deukumari expressed her gratitude for the support she receives from The Gurkha Welfare Trust.

“I want to thank you all. May you not trip while you walk. May you not get sick. May you not have to quarrel with anyone. May you achieve whatever you aim to do.”

“We struggled a lot. Income from farming was not enough. We had to borrow money to buy seeds and had to repay in crops. They charged heavy interest and not much was lef for us,” Deukumari said.

“We also tried our luck in trade. Me and my husband used to walk for three days to buy clothes and rations, bring them back to the village and sell them here. I remember my youngest son was just three years old and I had carried him all the way. It was very difficult.”

In 1994 Jagbahadur started to receive a monthly pension from The Gurkha Welfare Trust, enabling him to support his family. When he died in 2008, we continued to provide a pension for his widow.

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TRUSTEES’ REPORT

Welfare Grants

We are needed the most during moments of tragedy. When disaster strikes in the form of fi re, fl ood, landslide or earthquake, GWT is ready to provide immediate assistance, by off ering fi nancial and other support.

A total of 963 grants were made in 2021/22 for the immediate relief of destitution and in response to fi re, fl ood and landslide damage at a total at a cost of £1,208,000 (2020/21: £1,283,000)

101 earthquake-resilient homes were delivered in a continuation of the EQ Homes project.

Funeral grants were paid in respect of 383 former Welfare Pensioners.

OUR RESIDENTIAL HOMES

The Trust runs two Residential Homes (RHs), one located at the Area Welfare Centre (AWC) at Kaski, west Nepal and a second located at the AWC at Dharan, east Nepal.

The Homes provide round-the-clock care to Gurkha veterans and widows who would otherwise struggle to live alone. With no comparable facility in Nepal, they set the standard of care for the elderly.

The RHs have a maximum capacity of 48 (including rehabilitation) and there were 36 permanent and 7 rehabilitation residents as at 30 June 2022 with a total expenditure of £468,000 (2020/21: £492,000). The annual running costs of both RHs are met by designated funds.

Despite the constraints imposed by COVID-19, the RHs have continued to deliver rehabilitation care. This has greatly improved their quality of life and helped them to live with dignity.

BUILDING A SAFE HOME FOR DHAN BAHADUR AND SUKMAYA ~~BUILDING A SAFE HOME FOR DHAN BAHADUR AND SUKMAYA~~

Having a safe place to call home is increasingly important to Gurkha veterans and widows, especially as they grow older. Rifl eman Dhan Bahadur Limbu and his wife Sukmaya were very grateful to the GWT supporter whose donation enabled us to build them an earthquake-resilient home.

Dhan served in the 10th Gurkha Rifl es, and he starkly remembers his service. “I enlisted from Dharan,” Dhan said. “We were then separated and sent to diff erent platoons. We went to Hong Kong. From there, we were taken to the confl ict between Indonesia and Malaya in Borneo. We were then told that we had to leave on redundancy. I was made redundant in 1969, aft er the confl ict was sett led between the two parties. I lost a few of my colleagues during the confl ict.”

Dhan’s life was tough when he returned to Nepal aft er being made redundant. He worked in the fi elds to make a living, and for a long time he and his family lived in an old house made of timber and bamboo. The beams of the home were bent with age and were hazardous in the event of a natural disaster.

We constructed a new, earthquake-resilient home for Dhan and his wife Sukmaya, so that they can rest easy knowing they are safe from Nepal’s unpredictable environment.

“I like the house, it is enough for the two of us,” Dhan said. “I would like say ‘Dhanyabad’ to the gentleman who helped us.”

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TRUSTEES’ REPORT

HOSTING HUMLA’S FIRST PROSTHETICS CAMP

OUR MEDICAL AID

The Trust provides an international standard of healthcare and medication to Gurkha veterans and their families living in Nepal. We do this through our regional medical clinics, via home visits by specialist staff and by arranging subsidised treatment at carefully selected national hospitals. We committed to the provision of primary medical care enabling all pensioners’ access to an appointment at one of our medical centres and to be seen by appropriately qualified medical staff.

GWT medical services provided c115,000 faceto-face patient consultations, c47,000 telephone consultations and over 9,000 home visits during the year at a total cost of £7,559,000 (2020/21: £6248,000).

The two-year contractual agreement, from January 2020, with International SOS for medical services in Darjeeling remains in place.

In 2021/22 the Trust supported three medical camps at Humla, Solukhumbu and Khotang that treat the wider community at a direct cost of £118,000 (2020/21: £103,000). The medical camp model has been developed and refined to concentrate on chronic health problems that affect quality of life rather than life expectancy. As the camps have now become specialist interventions a significant development is the collaboration and utilisation of local hospitals which can provide space, equipment and human resources as well as assisting with initial screening and post camp follow up. Local health professionals are also involved so that they may learn new skills and develop best practice.

New specialities that have been successfully introduced include audiometry and hearing aid provision, adjustable spectacle distribution, mobility aids including the provision of artificial limbs, Ear, Nose and Throat referrals and funding referrals to secondary care for selected beneficiaries. In addition, a school health programme has been trialled.

OUR SCHOOLS

Our schools’ programme builds, repairs and improves schools in remote regions of Nepal and in turn provides access to education and a better future for Nepali children.

Unlike last year, when projects had to be suspended during the national lockdown, the construction of school projects this year was not affected.

Nevertheless, adherence to strict COVID protocols and closure of Nepali schools in Jan / Feb presented challenges, nevertheless, all projects were completed. This included 3 Major schools, 12 Minor School Extensions and 90 school refurbishments.

Total expenditure in 2021/22 was £1,116,000 (2020/21: £1,078,000).

Retaining the skills and expertise in construction techniques amongst our staff is a key requirement in retaining skills in-house to ensure we can react immediately following natural disaster and forms part of our disaster resilience strategy.

OUR CLEAN WATER AND SANITATION

The new five-year programme Resilient WASH and Emergency Preparedness Programme (RWEPP) started in July 2021. The RWEPP is a jointly funded programme delivered by the Foreign Commonwealth and Development Office (FCDO) and Gurkha Welfare Trust. The RWEPP aims to increase inclusive access to sustainable and resilient Water, Sanitation and Hygiene (WASH) services, and strengthen the resilience of communities to deal with climate induced disasters.

RWEPP will directly contribute to the attainment of the UN’s Sustainable Development Goal 6 (increasing access to clean water and sanitation services) and Goal 9 (building resilient infrastructure, promotion of inclusive and sustainable industrialisation and foster innovation). RWEPP will also contribute support to the UK’s strategic priorities of climate change, COVID-19 and global health, and humanitarian preparedness and response.

Key concept and impact of the programme

• Sustainability of WASH projects. A key factor to the sustainability of WASH projects has been the formation of Water User and Sanitation Committees (WUSCs) in each targeted community. WUSCs have active and adequate Operation & Maintenance (O&M) funds; and provide training to Village Hygiene Promoters (VHP) and Community Maintenance Workers (CMWs). Furthermore, all the schemes implemented by RWEPP were included in local government plans and based on signed tripartite agreements between the project, communities (WUSCs) and local governments.

Out of the 77 districts in Nepal, Humla is reported to be the most underprivileged in terms of infrastructure, development, road access, education, and health services. In November we saw the successful rollout of our fitment camp, the first of its kind in Humla, which provided dozens of villagers with prosthetic limbs to improve their quality of life.

FIRST STEPS FOR TEJBAHADUR

Several years ago, young Tejbahadur Budhathoki fell from a roof and broke his leg. Sadly, the local health post in his village did not have the capacity to treat his injury, and his condition worsened. By the time Tejbahadur arrived at a hospital, doctors had no choice but to amputate his leg.

“He can’t walk and is unable to go to school,” said Tejbahadur’s father, Parba. “We were informed about this camp by the local health post. We are positive that your help will have a positive impact.

“We are from a poor family. We could not have afforded this because of our financial condition. We are very happy that you have helped us. It would have been very expensive if we had to travel to the city to get the treatment. Although it took us three days to get here, we are very happy. Many ‘dhanyabad’ (thank you) to you all.”

HELPING SONIYA WALK AGAIN

12-year-old Soniya had a tragic accident in which her feet were badly burnt, and doctors needed to amputate her toes. Ever since, she has had difficulty walking.

“We came to know about the camp from the local health worker,” said her mother, Jyaula. “The new feet look good. I am not sure how it’s going to be in the future. It is a great deed that you have done. Because of your efforts our daughter has been able to overcome her physical disability.”

GIVING BHAKTARAJ NEW HANDS

Bhaktaraj Budha, aged 12, had to have both his hands amputated after being electrocuted. In our Humla Medical Camp earlier this year, we took Bhaktaraj’s measurements for new prosthetics.

“He was checked upon during the medical camp earlier,” said Tula, Bhaktaraj’s father. “Now, they have installed the artificial hands. You have invested so much. We are indebted to you for this generosity. Your organisation has helped so much.”

Bhaktaraj told us he hasn’t learned how to write yet aside from writing his name, but with his new prosthetics he is excited to start.

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18 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

TRUSTEES’ REPORT

TRANSFORMING SHREE SARASWATI BALKALYAN SCHOOL

• RWEPP has supported the most vulnerable, and empowered women and excluded groups by increasing their participation in Water User and Sanitation Committees (WUSCs). The percentage of women in key decision-making positions has increased to 64% against the target of 33%. In addition, a large number (70%) of excluded groups have been included in WUSCs. Toilets, tap stands, and handwashing stations built under this programme are child, gender, and disability friendly. Likewise, the menstrual hygiene management intervention has directly supported girl students to maintain their hygiene in schools. Female representation on user committees was 49%. Marginalised and excluded group representation on user committees was 72%.

OUR DISASTER RESILIENCE

Nepal is highly vulnerable to climate related, natural, and man-made crises. RWEPP programme quickly adapted to respond to disasters. Against the intended result of providing an emergency response (COVID-19, Winterisation, Monsoon, and Emergency-WASH) to 25,000 people, RWEPP has successfully responded to 44,414 people. RWEPP has supported COVID-19, Monsoon Support, and Winterisation to communities who were affected and in need. The Emergency Preparedness and Response Programme key activities delivered during this FY 21/22 are listed below.

• COVID-19 response related intervention. RWEPP staff delivered immediate and practical support to protect the population and health workers. During the COVID-19 response, GWT also provided sanitation awareness training and advocacy, hygiene kits, and sanitary pads to maintain personal hygiene and privacy. RWEPP’s COVID response plan contributed to the prevention of the transmission of COVID-19 in Nepal and reduced the social impact on the most

vulnerable groups including girls, women, and children with disabilities. A total of 36,649 people (17,573 females and 19,076 males) have benefitted in FY 2021/22. During this FY, the programme has supported 78 Health Care Facilities (HCFs), 6 Isolation centres, 23 local government institutions, four communities, three orphanages, and 75 schools across 6 Provinces, 35 Districts, and 66 Municipalities.

• Winterisation Support. Nepal is also experiencing the impacts of global warming on its temperature patterns. The climate data of more than four decades has shown an increasing trend in annual temperatures across Nepal, resulting in climate extremities, related ill-health affecting the population and a change in agricultural production patterns. With the average minimum temperature trend during the winter months decreasing in the Terai region of Nepal, support was provided to the communities most affected. RWEPP delivered winterisation support to the Palikas of five districts. A total of 699 households and 3,266 people (1,676 females and 1,590 males, including 71 people with disability and 32 pregnant women) benefitted from this intervention.

• Disaster Risk Reduction Management (DRRM).

In accordance with the Nepal Government’s DRRM Strategic Action Plan (2018-2030) and Local Disasters and Climate Resilience Planning Guidelines 2017 (LDCRP Guidelines, 2017), GWT N/ RWEPP successfully supported the Ward Level Disaster Risk Management Plans (DRM Plan). During, Ward Disaster Management Committee (WDMC) formation process, 210 (63 female and 147 male) ward level representatives were appointed as WDMC members. During the DRM Plan and Vulnerability Capacity Assessment (VCA) training, 208 (62 female and 146 male) were trained.

Nearly 1,000 children attending Shree Saraswati Balkalyan Secondary School will have a brighter future, thanks to the generosity of our supporters.

population was very minimal around the area,” he said. “Our classrooms walls were sheets made of bamboo…there was no roof. Whenever we saw thick dark clouds in the sky, the school would have to close.”

The secondary school, located in the Jhapa District of Nepal, has been completely rebuilt by our team. Students can now learn in 24 new and improved classrooms, fitted with desks, benches, and bookshelves.

Although the school had made small improvements over the years, like installing CGI (corrugated iron) roofing, the infrastructure was worn down by time and Nepal’s unpredictable weather. The new school buildings will give hundreds of students a safe environment to learn, where they won’t have to worry about leaking roofs, dilapidated desks, or cracked walls.

As part of the building project, the Trust constructed gender separate toilet blocks, installed an incinerator, and refurbished the school’s cafeteria and daycare facility.

“I cannot express how happy I am” said Premkumar. “The new building will provide an excellent environment. These classrooms will motivate students to attend classes and study. This will help the overall development of students. Social, mental, cultural, and educational development. This will help them achieve it.”

“I am very happy that we will now be able to study in this new and high standard building” Manisha Rai, student

Before construction was carried out, the walls of Shree Saraswati Balkalyan were aged and cracked following damage during the devastating earthquake of 2015. The rooms had been small and overcrowded, with up to 56 students crammed into one classroom at a time. The roofs had also given way and leaked during the monsoon, making it an unsafe environment for the children.

Premkumar Rai was one of the first students who attended Shree Saraswati Balkalyan when it was founded in 1980. Now, he teaches at the school. “When the school was first established, the

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TRUSTEES’ REPORT

THE IMPACT OF GROUNDWATER

OUR INFRASTRUCTURE AND STAFF

The staff and administration costs of the Gurkha Welfare Trust in Nepal continue to be met in large part by the MOD through an annual Grant in Aid (GIA) for the Trust’s contribution to fulfilling vital tasks on behalf of the serving and retired members of the Brigade of Gurkhas through its network of staff and AWCs and through the secondment of a Field Director and Project Engineer and part of the time of the Defence Advisor as Director GWT(N). These tasks include liaising with family members of serving Gurkha servicemen in compassionate cases.

Our network of 20 Area Welfare Centres (AWCs) has been divided in to five clusters with up to four satellite AWCs centred around a Key AWC (Butwal, Kaski, Kathmandu, Dharan & Damak). Within these clusters, multi-disciplinary Pensioner Support Teams (PST) facilitate a more dynamic and mobile approach to welfare delivery direct to our pensioner’s homes. How often a pensioner is visited will depend on the vulnerability assessment that has been conducted for all Welfare Pensioners with those deemed most vulnerable being visited with greater frequency according to need.

In the UK, the Trust has a Gurkha Welfare Advice Centre (GWAC) to assist pensioners and their dependants with access to welfare and statutory entitlements that arise as a result of linguistic and cultural hurdles. This centre is co-located with the Trust Headquarters in Salisbury. In addition, the Trust runs another advice centre jointly with HQ Brigade of Gurkhas (HQBG) in Aldershot, one of the main centres of Gurkha settlement in the UK.

The Trust and both GWACs work closely with local councils, Government departments and other Service charities to ensure effective support to those ex-servicemen and their dependants who may struggle as a result of linguistic and cultural hurdles in accessing appropriate support. Those service charities remain responsible for meeting the cost of any welfare support which enables the Trust to retain its focus on Nepal and those ex-servicemen and their dependants who remain in conditions of very real poverty and distress. However, in recognition of their work supporting the increasing number and complexity of welfare cases in the UK the Trust makes an annual welfare grant to ABF – The Soldier’s Charity. During this reporting period, this welfare grant was £250,000. The Trust remains extremely grateful for the assistance provided by ABF – The Soldier’s Charity and those

other organisations that are routinely involved with assisting those arriving from Nepal to settle in the UK.

INTERNAL COMMUNICATION

Effective communication with employees is of vital importance and the Trust has established procedures to provide information to, and consult with, employees on financial, employment and other matters that affect them.

DIVERSITY AND INCLUSION

The Trust is committed to promoting and supporting diversity through the creation of an environment in which individuals are treated on the sole basis of their relevant merits and abilities. All staff and trustees share this commitment. The Trust will not tolerate any discrimination or behaviours towards an individual in respect of age, disability, race, religion, gender or sexual orientation, which are offensive, discriminatory or hostile towards the individual.

Through the provision of reasonable adjustments within the workplace, the Trust seeks to maximise the talent and opportunities for both potential and current employees. Arrangements will be made, wherever possible, for retraining employees to enable them to perform work identified as appropriate to their aptitude and ability.

The Trust complies with all UK legislation and applies this as best practice in Nepal wherever practicable, in accordance with Nepal statutory regulations.

ENVIRONMENTAL MATTERS

The Trust is committed to minimising the impact that its processes have on the environment and to providing a safe working environment for our employees. Accordingly, a new Environmental policy has been produced by the Trust.

In accordance with the UK Government’s Streamlined Energy & Carbon Reporting policy, the Trust is a low energy consumer in the UK and is therefore exempt from providing detailed energy consumption disclosures.

In Nepal, the Trust seeks to reduce its environmental footprint in a number of ways. The use of solar panels in both the HQ and across our AWC network helps mitigate energy consumption.

In remote areas of Nepal many people still struggle to find clean, safe water. Our water projects provide villages with access to clean water and improve sanitation. In some areas the only option is to source a groundwater supply and pipe the freshwater straight to villagers’ doorsteps.

Shuva Bahadur Ale, a villager from Charghare in the Bardibas Municipality, said that before the GWT’s intervention, people in his village shared a communal well which was heavily used and dried up during the dry season. Villagers drinking the well water also risked catching waterborne diseases.

“It was difficult at first,” Shuva said. “We did not have sufficient water from the well. We mainly relied on the dug wells in our community. Our dug wells were not designed to cope with increased water demand, so one well could not replenish fast enough to serve more than two households at the same time. It led to an intermittent supply where water was not always available when needed.

“Mainly children and women were facing problems beforehand. Sometimes, children could not attend school on a regular basis, and women had to rush their household activities to fetch the water.”

sites. There is also less incidence of waterborne diseases.” Shuva said.

Shuva is a member of the village committee that has taken on responsibility for maintaining the project, ensuring its sustainability into the future, and explained “While receiving training from GWT, I learned about the importance of safe drinking water, hygiene, sanitation, water quality tests, leadership, how to run the committee, and sustainability.”

Charghare now has a clean water for every household in the village. In total, the GWT installed 551 tap stands, benefitting 3,035 people.

“Now, children can regularly attend the school on time. Women can cook food and provide lunch for their husbands who are working on construction

EMPOWERING WOMEN THROUGH OUR WATER PROJECTS

Asha Waiba became a role model for women in her community, when she took on a vital role in the village Water Users Committee.

children had to spend their time fetching the water.”

Asha also recounted how during the monsoon period, rats, insects, and dirt would wash into the community’s sources of water, increasing the risk of disease.

After training with members of the GWT, Asha learned best practices in hygiene and sanitation, and how to promote these practices within her community. She also learned how to routinely test the water quality and help maintain the equipment.

Before we provided a clean water supply to the village, Asha and other women in her

Asha said, “We work together as a community on this project. So, we all have the feeling of ownership that we need to manage and sustain it. After all the experience and training, I have earned respect from the community,” Asha said. “Now, women in my community perceive me as a role model and they have been inspired by my work.”

community had to walk for hours to collect drinking water. Because this took so much time out of her day, Asha found it was difficult to balance other responsibilities at work and at home.

“It was very hard at first in the beginning,” Asha said. “We used to collect water from the well or river. It used to take a long time. Most of the women and

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TRUSTEES’ REPORT

TRUSTEES’ REPORT

Travel by vehicle and domestic airlines has been reduced through the greater use of online conference and communication facilities as a direct result of the digitisation of our welfare network.

As a consequence of the restriction of movement due to local and national lockdowns, both in UK and Nepal, our environmental footprint has aided a further reduction in our environmental footprint.

TRAINING

The Trust is committed to ensuring that staff are properly trained for their roles as well as helping maintain motivation and supporting continued professional development. We have increased the number of staff available to deliver in-house training and have a comprehensive programme to utilise a wide range of individuals and teams from UK, where the necessary skills did not exist in Nepal.

The Trust’s training budget has been under-utilised during FY2201/22 as a result of travel restrictions emanating from the two waves of the pandemic. Training events did take place, but many were online. Of note, however, the first Annual Conference for over three years was held in Pokhara. In anticipation of greater freedoms in FY 2022/23, there is a renewed emphasis on the full implementation of the training plan.

SAFEGUARDING

The Trust operates a zero-tolerance approach to dealing with safeguarding issues for all staff, contractors, visitors and beneficiaries, regardless of location. As an organisation, we strive to maintain an environment that is free from harassment, abuse and mistreatment in all of our operations and activities.

This approach is reinforced through regular training, both during initial induction training and thereafter with annual Individual Continuous Training (ICT) combined with regular briefings to beneficiaries and communities. This is based on a robust safeguarding policy which is regularly reviewed.

The policy aims to:

responsibilities in respect of safeguarding and is provided with the necessary information, training and support on safeguarding matters;

GWT’s Safeguarding Policy also seeks to effectively manage the risks associated with activities and events involving vulnerable beneficiaries through:

Statement of how directors have complied with their duties to have regard to matters in Section 172(1) of the Companies Act 2006

A director of a company must act in a way he/she considers, in good faith, would be the most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to the following matters:

OUR POLICIES

Welfare Pensions are awarded in cases of destitution to ex Gurkha Soldiers who have served in the British Army and their widows who have not qualified by length of service for a pension paid by the British Government. All cases are investigated by an Area Welfare Officer and only in cases where obvious destitution exists, are they granted. All cases are re-examined at a time determined at the time of award, but no longer than five years, to ensure that the pension is still required.

Hardship grants are made when the applicant reports, or the hardship case is discovered by a Pensioner Support Team. At this stage a form is completed outlining the situation, the status of the applicant and any other relevant details. In the case of a house rebuild, details of land ownership are also captured. Group cases, such as large-scale rebuilding of houses following a natural disaster such as the 2015 earthquake are considered by members of a board who will decide relative merits of cases and allocate appropriate resources within priorities and budget.

Statement summarising how directors have engaged with suppliers, customers and others in a business relationship with the company.

The Trust assesses the need of its beneficiaries through a Pensioner Risk Assessment, from which a Pensioner Care Plan is developed by our Welfare Officers and medical staff. The plans are regularly reviewed to ensure that the level of care is

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TRUSTEES’ REPORT

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)

The way in which we conduct our work demonstrates our commitment to maintaining ethical standards and reducing any negative impact on both people and the planet.

ENVIRONMENTAL

We are committ ed to minimising the impact that our processes have on the environment and to providing a safe working environment for our employees. Tangible examples of this over the last year have included:

GOVERNANCE

SOCIAL

Much of the Trust’s work can be considered to aff ect social change amongst communities. Most notably, this year:

Compliance is monitored annually through internal and external audits. Our ESG principles demonstrate our commitment to maintaining ethical standards and reducing any negative impact on people and the planet in the delivery of our charitable work.

FUNDRAISING POLICY

The Charity Commission issued guidance “Charity Fundraising – a guide to Trustee duties” and the Fundraising checklist (CC20) in 2016. The 2022 assessment was reviewed by the Audit Committ ee in March 2022.

INVESTMENT POLICY AND PERFORMANCE

The Trust meets the key challenges of short-term liquidity, cash fl ow fl exibility and long-term capital growth by holding cash in a short-term portfolio while splitt ing investments between mediumterm and long-term portfolios. In addition, there is a strategic portfolio invested in alternative investments and global smaller companies.

The purpose of the two main investment portfolios is to delineate the Trust’s requirements between monies that are held as an immediate reserve to cover cash fl ow requirements (c. 18 months) and truly long-term monies that can weather capital volatility over a 5-7 year investment time horizon.

The medium-term portfolio seeks a return that is bett er than 3m Libor UK cash and, over the past 12 months to 30th June, delivered -0.6% compared to 0.3% for the benchmark. The long-term and strategic portfolios seek a return that is bett er than both a composite benchmark and an infl ation target of CPI + 4%.

Over the past 12 months, the long-term portfolio returned -3.2% compared to -1.0% for the benchmark whilst, in the strategic portfolio, the alternatives portion returned 8.7% compared to 14.2% for the benchmark and the smaller companies portion returned -25% compared to 3.7% for the benchmark. Whilst both portfolios under-performed their infl ation plus targets this year they remain ahead of their benchmarks over the longer-term and are well-positioned to benefi t from global economic trends in the future.

26 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 27

TRUSTEES’ REPORT

TRUSTEES’ REPORT

Investment Risk – the risks & how do we mitigate these through our investment strategy?

Investment risk covers a variety of areas and the Investment Committee, on behalf of the Trustees, regularly reviews counterparty, custody, capital loss, market, liquidity, regulatory and sustainability risks as well as the investment process of the Trust’s fund manager to ensure that all industry safeguards are in place. The Investment Committee has guarded against two key areas of risk.

The first risk is loss of capital and hence our decision to invest in a well-diversified global portfolio across different asset classes to reduce the risk of loss from a single investment or strategy. To minimise volatility risk, we also aim to protect investments from sudden variations in market movements by balancing levels of risk and return between shortterm, medium-term and longer-term portfolios.

The second area is currency risk as the Trust’s fundraising activities and the MOD’s grant in aid are made in a different currency (Sterling) to the recipient beneficiaries (Nepali Rupee – NPR). It is difficult to mitigate this risk as there are few investments that can be made in Nepal and the NPR has been in steady decline against Sterling over the past 25 years. The solution has been to keep some short-term monies in Nepal in NPR, have some exposure to the US Dollar in the medium-term portfolio and to have a large weighting of global equities in the long-term portfolio.

Increasing exposure to global equities has provided access to a wider and more diversified investment universe that historically has enhanced returns and reduced the concentration risk more prevalent in UK domestic indices. It has enabled our fund manager to invest in global themes such as digitalisation, automation, climate change, ageing demographics and evolving consumption that are increasingly relevant in a post-COVID world. Sustainability lies at the heart of our fund manager’s investment process ensuring that environmental, social and governance (ESG) risks are also monitored and minimised.

RISK MANAGEMENT

All activities are subject to regular risk review by the Board of Trustees. Major risks are, for this purpose, those that could have a significant effect on:

The Trustees review all risks on an ongoing basis and satisfy themselves that adequate procedures are in place to minimise and manage the risks identified. Where possible and appropriate, risks are covered by insurance.

The Trust’s financial Reserves policy is assessed and set at a level which enables the Trust to help manage its risks.

OUR PRINCIPAL RISKS AND UNCERTAINTIES

a. Operational Risks

All key risks appear in the Trust’s Risk Register and include operational risks. The key risks are identified as:

• Disruption of services due to natural disaster in Nepal. GWT operates in a country that is extremely prone to natural disasters and where its internal resilience and institutions are relatively fragile. GWT has a disaster resilience plan which is regularly reviewed and practised. Our infrastructure maintains plans and supplies with which to respond and the Trust has a fully funded designated Disaster Response fund.

effect on the Trust’s ability to deliver other community and individual aid. In the short term, activity levels may be constrained by the Trust’s resources. In the longer term, engagement with FCDO to ensure continued support or restrict activities to a level that the Trust can sustain without external support.

b. Financial Risks

The Trust faces a number of key financial risks. The Trustees consider that the following summarises those financial risks and their responses to them:

Ukraine and subsequent cost of living crisis driven by global fuel prices has seen fluctuations in the value of Sterling over the last few months. As at the end of November 2022, the rate of exchange has recovered from the position in late September 2022, in which the rate had fallen by 9.1% from the 30 June 2022 year-end. At present, a 1% change to the average rate creates an increase or reduction in costs of £195,000 but it also changes the value of our liabilities on the balance sheet by £396,000 so our net assets can change significantly one year to the next. To mitigate against adverse movements funds to cover three months cash flow are held in Nepali Rupees and the investment portfolio is spread across a wide range of currencies.

c. Going concern

The Trust has undertaken a robust assessment of the continued global economic effects following the pandemic and the effects of the war in Ukraine, and the impact on the ability of the Trust to operate as a Going Concern.

The main areas of financial risk have been identified as:

When agreeing the budget for 2022/23, Trustees have been able to draw on the evidence of fundraising performance during 2021/22 in which fundraising income (particularly legacies) exceeded projections and maintain levels of charitable activity. When assessing the required level of reserves, Trustees have maintained the optimal level of free reserves at 18 months of routine expenditure to reflect continued economic uncertainty.

The Trust has applied a sensitivity assessment to future income projections and the investment portfolio, to understand the extent to which reductions can be managed without impacting on long term commitments and the ability to deliver charitable activities to our beneficiaries. Financial performance is scrutinised on a regular basis by the Finance Committee and the Main Board so that any shortfall in income will be identified to Trustees in a timely manner.

28 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 29

TRUSTEES’ REPORT

TRUSTEES’ REPORT

Trustees have concluded that the Trust remains in a strong financial position and operates as a Going Concern.

provisions of medical services £2,525,000 (2020/21: £2,525,000). Under the RWEPP agreement with the FCDO we received £1,933,000 (2020/21: £970,000).

Notable donations include £122,600 (2020/21: £141,500) contributed by all ranks of the Brigade of Gurkhas and under the Service Day’s Pay Giving scheme. Following a decision by the Brigade of Gurkhas Council of Colonels in March 2022, the income from SDPG will be diverted to support renovation work at the Gurkha Museum Winchester for a period of 2-years.

ADDITIONAL POLICIES

The Trust is committed to sustainable development, meeting the needs of our beneficiaries without compromising the ability of future generations to meet their own requirements and this is a guiding principle within our work in Nepal. Concern for the environment is an integral and fundamental part of this commitment and our aim is to reduce the impact of our operations on the environment. This aim is promulgated through the Environmental Policy.

Legacy income totalled £7,997,000 (2020/21: £5,004,000). The use of Gift Aid generated additional income of £803,900 (2020/21: £1,021,000).

EXPENDITURE

OUR FINANCIAL REVIEW

Charitable expenditure totalled £20,071,000 (2020/21: £18,088,000). This represents 88% of a total expenditure (prior to movement in the constructive obligation) of £22,705,000 (2020/21: £20,554,000). Our cost of raising funds including investment management is £2,634,000 (2020/21: £2,466,000) of which 77% is covered by our investment income of £2,045,000. Fundraising expenditure of £2,262,000 (2020/21: £2,119,000) continues to be effective raising income of £15,684,000 (2020/21: £13,416,000). This represents a Return on Investment of £6.93 for every £1 spent (2020/21: £6.33). 2021/22 is the fourth year

INCOME

Trust income from all sources during the financial year 2021/22 was £25,512,000 (2020/21: £22,046,000). Donations from individuals, companies, trusts and other organisations totalled £6,993,000 (2020/21: £8,230,000). We continue to be supported by the MOD who provided a grant of £3,325,000 (2020/21: £3,355,000) towards the cost of the means of delivery of our aid and a grant towards the

of the 5-Year Fundraising Strategy which is based on increased investment for donor acquisition in order to sustain and increase total income over the longer term. The rate of return remains above industry standards.

RESERVES

Designated Fund

The Trustees are concerned that the level of running costs of the Residential Homes should not have a detrimental effect on our ability to provide support to the much wider community of Welfare Pensioners. Therefore, a designated fund has been created that is sufficient to meet the annual running costs for 20 years and £400,000 to cover major refurbishments costs through to 2035.

Following specialist advice on the risk of future earthquakes, in June 2018, the Trustees agreed a designated fund to allow an immediate response to natural disaster. Funds were agreed for the repair or replacement of 13 beneficiaries’ homes during the year, destroyed as a result of the 2021 monsoon season (£50,000).

Trustees agreed to the funding of secondary medical care claims for the treatment of COVID-related illness at a cost of £357,100 from the reserve.

The Disaster Response designated reserve was increased at year end to reflect the 30 June 2022 rate of exchange and rate of inflation.

GWT has agreed to contribute £2,000,000 to RWEPP over the remaining four years of the Agreement.

Designated funds total £19,628,000 (2020/21: £21,037,000) as at 30 June 2022.

Restricted Funds

The restricted balance at 30 June 2022 is £1,364,000; of which £613,000 follows an extremely successful appeal and is for Earthquake Homes and hardship grants in 2022/23, £97,600 is for the use (depreciation) of assets within RWEPP, £66,800 is for planned school projects spanning two years, £30,500 is for medical camps, and £510,900 is for support costs as a result of continued COVID-19 procurement delays and a favourable rate of exchange.

Constructive Obligation

When a charity has created a valid expectation through past practice that it will meet a liability

the Charity Commission requires it to recognise the liability on the balance sheet as a constructive obligation. The Trust considers that a constructive obligation has been created for the payment of the Welfare Pensions and the disability support grants.

Based on WP and DSG beneficiary numbers at 30 June 2022 and key assumptions including: 35 new WP joiners for each of the next five years (average age 73), agreed increases in rates payable, extended mortality rates, long-term inflation at 7% and a discount rate at 6.5%. The actuarial calculation at 30 June 2022 ROE is £39,300,000; an increase of £1,662,000 from June 2021, reflecting an above inflation uplift in the monthly allowance and a fall in the rate of exchange at the year-end between the Nepalese Rupee and Sterling.

Reserves Policy

Based on a risk assessment and after allowing for funds to meet the constructive obligations, Residential Homes running costs and Disaster Response, as mentioned above, the Trust’s Reserves Policy takes into consideration:

30 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 31

TRUSTEES’ REPORT

In light of the continued economic uncertainty following the global pandemic and the war in Ukraine, Trustees consider that the Trust ideally requires free reserves equivalent to 18 months of standard expenditure not covered by other provisions, currently around £27,479,000. This level of reserve will enable the Trust to adjust its infrastructure and respond quickly to any of these risks. The Reserve Policy is reviewed annually during the budget setting process taking account of current and future risks and the economic climate, both in the UK and Nepal, and consequential impact on the Trust’s investment portfolio.

After taking the Constructive Obligation into account the Trust has total funds of £53,899,000 (2020/21: £56,967,000), however, the free reserves which are available to meet contingencies and exclude tangible fixed assets, designated and restricted funds amount to £31,828,000 (2020/21: £33,019,000). This represents 116% of the minimum level of reserves deemed appropriate by the Trustees. With financial uncertainty anticipated for at least a further 12 – 24 months, this level of free reserves has enabled Trustees to agree a budget for 2022/23 and early planning for 2023/24 and maintain current levels of charitable activity.

Given the continued effects following the COVID-19 pandemic, the war in Ukraine, the volatility of investment markets, the continued uncertainty over future rates of exchange, the uncertain fundraising climate and the substantial risk of future natural disasters in Nepal, Trustees will continue to keep Trust finances under close review balancing current needs and the need to reach the ideal level of reserves to protect the interests of beneficiaries in the future.

This Trustees’ Report incorporating the Strategic Report was approved and authorised for issue by the Board of Trustees on 14 December 2022 and signed on its behalf by:

Lieutenant General R Wardlaw OBE Chairman Original signed and dated 14 December 2022

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees, who are also directors of The Gurkha Welfare Trust for the purposes of company law, are responsible for preparing the Trustees’ Annual report (including the Group 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 the maintenance and integrity of the corporate and financial information included on the charitable group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

So far as each of the Trustees is aware at the time the report is approved:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company and the group’s transactions, disclose with reasonable accuracy at any time the financial position of the charitable group and enable them to ensure that the financial statements comply with the Companies Act 2006 and the provisions of the charitable company’s constitution. They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

32 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 33

TRUSTEES, OFFICIALS AND ADVISORS TO THE TRUST

Under the patronage of The former Prince of Wales KG KT GCB OM AK QSO PC ADC

Vice Patrons

Field Marshal Sir John Chapple GCB CBE DL (to 25 March 2022) Dame Joanna Lumley DBE

Investment Committee

TRUSTEES, OFFICIALS AND ADVISORS

P M A Grant (Chair)

THE GURKHA WELFARE TRUST

Major General (Ret’d) J J Cole CBE

Trustee Directors

(to 17 September 2022)[****]

Lieutenant General R Wardlaw OBE (Chairman)[*]

J G R David Esq P M Rigg Esq A Brown Esq

Chief Executive Officer, The Gurkha Welfare Trust

S J Cooper Esq

A P W Howard Esq

J G R David Esq

Director The Gurkha Welfare Trust (Nepal)

Governance Committee

Colonel J P Davies MBE (to 11 November 2021)[**]

Colonel P T Smith

Mrs A Levin (Chair)

P M A Grant Esq

Field Director The Gurkha

Colonel J P Davies MBE

Dr J D Keeling MBA, MB BS, FRCGP, DRCOG

Welfare Trust (Nepal)

(to 11 November 2021)[**]

Lieutenant Colonel E Davis QG SIGNALS

Colonel D Rex MVO

Mrs A Levin

(from 15 September 2021)[***] Colonel D J Robinson

Major (Retd) Hemchandrai Rai MBE BEM

(to 30 October 2021)

Lieutenant Colonel M Hing RLC

(from 12 November 2021)[**]

Colonel D Rex MVO

(from 30 October 2021)

Head of Fundraising and Communications

(from 15 September 2021)[***]

Members

Colonel D J Robinson

A Bentham Esq

(from 12 November 2021)[**]

Major General (Ret’d) J J Cole CBE (to 17 September 2022)[****]

Company Secretary

Ms C L Turner

N D J Rowe Esq

Brigadier J L Clark CBE[****]

Audit and Finance Committees

Brigadier M Fayers

(from 17 September 2022)[****]

S J Cooper Esq (Chair) Dr J D Keeling MBA, MB BS, FRCGP, DRCOG

Brigadier P S Reehal MBE[****]

Major General G M Strickland DSO

MBE[****]

Ms C L Turner

**** Nominated - The Royal Gurkha Rifles, The Queen’s Gurkha Engineers, The Queen’s Gurkha Signals and The Queen’s Own Gurkha Logistic Regiment

Investment Managers

Sarasin & Partners LLP Juxon House, 100 St Paul’s Churchyard London EC4M 8BO

Auditors

Crowe U.K. LLP 4th Floor, St James House St James Square Cheltenham GL50 3PR

Bankers

The Royal Bank of Scotland Lawrie House Victoria Road Farnborough GU14 7NR

HSBC Bank plc 90 Baker Street London W1M 2AX

Solicitor

A J Lutley Esq Springfield, Rookery Hill Ashtead Park Ashtead Surrey KT21 1HY

Registered Address

P.O Box 2170 22 Queen Street Salisbury SP2 2EX

Company Limited by Guarantee Number 05098581

Registered Charity Number 1103669

34 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 35

AUDITOR’S REPORT

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF THE GURKHA WELFARE TRUST

Opinion

We have audited the financial statements of The Gurkha Welfare Trust (‘the charitable company’) and its subsidiaries (‘the group’) for the year ended 30 June 2022 which comprise Consolidated Statement of Financial Activities, Consolidated Balance Sheet, Consolidated Statement of Cash Flows, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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

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

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.

Other information

The trustees are responsible for the other information contained within 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 themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustee’s 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 charitable company’s or the group’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.

We have nothing to report in this regard.

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 charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors’ 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 requires 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 33, 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 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

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.

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below.

Extent to which the audit was considered capable of detecting irregularities, including fraud:

Irregularities, including fraud, are instances of noncompliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members including internal specialists and significant component audit teams. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

We obtained an understanding of the legal and regulatory frameworks within which the charitable company and group operates, focusing on those laws and regulations that have a direct effect on the

36 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 37

AUDITOR’S REPORT

determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, the Charities Act 2011 together with the Charities SORP (FRS 102). 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 might be fundamental to the charitable company’s and the group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company and the group for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulation (GDPR), Health and safety legislation, employment law, and Anti-fraud, bribery and corruption legislation. We also considered compliance with local legislation for the group’s overseas operations.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other 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 income, welfare pension payments and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, internal audit, component auditors and the Audit Committee about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, designing audit procedures to test the timing of income and welfare pension payments, reviewing of component auditor working papers, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, 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 noncompliance 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 non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

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. Our audit work has been undertaken so that we might state to the charitable company’s members 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 and the charitable company’s members 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

St James House St James Square Cheltenham, GL50 3PR

Original signed and dated 15 December 2022

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The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 39
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38 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

FINANCIAL ACTIVITIES

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 30 JUNE 2022

NOTES

The consolidated statement of financial activities includes the income and expenditure account.

There are no other gains and losses other than those shown above.

(incorporates the consolidated income and expenditure account)

Notes
Income from:
3
Donations and legacies
Donations
3a
Legacies
3b
Grants
Ministry of Defence
3c
Charitable activities
3d
Ministry of Defence
Foreign, Commonwealth and
Development Ofce
Other trading activities
Fundraising Events
3e
Retail
Investments
3f
Total
Expenditure on:
4
Raising funds
Fundraising
4f
Investment management costs
4f
Charitable activities
Individual aid
4a
Medical aid
4b
Disaster response
4d
Residential Homes
4c
Community aid
4e
Sub Total Expenditure
Movement in constructive obligation
4g/14
Total
Net income/(expenditure) before other
gains and losses
Other gains and losses
Net (losses)/gains on investments
9
Net (expenditure)/income
Transfers between funds
16&17
Other recognised gains/(losses)
Proft & loss revaluation gain/(loss)
Net movement in funds
Reconciliation of funds
Funds brought forward
Total Funds Carried Forward		 Unrestricted
General Designated
£000
£000
5,126
0
7,997
0
0
0
0
0
0
0
666
0
24
0
2,045
0
15,858
0
2,262
0
372
0
3,281
50
4,231
357
49
0
0
463
274
1,396
10,469
2,266
1,662
0
12,131
2,266
3,727
(2,266)
(4,254)
0
(527)
(2,266)
(699)
857
(1,226)
(1,409)
41
0
(1,185)
(1,409)
34,092
21,037
32,907
19,628		 Restricted
£000
1,867
0
3,325
2,525
1,933
4
0
0
9,654
0
0
3,922
2,971
0
5
3,072
9,970
0
9,970
(316)
0
(316)
(158)
(474)
0
(474)
1,838
1,364		 2021-22
Total
£000
6,933
7,997
3,325
2,525
1,933
670
24
2,045
25,512
2,262
372
7,253
7,559
49
468
4,742
22,705
1,662
24,367
1,145
(4,254)
(3,109)
0
(3,109)
41
(3,068)
56,967
53,899		 2020-21
Total
£000
8,230
5,004
3,355
2,525
970
168
14
1,780
22,046
2,119
347
7,955
6,248
30
492
3,363
20,554
(2,009)
18,545
3,501
9,841
13,342
0
13,342
(9)
13,333
43,634
56,967

All the Trust’s activities are derived from continuing activities.

Profit for Companies Act purposes (before unrealised gains and losses) is: £1,497,000 including movement in constructive obligation (2020/21: £3,581,000).

Net Income/(expenditure) before movement in constructive obligation: £2,807,000 (2020/21: £1,493,000).

See Note 19 for a comparative statement of financial activities for year ended 30th June 2021. The notes on pages 46 to 72 form part of these accounts.

40 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 41

BALANCE SHEET

CONSOLIDATED AND CHARITY BALANCE SHEET AT 30 JUNE 2022

NOTES

The net expenditure for the Trust for the year ended 30 June 2022 was £3,109,000 (2021: income - £13,342,000). As permitted by Section 408 of the Companies Act 2006, no separate Statement of Funds or Income and Expenditure account has been presented for the Charity only.

Notes
Fixed assets:
Intangible assets
7
Tangible assets
8
Investments
9
Total fxed assets
Current assets
Medication, project & trading stock
Debtors
10
Cash at bank and in hand
Total current assets
Liabilities
Creditors: amounts falling due within one year
11
Provisions for liabilities falling due within one year
Constructive Obligation
14
Net current assets or liabilities
Provisions for liabilities falling due afer more than
one year
Constructive Obligation
14
Total net assets or liabilities
Funds:
Restricted funds
18
Unrestricted funds
General
Welfare pension reserve
Net General funds
17
Designated
17
Unrestricted funds afer provision for liabilities and
charges
Total funds		 Group
2022
2021
£000
£000
155
80
1,842
1,995
81,433
86,128
83,430
88,203
371
411
2,106
736
8,212
6,011
10,689
7,158
(920)
(756)
(3,989)
(4,026)
5,780
2,376
(35,311)
(33,612)
53,899
56,967
1,364
1,838
72,207
71,730
(39,300)
(37,638)
32,907
34,092
19,628
21,037
52,535
55,129
53,899
56,967		 Charity
2022
2021
£000
£000
151
72
1,277
1,430
81,433
86,128
82,861
87,630
363
405
2,106
737
8,166
5,997
10,635
7,139
(918)
(744)
(3,989)
(4,026)
5,728
2,369
(35,311)
(33,612)
53,278
56,387
1,364
1,838
71,586
71,150
(39,300)
(37,638)
32,286
33,512
19,628
21,037
51,914
54,549
53,278
56,387		 Charity
2022
2021
£000
£000
151
72
1,277
1,430
81,433
86,128
82,861
87,630
363
405
2,106
737
8,166
5,997
10,635
7,139
(918)
(744)
(3,989)
(4,026)
5,728
2,369
(35,311)
(33,612)
53,278
56,387
1,364
1,838
71,586
71,150
(39,300)
(37,638)
32,286
33,512
19,628
21,037
51,914
54,549
53,278
56,387
87,630
405
737
5,997
7,139
(744)
(4,026)
2,369
(33,612)
56,387
1,838
71,150
(37,638)
33,512
21,037
54,549
56,387

Approved and authorised for issue by the Board of Trustees on 14 December 2022 and signed on its behalf by:

Lieutenant General R Wardlaw OBE Chairman

Original signed and dated 14 December 2022

The notes on pages 46-72 form part of these accounts.

42 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 43

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022

Notes
below
Cash fows from operating activities:
Net cash provided by/(used in) operating activities
Note A
Cash fows from investing activities:
Dividends and interest from investments
Purchase of Intangibles
Purchase of property, plant and equipment
Proceeds from sale of investments
Purchase of investments
Net cash provided by (used in) investing activities
Operating activities
Change in cash and cash equivalents in the reporting
period
Cash and cash equivalents at the beginning of the
reporting period
Note B
Cash and cash equivalents at the end of the reporting
period
Note B		 2021/22
£000
7
2,045
(142)
(165)
77,287
(76,234)
2,791
2,798
9,010
11,808		 2020/21
£000
(106)
1,780
(15)
(415)
4,748
(11,621)
(5,523)
(5,629)
14,639
9,010

NOTES

A. Reconciliation of net income to net cashfow from
Net (expenditure)/income for the reporting period (as per
SOFA)
Adjustments for:
Depreciation and amortisation
Losses/(Gains) on investments
Investments donated
Dividends and interest from investments
Gains/(Losses) on foreign exchange
Decrease/(Increase) in stocks
(Increase) in debtors
Increase/(Decrease) in creditors
Increase/(Decrease) in constructive obligation
Net Cash provided by (used in) operating activities
B. Analysis of cash and cash equivalents
Cash in hand and at bank
Notice deposits (less than 3 months)
Total cash and cash equivalents		 2021/22
£000
(3,109)
385
4,254
(15)
(2,045)
41
40
(1,370)
164
1,662
7
2021/22
£000
8,212
3,596
11,808		 2020/21
£000
13,342
391
(9,841)
0
(1,780)
(9)
(79)
(54)
(67)
(2,009)
(106)
2020/21
£000
6,011
2,999
9,010		 Cash fow
in year
£000
2,201
597
2,798

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The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 45
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44 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

FOR THE YEAR ENDED 30 JUNE 2022

The main areas of financial risk have been identified as:

1. BASIS OF PREPARATION

Statement of compliance

• Reduction in fundraising income;

The financial statements are prepared under the historical cost convention as modified to include the revaluation of investments at fair value. The format of the financial statements has been presented to comply with the Companies Act 2006 and FRS102 The Financial Reporting Standard applicable in the UK and Ireland and the Statement of Recommended Practice Accounting and Reporting by Charities (“SORP 2015 updated 2019”). The Charity is a Public Benefit Entity as defined by FRS102.

The Trust has applied a sensitivity assessment to future income projections and the investment portfolio, to understand the extent to which reductions can be managed without impacting on long term commitments and the ability to deliver charitable activities to our beneficiaries. Financial performance is scrutinised on a regular basis by the Finance Committee and the Main Board and therefore any shortfall in income will be identified to Trustees in a timely manner.

General information

The Charity is a private company limited by guarantee, incorporated in England and Wales (company number: 05098581) and a charity registered in England and Wales (charity number: 1103669). The Charity’s registered office address is:

Trustees have concluded that the Trust remains in a strong financial position and operates as a Going Concern.

P.O Box 2170,

22 Queen Street Salisbury SP2 2EX

Significant judgments and sources estimation uncertainty

Basis of Consolidation

These financial statements consolidate the results, assets and liabilities of the Charity’s trading subsidiary, GWT Trading Limited, on a line by line basis. The statements also include consolidation of the Ex Servicemen and Families Support Society, a not for profit company registered in Nepal 2 July 2018 for the legal ownership of land assets purchased by GWT in Nepal.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Charity’s accounting policies. The key judgements that have been applied by management relate to:

The Charity’s own Statement of Financial Activities has not been presented, as permitted by section 408 of the Companies Act 2006. The Charity’s net income for the year as an individual entity was a deficit of £3,109,000 (2020/21: surplus of £13,342,000).

Going concern

The Trust has undertaken a robust assessment of the continued global economic effects of COVID-19 and its impact on the ability of the Trust to operate as a Going Concern.

entrants per year for each of the next five years, with an average age at joining of 73.

2. PRINCIPAL ACCOUNTING POLICIES

The following principal accounting policies have been applied:

Income

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

Recognition of income is deferred where conditions specify that such income relates to future accounting periods. Where donors specify that funds are for specific purposes such income is included in incoming resources of restricted funds.

Donations . Income from donations, covenants and gift aid includes receipts from fundraising events. Donations, together with the resulting tax credit from gift aid, are credited directly to the statement of financial activities when received by the Trust. Donations and all other receipts (including capital receipts) from fundraising are reported gross and the related fundraising costs are reported in raising funds.

Gifs in Kind are recognised in respect of personnel funded by the Ministry of Defence in roles which would have to be replicated by the Trust. An equivalent cost is also reported within staff costs. Gifts in Kind are recognised in respect of donated

goods either in support of fundraising activity or in direct support of the provision of charitable activity. An equivalent cost is also reported within the cost of fundraising or the appropriate cost of charitable activity.

Legacies are recognised and credited directly to the statement of financial activities based on the earlier of settlement of the estate and issue of Estate Accounts or receipt of payment.

Grant Income . Income from government and other grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred.

Income from other trading activities is recognised as earned as the related goods are provided.

Interest and Dividends Receivable. Investment

income is recognised on a receivable basis and when the amounts can be measured reliably. Interest on funds on deposit is included when receivable upon notification by the relevant banking institutions. Dividends receivable on assets held for investment purposes are receivable upon notification by the relevant investment institutions.

Expenditure

All expenditure is included in accordance with the accruals concept. Any liabilities as a result of legal or constructive obligations committing the Trust to expenditure have been included.

Cost of raising funds comprises costs directly attributable to fundraising and managing the investment portfolio. Charitable activity costs in the UK are incurred in running the Gurkha Welfare Advice Centre and in supporting the activities in Nepal. The costs of running the Trust’s office and staff costs have been allocated on a time spent and area occupied basis to raising funds and charitable activity.

Governance costs are apportioned on the same basis as the office and staff costs and are disclosed in the notes comprising audit and legal fees and the costs associated with constitutional and statutory requirements.

Costs in Nepal have been allocated to the direct charitable activities. Direct costs include actual grants made, provision of medical services and costs related to people directly employed in delivering

46 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 47

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

one of our charitable activities. Other direct costs such as staff costs and overheads of the Area Welfare Centres established for the delivery of more than one charitable activity are apportioned as other direct costs. Support costs include staff and administrative overheads. Support and governance costs have been allocated to activity cost categories in a fair and appropriate method on a basis consistent with the use of resources by applying person days spent on the various activities or space occupied.

Grants payable to individuals may be subject to conditions. Expenditure on such performancerelated grants is recognised to the extent that the recipient has complied with the conditions.

Short term benefits including holiday pay are recognised as an expense in the period in which the service is received. Termination benefits are accounted for on an accrual basis and in line with FRS 102.

Taxation

Irrecoverable VAT is not separately analysed and is charged directly to the Statement of Financial Activities (SOFA) as part of the expenditure to which it relates.

Operating leases

Rental payments under operating leases are charged on a straight-line basis over the period of the lease.

Foreign currencies

Fixed assets in foreign currencies are converted to sterling at the exchange rate ruling at the time of purchase. Investments, current assets and liabilities in foreign currencies are converted into sterling at the exchange rate ruling at the balance sheet date. Transactions during the year in foreign currencies, mainly Nepalese rupees, are converted into sterling at the average rate of exchange for the month in which the transaction was undertaken. Exchange rate gains or losses are recorded as support costs to the activities to which they relate.

Pensions and retirement benefits

In the UK, the Trust makes contributions to employee individual defined contribution pension plans.

In Nepal, previously the Trust contributed to individual plans within a defined contribution Provident Fund managed by Standard Chartered Bank Nepal Limited. In addition, employees were entitled to a one-off gratuity payment on leaving that was based on length of service. Following changes under the Labour Act of Nepal in 2017 the gratuity liability was transferred from a defined benefit to contributory scheme.

In November 2019, the Trust enrolled in the new Social Security Fund (SSF) of Nepal with contributions at a rate of 31% of staff salary being 20% employer contribution and 11% employee contribution.

During the year, the decision was taken to close the Trust’s Provident Fund and Gratuity Fund and staff were given the option of either withdrawing funds or transferring to the SSF. As at 30 June 2022, the only funds remaining with Standard Chartered Bank Nepal Limited are in respect of the eight staff in Darjeeling who are not eligible to join the SSF.

Contributions for staff in both UK and Nepal are charged to the SOFA on the basis of amounts provided for the period.

Fund accounting

Funds held by the Trust are either:

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations might be small. In particular:

Investments

Listed investments are stated in the balance sheet at fair value. All movements in value arising from investment changes and revaluations are included in the Statement of Financial Activities (SOFA).

Fixed assets

The cost of minor additions or acquisitions of fixed assets under £5,000 is charged wholly to the SOFA in the year of purchase. Fixed assets above this amount are capitalised in the financial statements at cost. Donated fixed assets are brought into account at an estimate of their market value at the time of acquisition. Land, beneficially owned by the Trust, is valued at historical cost and is not depreciated.

Intangible Assets: Software which is considered as an asset in its own right, is disclosed as an intangible asset.

Tangible Assets: Software which is an integral function of enabling supporting hardware to function, is considered a part of the overall tangible fixed asset.

Amortisation

The costs of intangible fixed assets are amortised over the expected useful life of the assets. Amortisation rates are:

Depreciation

Depreciation is provided on all tangible assets except land to write off the costs of the asset less any material residual value, by equal instalments over their expected useful lives. Depreciation rates are:

Completed buildings 10% per annum on a straight-line basis Vehicles and equipment 25% per annum on a straight-line basis.

Computers and software 33.33% per annum on a straight-line basis.

For all depreciable assets, a full year’s depreciation is charged in the year of acquisition or completion and no depreciation is charged in the year of disposal.

Stocks

The stocks of medication, project materials and bought-in goods for sale are valued at the lower of cost and net realisable value on a first in first out basis.

Financial Instruments

Basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable are accounted for on the following basis:

Cash and cash equivalents includes cash in hand, deposits held at banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts, when applicable, are shown within current liabilities.

Debtors and creditors are measured at the

transaction price less any provision for impairment. Any losses arising from impairment are recognised as expenditure.

Bank borrowings . Liabilities for borrowings which are subject to a market rate of interest are measured at the value of the amount advanced, less capital repayments.

48 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 49

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

3. INCOME

Total income includes income transferred from the charitable trust “Gurkha Welfare Trust”, former charity number 1034080. The Trust is retained while it receives donations and legacy income.

a. Donations
Donations from individuals
Donations from companies, trusts, clubs and organisations
b. Legacies
c. Grants
Ministry of Defence – to support operating costs in Nepal
d. Charitable Activities
Ministry of Defence – for medical services
FCDO – for water and sanitation projects in remote locations
e. Other trading activities
Fundraising events
Retail
f. Investments
Investment dividends and interest
Bank interest		 2021/22
£000
5,665
1,328
6,993
7,997
3,325
2,525
1,933
670
24
1,746
299		 2020/21
£000
6,878
1,352
8,230
5,004
3,355
2,525
970
168
14
1,575
205

Donations from individuals include part of the contributions made by all ranks of the Brigade of Gurkhas under Service Day’s Pay Giving of £122,600 (2020/21: £141,500) and donations from the Gurkha Contingent of the Singapore Police of £53,069 (2020/21: £93,850).

Donations from companies and organisations includes gifts in kind of £116,300 of which £79,700 represents the benefit of the Field Director who is a serving Army Officer employed by the Ministry of Defence. The benefit is determined as the cost which would be incurred if the Trust had to directly employ an equivalent position. £31,800 represents the benefit of staff clothing donated for use by employees in Nepal.

Future legacy income of £5,156,000 is expected in respect of legacies due which have been notified to the GWT.

4. EXPENDITURE

4. EXPENDITURE
Grants Direct
Costs		 Support Costs 2021/22 2020/21
Support Governance Totals Totals
£000 £000 £000 £000 £000 £000
a. Individual Aid
Welfare pension 3,647 0 1,326 43 5,016 5,577
Care for the elderly 88 3 1 1 93 108
Disability support 193 0 89 2 284 282
Winter allowance 22 0 35 1 58 95
Welfare Grants & Support 773 90 335 10 1,208 1,283
UK welfare 250 323 4 17 594 610
Total individual aid 4,973 416 1,790 74 7,253 7,955
b. Medical aid 2,275 4,346 870 68 7,559 6,248
c. Residential Homes 25 385 54 4 468 492
d. Disaster Response 0 48 0 1 49 30
e. Community aid
School projects 169 623 314 10 1,116 1,078
COVID support 0 76 0 1 77 397
Water projects 0 3,124 422 3 3,549 1,888
Total community aid 169 3,823 736 14 4,742 3,363
Sub Total Charitable activities 7,442 9,018 3,450 161 20,071 18,088
f. Cost of generating funds
Fundraising 0 1,733 462 67 2,262 2,119
Investments 0 354 16 2 372 347
Total costs of generating funds 0 2,087 478 69 2,634 2,466
Total Expenditure prior to movement 7,442 11,105 3,928 230 22,705 20,554
in Constructive Obligation
g. Movement in Constructive
Obligation		 0 1,662 0 0 1,662 (2,009)
Total Expenditure 7,442 12,767 3,928 230 24,367 18,545

UK Welfare includes a grant of £250,000 (2020/21: £250,000) paid to ABF The Soldiers’ Charity for the support of former Gurkhas who have retired in the UK. All other grants totalling £7,442,000 (2020/21: £6,423,000) were to individuals or small community groups.

The number of grants issued to individuals or communities on the table below are recorded on a beneficiary database based on British Army records which is subject to independent audit in Nepal.

All grants to individuals require proof of identity before issue and community grants are only arranged with approval from the local community council.

50 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 51

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

Activity
Benefciaries
Notes		 Activity
Benefciaries
Notes		 Activity
Benefciaries
Notes
Welfare
pensions:		 3,453 There were 3,812 recipients at the start of the year and 79 new recipients.
35 ceased due to their move to the UK. A detailed database of all welfare
pensioners is maintained based on data from British Army records.
Payments are made on a quarterly basis and require proof of identity.
Following net movements, there are 3,453 recipients at 30 June 2022.
Home Care: 302 We provided grants to 302 carers in support of the most vulnerable
benefciaries. Carers are provided with training in support of their
responsibilities.
Disability
Support:		 232 The number of recipients is 225 at 30 June 2022. This data is held on the
same database as the welfare pensioners and is subject to both proof
of identity and medical requirement. In addition there are 30 siblings in
receipt of a reduced grant.
Winter
allowance:		 ~4,500 All welfare pensioners, wives, DSG recipients and residential home
residents supported last December received a GWT hat, gloves and
mufer.
Welfare
(Hardship)
grants:		 1,346 These grants were awarded for cases of special need not covered by
the other awards. Each grant is individually assessed and approved by a
senior member of staf. For 21-22 this included 101 earthquake resilient
houses. A further 13 replacement homes/signifcant repairs were funded
from the Disaster Reserve following severe damage from storms and
monsoon landslips.
Residential
care:		 36 Our 2 Residential Homes have a capacity of 48. There were 36 permanent
and 7 rehabilitation residents at the 30 June 2022. 2 rooms in each home
have become rehabilitation and respite rooms providing short - medium
term care for pensioners prior to returning to their homes.
School
projects:		 105
(projects)		 Communities were assisted through the repair, extension or new build
of a school. Every project is arranged with and authorised by the local
community commitee and requires a community contribution.
3 major, 12 minor and 90 refurbishment projects were substantially
completed in-year.

Analysis of Support Costs

People
£000
a. Individual Aid
1,432
b. Medical Aid
692
c. Disaster response
0
d. Residential Homes
43
e. Community Aid
574
f. Fundraising
303
g. Investment
management
10
Total
3,054
Basis of allocation
Time spent		 Premises &
vehicles
Services
£000
£000
351
285
169
138
0
0
11
8
110
101
59
75
2
3
702
610
Space
& time
Time spent		 Legal &
Professional
£000
2
3
0
0
0
25
1
31
Direct		 Currency
£000
(280)
(132)
0
(8)
(49)
0
0
(469)
Pro rata
with cost		 Sub Total
Support
Sub Total
Governance
£000
£000
1,790
74
870
68
0
1
54
4
736
14
462
67
16
2
3,928
230
Atribution
& time		 Total
£000
1,864
938
1
58
750
529
18
4,158

5. GOVERNANCE COSTS

Apportioned governance costs were:

Staf employment costs
Staf & trustee other costs
Premises costs
Ofce services
Legal & professional		 2021/22
Total
£000
96
41
20
23
50
230		 2020/21
Total
£000
113
18
25
24
45
225

Further information on the grants can be found in the Trustees’ Annual Report.

The total charitable activity expenditure of £20,071,000 represents 88% of total expenditure before the movement in the constructive obligation.

52 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 53

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

6. STAFF, TRUSTEE AND GOVERNANCE COSTS

a. Staf numbers
The trust employed the following average number of staf:
UK:
Administration & fundraising
Welfare
Nepal:
Individual aid inc welfare, Residential Homes and general staf
Medical services
Water projects
Schools projects
b. Staf costs
UK:
Salaries
Benefts
Social security costs
Pension
Nepal:
Salaries
Benefts
Pension (see Note 13)
Gratuity (see Note 13)
Ex Gratia
The number of employees whose emoluments exceeded £60,000 for the year was:
£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000		 2021/22
19
8
234
143
110
7
521
2021/22
£000
953
14
99
85
1,151
4,264
79
369
259
0
4,971
6,122
2021/22
Number
2
-
-
1
1		 2020/21
17
8
239
130
114
7
515
2020/21
£000
935
11
95
80
1,121
4,195
56
296
285
6
4,838
5,599
2020/21
Number
1
-
-
1
1

Employer’s pension contributions for the higher paid employees were £22,560 (2020/21: £9,000).

Key people in the Trust in UK and Nepal with delegated authority from the Trustees are the CEO, Director GWT(N), the Field Director GWT(N), Medical Director GWT(N) and the Head of Fundraising and Communications. They have combined salary and benefits cost to the Trust totalling £299,800 (2020/21: £287,000).

Both the Director GWT(N) and the Field Director GWT(N) are seconded from the British Army with their costs being met by the MOD.

There were no ex gratia payments during the year (2020/21: one at £6,128).

There were no redundancy payments during the year (2020/21: Nil).

Trustees’ expenses, remuneration and donations

In 2021/22 no Trustee received any remuneration or pension but four Trustees were either reimbursed or expenses were paid on their behalf of £18,630: principally on travel to Nepal but also in respect of attendance at meetings at in London (2020/21: three Trustees were either reimbursed or expenses were paid on their behalf of £2,920). Trustees donated a total of £2,160 (2020/21: £1,320).

Related party transactions

Colonel David Robinson is a Trustee of The Gurkha Museum Trust. There were no transactions between The Gurkha Welfare Trust and The Gurkha Museum Trust during 2021/22 (2020/21: payments of £479).

Net expenditure

Net expenditure for the period is stated after charging:

2021/22 2020/21
£000 £000
Audit Fees UK excluding VAT Crowe U.K. LLP UK 27 26
Nepal: CSC & Co 12 10
Joshi and Bhandari 3 3
Audit Expenses in Nepal Crowe U.K. LLP UK 2 0
Tax Advisory Services Crowe U.K. LLP UK 2 3
Actuarial fees M/s K A Pandit (India) 2 2

7. INTANGIBLE ASSETS

a. Group
Cost
At 1 July 2021
Additions
Asset transfers
Reclassifcations
At 30 June 2022
Amortisation
At 1 July 2021
Amortisation
At 30 June 2022
Net Book Value
At 1 July 2021
At 30 June 2022		 Computer
Sofware
£000
123
0
106
0
229
(46)
(76)
(122)
77
107		 Assets Under
Construction
£000
3
142
(106)
9
48
0
0
0
3
48		 b. Charity
Total
£000
Cost
126
At 1 July 2021
142
Additions
0
Asset transfers
9
Reclassifcations
277
At 30 June 2022
Amortisation
(46)
At 1 July 2021
(76)
Amortisation
(122)
At 30 June 2022
Net Book Value
80
At 1 July 2021
155
At 30 June 2022		 Computer
Sofware
£000
111
0
106
0
217
(42)
(72)
(114)
69
103		 Assets Under
Construction
£000
3
142
(106)
9
48
0
0
0
3
48		 Total
£000
114
142
0
9
265
(42)
(72)
(114)
72
151

Reclassification: IT software reclassified from Tangible Fixed Assets (Assets under Construction) to Intangible Fixed Assets (Assets Under Construction).

54 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 55

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

8. TANGIBLE FIXED ASSETS, GROUP AND CHARITY

a. Group

Freehold Land Leasehold Vehicles & IT Assets in Total
& Buildings Property Equipment Construction
£000 £000 £000 £000 £000 £000
Cost
At 1 July 2021 2,388 967 869 320 53 4,597
Additions 0 0 62 0 103 165
Asset transfers 21 60 19 0 (100) 0
Reclassifcations 0 0 0 0 (9) (9)
Disposals 0 0 (188) 0 (28) (216)
At 30 June 2022 2,409 1,027 762 320 19 4,537
Depreciation
At 1 July 2021 (1,171) (315) (812) (276) (28) (2,602)
Depreciation (111) (103) (51) (44) 0 (309)
Disposals 0 0 188 0 28 216
At 30 June 2022 (1,282) (418) (675) (320) 0 (2,695)
Net Book Value
At 1 July 2021 1,217 652 57 44 25 1,995
At 30 June 2022 1,127 609 87 0 19 1,842

Reclassification: IT software reclassified from Tangible Fixed Assets (Assets under Construction) to Intangible Fixed Assets (Assets under Construction)

b. Charity

Cost
At 1 July 2021
Additions
Asset transfers
Reclassifcations
Disposals
At 30 June 2022
Depreciation
At 1 July 2021
Depreciation
Disposals
At 30 June 2022
Net Book Value
At 1 July 2021
At 30 June 2022		 Freehold Land
& Buildings
£000
1,823
0
21
0
0
1,844
(1,171)
(111)
0
(1,282)
652
562		 Leasehold
Property
£000
967
0
60
0
0
1,027
(315)
(103)
0
(418)
652
609		 Vehicles &
Equipment
£000
869
62
19
0
(188)
762
(812)
(51)
188
(675)
57
87		 IT
Assets in
Construction
£000
£000
320
53
0
103
0
(100)
0
(9)
0
(28)
320
19
(276)
(28)
(44)
0
0
28
(320)
0
44
25
0
19		 Total
£000
4,032
165
0
(9)
(216)
3,972
(2,602)
(309)
216
(2,695)
1,430
1,277

9. INVESTMENTS

The historical cost of investments at 30 June 2022 (including investment cash) was £85,041,738 (2021: £67,317,248). 97% of the investment assets are placed in a mixed portfolio of thematic funds.

Listed investments
Fixed interest
UK
Equities
UK
Americas
Emerging markets
Alternative investments
Multi Asset
Other overseas/Non-specifc region
Property
Cash held as part of investment portfolio
Major movements in investments during the year were:
Opening market value (excl. Cash)
Purchases
Disposal proceeds
(Losses)/Gains on investments
Investments donated
Closing market value (excl cash)		 2021/22
£000
2,130
218
0
0
2,686
63,972
1,813
7,018
77,837
3,596
81,433
2021/22
£000
83,129
76,234
(77,287)
(4,254)
15
77,837		 2020/21
£000
9,856
316
365
2,278
14,445
0
52,144
3,725
83,129
2,999
86,128
2020/21
£000
66,415
11,621
(4,748)
9,841
0
83,129

Investment in subsidiary

GWT owns 100% of the issued share capital of GWT Trading Ltd, being 2 ordinary shares with a nominal value of £1. GWT Trading Ltd is registered in England and Wales No.: 02986861 and its registered office is P.O Box 2170, 22 Queen Street, Salisbury SP2 2EX.

GWT Trading Ltd Income Statement for the year ended 30 June 2022

Turnover
Cost of sales
Gross proft
Administrative expenses
Operating proft
Proft for the fnancial year before taxation
Tax on proft on ordinary activities
Proft for the fnancial year afer taxation		 2021/22
£
114,028
(53,820)
60,208
(4,539)
55,669
55,669
0
55,669		 2020/21
£
55,465
(6,456)
19,009
(4,541)
14,468
14,468
0
14,468

56 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 57

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

GWT Trading Ltd Statement of Changes in Equity

GWT Trading Ltd Statement of Changes in Equity 2021/22 2020/21
£ £ £ £
P&L Share
Capital		 P&L Share
Capital
Total funds brought forward 14,468 2 14,786 2
Proft for the year 55,669 0 14,468 0
Gif Aid payment (14,468) 0 (14,786) 0
Retained earnings at year end 55,669 2 14,468 2

The company has no recognised gains or losses other than the profit in both periods. All amounts relate to continuing activities.

GWT Trading Ltd Balance Sheet at 30 June 2022

Fixed Assets
Intangibles
Total Fixed Assets
Current Assets
Stock
Debtors
Cash at bank and in hand
Creditors - amounts falling due within one year
Net Current Assets
Net Assets
Share Capital
Retained Proft		 2022
£
3,961
3,961
8,049
1,723
45,246
55,018
(3,308)
51,710
55,671
2
55,669
55,671		 2021
£
7,923
7,923
4,922
1,035
14,671
20,628
(14,081)
6,547
14,470
2
14,468
14,470

A number of physical fundraising events were able to be held during the year including the Carol Concert in December and the Doko challenge and GWT Golf Day which were both held in June 22. Unfortunately the Gurkha Band Concert in Leyburn had to be cancelled due to COVID-19; a firm favourite in the fundraising calendar, this will return in November 2022. GWT Trading entered into an arrangement with Bremont Watches for a limited edition GWT-branded watch, resulting in income of £25,000.

The following GWT(N) employees are the Directors of the Ex Serviceman and Families Support Society:

Yam Bahadur Rana

Shyamkumar Rai

Pim Bahadur Gurung Siddhartha Gurung

Lila Pun Sherchan

The Ex Servicemen and Families Support Society was registered in Nepal on 2 July 2018: Registration number 192748/74/075. The registered address is Pokhara Lekhnath Metropolitan Municipality, Ward Number 10, Ramghat.

The trading results for the Ex Servicemen and Families Support Society the year ended 30 June 2022, as extracted from the financial statements are summarised below:

Ex Servicemen and Families Support Society Income and Expenditure for the Year ended 30 June 2022

Income and Expenditure
Income
Administrative expenses
Operating proft/(loss)
Proft/(Loss) for the fnancial year
Ex Servicemen and Families Support Society Balance Sheet at 30 June 2022
Fixed Assets
Tangible Fixed Asset
Total Fixed Assets
Current Assets
Cash at Bank
Creditors falling due within 1 year
Net Current Assets
Net Assets
Share Capital
Reserves		 2021/22
£
286
(269)
17
17
2022
£
565,129
565,129
420
(132)
288
565,417
661
564,756
565,417		 2020/21
£
0
(152)
(152)
(152)
2021
£
565,129
565,129
390
(138)
252
565,381
614
564,767
565,381

The GWT Group includes the consolidation of the Ex Servicemen and Families Support Society, a not for profit company registered in Nepal for the legal ownership of land assets purchased by GWT(N). The Directors of the company are all employees of GWT(N) and they must resign their role as Director when their employment is terminated. It is therefore deemed that GWT(N) has control of the Ex Servicemen and Families Support Society and the results are consolidated into the GWT results from 1 July 2020 with the subsidiary retaining all of its profits. Legal ownership of land assets at Kaski was transferred to the company during 2020/21 and the remaining land assets in Dharan, Damak and Gulmi (£228k) are scheduled for transfer during 2022/23.

58 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 59

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

10. DEBTORS

Trade Debtors
Amounts owed by intercompany
Prepayments and Accrued Income
Legacies
Other Debtors		 Group
2022
2021
£000
£000
411
11
0
0
288
172
1,033
280
374
273
2,106
736		 Charity
2022
2021
£000
£000
411
10
0
2
288
172
1,033
280
374
273
2,106
737

11. CREDITORS

The retirement benefits in Nepal previously consist of a defined contribution Provident Fund with 10% contributions from both employer and employee. The Provident Fund is held by the Gurkha Welfare Scheme Staff Retirement Benefit Fund (SRBF), an independent body. In addition, Nepali Labour Laws required employers to contribute to a Gratuity fund. Traditionally this was accumulated in a fund and paid to employees on leaving based on years of service and an independent gratuity fund was established to match the liability. In 2017, under the Labour Act Nepal the gratuity changed from a defined benefit to a defined contribution scheme.

In accordance with the Labour Act, in November 2019, the Trust enrolled in the new Social Security Fund (SSF) of Nepal with combined contributions at a rate of 31% of staff salary; 20% employer contribution and 11% employee contribution. The majority of staff were required to transfer funds to the new SSF.

In line with Government of Nepal direction, during the year, Trustees decided that the SRBF should be closed and staff offered the choice of either withdrawing accumulated funds and accepting any taxation liability or transferring funds to the SSF. As at 30 June 2022, the SRBF remains solely for the eight staff employed in Darjeeling who are not eligible to contribute to the SSF.

The Trust has no further liability other than the monthly payments recognised in the SOFA.

Trade Creditors
Amounts owed to group and associated undertakings
Accruals
Taxation & social security
Other Creditors		 Group
2022
2021
£000
£000
192
278
0
0
186
182
38
29
504
267
920
756		 Charity
2022
2021
£000
£000
191
276
2
(8)
183
180
38
29
504
267
918
744

12. FINANCIAL INSTRUMENTS

Financial assets measured at fair value
Investments in shares
Other liabilities measured at fair value
Constructive obligations (see Note 14)
Net fnancial instruments		 Group
2021/22
2020/21
£000
£000
77,837
83,129
39,300
37,639
38,537
45,490		 Charity
2021/22
2020/21
£000
£000
77,837
83,129
39,300
37,639
38,537
45,490

The constructive obligation is measured at fair value based on the expected amounts payable, discounted at an appropriate market rate. The Trust has no loans or overdrafts and has no forward currency contracts or hedging arrangements.

13. PENSIONS AND LEAVING BENEFITS

The charity provides defined contribution pension arrangements for its employees in the UK, and UK employees based in Nepal. Each employee is able to either join the Government’s NEST scheme or arrange their own personal pension plan and the charity contributes 2% of salary for every 1% contributed by the employee, up to a maximum of 10%. Contributions are charged to the statement of financial activities in the year in which they are made. The assets of the plans are held separately from those of the charity. The contributions made by the charity in 2021/22 were £84,717 (2020/21: £79,850). No further liability arose other than these payments.

In response to COVID-19, the Government of Nepal funded both the employer and employee contributions due for two months in 2021 through a direct payment on behalf of employees into the SSF.

14. CONSTRUCTIVE OBLIGATION (PROVISIONS FOR LIABILITIES FALLING DUE AFTER MORE THAN ONE YEAR)

The Trust has recognised for some years a long-term constructive obligation, as defined by SORP (revised 2019), in respect of its welfare pensions. The SORP requires that such “constructive obligations”, even though they are not legally binding liabilities, be recognised on a charity’s balance sheet. From 2014/15 the Trust has recognised a similar obligation for the welfare support provided through the Disability Support Grant (DSG) to the disabled children of welfare pensioners who were not able to support themselves when their parents were deceased.

An independent actuarial assessment of the net present value of future payments for both the welfare pension and the DSG, as at 30 June 2022, has been obtained using the following long-term assumptions:

The value of the obligation is particularly sensitive to the exchange rate of NPR to GBP with a low of NPR148.20/£ in June 2022, a high of NPR163.65/£ in July 2021 and an average for the year at NPR 158.56/£.

60 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 61

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

Based on the exchange rate of NPR151.27/£, (2020/21: NPR162.64/£) that applied on 30th June 2022, the value of the obligation for the welfare pension was £32,475,000. This is an increase of £1,186,000 on the figure for 2020/21 of £31,288,000. The liability to cover DSG has increased by £476,000 to £6,825,000, (2020/21: £6,350,000). The combined total constructive obligation is £39,300,000.

Balance at Movement in Movement in Balance at
1 July 2021 Actuarial Valuation Rate of Exchange 30 June 2022
£000 £000 £000 £000
Welfare Pension 31,288 (1,084) 2,271 32,475
Disability Support Grant 6,350 (2) 477 6,825
Total Constructive Obligation 37,638 (1,086) 2,748 39,300

15. OPERATING LEASES AND OTHER COMMITMENTS

At 30 June 2022 the group’s future minimum operating lease payments are as follows:

2021/22 2020/21
£000 £000
UK Property lease
Within 1 year 70 75
Between 1 to 5 years 246 234
Over 5 years 46 90
Nepal Property
Within 1 year 26 19
Between 1 to 5 years 3 13
Over 5 years 0 0

Lease payments for the year which are recognised as expenses within the SOFA totalled £121,340 (2020/21: £120,992).

Capital commitments at the balance sheet date:

The Trust has capital commitments which are not provided for elsewhere in the accounts of £1,700 (IT). This represents the cost of the contracted commitment less the cost of payments already made.

16. ANALYSIS OF NET ASSETS BETWEEN FUNDS OF THE GROUP AND CHARITY

Intangible assets
Tangible assets
Investments
Current assets
Current liabilities
Constructive obligation		 Unrestricted
General
£000
155
924
62,615
9,433
(920)
(39,300)
32,907		 Unrestricted
Designated
£000
0
810
18,818
0
0
0
19,628		 Restricted
£000
0
108
0
1,256
0
0
1,364		 Total
£000
155
1,842
81,433
10,689
(920)
(39,300)
53,899

The unrestricted designated fund provides for:

17. UNRESTRICTED FUNDS OF THE GROUP AND CHARITY
Designated funds
RWEPP
Disaster response
Residential homes
Total designated funds
General funds
Total unrestricted funds		 Balance at 1
July 2021
£000
4,500
7,500
9,037
21,037
34,092
55,129		 Incoming
resources in
the year
£000
0
0
0
0
15,858
15,858		 Outgoing
resources in
the year
£000
(1,396)
(407)
(463)
(2,266)
(10,469)
(12,735)		 Gains and
Transfers
£000
(1,104)
1,616
345
857
(4,912)
(4,055)		 Movement in
obligation
£000
0
0
0
0
(1,662)
(1,662)		 Balance at 30
June 2022
£000
2,000
8,709
8,919
19,628
32,907
52,535

Unrestricted funds, both general and designated, are expendable at the discretion of the Trustees in the furtherance of the Trust’s objectives. The designated funds have been earmarked by the Trustees for particular purposes, but the designations have an administrative purpose only and do not legally restrict the Trustees’ discretion to apply the funds.

Trustees took the prudent precaution in 2011-12 of creating a designated fund to cover the running costs of the residential homes for the next twenty years so that the homes would not be a drain on other activities. Trustees have identified the requirement to increase the fund to include major works (£400,000) for the next ten years. A further transfer-in of £340,000 represents the increase in valuation of the Residential Homes funds within the investment portfolio. The fund is currently valued at £8,919,000 assuming long term inflation in Nepal of 7.0%.

In June 2018, following advice from leading seismologists, Trustees created a designated fund to enable an immediate response to any future natural disasters. This fund was used during 2020/21 to provide 13 significant repairs or replacement of earthquake resilient homes following damage by storms and landslips during the 2021 monsoon. Trustees agree to fund the payment of secondary medical claims for COVIDrelated illness from the reserve at a cost of £357,000. The fund was increased for the effects of year end inflation and the rate of exchange with the fund totalling £8,709,000 at 30 June 2022.

Trustees identified the requirement for funds to meet the financial commitment against the planned FCDO programme for the remaining four years of the RWEPP grant agreement of £2,000,000 at 30 June 2022.

62 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 63

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

18. RESTRICTED FUNDS OF THE CHARITY

a.
Grants to individuals:
Welfare pensions & DSG
Welfare grants
b.
Medical:
MOD Grant In Aid Medical
Medical
Medical camps
c.
Residential Homes:
d.
Water projects:
Water projects – FCDO
Water projects – other
e.
Schools projects:
Neal Turkington Fund
Schools
f.
Community COVID projects
COVID equipment
g.
Other grants:
Vehicles & equipment
MOD Grant in Aid Support
Support & infrastructure		 Balance at
01 July 21
£000
0
826
826
0
0
81
81
0
114
0
114
18
146
164
88
88
0
565
0
565
1,838		 IncomeExpenditure
£000
£000
439
(439)
626
(839)
1,065
(1,278)
2,550
(2,550)
158
(158)
80
(131)
2,788
(2,839)
5
(5)
1,933
(1,949)
214
(204)
2,147
(2,153)
0
0
299
(378)
299
(378)
0
(76)
0
(76)
18
(13)
3,300
(3,196)
32
(32)
3,350
(3,241)
9,654
(9,970)		 Transfers
£000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(158)
0
(158)
(158)		 Balance at
30 June 22
£000
0
613
613
0
0
30
30
0
98
10
108
18
67
85
12
12
5
511
0
516
1,364

c. Residential Homes

A donation for the provision of rehabilitation services provided through the Residential Homes.

d. Water projects

FCDO funding is provided through an accountable grant agreement for the rural water and sanitation programme with additional funding coming from charitable trusts and individuals. The balance at 30 June 2022, reflects the net book value of assets funded through the agreement which continue to be in use in support of the new delivery agreement.

e. Schools projects

Several individuals and charitable trusts have sponsored the rebuilding of schools. Restricted funds are carried forward to 2022/23 to enable completion of two specific projects. A memorial fund in memory of Neal Turkington, lost in action while serving in Afghanistan, funded two major build projects in 2013. A final project has been identified for completion during 2022/23.

f. Community COVID Projects

COVID-19 support to the wider community continued during 2021/22. This was principally through the distribution of Personal Protective Equipment (PPE), oximeters and oxygen concentrator which had been funded by a donor in June 2021.

g. Other grants

The MOD grant-in-aid is provided to support the administration and infrastructure costs of the GWT(N). Restricted donations included income to fund the additional COVID related expenditure incurred ensuring that the welfare staff were able to undertake their work in a safe environment. With the continuation of the COBID pandemic and subsequent economic and supply chain challenges, GWT(N) continued to experience delays in the procurement of equipment including replacement motorbikes, resulting in the carry-forward of restricted funds to 2022/23. The carry-forward is further increased by due to the favourable rate of exchange for much of the year.

a. Grants to individuals

Restricted funds for welfare pensions are obtained from individuals that regularly donate to a pensioner support fund as well as other advertising and appeals. Welfare grants include delivering 101 earthquake resilient homes. The 100 Home fundraising campaign in 2022 was very successful and exceeded the programme budget, providing restricted funds towards homes and welfare grants to be delivered in 2022/23.

b. Medical

The MOD Medical grant-in-aid is provided in support of medical services to our beneficiaries. One medical camp were cancelled and the donor agreed that funds could be carried forward to 2022/23.

64 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 65

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

The following notes, numbers 19 to 24, refer to financial year 2020/21 and are included for comparative purposes only. The restatement follows the change in accounting policy for the recognition of legacy income.

19. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES FOR YEAR ENDED 30TH JUNE 2021

Notes
Income from:
3
Donations and legacies
Donations
3a
Legacies
3b
Grants
Ministry of Defence
3c
Charitable activities
3d
Ministry of Defence
Foreign, Commonwealth and Development
Ofce
Other trading activities
Fundraising Events
3e
Retail
Investments
3f
Total
Expenditure on:
4
Raising funds
Fundraising
4f
Investment management costs
4f
Charitable activities
Individual aid
4a
Medical Aid
4b
Disaster response
4d
Residential Homes
4c
Community aid
4e
Sub Total Expenditure
Movement in constructive Obligation
4g/14
Total
Net (expenditure)/income before other
gains and losses		 Unrestricted
General
Designated
£000
£000
4,808
0
5,004
0
0
0
0
0
0
0
167
0
14
0
1,774
0
11,767
0
2,119
0
347
0
3,929
30
3,303
0
0
30
0
492
510
0
10,208
552
(2,009)
0
8,199
552
3,568
(552)		 Restricted
£000
3,422
0
3,355
2,525
970
1
0
6
10,279
0
0
3,996
2,945
0
0
2,853
9,794
0
9,794
485		 2020-21
Total
£000
8,230
5,004
3,355
2,525
970
168
14
1,780
22,046
2,119
347
7,955
6,248
30
492
3,363
20,554
(2,009)
18,545
3,501
Other gains and losses
Net gains/(losses) on Investments
9
Net (expenditure)/income
Transfers between funds
16&17
Other recognised gains/(losses)
Proft & loss revaluation gain/(loss)
Net Movement in Funds
Reconciliation of funds
Funds brought forward
Total Funds Carried Forward		 9,841
13,409
(6,821)
6,588
(9)
6,579
27,513
34,092		 0
(552)
6,821
6,269
0
6,269
14,768
21,037		 0
485
0
485
0
485
1,353
1,838		 9,841
13,342
0
13,342
(9)
13,333
43,634
56,967

66 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 67

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

20. COMPARATIVE STATEMENT OF EXPENDITURE 2020-21

Charitable activities
a. Individual aid
Welfare pensions
Care for the elderly
Disability support
Winter allowance
Welfare Grants & Support
UK welfare
Total
b. Medical aid
c. Residential homes
d. Disaster Response
e. Community aid
School projects
COVID Support
Water projects
Total Community Aid
Sub Total Charitable activities
f. Cost of generating funds
Fundraising
Investments
Total costs of generating funds
Total Expenditure prior to
movement in Constructive
Obligation
a. Movement in Constructive
Obligation
Total		 Grants
£000
3,759
106
176
47
738
250
5,076
1,471
25
0
101
0
0
101
6,673
0
0
0
6,673
0
6,673		 Direct
costs
£000
0
0
0
0
95
334
429
3,596
392
30
557
389
1,507
2,453
6,900
1,618
328
1,946
8,846
(2,009)
6,837		 Support costs
Support
Governance
£000
£000
1,770
48
1
1
104
2
47
1
439
11
4
22
2,365
85
1,119
62
70
5
0
0
411
9
3
5
378
3
792
17
4,346
169
447
54
17
2
464
56
4,810
225
0
0
4,810
225		 2020/21
Totals
£000
5,577
108
282
95
1,283
610
7,955
6,248
492
30
1,078
397
1,888
3,363
18,088
2,119
347
2,466
20,554
(2,009)
18,545

21. COMPARATIVE ANALYSIS OF SUPPORT COSTS 2020-21

a. Individual Aid
b. Medical Aid
c. Disaster Response
d. Residential Homes
e. Community Aid
f. Fundraising
g. Investment
management
Total
Basis of allocation		 People
£000
1,382
654
0
41
541
273
11
2,902
Time
spent		 Premises &
vehicles
£000
327
159
0
10
100
56
2
654
Space &
time		 Services
£000
227
107
0
7
77
85
3
506
Time
spent		 Legal &
Professional
Currency
£000
£000
7
422
3
196
0
0
0
12
1
73
33
0
1
0
45
703
Direct
Pro rata
with cost		 Sub Total
Support
Sub Total
Governance
£000
£000
2,365
85
1,119
62
0
0
70
5
792
17
447
54
17
2
4,810
225
Atribution
& time		 Total
£000
2,450
1,181
0
75
809
501
19
5,035

22. COMPARATIVE ANALYSIS OF NET ASSETS BETWEEN FUNDS, GROUP AND CHARITY 2020-21

Intangible assets
Tangible assets
Investments
Current assets
Current liabilities
Constructive obligation		 Unrestricted
General
£000
78
995
65,977
5,436
(756)
(37,638)
34,092		 Unrestricted
Designated
£000
0
886
20,151
0
0
0
21,037		 Restricted
£000
2
114
0
1,722
0
0
1,838		 Total
£000
80
1,995
86,128
7,158
(756)
(37,638)
56,967

The unrestricted designated fund provides for:

68 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022 69

NOTES TO THE ACCOUNTS

NOTES TO THE ACCOUNTS

23. COMPARATIVE UNRESTRICTED FUNDS OF THE GROUP AND CHARITY 2020-21

Designated funds
RWEPP
Disaster Response
Residential homes
Total designated funds
General funds
Total unrestricted funds		 Balance
at 1 July
2020
Incoming
resources
in the year
Outgoing
resources
in the year
£000
£000
£000
0
0
0
5,990
0
(60)
8,778
0
(492)
14,768
0
(552)
27,513
11,767
(10,208)
42,281
11,767
(10,760)		 Gains and
Transfers
Movement in
obligation
£000
£000
4,500
0
1,570
0
751
0
6,821
0
3,011
2,009
9,832
2,009		 Balance
at 30 June
2021
£000
4,500
7,500
9,037
21,037
34,092
55,129

Unrestricted funds, both general and designated, are expendable at the discretion of the Trustees in the furtherance of the Trust’s objectives. The designated funds have been earmarked by the Trustees for particular purposes, but the designations have an administrative purpose only and do not legally restrict the Trustees’ discretion to apply the funds.

Trustees took the prudent precaution in 2011-12 of creating a designated fund to cover the running costs of the residential homes for the next twenty years so that the homes would not be a drain on other activities. Trustees have identified the requirement to increase the fund to include major works (£400,000) for the next ten years. A further transfer-in of £351,000 represents the increase in valuation of the Residential Homes funds within the investment portfolio. The fund is currently valued at £9,037,000 assuming long term inflation in Nepal of 7.0%.

In June 2018, following advice from leading seismologists, Trustees created a designated fund to enable an immediate response to any future natural disasters. This fund was used during 2020/21 to provide two replacement earthquake resilient homes following destruction by fire and four replacement homes following destruction during the 2020 monsoon. Trustees agreed to increase the fund for the effects of inflation with the fund totalling £7,500,000 at 30 June 2021.

Trustees also identified the requirement for funds to meet the financial commitment for the 5-year RWEPP grant agreement of £4,500,000 at 30 June 2021.

24. COMPARATIVE RESTRICTED FUNDS OF THE CHARITY 2020-21

a. Grants to individuals:
Welfare pensions & DSG
Welfare grants
b. Medical:
MOD Grant in Aid Medical
Medical
Medical camps
c. Water projects:
Water projects - FCDO
Water projects – other
d. Schools projects:
Neal Turkington Fund
Schools
e. Community COVID Projects
COVID Equipment
f. Other grants:
Vehicles & equipment
MOD Grant in Aid
Support & infrastructure		 Balance
at 1 July
2020
£000
0
495
495
126
0
35
161
600
0
600
18
79
97
0
0
0
0
0
0
1,353		 Income Expenditure
£000
£000
749
(749)
1,137
(806)
1,886
(1,555)
2,525
(2,651)
181
(181)
160
(114)
2,866
(2,946)
975
(1,461)
167
(167)
1,142
(1,628)
0
0
476
(409)
476
(409)
476
(388)
476
(388)
10
(10)
3,356
(2,791)
67
(67)
3,433
(2,868)
10,279
(9,794)		 Transfers
£000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 Balance
at 30 June
2021
£000
0
826
826
0
0
81
81
114
0
114
18
146
164
88
88
0
565
0
565
1,838

a. Grants to individuals

b. Medical

The MOD Medical grant-in-aid is provided in support of medical services to our beneficiaries. Due to COVID-19 two medical camps were cancelled and the donor agreed that funds could be carried forward to 2021/22. Restricted income included funds for the additional COVID related expenditure incurred ensuring that the medical staff were able to undertake their work in a safe environment.

Restricted funds for welfare pensions are obtained from individuals that regularly donate to a pensioner support fund as well as other advertising and appeals. Welfare grants include Tranche 3 of the 300 Homes programmes; delivering 101 earthquake resilient homes. The 100 Home fundraising campaign in 2021 was very successful and exceeded the programme budget, providing restricted funds towards Tranche 4 to be delivered in 2021/22.

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NOTES TO THE ACCOUNTS

c. Water projects

FCDO funding is provided through an accountable grant agreement for the rural water and sanitation programme with additional funding coming from charitable trusts and individuals. The Phase V agreement was extended until 30 June 2021 to enable completion of projects delayed by COVID-19 during 2019/20. A new five-year agreement has been signed with FCDO for the provision of rural water and sanitation services from 1 July 2021. The balance at 30 June 2021, reflects the net book value of assets funded through the agreement which continue to be in use in support of the new delivery agreement.

d. Schools projects

Several individuals and charitable trusts have sponsored the rebuilding of schools. One of the major school projects was programmed over two financial years and restricted funds are carried forward to 2021/22 to enable completion. A memorial fund in memory of Neal Turkington, lost in action while serving in Afghanistan, funded two major build projects in 2013. A final school project has been identified for completion during 2021/22.

e. Community COVID Projects

Support to the wider community during the second wave of the COVID-19 pandemic in Nepal. This was principally through the distribution of Personal Protective Equipment (PPE), oximeters and oxygen concentrator which had been donated as goods for distribution, to the GWT.

f. Other grants

The MOD grant-in-aid is provided to support the administration and infrastructure costs of the GWT(N). Restricted donations included income to fund the additional COVID related expenditure incurred ensuring that the welfare staff were able to undertake their work in a safe environment. As a result of COVID-19, GWT(N) experienced delays in the procurement of equipment including replacement motorbikes, resulting in the carryforward of restricted funds to 2021/22. The carry-forward is further increased by due to the favourable rate of exchange during the year.

72 The Gurkha Welfare Trust Annual Report and Accounts | Year ended 30 June 2022

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The Gurkha Welfare Trust

PO Box 2170 22 Queen Street Salisbury SP2 2EX

Tel: 01722 323 955 Email: info@gwt.org.uk www.gwt.org.uk

Registered Charity No 1103669 Company Limited by Guarantee No 5098581 Registered in England

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