Charlty Teglstratlon number 1150801 Company r¢gi$tration numb•r 8354834 (England and Wal•sl THE TOLKIEN TRUST ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
THE TOLKIEN TRUST LEGAL AND ADMINISTRATIVE INFORMATION Tru8t6•s Bailbe Tolkien Michael T01kn Simon Tolkien Se¢r•tary Cathlaen Blackbum Chorlty numb•r 1150801 Company nurnr Reg18t•r offic• Prama House 267 Banbury Road Oxford OX2 7HT Audltor Critd)18yBAudil LLP Beaver House 23-38 Hythe Bridge Streg1 OX12EP B•nkor8 Lws Bank plc S¢llcStors Maier Blackbum LLP Prama House 267 8anbury Road Oxlord OX2 7HT Inv•8trnent advl¥or• Inveslec Wealth & Investrnent 30 Gresham Street London EC2V 7QN
THE TOLKIEN TRUST CONTENTS Page Trust•e8' report Statemtsnt oftwslees, rnsponsibllth'es Independent audltof$ report Stslement of fin8naal a¢tiwtig8 Balance sheet Ststemenl of Cash Ilows 10 Not8$ to the financia stat•m&nts
THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTOR'S REPORT) FOR THE YEAR ENDED 31 DECEMBER 2021 The trustee8 present their annu81 report arKI finanoal statemènts f(Y the year ended 31 Decemb8r 2021. Th8 financ4al statgments have been wepared in 8cccKdance the a¢countiThJ polleies set out in nota 1 to the financial staternents and comply with the charivs Memorandum arKJ Artides of Association, the Comp8nies Act 2006 and 'Accounting and RÈwrts'ng by Charities". Statement of Recommèn(led Piacti¢e applicable lo charities preparing their accounts in a¢cordanc$ with the Fin8ncial Rgporting Standard applicable in th& UK and Republic of Irèland IFRS 1021 leff6cb.ve l January 2019).. Oblè¢tives and a¢tivitl•s The charity's objects are to bènefit such tharItab instilutyons or purposes 8$ the TnJstè&s from tim8 to lim& think fit. Accordingly, tha Trust 0rateS for the public b6n8fit. Truslees have complied with their duty und8r sactson 17151 of the Charities Act 2011 to have due regard lo pubhc benèfit guidance publish&d by tha Charity Commission. The policies 8dopled ift furtherance of these objects ar& detailed bak)W aTKI ther6 has been ro change in these during the year. Grantwmaklng pollcy The Twsl makes donatlons annUaY lo a wide range of charit16s and charitsbltr causes, but with a recurrent emphasis upon those aimed al alleviating poverty and socsal, eduCatnal and healthcare dlsadvanlage, as well as those focusing on environmentsl concèms and the arts. CharilS and G4uses are s&knted by thè Trustees in th6lr discrglion on th8 basis of r&arch undertaken on thair baham and. Fn the cas& of existing b8neficiari8s, the Trustees. assessment ol the uso made of grants previously givan. Though many of the charities rec@iviig grants are based in Ihe United Kingdom, th& lund8 given are expand1 on chadtablg work both 81 homg and abroad. including in Africa and, mofg rnlly, Nwth Ameri¢8 and Eunw {for assistance to r8fugoes fleeing ¢)filtr. zon881. A8 a solaly granl-maklng charity. the Trust'$ emphasis is on foDJs8d and effectNg glving. Reclpignts of Erants are therefore Igquired to undergo monitoring and evaluation, vthich Snvofve8 them in providing roports to th8 Trust on how thalr gr8nts have been US and. in certain cases. rrlIrj 7th the Trusto8s' representatives to discuss their achiavements. The Trust now gives to fewer charilies than previously but. whwe appropriate. airns lo bLild closèr lalionships with ben8fi¢iaries with 8 view lo maximislng the impaci of its giving. In some inst8n¢es. the Trust makes grants which 818 ¢onditional upon th& raisiThJ of matched ftlnding. enabllng the charftles ¢onc8mèd lo leveragè thè Trust's contributions in •r lo increase their supsx)rtw base arKI income. The Trust may also challenge charities to idenlrfy the action$ which would enable Ihem lo dev&lop ar grow, such a5 appolntng a key member ol staff or c¥e8ting 8 new wgbsite enabling greater online enga9gmenl and donations. and helJ lo fund these actions. Further datalls can bg found on tho Tw$f8 website at vMw.tolkienlrust.org Aehlgvem•nts and p•rfomianc• Dunng th8 year th$ Trust madè di3tn'bution$ from irthm& to 78 charili•s. Financlal rgVi•W The Trust's chief ass&ts consist of cOphtS In certain works by J R R Tolkien, which provide royatty In¢ome. and cash and inv8Stm8nts. The Tnjst do8S Mt engage in fvnd4aising. The Trust has no reslricted funds and no endowment. For the year roy81ty incomè w98 £3,535.77712020'. £5,377.1361 and the charity aw8rfed grants totalling £5.472,000 12020.. £3,530,453). Further delails are included in Ihe stalement of financial activities and r¢lated notes. Reserves Policy The Trust maintains a general rp8erve, the balance on vh)iL as at 31 December 2021 was £36.291,5J)12020: £36,091,705). Reserves are hekl lo enable the Trust to smooth out the fluctuations in its nel incomè from year to year and thus to maintain a substantial lgvel ol annual grJnl enditUTe over the k)nger terrn,. to mèet ftjlure grant commitments where grants are payab over a number ol years., and to stand ready to defend ils copyright interests whenever these come under threaL
THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 Inv•stment policy The Trust has engag professional inv8stment managers to administer its inv8slments. These consist of a portfolio of equitiès, fixed int8r8St seeLJri¢ies, unit Injsts and olhèr irhstruments investad to provide both income and capital appreciation. Th8 relum is measured on a totsl retum basis. No individual investment exceeds 10°A of th$ portfollo. No investments are made in derivatives. The Trust follows an ethical investment policy 8nd does not invest in tobacco Companies, ojmpanies whose main Ixjsiness is the manuf8ctsj of armaments or in companies providing gambling Services Investm•nt perfomanc• The Trust has agre8d an investment perfc¥marK8 benchmark viti Its Irwestsnènt managèrs basad on the Trustees. need to build capital to fund Ih&ir grant Making- th&ir attitude to investmènt risk.. and the timeframe for investment. Thastr three factors det$mine an 8ppropriale asset 8llocalion 8nd thus 8 benchmark against which th8 inveslmanl managers. perforniance can be assessed. During 2017 the Truslges agreed a benchmark wilh their inv&stmenl managers which was amènded lo a "b8spoke' benchmark. after discussion wilh and advice trom their invo$lment managers. Thtr agreed benchmark is.. 12% of Ihe rètum of ihè FfA British Govemm8nl All Stocks Index,. 52¢/) of tho FTSE All ShBre Index., 25% of the FTSE Worky ExiJK Index," 5% of the IPD Monthty Property Indgx.. and 5% of th8 'cash retum +2%. against whid) the altemalive investments 8re measured.. and 1 cash. There are agreed Ilmitations as lo thè minimum and mayimum amounts of each asset class that can be held. Thè Inveslmènl managors deem a 'MediumlHigh" risk approach suiiable given tha Trust's drtyJmstanee$ with a 1o81rith.on lo a maxlmum 0182.5% in equrti8s.' UK and ax-UK MbInad. The Trustses undgrsland that over th& long l¥mi the mandate wll allow the ¢aplt81 valuo of th8 portfollo lo bg etaine<l in real tom8 and gtsneratè 8 good bvel of tolal rtrlum. The Tru51ees also undersiand that as risk assatg do not necessarily move in a linear fashion. ihgre may be riOdS when Ihe portf(Aio valug wll fall. However, they also understand that, based on hislorical r&lums, equity inveslmenl is necessary if Iha value of both the capllal of th& lund and incoma is lo maintsin its pur¢hasing power when compared with inflation. Thè portfollo relum8d 10.6%, nel of fe&$, on a totsl relum basls for 12 months ènding 31 Dmber 2021. 11 was a year of'two halves, with the increased pace of vacdnation and gradual re• onIng of thè economles during the first half contrtbulin9 Posltivety to investor sentiment. The dfvergence bèlween sector perfomiances witnessèd in 2020 continued in an ebb and flow with Ihe 'stay 8t home. growth stocks givir¥J ground lo tha 'r8wning' Value Stocks. By the latt8r haw ol year, a mlxture of penlryup dèmand and suppty chain disruptions created an Incre8sing level ol inflationary pressurns. The markets began to anticipat& central bank 8¢tion. acknowledging that inflotion would be elevaled, albeit temporarity and KX)lentlIY lead lo a slowd¢y•vn in glob81 growlh. The y98r ended wlth 8 widgsp*ad new variant of SAR&CoV2 named 'Omlcron', 18adlng to fiJrtkr h)ck4lown mèa8ure8 by governments across tho world. Prlnclpal Tl8k8 and unc4rtalntle¥ The principal risks and uneertainlies affe¢ting ihe Twsl arise from ts ownershlp of copyright 85sets. It is necessary from timè to lime lo eng8ge in b981 aclh)n to défend Ihesè assets or to ènsure that thé Trusl recèives approprf8t& value Irtsrn them, which can InCase the 0rating costs of the Tnjgt. Thg incomo aarned from these assets IF18y also fluctuate from year to year, often to a signfficant exlent. Th6 Trust deals with these risks and uncortalnlies by gdding to net Income from tts reservès in order lo ty to achievè a wnsistent18vel of annual gr8nt expenditure. 111 should be noted, however. that this consistancy is not ahvays apparanl when comp8ring the lèvel of grant expenditure from ye8r lo year, given that grants lo be paid out over a temi of years ale accounted for in fvll in the rinancial year in whith they arè inrtrdlly agreod. Grnnts payable over a term ol years 8180 require th9 maintenancè of 5vificient resèrves lo enable tre Trust to honour futuro grant commitsnenls.) Plans for futurè ndI The Trust plans to continu8 to 'M)Tk with 3 limited number of char0$. developing And n5011dating its current strategy. and modifyiro ils approach rf rrent Monitng praclices sugg8sl that in(Trased imp8Ct can be achigved. Structure. govgrnancfr and manaymènt The charity is a charitable comp8ny g0veM by itsArli(A8s ofAssociatknn.
THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 The tsusieas. who ar& thè dir6¢tors for the pwposo of law, anrt s6rv8d durtng th8 ye8r and up to the data ol signature of IhÈ finaryaal 5ta18Th were.. 88illi0 Tolkian Schael Tolkien Simon Tolen Pd8¢illTdkSon 100c• 28 Fbru8ry 20221 The 0)nstitutn of Ihe eharitable company e5tsUWes the ierms ¢)n which Tnjstees are appolnied and exerclse their puwers. New 7rnstee& I gN8n guidantrt on Ihelr gal reStbillI{el 8$ thrity trv$te8s, and all Trusieea are kepl uPld8¢6 wllh rèlevant legal developments and Charity c0ftsn lda. None of th• Iru$let4 h88 8r.y b8nefi¢ial Inter in Ih¢ convny.I ol th• tru8tees ar• member8 of the ccfflpany and guÈroniee to conthbe E10 h the eveni %inding vp. The Tru$tees make all Btrawc deds1o r•l8ltng to thts th8rfly. fftdudinj as lo whom grnt6 Shou d be pa. DISCIUr• of Informalion to audltor Each of tha Iru$lees ho$ confirm6¢ IhBt Ihere is rts InforrnattoTh ol w¢ they are awart whi¢h Is relevani lo th8 audit. but ol which the audiiw is up8w•re. -. h8ve lurther Confimd that Ihey have takèn appropriats Step8 10 5denUfy $u¢h ralev•nl Inloryratn a1 to e$WiEh Ihai the aLltor Is awa ol stjth Infomiaiion. The report h88 boen pr¥)0 in aco)rthnce the Small Componk?s R•Airn8 uThaor Section 419121 of Ihé Companles Aci 20(. The tru8tses' rew¢wes 8ppr¢Jved by Ihe 8oard TruStee8. Michael Tolkien Truste•
THE TOLKIEN TRUST STATEMENT OF TRUSTEES. RESPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 2021 Th& trustees, who are al80 the dirgCtOTS of The Tolkièn Twst for the purposg of comp8ny law, are responsible for preparing thè Trustees, Report and Ihe financ4al statements in accordance wrth appli(*ble law and Unitèd Kingdom Accounting Standards Iunited Kingdom GeneralfyAccepted Accounting Practice). Company Law r8quires lh6 Iruslees to prepare financial stslements for each financial year whlch glve a true and fair view of the state of affairs of eh8rity and of the incoming resources and applicaOn of resourees. inrludin9 the income and trxpendilLbr8, of the tharilab rnpanY for that year. In preparing these financial stat8ments. the Iruslees are reqLFif8d to: - $81gd 8Uitabl8 8¢countlng pObC 8nd Ih8n 8k¥)ty them o)n8ist8ntty: - obseiv• the methc¥Js and principles in the Charitss SORP: - make judgements and e81imat&$ Ihal aro fe8s0nabJo and prud&nl: slate whether applicabke UK ALrounb'ThJ SlatKlard8 have been followed, subl•¢t to any material partureS dlsclos8<18nd eX?ne in thè thandal statements,. aTrJ pr8pare th8 financial stslemerts on the gn9 o)ncom basls un1&s8 it Is Inappropriat8 lo presuma that th8 ch8rity 11 continua In operation. The trustees are rosponsible for ke&ping adequate accounting fecofds Ihat disclo$& wth r888onable 8ura0Y Bt any lime tho financial position ol the charity and enable them lo gnsure that thè finanual stslernents ¢ompli with the Companiès Act 2006. They arg also responsibl& lor safeguarding the as$gts ol lh& ¢h8rity and htrnce 'or taking reasonabl9 31eps lor the prev&nlion and detection of fraud and other irwularities.
THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE TOLKIEN TRUST Opinlo We havtr audiled the financial statements of The Tolkien TnJ$l (the 'charity'l for the year ended 31 Decfymber 2021 whi¢h comprisè the statèment of financial actiwties. thè b4lance sh88t, the stat8rnent of cash flows and notes to the rinancial statements, Including signthcant act4yJnting Oici&s. The financial reporting framework that has been applied in their preparatson is applieable law al UnitÈil Kingdom Accounting Standards, Sncluding Financial Reporting St8ndard 102 The Finèncial ReKtt)rting Sland8rd applicable in th& UK and Republic of Ir8land {United Kingdom GeneTaltyAccepled Accountin9 Praclic81. In our opinion. the financial 8tatem&nl8'. give a true and fair vlew ?f the slate of Iho charitable companls affai as at 31 Dacomber 2021 and of its incoming resour¢gs and application of resourc8$, for the yaar then endèd.. have been properfy prepare11 Ni with United Kingdom Generalty Accepted Accounung Pracllc&', and have beers prgpared In 8cts)rdancs with Ihe requirements of the Ccrfnp8ni83Act 2006. Ba$ls for oplnlon We conducted our audit in accJrd8n¢e ¥th Inlemational Slandth$ on Audn9 IUKI IISAS IUKI) and 8pplicablg law. Our r8$ponsibilltle$ undef tiose stand8r(Is are further described in the Al110rtS responsibilitl8s for Ihe audit of the fin8nci81 slatem&nts seclion of our report. W& 8re ind6wndent of the Charity in accordance wlh the &lhi¢al requlrgments th81 are relevant to our audit ol the finanaal 8tstem8nts in th& UK. including the FRC'S Ethical Standard, and we have luffilled )ur other ethical pOnsibIlitieS in accor<lance vrtth these requiromenls. Wa b81ieve th81 the audll ewdenco we have obtained is sufficient and appropriate lo provide a basis for our opinion. Con¢lu•lon8 r•latlng to golng concern In auditing the financial statements, we hava concluded Ihal the truste. use of the going concern bgsls of 8UntIng In the preparation ol the financial statements is appropriat8. Based on the work wa have porformed. wè have not idèntified any m8lerial uncartainlies ralats'ng lo evants or conditions that, individualty or collectivety, may cast signrficanl d0¢ on the charity's ability to continue 8$ 8 going conc¥m for a perlod ol at bast twèlve mwth8 trom when the financlal staiements are authorfs8d for Is$u8. Our responsibilities and the r8sponsibl1 of the lrn$lees wlth respect lo gc4ng concem 8re descrfbed in the relev8nl sections ol Ihls report. Oth•r Informatlon The olher information comprises th8 informallon indLAYed In thè annual rèp(Mt other th8n the financial slalernents and our auditor's report Ihereon. The Iwslees a responsible for the other infomation contained within the annual report. Our opinion on the finan¢i81 statemènts does not ¢over ihe other infomabon and, excèpt lo the extent otherwise explicitly staled in our pOrt. we do not &XSS any form of assurèn¢e conclusion Ihereon. Our responsibility is to read the othw infomiation and. in doing so. consid8r whether thè other inf0m8tn is materially inconsistent with the financial st&lements Of our kno&ge obtain8d in the coursè of the audit, or otherwise app8ars to be materialty misstated. If we idenbfy such matèrial ino)nsisten¢ies or appartrnl rnatersal misstaternents, we are requirèd to detemilno whe¢her this gives rise to a material misstaiemenl in the financial ststements themselves. If, based ()n the woth wg have per10m, we conclude that there is a mat8rial misslatem6nt of this othèr information, we are required to report that lad. We have nothing to rewt in this regard. Oplnlons on oth•r matters prèseribed by th• Companles A¢t 21x16 In our opinion, based on Ihe work undertaken in the wurse of our audit.. the infomiation given in Ihe trustees. report for Ihe finan¢ial year for which the finan(aal stat&mènts are prepared. which includes tho directors, reFX)rt prepar8d for the purposas of wmpany law. is consistont with the financial statements., and the directors, report induded vrithin the Irustaes. report has been prepa in accordance wtth applicable legal requirements.
THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST Mattèrs on whleh we ar¥ requlrèd to r•port by ex¢gption In the light of the knowledge and understsnding of the charity and its environment obtaine(l in th8 COLWSè of the audlt. we hav6 not identthed matèrial misstatemènts in the directors, rètx)rt induded within Ihe trust8&s' report. In the Ilght of the knowledgè and underslanding of th8 oynpany 4rKI lis ènvironmènt obtained in the course ol the audit. we have not identified material misstslements In the Injstees. rèpxvt. We have nothing lo rep. in "ospect of the followiro matters in relati<)n lo which the Companies A 2Crf)6 rgquires u$ to report to you rf, in our opinlon.. adequate accounting record5 have r1 been kept. or returns adequatè for our audit ha not been ffjceived trom branches not visited Jy us.. or the flnancial statements are rt in agreement wth Ihe accounting r6cords and luMS,. certain disclosures ol tnJ81ees' r&muneration 8peafied by Law ar8 not made., or we havo not received all the inlomialknn and èxplanations we require for our audit., or the trustees were not enfjlled to prepare th& financial statements in acrdanCe with the Small c)mpanies reglme and takè advantatsE of the small companies, exemptions in preparing the trustees. rgport and Irorn tho iequlremerl lo prepare a strategic reFKl. Ro$pon8lbllltles of tru•t••• As oxplained more fulty in the slatemenl of Iruste8s' responsibilities. thè tW31e&s. who are also the di-g¢lors of the harity for the purpose ol compeny law, are r8spon$ibl8 for th8 prep8ralion of the finanaal statements and for bging $8tisfi6d that they glv8 a true and lair vi8w, and lor stsch intemal ¢onlrol as the tnJst&&s determine 15 necessary lo enable the prep8rallon oi financlal slat8m&nts that are free from malerial misstalèmenl. whether tc. fraud tsr error. In preparing Ihe financial statements. the Iruslees are responsible for assessing the charlty's ablllty lo continu8 as a goin9 concem. disdosing. as applicab. matters related to going concern and uslng Ih? golng Concèm basis ol accounllng Un$$ Ihe trustees either inlend io qu818 Ihe charilable comp8ny or to cease opèrauons, or h8ve no realistic ahemative but lo do so. Audltorf8 rosponslbllltl48 for th• audlt of th• financlal •t•t•m•nts Our objectivas are lo obtain reasonable assurarth aboul whelher the financial stat&mtrnts as a Who aro free from material misstalemenl, whether due lo Iravd or error. and to Ie an 8udilorfs ret)ort that Includes our opinlon. Reasonabltr assurance is a higb level of assurance but Is not a guarantee that an audit conducted In accordancè with ISAS IUKI will ah¥ays deleci a material misslatement when il exists. Mis$tslem6nts can arisè from fraud or error and arè considored material if. individually or in the aggragale. they could reasonably b8 oxpecled to influence the ewnomic de¢isions of users takgn on ihe of th8$9 Tinar481 $talem8nts. The &xlent to whlch our procedurns are Capats ol det8CtirBJ irr8gul81itses. Inctuding fraud.18 detailad below. Our approach to Identifyln9 and ass6ssiTrJ th8 risks of material mkstatement In respect of irreguL9ritias. includlng fraud and non<omplianc8 kws 8nd regula11c$. was as follows.. the engag6mènt partner ènsured that the eThJagemenl t8am lleCtIV*1Y had the appropriate competence, Capabilities and skills to Idenknty o¥ rècognise n0nvc0mplian wth applicable laws and regulations,. • we identThèd Ihe laws arKI re9ulalions applicabfe to Ihe tharilable company through dTscusslJns v dirèctorsltnjstses and otier managemenl, and frorn our knowledge and experienc8 of the cllent's sector,. we focused on specific laws and reguLattons which considered may have a direct materf81 effect on the financi81 statemènts or the operations of charitable (ajnpany.. we assesse(I the extent of compliance Mth the laws and UlationS Identffied above through making enquiries of managemert,. ènd Idenlffied laws and regubtions were wmmunic8taJ within the 8udii team wuLirty and the team r?m8ined art to instances of non-compliance thTOUglx)ut the audit.
THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST We assessed the suwptibility of the charrt8ble company'$ finanu81 ststèments to materi81 misstatement. including obtaining an understanding of trow fraud might (#xyJr. ty.. making enquiries of nanagement as to where they considered Ihere wa8 SUSCgpts'bility lo fraud. th8lr knowledge of aclual. 8USPèCted and alleg8d fraud.. and CC81d8rin9 the intemal control$ in to mthgale rth of fraud and non-¢ompliance with laws and regulation8. To address th8 risk offraud thrcugh management blas aNJ overrid8 of contro15. W&: p8rform8d arkalytlcal prxedures to idenllfy any unusual or un8xpeded rel8tionshlps.' lestgd pum81 entries Ic id¢ntify unusual transactions: assessed whether lud3èments and assumpt*8 mat1& in dglerminlng the a¢counting estimates wère Indlcatlve of polènlial bws.. invosligatsd th8 ralkfja18 b&hind $k3niftcanl or unusual trarbSaCtK)ns. In response to th8 rfsk of irrewlarillgs and non•iance wfth laws and regulations, we ¢J881gnèd proc&dures which Included. We not Ilmiled ¢0.. agraeing financial stslemenl disclosures to undertying supp).3 dwim8ntalion', ading the minutes ol meelin9s ol those charged governance.. and enquidng of Managem1 as lo actual and potential liligalion and daim8. A lurther descriptSon of our re4)onsibilrtle8 is avallable on the Finand81 Repthng Coundl's web$lte al: hltps'.11 www.frc.org.ukJautJilorsrg8f4)nslbllilie8. This description forms part of our auditorfs rem. U•e of our r•port This report is made solely lo th8 charitsble comp8nYs members, as a body. in accordance wilh Chapter 3 of Part 16 of thè Companie5 Act 2006. Our audrt work ha$ been undertaken so th81 we might statè lo the charitable Company's members thoso mattèrs we are required to Stale to them in an auditors, rèport and for no other purptssa. To the fullest extent pgmiltled by L9w. we do not acL8pI or as$um8 r8sponsiblllty to anyone othgr than th8 charllable company ar7d the charitable conyany's members as a body. ts our audlt work, lor thls report. or foi the opinlons we have formed. Robert Kirtland Isenlor Statutcry Audltorl for and on bohalf of Crltchl•y8 Aud5t LLP 201912022 Charter8d A¢countsnls Statutory Audltor Beaver House 2&38 Hyihe Bridge Street Oxford OX12EP
THE TOLKIEN TRUST STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2021 Unr•stricted Unre8tricted funds funds 2021 2020 Not•8 ncom• from: Donations and 9aCleS Investrngnts Royalties 642,228 3,535,777 595,264 ?,377.136 Total Incom• 4.178,063 ?.972,400 Ex 8nditur• o Raising fvnds 311.345 245,858 Charitable a¢liwlles 5,751,208 3,800,267 Total exp•ndltur• 6.062,553 4,046,125 Nel galn811108$es) on Inv&8lments 2.084.315 824,183 Net Sncomo and n•t mov•m•nt In fund* 199,825 2,750,458 Fund bo18n¢6s at 1 January 2021 36.091,705 3=.,341,247 Fund balancèi at 31 D袕mb•r 2021 36.291.530 3e,091,705 The statement of flnancial actiwli8s includ8$ all gafj and108S65 r8cogni88d in Ihe year. All incom& and exwrKlilure derive from cmtinuing aclivitth. The sta(em•nl ol financial aclivltles also Compl Ihe rnquiroments 8n ino)m8 8nd expenditure account under th& Compani&s Act 2CIJ6.
THE TOLKIEN TRUST BALANCE SHEET AS A T31 DECEM8ER 2021 2021 Ntstes 2020 Flxed a66èts Heritage assets Investments 11 12 279,000 27,115,103 24.500,199 Curr•nt 45•1• Deblars Cfi6h 81 bjnk 8nd In hand 27,394,103 24,60C,199 13 2,492.790 10.164.281 2.156,438 10.535.084 eredlior4'. amount$ Yaulno duo 1h1n yesr 12.657,071 12.691, 14 12.239,6UI 1385.0181 Nel curr•nl 10.417,427 12,308.$06 Total &¥ot• l••a ¢urr•nt Il•bditl 37.811,530 36,806.70S Credltors.. amrjunti talllng due 8ft•r rnore than on• y•aT 15 {1,520.¢XIOI i715,OODI Net 848ets 36,291.530 36,091.705 In¢vm• fvnds Un5Cted fund 36.291,530 36,091,705 36,291,530 36.091,705 The Ilnanoal sl¥1oments wore approved 8ttd aUthj for iu¢ by tho Tn*te¢• Qn...... . Michael Tolknen TYust•e Ctsmpany mg15traUon numbei 8354834
THE TOLKIEN TRUST STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 2021 2020 Not•s Cash flows from op•ratlng actlvltl•s Cash absorbed by operations 18 1203,442} {750,5341 In¥•$ting 8¢tivltS•8 Purchase of herita9& ass8ts Pureh8se ol Investments Proceed5 on disposal of inve3tments Investment income r8eeived 1279.OCKII {3,989.110) 3.458,521 642,228 {4,771,812 4,313,772 595,264 Nèt cash lus•d InVg•n•rat•d from Investlng actlvitle8 (167.3611 137,224 Nèt ¢ash u*od In finanelng actlvltlos Not d¥cr••$• In cash and cash •qulval•nts 1370.8031 1613.3101 Cash and cash equivalenls 81 beginning of year 10,535,084 11,148,394 Ca8h and ca4h •qulval•nt$ at •nd ot y••r 10.164,281 10.535,084 10-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Accounting pollcl•s Charlty Infomiatlon The Tolkien Trust 15 a prtvate company limited by guarantee infworated in England 8nd Wales. The registèred oifice is Prama House. 267 Banbury Road. Oxford, OX2 7HT. 1.1 Accountlng convgntlon The finan¢i81 statoments have b6en prepared in accordance with thg charity's Memor8ndum and Arti¢les of A830ciation. th& Comparies Act 2006, FRS 102 The Finan(¥al Rèkx)rts'ng Standard applicabl6 in the UK and Republi¢ of Ireland" I-FRS 102.1 and the Charibes SORP"AcwJnling and Reporting by Charities.. Statement of Recommended Practice applicable to charities weparing their accwnts in accordance wllh the Financial Reporting Standard applicable in the UK and Republic ol Ireland IFRS 1021. (effective 1 January 20191. The charity is a Public Benefit Entity as defined by FRS 102. The financial sl8lements are prepared in sterting, which is th8 lunction81 Cu•neY of tha charity. Monetary 8mounis in these financial ststèmenls are rounded to tho neare$l £. The finan¢lal statements have been prepar und&r the historical cost convention, modified to Includ8 certain ftnancial Inslruments at faw value. The prfnapal a¢¢ountiNJ polici8s adoplad are set ¢)ut b810w. 1.2 Golng conc•rn At the lime of approvlng Ihe finanoal siatements, the trustees have a rea80nable expeclatlon that the charfly h88 adequate resources to conllnue In operational existence for the foreseeable lulure. Thu8 the Iruslees ¢onlinue lo adopt the going con¢em basis ol accounting in prnparing thg financial slalemfynts. 1.3 Ch•rltabh funds Unrèslricled funds are ayallable for use at thè dlscrelion of the trust In fvrtherancs of thalr ¢hadtabl¢ obj8¢¢lves. 1.4 Income Income from royalties an ¢SmSlar income is recognised net of VAT and when the charity Is logalty ènlilled to il after any performance cordilions have been met, th& amounls can be measured r81iably, and It is probab18 that income will be rocèied. Amounts &amed in resp6et of tha year to 31 December arè recognlsed as Income in the year rf they can be quanltfied by the time ol thè 8pproval of the fin8ncial stgt&ments. DidendS arg includèd when they are received. Interest is induded on a receivabltr basis. 1.5 ExndItur0 Expenditure is re¢ognis8(l onc8 there is 8 al or constructive obligaiion to transfer eoMomi¢ benefit lo third paty, it is probabl• thal a transfer of ecorthiic benafit¥ ill b8 required in 8elUemgnt, ant1 the amtsunt of oblatIon (n be measured reliably. Expendlluro is dassified by activlty. The o)sts of each actswty are m8¢Je up of the total of direct costs and shared costs, Induding supyort costs invofved in undertaking each aclivTty. Grants are nomially rècognised as an èxpensè when thèy are approved for paymont by the Truste89. However. rf th8 Trustees have entered intr) a grant agreement wth a bgneficAary. the full arnount ol the grant is recognised when the agreemènt is signed. Expèndrture is recognised on an accruals basis and include any irrecoverable VAT. Any costs that need to b8 apportioned between costs of generating funds, wpport costs and governance cosis are done so based the Tru8tees' esb.mate of the amount of costs applirable to 8ad) category. 1.6 H8rlts9g assèts Purchased heritsge a&89ts are capital¢s8d Ni the balance shoot. No dreCIatiOn is chargèd as the assets have an indèfinite lifè. 11
THE TOLKIEN TRUST NOTES TO THE FINAKCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 ACCOUnn9 pollcl• Icontlnued) 1.7 Fix•d a•t Investmgnts Fixed asset investmènts arg initialty measured at transath.on prf¢e exduding transacdon c4yJts, and are 3ubs&quently measured at f8ir value at each r&porbng date. Changes in fair value ara recognised in not incom8llexp8ndilurel for Ihe year. Transac costs a eypensed as incurTed. 1.8 Uncapltall¥•d flx•d ass•ts Th8 assots of the charity consist in part of copyrights in reLatn lo works written by the latè J R R Tolkien. These are shown in nolg 10. They have no value in the financial statomenis as these were ThS11Y s&ttled into The Tolki8n Trust (when it was an unincorpordted tharityl many Ye8 ago. 1.9 Cash and cash equlv•lo Cash 8nd cash equivaltrnts indude 8 in hol and (1eposits held at ¢•ll with banks. 1.10 FSnanclal In•trum•nt¥ The charity has elected t) apply the provislons of Section 11 '8asic Financlal Instruments, and Sectlon 12 'Other Flnanclal Instwmerts IssL, of FRS 102 to am of its financAal in8tnJm&nts. Flnanci81 Instruments a iecogni58d In th8 chariV$ ba18nc sheet wh8n the ¢harity becomas p8rty to the contractual provisK)ns of the instrument. Finandal assels and liabi iti88 8re offsot, the not 8moutts rKesentod in thg finana818tatem&nts, when there is a legally enforceable nght to sel off th& recognised amunts and there is an int&ntion lo settle on 8 nel basis or lo wlise Ihe awl and sgtue the h'ability Simlan80uSty. 8aslc Ilnanclal •ss•ts Basic fln8ncial 885ets. Kthich Indud• tlebtors and c88h arKI bank balances. are In1I81fy maasured al transadion price. B•$lc Ilnanclal Il•bllltles Basic financial liabilities, i[lUdIng credilors and grants awarded Th)1 a initialty recognlsed al Iransaction price . Financial liabilities e t dls(#)unlod as thè effect wrxjkl not be mat8ri01 Amounts payable aro Classif as current liabililies rf paym8nt Is du8 thin one y¥ar or19S8. If t)ol, they arg prèsented a$ non-current IAbilrties. Crltlcal accountlng •stlmat•8 and Judg•mgnts In the appll¢81ion of the charity's accounting w)liryes, the trustees are required to make judg&ments, &ytimates nd assumptions about the carrwng amount of 833ets and liabr11t that are [t readily app8rent from olhar sources. The estimates and assouated assumptions are bas8(l on histOriC81 experience and other factors that are considered to be rel8v8nl. Aclual resums may dthr from th08e esfimatss. The estimates and undertying assumplions are revièwed on 8n ongolng basis. Revisions lo accountsng estimat$s are reci>Jnised in the period in which the estimat& is wsed where the revislon affects only Ih81 period, or In the pgrrthj of the revisir and future period5 where Ihe revision affects both ujrrenl and future periods. crftlcal Judgemonts Inv•$lment values Investrnent values are delemiingd using the stock market value as at the year-end dale. 12-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS {CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 Investm•nt• Unrestrleted Unrestrict8d funds funds 2021 2020 Dividends rec8ived Interest reoivable 534.058 108.170 458,529 136,735 642,228 595,264 Ra181ng funds Unrnstrlct•d Unreslrlcled funds lynds 2021 2020 UK leg81 fees relatin9 to o)ntra¢t and copyrlghl matters US and other ovgrseas i8tal fe8$ Othèr profegsional f&e8 174.615 33.439 2,638 141,946 13,968 2,290 Legal and professional 210.692 158,204 Investmgnt managemanl fee$ 100,653 87,654 311.345 245,858 In¢ludad in oth8r professional fe88 is £2.08012020'. £2.CiYJi of foes payable to Budilors for non•audil s8Ncts. Charltabla acUvStl•• Grant fundlng 2021 Gr•nt ndlng 2020 Grant funding of activibos Isoe note 61 5.472,000 3.530,453 Share of support costs Is88 note 71 Share of governan costs (see note 7) 195,356 83,852 203,664 66.150 5,751.208 3,800.267 13-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 Grants payabl• GrantGrant funding fundln9 2021 2020 Grants lo Institltons'. Analysed bèlow 5.472,000 3,530,453 2021 2020 AcdonAid Alad¢Jin Prole¢t Akhdmer Rèsearch UK Assotsalion IMAD Asylum Welcome Basmeh & Zeitooneh 8ecomg Chanty Be Fr88 Youn9 Car8rs Bè81 Friends Animal Soci Birdlife Intèmalional 8lo&mlonleln Cathadral Bodl818n Library British Friends of Neve Shalom Camfed Intemalional Cenlre Primo Lgvi Change Please Foundation Children On Tha Edg& Cité Inlemational& de la I8er1&AUbuSS0n ClaTernont College Client Earth Culleslowe & Olstrict Communty Associalion Detention Action Dir8d Relief Doctors of the Worfd UK Domlnican Council IBlackfn'ars} Dragon School Trtjsl Emergen¢y UK Glass Door Greena¢e Environment Trust Help Rèftjgees Hope Project ILgsb051 Howard L8ague for Penal Reform Humanity & Indusion Jane Grigson Trust Kgnl Refugee Action 150,000 20,000 30.000 20,000 80,000 20,000 50,000 20.000 35.000 20,000 20,000 20,000 40.000 50,000 50,000 20,000 5.000 150,Th)0 25,000 100,000 100,000 85.000 40.000 30,000 30,000 40,000 40,1)00 30,000 150,000 45.OCKJ 200,000 15,000 40,000 40.000 200,000 15,000 82,000 30,000 10,000 10,000 10,000 25.000 10,000 120,000 150,0 80,000 150,000 100,000 50,000 30.000 30,000 10.IXNJ 10,C¥)O 15,000 13,000 15,000 14_
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 Grnnts payablè Icontlnuedl La Clmade Linda Norgrove Foundats'on Linkage Community TnJs-. Maison Sh8kJm France IRwaniJa) Marie Curi8 Marfn¢ Mammal Centre Médacins du Mon¢Je Méd&Gins Sans FrMtière$ Medical Foundation Memorial de la Shoah Museum ol Oxlord Dèvelopment Tw8t Bridge Foun(lalion Oxford Bach Choir Oxford Food Hub Oxforil Lieder Fesllval Oxfor<l Philharmonic Orchsstra Oxford Playhouse Trust Oxford Shakospeaie Ensembltt ICre81ion Thttatrg Company) Panzi Foundallon Pesticide Actlon Natwork UK Photography Oxford Pilotes Vdontaires Prlsm th8 Gift Fund (Ham) ?efvgees} prtson Photsnix Trust Prisoners Abroad The Porch Readlng LSst Foundation Relug¥e8 at Home Repriavè ResQ Road to Recovery San Marco$ High School A4PLE Academy Sanctuary Hosting Santa Barbara Museum ofArt Sch£xYreaders sett Support Shelter Cymru Solidarités Inlematlonal SOS Mediterranée Southampton and Winchester M¥ilors' Group Spark Inside Support a Survivor of Torture rho Tab1 TnJ81 Theatres Trust TREAT (Trvsl for R&wearch and Education on theArms Trade} Turtle Hospit81 Uganda Childbirth Injury Fd University of Oxf()rd Botanic Garden University of Oxford (rh8 J£tR Tolkien Professorship of English Lilernture and Language) University of Oxford (Care for COV1D-olaned children) 100.000 20,000 50,0(NJ 30,000 30,000 30,000 100,000 400,OCK 100,000 20,000 50.(XJO 30,000 130,000 250.000 30,000 20,000 100.000 10,000 15.0 25,000 15,000 10,000 20,000 75,000 90,000 10,000 100.000 25,000 20,000 10,000 20,000 70.OCIO 170,000 15,OCM] 50,000 100,000 15.000 110.000 80,000 20,000 40,000 95,000 20,000 80.000 25,000 95,000 10,000 30,000 25,453 15,000 25,000 20,000 15.000 50,000 40,000 20,000 40,000 1(K),000 25,000 20,000 25,CK)O 25,000 20,000 20,000 145,000 15.000 25.000 25.000 1,600,000 730,000 25,000 20,000 40,000 15,000 20,(XJO 120,000 92,tKIo 15-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 Grants payablo Icontlnuèdl University of Sussex Videre est Credere WienÈr Library Working Chan¢e Wtldemè$s Youth io.wo 30,000 15,0(M) 40.000 10,000 30,000 15.000 40,000 5,472,IJoo 3,530,453 Support ¢ts Support Gov•mane• eosts co$ts 2021 Support costs Govemance cost8 2020 UK legal fags relab.ng to grant adminlslration Other prolesslonal 1088 Other c031s 13,475 181.336 545 13,475 181.336 545 10,866 191,659 1,139 10,866 191,659 1,139 Auditors, 18e8- audit- current year Auditor3. fees- audlt- prior year adjustm&nl Audltors. fe8s- tax compliance Legal and prolessl¢)nal 7.OLTh) 7,1]00 12551 (2551 12,4251 {2.4251 750 76.357 750 76.357 61.575 61,575 195.356 83.852 279.208 203.864 66,150 269,814 Analysed betweon Charttablg a¢tlvlOes 195,356 83,852 279.208 203.664 66.150 269,814 Tru¥te•s None of the trustees lor aiy person8 0)nnected wrfh thaml rec&Ned any rernungr81ion or benofils from the charity durlng the wr. N•t galnsl{10ss•$l on Investm•nts Unr•strtct•d Unrestricted lunds funds 2021 2020 Revaluation of investments 2,084.315 824,183 16.
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 10 Copyright Assets Th8 charity's literary assets comprisa.. Certain US copyrights in The lo of the Rings." and ihe w(d¥de PYrightS in Smttth of Wootton Major, Te and Leaf. Roverandom, Mylhopoeia, The L8gend of Si9urd and Gtsdwn, The Fèll of Arthurand Beobwlf."A franslai?on and Comm&ntary. all by J R R Tolkion. The copyrighls in the publishad editsons of variou8 philological wrTbngs and fragments by J R R Tolklen. Certain unpubh'she¢J papern. tter8. artistic worts. picture8, photographs and other cocument8 Originally lonning part of the Estatè 01 J R R Tolkien, and th6 copynghl in such materials formedy owned by the Estate. 17_
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 11 Horltsy ass•ts Ar¢hlv• At 1 January 2021 Purchasgs 279,000 At 31 D袢mb•r 2021 279,000 The acquirèd h8ritage assets have b8èn pla¢8d on long-t$nn dèposit in the Tolkien Archive at the Bodlei8n Library in the University ol Oxford so thal they rnay b8 held wtth the liler8ry papers and other archives ol J R R Tolkitsn an¢J the Tolklen famity. 8nd bo attessible to scholats. The acquisibon In 202110- £279.LMIO is the only heritage asset transaction in the past 5 yèars 18-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 12 FIX assèt invo¥tm•nts EquIt$ Flx•d intèrg8t Cash h•ld by Illstèdl securlti Inv•stmènt Ilist•dl managers Total Cost or valuatlon Al 1 January 2021 Addits'ons Valuation ¢han9es Disposals 21.403.273 3.883,852 2,179,908 12.858,521) 2.700.835 396,091 105,258 £4,500.199 3.989,110 2,084.315 13.458,5211 (95,593) 1600.0fy)) Al 31 DeGemb8r 2021 24.608.512 2,005,242 501,349 27,115,103 Carrylng amount Al 31 December 2021 24,608.512 2.005.242 501.349 27,115,103 At 31 Decernber 2020 21.403.273 2.700.835 396,091 24.500,199 13 D¥btors Amounts falllng du• wlthln *)n• y•ar 2021 2020 Royalt188 recelv8bl& Othtrr debtors 2,487.762 11.028 2,147,145 9,293 2,492.790 £,156,438 14 Cr¢dltors: amounts tslllnu du• tthIn on• y•ar 2021 2020 Gr8nls award8d not yo1 pa Accruals and deferrod income 2.108.422 131,222 270,000 115,016 2.239,644 385.016 1S Credltors: amounts fallSng due after more than onè year 2021 2020 Grants awarded not yet pakl 1,520.otKJ 715,000 19-
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 16 Grnnts aw4rd•d not yet paid At 1 January 2021 At31 Dgcembgr 2021 Amounts Award•d Payments Mado 2021 mov•m•nts Univorsity of hrtaniloba Alan Klass Memorial Fund PrcJramme 8odleian Archivist Bodleian Curator of Me(Jleval Manuscripts B(xlleian Library- olh&r University of Oxford The.RR Tcdki8n Professorship of English Lit8r8ture ar Langua9& Crté Intemalionale de la tswsserieAubu8son Awarded Dgcember 2020." paid In 2021 Awarded and paid in 2021 Awarded Detsmb8r 2021. pakl in 2022 180,IMJ 295,000 180.000 250,000 325,000 11,422 45.000 60.000 13,578 25,000 1,600.0 320,000 1,280,000 100,000 1(rf1. 25.CrfXI 25,000 2,365,1)00 2,365,000 1,482,000 1,482,0 985.1 5.472,(N)0 2,828.578 3,628,422 At 1 January 2020 At31 D•¢•mbèr 2020 Amount• Aw•rdod PAym•nt• Mad• 2020 mov•m•nt8 University of Manitoba Alan Klass Memorial Fund Pr(Jramm8 Bod181an Archlvist Bodlèlan Curator of Medi8val manU8cpts Cité Internationale de 18 lapissengAut)uswn Awarded 2019., paid in 202J Awardèd and paid in 2020 Award9d December 2020., Jaid in 2021 270,0 340,OCM) 445,000 180,000 295,000 385,IX)O 100,000 45.000 60.000 100,000 2,222,000 3.355.453 150.CNXt 2.222,1 3.355.453 25.W) 25,000 3,327,000 3.530,453 5.872,453 985,000 17 R•lat•d party tran$actlon5 There We no dIsdosab related paty transaclj.orts dng the yw {2020- nonel.
THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2021 18 Cash generat from opgratlons 2021 2020 Surplus for the year 199.825 2,750,458 Adluslments for. Investment incomtr recoynised in statement of finanrAal actNitia8 Fair value gains and Josses investments 1642.2281 12,084.3151 1595,2641 1824,1831 Movgments in working capital.. Ilncre88eyd8¢reas8 in d}lorS Increa581ldè¢reassl in cr8ditors 1336,3521 2.659,628 248,229 P,329.7741 C•sh ahorbed by operatlons 1203.4421 1750,5341 19 An•ly813 of ch•ng•s In n•t fund# Tho charity had no d6bl during the year. 21