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← The Tolkien Trust

2023-12-31-accounts

Charity registration number 1150801

Company registration number 8354834 (England and Wales)

THE TOLKIEN TRUST

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

THE TOLKIEN TRUST

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Baillie Tolkien
Michael Tolkien
Simon Tolkien
Secretary Cathleen Blackburn
Charity number 1150801
Company number 8354834
Registered office Prama House
267 Banbury Road
Oxford
OX2 7HT
Auditor Critchleys Audit LLP
Beaver House
23-38 Hythe Bridge Street
Oxford
OX1 2EP
Bankers Lloyds Bank plc
Oxford
Solicitors Howes Percival LLP
Prama House
267 Banbury Road
Oxford
OX2 7HT
Investment advisors Investec Wealth & Investment
30 Gresham Street
London
EC2V 7QN

THE TOLKIEN TRUST

CONTENTS

Page
Trustees' report 1 - 3
Statement of trustees' responsibilities 4
Independent auditor's report 5 - 8
Statement of financial activities 9
Balance sheet 10
Statement of cash flows 11
Notes to the financial statements 12 - 22

THE TOLKIEN TRUST

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) FOR THE YEAR ENDED 31 DECEMBER 2023

The trustees present their annual report and financial statements for the year ended 31 December 2023.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's Memorandum and Articles of Association, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)".

Objectives and activities

The charity's objects are to benefit such charitable institutions or purposes as the Trustees from time to time think fit. Accordingly, the Trust operates for the public benefit. The Trustees have complied with their duty under section 17(5) of the Charities Act 2011 to have due regard to public benefit guidance published by the Charity Commission. The policies adopted in furtherance of these objects are detailed below and there has been no change in these during the year.

Grant-making policy

The Trust makes donations annually to a wide range of charities and charitable causes, but with a recurrent emphasis upon those aimed at alleviating poverty and social, educational and healthcare disadvantage, as well as those focusing on environmental concerns and the arts. Charities and causes are selected by the Trustees in their discretion on the basis of research undertaken on their behalf and, in the case of existing beneficiaries, the Trustees’ assessment of the use made of grants previously given. Though many of the charities receiving grants are based in the United Kingdom, the funds given are expended on charitable work both at home and abroad, including in Africa and, more recently, North America and Europe (for assistance to refugees fleeing conflict zones).

As a solely grant-making charity, the Trust’s emphasis is on focused and effective giving. Recipients of grants are therefore required to undergo monitoring and evaluation, which involves them in providing reports to the Trust on how their grants have been used and, in certain cases, meeting with the Trustees’ representatives to discuss their achievements. The Trust now gives to fewer charities than previously but, where appropriate, aims to build closer relationships with beneficiaries with a view to maximising the impact of its giving. In some instances, the Trust makes grants which are conditional upon the raising of matched funding, enabling the charities concerned to leverage the Trust’s contributions in order to increase their supporter base and income. The Trust may also challenge charities to identify the actions which would enable them to develop and grow, such as appointing a key member of staff or creating a new website enabling greater online engagement and donations, and help to fund these actions.

Further details can be found on the Trust's website at www.tolkientrust.org

Achievements and performance

During the year the Trust made distributions from income to 95 charities.

Financial review

The Trust’s chief assets consist of copyrights in certain works by J R R Tolkien, which provide royalty income, and cash and investments. The Trust does not engage in fund-raising. The Trust has no restricted funds and no endowment.

For the year royalty income was £9,155,049 (2022: £5,270,353) and the charity awarded grants totalling £5,520,000 (2022: £5,651,000). Further details are included in the statement of financial activities and related notes.

Reserves Policy

The Trust maintains a general reserve, the balance on which as at 31 December 2023 was £37,388,289 (2022: £31,652,887). Reserves are held to enable the Trust to smooth out the fluctuations in its net income from year to year and thus to maintain a substantial level of annual grant expenditure over the longer term; to meet future grant commitments where grants are payable over a number of years; and to stand ready to defend its copyright interests whenever these come under threat.

THE TOLKIEN TRUST

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Investment policy

The Trust has engaged professional investment managers to administer its investments. These consist of a portfolio of equities, fixed interest securities, unit trusts and other instruments invested to provide both income and capital appreciation. The return is measured on a total return basis. No initial holding can exceed 5% of the total portfolio and the total sum of all equity holdings in excess of 5% cannot be equal to or in excess of 40% of the fund’s value. No investments are made in derivatives. The Trust follows an ethical investment policy and does not invest directly in tobacco companies, or companies whose main business (i.e. >10% of revenue) is the manufacture of armaments or the provision of gambling services.

Investment performance

The Trust has agreed an investment performance benchmark with its investment managers based on the Trustees’ need to build capital to fund their grant making; their attitude to investment risk; and the timeframe for investment. These three factors determine an appropriate asset allocation and thus a benchmark against which the investment managers’ performance can be assessed. During 2023 the Trustees agreed to amend their “bespoke” benchmark, after discussion with and advice from their investment managers. The agreed benchmark is: 5% of the return of the Bloomberg Global-Aggregate Total Return Index (GBP Hedged); 78% of the MSCI All Country World Index (NR); 5% of the IPD Monthly Property Index; and 10% of the Alternatives Composite Index (37.5% BoA Merrill Lynch Sterling Corporate Bond Index, 37.5% MSCI All Country World Index, 25% B o E Base Rate -0.5%) against which the alternative investments are measured; and 2% cash. There are agreed limitations as to the minimum and maximum amounts of each asset class that can be held. The investment managers deem a “Medium/High” risk approach suitable given the Trust’s circumstances with a restriction to a maximum of 82.5% in equities: UK and ex-UK combined.

The Trustees understand that over the long term the mandate will allow the capital value of the portfolio to be retained in real terms and generate a good level of total return. The Trustees also understand that as risk assets do not necessarily move in a linear fashion, there may be periods when the portfolio value will fall. However, they also understand that, based on historical returns, equity investment is necessary if the value of both the capital of the fund and income is to maintain its purchasing power when compared with inflation.

The portfolio returned 10.2%, net of fees, on a total return basis for the 12 months ending 29th December 2023. The primary driver over this period remained market expectations on global inflation and the timing of interest rate cuts by the Central Banks. The first three quarters experienced increased volatility brought on by a number of challenges, including the collapse of a handful of US regional banks, sluggish recovery in China and the market’s reaction to the continued rhetoric around ‘higher for longer’ from the Central Banks. On the other hand, the US economy belied the experts in proving to be more robust than expected and a concentrated number of large technology companies dubbed ‘The Magnificent Seven’ produced exceptional returns on the promise of the next technological revolution in the form of Generative Artificial Intelligence (AI). Geo-politics became the focus at the beginning of the last quarter of the year, with escalating tensions in the Middle East causing turmoil in the markets. However, the final weeks of the year delivered strong gains, spurred by investor optimism around the timing and level of interest rate cuts. The resulting rally in equities alongside robust returns from longer dated assets such as infrastructure contributed towards a positive total return for the portfolio over the year.

Principal risks and uncertainties

The principal risks and uncertainties affecting the Trust arise from its ownership of copyright assets. It is necessary from time to time to engage in legal action to defend these assets or to ensure that the Trust receives appropriate value from them, which can increase the operating costs of the Trust. The income earned from these assets may also fluctuate from year to year, often to a significant extent. The Trust deals with these risks and uncertainties by adding to net income from its reserves in order to try to achieve a consistent level of annual grant expenditure. (It should be noted, however, that this consistency is not always apparent when comparing the level of grant expenditure from year to year, given that grants to be paid out over a term of years are accounted for in full in the financial year in which they are initially agreed. Grants payable over a term of years also require the maintenance of sufficient reserves to enable the Trust to honour future grant commitments.)

Plans for future periods

The Trust plans to continue to work with a limited number of charities, developing and consolidating its current strategy, and modifying its approach if current monitoring practices suggest that increased impact can be achieved.

THE TOLKIEN TRUST

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Structure, governance and management

The charity is a charitable company governed by its Articles of Association.

The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:

Baillie Tolkien Michael Tolkien Simon Tolkien

The constitution of the charitable company establishes the terms on which Trustees are appointed and exercise their powers. New Trustees are given guidance on their legal responsibilities as charity trustees, and all Trustees are kept up-to-date with relevant legal developments and Charity Commission guidance.

None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £10 in the event of a winding up.

The Trustees make all strategic decisions relating to the charity, including decisions as to whom grants should be paid.

Disclosure of information to auditor

Each of the trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

The report has been prepared in accordance with the Small Companies Regime under Section 419(2) of the Companies Act 2006.

The trustees' report was approved by the Board of Trustees.

Michael Tolkien

Trustee

6 September 2024

THE TOLKIEN TRUST

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 DECEMBER 2023

The trustees, who are also the directors of The Tolkien Trust for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company Law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

THE TOLKIEN TRUST

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE TOLKIEN TRUST

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Opinion

We have audited the financial statements of The Tolkien Trust (the ‘charity’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

THE TOLKIEN TRUST

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charity and its 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 statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose 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 charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

THE TOLKIEN TRUST

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

THE TOLKIEN TRUST

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST

Robert Kirtland (Senior Statutory Auditor) for and on behalf of Critchleys Audit LLP

Chartered Accountants Statutory Auditor

10 September 2024

Beaver House 23-38 Hythe Bridge Street Oxford OX1 2EP

THE TOLKIEN TRUST

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2023

**Unrestricted ** Unrestricted
funds funds
2023 2022
Notes £ £
Income from:
Investments 3 538,437 614,641
Royalties 9,155,049 5,270,353
Total income 9,693,486 5,884,994
Expenditure on:
Raising funds 4 295,592 313,117
Charitable activities 5 5,515,733 5,918,573
Total expenditure 5,811,325 6,231,690
Net gains/(losses) on investments 11 1,853,241 (4,291,947)
Net income and net movement in funds 5,735,402 (4,638,643)
Fund balances at 1 January 2023 31,652,887 36,291,530
Fund balances at 31 December 2023 37,388,289 31,652,887

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

THE TOLKIEN TRUST

BALANCE SHEET

AS AT 31 DECEMBER 2023

Notes
Fixed assets
Heritage assets
14
Investments
15
Current assets
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within
one year
17
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after
more than one year
18
Net assets
Income funds
Unrestricted funds		 2023
£
£
279,000
25,619,620
25,898,620
4,537,212
9,129,336
13,666,548
(1,636,879)
12,029,669
37,928,289
(540,000)
37,388,289
37,388,289
37,388,289		 2022
£
£
279,000
23,335,492
23,614,492
1,934,311
7,768,058
9,702,369
(658,974)
9,043,395
32,657,887
(1,005,000)
31,652,887
31,652,887
31,652,887

The financial statements were approved and authorised for issue by the Trustees on 6 September 2024

Michael Tolkien Trustee

Company registration number 8354834

THE TOLKIEN TRUST

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by)
operations
22
1,253,728
Investing activities
Purchase of investments
(22,246,374)
Proceeds from disposal of investments
21,815,487
Investment income received
538,437
Net cash generated from investing
activities
107,550
Net cash used in financing activities
-
Net increase/(decrease) in cash and cash
equivalents
1,361,278
Cash and cash equivalents at beginning of year
7,768,058
Cash and cash equivalents at end of year
9,129,336		 2022
£
£
(2,498,528)
(6,915,753)
6,403,417
614,641
102,305
-
(2,396,223)
10,164,281
7,768,058

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

Charity information

The Tolkien Trust is a private company limited by guarantee incorporated in England and Wales. The registered office is Prama House, 267 Banbury Road, Oxford, OX2 7HT.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association. the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.

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

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

1.4 Income

Income from royalties an similar income is recognised net of VAT and when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received. Amounts earned in respect of the year to 31 December are recognised as income in the year if they can be quantified by the time of the approval of the financial statements. Dividends are included when they are received. Interest is included on a receivable basis.

1.5 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.

Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity.

Grants are normally recognised as an expense when they are approved for payment by the Trustees. However, if the Trustees have entered into a grant agreement with a beneficiary, the full amount of the grant is recognised when the agreement is signed. Expenditure is recognised on an accruals basis and include any irrecoverable VAT. Any costs that need to be apportioned between costs of generating funds, support costs and governance costs are done so based on the Trustees’ estimate of the amount of costs applicable to each category.

1.6 Heritage assets

Purchased heritage assets are capitalised in the balance sheet. No depreciation is charged as the assets have an indefinite life.

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

1.7 Fixed asset investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

1.8 Uncapitalised fixed assets

The assets of the charity consist in part of copyrights in relation to works written by the late J R R Tolkien. These are shown in note 12. They have no value in the financial statements as these were mostly settled into The Tolkien Trust (when it was an unincorporated charity) many years ago.

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks.

1.10 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price.

Basic financial liabilities

Basic financial liabilities, including creditors and grants awarded not paid are initially recognised at transaction price . Financial liabilities are not discounted as the effect would not be material

Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements:

Investment values

Investment values are determined using the stock market value as at the year-end date.

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

3 Investments

Unrestricted Unrestricted
funds funds
2023 2022
£ £
Dividends received 345,431 532,849
Interest receivable 193,006 81,792
538,437 614,641

4 Raising funds

Unrestricted Unrestricted
funds funds
2023 2022
£ £
UK legal fees relating to contract and copyright matters 168,645 172,847
US and other overseas legal fees 29,646 38,940
Other professional fees 2,509 3,310
Legal and professional 200,800 215,097
Investment management fees 94,792 98,020
295,592 313,117

Included in other professional fees is £2,472 (2022: £2,200 of fees payable to auditors for non-audit services.

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

5 Expenditure on charitable activities

Direct costs
Grant funding of activities (see note 6)
Share of support and governance costs (see note 7)
Support
Governance
Analysis by fund
Unrestricted funds
6
Grants payable
Grants to institutions:
Analysed below
AAPLE Academy Foundation
ActionAid
Age UK
Aladdin Project
Alzheimer's Research UK
Association IMAD
Asylum Welcome
Basmeh & Zeitooneh
Be Free Young Carers
Become Charity
Best Friends Animal Society
Birdlife International
Bodleian Library
British Friends of Neve Shalom
CALMS
Camfed International		 Grant
making
Grant
making
2023
2022
£
£
5,250,000
5,651,000
184,779
188,116
80,954
79,457
5,515,733
5,918,573
5,515,733
5,918,573
Grant
funding
Grant funding
2023
2022
£
£
5,250,000
5,651,000
2023
2022
£
£
30,000
30,000
125,000
125,000
70,000
70,000
10,000
20,000
70,000
70,000
22,000
20,000
124,000
110,000
22,000
20,000
20,000
20,000
50,000
50,000
85,000
50,000
22,000
20,000
-
35,000
55,000
35,000
25,000
-
110,000
100,000

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

6 Grants payable (Continued)
Centre Primo Levi 44,000 230,000
Challenging MND 50,000 50,000
Children on the Edge 33,000 30,000
Claremont McKenna College 50,000 45,000
ClientEarth 155,000 200,000
Colorado State University Foundation 40,000 40,000
Creation Theatre 45,000 45,000
Cutteslowe Community Association 15,000 15,000
Detention Action 40,000 40,000
Direct Relief - 170,000
Doctors of the World UK 80,000 80,000
Dominican Council - 10,000
Dragon School Trust 30,000 30,000
Duke of Edinburgh Award 35,000 70,000
Dyslexia Research Trust 49,000 -
Emergency UK - 10,000
Exeter College Oxford - 50,000
Festival Medical Services 90,000 -
Glass Door Homeless Charity 128,000 120,000
Greenpeace Enviromental Trust 120,000 150,000
Hillside House - 25,000
Hope Project Lesvos 30,000 30,000
Howard League for Penal Reform 30,000 30,000
Human Rights Watch - 100,000
Humanity & Inclusion 11,000 110,000
Kent Refugee Action Network 15,000 15,000
La Cimade 55,000 114,000
Leeds Hospital Charity 50,000 50,000
Linda Norgrove Foundation 22,000 70,000
Linkage Community Trust Ltd 45,000 50,000
Maison Shalom 33,000 30,000
Mango Tree Orphan Support Programme 20,000 -
Marie Curie 70,000 70,000
Marine Mammal Center - 30,000
Medecins du Monde 200,000 200,000
Medecins Sans Frontieres UK 275,000 300,000
Memorial de la Shoah 20,000 40,000
Museum of Oxford 93,000 -
My Name'5 Doddie Foundation 50,000 50,000
One Acre Fund 100,000 100,000
Oxford Bach Choir 25,000 25,000
Oxford Food Hub 33,000 30,000
Oxford Lieder Limited 25,000 25,000
Oxford Philharmonic Orchestra 15,000 15,000
Oxford Playhouse Trust 10,000 10,000
Panzi Foundation 125,000 125,000
Pesticide Action Network UK 110,000 100,000
Photography Oxford 10,000 10,000
Pilotes Volontaires 158,000 135,000
Prison Phoenix Trust 20,000 20,000
Prisoners Abroad 138,000 80,000

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

6
Grants payable
Reading List Foundation
RefuAid (Prism the Gift Fund)
Refugees at Home
Reprieve
RESQ ONLUS
Road to Recovery
Sanctuary Hosting Limited
Santa Barbara Museum of Art
Santa Barbara Wildlife Care Network
Save the Children Fund
Schoolreaders
Settle Support
Shelterbox
Solidarites International
SOS Humanity
SOS Mediterranee France
Southampton and Winchester Visitors Group
Spark Inside
St Luke's Oxford
Support a Survivor of Torture
The Porch
The Tablet Trust
The Turtle Hospital
Theatres Trust
TREAT (Trust for Research and Education on the Arms Trade)
Uganda Childbirth Injury Fund
Ukrainian Patriot
University of Manitoba
University of Oxford Botanic Garden
University of Oxford (Care for COVID-orphaned children)
University of Sussex
Videre Est Credere
VII Foundation
Virtual Doctors
VNA Health Foundation
Welsh Housing Aid (Shelter Cymru)
Wiener Holocaust Library
Wilderness Youth Project
Work Rights Cenre
Working Chance Limited		 (Continued)
28,000
25,000
20,000
20,000
20,000
-
105,000
95,000
11,000
10,000
53,000
90,000
-
20,000
15,000
25,000
15,000
-
122,000
-
55,000
50,000
40,000
40,000
77,000
100,000
205,000
325,000
28,000
25,000
50,000
-
22,000
20,000
25,000
25,000
11,000
10,000
28,000
25,000
20,000
-
20,000
20,000
25,000
25,000
20,000
20,000
105,000
145,000
28,000
25,000
80,000
70,000
-
(75,000)
28,000
25,000
94,000
92,000
10,000
10,000
35,000
75,000
-
30,000
30,000
-
30,000
25,000
52,000
-
17,000
15,000
30,000
25,000
20,000
30,000
44,000
40,000
5,250,000
5,651,000

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

7
Support costs
Support
costs
Governance
costs
2023Support costs Governance
costs
£
£
£
£
£
UK legal fees relating to
grant administration
12,677
-
12,677
12,224
-
Other professional fees
171,016
-
171,016
175,383
-
Other costs
1,086
-
1,086
509
-
Auditors' fees - audit -
current year
-
9,230
9,230
-
8,500
Auditors' fees - audit -
prior year adjustment
-
(110)
(110)
-
1,685
Legal and professional
-
71,834
71,834
-
69,272
184,779
80,954
265,733
188,116
79,457
Analysed between
Charitable activities
184,779
80,954
265,733
188,116
79,457
8
Net movement in funds
2023
£
The net movement in funds is stated after charging/(crediting):
Fees payable for the audit of the charity's financial statements
9,120		 2022
£
12,224
175,383
509
8,300
1,885
69,272
267,573
267,573
2022
£
9,930

9 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.

10 Employees

The average monthly number of employees during the year was:

2023 2022
Number Number
Total - -

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

11 Gains and losses on investments

Unrestricted Unrestricted
funds funds
2023 2022
Gains/(losses) arising on: £ £
Revaluation of investments 1,853,241 (4,291,947)

12 Taxation

The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.

13 Copyright Assets

The charity’s literary assets comprise:

14 Heritage assets

Archive
£
At 1 January 2023 and at 31 December 2023 279,000

The acquired heritage assets have been placed on long-term deposit in the Tolkien Archive at the Bodleian Library in the University of Oxford so that they may be held with the literary papers and other archives of J R R Tolkien and the Tolkien family, and be accessible to scholars.

The acquisition in 2021 for £279,000 is the only heritage asset transaction in the past 5 years.

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

15 Fixed asset investments
Equities Fixed interest Cash held by Total
(listed) securities investment
(listed) managers
£ £ £ £
Cost or valuation
At 1 January 2023 20,564,138 2,318,934 452,420 23,335,492
Additions 20,409,020 1,251,418 585,936 22,246,374
Valuation changes 1,796,221 57,020 - 1,853,241
Disposals (20,554,049) (1,261,438) - (21,815,487)
At 31 December 2023 22,215,330 2,365,934 1,038,356 25,619,620
Carrying amount
At 31 December 2023 22,215,330 2,365,934 1,038,356 25,619,620
At 31 December 2022 20,564,138 2,318,934 452,420 23,335,492
16 Debtors
2023 2022
Amounts falling due within one year: £ £
Royalties receivable 4,512,480 1,920,977
Other debtors 12,836 13,334
Prepayments and accrued income 11,896 -
4,537,212 1,934,311
17 Creditors: amounts falling due within one year
2023 2022
£ £
Grants awarded not yet paid 1,507,387 536,422
Accruals and deferred income 129,492 122,552
1,636,879 658,974
18 Creditors: amounts falling due after more than one year
2023 2022
£ £
Grants awarded not yet paid 540,000 1,005,000

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

19 Grants awarded not yet paid

At
2023 movements
University of Manitoba
Alan Klass Memorial Fund Programme
Bodleian Archivist
Bodleian Curator of Medieval Manuscripts
Bodleian Library - other
University of Oxford The JRR Tolkien
Professorship of English Literature and
Language
Awarded December 2022; paid in 2023
Awarded and paid in 2023
Awarded December 2023; paid in 2024
At
2022 movements
University of Manitoba
Alan Klass Memorial Fund Programme
Bodleian Archivist
Bodleian Curator of Medieval Manuscripts
Bodleian Library - other
University of Oxford The JRR Tolkien
Professorship of English Literature and
Language
Cité Internationale de la tapisserie Aubusson
Awarded December 2021; paid in 2022
Awarded and paid in 2022
Awarded December 2022; paid in 2023		 1 January
2023
£
90,000
205,000
265,000
11,422
960,000
10,000
-
-
1,541,422
1 January
2022
£
180,000
250,000
325,000
11,422
1,280,000
100,000
1,482,000
-
-
3,628,422		 Amounts
Awarded
Payments
Made
At 31
December
2023
£
£
£
-
90,000
-
-
60,000
145,000
-
65,000
200,000
-
-
11,422
-
320,000
640,000
-
10,000
-
4,199,035
4,199,035
-
1,050,965
-
1,050,965
5,250,000
4,744,035
2,047,387
Amounts
Awarded
Payments
Made
At 31
December
2022
£
£
£
(75,000)
15,000
90,000
-
45,000
205,000
-
60,000
265,000
-
-
11,422
-
320,000
960,000
-
100,000
-
1,482,000
-
5,716,000
5,716,000
-
10,000
-
10,000
5,651,000
7,738,000
1,541,422

THE TOLKIEN TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

20 Unrestricted funds

The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.

At 1 January
2023
£
General funds
31,652,887
Previous year:
At 1 January
2022
£
General funds
36,291,530		 Income
Expenditure
£
£
9,693,486
(5,811,325)
Income
Expenditure
£
£
5,884,994
(6,231,690)		 Gains and
losses
£
1,853,241
Gains and
losses
£
(4,291,947)		 At 31
December
2023
£
37,388,289
At 31
December
2022
£
31,652,887

21 Related party transactions

There were no disclosable related party transactions during the year (2022 - none).

22 Cash generated from operations

Cash generated from operations
Surplus/(deficit) for the year
Adjustments for:
Investment income recognised in statement of financial activities
Fair value gains and losses on investments
Movements in working capital:
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Cash generated from/(absorbed by) operations		 2023
£
5,735,402
(538,437)
(1,853,241)
(2,602,901)
512,905
1,253,728		 2022
£
(4,638,643)
(614,641)
4,291,947
558,479
(2,095,670)
(2,498,528)

23 Analysis of changes in net funds

The charity had no material debt during the year.