Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 Charity registration number 1150801 (England and Wales) Company giStratIon number 8354834 THE TOLKIEN TRUST ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST LEGAL AND ADMINISTRATIVE INFORMATION Trustees Baillie Tolkien Simon Tolkien Royd Tolkien (Appointed 1 December 2024) (Appointed 1 December 2024) (Appointed 1 December 2024) Rachel Tolkien Amanda Doyle Secretary Cathleen Blackbum Charity number 1150801 Company number 8354834 Registered office Prama House 267 Banbury Road Oxford OX2 7HT Auditor Gravita Audit Oxford LLP First Floor. Park Central 41>41 Park End Street Oxford OX1 1JD 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
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST CONTENTS Page Trustees, report Statement of trustees. responsibilities Independent auditorfs report Statement of financial activities Balance sheet 10 statement of cash flows 11 Notes to the financial statements 12-22
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) FOR THE YEAR ENDED 31 DECEMBER 2024 The trustees present their annual report and financial statements for the year ended 31 December 2024. 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 Associats'on, 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 insb'tutions or purposes as the Trustees from time to time think fit. Accordingly, the Trust operates for the public benefit. The Trustees have complied wth 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 )Mde range of charities and charitable causes, but with a recurrent emphasis upon those aimed at alleviating povety 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, North America and Europe (for assistance to refugees). 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, where appropriate, aims to build closer relationships with beneficiaries with a view to maximising the impact of its giving. In some inStanS. the Trust makes grants which are conditional upon the raising of matched funding, enabling the charities ConMed 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 vbsIte at YW4V.tolkientrust.org Achievements and performance During the year the Trust made distributs'ons from income to 102 charities. Financial review The Trust's chief assels consist of copyrights in rtain works by J R R Tolkien, which provide royalty income, and cash and investments. The Trust does not engage in nd-raisIng. The Trust has no restricted funds and no endowment. For the year royalty income was £4,271.690 (2023= £9,155.049) and the charity awarded grants totalling £6,044,078, 12023.. £5.520,000). 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 2024 was £38,963.098 {2023: £37,388,289). Of this £1,774,000 (2023.. £279,000) is represented by heritage assets leaving available reserves of £37,179,078 {2023= £37,109,289). 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 temi- 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.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 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 50A of the total portfolio and the total sum of all equity holdings in excess of 50kn 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. >100/0 of revenue) is the manufacture of amiaments or the provision of gambling seprfices. Investment perforniance The Trust has agreed an investment perfOrrnan benchmark wth 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 detemiine an appropnate 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, which benchmark remains unchanged in 2024. The agreed benchmark is-. 50/0 of the return of the Bloomberg Global-Aggregate Total Retum Index (GBP Hedged): 780h of the MSCI All Country World Index (NR),. 50/0 of the IPD Monthly Property Index,. and 100kn of the Altematives Composite Index {37.50/0 BOA Merrill Lynch Sterling Corporate Bond Index, 37.5% MSCI All Country World Index, 25% B o E Base Rate -0.5/1 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 'MediumlHigh" risk approach suitable given the Trust's circUmstanS with a restriction to a maximum of 82.5% in equities.. UK and ex-UK combined. The Trustees understand that over the long temi the mandate will allow the capital value of the portfolio to be retained in real terms and generate a good level of total retum. 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 retums, equity investment is necessary if the value of both the capital of the fund and income is to maintain its purchasing power vthen compared with inflation. The portfolio retumed 8.70k, net of fees, on a total retum basis for the 12 months ending 31 st December 2024. The primary driver over this period, as was the case for much of the last two years, remained market expectations on global inflation and the timing of interest rate cuts by the Central Banks. Balanced portfolios made decent progress again during 2024 but there was no pronounced increase in returns towards the year end, as there was during December last year. Evidence suggests that, in the UK and US, neither inflation nor interest rates are projected to continue to fall as quickly as had been hoped. With investors also expressing concern about fiscal deficits, bond markets have eXperIend a sell-off. with global government bonds delivering another year of negative retum contrasted against a strong perfomiance by global equities. As with last year, the US economy belied the experts in proving to be more robust than expected, and US equities have delivered the lion's share of retum to global investors (27% retum from the S&P Index vs 9.6Q/o from the UK'S FTSE 100 Index) and a COnntrated number of large technology companies dubbed 'The Magnificent Seven, put on 67% over the year. However, this result comes in an environment of occasional squalls of volatility.. as an example, global stock markets fell sharply in August during which spell the Magnificent 7 dropped by 17Qkn . Despite perceived global instability, and concomitant market instability. baland portfolios continue to deliver decent retums above what would be achieved by holding cash. Global equities sit wthin a few percent of all-time highs despite several occasions of market shock over the last few years which might have persuaded investors to exit. This has contributed to the positive total return for the Trust's portfolio over the year.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 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 fvll 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. Structure, governance and management The charity is a charitable company govemed by its Artides 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 Royd Tolkien Rachel Tolkien Amanda Doyle (Resigned 31 December 2024) (Appointed 1 December 2024) (Appointed 1 December 2024) (Appointed 1 December 2024) The constitution of the charitable company establishes the tenns 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 wnding up. The Trustees make all strategic decisions relating to the charty, including decisions as to whom grants should be paid.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Disclosure of infomiation 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 wth the Small Companies Regime under Section 419(2) of the CompaniesAct 2006. The trustees, report was approved by the Board of Trustees. Svjned by: bAi(ts"L t&LtL 28E2YE54Y. Simon Tolkien Trustee Baillie Tolkien Trustee 17 September 2025 21 September 2025
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST STATEMENT OF TRUSTEES. RESPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 2024 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 Practi}. 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 reSoUrS and application of resources, induding the income and expenditure, of the charitsble company for that year. In preparing these financial statements, the trustees are required to= select suitable accounting policies and then apply them consistently- observe the methods and principles in the Charities SORP- make judgements and estimates that are reasonable and prudent., state whether applicable UK Accounb'ng Standards have been followed, subject to any material departures disclosed and explained in the financial statements.. and prepare the financial statements on the going cOnM basis unless it is inappropriate to presume that the charity 11 continue in operation. 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.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE TOLKIEN TRUST Opinion We have audited the financial statements of The Tolkien Trust (the 'charity') for the year ended 31 December 2024 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, induding 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- give a true and fair view of the state of the charitable company's affairs as at 31 December 2024 and of its incoming resources and application of reSoUrs. induding its income and expenditure, for the year then ended., have been properfy prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance viith the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance wth Intemational Standards on Auditing (UK) (ISAS IUK)} and applicable law. Our responsibilities under those standards are further described in the Auditoffs SponSIbl1111eS 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 suffiaent and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have conduded that the trustees, use of the going concem basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have perfomied. 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 e1ve months from vthen the financial statements are authorised for issue. Our responsibilities and the responsibilities of the twstees with respect to going concern are described in the relevant sections of this report. Other information The other information comprises the infomiation induded in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other infomiation contained within the annual report. Our opinion on the financial statements does not cover the other infomiation and, except to the extent otherwise explicitly stated in our report, we do not express any fomi of assurance condusion 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 detemiine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have perfomied, we condude 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. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of our audit.. the information given in the trustees, report for the financial year for which the financial statements are prepared, which includes the directors. report prepared for the purposes of company law, is consistent with the financial statements., and the directors, report included within the trustees, report has been prepared in accordance wth applicable legal requirements.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST Matters on which we are required to report by exception In the light of the knowledge and understanding of the charty and its environment obtained in the course of the audit, we have not identified material misststements 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- adequate accounting records have not been kept, or retums adequate for our audit have not been received from branches not visited by us- or the financial statements are not in agreement with the accounting records and returns,. or certain disclosures of trustees. remuneration specified by law are not made" or we have not received all the infom)ation and explanations we require for our audit., or the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies. exemptions in preparing the trustees, report and from the requirement to prepare a strategic report. 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 intemal 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 concem, disclosing, as applicable, matters related to going concern and using the going concem basis of accounting unless the trustees either intend to liquidate the charitable company or to Cease operations, or have no realistic altemative but to do so. Auditorfs 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 auditorfs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance th ISAS (UK} will always detect a material misstatement vthen 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. induding fraud, is detailed below. 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.. the engagement partner ensured that the engagement team collectively had the appropriate competence. capabilities and skills to identify or recognise non-complian with applicable laws and regulations., we identified the laws and regulations applicable to the charitable company through discussions with directorsltrustees and other management, and from our knoedge and experience of the client's sector,. we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the charitable company,. we assessed the extent of compliance Vlryth the laws and regulations identified above through making enquiries of management., and Identified laws and regulations were communicated wthin the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF THE TOLKIEN TRUST We assessed the susceptibility of the charitable company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by.. making enquiries of management as to where they considered there was susceptibility to fraud, their knoedge of actual. suspected and alleged fraud: and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we.. performed analytical procedures to identify any unusual or unexpected relationships., tested journal entries to identify unusual transactions., assessed whether judgements and assumptions made in detemiining the accounting estimates were indicative of potential bias- investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-complian Vth laws and regulations, we designed procedures which included, but were not limited to.. agreeing financial statement disclosures to underlying supporting documentation- reading the minutes of meetings of those charged wth governan., and enquiring of management as to actual and potential litigation and claims. A further description of our responsibilities is available on the Financial Reporting Council's website at.. https=Il www.frc.org.uklauditorsresponsibilities. 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 stste 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 fomied. Colin Mills (Senior Statutory Auditor) For and on behalf of Gravita Audrt Oxford LLP. Statutory Auditor Chartered Accountants First Floor, Park Central 4041 Park End Street Oxford OX1 1JD Date: 22 Sopt¢.mber 2025
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2024 Unrestricted Unrestricted funds funds 2024 2023 Notes Income from: Donations and legacies Investments Royalties 14 1,495,000 691,463 4,271,690 538,437 9,155,049 Total income 6,458,153 9,693,486 enditure on: Raising funds 302,201 295,592 Charitable activities 6.305,610 5,515.733 Total expenditu 6,607,811 5,811,325 Net gainsl(losses) on investments 11 1,724,467 1,853,241 Net income and net movement in funds 1,574,809 5,735,402 Fund balances at 1 January 2024 37.388,289 31,652.887 Fund balances at 31 December 2024 38,963,098 37,388.289 The statement of financial activities indudes 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.
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST BALANCE SHEET AS AT 31 DECEMBER 2024 2024 2023 Notes Fixed assets Heritage assets Investments 14 15 1,774.000 27,828.945 279.000 25,619.620 29,602,945 25,898,620 Current assets Debtors Cash at bank and in hand 16 3,092,023 11,077,843 4,537,212 9,129,336 14,169,866 13,666,548 Creditors: amounts falling due within one year 17 (4.414.713) (1,636.879) Net current assets 9,755.153 12,029.669 Total assets less curnt liabilities 39,358,098 37,928,289 Creditors: amounts falling due after more than one year 18 (395,000) {540,000) Net assets 38,963.098 37,388.289 Income funds Unrestricted funds 38,963,098 37,388,289 38,963,098 37,388,289 1710912025 The financial statements were approved and authorised for issue by the Trustees on ......................... stgned by.. Do¢¥S*ned by. rnbiE Baillie Tolkien Trustee Simon Tolkien Trustee Company registration number 8354834 10-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024 2024 2023 Notes Cash flows from operating activities Cash generated from operations 22 1,741.902 1,253.728 Investing activities Purchase of investments Proceeds from disposal of investrnents Investment income received (6,046,261) 5,561,403 691.463 (22,246,374) 21,815,487 538,437 Net cash generated from investing activities 206,605 107,550 Net cash generated from financing activities Net increase in cash and cash equivalents 1,948.507 1,361.278 Cash and cash equivalents at beginning of year 9,129.336 7,768.058 Cash and cash equivalents at end of year 11,077,843 9,129,336 11
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 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 accordan 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 20191. 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 concem 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 concem 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 furtheran 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 eamed 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 adivity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Grants are nomially 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 governan 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 balan sheet at cost. Donated heritage assets are included in the balance sheet at their value at the date of donation (which becomes the deemed cost). No depreciation is Charged as the assets have an indefinite life. 12-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Accounting policies {Continued) 1.7 Fixed asset investments Fixed asset investments are initially measured at transaction pri excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net incomel(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 paty 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 regnised amounts and there is an intention to settle on a net basis or to realise the asset and setue the liability simultaneously. Basic financial assets Basic financial assets, which indude 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 wtthin one year or less. If not, they are presented as non-current liabilities. 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 carying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experien 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 fijture 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. 13-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Investments Unrestricted Unrestricted funds funds 2024 2023 Dividends reiVed Interest receivable 512,873 178,590 345,431 193,006 691,463 538,437 Raising funds Unrestricted Unrestricted funds funds 2024 2023 UK legal fees relating to contract and copyright matters US and other overseas legal fees Other professional fees 152,063 43,544 2,650 168.645 29.646 2.509 Legal and professional 198,257 200,800 Investment management fees 103,944 94,792 302,201 295,592 Induded in other professional fees is £2,615 (2023.. £2,472 of fees payable to auditors for non-audit services. 14-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Expenditure on charitable activities Grant making 2024 Grant making 2023 Direct costs Grant funding of activities {see note 6) 6,044,078 5,250,000 Share of support and governance costs Isee note 7) Support Governan 131,738 129,794 184,779 80,954 6.305,610 5,515.733 Analysis by fund Unrestricted funds 6.305,610 5,515.733 Grants payable GrantGrant funding funding 2024 2023 Grants to institutions.. Analysed below 6,044,078 5,250,000 2024 2023 AAPLE Academy Foundation ActionAid Arbor Day Age UK Aladdin Project Alzheimer's Research UK Association IMAD Asylum Welcome Basmeh & Zeitooneh Be Free Young Carers Become Charity Best FriendsAnimal Society Birdlife Intemational Blackfriars Oxford British Red Cross British Friends of Neve Shalom 30,000 30,000 125,000 25,000 70,000 10,000 70,000 22,000 60,000 22,000 20,000 50,000 95,000 22,000 10,000 120,000 70,000 70,000 10,000 70,000 22,000 124,000 22,000 20,000 50.000 85.000 22.000 55,000 15-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Grants payable {Continued) Camfed Intemational Centre Primo Levi Challenging MND Children on the Edge Claremont McKenna College ClientEarth Collectif des Artistes Liriques et Musiciens pour la Solidarite (CALMS) Colorado State University Foundation Creation Theatre Cutteslowe Community Association Detention Action Doctors of the World UK Dragon School Trust Duke of Edinburgh's Award Dyslexia Research Trust Extreme Medical Services (EMR) Festival Medical Services Freedom from Torture Glass Door Homeless Charity Greenpeace Enviromental Trust Help Lesotho Hope Project Lesvos Howard League for Penal Reform Humanity & Inclusion Kent Refugee Action Nerk La Cimade Leeds Hospitals Charity Linda Norgrove Foundation Linkage Community Trust Ltd Maison Shalom Mango Tree Orphan Support Programme Marie Curie Medecins du Monde Fran MMR Rescue {Ukrainel Medecins Sans Frontieres UK Memorial de la Shoah Museum of Oxford My Name'5 Doddie Foundation One Acre Fund Oxford Bach Choir Oxford Food Hub Oxford Lieder Limited Oxford Philharmonic Orchestra Oxford Playhouse Trust Panzi Foundation Pembroke College Oxford, Tolkien Memorial Sculpture Pesticide Action Network UK Photography Oxford Pilotes Volontaires Prison Phoenix Trust Prisoners Abroad 110,000 44,000 50,000 33,000 20,000 155,000 25,000 35,000 45,000 15,000 40,000 80,000 30,000 70,000 49,000 130,000 110,000 44,000 50,000 33,000 50,000 155,000 25,000 40,000 45,000 15,000 40.000 80.000 30.000 35.000 49.000 90,000 20,000 83,000 120,000 30,000 30,000 30,000 11,000 15,000 55,000 50,000 22,000 120,000 33,000 20,000 70,000 200,000 100,000 275,000 20,000 40,000 50,000 100,000 128,000 120,000 30,000 30,000 11,000 15,000 55,000 50.000 22.000 45.000 33.000 20,000 70,000 200,000 275,000 20,000 93,000 50,000 100,000 25,000 33,000 25,000 15.000 10.000 125.000 33,000 25,000 15,000 10,000 125,000 7,500 110,000 110,000 10,000 158,000 20,000 138,000 78,000 20,000 88,000 16-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Grants payable {Continued) Reading List Foundation RefuAid (Prism the Gift Fund) Refugees at Home Reprieve RESQ ONLUS Road to Recovery Santa Barbara Museum of Art Santa Barbara Wildlife Care NeOrk Save the Children Fund Schoolreaders Settle Support Shelterbox Shelter Cymru Skidmore College Solidarites International SOS Humanity SOS Mediterranee France Southampton and Wnchester Visitors Group Spark Inside St Luke's Oxford Support a Survivor of Torture The Christian Heritage Centre at Stonyhurst The Porch The Tablet Trust The Turtle Hospital Theatres Trust TREAT ffrust for Research and Education on the Arms Trade) Uganda Childbirth Injury Fund Ukrainian Patriot University of Oxford Botanic Garden and Art)oretum University of Oxford (Care for COVID-orphaned children) University of Oxford - Management of Tolkien Archives University of Oxford - reversal of B(>Jleian Archives grant superseded University of Sussex Videre Est Credere Virtual Doctors VNA Health Foundation Vblener Holocaust Library Imlderness Youth Project Work Rights Centre Working chan Limited 28,000 20,000 20,000 105,000 11,000 53,000 28,000 20,000 20,000 105,000 11,000 53,000 15,000 15,000 122,000 55,000 40.000 77.000 52.000 10,000 250,000 55,000 40,000 80,000 52,000 20,000 80,000 28,000 50,000 22,000 25,000 205.000 28,000 50,000 22,000 25,000 11,000 28,000 60,000 20,000 20,000 20,000 20,000 105,000 28,000 80,000 30,000 20,000 20,000 25,000 20,000 105.000 28.000 80.000 28.000 94,000 1,020,000 (156,422) 10,000 35,000 30,000 30,000 17,000 30,000 20,000 44,000 10,000 35,000 30,000 30,000 17,000 30,000 20,000 44,000 6,044,078 5,250.000 17-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Support costs allocated to activities 2024 2023 UK legal fees relating to grant adminsitration Other professional fees other costs Governan costs 20.946 43.750 67.042 129,794 12.677 171.016 1.086 80,954 261,532 265,733 Analysed between: Grant making 261,532 265,733 2024 2023 Governance costs comprise: Audit fees Legal and professional 11,100 118,694 9.120 71,834 129,794 80,954 Net movement in funds 2024 2023 The net movement in funds is stated after chargingl{crediting)'. Fees payable to the charity's auditor= for the audit of the charity's financial statements adjustment in respect of prior year 10.400 700 9.230 {110) 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.. 2024 Number 2023 Number Total 18-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 11 Gains and losses on investments Unrestricted Unrestricted funds funds 2024 2023 Gainslllossesl arising on= Revaluation of investments 1,724,467 1,853,241 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-. Certain US copyrights in The Lord of the Rings." and the worldwide copyrights in Smith of Wootton Major, TTre and Leaf, Roverandom, Mythopoeia, The Legend of Sigurd and Gudmn, The Fall of Arthur and Beowulf." A TTrns1atn and Commentary, all by J R R Tolkien. The copyrights in the published editions of various philological writings and fragments by J R R Tolkien. Certain unpublished papers, letters, artistic works, pictures, photographs and other documents originally forming part of the Estate of J R R Tolkien, and the copyright in such materials formerly owned by the Estate. 14 Heritsge assets Archive At 1 January 2024 Donated assets 279,000 1,495,000 At 31 December 2024 1,774,000 The acquired heritage assets have been placed on long-temi 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 acSsible to scholars. The donation (by legacy) in 2024 with a value of £1.495.000 and the acquisition in 2021 for £279,000 are the only heritage asset transactions in the past 5 years. 19-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 15 Fixed asset investments Listed Fixed interest Cash held by investments securities investment Ilistedl managers Total Cost or valuation At 1 January 2024 Additions Valuation changes Disposals 22,215.329 5,949,079 1,821,880 (5,384,239) 2,365.934 97,182 (97,413) (96,577) 1,038,357 194,414 25,619.620 6,240,675 1,724,467 1275,000) {5,755,816) At 31 December 2024 24,602,049 2,269,126 957,771 27,828,946 Carrying amount At 31 December 2024 24,602,049 2,269,126 957,771 27,828,946 At 31 December 2023 22,215.329 2,365.934 1,038,357 25,619,620 16 Debtors 2024 2023 Amounts falling due within one year: Royalties re1vable Other debtors Prepayments and accrued income 3,078,710 13,313 4,512,480 12,836 11,896 3,092,023 4,537,212 17 Creditors: amounts falling due within one year 2024 2023 Grants awarded not yet paid Accruals and deferred income 4,313,000 101,713 1,507,387 129,492 4,414,713 1,636,879 18 Creditors: amounts falling due after more than one year 2024 2023 Grants awarded not yet paid 395,000 540,000 -20-
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 19 Grants awarded not yet paid At31 December 2024 At 1 January 2024 Amounts Payments Awarded Made 2024 movements Bodleian Archivist Bodleian Curator of Medieval Manuscripts Bodleian Library- other Bodleian Libary- Tolkein Archives University of Oxford The JRR Tolkien Professorship of English Literature and Language Awarded December 2023,. paid in 2024 Awarded and paid in 2024 Awarded December 2024.. paid in 2025 145,000 200,000 11,422 {145.000) 200,000 11.422 1.020.000 490,000 530.000 640,000 1.050,965 320,000 1,050.965 1,522.500 320,000 1.522,500 3.658.000 3,658.000 2.047,387 6.044.078 3,383,465 4,708.000 At31 December 2023 At 1 January 2023 Amounts Payments Awarded Made 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 Dember 2023,. paid in 2024 90,000 205,000 265,000 11,422 90,000 60,000 65,000 145,000 200,000 11,422 960,000 10,000 320,000 10,000 4,199,035 640,000 4,199,035 1,050,965 1,050,965 1,541,422 5,250,000 4,744,035 2,047,387 21
Docusign Envelope ID.. l88F706tFA0c4BS1>91F2A08E3AA04S6 THE TOLKIEN TRUST NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 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 2024 Income Expenditure Gains and losses At31 December 2024 General funds 37.388,289 6,458.153 (6,607,811) 1,724,467 38,963,098 Previous year: At 1 January 2023 Income Expenditure Gains and losses At31 December 2023 General funds 31.652,887 9,693.486 (5,811.325) 1,853,241 37,388,289 21 Related party transactions There were no disclosable related party transactions during the year (2023 - none). 22 Cash generated from operations 2024 2023 Surplus for the year 1,574,809 5,735,402 Adjustments for: Investment income recognised in statement of financial activities Non-cash legacies Fair value gains and losses on investments (691,463) (1,495,000) (1,724,467) {1,853,241) {538,437) Movements in working capital: Decreasel(increasel in debtors Increase in creditors 1,445,189 2,632,834 (2,602,901) 512,905 Cash generated from operations 1,741,902 1,253,728 23 Anatysis of changes in net funds The charity had no material debt during the year.