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2020-12-31-accounts

Trustees’ Annual Report and Financial Statements 2020

Registered Charity Number: 1159154

The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020

LEGAL AND ADMINISTRATIVE DETAILS

Established under the Will of the First Viscount Leverhulme.

Trustees Mr N W A FitzGerald KBE DSA (Chairman) Mr D Baillie Mr A C Butler (resigned 23 June 2021) Mr P J Cescau (resigned 23 June 2021) Professor K Gull CBE FRS Mr Alan Jope (from 4 January 2021) Sir Dave Lewis (from 7 October 2020) Mr R H P Markham CMG Ms M McEwan (from 7 October 2020) Ms L Nair Mr P G J M Polman (resigned 11 March 2020) Mr C Saul Ms A Sourry (resigned 11 March 2020) Mr S G Williams Director Professor Gordon Marshall CBE FBA AcSS (until 31 December 2020) Professor Anna Vignoles CBE FBA (from 4 January 2021) Bankers Barclays Bank PLC, 1 Churchill Place, London, E14 5HP Legal Advisors Maurice Turnor Gardner LLP Milton House, Milton Street, London, EC2Y 9BH Independent Auditors PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors 1 Embankment Place, London WC2N 6RH Custodian Northern Trust 50 Bank Street, Canary Wharf, London E14 5NT

Investment Advisor Partners Capital LLP 5 Young Street, London W8 5EH Office Address 1 Pemberton Row, London EC4A 3BG Tel. 020 7042 9888 Website www.leverhulme.ac.uk

Registered Charity Number 1159154

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020

The Trustees present their Annual Report and the audited Financial Statements for the year ended 31 December 2020.

History

The Leverhulme Trust is a Registered Charity, Number 1159154, and was constituted as a Charitable Incorporated Organisation in the United Kingdom on 11 November 2014. It derives from the Will of the First Viscount Leverhulme (the “Founder”), who died in 1925. He left a proportion of his shares in Lever Brothers Limited upon trust and specified that the beneficiaries of the resulting income should include certain trade charities and the provision of scholarships for such purposes of research and education, being valid charitable purposes, as the Trustees might decide. The shareholding subsequently became associated with Unilever plc.

In November 1983, the High Court approved a declaration of Charitable Trust from the Will which gave each of its two charitable objects an independent existence including its own Unilever plc shareholding. The eligible trade charities became the concern of the Leverhulme Trade Charities Trust. The Leverhulme Trust, (“the Trust”), from that date, was solely concerned with research and education.

At the conclusion of 2014, the Trustees transferred all the assets, liabilities and undertakings of the previous established Trust to this newly formed Charitable Incorporated Organisation (CIO), Number 1159154. The objects of the CIO are substantially the same as the Trust, and the Trust Board members of the previous Trust were the founding Trustees of the CIO.

Objectives and Activities

The objective of the Trust is the provision of scholarships and other similar support for education and research in order to fulfil the Founder’s objectives.

The Trustees have set in place a range of activities to meet this objective. The constitution of the Trust places no restriction on the disciplines that are to provide the scholarships for research or education; however, in recognition of the substantial sums provided by other funders of research and scholarship in medicine and related clinical activities, the Trust does not fund in this area. The Trust operates in responsive mode, with the choice of research topic determined by individual applicants.

The Trustees confirm that they have referred to the Charity Commission’s guidance on public benefit when reviewing the Trust’s aims and objectives and in planning future activities and setting the grantmaking policy for the year. The Trust Board meets annually to review its grant-making activities, and to make modifications to the portfolio, where appropriate.

The Trustees have set in place a strategy for achieving the aims and the objectives of the Trust, which consists of making grants across a broad range of schemes, by identifying individuals who can demonstrate high-quality scholarship, originality, and excellence in their chosen research proposal.

The grant-making policies of the Trust are set out on the Trust’s website. This provides detailed information on how to apply for a grant, and explains how awards are administered.

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Objectives and Activities (continued)

In assessing grant applications for funding, the Trustees use the following criteria to prioritise work of outstanding scholarship:

A second set of criteria reflect the particular values of the Leverhulme Trust, and express the Trust Board’s aspiration that the Trust’s funding maintains a distinctive role within the current research funding landscape. Applications are particularly welcomed when they:

All applications to the Trust are subject to the established and robust peer review mechanisms of the academy and higher education sector to identify innovative, original research which meets the Trust’s criteria, as stated above. All decisions are taken in light of the peer review comments received.

Details of the main schemes can be seen in the section ‘Achievements and Performance’ below.

Public Benefit

The benefits provided by fulfilling the Founder’s wishes of funding scholarships for education and research are primarily associated with the skills developed by the research, teaching and student communities, as a consequence of the Trust’s awards. This outcome is believed to be well in keeping with the Founder’s intent, namely of public benefit.

Achievements and Performance

The Trust makes grants across a range of regular schemes, providing support for individuals at a range of career stages, for groups and teams of researchers, and for international collaborations. The majority of these schemes operate annually, while others (indicated ▲ below) run triennially:

Arts Scholarships▲

Open to specialist arts training organisations to develop innovative teaching and to provide bursaries for individuals of exceptional talent to develop their skills in the fine and performing arts. Awards range from £25,000 to £490,000. (2020:nil, 2019:nil)

Doctoral Scholarships▲

To support doctoral studies in UK universities at a time of growing undergraduate debt. Each grant is for £1,350,000 and provides fifteen fully-funded Leverhulme Doctoral Scholarships (five in each of four years). The scholarship funds full-time studies and covers maintenance at the level of a research council UK doctoral stipend and full university tuition fees. The balance is to be used to provide funds for the student’s research expenses and research training. (2020:£13.5m, 2019:nil)

Early Career Fellowships

Providing a bridge into an academic career for researchers with a proven research record who have not yet held an established academic post. The scheme provides 50% of the salary costs of a 3-year academic appointment, with the host institution providing the balance, plus some research costs. The Trust’s contribution over 3 years is up to £93,000. (2020:£13.9m, 2019:£13.2m)

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Achievements and Performance (continued)

Emeritus Fellowships

Providing funding for 3-24 months for senior researchers who have retired from an academic post to enable them to complete a research project and publish the results. Awards are for up to £22,000. (2020:£0.6m, 2019:£0.5m)

International Academic Fellowships

Enabling established researchers in UK higher education institutions to spend 3-12 months in overseas research centres, to develop new knowledge, skills and ideas. Up to £45,000 available. (2020:£0.4m, 2019:£0.4m).

International Professorships

To recruit excellent research leaders of any nationality, currently working outside the UK, in order to fill strategically important positions in this country. This competition was first held in 2020 with 4 awards totalling £17.7m being made. These amounts were not included in the 2020 expenditure on charitable activities as they are still subject to the completion of certain formalities and the professorial appointment. They are likely to be recognised in the 2021 financial statements.

Major Research Fellowships

Supporting well-established academics in the humanities and social sciences to focus for 2 or 3 years on a specific piece of significant, original research. The scheme is particularly aimed at those whose day-to-day duties have prevented them from completing a programme of research. Annual replacement costs plus research expenses is in the region of £50,000. (2020:£4.8m, 2019:£4.7m)

Philip Leverhulme Prizes

To recognise researchers at an early stage of their career, whose work has already had a significant international impact, and whose future research career is exceptionally promising. £100,000 is provided over two or three years for any research purpose. (2020:£3.0m, 2019:£3.0m)

Research Centres▲

To support fundamental cross-disciplinary research across the sciences, humanities and social sciences. This competition, held first in 2015, was designed to encourage original research which would establish or reshape a significant field of study and transform understanding of an important topic in contemporary societies. Awards of up to £10,000,000 over 10 years. (2020:nil, 2019:nil)

Research Fellowships

Supporting experienced researchers, particularly those whose day-to-day responsibilities have prevented them from completing a programme of research, and open to independent scholars as well as those holding posts in universities. Replacement costs/loss of earnings and research expenses available over 3-24 months. Maximum award £55,000. (2020:£6.2m, 2019:£5.8m)

Research Leadership Awards▲

Supporting researchers with an established university career to build a research team to address a distinct research problem. Between £800,000 and £1million over 5 years is available to fund research assistants and research students working under the leadership of the award holder, plus associated costs. (2020:nil, 2019:£14.3m)

Research Project Grants

Available for any research topic, with the choice of theme and research approach left to applicants. Up to £500,000 over 5 years is available to cover salaries for research and associated costs. This is the Trust’s core funding stream and its popularity saw the allocation to grants at £44.0m in 2020 (2019 : £43.2m).

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Achievements and Performance (continued)

Study Abroad Studentships

Supporting a period of postgraduate study or research in any overseas country except the USA. Awards offer maintenance, travel and essential research/study costs for between 12 and 24 months. Annual award values average £44,000. (2020:£1.4m, 2019:£1.4m)

Visiting Professorships

To enable UK institutions to invite an eminent researcher from overseas to enhance the knowledge and skills of academics and students in the host institution. Awards cover maintenance, travel expenses and research costs and last for between 3 and 12 months. Given the variety of individual circumstances, the value of an award can range from under £10,000 to over £140,000, depending on duration. (2020:£1.9m, 2019:£2.1m)

A summary of the value of grants made during the year can be seen in the following table.

Types of schemes
Research Project Grants
Doctoral Scholarships
Research Leadership
Early Career Fellowships
Major Research Fellowships
Research Fellowships
Leverhulme Prizes
Academy Fellowships/Scholarships
Visiting Professors
Study Abroad Studentships
Emeritus Fellowships
International Academic Fellowships
Grants Awarded in Year		 2020
2019
£000
%
£000
%
43,966
48
43,241
46
13,500
15
-
-
-
-
14,285
15
13,857
15
13,206
14
4,787
5
4,659
5
6,213
7
5,756
6
3,000
3
3,000
3
2,217
2
4,948
5
1,893
2
2,089
2
1,394
1
1,432
2
598
1
527
1
369
1
387
1
91,794
100
93,530
100

The number of applications received for consideration for all schemes amounted to 3,639 in 2020 (2019: 3,663). The number of grants which were subsequently made amounted to 650 (2019: 659).

The Trust maintains a portfolio of diverse awards (see above) which are attractive to the research community. This is demonstrated by the numbers of applications, which remain consistently high across the schemes (e.g. 2020: Research Project Grants over 880, Early Career Fellowships over 700, Research Fellowships over 800). The selection of successful applications, based on peer review, involves success rates ranging from c. 17 to 41%. The Trust is able to disburse its available income without any sacrifice of quality.

The Trust considers that the current grant levels are in line with the aims and objectives set by the charity.

All grant recipients are required to report both annually (for multi-year awards) and on completion. Final grant reports are reviewed by the Director (some 80% of grants) and submitted for Trust Board scrutiny, or are assessed and reviewed by the appropriate committees or panels to which authority has been delegated. All reports are graded, although it is not appropriate to set numerical targets for grades (nor to normalise these) due to the range, diversity and nature of the activities being reported on. Research outcomes are described, in the context of the ambitions presented in the original bid, and the outputs listed; particular attention is therefore given to the broad findings and to publications or other forms of dissemination resulting from the award. Academic papers and publications arising from the Trust’s funding are subject to the usual relevant academic peer review process for such publications. Acknowledgment of Leverhulme support in outputs (journal articles, monographs etc) is

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Achievements and Performance (continued)

a formal requirement of the Trust. Publications arising from Leverhulme grants are also subject to external peer review through the Government’s mechanism (Research Excellence Framework, Research Assessment Exercise prior to this) to assess the research of British higher education institutions, see http://www.ref.ac.uk/. The Trust monitors the impact of its support on the careers of grant recipients via case studies in its Annual Review.

Whilst the current situation in relation to COVID-19 has undoubtedly proved challenging, the Trust benefits from the hitherto healthy academic and research environment in the UK. The excellence of UK scholarship is recognised for example in the various league tables of the World’s top universities and the standard research metrics (such as citation statistics) which are available for each country. Despite the high volume of applications to the Trust (around 4,000 per annum) the Trust has consistently secured appropriate levels of peer review to allow it to meet its objectives. The value of the Trust’s activities is enhanced by the funds provided by the Government via the Research Charities Support Fund, which provides a contribution towards university overhead costs.

The Trust also continues to place importance on international collaborations, by assisting Study Abroad Students to expand their horizons through postgraduate study or research overseas, supporting academics to develop new collaborations and lines of research with colleagues around the world via our International Academic Fellowships, and enabling UK universities to host distinguished academic visitors from overseas through our Visiting Professorships. It is also noteworthy that so many of our other grant holders choose to spend at least part of their time working with colleagues in other countries and in ways that invariably prove to be immensely rewarding. The Trust Board is delighted to be able to help foster these collaborative research relationships. British academic and cultural institutions are world leaders because of their ability to attract the finest talent from around the world; we should be robust in safeguarding this unique competitive advantage.

COVID-19

The Trustees are pleased to report that the operations and finances of the Trust were not materially affected by the COVID-19 virus. Although the value of the Trust’s investments initially fell in the first quarter of the year, the market recovered thereafter resulting in an overall return of 4.7% for the year. The Trust successfully transitioned to home working in March 2020 and will continue this way of working for the duration of the pandemic. The Trustees and staff adjusted the processes and controls in place at the Trust to function in a home working environment with no detrimental impact noted on operations. As reported, the Trust continued to make new awards during the year and with minor exceptions the volume of applications and value of awards were unaffected. The Trustees have considered the impact of COVID-19 on the risks the Trust faces and on the ability of the Trust to continue as a going concern and have concluded that there has been minimal impact.

The Trust has been in active conversations with its beneficiaries where their activities have been adversely affected by the direct or indirect impact of the pandemic. The Trustees created a contingency fund of up to £10m to help grant holders where additional costs were required as a result of the pandemic. As at 31 December 2020, an amount of £2.4m had been committed from this contingency.

Financial Review

The income of the Trust amounted to £93.8m in 2020 (2019: £111.5m). The reduction in income of the Trust for the year was the result of the introduction of a total return target to replace the previous income target and the updated investment policy detailed below. The Trust has not carried out any fundraising activities during the year therefore no fundraising disclosures are made.

Grants awarded in the year were £91.8m in line with expectations (2019 : £93.5m). A summary by scheme can be seen in Note 3b to the financial statements.

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Investment policy and performance (continued)

The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern due to the liquid nature of the Trust’s investments. The value of the Trust’s funds at the end of 2020 was £3,519m (2019: £3,516m).

Investment policy and performance

The Trust’s investment adviser was appointed in November 2019 and an updated investment policy statement and strategic asset allocation was agreed by the Investment Committee and the Trustees. A transition plan was agreed at the end of 2019 and the Trust’s previous investments were transitioned, in accordance with the new agreed strategic asset allocation, between the start of 2020 and the end of the year.

The Trust now targets a minimum total return over time net of fees, currently 7%, to protect the portfolio’s real value (with inflation measured by UK CPI) after funding the annual withdrawal of 3%. In 2020 the Trust’s investments (net of fees) returned 4.7% (2019:12.6%).

The Trust incorporates responsible investment best practices into investment decision making, It believes that by engaging in a broad set of extra-financial considerations – including environmental, social and governance (ESG) issues – the long-term financial performance of the portfolio can be sustained with potential for improvement. The Trust’s approach is to operate a set of principles that reflect its values and to apply them with common sense and a measure of pragmatism and to ensure it remains cognisant of changes and trends in investment markets and in society at large. It seeks impact through its grant giving for academic scholarship. The investment of its funds to provide these scholarships means that investment decisions are predominately driven by economic return.

Risk management

During the year, the Trust’s Risk Committee continued to monitor both operational and strategic risks and ensured that the risk register was kept up to date. The Risk Committee will continue to review all risks and make recommendations to the Trust Board as appropriate on an annual basis.

The Chairman and Trustees consider that significant disruption to, or underperformance in, the Trust’s Unilever shareholding and/or the portfolio managed by Partners Capital would lead to a damaging reduction in funds available for distribution by the Trust Steps taken to mitigate this risk include ongoing review of Unilever performance, and in relation to the portfolio managed by Partners Capital, the adoption of a risk-based Investment Policy Statement by the Trust with a focus on asset class diversification and total return.

Other principal risks to the implementation of the Trust’s strategy concern the relationships with its applicant and peer review communities. The success of the strategy of the Trust is dependent on the ability to attract sufficient numbers and quality of applicants, and to be able to rely on the good will of its peer reviewers. Steps to mitigate these risks include the regular review and refreshing of the Trust’s portfolio of grant schemes (undertaken at the annual Strategy Meeting). The Trust Board also engages in regular horizon-scanning of the academic landscape, while continuing to engage and maintain relationships with the academic community through regular formal and informal meetings and activities, both with its committees and panels and with the broader academic community.

Reserves policy

It is Trust policy to at least maintain the real value of the level of reserves over the long term and to maintain sufficient liquidity to meet its commitments. It has set a target real growth of 1% per annum in investment returns, after a 3% annual withdrawal, with a view to increasing the probability of achieving this policy target. The reserve balance at 31 December 2019 was £3,590m (2019: £3,516m) in line with the target.

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Plans for future periods

The Trustees have agreed that annual withdrawals will be made from the Trust’s investments at a rate of 3% of the five year rolling average value each year. During the transition period to the adoption of a total return investment objective, the Trustees have agreed that the Trust will aim to spend £100m per annum for the five year period (2020- 2024) to ensure it supports the widest range of charitable activity consistent with their objectives and their grant-making policy. They will continue to monitor the demand for existing programmes and to develop new programmes and schemes.

A new scheme, Leverhulme International Professorships launched in 2019 with the results of the first competition being announced in late 2020. Four awards totalling £17.7m were made subject to the completion of certain formalities and the professorial appointments.

The Trust Board has identified funds for schemes in addition to the International Professorships where the grants will not be committed until 2020 or beyond: £2.0m for Visiting Professorships; £5.0m for Major Research Fellowships; £3.0m for Prizes; £15m for Arts Scholarships; £1.2m for Senior Fellowships and £25.9m for the RAAC (Research Awards Advisory Committee).

Structure, Governance and Management

During 2020, the Trust Board had a membership of 11 Trustees. At the beginning of 2021 an additional Trustee, Mr Jope was appointed bringing the number of Trustees to 12. The Trustees, who receive no remuneration for their services, meet four times annually. Details of Trustee expenses and any related party transactions are disclosed in the notes to the financial statements (notes 3d and 9).

Two Trustees resigned during the year, Paul Polman and Amanda Sourry and were replaced by the appointment of Sir Dave Lewis and Mhairi McEwan. At the beginning of 2021 Alan Jope was appointed as an additional Trustee. Full information on the scope of The Leverhulme Trust and the policies of the Trustees is given on the website http://www.leverhulme.ac.uk.

Trustees’ induction and training consists of briefings from other Trustees and the Director of the Trust; those appointed receive copies of relevant Charity Commission publications.

At the end of December 2020, Professor Gordon Marshall left his position as the Director of the Trust and was replaced at the start of January 2021 by Professor Anna Vignoles.

The Trustees consider the Board of Trustees together with the Director, Director of Finance and Assistant Director of the Trust as comprising the key management personnel of the charity in charge of directing and controlling the charity and running and operating the charity on a daily basis. The Trust has the equivalent of 15 staff who are accountable to the Director. All staff members are involved in the delivery of the Trust’s grant-making activities.

The pay of the key management personnel and of the Trust’s staff generally is reviewed annually by the Nominations and Remuneration Committee in light of changes to prices and average earnings. Remuneration levels are also periodically benchmarked against other similar organisations.

The remuneration of the key management personnel consists of fixed salary, variable pay and pension payments. The variable pay is determined on performance against agreed objectives. Remuneration levels are set in relation to that required to attract and retain the quality of executive needed to effectively and efficiently run a Foundation of this size and complexity.

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Structure, Governance and Management (continued)

The Trust has four advisory committees and an advisory panel:

The Trust is a member of the Association of Charitable Foundations (ACF). The ACF provides helpful information on good practice, changes in the law affecting charitable foundations, and acts as an authoritative lobby on behalf of its members with Government and regulators.

Statement of trustees’ responsibilities

The trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales 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 of the charity for that period.

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

The trustees are responsible for keeping proper 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 Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008. 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.

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The Leverhulme Trust Registered Charity Number 1159154

TRUSTEES’ ANNUAL REPORT – 2020 (continued)

Statement of trustees’ responsibilities (continued)

The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The trustees are not aware of any additional information which should have been shared with the auditors.

The Trustees’ Annual Report was approved by the Trustees and signed on its behalf by:

Niall W A FitzGerald (Chairman) 22 July 2021 1 Pemberton Row London EC4A 3BG

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The Leverhulme Trust Registered Charity Number 1159154

Independent auditors' report to the trustees of The Leverhulme Trust

Report on the audit of the financial statements

Opinion

In our opinion, The Leverhulme Trust's financial statements:

We have audited the financial statements, included within the Trustees' Annual Report and Financial Statements, which comprise: the balance sheet as at 31 December 2020; the statement of financial activities and the cash flow statement for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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 the date on which the financial statements are authorised for issue.

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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the charity's ability to continue as a going concern.

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

Reporting on other information

The other information comprises all of the information in the Trustees' Annual Report and Financial Statements other than the financial statements and our auditors' report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

Based on our work undertaken in the course of the audit, the Charities Act 2011 requires us also to report an opinion and matters as described below.

Trustees' Report

Under the Charities Act 2011, we are required to report to you if, in our opinion, the information given in the Trustees' Report is inconsistent in any material respect with the financial statements. We have no exceptions to report arising from this responsibility.

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Responsibilities for the financial statements and the audit

Responsibilities of the trustees for the financial statements

As explained more fully in the Statement of trustees' responsibilities, the trustees are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The trustees are also responsible for such internal control as they 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 charity or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

We are eligible to act and have been appointed as auditors under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the charity and its environment, we identified that the principal risks of non-compliance with laws and regulations related to the Charities Act 2011 and relevant regulations made or having an effect thereunder, including The Charities (Accounts and Reports) Regulations 2008, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered the direct impact of these laws and regulations on the financial statements. We evaluated the incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) by the trustees and those responsible for, or involved in, the preparation of the underlying accounting records and financial statements and determined that the principal risks were related to the posting of inappropriate journals to conceal misappropriation of assets. Audit procedures performed included:

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of noncompliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.

Use of this report

This report, including the opinions, has been prepared for and only for the charity's trustees as a body in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act (Part 4 of The Charities (Accounts and Reports) Regulations 2008) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

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The Leverhulme Trust Registered Charity Number 1159154

Other required reporting

Charities Act 2011 exception reporting

Under the Charities Act 2011 we are required to report to you if, in our opinion:

We have no exceptions to report arising from this responsibility.

PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London

22 July 2021

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The Leverhulme Trust Registered Charity Number 1159154

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

Note
Income and endowments from:
- Investment income
2
Total income and endowments
Expenditure on:
Raising funds
- Investment management costs
Charitable activities
3b
Total expenditure
Net (Expenditure)/Income before
Net gains on investments
Net gains on investments
Net income and net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward		 2020
£000
93,766
93,766
4,464
91,584
96,048
(2,282)
76,109
73,827
3,516,486
3,590,313		 2019
£000
111,487
111,487
6,456
91,125
97,581
13,906
324,594
338,500
3,177,986
3,516,486

The notes on pages 17 to 29 form part of these financial statements.

14

The Leverhulme Trust Registered Charity Number 1159154

BALANCE SHEET AS AT 31 DECEMBER 2020

Fixed assets:
Note
Tangible assets
4
Investments
-
Investment in shares in Unilever plc
5a
-
Other investments
5b
Total fixed assets
Current assets
Debtors
6
Cash at bank and in hand
Total Current assets
Liabilities:
Creditors: amounts falling due within one year
7
Net current liabilities
Total assets less current liabilities
Creditors: amounts falling due after one year
7
Total net assets
The funds of the Charity
Unrestricted funds
Total Charity funds		 2020
£000
60
2,061,217
1,780,175
3,841,392
3,841,452
1,138
2,659
3,797
(148,910)
(145,113)
3,696,339
(106,026)
3,590,313
3,590,313
3,590,313		 2020
£000
60
2,061,217
1,780,175
3,841,392
3,841,452
1,138
2,659
3,797
(148,910)
(145,113)
3,696,339
(106,026)
3,590,313
3,590,313
3,590,313		 2019
£000
90
2,041,741
1,705,380
3,747,121
3,747,211
5,747
3,779
9,526
(128,294)
(118,768)
3,628,443
(111,957)
3,516,486
3,516,486
3,516,486		 2019
£000
90
2,041,741
1,705,380
3,747,121
3,747,211
5,747
3,779
9,526
(128,294)
(118,768)
3,628,443
(111,957)
3,516,486
3,516,486
3,516,486
1,138
2,659		 5,747
3,779
3,841,452
(145,113)		 3,747,211
(118,768)
3,797
(148,910)		 9,526
(128,294)
3,696,339
(106,026)		 3,628,443
(111,957)
3,590,313 3,516,486
3,590,313
3,590,313		 3,516,486
3,516,486

The notes on pages 17 to 29 form part of these financial statements.

The financial statements on pages 14 to 29 were approved by the Trustees and signed on their behalf by:

Niall W A FitzGerald Trustee

22 July 2021

15

The Leverhulme Trust Registered Charity Number 1159154

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020

2020
£000
Cash flows from operating activities:
Net cash used in operating activities (a)
(76,865)
Cash flows from investing activities:
Dividends and Interest
Investment management costs
98,375
(4,468)
Purchase of investments
(2,252,017)
Proceeds from sale of investments
2,248,508
Cash inflow from FX hedging
-
Increase in cash held by
investment managers
(14,653)
Net cash provided by investing activities
75,745
Change in cash and cash equivalents in
the year
(1,120)
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
a) Reconciliation of net income to net cash flow from
operating activities
Net income for the reporting year (as per the statement of
financial activities)
Adjustments for:
Dividends and interest
Net gains on investments
Investment management costs
3,779
2,659
2020
£000
73,827
(93,766)
(76,109)
4,468
Increase in creditors
14,685
Depreciation
30
Net cash used in operating activities
(76,865)
b) Analysis of changes in net cash/(debt)
Net cash at 1 January
Net Cash (outflow)/inflow
Net cash at 31 December
3,779
(1,120)
2,659		 2020
£000
Cash flows from operating activities:
Net cash used in operating activities (a)
(76,865)
Cash flows from investing activities:
Dividends and Interest
Investment management costs
98,375
(4,468)
Purchase of investments
(2,252,017)
Proceeds from sale of investments
2,248,508
Cash inflow from FX hedging
-
Increase in cash held by
investment managers
(14,653)
Net cash provided by investing activities
75,745
Change in cash and cash equivalents in
the year
(1,120)
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
a) Reconciliation of net income to net cash flow from
operating activities
Net income for the reporting year (as per the statement of
financial activities)
Adjustments for:
Dividends and interest
Net gains on investments
Investment management costs
3,779
2,659
2020
£000
73,827
(93,766)
(76,109)
4,468
Increase in creditors
14,685
Depreciation
30
Net cash used in operating activities
(76,865)
b) Analysis of changes in net cash/(debt)
Net cash at 1 January
Net Cash (outflow)/inflow
Net cash at 31 December
3,779
(1,120)
2,659		 2020
£000
Cash flows from operating activities:
Net cash used in operating activities (a)
(76,865)
Cash flows from investing activities:
Dividends and Interest
Investment management costs
98,375
(4,468)
Purchase of investments
(2,252,017)
Proceeds from sale of investments
2,248,508
Cash inflow from FX hedging
-
Increase in cash held by
investment managers
(14,653)
Net cash provided by investing activities
75,745
Change in cash and cash equivalents in
the year
(1,120)
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
a) Reconciliation of net income to net cash flow from
operating activities
Net income for the reporting year (as per the statement of
financial activities)
Adjustments for:
Dividends and interest
Net gains on investments
Investment management costs
3,779
2,659
2020
£000
73,827
(93,766)
(76,109)
4,468
Increase in creditors
14,685
Depreciation
30
Net cash used in operating activities
(76,865)
b) Analysis of changes in net cash/(debt)
Net cash at 1 January
Net Cash (outflow)/inflow
Net cash at 31 December
3,779
(1,120)
2,659		 2019
£000

(83,010)
110,877
(6,456)
(312,088)
312,712
2,026
(22,853)
84,218
1,208

2,571
3,779
2019
£000
338,500
(111,487)
(324,594)
6,456
8,055
60
(83,010)
2,571
1,208
3,779		 2019
£000

(83,010)
110,877
(6,456)
(312,088)
312,712
2,026
(22,853)
84,218
1,208

2,571
3,779
2019
£000
338,500
(111,487)
(324,594)
6,456
8,055
60
(83,010)
2,571
1,208
3,779		 2019
£000

(83,010)
110,877
(6,456)
(312,088)
312,712
2,026
(22,853)
84,218
1,208

2,571
3,779
2019
£000
338,500
(111,487)
(324,594)
6,456
8,055
60
(83,010)
2,571
1,208
3,779
(1,120)
3,779
2,659
2020
£000
73,827
(93,766)
(76,109)
4,468
14,685
30
(76,865) (83,010)
3,779
(1,120)
2,659		 2,571
1,208
3,779

16

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS

1 Accounting policies

Basis of preparation of the financial statements

These financial statements have been prepared in accordance with applicable accounting standards in the United Kingdom (FRS102), the Charities SORP (FRS 102) second edition October 2019 and the Charities Act 2011. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at fair value. The Trust’s functional currency and presentational currency is Pounds Sterling (GBP)

The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern due to the liquid nature of the Trust’s investments.

The financial statements have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following the Charities SORP (FRS 102) second edition October 2019 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The trust constitutes a public benefit entity as defined by FRS102.

Significant judgements and estimates

In preparing the financial statements, accounting estimates and judgements are made. The most significant area of judgement is that the liability from multi-year grant commitments is recognised in full at the point of the grant award as there is not deemed to be performance related conditions that prevent recognition of the expenditure.

All Leverhulme Research centres are subject to a 5 year review. The Trustees do not deem this to be a performance related condition that prevents recognition of the expenditure.

The only estimate that has a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year is related to the valuation of the Trust's investments and, in particular, those classified as Level 2 and Level 3 of the fair value hierarchy. Explanation of the method for determining the valuation of investments is included within the investments accounting policy below and within note 5.

The Trust also estimates the allocation of support costs between expenditure on charitable activities and raising funds and estimates the allocation to each grant activity. This estimate is apportioned on the basis of staff time spent on activities in line with the methods prescribed by the Charities SORP. Details of this allocation are included within note 3.

A summary of the principal accounting policies, which have been applied consistently is set out below.

Fund structure

The funds of the charity are unrestricted and are fully expendable at the discretion of the Trustees.

Incoming resources

Incoming resources are recognised when the Trust has entitlement to the resources, it is probable that the resources will be received and the monetary value of the incoming resources can be measured with sufficient reliability.

Investment income represents dividends and interest on fixed investments and deposits, with any associated tax credits or recoverable taxation, which are included on an accruals basis. Dividends are recognised when declared. Where investment income from pooled investment vehicles is re-invested it is accounted for in the unit price.

17

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

1 Accounting policies (continued)

Resources expended

Liabilities are recognised as resources expended when there is a legal or constructive obligation committing the Trust to the expenditure. At the end of a grant, a liability is still recognised until after a final report is received from the grant recipient and is accepted by the Trust. At which point the balance can be written off and credited to grant funding activity within charitable expenditure disclosed in note 3b.

Raising funds

The cost of raising funds consists of investment management fees and investment governance costs. The apportionment of support costs to investment governance costs is shown in note 3.

Charitable activities

The cost of charitable activities consists of grants awarded, governance costs and an apportionment of support costs as shown in note 3.

Financial Liabilities

Grants, both single and multi-year, are recognised in the financial statements as liabilities after they have been approved by the Trustees, the recipients have been notified and there are no further terms and conditions to be fulfilled which are within the control of the Trust. In these circumstances there is a valid expectation by the recipients that they will receive the grant. Grants greater than one year are not amortised due to the impact not being material.

Grants amounts that have been approved by the Trustees for specific purposes in future years, but have not been allocated to, or agreed by, specific recipients at year-end are disclosed as commitments.

Tangible fixed assets

Tangible fixed assets acquired with a cost of more than £25,000 are capitalised. Otherwise they are expensed in the year of acquisition.

Depreciation is applied to fixed assets on a straight-line basis over their expected useful life, less estimated residual value, at the following annual rates:

Furniture, fittings and equipment 10% Computers and software 33 ⅓%

Depreciation is provided to recognise the useful economic life of the assets. Tangible fixed assets are stated at historic purchase cost less accumulated depreciation.

Investments

The Trust has elected to apply the provisions of Section 11 and Section 12 of UK GAAP FRS102 in full. All investments are at fair value through profit or loss upon initial recognition and are measured at subsequent reporting dates at fair value.

The fair value of listed security investments is bid value. The fair value of unlisted investments uses valuation techniques determined by the Trustees on the advice of the Investment Advisor Partners Capital. These valuations are on the basis of the latest information available from the relevant fund manager.

Purchases and sales of investments are accounted for on a trade date basis.

Gains and losses arising from changes in the unrealised fair value and on the sale of investments are shown as Net gains/(losses) on investments within the Statement of Financial Activities and shown within the unrestricted funds of the Trust on the Balance Sheet.

Forward Contracts

Forward contracts are recognised at fair value, being marked to market value at the closing foreign exchange rates on 31 December 2019.Cash and bank balances

18

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

1 Accounting policies (continued)

Cash and bank balances

Cash and bank balances represent money on deposit and on current accounts with banks with a maturity of less than three months. Cash held by investment managers is included within investments.

Pension scheme

All staff are employed jointly by Unilever UKCR Ltd and the Trust. The Trust staff participate in the Unilever UKCR Ltd defined benefit pension scheme. Although the pension scheme is a defined benefit scheme, as this is a multi-employer scheme, information is not available to ascertain the Trust’s share of the underlying assets and liabilities of the scheme in order make the appropriate disclosures as required by section 28 of FRS 102. It is therefore accounted for as if this were a defined contribution scheme.

Taxation

The Leverhulme Trust carries on activities which are exempt from corporation tax and income tax. Irrecoverable Value Added Tax is included with the expenditure to which it relates.

Operating lease

Operating lease annual rentals are charged to the Statement of Financial Activities on a straight-line basis over the term of the lease.

2 Investment income

Dividends from Unilever plc
Managed investments
Fixed interest
Global Equities
Hedged Equities
Property
Cash
Bank interest
Total investment income		 2020
£000
68,191
2,541
20,895
756
757
625
93,765
1
93,766		 2019
£000
66,478
5,001
38,484
-
1,030
489
111,482
5
111,487

Dividend income from Unilever plc is in respect of ordinary equity shares.

3a (i) Allocation of governance and support costs

The breakdown of support costs and how these were allocated between governance and other support costs is shown in the table below:

Cost Type
Staff costs
Accommodation
Other		 2020
Total
allocated
£000
2020
Invest-
ment
Costs
£000
2020
Gover-
nance
costs
£000
2020
Support
Costs
£000
2019
Total
allocated
£000
2019
Invest-
ment
Costs
£000
2019
Gover-
nance
costs
£000
2019
Support
Costs
£000
1,412
53
44
1,315
1,426
54
44
1,328
378
14
12
352
373
14
12
347
532
20
16
496
567
21
18
528
2,322
87
72
2,163
2,366
89
74
2,203

Support costs are apportioned on the basis of staff time spent on activities. The allocation to Investment Costs are included within Investment management costs on the SOFA.

19

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

3a (ii) Governance costs: 2020 2019
£000 £000
Audit & Legal 108 94
Secretarial 8 15
Trustee expenses 1 1
Support costs (based on 72 74
apportioned staff time per note
3a (i))
Total Governance Costs 189 184
a (iii) Total Governance and Support Costs
2020 2019
£000 £000
Support Costs (note 3a (i)) 2,163 2,203
Governance Costs (note 3a (ii)) 189 184
2,352 2,387

3a (iii) Total Governance and Support Costs

3b Analysis of charitable expenditure

Grant funding during the year plus apportioned support costs are as follows:

Activity
Research Awards Advisory Committee
Responsive Mode Projects
Doctoral Scholarship
Research Leadership
Major Research Fellowships
Academy Fellowships/ Scholarships
Visiting Professors
Prizes
Grants awarded
Adjustment on prior year grant awards
Total Costs		 Grant
funded
activity
Support and
governance
costs
Total
Grant
funded
activity
Support and
governance
costs
Total
2020
£000
2020
£000
2020
£000
2019
£000
2019
£000
2019
£000
22,431
480
22,911
21,308
486
21,794
43,966
1,074
45,040
43,241
1,090
44,331
13,500
209
13,709
-
-
-
-
-
-
14,285
212
14,497
4,787
251
5,038
4,659
255
4,914
2,217
7
2,224
4,948
8
4,956
1,893
172
2,065
2,089
175
2,264
3,000
159
3,159
3,000
161
3,161
91,794
2,352
94,146
93,530
2,387
95,917
(2,562)
-
(2,562)
(4,792)
-
(4,792)
89,232
2,352
91,584
88,738
2,387
91,125

Support and governance costs are apportioned on the basis of staff time spent on activities. The adjustments on prior year grant awards include the write back of amounts on closed grants.

20

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

3c Staff

Wages and salaries
Social Security costs
Pension costs
Contractors
Other		 2020
£000
935
130
242
57
48
1,412		 2019
£000
902
134
206
112
72
1,426

The monthly average number of full time equivalent staff during the year was 15 (2019:15). All staff are involved in grant making and are employed jointly by Unilever UKCR Ltd and the Trust with their cost recharged to the Trust. At 31 December 2020 an amount of £20,956 (2019: £20,956) relating to pension contributions remained outstanding. The number of staff who received salaries and other emoluments (excluding pension contributions) over £60,000 was:

2020 2019
Number Number
£80,001 - £90,000 - 1
£100,001 - £110,000 1 -
£140,001 - £150,000 1 1
£290,001 - £300,000 1 1

Unilever UKCR Ltd operates a defined benefit pension scheme to which £54,452 (2019: £53,394) was contributed by the Trust in relation to higher paid employees. Although the pension scheme is a defined benefit scheme, as this is a multi-employer scheme, information is not available to ascertain the Trust’s share of the underlying assets and liabilities of the scheme in order make the appropriate disclosures as required by section 28 of FRS 102. It is therefore accounted for as if this were a defined contribution scheme.

The scheme reported an estimated funding level at March 2020 of 96%. The pension scheme is a last man standing scheme. There is no agreement in place for the Trust to contribute to the funding of the scheme’s deficit reduction plan.

The Trust consider the Board of Trustees, the Director, Director of Finance and Assistant Director of the Trust as comprising the key management personnel of the charity. The total employment benefits including employer pension contributions of the key management personnel was £603,233 (2019: £583,832).

The Director is the highest paid member of staff.

3d Trustee costs

Trustees did not receive any remuneration during the year (2019: nil). Three Trustees (2019: two) received travelling and subsistence expenses of £858 (2019: £828).

3e Net incoming/(outgoing) resources after charging

e Net incoming/(outgoing) resources after charging
2020 2019
£ £
Auditors Remuneration (excluding non recoverable VAT) 59,615 23,249
Auditors Remuneration – Tax Compliance (excl. non-recoverable VAT) - 700
Depreciation 30,000 60,000
Operating lease rentals 276,000 276,000

21

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

4 Tangible assets

Cost
At 1 January
Disposals
At 31 December
Accumulated depreciation
At 1 January
Charge for year
Disposals
At 31 December
Net book value
At 31 December		 Furniture,
fittings and
equipment
Computers
and
software
Total
Furniture,
fittings and
equipment
Computers
and
software
Total
2020
£000
2020
£000
2020
£000
2019
£000
2019
£000
2019
£000
301
90
391
322
90
412
-
(90)
(90)
(21)
-
(21)
301
-
301
301
90
391
211
90
301
202
60
262
30
-
30
30
30
60
-
(90)
(90)
(21)
-
(21)
241
-
241
211
90
301
60
-
60
90
-
90

5 Investments

a) Investment in shares in Unilever plc

2020 Movement in 2019
fair value
£000 £000 £000
Historical cost 9,308 - 9,308
Fair value 2,061,217 19,476 2,041,741

The fair value of investments held in Unilever plc shares reflects the market year end share prices. These shares are Level 1 in the fair value hierarchy.

For cost purposes the shares are valued at the market price of £9,308,018 on Budget day 1965. There were no purchases or disposals of shares in the year (2019: none).

b) Other Investments

Other investments represent amounts advised and managed by Partners Capital LLP under a Discretionary Management Agreement signed in 2019 and primarily comprise pooled investment vehicles. The historical cost at 31 December 2020 was £1,632.5million (2019: £1,438.6 million).

22

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

b) Other Investments (continued)

Investments
Fixed Income
Inflation Linked Bonds
Credit
Global Equities
Hedged Equities
Property
Commodities
Private Debt
Private Equity
Cash
Derivatives
Forward Foreign Currency Contract
Investments
Movement in
Other Investments
As at 1 January
Purchases
Disposals
Net Investment Gains
Increase to cash
As at 31 December		 2020
2019
Fair value
Fair value
£000
£000
24,464
187,810
71,658
-
54,381
-
1,111,938
1,393,967
214,219
-
49,787
30,667
26,755
-
103,501
-
7,887
-
111,673
96,194
-
654
1,780,175
1,705,380
2020
2019
£000
£000
1,705,380
1,474,156
2,252,017
312,088
(2,248,508)
56,633
(312,714)
208,997
14,653
22,853
1,780,175
1,705,380

In 2020, disposals and purchases represents £1,176.3m of sales in relation to the portfolio held with existing investment managers with the proceeds subsequently re-invested into the Partners Capital portfolio in line with the revised investment strategy. The remaining amount represents purchases and sales that have occurred since the transition to the Partners Capital portfolio. The balance shown for Cash in the table above includes £120.6m of pending sales and excludes £46.0m of pending purchases as at 31 December 2020. The balance shown for Global Equities in the table above includes £46.0m of pending purchases and excludes £120.6m of pending sales as at 31 December 2020.

Included within Net investment gains is £12.3m of realised foreign exchange gains (2019: £2.6m losses) in relation to purchases and sales during the year.

There are no equity holdings in one company greater than 5% of the total of investments in Other Investments. The Trust has entered into commitments to invest in private equity funds. At the balance sheet date outstanding commitments totalled £130.5m (2019: NIL).

c) Recognised fair value measurements

The following table categorises the fair values of the Trust’s investment assets based on the inputs to the fair value. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:

23

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

c) Recognised fair value measurements (continued)

Level 1 – valued using quoted prices in active markets for identical assets.

Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.

Level 3 – valued by reference to valuation techniques (to estimate what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations) using inputs that are not based on observable market data.

2020
Investments
Fixed Income
Inflation Linked Bonds
Credit
Global Equities
Hedged Equities
Property
Commodities
Private Debt
Private Equity
Cash
Investments
2019
Investments
Fixed Income
Global Equities
Property
Cash
Forward Foreign Currency Contract		 Level 1
Level 2
Level 3
Total 2020
£000
£000
£000
£000
24,460
4
-
24,464
71,658
-
-
71,658
26,097
28,284
-
54,381
382,229
729,709
-
1,111,938
-
214,219
-
214,219
-
30,667
49,787
-
-
-
49,787
30,667
-
103,501
-
103,501
-
-
7,887
7,887
111,673
-
-
111,673
646,784
1,125,504
7,887
1,780,175
Level 1
Level 2
Level 3
Total 2019
£000
£000
£000
£000
187,810
-
-
187,810
1,393,967
-
-
1,393,967
-
26,755
-
26,755
96,194
-
-
96,194
654
-
-
654
1,678,625
26,755
-
1,705,380

d) Financial Risk Management

Credit Risk The carrying amounts stated above represents the Trust’s maximum exposure to credit risk therefore further disclosure is not required.

Market Risk The Trust’s exposure to movements in equity prices arising from its investment portfolio is mitigated by diversification. The Trust invests in multiple asset classes with a variety of underlying investment managers.

The Trust monitors its equity risk using a risk framework based on beta to equity markets. Exposures to core market risks are converted into one single “equity equivalent” portfolio risk metric. The equity beta at 31 December 2020 was 0.75 (2019: 0.86) compared with a long term target of 0.75 (2019: 0.75). Therefore, for a 1% reduction in equity prices the value of the Trust’s investments would be expected to fall by 0.75% and every 1% reduction in global equity prices would be expected to lead to a reduction of £27.9m (2019 : £32.2m) in Charity Funds.

The Trust's objectives, policies and processes for managing the risk arising from financial instruments is further explained in the Trustees' Annual Report.

24

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

d) Financial Risk Management (continued)

Currency Risk The Trust takes a long term view of the currency risk inherent within a global investment portfolio.

The largest non-sterling exposure is to the US Dollar and a 1% weakening of the Dollar against Sterling would be expected to lead to a direct reduction of £6.5m in Charity Funds although an indirect impact of currency rate movements on the value of non US Dollar denominated investments would also be expected.

At 31 December 2020, the Trust had no open forward exchange contracts (2019: £112,420,906).

6 Debtors

Debtors comprise accrued investment income of £1,041,644 (2019: £5,648,084) and prepaid administrative expenses of £96,500 (2019: £98,835).

7 Creditors

7 Creditors
Grants payable
Accrued administrative expenses and Investment management fees
Total
Amounts falling due within one year
Amounts falling due after more than one year
 2020
£000
253,729
1,207
254,936
148,910
106,026
 2019
£000
238,592
1,659
240,251
128,294
111,957

8 Lease commitments

At 31 December 2020 the Trust had annual commitments under an operating lease for its office which was renewed in 2012 for a term ending 24 July 2022. Currently it amounts to £230,000 plus Value Added Tax per annum. The minimum lease payments remaining equates to £358,000 (2019: £588,000).

9 Related parties

The Report of the Trustees explains the relationship between the Trustees of this Trust and those of the Leverhulme Trade Charities Trust.

In 2020, the Trust received dividend income of £68,191,007 from Unilever plc (2019: £66,478,019). Unilever plc is a company with a director in common with the Trust's Trustees.

The Trust's investments include £2,061,217,513 of ordinary shares held in Unilever plc (2019: £2,041,741,073).

Staff are jointly employed by Unilever UKCR Ltd and the Trust with their cost recharged to the Trust. Unilever UKCR Ltd is a subsidiary of Unilever plc.

Certain Trustees are also Trustees or Directors of other organisations which are recipients of grants from the Trust. In these instances, the Trustees have declared their interest at the time of the grant approval. Professor Gull is a professor of Molecular Microbiology at the Sir William Dunn School of Pathology in Oxford and Mr Polman is Chair of the Said Business School, Oxford. One award was made to a grant recipient at the Sir William Dunn School of Pathology being a Philip Leverhulme Prize totalling £100,000 in the year (2019: NIL). The total amount outstanding as at 31 December 2020 was £100,000 (2019: NIL). Professor Gull had no influence over this transaction. There were no transactions with the Said Business School, Oxford during the year (2019: NIL).

25

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

9 Related parties (continued)

The Leverhulme Trade Charities Trust does not have any employees but a charge of £80,000 (2019: £78,000) is made by the Leverhulme Trust, whose Director of Finance, in his capacity as Secretary, is responsible for the day to day administration of the Leverhulme Trade Charities Trust. This charge included an appropriate proportion of overheads incurred by the Leverhulme Trust on behalf of the Leverhulme Trade Charities Trust.

10 Commitments

At 31 December 2020 Trustees had approved the spending levels for various schemes for 2021 amounting to £69.8m (2020: £47.0m). Of this amount £17.7m relates to the provisional award in 2020 of 4 Leverhulme International Professorships. Individual grants will be awarded under the other schemes in 2021.

26

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

NOTES TO THE FINANCIAL STATEMENTS (continued)
11 2020 Grants awarded by institution
Institution
University of Oxford
University of Edinburgh
University of Birmingham
University of Warwick
University of Cambridge
University College London
University of Sheffield
University of Glasgow
King's College London
University of Southampton
University of Manchester
University of Nottingham
Queen Mary, University of London
University of Bristol
University of Leeds
University of East Anglia
Durham University
University of Kent
University of Exeter
Royal Society/British Academy/Royal Academy of
Engineering
Queen's University Belfast
University of Sussex
Manchester Metropolitan University
University of Hull
University of Bath
University of Liverpool
University of Strathclyde
Imperial College London
Northumbria University
Cardiff University
Heriot-Watt University
University of St Andrews
Newcastle University
University of York
University of Leicester
Royal Holloway, University of London
Lancaster University
Loughborough University
London School of Economics and Political Science
Bangor University
University of Aberdeen
University of Surrey
University of Plymouth
47 institutions below £500,000
Individuals below £500,000
2020 Total grants awarded		 Number
of
awards
Amount
£000
47
6,099
37
4,628
31
4,176
29
4,167
35
4,130
36
3,762
26
3,314
20
3,032
14
2,888
7
2,561
19
2,470
14
2,427
15
2,379
18
2,261
7
2,231
8
2,225
12
1,971
13
1,924
11
1,844
5
1,835
4
1,835
6
1,775
4
1,543
3
1,536
6
1,504
13
1,290
6
1,284
10
1,228
7
1,183
10
1,128
7
1,117
13
1,052
7
1,003
12
963
8
919
8
916
7
771
3
614
6
596
4
589
4
567
2
510
3
505
557
84,752
82
6,546
11
496
650
91,794

27

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

11 2019 Grants awarded by institution

019 Grants awarded by institution
Institution
University of Cambridge
University College London
Durham University
University of Manchester
Royal Society/British Academy/Royal Academy of
Engineering APEX Awards
University of Edinburgh
University of Oxford
University of Warwick
University of Birmingham
University of Leeds
University of Bristol
University of Kent
University of Glasgow
Imperial College London
King's College London
University of Nottingham
University of Reading
Birkbeck, University of London
University of Strathclyde
University of York
University of St Andrews
Queen Mary, University of London
Queen's University Belfast
University of Sheffield
University of Essex
University of Southampton
Cardiff University
University of East Anglia
SOAS, University of London
Natural History Museum
University of Sussex
Lancaster University
University of the Highlands and Islands
Newcastle University
University of Liverpool
University of Bath
University of Stirling
University of Surrey
University of Exeter
University of Aberdeen
University of Plymouth
Royal Holloway, University of London
Oxford Brookes University
63 institutions below £500,000
Individuals below £500,000
2019 Total grants awarded		 Number
of
awards
Amount
£000
49
4,808
30
4,329
19
4,200
19
3,801
1
3,750
32
3,627
36
3,561
26
3,203
15
3,024
13
2,830
17
2,708
13
2,393
14
2,388
17
2,370
24
2,268
13
2,151
10
2,079
14
1,983
9
1,956
12
1,945
13
1,912
17
1,898
8
1,857
17
1,800
5
1,353
7
1,323
9
1,299
12
1,137
3
1,065
3
997
5
992
7
987
1
986
10
933
8
875
5
872
4
824
5
775
8
765
5
600
2
586
5
545
2
513
544
84,268
112
9,178
3
84
659
93,530

28

The Leverhulme Trust Registered Charity Number 1159154

NOTES TO THE FINANCIAL STATEMENTS (continued)

12 Registered Office

The registered office for The Leverhulme Trust is 1 Pemberton Row, London, EC4A 3BG.

29