7
Trustees’ Annual Report and Financial Statements 2021
Registered Charity Number: 1159171
Leverhulme Trade Charities Trust Registered Charity Number 1159171
TRUSTEES’ ANNUAL REPORT – 2021
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 A Jope (from 4 January 2021) | |
| Sir Dave Lewis | |
| Mr R H P Markham CMG | |
| Ms M McEwan | |
| Ms L Nair | |
| Mr C Saul | |
| Mr K Weed CBE (from 6 October 2021) | |
| Mr S G Williams | |
| Director | 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 | PricewaterhouseCoopers LLP |
| Auditors | Chartered Accountants and Statutory Auditors |
| 1 Embankment Place, London, WC2N 6RH | |
| Investment | Partners Capital LLP |
| Advisor | 5 Young Street, London W8 5EH |
| Office Address | 1 Pemberton Row, London EC4A 3BG |
| Tel. 020 7042 9888 | |
| Website | www.leverhulme-trade.org.uk |
| Registered | |
| Charity Number | 1159171 |
1
Leverhulme Trade Charities Trust Registered Charity Number 1159171
TRUSTEES’ ANNUAL REPORT – 2021
The Trustees present their Annual Report and the audited financial statements for the year ended 31 December 2021.
History
The Leverhulme Trade Charities Trust is a Registered Charity, Number 1159171 and was constituted as a Charitable Incorporated Organisation in the United Kingdom on 12 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 the income beneficiaries, to 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 one with Unilever plc.
In November 1983, the High Court approved a declaration of Charitable Trust from the Will which gave its two charitable objects each an independent existence including each its own Unilever plc shareholding. The eligible trade charities became the concern of the Leverhulme Trade Charities Trust (“the Trust”). The Leverhulme 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 1159171. The objects of the CIO are substantially the same as the previous Trust and the Trust Board members of the previous Trust were the founding Trustees of the CIO.
Objectives and Activities for the Public Benefit
The instructions given for the establishment of the Trust in the Will of the Founder in defining the purpose are succinct and generous in allowing for changes to fit the times. The objective is to provide benefits for charities connected with Commercial Travellers, Grocers or Chemists as the Trustees in their discretion direct. 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 awarding grants for the year.
The aims of the charity are to fulfil the Founder’s instructions. In order to carry out these aims Trustees have set in place a range of activities seeking to fulfil the Founder’s intent. The Will itself places no restriction on the disciplines that are to form the content of the benefits.
The Trustees have set in place a strategy for achieving the aims and the objectives of the Trust which consists of making grants that include responding to applications from institutions having connections with the three categories of beneficiaries and making undergraduate and postgraduate bursaries to individuals connected with the three categories.
The grant making policy of the Trust provides assistance to beneficiaries who can show financial need and qualify for consideration by being connected with Commercial Travellers, Grocers or Chemists, their spouses, widows/widowers and children.
Applications for bursaries need to be made using the Trust’s online application system which can be accessed via the Trust’s website www.leverhulme-trade.org.uk. Applications from eligible institutions on behalf of qualifying individuals need to be in writing addressed to the Secretary of the Trust. Details of the main activities can be seen in the next section Achievements and Performance.
Where application numbers exceed the amounts allocated for bursaries, awards are reduced or declined based on the financial need of the applicant.
2
Leverhulme Trade Charities Trust Registered Charity Number 1159171
TRUSTEES’ ANNUAL REPORT – 2021 (continued)
Achievements and Performance
During the year, no (2020:0) applications for renewal of normal grants were received amounting to £nil (2020: £nil). The Trust Board agreed to repurpose the remaining two years of the award previously offered to support the establishment of a GroceryAid trauma counselling service and instead to make a £280,000 School Essentials Grant in 2021,this will provide funding for equipment for children starting a school year.
Additionally, the Trust Board agreed to continue the undergraduate and postgraduate bursary schemes open to all UK universities and approved undergraduate funding for 2021 of £2,044,000 (2020: £1,076,000). Due to delays caused by the impact of COVID-19 on the higher education sector at the end of 2020 and the start of 2021, a number of awards made in 2021 related to applications received in 2020, leading to the significant increase in funding for undergraduate bursaries in 2021. During 2021, 307 applications for undergraduate bursaries were received (2020: 460) and at the end of the year 210 were approved as grants (2020: 320). The Trust Board agreed to funding postgraduate bursaries of £370,000 for 2021 (2020: £411,000). During the year, 103 (2020: 87) applications for postgraduate bursaries were received and 68 (2020: 70) were approved as grants.
The value of grants made can be seen in the following table, grants to institutions made in 2019 were all for the three year period to 2021:
| Period of grant Grants to Institutions for Benevolence - GroceryAid 3 years - The Salespeople’s Charity 3 years - Royal Pinner School Foundation 3 years The value of bursaries made can be seen in the following table: Undergraduate bursaries for periods of between one and six years Postgraduate bursaries for periods of between one and four years |
2021 £000 280 - - 280 2021 £000 2,044 370 2,414 |
2020 £000 21 - - |
|---|---|---|
| 21 | ||
| 2020 £000 1,076 411 |
||
| 1,487 |
The above tables indicate the performance achieved against the objectives of making grants to various institutions and bursaries to undergraduate and postgraduate students. The Trust considers that the current grant levels are in line with the aims and objectives set by the charity.
Financial Review
The income of the Trust amounted to £3.0m in 2021 (2020: £3.3m). The Trust has not carried out any fundraising activities during the year therefore no fundraising disclosures are made.
A summary of funding made to beneficiaries during the year can be seen in the previous section - Achievements and Performance.
3
Leverhulme Trade Charities Trust Registered Charity Number 1159171
TRUSTEES’ ANNUAL REPORT – 2021 (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 Net Assets at the end of 2021 was £95.2m (2020: £102.4m).
Investment policy and performance
The Trust’s investment advisor, Partners Capital, was appointed in 2020 and an updated investment policy statement and strategic asset allocation was agreed by the Trust’s Investment Committee and the Trustees. The assets were transitioned to the Partners Capital Master Portfolio in accordance with the agreed strategic asset allocation at the start of 2021.
The Trust now targets a minimum total return over time net of fees, currently 5.8%, to protect the portfolio’s real value (with inflation measured by UK CPI) after funding the annual withdrawal of 3%. In 2021, the first year of the new strategy, the Trust’s investments (net of fees) returned 9.9%.
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 predominantly driven by economic return.
The Trustees annually review the Trust’s shareholding in Unilever plc.
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.
COVID-19
The Trustees are pleased to report that the operations and finances of the Trust continue to be materially unaffected by the COVID-19 virus. 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 awarding of bursaries for 2020 was delayed slightly due to disruption caused by the pandemic within the University sector leading to a number of awards relating to 2020 applications being made later than usual and falling into 2021.
4
Leverhulme Trade Charities Trust Registered Charity Number 1159171
TRUSTEES’ ANNUAL REPORT – 2021 (continued)
Plans for Future Periods
The Trust’s Investment Policy allows for annual withdrawals to be made from the Investment Portfolio of 3% of the five year rolling average value each year. The Trustees aim to continue to maintain real spending levels over a three year cycle and support a wide range of charitable activity consistent with their objectives and their grant making policy. They will continue to review the level of funding for the Undergraduate and Postgraduate Bursary schemes and increases to requests for grants from institutions.
Structure, Governance and Management
The Trustees who served during the year and up to the date of the approval of the Annual Report, are listed on page 1.
The Trustees, who receive no remuneration for their services, meet annually. Details of Trustee expenses and any related party transactions are disclosed in the notes to the financial statements (notes 3d and 6).
During the year, the Trust Board agreed to the formation of the Trade Charities Advisory Committee. This Committee will decide on the allocation of the funds delegated to it to be allocated in accordance with the objects of the Trust and to decide which applications for grants are to be accepted. This Committee will be formed of three Trustees, Mr Lewis (Chair), Mr Baillie and Professor Gull, and three external members, Ms Nicola Adams, Dr Shenila Rawal, and Mr Charles Wilson.
Trustees’ induction and ongoing training consists of briefings from other Trustees and the Director of The Leverhulme 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, the Director and Director of Finance of The Leverhulme 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. No staff are employed by the Trust. The Director of Finance of The Leverhulme Trust acts as Secretary for the Trust and is responsible to the Trustees for the day to day administration of the Trust.
The Trust Board has a second committee, the Investment Committee. The membership of the Investment Committee consists of four Trustee Board members (Mr Markham (Chairman), Mr FitzGerald, Professor Gull and Mr Saul), the Director of Finance of the Trust and three external investment specialists (Dame Elizabeth Corley, Ms Angela Docherty and Mr Quintin Price). Its remit is to make recommendations to the Trustees regarding the non-Unilever investments of the Trust.
The Trustees have assessed the major risks to which the charity is exposed. The Trustees consider that potential variability of investment returns constitute the Trust’s major risk. Action to mitigate the impact of this includes regular and ongoing review and discussion regarding the investment portfolio.
5
Leverhulme Trade Charities Trust Registered Charity Number 1159171
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:
-
select suitable accounting policies and then apply them consistently;
-
observe the methods and principles in the Charities SORP;
-
make judgments and estimates that are reasonable and prudent;
-
state whether applicable accounting standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
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 Charities (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.
The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website. www.leverhulme-trade.org.uk 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 on pages 2 to 6 was approved by the Trustees and signed on its behalf by
Niall FitzGerald ( Chairman) 7 September 2022
1 Pemberton Row London EC4A 3BG
6
Leverhulme Trade Charities Trust Registered Charity Number 1159171
Independent auditors’ report to the trustees of Leverhulme Trade Charities Trust
Report on the audit of the financial statements
Opinion
In our opinion, Leverhulme Trade Charities Trust’s financial statements:
-
give a true and fair view of the state of the charity’s affairs as at 31 December 2021 and of its incoming resources and application of resources and cash flows for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
-
have been prepared in accordance with the requirements of the Charities Act 2011 and Regulation 8 of The Charities (Accounts and Reports) Regulations 2008.
We have audited the financial statements, included within the Trustees’ Annual Report and Financial Statements, which comprise: the balance sheet as at 31 December 2021; 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.
7
Leverhulme Trade Charities Trust Registered Charity Number 1159171
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 by the engagement team included:
-
Testing journal entries where we identified particular fraud risk criteria.
-
Obtaining independent confirmations of material investment valuations and cash balances at the year end.
-
Testing estimates and judgements made in the preparation of the financial statements for indicators of bias.
-
Reviewing meeting minutes, any correspondence with the Charity Commission for England and Wales, and significant contracts and agreements.
-
Holding discussions with the trustees to identify significant or unusual transactions and known or suspected instances of fraud or non-compliance with applicable laws and regulations.
-
Assessing financial statement disclosures, and agreeing these to supporting evidence, for compliance with the Charities Act 2011 and regulations made under them.
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.
8
Leverhulme Trade Charities Trust Registered Charity Number 1159171
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 not obtained all the information and explanations we require for our audit; or
-
sufficient accounting records have not been kept by the charity; or
-
the financial statements are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London
Date: 7 September 2022
9
Leverhulme Trade Charities Trust Registered Charity Number 1159171
STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2021
| 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 income before net gains on investments Net (losses)/gains on investments 4 Net (expenditure)/income and net movement in funds Reconciliation of funds: Total funds brought forward Total funds carried forward |
2021 £000 3,008 3,008 31 2,597 2,628 380 (7,591) (7,211) 102,433 95,222 |
2020 £000 3,274 |
|---|---|---|
| 3,274 | ||
| 53 1,643 |
||
| 1,696 | ||
| 1,578 815 |
||
| 2,393 100,040 |
||
| 102,433 |
The notes on pages 13 to 19 form part of these financial statements
10
Leverhulme Trade Charities Trust Registered Charity Number 1159171
BALANCE SHEET AS AT 31 DECEMBER 2021
| Note Fixed assets: Investments in shares in Unilever plc 4 Other investments 4 Total fixed assets Current Assets: Cash at bank and in hand Total current assets Liabilities: Creditors: amounts falling due within one year 5 Net current liabilities Total assets less current liabilities Creditors: amount falling due after one year 5 Total net assets The funds of the charity Unrestricted funds Total charity funds |
2021 £000 80,314 16,267 96,581 1,019 1,019 (1,511) (492) 96,089 (867) 95,222 95,222 95,222 |
2021 £000 80,314 16,267 96,581 1,019 1,019 (1,511) (492) 96,089 (867) 95,222 95,222 95,222 |
2020 £000 89,403 14,800 104,203 1,541 1,541 (2,725) (1,184) 103,019 (586) 102,433 102,433 102,433 |
2020 £000 89,403 14,800 104,203 1,541 1,541 (2,725) (1,184) 103,019 (586) 102,433 102,433 102,433 |
||
|---|---|---|---|---|---|---|
| 1,019 | 1,541 | |||||
| (492) 96,089 (867) |
(1,184) 103,019 (586) |
|||||
| 95,222 | 102,433 | |||||
| 95,222 95,222 |
102,433 102,433 |
The notes on pages 13 to 19 form part of these financial statements.
The financial statements on pages 10 to 19 were approved by the Trustees and signed on their behalf by:
Niall FitzGerald Trustee
7 September 2022
11
Leverhulme Trade Charities Trust Registered Charity Number 1159171
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021
| 2021 £000 Cash flows from operating activities: Net cash used in operating activities (a) Cash flows from investing activities: Dividends and interest Investment management costs 3,008 - Purchase of investments - Proceeds from sale of investments - Net cash provided by investing activities Change in cash and cash equivalents in the year Cash and cash equivalents brought forward Cash and cash equivalents carried forward a) Reconciliation of net (expenditure)/income to net cash flow from operating activities Net (expenditure)/income (as per the statement of financial activities) Adjustments for: Dividends and interest Net losses/(gains) on investments Investment management costs Decrease in creditors Net cash used in operating activities b) Analysis of changes in net cash/(debt) Net cash at 1 January Net cash (outflow)/inflow Net cash at 31 December |
2021 £000 Cash flows from operating activities: Net cash used in operating activities (a) Cash flows from investing activities: Dividends and interest Investment management costs 3,008 - Purchase of investments - Proceeds from sale of investments - Net cash provided by investing activities Change in cash and cash equivalents in the year Cash and cash equivalents brought forward Cash and cash equivalents carried forward a) Reconciliation of net (expenditure)/income to net cash flow from operating activities Net (expenditure)/income (as per the statement of financial activities) Adjustments for: Dividends and interest Net losses/(gains) on investments Investment management costs Decrease in creditors Net cash used in operating activities b) Analysis of changes in net cash/(debt) Net cash at 1 January Net cash (outflow)/inflow Net cash at 31 December |
(3,530) 3,008 |
2020 £000 3,351 (53) (14,800) 14,840 |
2020 £000 3,351 (53) (14,800) 14,840 |
(2,789) 3,338 |
||
|---|---|---|---|---|---|---|---|
| (522) | 549 | ||||||
| 1,541 1,019 2021 £000 (7,211) (3,008) 7,591 31 (933) (3,530) 1,541 (522) 1,019 |
992 1,541 2020 £000 2,393 (3,274) (815) 53 (1,146) (2,789) 992 549 1,541 |
||||||
12
Leverhulme Trade Charities Trust Registered Charity Number 1159171
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.
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.
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 6.
The Trust estimates the allocation of support costs 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.
Income recognition
Income is 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.
13
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
1 Accounting policies (continued)
Expenditure recognition
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 impact not being material.
For grants where funding has been allocated but the value cannot reliably be measured, an estimate of the potential liability is disclosed as a commitment.
Raising funds
The cost of raising funds consists of investment management fees.
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
The Trust holds liabilities which will be settled in future years. An adjustment has not been made to discount future payments as this adjustment is not considered to be material.
Investments
The Trust has elected to apply the provisions of Section 11 and Section 12 of 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.
Cash at bank and in hand
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.
Taxation
The Leverhulme Trade Charities 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
14
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
| 2 Investment income Dividends from Unilever plc (in respect of ordinary equity shares) Managed pooled investments: Equities - Global Fixed interest bonds – Global Bank interest Total investment income |
2021 £000 3,005 3 - 3,008 - 3,008 |
2020 £000 2,958 290 25 |
|---|---|---|
| 3,273 1 |
||
| 3,274 |
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 |
2021 Total allocated £000 2021 Governance costs £000 2021 Support costs £000 2020 Total allocated £000 2020 Governance costs £000 2020 Support costs £000 50 5 45 50 5 45 30 3 27 30 2 28 26 2 24 17 1 16 |
|---|---|
| 106 10 96 97 8 89 |
Support costs are apportioned on the basis of staff time spent on activities.
| 3a (ii) Governance costs: Audit & Legal Support costs (based on apportioned staff time per note 3a (i)) Total Governance Costs |
2021 £000 2020 £000 30 34 10 8 |
|---|---|
| 40 42 |
Audit & legal costs include the external audit fees of £26,028 (including non-recoverable VAT) (2020: £27,720).
3a (iii) Total Governance and Support Costs
| Support Costs (note 3a (i)) Governance Costs (note 3a (ii)) |
2021 £000 2020 £000 96 89 40 42 |
|---|---|
| 136 131 |
15
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
3b Analysis of charitable expenditure
The Trust undertakes its charitable activities through grant making and awarded grants to a number of individuals and institutions in furtherance of its charitable activities.
| Activity Grants to Institutions Undergraduate Bursaries Postgraduate Bursaries Grants awarded Adjustment on prior year grant awards Total costs |
2021 2020 Grant funded activity £000 Support and governance costs £000 Total £000 Grant funded activity £000 Support and governance costs £000 Total £000 280 14 294 21 - 21 2,044 103 2,147 1,076 94 1,170 370 19 389 411 37 448 |
|---|---|
| 2,694 136 2,830 1,508 131 1,639 (233) - (233) 4 - 4 |
|
| 2,461 136 2,597 1,512 131 1,643 |
The adjustments on prior year grant awards represent supplements to grants previously awarded, the write back of amounts on closed grants or grants that have not been and will not be taken up. Total support costs are then apportioned pro rata to the value of each funded activity. Total amount and number of grants to institutions and individuals are shown in the Trustees’ Annual Report.
3c Staff
The Trust has no employees during the year (2020: none) but a charge of £80,000 (2020: £80,000) based on time spent 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 includes an appropriate proportion of overheads incurred by The Leverhulme Trust on behalf of the Leverhulme Trade Charities Trust.
3d Trustee costs
The Trustees did not receive any emoluments or reimbursement of expenses in respect of their services to the Trust (2020: £nil).
4a Investments in shares in Unilever plc
| 2021 | Movement | 2020 | |
|---|---|---|---|
| in fair | |||
| value | |||
| £000 | £000 | £000 | |
| Historic cost | 404 | - | 404 |
| Fair value | 80,314 | (9,089) | 89,403 |
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. There were no purchases/sales during the year (2020: none). For cost purposes, the shares were valued at the market price of £403,724 on Budget day 1965.
16
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
4b Other investments
Other investments relate to the Partners Capital The Master Portfolio (C) Ltd and primarily comprise pooled investment vehicles. This had a subscription date of 1 January 2021 but funds were committed to the subscription before 31 December 2020. This investment is in Level 2 in the fair value hierarchy. The historic cost at 31 December 2021 was £14.8 million (2020: £14.8 million).
| Investments Multi-asset Class Investments Movement in Other Investments As at 1 January Purchases Disposals Net Investment Gains As at 31 December |
2021 2020 Fair value Fair value £000 £000 16,267 14,800 |
|---|---|
| 16,267 14,800 |
|
| 2021 2020 £000 £000 14,800 14,870 - 14,800 - 1,467 (14,840) (30) |
|
| 16,267 14,800 |
An amount of £31,000 in respect of Investment Management fees was paid within the Multiclass Investment pooled fund and is reflected in Net Investment Gains. It did not result in a cash-flow.
There are no equity holdings in one company greater than 5% of the total of investments in Other investments.
4c 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 is exposed to movements in equity prices, the largest risk being to a fall in the Unilever share price, 1% reduction in this price at 31 December 2021 would be expected to lead to a reduction of £894,000 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.
Currency Risk
The Trust takes a long term view of the currency risk inherent within a global investment portfolio.
17
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
5 Creditors
| Grants payable Other creditors Total Amounts falling due within one year Amounts falling due after more than one year Grants payable are analysed as follows: GroceryAid The Salespeople’s Charity The Girls’ Day Schools Trust United Reformed Church Schools Royal Pinner School Foundation Undergraduate/Postgraduate Bursaries Total |
2021 £000 2,352 26 2,378 1,511 867 - - 156 130 - 286 2,066 2,352 |
2020 £000 3,270 41 3,311 2,725 586 483 450 156 140 200 1,429 1,841 3,270 |
|
|---|---|---|---|
.
18
Leverhulme Trade Charities Trust Registered Charity Number 1159171
NOTES TO THE FINANCIAL STATEMENTS (continued)
6 Related parties
The Trustees’ Annual Report explains the relationship between the Trustees of this Trust and those of The Leverhulme Trust.
In 2021, the Trust received dividend income of £3,004,722 from Unilever plc (2020: £2,957,700). Unilever plc is a company with a director in common with the Trust's Trustees.
The Trust's investments include £80,313,888 of ordinary shares held in Unilever plc (2020: £89,402,761).
The Trust does not have any employees but a charge of £80,000 (2020: £80,000) 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.
7 Registered Office
The registered office for the Leverhulme Trade Charities Trust is 1 Pemberton Row, London, EC4A 3BG.
19