2020-12-31-accounts

Company no. 10036700 Charity no. 1165868

The REME Charity Report and Audited Financial Statements 31 December 2020

The REME Charity

Reference and administrative details

For theyear ended 31 December 2020	For theyear ended 31 December 2020
Company number	10036700
Charity number	1165868
Registered office and	The REME Charity
operational address	RHQ REME
	The Prince Philip Barracks
	MoD Lyneham
	Lyneham
	Chippenham
	SN15 4XX
Trustees	Trustees, who are also directors		under company law, who served
	during the year and up to the date		of this report were as follows:
	Maj Gen S M Andrews CBE		Chairman
	Col M J A Bullard MBE
	Col (Retd) R Fram MC
	Mr A P Graham
	Capt PCD Hembery
	Col C P Phillips CBE
	Ms C C Robinson
	Col A J Rogers ADC
	Col D G Scott
	Col M A Simpson QVRM TD VR
Corps Secretary and Chief	Lt Col (Retd) M J Tizard
Executive Officer
Treasurer	Mrs Claire Barrett	(resigned 3 March 2021)
	Mr Steven Butcher	(appointed 1 February 2021)
Bankers	Holt's Farnborough Branch
	Royal Bank of Scotland
	Lawrie House
	Victoria Road
	Farnborough
	GU14 7NR
Solicitors	Wilsons Solicitors LLP
	Alexandra House
	St Johns Street
	Salisbury
	Wilts
	SP1 2SB

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The REME Charity

Reference and administrative details

For the year ended 31 December 2020

Investment advisor and Sarasin and Partners LLP BlackRock (for the AFCIF holding) nominee company Juxton House 33 King William Street 100 St Paul’s Churchyard London London EC4R 9AS EC4M 8BU Auditors Godfrey Wilson Limited Chartered accountants and statutory auditors 5th Floor Mariner House 62 Prince Street Bristol BS1 4QD

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

The trustees present their report along with the financial statements of the charity for the year ended 31 December 2020. The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the charity’s Articles of Association, the Charities Act 2016, the Companies Act 2006, the Charities (Accounts and Reports) Regulations, and the Charities Statement of Recommended Practice (FRS102) effective 1 January 2019.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The charity is governed by the Articles of Association of The REME Charity dated 2 March 2016 and the 2019/20 REME Charity Governance Manual.

The Corps of Royal Electrical and Mechanical Engineers (REME) has been supported by a charity since 1945. The REME inaugural charities were the REME Benevolent Fund and REME Scholarship funds but, over the years, these charities have been linked, closed and joined by others. Today, The REME Charity is the headline charity which has the REME Central Charitable Trust (296030-1), the REME Benevolent Fund (246967-1) and the REME Sports Association (246967-2) linked to it. The REME Museum (27240) is included in these group accounts as it governed by the same Trustee Board and is administered by the REME Charity.

Since its formation in 2016, the Charity continues to develop its operations and organisation. An annual trustee workshop, usually held in March of each year, sets the themes for the year. In 2020 the Charity concentrated on measuring its impact and further evolving its outreach to REME veterans through its Connect project. While the COVID-19 pandemic created some difficulties, outreach was improved through a national network of 150 COVID volunteers and the launching of a new REME Connect website. Work is also in hand to bring the REME Trading Company under the control of the Charity.

Recruitment and appointment of trustees

Trustees are selected by virtue of their knowledge, experience and expertise and are invited onto the Board of Trustees after recommendation. They are encouraged to keep themselves up to date with current regulatory, reporting and compliance related matters thereby enabling them to fulfil their obligations. Succession plans are in place to ensure the Board remains current and effective. There were no changes to the Board of Trustees in 2020.

Organisational structure and governance

The Board of Trustees is an independent decision making governing body which meets at least twice a year. The board consists of 10 Trustees led by a Chairman. Trustees are given responsibility for different areas of the business and chair separate sub-committees to monitor performance and exercise governance. The Finance and Investment Committee meets twice yearly, while the Benevolence Committee meets on a monthly basis. The execution of the day to day running of the business is delegated to the Executive team, of the Chief Executive Officer and other principal officers of the Charity with delegated spending powers defined in the Governance Manual.

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

Risk management

The Charity maintains a risk register which is reviewed annually. Risks are categorised in five main areas: Impact, Financial Sustainability, Compliance, Operational and Hazards and Reputation. While the reduction in the size of the REME Corps and the subsequent reduction in income being received through the day’s pay giving scheme is of concern, the two highest risks are currently assessed as staff churn and maintaining a competent and compliant finance department. As we move into 2021, a replacement Treasurer has been recruited and we await the detailed implications of The Army Charities Strategy which has reviewed the relationship between military charities and the Regimental Headquarters.

OBJECTS AND ACTIVITIES

Public benefit

We provide public benefit by assisting REME regular and reserve personnel to more effectively perform their roles and duties within the British Army. We also support the retired veteran community and their families and enhance esprit de corps by promoting the concept of support to the REME family for life. We do this by providing funding for benevolence, welfare, in-house publications, sports, adventurous activities, social gatherings and events. This assistance also enables Service personnel to face the challenges and dangers associated with military service by developing and maintaining teamwork, skills, fitness, confidence, character, spirit and morale. We promote the efficiency of the armed forces of the Crown by enhancing the British Army’s capability to undertake the roles demanded of it including the defence of the United Kingdom and its interests. By supporting the wider REME family we assist the Government in fulfilling its promise in the Armed Forces Covenant to treat serving personnel, veterans and their families fairly. Through our support to the REME Museum we preserve the heritage of the Corps of REME through collecting and conserving appropriate artefacts, memorabilia and memories for future generations and communicate the story of REME and the people who served in the Corps to the visiting public and to the wider audience on-line.

Objects

The REME Charity is independent of the military authorities, and whilst working in conjunction with them, it undertakes a crucial function as the needs and ambitions of the REME family go beyond the bounds of the resources and policies of the Army and MOD. We meet the needs and ambitions through three objects which in the formal language of governance are:

a) To promote the efficiency of REME and foster esprit de corps;

b) To relieve either generally or individually necessitous persons being members or former members of REME or their dependants (beneficiaries); and

c) To support charitable purposes for the benefit of beneficiaries.

The objects allow the charity to provide support to REME regular, reserve and retired personnel and their families. This is done though the provision of grants to groups and/or individuals and through arranging social events which promote REME efficiency, ethos and comradeship, giving members a sense of belonging to the REME family.

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

2020 themes and activities

The main themes for 2020 were to meet grant demands, consolidate the Charity reform programme and to further expand membership of the REME Association by reaching out to past members. No one could have predicted the wide-ranging impact of COVID-19 which has resulted in significant changes to the year’s planned activities:

a) The Executive Team were sent home on 23 March 2020 as part of HM Government lockdown policy and began working from home. New ways of working were quickly established and Skype and Zoom calls became the norm. The Executive streamlined processes and while ensuring compliance to regulations went almost entirely paperless. We are grateful for the financial support we have received through the Government’s Furlough Scheme; this amounted to £7,157;

b) COVID-19 caused an early adjustment of the budget, and funds were diverted from sport and esprit de corps activities, which had been severely curtailed, to benevolence. The Trustees agreed to maintain higher than normal cash holdings to meet a potential increase in benevolence grants. It transpired that demand in 2020 remained at historic levels and additional funds were not required. At year end, the high levels of cash remain and will be carried forward into 2021 and should demand increase the Charity will be well placed to provide support;

c) The REME Charity provides grants in collaboration with other military charities some of whom who were struggling with their own fund raising as a result of COVID-19. We were pleased to be able to make extraordinary grants of £10,000 to the Royal British Legion Industries, and £100,000 to the Army Benevolent Fund, The ‘Soldiers’ Charity;

d) Assistance is not always in the form of Grants. In May 2020 one of our serving soldiers suffered life changing injuries as a result of an accident. We assisted with immediate help at his hospital bedside and later by using our legal team to set up a Personal Accident Trust Fund for the family. This assistance has ensured the family are on a firm financial and legal position going forward;

e) As the year progressed it became clear that sporting and esprit de corps activities were unlikely to restart. While some funding was switched to benevolence the overall result was an underspend to the sport and esprit de corps budgets. In lieu of offsetting function costs, the Officers’ Mess took the opportunity to purchase additional crockery and cutlery to increase the number of place settings at dinners and thus be in a position to enhance future esprit de corps events. The Charity reviewed how it could provide support to those in need and provided one off Covid Support Grants to the serving and retired communities via units and REME Association branches. As a result, over £45,000 was granted and distributed out to the most in need; and

f) The REME Association reform continued. As a direct response to lockdown, in late March 2020 we launched a plea for volunteers to assist those who might feel isolated and in need of help. Very quickly 150 volunteers stepped forward and a nationwide volunteer framework was established. While only a few calls for assistance were ever made, the scheme did serve to improve our outreach. Newsletters continued to be sent out every 6 weeks, and the audience increased to just over 1,500. An additional REME Association Branch was also established; The Recovery Mechanic branch are the first trade related non-territorial branch and it is hoped more will follow. One casualty was the revaluation of property and while this continued, progress was slower than expected and it will conclude in 2021. Finally, in order to best exploit and expand the Association’s outreach a marketing expert was engaged. Work started in the autumn and is reporting during 2021.

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

Strategies to achieve objects

The Trustees make an annual estimate of the likely financial call on the Charity in order to meet its objects. A formal budgeting system is used, and monthly expenditure tracked against it. The Trustees’ strategy is, in general terms, to meet the reasonable need of all applicants and thus ensuring enough income is received by the Charity is vital. The income stream is varied but comes mainly from the Day’s Pay Giving Scheme, from investment returns, donations and some sponsorship. The Charity has an effective structure of sub-committees chaired by a Trustee, which ensures good governance throughout the year. Investment income targets are placed on the Investment Manager and donations and sponsorship are encouraged from the veteran community and beyond. These strategies enable the objects to be met.

Significant charitable activities

The Charity’s objects are primarily met through grant making, but COVID-19 saw a significant change in the planned activities. While the Benevolent Fund maintained historical spending norms making individual grants to 367 (2019: 424) serving and retired members of the Corps, sport, adventurous training and esprit de corps events were vastly reduced. There were 7 (2019: 135) adventurous exercises involving 62 (2019: 1,884) officers and soldiers and while 37 (2019: 36) different sports were supported their spend was 56% down on 2019. All esprit de corps activities after March were cancelled or postponed; the result was a % reduction in spending. The monthly magazine, ‘The Craftsman’ and a REME calendar were produced and served to be a lifeline to those in isolation and lockdown. Miscellaneous discretionary grants increased partially due to gifting REME stable belts and nurturing packs to new REME recruits; this totalled £94,944 (2019: £74,741).

Grant making

Grants come from donated income received during the year and are made directly in support of charitable activities to meet with the Charity’s objects. They include grants to support benevolence, adventurous training and sports, the REME Association, the REME Institution, the REME Messes, and the REME Chapels and Memorials, all of which contribute to promote unit cohesion and esprit de corps. The REME Museum also receives a grant to offset its operating costs and to support heritage activities.

ACHIEVEMENTS AND PERFORMANCE

Performance management

The Charity measures activity and grants to assess performance and where appropriate, set goals. Income is measured by reviewing the percentage of regular and reserve officers and soldiers who donate through the Day’s Pay Giving Scheme, measuring investment income against target, measuring income from veterans and measuring sponsorship income. This is translated into detailed grants budgets across all areas and the outturn monitored monthly.

2020 performance and impact

The 2020 budget was set and approved by the Trustees in their 2019 autumn meeting. There are over 40 separate fund managers and bids were screened and approved, and income forecasts completed. All approved bids were met and as a result of COVID-19, and the lack of opportunity to spend on sporting and esprit de corps activities a large surplus of £317,380 was reported. As a result in the inclusion of Reservists in the data, contributions via the Days Pay Giving Scheme are down as shown: Officers’ at 83.5% (2019: 93%) and Soldiers’ at 79.4% (2019: 81%). Work is in hand to increase participation in the Day’s Pay Giving Scheme.

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

Investment performance

Due to the global pandemic the investment market suffered a strategic shock in 2020 and while returns have been unaffected in the short term, the longer term future (2022/23 and beyond) is less certain. At year end the market value of the Sarasin and Partners REME Charity portfolio was £11,938,497 and the value of the Resilience Portfolio was £952,170; this represented an annual increase of 9.3% and 5.0% respectively an achievement which, given the circumstances, we are pleased with. The income target of £250,000 was achieved. The Blackrock Armed Forces Common Investment Fund (AFCIF) changed and became the Blackrock Armed Forces Income and Growth Fund and was worth £278,210 an increase of 4.8%; an income of £9,488 was achieved. The market value of the Charity investments on 31 December 2020 was £13,168,877.

Funding sources

The Charity is supported through donations from officers and soldiers through the Day’s Pay Giving Scheme, investment income, bank interest, property income, sponsorship, fundraising and general donations.

FINANCIAL REVIEW

Income

Income for the Charity was £2,174,379 which includes £261,465 of services and facilities donated by the MoD, and £972,783 from donations from regular and reserve officers’ and soldiers’ through the Day’s Pay Giving Scheme. In 2020 the Warrant Officers’ and Senior Non-Commissioned Officers’ agreed to increase their charitable donation from 100% of a day’s pay to 120%. This additional income will be placed in a restricted fund for the use in the HQ WOs’ and Sgts’ Mess to enhance future esprit de corps activities. Income donated from retired officers’ who are members of the REME Institution was £33,700. Gift aid of £12,648 was recovered and investments and interest income was £423,926. We constantly look for potential new sources of income and are pleased that our supporters through the use of Amazon Smile have contributed £831 in 2020.

Expenditure

Expenditure for the year was £1,856,999 and comprised £587,476 in esprit de corps activity, £440,990 in grants, £328,890 on the museum, £380,847 on support costs and £118,796 on investment management and fundraising costs. It can be attributed to the following areas:

a) Benevolence Grants totalled £385,689 which was 38% above the budget of £280,000 but included extraordinary grants of £10,000 to the Royal British Legion Industries, and £100,000 to the Army Benevolent Fund, The ‘Soldiers’ Charity. 424 grants were made, 52 to serving personnel and 372 to those retired. The average grant was £456;

b) One off grants in support of COVID-19 totalled £45,000;

c) The REME Museum was given a grant of £47,160.

d) Publications expenditure was £100,728. This can be attributed to £94,489 for the production of the monthly newsletter (the Craftsman magazine) and £6,239 for the publication of the REME calendar;

e) Expenditure on REME sports and adventurous and enterprising activities in the UK and Germany was well down as a result of COVID-19. We spent £215,752 of which £203,909 was spent on sport and £11,843 on adventurous and enterprising activities which includes winter sports;

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

f) REME Discretionary Funds were £94,944 and were over the £40,000 budget. This was attributed to the purchase and presentation of REME belts and nurturing packs to new REME recruits;

g) Staff salaries and governance costs were £550,602. The following are of note; salaries were £62,760 for the Charity and £250,962 for the Museum but the MoD contributed £179,511 in Grant in Aid to offset Museum salaries; contractors were employed to cover resource shortfalls and projects and cost £7,718; and

h) Additional accounting costs of £3,240 were incurred to provide advice on the incorporation of the REME Trading Company Ltd, into the REME Charity.

Factors outside of the charity's control

It was impossible to predict the impact of COVID-19, but the Charity adapted and mitigated where possible including by the successful application of the Government Furlough Scheme. Ordinarily, there are many factors which impact on our performance, with the main areas being the reliance on MoD for their donated services, the performance of the stock market, and the changes to the structure and size of the REME imposed under government defence reviews.

Reserves policy

The Trustees review the reserves policy annually and aim to match the amount held in reserves to mitigate against potential financial threats and needs over the long term. The charity relies upon the MoD for administration of the Day’s Pay Giving Scheme, provision of infrastructure, utilities, IT systems, office supplies and a proportion of staff costs. If these MoD donated services were to be withdrawn, the Charity would suffer a strategic shock. The Charity’s reserves must be able to meet such a strategic shock if it were to occur and accordingly part of our investments are held in a more conservatively managed Resilience Portfolio. Furthermore, military operations overseas are expected to have an impact on the benevolent grants which are expected to increase in the coming year. Taken overall, the Trustees have assessed the level of reserves held in the charity’s investment portfolio, and which may be required to meet these contingencies, should be in the region of £15M.

Funds in deficit

The Charity has no deficits. The Trustees assess the loan to The REME Trading Company as manageable. The Trading Company will be moved into the Charity in 2021.

Financial position

The trustees consider that the assets held by the charity enable the fund to meet its foreseen future obligations. Given the charity's current level of reserves, including investment assets of £13.1M and £856k of cash, the trustees consider that the charity will continue as a going concern for a period of at least 12 months from the date on which these financial statements are approved. The trustees therefore consider it appropriate to adopt the going concern basis of preparation of the accounts, as detailed in note 1(c) to the financial statements.

Dependency on donors

The viability of the charity depends on the continuance of voluntary donations from serving officers and soldiers and veterans.

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

Funds held as custodian trustee

No funds are held as custodian trustee.

PLANS FOR FUTURE PERIODS

Future aims, objectives and planned outputs

Much progress has been made since the Charity formed in 2016, and it continues to grow and evolve to meet the demands placed upon it. Our future aims are based around the following areas:

a) Impact and Connection were the chosen themes for 2020 and these will continue into 2021. The marketing project starting in late 2020 will report in early 2021 and will enable the Charity to develop a targeted plan to increase our outreach to veterans. The aim is to increase numbers from c1,500 to 10,000;

b) Due to COVID-19 the review of donors who give via the Day’s Pay Giving Scheme has been delayed. This work will be re-started in 2021 to trace some of those that we have missed. The aim is to increase donated income;

c) We will carry out a Trustee Workshop to identify areas for development. We will build on the Impact and Reach work carried out in 2020. This may involve an organisational review to configure the Charity appropriately to ensure we continue to meet our beneficiaries needs;

d) We will continue to monitor and mitigate risk and will pay particular attention to VAT and its applicability to our charity. The aim is to ensure statutory compliance; and

e) Following accounting advice, the REME Trading Company which currently operates as an independent company will be brought into the REME Charity and become a trading subsidiary. A review will be carried out in early 2021 to codify the new structure and determine an appropriate governance structure.

STATEMENT OF RESPONSIBILITIES OF THE TRUSTEES

The trustees (who are also directors of the charity for the purposes of company law) are responsible for preparing the trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

The trustees are required to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charity and the group and the incoming resources and application of resources, including the net income or expenditure, of the charity and the group for the year. In preparing those financial statements the trustees are required to:

• select suitable accounting policies and then apply them consistently;

• observe the methods and principles in the Charities SORP;

• make judgements and accounting estimates that are reasonable and prudent;

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The REME Charity

Report of the trustees

For the year ended 31 December 2020

• state whether applicable accounting standards and statements of recommended practice 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 operation.

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

In so far as the trustees are aware:

• there is no relevant audit information of which the charitable company's auditors are unaware; and

• the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charity in the event of winding up. The trustees are members of the charity but this entitles them only to voting rights. The trustees have no beneficial interest in the charity.

Auditors

Godfrey Wilson Limited were re-appointed as auditors to the group and parent charity during the year and have expressed their willingness to continue in that capacity.

Approved by the trustees on 21 April 2021 and signed on their behalf by

Maj Gen S M Andrews CBE - Chairman

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Independent auditors' report

To the members of

The REME Charity

Opinion

We have audited the financial statements of The REME Charity (the 'parent charity') and its subsidiary (the 'group') for the year ended 31 December 2020 which comprise the consolidated statement of financial activities, consolidated and parent charity balance sheets, consolidated statement of cash flows and the related notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and the Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• give a true and fair view of the state of the group and parent charity's affairs as at 31 December 2020 and of the group's incoming resources and application of resources, including its income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report other than the group and parent charity financial statements and our auditor’s report thereon. Our opinion on the group and parent charity financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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Independent auditors' report

To the members of

The REME Charity

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 such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in 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 in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

• the information given in the trustees’ report (incorporating the strategic report and the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the trustees’ report (incorporating the strategic report and the directors’ report) have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charity and their environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent charity, or returns adequate for our audit have not been received from branches not visited by us;

• the parent charity financial statements are not in agreement with the accounting records and returns;

• certain disclosures of trustees’ remuneration specified by law are not made; or

• we have not obtained all the information and explanations necessary for the purposes of our audit.

Responsibilities of the trustees

As explained more fully in the trustees’ responsibilities statement set out in the trustees’ report, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as 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.

12

Independent auditors' report

To the members of

The REME Charity

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charityʼs members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charityʼs members those matters we are required to state to them in an auditorʼs report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charityʼs members as a body, for our audit work, for this report, or for the opinions we have formed.

Date: 23 April 2021

Rob Wilson FCA

(Senior Statutory Auditor)

For and on behalf of:

GODFREY WILSON LIMITED

Chartered accountants and statutory auditors 5th Floor Mariner House 62 Prince Street Bristol BS1 4QD

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The REME Charity

Consolidated statement of financial activities (incorporating an income and expenditure account)

For the year ended 31 December 2020

Restricted Note £ Income from: Donations and legacies 3 247,434 Charitable activities 5 - Other trading activities 6 105,442 Investments 7 42,308 Total income 395,184 Expenditure on: Raising funds - Charitable activities: Benevolence grants 21,228 Esprit de corps 249,806 Museum 1,500 Total expenditure 8 272,534 Net income before investment gains 122,650 Net gains on investments 123,240 Net income 245,890 Transfers between funds 150,000 Other recognised gains / (losses): Losses on revaluation of fixed assets - 14 - Net movement in funds 9 395,890 Reconciliation of funds: Total funds brought forward 3,331,256 Total funds carried forward 3,727,146 Gains/ (losses) on revaluation of heritage assets	Unrestricted £ 1,356,524 24,261 16,772 381,638 1,779,195 149,445 533,538 489,238 412,244 1,584,465 194,730 674,150 868,880 (150,000) - (9,539) 709,341 14,994,147 15,703,488	2020 Total £ 1,603,958 24,261 122,214 423,946 2,174,379 149,445 554,766 739,044 413,744 1,856,999 317,380 797,390 1,114,770 - - (9,539) 1,105,231 18,325,403 19,430,634	2019 Total £ 1,506,593 51,535 123,409 416,114
			2,097,651
			54,630 419,290 1,127,904 370,605
			1,972,429
			125,222 1,564,607
			1,689,829 - (25,000) 609,667
			2,274,496 16,050,907
			18,325,403

All of the above results are derived from continuing activities. There were no other recognised gains or losses other than those stated above. Movements in funds are disclosed in note 22 to the accounts.

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The REME Charity

Consolidated balance sheets

As at 31 December 2020

Note Fixed assets Tangible assets 13 Heritage assets 14 Fixed asset investments 15 Investment property 16 Current assets Stocks 17 Debtors 18 Cash at bank and in hand Liabilities Creditors due within 1 year 19 Net current assets Total assets less current liabilities Creditors due after more than 1 year Net assets 21 Funds 22 Restricted funds Unrestricted funds Designated funds General funds Total charity funds	The group 2020 £ 461,211 4,105,773 13,168,877 500,000 18,235,861 133,747 289,911 856,365 1,280,023 (75,482) 1,204,541 19,440,402 (9,768) 19,430,634 3,727,146 3,369,431 12,334,057 19,430,634	The group 2019 £ 519,621 4,114,349 12,253,315 450,000 17,337,285 125,852 278,483 675,851 1,080,186 (75,556) 1,004,630 18,341,915 (16,512) 18,325,403 3,331,256 3,342,976 11,651,171 18,325,403	The charity 2020 £ 269,971 1,353,060 13,168,877 500,000 15,291,908 133,747 235,999 691,449 1,061,195 (244,413) 816,782 16,108,690 (9,768) 16,098,922 3,704,865 60,000 12,334,057 16,098,922	The charity 2019 £ 294,651 1,364,096 12,253,315 450,000
				14,362,062
				125,852 220,797 418,412
				765,061 (91,970)
				673,091
				15,035,153 (16,512)
				15,018,641
				3,327,475 40,000 11,651,166
				15,018,641

These accounts have been prepared in accordance with the special provisions applicable to companies subject to the small companies' regime.

Approved by the trustees on 21 April 2021 and signed on their behalf by

Maj Gen S M Andrews CBE - Chairman

15

The REME Charity

Consolidated statement of cash flows

For the year ended 31 December 2020

Cash used in operating activities: Net movement in funds Adjustments for: Depreciation charges Revaluation (gains) / losses on fixed assets Revaluation (gains) / losses on heritage assets Donation of heritage assets (Gains) / losses on investments Dividends, interest and rents from investments Loss / (profit) on the disposal of heritage assets Decrease / (increase) in stock Decrease / (increase) in debtors Increase / (decrease) in creditors Net cash provided by / (used in) operating activities Cash flows from investing activities: Dividends, interest and rents from investments Purchase of tangible fixed assets Purchase of heritage assets Purchase of investments Transfer between investment cash accounts Net cash provided by / (used in) investing activities Increase / (decrease) in cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	2020 £ 1,105,231 143,489 - 9,539 (2,286) (797,390) (423,946) 1,663 (7,895) (11,428) (6,818) 10,159 423,946 (85,079) (340) (325,000) 156,828 170,355 180,514 675,851 856,365	2019 £ 2,274,496 64,881 25,000 (609,667) (5,981) (1,564,607) (416,114) 580 (13,344) (9,507) (25,289)
		(279,552)
		416,114 (3,939) - (186,195) 43,729
		269,709
		(9,843) 685,694
		675,851

Analysis of changes in net debt

The charity has not provided an analysis of changes in net debt as it does not have any long term financing arrangements.

16

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

1. Accounting policies

a) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities in preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The REME Charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes for investments (notes 1m, 1n) and heritage assets (note 1l).

b) Group accounts

These financial statements consolidate the results of the charitable company and its whollycontrolled subsidiary, The Corps of Royal Electrical and Mechanical Engineers Museum (charity registration number 272740) on a line by line basis. Transactions and balances between the charitable company and its subsidiary have been eliminated from the consolidated financial statements. Balances between the two charities are disclosed in the notes of the charitable company's balance sheet. A separate statement of financial activities, or income and expenditure account, for the charitable company itself is not presented because the charitable company has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006.

In accordance with Charity Commission guidance, all linked charities per a Scheme dated 28 October 2016 are required to be reported as restricted funds. The linked charities comprise:

• Royal Electrical and Mechanical Engineers Central Charitable Trust (charity no. 1165868-1);

• The Royal Electrical and Mechanical Engineers' Benevolent Fund (charity no. 1165868-2);

• Royal Electrical and Mechanical Engineers' Hotel Fund (charity no. 1165868-3 - now closed and removed from the register); and

• The General Fund of the Royal Electrical and Mechanical Engineers Sports Association (charity no. 1165868-4).

c) Going concern basis of accounting

The accounts have been prepared on the assumption that the charity is able to continue as a going concern. The trustees have considered the charity's circumstances, and in particular the impact of the COVID-19 pandemic on the charity’s current and future financial position. The charity holds unrestricted, general reserves of £12.3m, investment assets that can be drawn down if necessary of £13.2m and a cash balance of £856k. The trustees therefore consider that the charity has sufficient cash reserves to continue as a going concern for a period of at least 12 months from the date on which these financial statements are approved.

d) Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the item of income have been met, it is probable that the income will be received and the amount can be measured reliably.

17

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

1. Accounting policies (continued)

d) Income (continued)

Income from the government and other grants, whether 'capital' grants or 'revenue' grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred.

For legacies, entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executors to the Trust that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor's intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.

Income received for advertising in advance of publication is deferred until criteria for income recognition are met.

e) Donated services and facilities

Donated professional services and donated facilities are recognised as income when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of economic benefit from the use by the charity of the item, is probable and the economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), general volunteer time is not recognised.

On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

f) Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity: this is normally upon notification of the interest paid or payable by the bank.

g) Funds accounting

Unrestricted funds are available to spend on activities that further any of the purposes of the charity. Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose. Restricted funds are donations which the donor has specified are to be solely used for particular areas of the charity's work or for specific projects being undertaken by the charity.

h) Expenditure and irrecoverable VAT

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

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

18

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

1. Accounting policies (continued) i) Allocation of support and governance costs

• Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Governance costs are the costs associated with the governance arrangements of the charity, including the costs of complying with constitutional and statutory requirements and any costs associated with the strategic management of the charity’s activities. These costs have been allocated between costs of raising funds and expenditure on charitable activities based on the proportion of direct costs, as follows:

	2020	2019
Raising funds	8.0%	2.8%
Charitable activities:
Benevolence grants	29.9%	21.3%
Esprit de corps	39.8%	57.1%
Museum	22.3%	18.8%

The proportion of direct costs attributable to raising funds activities has increased due to the inclusion of investment manager fees in 2020. In 2019, fees were netted against fee rebates received from the investment managers.

j) Grants payable

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

k) Tangible fixed assets

Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:

Yachts 10 years straight line to residual value of £70,000 Furniture and equipment 3 - 10 years straight line basis

Items of equipment are capitalised where the purchase price exceeds £2,000.

l) Heritage assets

The charity is the repository of thousands of items, which are held in the Museum, the Messes, the Church or the Headquarters, the majority of which have been donated over many years both by individuals and by regimental units that have been closed. Most of the items held are either donated to the Museum or gifted by the Ministry of Defence.

19

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

1. Accounting policies (continued) l) Heritage assets (continued)

• Items are recorded at cost when an acquisition has been made by purchase. The valuation of such a diverse and varied collection and the lack in many cases of comparable market values has meant an equally diverse approach in obtaining valuations which are by their nature subjective. It has been necessary to use many sources of valuation expertise. These have included professional valuations as in the case of the small arms collection, guidance from the National Army Museum and recourse to the many web sites, trade magazines, auction houses and professional catalogues covering different aspects of the Collection. The trustees have valued the heritage assets where available by reference to these experts, however valuations are often informal and occasionally written valuations are unavailable.

The assets are considered to have indeterminate lives and the trustees therefore do not consider it appropriate to charge depreciation.

In respect to non-Museum heritage assets, the complete asset register for all areas is maintained and reviewed each year by the Corps Property Manager for movements within the holdings and these are adjusted through repairs and maintenance. The assets are generally valued at 50% of insurance value. The most recent valuation for artworks was carried out by Madley Associates, fellows of the National Association of Valuers and Auctioneers, in 2020. Silverware was revalued in 2020, but the final report will be received in 2021.

All heritage assets are reviewed for impairment annually and any charge taken to the SoFA.

m) Investment property

Investment properties are included in the balance sheet at fair value and are not depreciated. Changes in fair value are recognised in the statement of financial activities. Investment property is professionally revalued every two years, and informally reviewed for impairment annually.

n) Fixed asset investments

Listed investments are stated at market value at the balance sheet date. The statement of financial activities includes the net gains and losses arising on revaluation and disposal throughout the year.

o) Stock

Stock is included at the lower of cost or net realisable value. Donated items of stock are recognised at fair value which is the amount the charity would have been willing to pay for the items on the open market.

p) Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

q) Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

20

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

1. Accounting policies (continued)

r) Creditors

Creditors and provisions are recognised where there is a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

s) Financial instruments

The charitable company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently recognised at amortised cost using the effective interest method.

t) Pension costs

The company operates a defined contribution pension scheme for its employees. There are no further liabilities other than that already recognised in the SOFA.

u) Foreign currency transactions

Transactions in foreign currencies are translated at rates prevailing at the date of the transaction. Balances denominated in foreign currencies are translated at the rate of exchange prevailing at the year end.

v) Accounting estimates and key judgements

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

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

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.

Depreciation

As described in note 1k to the financial statements, depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life.

Revaluations

Heritage assets and investment property are stated at estimated fair value based on periodic valuations, as disclosed in notes 1l and 1m.

21

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

2. Prior period comparatives: statement of financial activities

Income from: Donations and legacies Charitable activities Other trading activities Investments Total income Expenditure on: Raising funds Charitable activities: Benevolence grants Esprit de corps Museum Total expenditure Net gains on investments Net expenditure Transfers between funds Other recognised gains / (losses): Losses on revaluation of fixed assets Gains on revaluation of heritage assets Net movement in funds	Restricted £ £ 255,287 1,251,306 4,000 47,535 94,191 29,218 42,159 373,955 395,637 1,702,014 4,282 50,348 305,098 114,192 702,515 425,389 1,944 368,661 1,013,839 958,590 131,558 1,433,049 (486,644) 2,176,473 693,069 (693,069) - (25,000) - 609,667 206,425 2,068,071 Unrestricted	2019 Total £ 1,506,593 51,535 123,409 416,114
		2,097,651
		54,630 419,290 1,127,904 370,605
		1,972,429
		1,564,607 1,689,829 - (25,000) 609,667
		2,274,496

22

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

3. Income from donations and legacies

Restricted £ £ Subscriptions - retired officers 13,480 20,220 Subscriptions - serving officers 177,861 120,379 Subscriptions - museum (gold card) - 95,905 Subscriptions - other ranks 11,807 533,131 Sports association grants 15,274 - MOD grant in aid - 179,511 Armed Forces Covenant Trust grant 20,000 - ABF donation 251 - Other donations 3,761 55,138 Donated heritage assets - 2,286 Legacies 5,000 - Donated investment management services - 88,489 Donated services and facilities - 261,465 Total income from donations and legacies 247,434 1,356,524 Prior period comparative Restricted £ £ Subscriptions - retired officers 14,170 21,255 Subscriptions - serving officers 115,201 114,553 Subscriptions - museum (gold card) - 92,299 Subscriptions - other ranks 10,253 509,451 Sports association grants 100,575 - MOD grant in aid - 170,443 ABF donation 400 - Other donations 14,688 110,683 Donated heritage assets - 5,981 Donated services and facilities - 226,641 Total income from donations and legacies 255,287 1,251,306 Donated services and facilities consists of: 2020 £ Donated staff time 211,362 Donated facilities - office premises, equipment and utilities 50,103 261,465* Unrestricted Unrestricted	2020 Total £ 33,700 298,240 95,905 544,938 15,274 179,511 20,000 251 58,899 2,286 5,000 88,489 261,465
	1,603,958
	2019 Total £ 35,425 229,754 92,299 519,704 100,575 170,443 400 125,371 5,981 226,641
	1,506,593
	2019 £ 177,009 49,632
	226,641

23

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

4. Government grants

• The charity receives government grants, defined as funding from the Ministry of Defence to fund charitable activities, and from HMRC under the Coronavirus Job Retention Scheme. The total value of such grants in the period ending 31 December 2020 was £186,668 (2019: £170,443) of which £7,157 related to the Coronavirus Job Retention Scheme (the Furlough Scheme). There are no unfulfilled conditions or contingencies attaching to these grants in the current or prior year.

5. Income from charitable activities

Museum admission Children's activities Museum research Total income from charitable activities Prior period comparative Museum admission Children's activities Museum research British Museum grant Total income from charitable activities 6. Income from other trading activities Sponsorship Other fundraising Total income from other trading activities	Restricted Unrestricted £ £ - 20,917 - 1,889 - 1,455 - 24,261 Restricted Unrestricted £ £ - 41,200 - 3,608 - 2,727 4,000 - 4,000 47,535 Restricted £ £ 96,428 - 9,014 16,772 105,442 16,772 Unrestricted	2020 Total £ 20,917 1,889 1,455
		24,261
		2019 Total £ 41,200 3,608 2,727 4,000
		51,535
		2020 Total £ 96,428 25,786
		122,214

24

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

6. Income from other trading activities (continued) Prior period comparative:

Income from other trading activities (continued)
Prior period comparative: Sponsorship Functions Other fundraising Total income from other trading activities	Restricted £ £ 85,500 - 2,145 - 6,546 29,218 94,191 29,218 Unrestricted	2019 Total £ 85,500 2,145 35,764
		123,409

7. Income from investments

Income from listed investments Property income Bank interest Total income from investments Prior period comparative: Income from listed investments Property income Bank interest Total income from investments	Restricted £ £ 27,867 380,617 14,441 - - 1,021 42,308 381,638 Restricted £ £ 28,800 372,912 13,359 - - 1,043 42,159 373,955 Unrestricted Unrestricted	2020 Total £ 408,484 14,441 1,021
		423,946
		2019 Total £ 401,712 13,359 1,043
		416,114

25

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

8. Total expenditure

REME Museum REME Institution (Officers' club) Officers Mess functions and costs Grants payable (note 12) REME Sports Association events and costs REME Corps Sergeants' Mess Office expenses Depreciation and scrapped assets Corps recruiting Fundraising and investment property costs Publication costs Staff costs (note 10) Insurance Trustee expenses Donated facilities Investment manager fees Legal and professional Sub-total Allocation of support and governance costs Total expenditure	£ - - - - - - - - - - 7,062 - 33,875 - - - 77,859 - 118,796 30,649 149,445 Raising funds	Charitable activities: grants £ - - - 378,230 - - - - - - - - 62,760 - - - - - 440,990 113,776 554,766	£ - 9,003 9,570 117,009 203,909 9,779 6,391 3 - 70,908 - 100,728 60,176 - - - - - 587,476 151,568 739,044 Charitable activities: esprit de corps	£ 19,477 - - - - - - - 58,451 - - - 250,962 - - - - - 328,890 84,854 413,744 Charitable activities: museum	Support and governance costs £ 351 2,318 - - - - - 79,885 85,038 - - - 142,829 7,281 2,442 50,103 - 10,600 380,847 (380,847) -	2020 Total £ 19,828 11,321 9,570 495,239 203,909 9,779 6,391 79,888 143,489 70,908 7,062 100,728 550,602 7,281 2,442 50,103 77,859 10,600
						1,856,999 -
						1,856,999

26

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

8. Total expenditure - prior period comparative (restated)

REME Museum REME Institution (Officers' club) Officers Mess functions and costs Grants payable (note 12) REME Sports Association events and costs REME Corps Sergeants' Mess Office expenses Depreciation and scrapped assets Corps recruiting Fundraising and investment property costs Publication costs Staff costs (note 10) Insurance Trustee expenses Donated facilities Legal and professional Sub-total Allocation of support and governance costs Total expenditure	£ - - - - - - - - - - 7,670 - 38,105 - - - - 45,775 8,855 54,630 Raising funds	Charitable activities: grants £ - - - 294,441 - - - - - - - - 56,887 - - - - 351,328 67,962 419,290	£ - 8,261 35,612 148,915 460,706 33,052 14,656 - - 79,878 - 100,679 63,325 - - - - 945,084 182,820 1,127,904 Charitable activities: esprit de corps	£ 15,248 - - - - - - - 56,817 - - - 238,469 - - - - 310,534 60,071 370,605 Charitable activities: museum	Support and governance costs £ 3,013 3,707 - - - 13,870 - 85,464 8,064 - - - 117,391 8,851 6,550 49,632 23,166 319,708 (319,708) -	Restated 2019 Total £ 18,261 11,968 35,612 443,356 460,706 46,922 14,656 85,464 64,881 79,878 7,670 100,679 514,177 8,851 6,550 49,632 23,166
						1,972,429 -
						1,972,429

The prior period comparatives have been restated for classification. Amounts previously shown under discretionary grants, adventurous and enterprising activities, Lyneham funding (D12) and REME Corps Sergeants' Mess are now all shown under grants payable. An analysis is provided in note 10.

27

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

9. Net movement in funds

This is stated after charging:

Depreciation Operating lease payments Trustees' remuneration Trustees' reimbursed expenses Auditors' remuneration: Statutory audit (including VAT) Consultancy (including VAT)	2020 £ 143,489 Nil Nil 2,442 16,758 3,240	2019 £ 64,881 Nil Nil 6,550 16,260 -

Trustees' reimbursed expenses comprise travel and accommodation costs relating to 4 trustees (2019: 4 trustees).

Total governance costs were £19,200 (2019: £22,810).

10. Staff costs and numbers

Staff costs were as follows:

Salaries and wages Social security costs Pension costs Donated salaries Freelance staff	2020 £ 307,668 16,977 6,877 211,362 7,718 550,602	2019 £ 305,717 18,467 6,571 177,009 6,413
		514,177

No employee earned more than £60,000 during the year.

The key management personnel of the charitable company comprise the Trustees, Corps Secretary and Museum Director. The total employee benefits of the key management personnel paid by the charity and recognised as a gift in kind were £30,320 and £43,706 respectively (2019: £54,727 and £44,355).

Average number of employees (head count):	2020 No. 21	2019 No. 21

11. Taxation

The charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

28

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

12. Grants payable

Grants payable
Benevolence Discretionary grants Lyneham funding (D12) Adventurous and enterprising activities REME Corps Sergeants' Mess Prior period comparative Benevolence Discretionary grants Adventurous and enterprising activities Lyneham funding (D12) REME Corps Sergeants' Mess	Individuals £ 163,689 13,509 - - - 177,198 Individuals £ 193,743 1,901 - - - 195,644	Institutions £ 195,000 81,435 18,234 11,843 11,529 318,041 Institutions £ 85,000 72,839 56,867 19,931 13,075 247,712	Total 2020 £ 358,689 94,944 18,234 11,843 11,529
			495,239
			Restated Total 2019 £ 278,743 74,740 56,867 19,931 13,075
			443,356

The charity's grant making activities are characterised by large numbers of small grants, paid to support serving and retired soldiers and officers of the REME Corps. Individual grants are rarely made direct to the individual beneficiary. Grants are usually processed via a third party organisation such as the Army Benevolent Fund; the Soldiers’ Charity (ABF), The Sailors, Soldiers and Air Force Institution (SSAFA), or the Royal British Legion (RBL). If the beneficiary is a serving soldier, a grant is processed through the unit welfare organisation.

The trustees consider all grants paid to institutions over £25,000, which require trustee board approval, to be material in the context of the accounts. The total amount of grants paid over this amount in 2020 was 1, to the Army Benevolent Fund for £185,000 (2019: 1, for £85,000, to the Army Benevolent Fund). There were no other committed grants at 31 December 2020. No support costs have been allocated to the grants disclosed above although staff costs are allocated to general grant making activities per note 8 to the accounts.

29

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

13. Tangible fixed assets Group Cost At 1 January 2020 Additions in year At 31 December 2020 Depreciation At 1 January 2020 Charge for the year At 31 December 2020 Net book value At 31 December 2020 At 31 December 2019 Charity Cost At 1 January 2020 Additions in year At 31 December 2020 Depreciation At 1 January 2020 Charge for the year At 31 December 2020 Net book value At 31 December 2020 At 31 December 2019	Yachts £ £ 280,000 852,540 - 85,079 280,000 937,619 - 612,919 71,000 72,489 71,000 685,408 209,000 252,211 280,000 239,621 Yachts £ £ 280,000 40,730 - 60,358 280,000 101,088 - 26,079 71,000 14,038 71,000 40,117 209,000 60,971 280,000 14,651 Furniture and equipment Furniture and equipment	Total £ 1,132,540 85,079
		1,217,619
		612,919 143,489
		756,408
		461,211
		519,621
		Total £ 320,730 60,358
		381,088
		26,079 85,038
		111,117
		269,971
		294,651

Following a change in accounting policy, yachts are now depreciated rather than revalued, on a straight line basis over ten years to a residual value of £70,000. As their net book value in the prior period is deemed to be materially fairly stated according to the new accounting policy, the prior period has not been restated. The prior period comparatives for furniture and equipment have been restated to correct an error in brought forward cost and depreciation, with no impact on the net book value in either period.

30

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

14. Heritage assets

At 1 January 2020 Additions Disposals Revaluations At 31 December 2020	2020 2019 £ £ 4,114,349 3,499,281 2,626 5,981 (1,663) (580) (9,539) 609,667 4,105,773 4,114,349 The group	2020 2019 £ £ 1,364,096 1,467,444 - 3,750 (1,663) (580) (9,373) (106,518) 1,353,060 1,364,096 The charity	2020 2019 £ £ 1,364,096 1,467,444 - 3,750 (1,663) (580) (9,373) (106,518) 1,353,060 1,364,096 The charity
			1,364,096

All heritage assets are deemed to be measured at valuation. The majority of heritage assets are donated items which are recognised on receipt at valuation. There is insufficient data available to disclose those assets measured at cost however the amount held at cost is a minor proportion of the total heritage assets.

Five year summary of heritage asset transactions:

Additions: Purchases Donations Total additions Disposals: Carrying value Proceeds Revaluations	2020 £ 340 2,286 2,626 1,663 - (9,539)	2019 £ - 5,981 5,981 580 - 609,667	2018 £ 23,698 6,130 29,828 30 - -	2017 £ 33,087 1,813 34,900 58,795 - 19,525	2016 £ - 26,548
					26,548
					80,000 -
					-

The REME Charity heritage assets

The REME Charity has gained a wide and varied collection of heritage assets since its formation in 1942. The assets are held within the Messes, the Church, and the Headquarters and have either been donated by individuals or units, or gifted by the MoD. The Collection which has been built up over many years reflects the wide range of artefacts ranging from wooden carvings, paintings, silver pieces, furniture and many trinkets and items of an ornamental nature.

The valuation of such a diverse and varied collection and the lack in many cases of comparable market values has meant an equally diverse approach in obtaining valuations. It has been necessary to use many sources of valuation expertise. These have included professional valuations as in the case of the silver and artwork and recourse to the many websites, trade magazines, auction houses and professional catalogues.

During the year ended 31 December 2020 all artworks were revalued by a professional auctioneer. Silverware was valued during the year ended 31 December 2020, but delays relating to Covid-19 meant that the report was not available in completed form before 31 December 2020.

31

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

14. Heritage assets (continued)

The REME Museum heritage assets

The REME Museum of Technology was established in 1958 to house and preserve the heritage of the Corps of Royal Electrical and Mechanical Engineers. The Museum aims to promote a broader understanding of the functions of the Corps, its interaction with society and its role in providing equipment engineering support to the Army. It also provides an information resource for members of the Corps, researchers, educationalists and general public.

The collection which has been built up over many years reflects the wide range of equipment for which the Corps is responsible including tanks, weapons, helicopters and electronic equipment. The Museum also houses and maintains a comprehensive collection of medals, uniforms, documents and pictorial records covering the many activities of the Corps since its formation in October 1942.

The Museum follows a strict acquisition policy and only accepts items which either relate to the heritage of the Corps or clearly illustrate the changes in engineering and repair techniques associated with equipment responsibilities. Most of the items held are either donated to the Museum or gifted by the Ministry of Defence. Items are recorded at cost when an acquisition has been made by purchase.

The valuation of such a diverse and varied collection and the lack in many cases of comparable market values has meant an equally diverse approach in obtaining valuations. It has been necessary to use many sources of valuation expertise. These have included professional valuations as in the case of the small arms collection, guidance from the National Army Museum and recourse to the many web sites, trade magazines, auction houses and professional catalogues covering different aspects of the collection.

During 2013, the museum director revisited the valuations of the collections with the assistance of specialist publications and experts in the various items. During 2019 the vehicles collection was revalued using the same methods.

A full inventory is maintained of all items accessioned into the collection including valuations on the Museum's collection management database. Information provided includes the provenance and acquisition source of each item.

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The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

15. Fixed asset investments

Blackrock Armed Forces Growth and Income Fund - unlisted Market value at 1 January 2020 Unrealised gains As at 31 December 2020 Sarasin Funds - all listed Market value at 1 January 2020 Additions Transfers between cash accounts Unrealised gains As at 31 December 2020 Total investments	2020 £ 265,437 12,773 278,210 11,987,878 325,000 (156,828) 734,617 12,890,667 13,168,877	2019 £ 232,854 32,583
		265,437
		10,313,387 186,195 (43,729) 1,532,025
		11,987,878
		12,253,315

Included within investments are amounts held on behalf of other REME organisations, as follows:

2020 2019 % % REME Benevolent Fund 0.3606% 0.3652% REME HQ Officers Mess 3.8247% 3.8710% REME Association 3.0613% 3.1000% REME Museum 2.4827% 1.2489%	2020 £ 46,494 493,094 394,669 318,406 1,252,663 Market	2019 £ 43,780 464,302 371,624 149,717 value
		1,029,423

16. Investment property

The charity owns Judnick House, a residential investment property. The property is held at fair value based on a market valuation obtained from an estate agent, Frank Schippers, dated 13 January 2021.

Market value at 1 January 2020 Revaluation gains Market value at 31 December 2020	2020 Total £ 450,000 50,000 500,000	2019 Total £ 450,000 -
		450,000

33

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

17. Stock Finished goods including wine for resale 18. Debtors Due within 1 year: Prepayments and accrued income Other debtors Due in more than 1 year: Loan to REME Trading company Total debtors 19. Creditors : amounts due within 1 year Trade creditors Social security and other taxes Accruals Other creditors Deferred income Intercompany Due in more than 1 year: Other creditors	2020 2019 £ £ 133,747 125,852 2020 2019 £ £ 153,550 141,726 4,584 4,980 158,134 146,706 131,777 131,777 289,911 278,483 2020 2019 £ £ 17,759 12,366 6,263 5,874 37,464 42,949 12,269 8,426 1,727 5,941 - - 75,482 75,556 9,768 16,512 The group The group The group	2020 2019 £ £ 133,747 125,852 2020 2019 £ £ 101,037 87,867 3,185 1,153 104,222 89,020 131,777 131,777 235,999 220,797 2020 2019 £ £ 17,397 12,366 6,263 5,874 29,810 33,158 12,269 8,426 1,727 5,941 176,947 26,205 244,413 91,970 9,768 16,512 The charity The charity The charity	2020 2019 £ £ 133,747 125,852 2020 2019 £ £ 101,037 87,867 3,185 1,153 104,222 89,020 131,777 131,777 235,999 220,797 2020 2019 £ £ 17,397 12,366 6,263 5,874 29,810 33,158 12,269 8,426 1,727 5,941 176,947 26,205 244,413 91,970 9,768 16,512 The charity The charity The charity
			91,970
			16,512

34

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

20. Deferred income

Deferred income
At 1 January 2020 Deferred during the year Released during the year At 31 December 2020	2020 2019 £ £ 5,941 - 1,727 5,941 (5,941) - 1,727 5,941 The group	2020 2019 £ £ 5,941 - 1,727 5,941 (5,941) - 1,727 5,941 The charity
			5,941

Deferred income relates to prepaid advertising income for publications not yet published as at 31 December 2020.

21. Analysis of group net assets between funds

Tangible fixed assets Heritage assets Fixed asset investments Investment property Current assets Current liabilities Creditors due after more than 1 year Net assets at 31 December 2020 Prior year comparative Tangible fixed assets Heritage assets Listed investments Investment property Current assets Current liabilities Creditors due after more than 1 year Net assets at 31 December 2019	Restricted funds £ 60,970 1,353,060 1,252,663 500,000 573,197 (12,744) - 3,727,146 Restricted funds £ 14,651 1,364,096 1,029,423 450,000 498,626 (25,540) - 3,331,256	Designated funds £ 191,236 2,752,713 - - 433,497 (8,015) - 3,369,431 Designated funds £ 224,970 2,750,253 - - 377,544 (9,791) - 3,342,976	General funds £ 209,005 - 11,916,214 - 273,329 (54,723) (9,768) 12,334,057 General funds £ 280,000 - 11,223,892 - 204,016 (40,225) (16,512) 11,651,171	Total funds £ 461,211 4,105,773 13,168,877 500,000 1,280,023 (75,482) (9,768)
				19,430,634
				Total funds £ 519,621 4,114,349 12,253,315 450,000 1,080,186 (75,556) (16,512)
				18,325,403

35

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

22. Movements in funds

Restricted funds CCT: Rory Cape Award Prize Mrs E Brewin Bequest Aliquot Shares Linked entities: REME Benevolent Fund HQ Officers Mess REME Sports Association REME Institution REME Sergeants' Mess REME Publications REME Association REME Museum: British Museum Project Museum Play Park Fund Total restricted funds	£ 5,000 14,180 1,029,423 - 1,648,440 - 604,760 25,672 - - 3,781 - 3,331,256 At 1 January 2020	Income £ - - - 7,718 89,079 111,440 78,473 57,786 11,358 19,330 - 20,000 395,184	£ - (13,509) - (7,718) (65,416) (111,440) (24,576) (17,687) (11,358) (19,330) - (1,500) (272,534) Expenditure	Gains / (losses) £ - - 73,240 - - - 50,000 - - - - - 123,240	£ £ - 5,000 - 671 150,000 1,252,663 - - - 1,672,103 - - - 708,657 - 65,771 - - - - - 3,781 - 18,500 150,000 3,727,146 Transfers between funds At 31 December 2020	£ £ - 5,000 - 671 150,000 1,252,663 - - - 1,672,103 - - - 708,657 - 65,771 - - - - - 3,781 - 18,500 150,000 3,727,146 Transfers between funds At 31 December 2020
						3,727,146

36

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

22. Movements in funds (continued)

Total restricted funds Designated funds: Museum - general Museum - development REME Yacht Club Hulls Total designated funds General funds Total unrestricted funds Total funds Unrestricted funds	£ 3,331,256 2,836,066 466,910 40,000 3,342,976 11,651,171 14,994,147 18,325,403 At 1 January 2020	Income £ 395,184 311,050 104,302 - 415,352 1,363,843 1,779,195 2,174,379	£ (272,534) (322,481) (86,250) - (408,731) (1,175,734) (1,584,465) (1,856,999) Expenditure	Gains / (losses) £ 123,240 (166) - - (166) 664,777 664,611 787,851	£ £ 150,000 3,727,146 - 2,824,469 - 484,962 20,000 60,000 20,000 3,369,431 (170,000) 12,334,057 (150,000) 15,703,488 - 19,430,634 At 31 December 2020 Transfers between funds	£ £ 150,000 3,727,146 - 2,824,469 - 484,962 20,000 60,000 20,000 3,369,431 (170,000) 12,334,057 (150,000) 15,703,488 - 19,430,634 At 31 December 2020 Transfers between funds
						3,369,431
						12,334,057
						15,703,488
						19,430,634

Purposes of restricted funds

Rory Cape Award Prize

The Rory Cape Award was instituted with a bequest from the family in 1974, to commemorate Captain Rory Cape REME, who took part in many adventurous activities but died tragically of cancer in 1972. The aim of this prestigious award is to encourage and further the interests of adventurous and enterprising pursuits within the REME.

37

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

22. Movements in funds (continued)

Purposes of restricted funds

Mrs E Brewin Bequest

Aliquot Shares

Linked entities

This fund was established in 2011 following the death of Mrs E Brewin, who was an avid supporter of the REME and wished that her estate be used to support REME widows who need benevolence. The funds are nearly exhausted, and it is anticipated the final payment will be made in 2021. The fund will then be closed.

The REME Charity’s investment portfolio was first created in 1985 from donations from a number of entities. Each of the entities is now inside the REME Charity and their percentage holding in the investment portfolio is expressed as an aliquot share holding.

The REME Charity was formed from the REME Charities in 2016. The antecedent charities are linked via a Charity Commission Scheme and are; The REME Central Charitable Trust (296030) and the REME Benevolent Fund (246967). The REME Sports Association charity (246967/1) was linked to the REME Benevolent Fund, but it now linked to the REME Charity under the same scheme. Income in these funds represents donations specifically restricted to each area of the charity. Where total expenditure exceeds income available, expenditure is limited to the available restricted funds.

Purpose of designated funds

Museum - general

Museum - development

REME Yacht Club Hulls

The REME Museum is given an operating budget each year from the REME Charity.

The REME Development fund is to provide funding to develop the Museum. It is not to be spent on administration, but purely on developing exhibits, attracting visitors and generally improving the visitor experience.

The REME Hulls fund was set up as a saving plan to purchase a new yacht every five years. £20k is deposited each year, so that £100k is available at the 5 year point.

38

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

22. Movements in funds (continued)

Transfers between funds

The transfer into the aliquot fund represents an increase in the Museum's investment contribution. The transfers to designated funds represent an increase to the yacht reserve.

Prior period comparative Restricted funds CCT: Rory Cape Award Prize Mrs E Brewin Bequest NMA Memorial fund Aliquot Shares Linked entities: REME Benevolent Fund HQ Officers Mess REME Sports Association REME Institution REME Sergeants' Mess REME Publications REME Association REME Museum: British Museum Project Other restricted funds Total restricted funds	At 1 January 2019 £ 5,000 16,081 - 885,631 - 1,629,454 - 543,422 43,915 - - - 1,328 3,124,831	Income £ - - 486 - 5,795 86,263 178,869 81,855 3,413 13,624 21,332 4,000 - 395,637	£ - (1,901) (9,174) - (279,086) (67,277) (464,947) (20,517) (21,656) (106,848) (42,214) (219) - (1,013,839) Expenditure	Gains / (losses) £ - - - 131,558 - - - - - - - - 131,558	£ £ - 5,000 - 14,180 8,688 - 12,234 1,029,423 273,291 - - 1,648,440 286,078 - - 604,760 - 25,672 93,224 - 20,882 - - 3,781 (1,328) - 693,069 3,331,256 Transfers between funds At 31 December 2019	£ £ - 5,000 - 14,180 8,688 - 12,234 1,029,423 273,291 - - 1,648,440 286,078 - - 604,760 - 25,672 93,224 - 20,882 - - 3,781 (1,328) - 693,069 3,331,256 Transfers between funds At 31 December 2019
						3,331,256

39

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

22. Movements in funds (continued) - prior year comparative

Total restricted funds Designated funds: Museum - general Museum - development REME Yacht Club Hulls Contingency Reserve Total designated funds General funds Total unrestricted funds Total funds Unrestricted funds	At 1 January 2019 £ 3,124,831 2,135,841 444,710 20,000 (20,000) 2,580,551 10,345,525 12,926,076 16,050,907	Income £ 395,637 300,869 98,166 - - 399,035 1,302,979 1,702,014 2,097,651	£ (1,013,839) (318,157) (75,966) - - (394,123) (564,467) (958,590) (1,972,429) Expenditure	Gains / (losses) £ 131,558 716,185 - - - 716,185 1,301,531 2,017,716 2,149,274	£ £ 693,069 3,331,256 1,328 2,836,066 - 466,910 20,000 40,000 20,000 - 41,328 3,342,976 (734,397) 11,651,171 (693,069) 14,994,147 - 18,325,403 Transfers between funds At 31 December 2019	£ £ 693,069 3,331,256 1,328 2,836,066 - 466,910 20,000 40,000 20,000 - 41,328 3,342,976 (734,397) 11,651,171 (693,069) 14,994,147 - 18,325,403 Transfers between funds At 31 December 2019
						3,342,976
						11,651,171
						14,994,147
						18,325,403

40

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

23. Financial instruments at fair value

Financial assets measured at fair value	2020 2019 £ £ 13,168,877 12,253,315 The group	2020 2019 £ £ 13,168,877 12,253,315 The charity

Financial assets measured at fair value comprise fixed asset investments.

24. Operating lease commitments

The charity held no operating lease commitments in the current or prior period.

25. Related party transactions

The REME Charity is the sole corporate trustee and parent charity of the Corps of Royal Electrical and Mechanical Engineers Museum (charity registration no. 272740). During the year the REME Charity paid donations totalling £47,160 (2019: £30,250) to the REME Museum. The REME Charity operates payroll and manages transactions on behalf of the Museum. At the year end £176,947 was due from the REME Museum (2019: £26,205).

The REME Charity also has a relationship with the REME Trading Company Limited (company registration no. 10258502). The Corps Secretary, Deputy Corps Secretary and one of the trustees of the REME Charity make up the board of directors of the REME Trading Company. Amounts owed to the REME Charity at 31 December 2020 were £131,777 (2019: £131,777). The REME Trading Company also donated £11,252 (2019: £20,000) to the REME Charity during the year.

The Corps Secretary is also a trustee of The Arborfield Association. The REME Charity paid £4,744 (2019: £4,622) to the Arborfield Association during the year from dividends generated by investments held in the Armed Forces Common Investment Fund unlisted portfolio.

26. Subsidiary undertakings

The Corps of Royal Electrical and Mechanical Engineers Museum

The consolidated financial statements include the results of The Corps of Royal Electrical and Mechanical Engineers Museum (the REME Museum), charity number 272740. The REME Charity is deemed to have control over the REME Museum by having sole corporate trusteeship. The REME Museum contributes to the esprit de corps objects of The REME Charity.

Results for the period

Gross income Expenditure Results for the year (excluding gains / losses)	2020 £ 435,352 (410,232) 25,120	2019 £ 403,036 (394,342)
		8,694

41

The REME Charity

Notes to the financial statements

For the year ended 31 December 2020

26. Subsidiary undertakings (continued) Net assets

Subsidiary undertakings (continued) Net assets
Assets Liabilities Total charity funds	2020 £ 3,339,728 (8,015) 3,331,713	2019 £ 3,316,550 (9,791)
		3,306,759

27. Parent charity

The parent charity's gross income and the results for the year are:

Gross income Results for the year (excluding gains / losses)	2020 £ 1,786,188 292,262	2019 £ 1,729,766 116,526

42