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|||



1 



## **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 

2 



## **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. 

3 



## **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. 

4 



## **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. 

5 



## **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. 

6 



## **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; 

7 



## **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. 

8 



## **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; 

9 



## **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 

10 



## **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. 

11 



## **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 

13 



## **The REME Charity** 

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

## **For the year ended 31 December 2020** 

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

14 



## **The REME Charity** 

## **Consolidated balance sheets** 

## **As at 31 December 2020** 

|Note<br>**Fixed assets**<br>Tangible assets<br>13<br>Heritage assets<br>14<br>Fixed asset investments<br>15<br>Investment property<br>16<br>**Current assets**<br>Stocks<br>17<br>Debtors<br>18<br>Cash at bank and in hand<br>**Liabilities**<br>Creditors due within 1 year<br>19<br>**Net current assets**<br>**Total assets less current liabilities**<br>Creditors due after more than 1 year<br>**Net assets**<br>21<br>**Funds**<br>22<br>Restricted funds<br>Unrestricted funds<br>Designated funds<br>General funds<br>**Total charity funds**|**The group**<br>**2020**<br>**£**<br>**461,211**<br>**4,105,773**<br>**13,168,877**<br>**500,000**<br>**18,235,861**<br>**133,747**<br>**289,911**<br>**856,365**<br>**1,280,023**<br>**(75,482)**<br>**1,204,541**<br>**19,440,402**<br>**(9,768)**<br>**19,430,634**<br>**3,727,146**<br>**3,369,431**<br>**12,334,057**<br>**19,430,634**|The group<br>2019<br>£<br>519,621<br>4,114,349<br>12,253,315<br>450,000<br>17,337,285<br>125,852<br>278,483<br>675,851<br>1,080,186<br>(75,556)<br>1,004,630<br>18,341,915<br>(16,512)<br>18,325,403<br>3,331,256<br>3,342,976<br>11,651,171<br>18,325,403|**The charity**<br>**2020**<br>**£**<br>**269,971**<br>**1,353,060**<br>**13,168,877**<br>**500,000**<br>**15,291,908**<br>**133,747**<br>**235,999**<br>**691,449**<br>**1,061,195**<br>**(244,413)**<br>**816,782**<br>**16,108,690**<br>**(9,768)**<br>**16,098,922**<br>**3,704,865**<br>**60,000**<br>**12,334,057**<br>**16,098,922**|The charity<br>2019<br>£<br>294,651<br>1,364,096<br>12,253,315<br>450,000|
|---|---|---|---|---|
|||||14,362,062|
|||||125,852<br>220,797<br>418,412|
|||||765,061<br>(91,970)|
|||||673,091|
|||||15,035,153<br>(16,512)|
|||||15,018,641|
|||||3,327,475<br>40,000<br>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:**<br>Net movement in funds<br>Adjustments for:<br>Depreciation charges<br>Revaluation (gains) / losses on fixed assets<br>Revaluation (gains) / losses on heritage assets<br>Donation of heritage assets<br>(Gains) / losses on investments<br>Dividends, interest and rents from investments<br>Loss / (profit) on the disposal of heritage assets<br>Decrease / (increase) in stock<br>Decrease / (increase) in debtors<br>Increase / (decrease) in creditors<br>**Net cash provided by / (used in) operating activities**<br>**Cash flows from investing activities:**<br>Dividends, interest and rents from investments<br>Purchase of tangible fixed assets<br>Purchase of heritage assets<br>Purchase of investments<br>Transfer between investment cash accounts<br>**Net cash provided by / (used in) investing activities**<br>**Increase / (decrease) in cash and cash equivalents in the year**<br>Cash and cash equivalents at the beginning of the year<br>**Cash and cash equivalents at the end of the year**|**2020**<br>**£**<br>**1,105,231**<br>**143,489**<br>**-**<br>**9,539**<br>**(2,286)**<br>**(797,390)**<br>**(423,946)**<br>**1,663**<br>**(7,895)**<br>**(11,428)**<br>**(6,818)**<br>**10,159**<br>**423,946**<br>**(85,079)**<br>**(340)**<br>**(325,000)**<br>**156,828**<br>**170,355**<br>**180,514**<br>**675,851**<br>**856,365**|2019<br>£<br>2,274,496<br>64,881<br>25,000<br>(609,667)<br>(5,981)<br>(1,564,607)<br>(416,114)<br>580<br>(13,344)<br>(9,507)<br>(25,289)|
|---|---|---|
|||(279,552)|
|||416,114<br>(3,939)<br>-<br>(186,195)<br>43,729|
|||269,709|
|||(9,843)<br>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:**<br>Donations and legacies<br>Charitable activities<br>Other trading activities<br>Investments<br>**Total income**<br>**Expenditure on:**<br>Raising funds<br>Charitable activities:<br>Benevolence grants<br>Esprit de corps<br>Museum<br>**Total expenditure**<br>Net gains on investments<br>**Net expenditure**<br>Transfers between funds<br>**Other recognised gains / (losses):**<br>Losses on revaluation of fixed assets<br>Gains on revaluation of heritage assets<br>**Net movement in funds**|Restricted<br>£<br>£<br>255,287<br>1,251,306<br>4,000<br>47,535<br>94,191<br>29,218<br>42,159<br>373,955<br>395,637<br>1,702,014<br>4,282<br>50,348<br>305,098<br>114,192<br>702,515<br>425,389<br>1,944<br>368,661<br>1,013,839<br>958,590<br>131,558<br>1,433,049<br>(486,644)<br>2,176,473<br>693,069<br>(693,069)<br>-<br>(25,000)<br>-<br>609,667<br>206,425<br>2,068,071<br>Unrestricted|**2019**<br>**Total**<br>**£**<br>**1,506,593**<br>**51,535**<br>**123,409**<br>**416,114**|
|---|---|---|
|||**2,097,651**|
|||**54,630**<br>**419,290**<br>**1,127,904**<br>**370,605**|
|||**1,972,429**|
|||**1,564,607**<br>**1,689,829**<br>**-**<br>**(25,000)**<br>**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<br>£<br>£<br>Subscriptions - retired officers<br>13,480<br>20,220<br>Subscriptions - serving officers<br>177,861<br>120,379<br>Subscriptions - museum (gold card)<br>-<br>95,905<br>Subscriptions - other ranks<br>11,807<br>533,131<br>Sports association grants<br>15,274<br>-<br>MOD grant in aid<br>-<br>179,511<br>Armed Forces Covenant Trust grant<br>20,000<br>-<br>ABF donation<br>251<br>-<br>Other donations<br>3,761<br>55,138<br>Donated heritage assets<br>-<br>2,286<br>Legacies<br>5,000<br>-<br>Donated investment management services<br>-<br>88,489<br>Donated services and facilities *<br>-<br>261,465<br>**Total income from donations and legacies**<br>247,434<br>1,356,524<br>**Prior period comparative**<br>Restricted<br>£<br>£<br>Subscriptions - retired officers<br>14,170<br>21,255<br>Subscriptions - serving officers<br>115,201<br>114,553<br>Subscriptions - museum (gold card)<br>-<br>92,299<br>Subscriptions - other ranks<br>10,253<br>509,451<br>Sports association grants<br>100,575<br>-<br>MOD grant in aid<br>-<br>170,443<br>ABF donation<br>400<br>-<br>Other donations<br>14,688<br>110,683<br>Donated heritage assets<br>-<br>5,981<br>Donated services and facilities *<br>-<br>226,641<br>**Total income from donations and legacies**<br>255,287<br>1,251,306<br>* Donated services and facilities consists of:<br>**2020**<br>**£**<br>Donated staff time<br>**211,362**<br>Donated facilities - office premises, equipment and utilities<br>**50,103**<br>**261,465**<br>Unrestricted<br>Unrestricted|**2020**<br>**Total**<br>**£**<br>**33,700**<br>**298,240**<br>**95,905**<br>**544,938**<br>**15,274**<br>**179,511**<br>**20,000**<br>**251**<br>**58,899**<br>**2,286**<br>**5,000**<br>**88,489**<br>**261,465**|
|---|---|
||**1,603,958**|
||2019<br>Total<br>£<br>35,425<br>229,754<br>92,299<br>519,704<br>100,575<br>170,443<br>400<br>125,371<br>5,981<br>226,641|
||1,506,593|
||2019<br>£<br>177,009<br>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<br>Children's activities<br>Museum research<br>**Total income from charitable activities**<br>**Prior period comparative**<br>Museum admission<br>Children's activities<br>Museum research<br>British Museum grant<br>**Total income from charitable activities**<br>**6.**<br>**Income from other trading activities**<br>Sponsorship<br>Other fundraising<br>**Total income from other trading activities**|Restricted Unrestricted<br>£<br>£<br>-<br>20,917<br>-<br>1,889<br>-<br>1,455<br>-<br>24,261<br>Restricted<br>Unrestricted<br>£<br>£<br>-<br>41,200<br>-<br>3,608<br>-<br>2,727<br>4,000<br>-<br>4,000<br>47,535<br>Restricted<br>£<br>£<br>96,428<br>-<br>9,014<br>16,772<br>105,442<br>16,772<br>Unrestricted|**2020**<br>**Total**<br>**£**<br>**20,917**<br>**1,889**<br>**1,455**|
|---|---|---|
|||**24,261**|
|||**2019**<br>**Total**<br>**£**<br>**41,200**<br>**3,608**<br>**2,727**<br>**4,000**|
|||**51,535**|
|||**2020**<br>**Total**<br>**£**<br>**96,428**<br>**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:**<br>Sponsorship<br>Functions<br>Other fundraising<br>**Total income from other trading activities**|Restricted<br>£<br>£<br>85,500<br>-<br>2,145<br>-<br>6,546<br>29,218<br>94,191<br>29,218<br>Unrestricted|2019<br>Total<br>£<br>85,500<br>2,145<br>35,764|
|||123,409|



**7. Income from investments** 

|Income from listed investments<br>Property income<br>Bank interest<br>**Total income from investments**<br>**Prior period comparative:**<br>Income from listed investments<br>Property income<br>Bank interest<br>**Total income from investments**|Restricted<br>£<br>£<br>27,867<br>380,617<br>14,441<br>-<br>-<br>1,021<br>42,308<br>381,638<br>Restricted<br>£<br>£<br>28,800<br>372,912<br>13,359<br>-<br>-<br>1,043<br>42,159<br>373,955<br>Unrestricted<br>Unrestricted|**2020**<br>**Total**<br>**£**<br>**408,484**<br>**14,441**<br>**1,021**|
|---|---|---|
|||**423,946**|
|||2019<br>Total<br>£<br>401,712<br>13,359<br>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<br>REME Institution (Officers' club)<br>Officers Mess functions and costs<br>Grants payable (note 12)<br>REME Sports<br>Association events and costs<br>REME Corps Sergeants' Mess<br>Office expenses<br>Depreciation and scrapped assets<br>Corps recruiting<br>Fundraising and investment property costs<br>Publication costs<br>Staff costs (note 10)<br>Insurance<br>Trustee expenses<br>Donated facilities<br>Investment manager fees<br>Legal and professional<br>**Sub-total**<br>Allocation of support and governance costs<br>**Total expenditure**|£<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>7,062<br>-<br>33,875<br>-<br>-<br>-<br>77,859<br>-<br>118,796<br>30,649<br>**149,445**<br>Raising funds|Charitable<br>activities:<br>grants<br>£<br>-<br>-<br>-<br>378,230<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>62,760<br>-<br>-<br>-<br>-<br>-<br>440,990<br>113,776<br>**554,766**|£<br>-<br>9,003<br>9,570<br>117,009<br>203,909<br>9,779<br>6,391<br>3<br>-<br>70,908<br>-<br>100,728<br>60,176<br>-<br>-<br>-<br>-<br>-<br>587,476<br>151,568<br>**739,044**<br>Charitable<br>activities: esprit<br>de corps|£<br>19,477<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>58,451<br>-<br>-<br>-<br>250,962<br>-<br>-<br>-<br>-<br>-<br>328,890<br>84,854<br>**413,744**<br>Charitable<br>activities:<br>museum|Support and<br>governance<br>costs<br>£<br>351<br>2,318<br>-<br>-<br>-<br>-<br>-<br>79,885<br>85,038<br>-<br>-<br>-<br>142,829<br>7,281<br>2,442<br>50,103<br>-<br>10,600<br>380,847<br>(380,847)<br>**-**|**2020 Total**<br>**£**<br>**19,828**<br>**11,321**<br>**9,570**<br>**495,239**<br>**203,909**<br>**9,779**<br>**6,391**<br>**79,888**<br>**143,489**<br>**70,908**<br>**7,062**<br>**100,728**<br>**550,602**<br>**7,281**<br>**2,442**<br>**50,103**<br>**77,859**<br>**10,600**|
|---|---|---|---|---|---|---|
|||||||**1,856,999**<br>-|
|||||||**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<br>REME Institution (Officers' club)<br>Officers Mess functions and costs<br>Grants payable (note 12)<br>REME Sports<br>Association events and costs<br>REME Corps Sergeants' Mess<br>Office expenses<br>Depreciation and scrapped assets<br>Corps recruiting<br>Fundraising and investment property costs<br>Publication costs<br>Staff costs (note 10)<br>Insurance<br>Trustee expenses<br>Donated facilities<br>Legal and professional<br>**Sub-total**<br>Allocation of support and governance costs<br>**Total expenditure**|£<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>7,670<br>-<br>38,105<br>-<br>-<br>-<br>-<br>45,775<br>8,855<br>**54,630**<br>Raising funds|Charitable<br>activities:<br>grants<br>£<br>-<br>-<br>-<br>294,441<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>56,887<br>-<br>-<br>-<br>-<br>351,328<br>67,962<br>**419,290**|£<br>-<br>8,261<br>35,612<br>148,915<br>460,706<br>33,052<br>14,656<br>-<br>-<br>79,878<br>-<br>100,679<br>63,325<br>-<br>-<br>-<br>-<br>945,084<br>182,820<br>**1,127,904**<br>Charitable<br>activities: esprit<br>de corps|£<br>15,248<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>56,817<br>-<br>-<br>-<br>238,469<br>-<br>-<br>-<br>-<br>310,534<br>60,071<br>**370,605**<br>Charitable<br>activities:<br>museum|Support and<br>governance<br>costs<br>£<br>3,013<br>3,707<br>-<br>-<br>-<br>13,870<br>-<br>85,464<br>8,064<br>-<br>-<br>-<br>117,391<br>8,851<br>6,550<br>49,632<br>23,166<br>319,708<br>(319,708)<br>**-**|**Restated**<br>**2019 Total**<br>**£**<br>**18,261**<br>**11,968**<br>**35,612**<br>**443,356**<br>**460,706**<br>**46,922**<br>**14,656**<br>**85,464**<br>**64,881**<br>**79,878**<br>**7,670**<br>**100,679**<br>**514,177**<br>**8,851**<br>**6,550**<br>**49,632**<br>**23,166**|
|---|---|---|---|---|---|---|
|||||||**1,972,429**<br>-|
|||||||**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<br>Operating lease payments<br>Trustees' remuneration<br>Trustees' reimbursed expenses<br>Auditors' remuneration:<br>Statutory audit (including VAT)<br>Consultancy (including VAT)|**2020**<br>**£**<br>**143,489**<br>**Nil**<br>**Nil**<br>**2,442**<br>**16,758**<br>**3,240**|2019<br>£<br>64,881<br>Nil<br>Nil<br>6,550<br>16,260<br>-|
|---|---|---|



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<br>Social security costs<br>Pension costs<br>Donated salaries<br>Freelance staff|**2020**<br>**£**<br>**307,668**<br>**16,977**<br>**6,877**<br>**211,362**<br>**7,718**<br>**550,602**|2019<br>£<br>305,717<br>18,467<br>6,571<br>177,009<br>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**<br>**No.**<br>**21**|2019<br>No.<br>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<br>Discretionary grants<br>Lyneham funding (D12)<br>Adventurous and enterprising activities<br>REME Corps Sergeants' Mess<br>**Prior period comparative**<br>Benevolence<br>Discretionary grants<br>Adventurous and enterprising activities<br>Lyneham funding (D12)<br>REME Corps Sergeants' Mess|Individuals<br>£<br>163,689<br>13,509<br>-<br>-<br>-<br>**177,198**<br>Individuals<br>£<br>193,743<br>1,901<br>-<br>-<br>-<br>195,644|Institutions<br>£<br>195,000<br>81,435<br>18,234<br>11,843<br>11,529<br>**318,041**<br>Institutions<br>£<br>85,000<br>72,839<br>56,867<br>19,931<br>13,075<br>247,712|**Total**<br>**2020**<br>**£**<br>**358,689**<br>**94,944**<br>**18,234**<br>**11,843**<br>**11,529**|
||||**495,239**|
||||Restated<br>Total<br>2019<br>£<br>278,743<br>74,740<br>56,867<br>19,931<br>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.**<br>**Tangible fixed assets**<br>**Group**<br>**Cost**<br>At 1 January 2020<br>Additions in year<br>At 31 December 2020<br>**Depreciation**<br>At 1 January 2020<br>Charge for the year<br>At 31 December 2020<br>**Net book value**<br>**At 31 December 2020**<br>At 31 December 2019<br>**Charity**<br>**Cost**<br>At 1 January 2020<br>Additions in year<br>At 31 December 2020<br>**Depreciation**<br>At 1 January 2020<br>Charge for the year<br>At 31 December 2020<br>**Net book value**<br>**At 31 December 2020**<br>At 31 December 2019|**Yachts**<br>**£**<br>**£**<br>280,000<br>852,540<br>-<br>85,079<br>280,000<br>937,619<br>-<br>612,919<br>71,000<br>72,489<br>71,000<br>685,408<br>**209,000**<br>**252,211**<br>280,000<br>239,621<br>**Yachts**<br>**£**<br>**£**<br>280,000<br>40,730<br>-<br>60,358<br>280,000<br>101,088<br>-<br>26,079<br>71,000<br>14,038<br>71,000<br>40,117<br>**209,000**<br>**60,971**<br>280,000<br>14,651<br>**Furniture and**<br>**equipment**<br>**Furniture and**<br>**equipment**|**Total**<br>**£**<br>**1,132,540**<br>**85,079**|
|---|---|---|
|||**1,217,619**|
|||**612,919**<br>**143,489**|
|||**756,408**|
|||**461,211**|
|||519,621|
|||**Total**<br>**£**<br>**320,730**<br>**60,358**|
|||**381,088**|
|||**26,079**<br>**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<br>Additions<br>Disposals<br>Revaluations<br>**At 31 December 2020**|**2020**<br>2019<br>**£**<br>£<br>**4,114,349**<br>3,499,281<br>**2,626**<br>5,981<br>**(1,663)**<br>(580)<br>**(9,539)**<br>609,667<br>**4,105,773**<br>4,114,349<br>**The group**|**2020**<br>2019<br>**£**<br>£<br>**1,364,096**<br>1,467,444<br>**-**<br>3,750<br>**(1,663)**<br>(580)<br>**(9,373)**<br>(106,518)<br>**1,353,060**<br>1,364,096<br>**The charity**|**2020**<br>2019<br>**£**<br>£<br>**1,364,096**<br>1,467,444<br>**-**<br>3,750<br>**(1,663)**<br>(580)<br>**(9,373)**<br>(106,518)<br>**1,353,060**<br>1,364,096<br>**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:**<br>Purchases<br>Donations<br>Total additions<br>**Disposals:**<br>Carrying value<br>Proceeds<br>**Revaluations**|**2020**<br>**£**<br>**340**<br>**2,286**<br>**2,626**<br>**1,663**<br>**-**<br>**(9,539)**|2019<br>£<br>-<br>5,981<br>5,981<br>580<br>-<br>609,667|2018<br>£<br>23,698<br>6,130<br>29,828<br>30<br>-<br>-|2017<br>£<br>33,087<br>1,813<br>34,900<br>58,795<br>-<br>19,525|2016<br>£<br>-<br>26,548|
|---|---|---|---|---|---|
||||||26,548|
||||||80,000<br>-|
||||||-|



## **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. 

32 



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



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

|**2020**<br>2019<br>**%**<br>%<br>REME Benevolent Fund<br>**0.3606%**<br>0.3652%<br>REME HQ Officers Mess<br>**3.8247%**<br>3.8710%<br>REME Association<br>**3.0613%**<br>3.1000%<br>REME Museum<br>**2.4827%**<br>1.2489%|**2020**<br>**£**<br>**46,494**<br>**493,094**<br>**394,669**<br>**318,406**<br>**1,252,663**<br>**Market**|2019<br>£<br>43,780<br>464,302<br>371,624<br>149,717<br>**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<br>Revaluation gains<br>**Market value at 31 December 2020**|**2020 Total**<br>**£**<br>**450,000**<br>**50,000**<br>**500,000**|2019 Total<br>£<br>450,000<br>-|
|---|---|---|
|||450,000|



33 



## **The REME Charity** 

## **Notes to the financial statements** 

## **For the year ended 31 December 2020** 

|**17.**<br>**Stock**<br>Finished goods including wine for resale<br>**18.**<br>**Debtors**<br>**Due within 1 year:**<br>Prepayments and accrued income<br>Other debtors<br>**Due in more than 1 year:**<br>Loan to REME Trading company<br>**Total debtors**<br>**19.**<br>**Creditors : amounts due within 1 year**<br>Trade creditors<br>Social security and other taxes<br>Accruals<br>Other creditors<br>Deferred income<br>Intercompany<br>**Due in more than 1 year:**<br>Other creditors|**2020**<br>2019<br>**£**<br>£<br>**133,747**<br>125,852<br>**2020**<br>2019<br>**£**<br>£<br>**153,550**<br>141,726<br>**4,584**<br>4,980<br>**158,134**<br>146,706<br>**131,777**<br>131,777<br>**289,911**<br>278,483<br>**2020**<br>2019<br>**£**<br>£<br>**17,759**<br>12,366<br>**6,263**<br>5,874<br>**37,464**<br>42,949<br>**12,269**<br>8,426<br>**1,727**<br>5,941<br>**-**<br>-<br>**75,482**<br>75,556<br>**9,768**<br>16,512<br>**The group**<br>**The group**<br>**The group**|**2020**<br>2019<br>**£**<br>£<br>**133,747**<br>125,852<br>**2020**<br>2019<br>**£**<br>£<br>**101,037**<br>87,867<br>**3,185**<br>1,153<br>**104,222**<br>89,020<br>**131,777**<br>131,777<br>**235,999**<br>220,797<br>**2020**<br>2019<br>**£**<br>£<br>**17,397**<br>12,366<br>**6,263**<br>5,874<br>**29,810**<br>33,158<br>**12,269**<br>8,426<br>**1,727**<br>5,941<br>**176,947**<br>26,205<br>**244,413**<br>91,970<br>**9,768**<br>16,512<br>**The charity**<br>**The charity**<br>**The charity**|**2020**<br>2019<br>**£**<br>£<br>**133,747**<br>125,852<br>**2020**<br>2019<br>**£**<br>£<br>**101,037**<br>87,867<br>**3,185**<br>1,153<br>**104,222**<br>89,020<br>**131,777**<br>131,777<br>**235,999**<br>220,797<br>**2020**<br>2019<br>**£**<br>£<br>**17,397**<br>12,366<br>**6,263**<br>5,874<br>**29,810**<br>33,158<br>**12,269**<br>8,426<br>**1,727**<br>5,941<br>**176,947**<br>26,205<br>**244,413**<br>91,970<br>**9,768**<br>16,512<br>**The charity**<br>**The charity**<br>**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<br>Deferred during the year<br>Released during the year<br>At 31 December 2020|**2020**<br>2019<br>**£**<br>£<br>**5,941**<br>-<br>**1,727**<br>5,941<br>**(5,941)**<br>-<br>**1,727**<br>5,941<br>**The group**|**2020**<br>2019<br>**£**<br>£<br>**5,941**<br>-<br>**1,727**<br>5,941<br>**(5,941)**<br>-<br>**1,727**<br>5,941<br>**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<br>Heritage assets<br>Fixed asset investments<br>Investment property<br>Current assets<br>Current liabilities<br>Creditors due after more than 1 year<br>**Net assets at 31 December 2020**<br>**Prior year comparative**<br>Tangible fixed assets<br>Heritage assets<br>Listed investments<br>Investment property<br>Current assets<br>Current liabilities<br>Creditors due after more than 1 year<br>**Net assets at 31 December 2019**|Restricted<br>funds<br>£<br>60,970<br>1,353,060<br>1,252,663<br>500,000<br>573,197<br>(12,744)<br>-<br>**3,727,146**<br>Restricted<br>funds<br>£<br>14,651<br>1,364,096<br>1,029,423<br>450,000<br>498,626<br>(25,540)<br>-<br>**3,331,256**|Designated<br>funds<br>£<br>191,236<br>2,752,713<br>-<br>-<br>433,497<br>(8,015)<br>-<br>**3,369,431**<br>Designated<br>funds<br>£<br>224,970<br>2,750,253<br>-<br>-<br>377,544<br>(9,791)<br>-<br>**3,342,976**|General<br>funds<br>£<br>209,005<br>-<br>11,916,214<br>-<br>273,329<br>(54,723)<br>(9,768)<br>**12,334,057**<br>General<br>funds<br>£<br>280,000<br>-<br>11,223,892<br>-<br>204,016<br>(40,225)<br>(16,512)<br>**11,651,171**|**Total**<br>**funds**<br>**£**<br>**461,211**<br>**4,105,773**<br>**13,168,877**<br>**500,000**<br>**1,280,023**<br>**(75,482)**<br>**(9,768)**|
|---|---|---|---|---|
|||||**19,430,634**|
|||||**Total**<br>**funds**<br>**£**<br>**519,621**<br>**4,114,349**<br>**12,253,315**<br>**450,000**<br>**1,080,186**<br>**(75,556)**<br>**(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**<br>_CCT:_<br>Rory Cape Award Prize<br>Mrs E Brewin Bequest<br>Aliquot Shares<br>_Linked entities:_<br>REME Benevolent Fund<br>HQ Officers Mess<br>REME Sports Association<br>REME Institution<br>REME Sergeants' Mess<br>REME Publications<br>REME Association<br>_REME Museum:_<br>British Museum Project<br>Museum Play Park Fund<br>**Total restricted funds**|£<br>5,000<br>14,180<br>1,029,423<br>-<br>1,648,440<br>-<br>604,760<br>25,672<br>-<br>-<br>3,781<br>-<br>3,331,256<br>At 1 January<br>2020|Income<br>£<br>-<br>-<br>-<br>7,718<br>89,079<br>111,440<br>78,473<br>57,786<br>11,358<br>19,330<br>-<br>20,000<br>395,184|£<br>-<br>(13,509)<br>-<br>(7,718)<br>(65,416)<br>(111,440)<br>(24,576)<br>(17,687)<br>(11,358)<br>(19,330)<br>-<br>(1,500)<br>(272,534)<br>Expenditure|Gains /<br>(losses)<br>£<br>-<br>-<br>73,240<br>-<br>-<br>-<br>50,000<br>-<br>-<br>-<br>-<br>-<br>123,240|£<br>**£**<br>-<br>**5,000**<br>-<br>**671**<br>150,000<br>**1,252,663**<br>-<br>**-**<br>-<br>**1,672,103**<br>-<br>**-**<br>-<br>**708,657**<br>-<br>**65,771**<br>-<br>**-**<br>-<br>**-**<br>-<br>**3,781**<br>-<br>**18,500**<br>150,000<br>**3,727,146**<br>Transfers<br>between funds<br>**At 31**<br>**December 2020**|£<br>**£**<br>-<br>**5,000**<br>-<br>**671**<br>150,000<br>**1,252,663**<br>-<br>**-**<br>-<br>**1,672,103**<br>-<br>**-**<br>-<br>**708,657**<br>-<br>**65,771**<br>-<br>**-**<br>-<br>**-**<br>-<br>**3,781**<br>-<br>**18,500**<br>150,000<br>**3,727,146**<br>Transfers<br>between funds<br>**At 31**<br>**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**<br>_Designated funds:_<br>Museum - general<br>Museum - development<br>REME Yacht Club Hulls<br>_Total designated funds_<br>General funds<br>**Total unrestricted funds**<br>**Total funds**<br>**Unrestricted funds**|£<br>3,331,256<br>2,836,066<br>466,910<br>40,000<br>3,342,976<br>11,651,171<br>14,994,147<br>18,325,403<br>At 1 January<br>2020|Income<br>£<br>395,184<br>311,050<br>104,302<br>-<br>415,352<br>1,363,843<br>1,779,195<br>2,174,379|£<br>(272,534)<br>(322,481)<br>(86,250)<br>-<br>(408,731)<br>(1,175,734)<br>(1,584,465)<br>(1,856,999)<br>Expenditure|Gains /<br>(losses)<br>£<br>123,240<br>(166)<br>-<br>-<br>(166)<br>664,777<br>664,611<br>787,851|£<br>**£**<br>150,000<br>**3,727,146**<br>-<br>**2,824,469**<br>-<br>**484,962**<br>20,000<br>**60,000**<br>20,000<br>**3,369,431**<br>(170,000)<br>**12,334,057**<br>(150,000)<br>**15,703,488**<br>-<br>**19,430,634**<br>**At 31**<br>**December 2020**<br>Transfers<br>between funds|£<br>**£**<br>150,000<br>**3,727,146**<br>-<br>**2,824,469**<br>-<br>**484,962**<br>20,000<br>**60,000**<br>20,000<br>**3,369,431**<br>(170,000)<br>**12,334,057**<br>(150,000)<br>**15,703,488**<br>-<br>**19,430,634**<br>**At 31**<br>**December 2020**<br>Transfers<br>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**<br>**Restricted funds**<br>_CCT:_<br>Rory Cape Award Prize<br>Mrs E Brewin Bequest<br>NMA Memorial fund<br>Aliquot Shares<br>_Linked entities:_<br>REME Benevolent Fund<br>HQ Officers Mess<br>REME Sports Association<br>REME Institution<br>REME Sergeants' Mess<br>REME Publications<br>REME Association<br>_REME Museum:_<br>British Museum Project<br>Other restricted funds<br>**Total restricted funds**|At 1 January<br>2019<br>£<br>5,000<br>16,081<br>-<br>885,631<br>-<br>1,629,454<br>-<br>543,422<br>43,915<br>-<br>-<br>-<br>1,328<br>3,124,831|Income<br>£<br>-<br>-<br>486<br>-<br>5,795<br>86,263<br>178,869<br>81,855<br>3,413<br>13,624<br>21,332<br>4,000<br>-<br>395,637|£<br>-<br>(1,901)<br>(9,174)<br>-<br>(279,086)<br>(67,277)<br>(464,947)<br>(20,517)<br>(21,656)<br>(106,848)<br>(42,214)<br>(219)<br>-<br>(1,013,839)<br>Expenditure|Gains /<br>(losses)<br>£<br>-<br>-<br>-<br>131,558<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>131,558|£<br>**£**<br>-<br>**5,000**<br>-<br>**14,180**<br>8,688<br>**-**<br>12,234<br>**1,029,423**<br>273,291<br>**-**<br>-<br>**1,648,440**<br>286,078<br>**-**<br>-<br>**604,760**<br>-<br>**25,672**<br>93,224<br>**-**<br>20,882<br>**-**<br>-<br>**3,781**<br>(1,328)<br>**-**<br>693,069<br>**3,331,256**<br>Transfers<br>between funds<br>**At 31**<br>**December 2019**|£<br>**£**<br>-<br>**5,000**<br>-<br>**14,180**<br>8,688<br>**-**<br>12,234<br>**1,029,423**<br>273,291<br>**-**<br>-<br>**1,648,440**<br>286,078<br>**-**<br>-<br>**604,760**<br>-<br>**25,672**<br>93,224<br>**-**<br>20,882<br>**-**<br>-<br>**3,781**<br>(1,328)<br>**-**<br>693,069<br>**3,331,256**<br>Transfers<br>between funds<br>**At 31**<br>**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**<br>_Designated funds:_<br>Museum - general<br>Museum - development<br>REME Yacht Club Hulls<br>Contingency Reserve<br>_Total designated funds_<br>General funds<br>**Total unrestricted funds**<br>**Total funds**<br>**Unrestricted funds**|At 1 January<br>2019<br>£<br>3,124,831<br>2,135,841<br>444,710<br>20,000<br>(20,000)<br>2,580,551<br>10,345,525<br>12,926,076<br>16,050,907|Income<br>£<br>395,637<br>300,869<br>98,166<br>-<br>-<br>399,035<br>1,302,979<br>1,702,014<br>2,097,651|£<br>(1,013,839)<br>(318,157)<br>(75,966)<br>-<br>-<br>(394,123)<br>(564,467)<br>(958,590)<br>(1,972,429)<br>Expenditure|Gains /<br>(losses)<br>£<br>131,558<br>716,185<br>-<br>-<br>-<br>716,185<br>1,301,531<br>2,017,716<br>2,149,274|£<br>**£**<br>693,069<br>**3,331,256**<br>1,328<br>**2,836,066**<br>-<br>**466,910**<br>20,000<br>**40,000**<br>20,000<br>**-**<br>41,328<br>**3,342,976**<br>(734,397)<br>**11,651,171**<br>(693,069)<br>**14,994,147**<br>-<br>**18,325,403**<br>Transfers<br>between funds<br>**At 31**<br>**December 2019**|£<br>**£**<br>693,069<br>**3,331,256**<br>1,328<br>**2,836,066**<br>-<br>**466,910**<br>20,000<br>**40,000**<br>20,000<br>**-**<br>41,328<br>**3,342,976**<br>(734,397)<br>**11,651,171**<br>(693,069)<br>**14,994,147**<br>-<br>**18,325,403**<br>Transfers<br>between funds<br>**At 31**<br>**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**<br>2019<br>**£**<br>£<br>**13,168,877**<br>12,253,315<br>**The group**|**2020**<br>2019<br>**£**<br>£<br>**13,168,877**<br>12,253,315<br>**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<br>Expenditure<br>**Results for the year (excluding gains / losses)**|**2020**<br>**£**<br>**435,352**<br>**(410,232)**<br>**25,120**|2019<br>£<br>403,036<br>(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)**<br>**Net assets**|||
|---|---|---|
|Assets<br>Liabilities<br>**Total charity funds**|**2020**<br>**£**<br>**3,339,728**<br>**(8,015)**<br>**3,331,713**|2019<br>£<br>3,316,550<br>(9,791)|
|||3,306,759|



## **27. Parent charity** 

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

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



42