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2021-12-31-accounts

Company no. 10036700 Charity no. 1165868

The REME Charity Report and Audited Financial Statements 31 December 2021

The REME Charity

Reference and administrative details

For theyear ended 31 December 2021 For theyear ended 31 December 2021
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
Maj PCD Hembery
Brig C P Phillips CBE
Ms C C Riley
Col A J Rogers
Col D G Scott
Col M A Simpson QVRM TD VR
Chief Executive Officer Lt Col (Retd) M J Tizard (resigned 2 July 2021)
Mrs Barbel Harris (appointed 10 August 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 2021

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

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The REME Charity

Report of the trustees

For the year ended 31 December 2021

The Trustees present their report along with the financial statements of the charity for the year ended 31 December 2021. 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 current 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 Board of Trustees and is administered by The REME Charity.

As a military charity, The REME Charity has to adapt its operations to the current requirements of the Corps it supports. The Board of Trustees regularly reviews its charitable activities to ensure it meets the needs of its beneficiaries. An annual Trustee workshop, usually held in March of each year, sets the themes for the year.

It is important to the charity to be clear about the impact and relevance it has for its beneficiaries and in its wider context. Much work was undertaken during 2020 and 2021 to explore the various facets of impact for our work.

A second workstream concentrated on extending the reach of the charity into our community and the wider charitable context. Further developmental work was undertaken to improve interconnectivity of beneficiaries – the REME family - via REME Connect, the one-stop-shop website at the heart of our digital communications.

Working with our veterans, we continued to improve our reach and translated the connectivity metaphor of the website into communities of support, particularly during the ongoing COVID-19 pandemic. Our cadre of over 150 volunteers sustained high response and support levels throughout the UK.

The REME Trading Company has been incorporated and is controlled by 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 offered training and are supplied with pertinent information by the CEO 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 2021.

3

The REME Charity

Report of the trustees

For the year ended 31 December 2021

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 Chief Executive Officer with delegated spending powers defined in the REME Governance Manual.

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 Corps and the subsequent reduction in income being received through the Day’s Pay Giving Scheme will always be of concern, the highest risk currently identified is loss of key staff, but the new organisational structure introduced in 2021 significantly mitigates this risk.

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 support their families and the retired veteran community and their families by enhancing esprit de corps through promoting the concept of support to the REME family for life. We do this by providing funding for benevolence, welfare, communications, activities, social gatherings and events. This assistance enables Service personnel to face the challenges and dangers associated with military service by developing and maintaining teamwork, skills, fitness, mental health 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 online.

Objectives

The REME Charity is independent of military authorities, a status we further enhanced through the appointment of a civilian Chief Executive Officer in 2021. 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. The three pillars of our support to the REME family are:

4

The REME Charity

Report of the trustees

For the year ended 31 December 2021

These objectives 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 or individuals and through fostering connections which promote REME efficiency, ethos and comradeship, giving members a sense of belonging to the REME family.

Themes and activities in 2021

COVID-19 continued to disrupt the charity’s ‘business as usual’. Staff worked from their own homes with weekly virtual meetings to calibrate workstreams and ensure wellbeing. The work practices established during initial lockdowns in 2020 continued to serve the team well.

The charity purposely carried high cash levels in its accounts accrued from underspent funds of 2020 in order to meet potential high pay-outs in 2021. Expected increased demand on welfare funding did not materialise and support levels remained constant. In 2021 we supported 305 individual cases with financial support amounting to £194,537, with average grants of £638. Furthermore, against expectations, the charity’s investment portfolio performed well and further boosted the deposits. To meet its charitable objectives, the Board of Trustees agreed to donate £85,000 to the ABF in support of their charitable purposes.

Ongoing restrictions frustrated many esprit de corps activities such as team sports, reunions, mess events and other gatherings, tours abroad and most disappointingly, the annual grassroots skiing event EXERCISE SUPREME GLACIER as well as the competitive EXERCISE SNOW SPANNER, with the latter cancelled due to prevailing restrictions abroad.

The REME family, in particular serving soldiers, were highly affected by the pandemic. Isolation and loss of sustaining connections and activities meant that we observed an increase in poor mental health. The REME Charity is proud to partner the Corps’ own mental health project ‘Lifting the Decks’. This initiative, created by CASM WO1 Daniel McNeill, strives to remove the stigma still attached to mental health conditions, affords timely access to specialist help and respite breaks. Not only has the project supported many cases since its inception in the spring of 2021, but it also galvanised the Corps in fundraising activities such as the ‘Virtual 10k’ in May and the ‘Lifting the Decks’ challenge in late summer. The first REME Mental Health Conference is planned for 2022.

The REME Association was subject to review in 2020/21. The review findings called for a focussed effort on improving access and connectivity between veterans hitherto not attached to specific branches. Unfortunately, no concrete plans were implemented as most veterans’ events were cancelled due to restrictions in 2021, bar the annual Memorial event at the National Memorial Arboretum, which saw a reduced turnout. However, with restrictions lifting, we have high hopes for 2022, starting in April with the Reunion event in Nottingham. The creation of supporting communities amongst the REME family and the connections between those in active service and those retired from the Corps is a strategic priority for 2022, with particular emphasis on more recent veterans of the Afghanistan and Iraq conflicts. Over 150 volunteers recruited in 2020 to deal with COVID-19 related issues demonstrated the spirit and resilience amongst our veterans.

Strategies to achieve objects

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, fundraising and some sponsorship. Careful budgeting is required to ensure spending is aligned with charitable objectives. As such, the charity’s approach is reactive to the needs of its beneficiaries but plans for 2022 are more proactive and will identify clear strategic priorities on which efforts will be focussed.

5

The REME Charity

Report of the trustees

For the year ended 31 December 2021

Charitable activities in 2021

The charity’s objectives are primarily met through grant making. However, 2021 saw a continuation of restrictions due to COVID-19 and many of the usually supported activities throughout the year were cancelled.

Benevolence supported 305 cases (2020: 424) with a total spend of £194,537. Support ranged from financial assistance for homebound travel in cases of emergency (particularly with extra costs for COVID-19 measures), the supply of material assistance in cases of marital breakdown to respite breaks for veterans, serving personnel and families due to poor mental health.

Esprit de Corps events were much diminished throughout the year due to continuing lockdowns. The 34 sports teams (2020: 37) only used £258,371 of their allocated spending of £357,175. In 2021 the REME E-Sports team ‘The Mustangs’ received financial support for the first time. £21k was match funded by a sponsor to allow the team to purchase competition computer suite hardware for installation at Prince Philip Barracks in Lyneham.

The REME Association, the REME Institution, the REME Messes as well as the REME Museum receive annual grants from the charity. Any unused funds return to the charity. Only the REME Museum was able to utilise their allocation in 2021 due to ongoing staff costs and partial re-opening in the latter part of the year.

‘The Craftsman’ magazine continued to be distributed to a 4,500 strong readership. A survey took place to investigate how the magazine contributes to the cohesion of the Corps and the REME family.

ACHIEVEMENTS AND PERFORMANCE

Income generation

The majority of The REME Charity’s funding is derived via the Day’s Pay Giving Scheme. Serving personnel surrender a portion of their pay to the charity.

The charity received 5 legacies amounting to £123,241, a substantial amount which demonstrates the esteem in which The REME Charity is held by retired Corps members.

The Virtual 10k Challenge in May 2021 was a most successful fundraising campaign, collecting IRO £12k for the charity in aid of the ‘Lifting the Decks’ project. WO2 Gary Hooson, who initiated the campaign, was awarded the Wally Harris Award for the biggest fundraising campaign of the year.

Investments performed much better in 2021 than in the previous year with the stock market much recovered after the initial setbacks caused by the pandemic. The portfolio continued to follow the agreed strategy of:

▪Grow the main long-term portfolio above the rate of inflation (RPI+4%);

▪Set aside some monies in a more bond-oriented 'resilience' portfolio;

The charity holds accounts portfolios with Sarasin & Partners and Blackrock Armed Forces Income and Growth Fund.

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The REME Charity

Report of the trustees

For the year ended 31 December 2021

At 31 December 2021 they reported:

▪Sarasin main portfolio: £13,195,370 (2020: £11,938,497);

▪Sarasin resilience portfolio: £1,011,624 (2020: £952,170);

FINANCIAL REVIEW

Income

The total income of The REME Charity as of 31 December 2021 was £2,511,910 which, in addition to income generation channels and activities mentioned above, includes £207,342 of services facilities donated by the MoD for the Charity and £47,926 of services facilities donated by the MoD for the Musuem.

Income for the Charity included £1,012,723 from donations from regular and reserve officers’ and soldiers’ through the Day’s Pay Giving Scheme. Income donated from retired officers’ who are members of the REME Institution was £33,950. Gift aid of £1,865 was recovered and investments and interest income was £394,231.

The REME Trading Company exists to trade for charitable purposes on behalf of The REME Charity. Primarily, its main objective is to facilitate a secure, safe and reasonably priced shop so members of The REME Family, serving, retired and their families can procure good quality, reasonably priced uniform and REME memorabilia.

The REME Trading Company aims to cover all operating costs, introduce new stock, provide a service for the REME Family and generate an operating profit which they can donate to The REME Charity.

2021 remained a difficult trading year with the COVID pandemic forcing the physical shop in the museum to remain closed for 50% of the year, however, due to the introduction of new products and social media advertising the company was delighted to make an operating profit of £74,045 which will be donated to The REME Charity.

Expenditure

Expenditure for the year was £2,276,018 and comprised £730,979 in esprit de corps activity, £357,547 in grants, £414,352 on the museum, £418,194 on support costs and £354,946 on income generation cost.

Factors outside of the charity's control

COVID-19 lockdowns and other restrictions continued to impact the charity’s operations. Most affected in terms of income generation was sports sponsorship with many companies withholding funding until activities resumed. Sponsorship amounts were furthermore reduced due to economic downturns for a number of businesses.

Ordinarily, there are many factors that impact our performance, with the main areas being the reliance on the 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.

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The REME Charity

Report of the trustees

For the year ended 31 December 2021

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. In 2022 it has been decided that the Resilience Portfolio should be merged with the Main 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 charity’s loan to The REME Trading Company was written off in 2021 to reflect the amount of slow moving stock transferred and start up funding provided when the Trading Company was first established.

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 over £14M and £850k of cash, the Trustees consider that the charity will continue as a going concern at current spending levels for a period of at least 8 years 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(d) to the financial statements.

Dependency on donors

The viability of the charity is highly dependent on the goodwill and donations of REME serving soldiers and veterans, with their contribution making up 41% of the charity’s income.

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The REME Charity

Report of the trustees

For the year ended 31 December 2021

Strategic plans for 2022 include the diversification of income streams through increased fundraising activity.

Fundraising practices

The REME Charity is registered with the Fundraising Regulator and we take care to ensure we comply with the Code of Fundraising practice. The majority of our fundraising is in the form of events and challenges. All are subject to relevant risk assessments and in FY2021 and to date, there have been no instances of non-compliance with the requirements. The REME Charity does not contract other companies to undertake fundraising on our behalf, nor do we use telephone direct marketing. The charity has received no complaints during the year.

Funds held as custodian Trustee

No funds are held as custodian Trustee.

PLANS FOR FUTURE PERIODS

The charity strives to become more independent from the Corps in order to supplement MoD directed activity with sufficient freedom and autonomy. To achieve this, the Trustees appointed Mrs Babs Harris to the position of Chief Executive Officer in August 2021. Mrs Harris is a civilian charity professional with many years of experience in senior positions in the sector. Together with the Board of Trustees, she will lead the strategic planning cycle in early 2022 and articulate future priorities for the charity.

The plans will be based on The REME Charity Impact Survey, conducted online and anonymously, administered to all beneficiary groups in November/December 2021 and contextualised through wider research conducted by national umbrella organisations such as TRBL, SSAFA and Forces in Mind. Strategic objectives will be captured in a 3-year plan with milestones and targets derived for all aspects of the charity’s work.

To ensure that beneficiary's voices are continually represented in the decision-making processes at strategic levels, in 2021, the Board of Trustees investigated ways to diversify board level representation. The formation of an ‘advisory group’ was agreed upon. The Group will act as a critical friend to the Board of Trustees and review and advise on strategic decisions from a beneficiary point of view. The CEO was tasked with the formation of the group by end of February 2022.

The charity will continue to improve the connectivity of the widespread REME family, particularly via digital platforms, including REME CONNECT and social media. There will also be a drive to reconnect regional sub-groups post-Covid to reinvigorate support networks and comradeship.

To better support the charity’s activities, we will introduce new accounting software (XERO) in early 2022. This user-friendly package will give more immediate access to information, greater transparency and better management accounts to budget holders. Key staff will undergo relevant training.

The charity has to increase its fundraising activity. In the absence of dedicated fundraising staff, we have to invest in a fundraising platform that affords the opportunity to communicate and administrate not only charity-originating events and activities but also a platform for our support community to set up their own events and challenges. Options evaluation is underway with purchase planned for early 2022.

9

The REME Charity

Report of the trustees

For the year ended 31 December 2021

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:

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:

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.

10

The REME Charity

Report of the trustees

For the year ended 31 December 2021

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 2022 and signed on their behalf by

Maj Gen S M Andrews CBE - Chairman

11

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 2021 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:

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.

12

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:

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:

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.

13

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.

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

(1) We obtained an understanding of the legal and regulatory framework that the charity operates in, and assessed the risk of non-compliance with applicable laws and regulations. Throughout the audit, we remained alert to possible indications of non-compliance.

(2) We reviewed the charity’s policies and procedures in relation to:

(3) We inspected the minutes of trustee meetings.

(4) We enquired about any non-routine communication with regulators and reviewed any reports made to them.

(5) We reviewed the financial statement disclosures and assessed their compliance with applicable laws and regulations.

(6) We performed analytical procedures to identify any unusual or unexpected transactions or balances that may indicate a risk of material fraud or error.

(7) We assessed the risk of fraud through management override of controls and carried out procedures to address this risk. Our procedures included:

▪Testing the appropriateness of journal entries;

▪Assessing judgements and accounting estimates for potential bias;

▪Reviewing related party transactions; and

▪Testing transactions that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. Irregularities that arise due to fraud can be even harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

14

Independent auditors' report

To the members of

The REME Charity

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: 21 April 2022

Rob Wilson FCA (Senior Statutory Auditor) For and on behalf of:

GODFREY WILSON LIMITED

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

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The REME Charity

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

For the year ended 31 December 2021

Restricted
Note
£
Income from:
Donations and legacies
3
418,453
Charitable activities
5
-
Other trading activities
6
421
Investments
7
32,624
Total income
451,498
Expenditure on:
Raising funds
12,307
Charitable activities:
Benevolence grants
135,391
Esprit de corps
210,335
Museum
10,882
Total expenditure
8
368,915
Net income before investment gains
82,583
Net gains on investments
45,481
Net income
128,064
Transfers between funds
17,190
Other recognised gains / (losses):
14
-
Net movement in funds
9
145,254
Reconciliation of funds:
Total funds brought forward
3,727,146
Total funds carried forward
3,872,400
Gains/ (losses) on revaluation of
heritage assets		 Unrestricted
£
1,469,962
34,327
194,516
361,607
2,060,412
422,537
302,639
685,187
496,740
1,907,103
153,309
833,100
986,409
(17,190)
68,145
1,037,364
15,691,143
16,728,507		 2021
Total
£
1,888,415
34,327
194,937
394,231
2,511,910
434,844
438,030
895,522
507,622
2,276,018
235,892
878,581
1,114,473
-
68,145
1,182,618
19,418,289
20,600,907		 Restated
2020
Total
£
1,592,457
24,261
264,260
423,946
2,304,924
343,626
545,837
698,731
407,086
1,995,280
309,644
797,390
1,107,034
-
(9,539)
1,097,495
18,320,794
19,418,289

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 23 to the accounts.

The prior period comparatives have been restated as described in note 1 (b) to the accounts.

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The REME Charity

Consolidated balance sheets

As at 31 December 2021

Note
Fixed assets
Tangible assets
13
Heritage assets
14
Mixed motive investments
15
Fixed asset investments
16
Investment property
17
Current assets
Stocks
18
Debtors
19
Cash at bank and in hand
Liabilities
Creditors due within 1 year
20
Net current assets
Total assets less current liabilities
Creditors due after more than 1 year
Net assets
22
Funds
23
Restricted funds
Unrestricted funds
Designated funds
General funds
Total charity funds		 The group
2021
£
1,398,947
3,098,635
43,224
14,511,967
460,000
19,512,773
191,738
148,631
859,688
1,200,057
(108,899)
1,091,158
20,603,931
(3,024)
20,600,907
3,872,400
3,462,125
13,266,382
20,600,907		 The group
2020
£
463,025
4,105,773
-
13,168,877
500,000
18,237,675
250,379
158,195
861,670
1,270,244
(79,862)
1,190,382
19,428,057
(9,768)
19,418,289
3,727,146
3,357,086
12,334,057
19,418,289		 The charity
2021
£
1,156,602
386,151
43,224
14,511,967
460,000
16,557,944
145,042
94,675
712,571
952,288
(281,088)
671,200
17,229,144
(3,024)
17,226,120
3,869,830
90,000
13,266,290
17,226,120		 The charity
2020
£
269,971
1,353,060
-
13,168,877
500,000
15,291,908
133,747
235,999
691,449
1,061,195
(244,413)
816,782
16,108,690
(9,768)
16,098,922
3,704,865
60,000
12,334,057
16,098,922

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 2022 and signed on their behalf by

Maj Gen S M Andrews CBE - Chairman

17

The REME Charity

Consolidated statement of cash flows

For the year ended 31 December 2021

Cash used in operating activities:
Net movement in funds
Adjustments for:
Depreciation charges
Revaluation (gains) / losses on heritage assets
Donation of heritage assets
(Gains) / losses on investments
Dividends, interest and rents from investments
Loss / (profit) on the disposal of heritage assets
Decrease / (increase) in stock
Decrease / (increase) in debtors
Increase / (decrease) in creditors
Net cash provided by / (used in) operating activities
Cash flows from investing activities:
Dividends, interest and rents from investments
Purchase of tangible fixed assets
Purchase of heritage assets
Purchase of investments
Transfer between investment cash accounts
Net cash provided by / (used in) investing activities
Increase / (decrease) in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 2021
£
1,182,618
95,102
(68,145)
(59,900)
(878,581)
(394,231)
184,180
58,641
9,564
22,293
151,541
394,231
(101,785)
(21,460)
(424,509)
-
(153,523)
(1,982)
861,670
859,688		 Restated
2020
£
1,097,495
143,808
9,539
(2,286)
(797,390)
(423,946)
1,663
(2,033)
(10,637)
(6,523)
9,690
423,946
(86,328)
(340)
(325,000)
156,828
169,106
178,796
682,874
861,670

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.

18

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

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 1n, 1o, 1p) and heritage assets (note 1m).

b) Restatement of prior period

The REME Trading Company Limited (REME Trading), company number 10258502, is wholly controlled by the Charity and should therefore be consolidated as a trading subsidiary. The results for the year ended 31 December 2020 have been restated to correct for this.

The impact of the restatement on group funds is as follows:

Group funds per 2020 signed accounts
REME Trading reserves
Restated group funds		 At 1
January
2020
18,325,403
(4,609)
18,320,794		 At 31
December
2020
19,430,634
(12,345)
19,418,289

The restatement relates to unrestricted designated and general funds only and does not impact restricted funds.

c) Group accounts

These financial statements consolidate the results of the charitable company and its whollycontrolled subsidiaries, The Corps of Royal Electrical and Mechanical Engineers Museum (charity registration number 272740) and The REME Trading Company Limited (company number 10258502) on a line by line basis. Transactions and balances between the charitable company and its subsidiaries have been eliminated from the consolidated financial statements. Balances between the parent and its subsidiaries 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.

19

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

1. Accounting policies (continued)

c) Group accounts (continued)

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:

d) Going concern basis of accounting

The accounts have been prepared on the assumption that the charity is able to continue as a going concern, which the trustees consider appropriate having regard to the current level of unrestricted reserves. There are no material uncertainties about the charity's ability to continue as a going concern.

e) 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.

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.

20

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

1. Accounting policies (continued)

f) Donated services and facilities

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.

g) 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.

h) 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.

i) 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.

j) Allocation of support and governance costs

Restated
2021 2020
Raising funds 19.1% 17.2%
Charitable activities:
Benevolence grants 19.2% 27.4%
Esprit de corps 39.4% 35.0%
Museum 22.3% 20.4%

21

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

1. Accounting policies (continued)

k) Grants payable

l) 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 Corps items Not depreciated

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

The REME Collection ("Corps items"), 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. Corps items are considered to have indeterminate lives and the trustees therefore do not consider it appropriate to charge depreciation. Items are initially recorded at cost when an acquisition has been made by purchase. The items are periodically revalued and any gain or loss arising on revaluation will be posted to the statement of financial activities. Methods of valuation are given in note 1 (m) below.

m) Heritage assets

The REME Charity has gained a wide and varied collection of assets since its formation in 1942. These are held within the Messes, the Church, and the Headquarters and have either been donated by individuals or units, or gifted by the MoD.

Where these assets are held primarily for their contribution to our nation’s culture and knowledge, they are classified as ‘heritage assets’.

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. 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 generally valued at 50% of insurance value. During the year ended 31 December 2021 all artworks and silverware were revalued by Madley Associates, fellows of the National Association of Valuers and Auctioneers.

The assets are considered to have indeterminate lives and the trustees therefore do not consider it appropriate to charge depreciation. All heritage assets are reviewed for impairment annually and any charge taken to the SoFA.

22

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

1. Accounting policies (continued)

n) Mixed motive investments

Mixed motive investments represent the charity's collection of fine art, held by the charity primarily to contribute to the esprit de corps activities of the messes, but which is also held for its potential investment growth. Fine art is held at fair value.

o) 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.

p) 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.

q) 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.

r) 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.

s) 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.

t) 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.

u) 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.

v) Pension costs

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

w) 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.

23

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

1. Accounting policies (continued)

x) Accounting estimates and key judgements

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 1l 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, mixed motive investments and investment property are stated at estimated fair value based on periodic valuations, as disclosed in notes 1m, 1n and 1o.

24

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

2. Prior period comparatives: statement of financial activities

Income from:
Donations and legacies
Charitable activities
Other trading activities
Investments
Total income
Expenditure on:
Raising funds
Charitable activities:
Benevolence grants
Esprit de corps
Museum
Total expenditure
Net income before investment gains
Net gains on investments
Net income
Transfers between funds
Other recognised gains / (losses):
Gains on revaluation of heritage assets
Net movement in funds		 Restricted
£
£
247,434
1,345,023
-
24,261
105,442
158,818
42,308
381,638
395,184
1,909,740
-
343,626
21,228
524,609
249,806
448,925
1,500
405,586
272,534
1,722,746
122,650
186,994
123,240
674,150
245,890
861,144
150,000
(150,000)
-
(9,539)
395,890
701,605
Unrestricted		 Restated
2020
Total
£
1,592,457
24,261
264,260
423,946
2,304,924
343,626
545,837
698,731
407,086
1,995,280
309,644
797,390
1,107,034
-
(9,539)
1,097,495

25

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

3. Income from donations and legacies

Restricted
£
£
Subscriptions - retired officers
13,580
20,370
Subscriptions - serving officers
185,695
125,947
Subscriptions - museum (gold card)
-
97,487
Subscriptions - other ranks
-
569,644
Sports association grants
50,000
-
MOD grant in aid
-
178,374
Other donations
45,937
63,617
Donated heritage assets
-
60,050
Legacies
123,241
-
Donated investment management services
-
99,206
Donated services and facilities
-
255,267
Total income from donations and legacies
418,453
1,469,962
Prior period comparative
Restricted
£
£
Subscriptions - retired officers
13,480
20,220
Subscriptions - serving officers
177,861
120,379
Subscriptions - museum (gold card)
-
95,905
Subscriptions - other ranks
11,807
533,131
Sports association grants
15,274
-
MOD grant in aid
-
179,511
Armed Forces Covenant Trust grant
20,000
-
ABF donation
251
-
Other donations
3,761
43,637
Donated heritage assets
-
2,286
Legacies
5,000
-
Donated investment management services
-
88,489
Donated services and facilities
-
261,465
Total income from donations and legacies
247,434
1,345,023
Donated services and facilities consists of:
2021
£
Donated staff time
202,458
Donated facilities - office premises, equipment and utilities
52,809
255,267*
Unrestricted
Unrestricted		 2021
Total
£
33,950
311,642
97,487
569,644
50,000
178,374
109,554
60,050
123,241
99,206
255,267
1,888,415
Restated
2020
Total
£
33,700
298,240
95,905
544,938
15,274
179,511
20,000
251
47,398
2,286
5,000
88,489
261,465
1,592,457
2020
£
211,362
50,103
261,465

26

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

4. Government grants

5. Income from charitable activities

Museum admission
Children's activities
Museum research
Development fund grant income
Total income from charitable activities
Prior period comparative
Museum admission
Children's activities
Museum research
Total income from charitable activities
Income from other trading activities
REME trading income
Sponsorship
Other fundraising
Total income from other trading activities		 Restricted Unrestricted
£
£
-
31,375
-
1,895
-
664
-
393
-
34,327
Restricted Unrestricted
£
£
-
20,917
-
1,889
-
1,455
-
24,261
Restricted
£
£
-
142,761
-
33,520
421
18,235
421
194,516
Unrestricted		 2021
Total
£
31,375
1,895
664
393
34,327
2020
Total
£
20,917
1,889
1,455
24,261
2021
Total
£
142,761
33,520
18,656
194,937

6. Income from other trading activities

27

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

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

Prior period comparative:
REME trading income
Sponsorship
Other fundraising
Total income from other trading activities		 Restricted
£
£
-
142,046
96,428
-
9,014
16,772
105,442
158,818
Unrestricted		 Restated
2020
Total
£
142,046
96,428
25,786
264,260

7. Income from investments

Income from investments
Income from listed investments
Property income
Bank interest
Total income from investments
Prior period comparative:
Income from listed investments
Property income
Bank interest
Total income from investments		 Restricted
£
£
15,396
361,472
17,228
-
-
135
32,624
361,607
Restricted
£
£
27,867
380,617
14,441
-
-
1,021
42,308
381,638
Unrestricted
Unrestricted		 2021
Total
£
376,868
17,228
135
394,231
2020
Total
£
408,484
14,441
1,021
423,946

28

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

8. Total expenditure

REME Museum
REME Institution (Officers' club)
REME Trading
Officers Mess functions and costs
Grants payable (note 12)
REME Sports
Association events and costs
REME Corps Sergeants' Mess
Office expenses
Repairs and maintenance
Depreciation and scrapped assets
Corps recruiting
Fundraising and investment property costs
Publication costs
Staff costs (note 10)
Insurance
Trustee expenses
Donated facilities
Investment manager fees
Legal and professional
Sub-total
Allocation of support and governance costs
Total expenditure		 £
-
-
140,985
-
-
-
-
-
-
-
-
40,830
-
104,926
-
-
-
68,205
-
354,946
79,898
434,844
Raising funds		 Charitable
activities:
grants
£
-
-
-
-
267,036
-
-
-
-
-
-
-
-
-
90,511
-
-
-
-
-
357,547
80,483
438,030		 £
-
7,909
-
60,386
102,214
258,371
18,184
21,658
135
-
-
37,547
-
106,568
118,007
-
-
-
-
-
730,979
164,543
895,522
Charitable
activities: esprit
de corps		 £
27,669
-
-
-
-
-
-
-
-
-
94,569
-
-
-
292,114
-
-
-
-
-
414,352
93,270
507,622
Charitable
activities:
museum		 Support and
governance
costs
£
748
3,618
-
-
-
-
-
-
78,672
3,960
184,713
-
-
-
27,247
6,428
772
52,809
-
59,227
418,194
(418,194)
-		 2021 Total
£
28,417
11,527
140,985
60,386
369,250
258,371
18,184
21,658
78,807
3,960
279,282
37,547
40,830
106,568
632,805
6,428
772
52,809
68,205
59,227
2,276,018
-
2,276,018

29

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

8. Total expenditure - prior period comparative

REME Museum
REME Institution (Officers' club)
REME trading
Officers Mess functions and costs
Grants payable (note 12)
REME Sports
Association events and costs
REME Corps Sergeants' Mess
Office expenses and shop overheads
Depreciation and scrapped assets
Corps recruiting
Fundraising and investment property costs
Publication costs
Staff costs (note 10)
Insurance
Trustee expenses
Donated facilities
Investment manager fees
Legal and professional
Sub-total
Allocation of support and governance costs
Total expenditure		 £
-
-
105,310
-
-
-
-
-
18,466
319
-
7,062
-
68,605
-
-
-
77,859
-
277,621
66,005
343,626
Raising funds		 £
-
-
-
378,230
-
-
-
-
-
-
-
-
62,760
-
-
-
-
-
440,990
104,847
545,837
Charitable
activities:
grants		 £
-
9,003
9,570
117,009
203,909
9,779
6,391
3
-
47,948
-
100,728
60,176
-
-
-
-
-
564,516
134,215
698,731
Charitable
activities: esprit
de corps		 £
19,477
-
-
-
-
-
-
-
58,451
-
-
-
250,962
-
-
-
-
-
328,890
78,196
407,086
Charitable
activities:
museum		 £
351
2,318
-
-
-
-
-
79,886
85,038
-
-
-
142,829
7,281
2,442
50,103
-
13,015
383,263
(383,263)
-
Support and
governance
costs		 £
19,828
11,321
105,310
9,570
495,239
203,909
9,779
6,391
98,355
143,808
47,948
7,062
100,728
585,332
7,281
2,442
50,103
77,859
13,015
Restated
2020 total
1,995,280
-
1,995,280

30

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

9. Net movement in funds

This is stated after charging:

Depreciation and loss on disposal of assets
Operating lease payments
Trustees' remuneration
Trustees' reimbursed expenses
Auditors' remuneration:
Statutory audit (including VAT)
Consultancy (including VAT)		 2021
£
279,282
Nil
Nil
772
18,060
1,920		 2020
£
143,808
Nil
Nil
2,442
16,758
3,240

Trustees' reimbursed expenses comprise travel and accommodation costs relating to 4 trustees (2020: 4 trustees).

Total governance costs were £18,831 (2020: £19,200).

10. Staff costs and numbers

Staff costs were as follows:
Salaries and wages
Social security costs
Pension costs
Donated salaries
Freelance staff		 2021
£
372,901
23,077
8,761
202,459
25,607
632,805		 Restated
2020
£
341,667
16,977
7,608
211,362
7,718
585,332

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

The key management personnel of the charitable company comprise the CEO, Operations Manager, Museum Director and Corps Secretary. The total employee benefits of the key management personnel paid by the charity and recognised as a gift in kind were £49,905 and £70,493 respectively (2020: £30,320 and £43,706).

Average number of employees (head count): 2021
No.
20		 Restated
2020
No.
26

11. Taxation

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

31

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

12. Grants payable

Grants payable
Benevolence
Discretionary grants
Adventurous and enterprising activities
REME Corps Sergeants' Mess
Officers Mess
Prior period comparative
Benevolence
Discretionary grants
Lyneham funding (D12)
Adventurous and enterprising activities
REME Corps Sergeants' Mess		 Individuals
£
164,854
-
-
-
-
164,854
Individuals
£
163,689
13,509
-
-
-
177,198		 Institutions
£
95,000
77,498
16,645
14,903
350
204,396
Institutions
£
195,000
81,435
18,234
11,843
11,529
318,041		 Total
2021
£
259,854
77,498
16,645
14,903
350
369,250
Restated
Total
2020
£
358,689
94,944
18,234
11,843
11,529
495,239

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 2021 was 1, to the Army Benevolent Fund for £85,000 (2020: 1, for £185,000, to the Army Benevolent Fund). There were no other committed grants at 31 December 2021. 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.

32

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

13. Tangible fixed assets

Tangible fixed assets
Group
Cost
At 1 January 2021 (restated)
Additions in year
Reclassification from heritage assets
Disposals
At 31 December 2021
Depreciation
At 1 January 2021 (restated)
Charge for the year
Disposals
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020 (restated)
Charity
Cost
At 1 January 2021
Additions in year
Reclassification from heritage assets
Disposals
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the year
Disposals
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020		 Yachts
£
280,000
-
-
-
280,000
71,000
11,500
-
82,500
197,500
209,000
Yachts
£
280,000
-
-
-
280,000
71,000
11,500
-
82,500
197,500
209,000		 £
940,064
101,785
95,515
(4,105)
1,133,259
686,039
83,602
(4,105)
765,536
367,723
254,025
£
101,088
-
95,515
(4,105)
192,498
40,117
31,108
(4,105)
67,120
125,378
60,971
Furniture
and
equipment
Furniture
and
equipment		 Corps
items
£
-
-
833,724
-
833,724
-
-
-
-
833,724
-
Corps
items
£
-
-
833,724
-
833,724
-
-
-
-
833,724
-		 Total
£
1,220,064
101,785
929,239
(4,105)
2,246,983
757,039
95,102
(4,105)
848,036
1,398,947
463,025
Total
£
381,088
-
929,239
(4,105)
1,306,222
111,117
42,608
(4,105)
149,620
1,156,602
269,971

33

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

14. Heritage assets

At 1 January 2021
Additions
Disposals
Revaluations
Reclassification to tangible fixed assets
Reclassification to mixed motive investment
At 31 December 2021		 2021
2020
£
£
4,105,773
4,114,349
81,360
2,626
(184,180)
(1,663)
68,145
(9,539)
(929,239)
-
(43,224)
-
3,098,635
4,105,773
The group		 2021
2020
£
£
1,353,060
1,364,096
78,990
-
(141,670)
(1,663)
68,234
(9,373)
(929,239)
-
(43,224)
-
386,151
1,353,060
The charity		 2021
2020
£
£
1,353,060
1,364,096
78,990
-
(141,670)
(1,663)
68,234
(9,373)
(929,239)
-
(43,224)
-
386,151
1,353,060
The charity
1,353,060

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

Five year summary of heritage asset transactions:

Additions:
Purchases
Donations
Total additions
Disposals:
Carrying value
Proceeds
Revaluations		 2021
£
21,460
59,900
81,360
(184,180)
-
68,145		 2020
£
340
2,286
2,626
1,663
-
(9,539)		 2019
£
-
5,981
5,981
580
-
609,667		 2018
£
23,698
6,130
29,828
30
-
-		 2017
£
33,087
1,813
34,900
58,795
-
19,525

The REME Charity heritage assets

The REME Charity has gained a wide and varied collection of assets since its formation in 1942. These are held within the Messes, the Church, and the Headquarters and have either been donated by individuals or units, or gifted by the MoD.

Where these assets are held primarily for their contribution to our nation’s culture and knowledge, they are classified as ‘heritage assets’. Other assets are of significance to the Corps but are not held as heritage assets. These items have been reclassified as non-depreciable tangible fixed assets during 2021.

Further detail on the recognition and valuation of these assets is given in notes 1 (l) and (m).

34

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

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.

15. Mixed motive investments

At 1 January 2021
Reclassification from heritage assets
At 31 December 2021		 2021
2020
£
£
-
-
43,224
-
43,224
-
The group		 2021
2020
£
£
-
-
43,224
-
43,224
-
The charity		 2021
2020
£
£
-
-
43,224
-
43,224
-
The charity
-

Mixed motive investments represent the charity's collection of fine art, held by the charity primarily to contribute to the esprit de corps activities of the messes, but which is also held for its potential investment growth. The paintings were previously included within heritage assets but have been reclassified in 2021 to better reflect the nature of the asset. The fine art collection is held at fair value and will be revalued every 5 years.

35

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

16. Fixed asset investments

Blackrock Armed Forces Growth and Income Fund - unlisted
Market value at 1 January 2021
Unrealised gains
As at 31 December 2021
Sarasin Funds - all listed
Market value at 1 January 2021
Additions
Transfers between cash accounts
Unrealised gains
As at 31 December 2021
Total investments		 2021
£
278,210
26,763
304,973
12,890,667
424,509
-
891,818
14,206,994
14,511,967		 2020
£
265,437
12,773
278,210
11,987,878
325,000
(156,828)
734,617
12,890,667
13,168,877

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

2021
2020
%
%
REME Benevolent Fund
0.3553%
0.3606%
REME HQ Officers Mess
3.7680%
3.8247%
REME Association
3.0159%
3.0613%
REME Museum
2.4459%
2.4827%		 2021
£
51,171
542,693
434,368
350,602
1,378,834
Market		 2020
£
46,494
493,094
394,669
318,406
value
1,252,663

17. Investment property

The charity owns Judnick House, a residential investment property. The property is held at fair value based on a desktop market valuation obtained from an estate agent, Frank Schippers, dated 2 December 2021.

Market value at 1 January 2021
Revaluation gains
Market value at 31 December 2021		 2021
£
500,000
(40,000)
460,000		 2020
£
450,000
50,000
500,000

36

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

18.
Stock
REME Trading stock for resale
Finished goods including wine for resale
19.
Debtors		 Restated
2021
2020
£
£
46,696
116,632
145,042
133,747
191,738
250,379
The group		 2021
2020
£
£
-
-
145,042
133,747
145,042
133,747
The charity		 2021
2020
£
£
-
-
145,042
133,747
145,042
133,747
The charity
133,747
19.
Debtors
Due within 1 year:
Trade debtors
Prepayments and accrued income
Other debtors
Due in more than 1 year:
Intercompany due from REME Trading
Total debtors
20.
Creditors : amounts due within 1 year
Trade creditors
Social security and other taxes
Accruals
Other creditors
Deferred income
Intercompany due to REME Museum
Due in more than 1 year:
Other creditors		 Restated
2021
2020
£
£
2,109
-
143,170
153,550
3,352
4,645
148,631
158,195
-
-
148,631
158,195
Restated
2021
2020
£
£
46,782
17,759
13,782
8,643
25,436
39,464
18,374
12,269
4,525
1,727
-
-
108,899
79,862
3,024
9,768
The group
The group		 2021
2020
£
£
1,680
-
89,643
101,037
3,352
3,185
94,675
104,222
-
131,777
94,675
235,999
2021
2020
£
£
43,962
17,397
10,138
6,263
16,300
29,810
18,477
12,269
4,525
1,727
187,686
176,947
281,088
244,413
3,024
9,768
The charity
The charity
244,413
9,768

37

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

21. Deferred income

Deferred income
At 1 January 2021
Deferred during the year
Released during the year
At 31 December 2021		 2021
2020
£
£
1,727
5,941
4,525
1,727
(1,727)
(5,941)
4,525
1,727
The group		 2021
2020
£
£
1,727
5,941
4,525
1,727
(1,727)
(5,941)
4,525
1,727
The charity
1,727

Deferred income relates to prepaid advertising income for publications not yet published as at 31 December 2021.

22. Analysis of group net assets between funds

Restricted Designated General Total
funds funds funds funds
£ £ £ £
Tangible fixed assets 748,938 239,880 410,129 1,398,947
Heritage assets 386,151 2,712,484 - 3,098,635
Mixed motive investments 43,224 - - 43,224
Fixed asset investments 1,378,834 - 13,133,133 14,511,967
Investment property 460,000 - - 460,000
Current assets 855,253 509,761 (164,957) 1,200,057
Current liabilities - - (108,899) (108,899)
Creditors due after more than 1 year - - (3,024) (3,024)
Net assets at 31 December 2021 3,872,400 3,462,125 13,266,382 20,600,907
Prior year comparative Restated
Prior year comparative Restated
Restricted Designated General total
funds funds funds funds
£ £ £ £
Tangible fixed assets 60,971 193,049 209,005 463,025
Heritage assets 1,353,060 2,752,713 - 4,105,773
Fixed asset investments 1,252,663 - 11,916,214 13,168,877
Investment property 500,000 - - 500,000
Current assets 573,196 423,719 273,329 1,270,244
Current liabilities (12,744) (12,395) (54,723) (79,862)
Creditors due after more than 1 year - - (9,768) (9,768)
Net assets at 31 December 2020 3,727,146 3,357,086 12,334,057 19,418,289

38

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

23. Movements in funds

Movements in funds
Restricted funds
CCT:
Rory Cape Award Prize
Mrs E Brewin Bequest
Aliquot Shares
Linked entities:
REME Benevolent Fund
HQ Officers Mess
REME Sports Association
REME Institution
REME Sergeants' Mess
REME Museum:
British Museum Project
Museum Play Park Fund
Total restricted funds		 £
5,000
671
1,252,663
-
1,672,103
-
708,657
65,771
3,781
18,500
3,727,146
At 1 January
2021		 Income
£
-
-
-
127,045
89,795
90,000
84,235
60,423
-
-
451,498		 £
-
(671)
-
(127,045)
(88,339)
(90,000)
(25,088)
(36,561)
(1,211)
-
(368,915)
Expenditure		 Gains /
(losses)
£
-
-
85,481
-
-
-
(40,000)
-
-
-
45,481		 £
£
(5,000)
-
-
-
40,690
1,378,834
-
-
-
1,673,559
-
-
-
727,804
-
89,633
-
2,570
(18,500)
-
17,190
3,872,400
Transfers
between funds
At 31
December 2021
3,872,400

39

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

23. Movements in funds (continued)

Total restricted funds
Designated funds:
Museum - general
Museum - development
REME Trading
REME Yacht Club Hulls
Total designated funds
General funds
Total unrestricted funds
Total funds
Unrestricted funds		 £
3,727,146
2,824,469
484,962
(12,345)
60,000
3,357,086
12,334,057
15,691,143
19,418,289
At 1 January
2021		 Income
£
451,498
333,063
109,467
274,216
-
716,746
1,343,666
2,060,412
2,511,910		 £
(368,915)
(333,152)
(126,795)
(200,171)
-
(660,118)
(1,246,985)
(1,907,103)
(2,276,018)
Expenditure		 Gains /
(losses)
£
45,481
(89)
-
-
-
(89)
901,334
901,245
946,726		 £
£
17,190
3,872,400
18,500
2,842,791
-
467,634
-
61,700
30,000
90,000
48,500
3,462,125
(65,690)
13,266,382
(17,190)
16,728,507
-
20,600,907
At 31
December 2021
Transfers
between funds		 £
£
17,190
3,872,400
18,500
2,842,791
-
467,634
-
61,700
30,000
90,000
48,500
3,462,125
(65,690)
13,266,382
(17,190)
16,728,507
-
20,600,907
At 31
December 2021
Transfers
between funds
3,462,125
13,266,382
16,728,507
20,600,907

40

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

23. Movements in funds (continued) Purposes of restricted funds

Mrs E Brewin Bequest

Aliquot Shares

Linked entities

British Museum Project

Museum Play Park Fund

In 2020, £5,000 was allocated to the Rory Cape Award after its funds were spend. On reflection it has been decided that this prize will continue but will be funded by the Adventurous Training grant and therefore this fund has been closed.

The final payment for this fund was made in January 2021 and the Brewin Fund has now been closed. REME widows will continue to be supported by the Benevolent Fund.

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.

This fund represents grant funding received from Money & Medals Network to fund training for the Museum Assistant Curator.

This relates to a grant from The Armed Forces Covenant Fund Trust that supports community projects. In the prior year the REME Museum was granted £20,000 for the installation of a children's play park in the grounds of the Museum to benefit the REME family and wider community. The work was completed in 2021.

41

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

23. Movements in funds (continued) Purpose of designated funds Museum - general The REME Museum is given an operating budget each year from the REME Charity. Museum - development 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.

REME Trading The REME Trading Company operates the shop in the REME Museum and online. REME Yacht Club Hulls The REME Hulls fund was set up as a saving plan to purchase a new yacht every five years. £30k was deposited during the year.

Transfers between funds

The brought forward balance for the Rory Cape Award Prize was transferred to unrestricted reserves during the year as this is now funded by The REME Charity out of unrestricted funds. The transfer into the aliquot fund represents an increase in the Museum's investment contribution.

The transfer of funds from the Museum Play Park Fund represents capital expenditure for the children's play park that was incurred during the year. The transfer to REME Yacht Club Hulls designated fund represent an increase to the yacht reserve.

42

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

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

43

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

23. Movements in funds (continued) - prior year comparative (restated)

Total restricted funds
Designated funds:
Museum - general
Museum - development
REME Trading
REME Yacht Club Hulls
Total designated funds
General funds
Total unrestricted funds
Total funds
Unrestricted funds		 At 1 January
2020
£
3,331,256
2,836,066
466,910
(4,609)
40,000
3,338,367
11,651,171
14,989,538
18,320,794		 Income
£
395,184
311,050
104,302
142,045
-
557,397
1,352,343
1,909,740
2,304,924		 £
(272,534)
(322,481)
(86,250)
(161,241)
-
(569,972)
(1,152,774)
(1,722,746)
(1,995,280)
Expenditure		 Gains /
(losses)
£
123,240
(166)
-
-
-
(166)
664,777
664,611
787,851		 £
£
150,000
3,727,146
-
2,824,469
-
484,962
11,460
(12,345)
20,000
60,000
31,460
3,357,086
(181,460)
12,334,057
(150,000)
15,691,143
-
19,418,289
Transfers
between funds
At 31
December 2020		 £
£
150,000
3,727,146
-
2,824,469
-
484,962
11,460
(12,345)
20,000
60,000
31,460
3,357,086
(181,460)
12,334,057
(150,000)
15,691,143
-
19,418,289
Transfers
between funds
At 31
December 2020
3,357,086
12,334,057
15,691,143
19,418,289

44

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

24. Financial instruments at fair value

Financial assets measured at fair value 2021
2020
£
£
14,511,967
13,168,877
The group		 2021
2020
£
£
14,511,967
13,168,877
The charity

Financial assets measured at fair value comprise fixed asset investments.

25. Operating lease commitments

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

26. 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 £60,566 (2020: £47,160) to the REME Museum. The REME Charity operates payroll and manages transactions on behalf of the Museum. At the year end £187,686 was due to the REME Museum (2020: £176,947).

The REME Charity also has control of the REME Trading Company Limited (company registration no. 10258502). The Operations Manager 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 2021 were £Nil (2020: £131,777). An amount of £131,777 of this balance was written off during the year. This balance related to stock that had been transferred from the Charity to REME Trading where no consideration was paid and to some start up funding provided by the Charity. The REME Trading Company also donated £nil (2020: £11,252) and made sales of goods from the shop totalling £31,549 (2020: £22,960) to the REME Charity during the year.

The Corps Secretary, who resigned during the year, was a Trustee of The Arborfield Association. The REME Charity paid £2,372 (2020: £4,744) to the Arborfield Association during the year from dividends generated by investments held in the Armed Forces Common Investment Fund unlisted portfolio.

One of the trustees is also a trustee of Army Rifle Association. The REME Charity paid £140 (2020: £nil) to the Army Rifle Association during the year for entry fees.

27. 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.

45

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

27. Subsidiary undertakings (continued) Results for the period

Gross income
Expenditure
Results for the year (excluding gains / losses)
Net assets
Assets
Liabilities
Total museum funds		 2021
£
442,619
(461,158)
(18,539)
2021
£
3,323,541
(10,456)
3,313,085		 2020
£
435,352
(410,232)
25,120
2020
£
3,339,728
(8,015)
3,331,713

The REME Trading Company Limited

The consolidated financial statements include the results of The REME Trading Company Limited (REME Trading), company number 10258502. REME Trading was incorporated to operate the cafe and shop situated within the REME museum. The REME Charity is deemed to have control over REME Trading, the directors of REME Trading being key management personnel of The REME Charity.

Results for the period

Turnover
Cost of sales
Gross profit
Other operating income
Administrative expenses
Operating profit / (loss)
Tax on profit / (loss)
Profit for financial year		 2021
£
174,310
(140,985)
33,325
99,906
(59,186)
74,045
-
74,045		 2020
£
165,006
(105,310)
59,696
-
(67,432)
(7,736)
-
(7,736)

46

The REME Charity

Notes to the financial statements

For the year ended 31 December 2021

27. Subsidiary undertakings (continued)

The aggregate of the assets, liabilities and funds was:

Subsidiary undertakings (continued)
The aggregate of the assets, liabilities and funds was:
Assets
Liabilities
Total reserves		 2021
£
66,741
(5,041)
61,700		 2020
£
123,749
(136,094)
(12,345)

28. Parent charity

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

Gross income
Surplus for the year (excluding gains / losses)		 2021
£
1,982,093
180,382		 2020
£
1,786,188
292,262

47