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2022-08-31-accounts

Charity Registration No. 1167682

ARMED FORCES EDUCATION TRUST

REPORT OF THE TRUSTEES AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2022

10 Bridge Street Christchurch Dorset BH23 1EF

ARMED FORCES EDUCATION TRUST

CONTENTS

Page
Legal and administratve informaton 1
Report of the Trustees 2 - 6
Statement of Trustees' responsibilites 7
Independent auditor's report 8 - 11
Statement of fnancial actvites 12
Statement of fnancial positon 13
Notes to the fnancial statements 14 - 21

ARMED FORCES EDUCATION TRUST

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Mr A Behagg Chair
Mr M Willis
Mrs J Lycet
Mrs M Clohessy Treasurer
Mr T Flesher
Mr I Buckle
Ms L G Buckingham Robinson
Mr D J Toriat
Charity number 1167682
Principal address Armed Forces Educaton Trust
PO Box 684
Farnham
Surrey
GU9 1LP
Auditor TC Group
10 Bridge Street
Christchurch
Dorset
BH23 1EF

ARMED FORCES EDUCATION TRUST

TRUSTEES' REPORT

FOR THE YEAR ENDED 31 AUGUST 2022

The Trustees present their report and financial statements for the year ended 31 August 2022.

The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements, the Charities Act 2011 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016).

Objectives and activities

Objectives and aims

The purpose of the Trust, as set out in its governing document, is the advancement of education of people under the age of 25 years who are or were dependents of serving or former members of HM Armed Forces.

Aim and Intended Impact

The Trust's aim is to improve opportunities and outcomes for children and young adults whose education has been adversely impacted by their parents' service in the Armed Forces. The Trust identifies individuals and institutions in need of its help and establishes a sustainable method of supporting them financially in education.

The key challenge facing the Trust continues to be the task of reaching out to as wide an audienceas possible, so that the Trust can identify those individuals and institutions most in need of its help.

Objectives for the Year

The Trust regularly reviews its strategic intent and ensures that its principal objectives for the year reflect the operation of the Trust as a grant giving body. These objectives were:

The number of applicants, the breadth of their geographical location and the diversity of service personnel applying are all key indicators of the Trust's success in meeting its objectives.

Public benefit

The Trustees have had regard to the guidance issued by the Charity Commission on public benefit and have taken care in agreeing the objects with the Charity Commission to reflect a focus on public benefit. The main activities in relation to its purpose for the public benefit include awarding:

Throughout the period the Trustees had due regard to public benefit guidance in determining the activities of the Trust.

ARMED FORCES EDUCATION TRUST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

Grant making

The Trust's policy on grant making is to seek to maximise the effect of grants given: a) to counter instances where children or young adults may have had their education compromised or put at risk because of a parent's current or past military service, or b) to support educational establishments to help minimise the effects of service life on pupils.

To the extent possible, the Trust aims to ensure that grant money awarded does not replace funding which is already available from public or private sources.

Achievements and performance Charitable activities

The Trust seeks to make awards to educational establishments and individuals across all of the Armed Services, most in need of its help, wherever they are based in the world. To raise awareness and promote its services, the Trust uses social media, including Twitter, Facebook and Instagram. The CEO and members of the Board regularly attend conferences and networking events. The CEO liaises with a number of charities, including for example the Thornton-Smith and Plevins Trust and the Buttle Trust, who can make referrals to the Trust and in some instances help jointly fund grants. The Educational Trusts Forum (ETF) is another organisation that provides beneficial networking opportunities and regularly signposts parents in need to help to the Trust.

To help broaden the reach of the Trust, the CEO met with representatives of the various Families Federations during the year to exchange information and promote the Trust through articles in the Families Federations’ magazines. The Trust is proactive in staying abreast of issues facing services personnel. In September 2021, the CEO attended the Forces Additional Needs and Disability Forum (FANDF) conference to further the Trust’s understanding of the issues encountered by children and young adults with special educational needs or disabilities (SEND). In March 2022, the CEO attended a virtual SEND conference which highlighted the disadvantage to service children with SEND which can arise from their parents’ mobility. At a Forces Pension Society event in May 2022, the Trust received insight over the challenges service personnel face when they retire or are discharged while they still have children in education.

During the year, the CEO carried out an in-depth analysis of the nature of enquiries received by the Trust. The analysis showed that over a third of all individual enquiries led to an application for a grant. Those that did not progress were typically due to the request not meeting the Trust’s criteria for an award or because individuals had secured alternative funding. In the past, the majority of individual applications have been from current or ex-Army personnel, however the Trust has been able to build on its recent success in promoting its offering to all of the Armed Services and is now receiving many RAF referrals through SSAFA.

Following its analysis, the Trust also reviewed and revised its application forms to streamline the application process. It is hoped that this will ease the burden on applicants, particularly when completing the forms on mobile devices and encourage schools and Local Education Authorities to progress their enquiries to formal grant applications. The analysis also showed that the Trust has seen a geographical broadening of its awards to schools compared to prior years. To help broaden its reach further, the CEO has worked closely with the MOD Local Authority Partnership (MODLAP) to encourage applications from areas throughout the UK.

In October 2021, the CEO attended the Service Children’s Progression Alliance (SCiP) conference which provided a networking opportunity with schools and organisations that provide grants to service personnel. Following rigorous academic research, SCiP launched the Thriving Lives Toolkit (TLT) which provides schools with a framework to support service children and encourages schools to review their practices against this framework. The Trust has agreed to fund SCiP for up to two years to engage with schools with service children. In agreeing to fund SCiP, the Trust hopes that the online version of the TLT reaches schools with both large and small numbers of service children, across all areas of the UK.

FOR THE YEAR ENDED 31 AUGUST 2022

ARMED FORCES EDUCATION TRUST

TRUSTEES' REPORT (CONTINUED)

The Board reviews all “End of Grant” reports from collective grant recipients to ensure that the objectives of the grant were met. In comparing the original purpose of the grant with actual outcomes, the End of Grant reports help inform and improve the Trust’s future decision-making.

Financial review

Reserves policy

The Trustees review the Trust's policy on reserves at least annually with reference to guidance published by the Charity Commission. The policy is also reviewed, when warranted, by changes in risk assessment or the business plan. During the year, reserves were held to minimise any disadvantage to beneficiaries should the Trust's income be stopped or severely reduced. Taking account of the main risks to the Trust, the Trust's policy is to hold reserves of around three times the level of total annual grants awarded based on forward estimates.

As at 31 August 2022, total unrestricted reserves amounted to £13,975,820 (2021: £13,868,505), of which £2,190,820 were free reserves as the Trust's investment property cannot be quickly disposed of. Free reserves as at 31 August 2022 of £2,190,820 (2021: £2,308,505) represent 4.8 years of total grants based on forward estimates.

Financial Activities and Results

The results for the year and the financial position are set out in the Statement of Financial Activities on page 12 and the Statement of Financial Position on page 13. The Trust's principal source of funds was income from rent receivable on its principal property asset. The property asset is let on a 50 year lease to September 2061 to Cognita Schools Limited, a company which operates and invests in schools. The Trustees regularly meet with personnel from Cognita to ensure that the terms of the lease are being met. The Trust is not involved in direct fundraising although periodically donations and legacies are made to the Trust. In particular, the Trust receives an annual donation from the Privy Purse. The Trustees have agreed to award this donation each year to the grantee who they feel has best met the objectives of their grant.

During the year, individual grants totalling £256,579 (2021: £102,387) were awarded. Grants were awarded to 26 (2021: 18) children and young people to assist with the provision, or to sustain an existing provision, of appropriate education. These have enabled the beneficiaries to have greater stability or receive individual support to counter the educational and emotional disruptions caused by parental service in the Armed Forces.

In addition, grants totalling £186,934 (2021: £150,082) were given to 13 (2021: 21) institutions including schools and LEAs to enable educational support, not fundable from other public sources, to be provided to Armed Forces children. The recipients have been able to provide individual and group interventions, or arrange targeted training to teachers and staff working with Armed Forces children. Grants payable to institutions of £186,934 (2021: £150,082) included in note 6, includes £12,664 (2021: £42,304) of grants released from accruals no longer payable, due to changes in circumstances of recipients. The Trust invests surplus funds with the Newton Income and Growth Fund for Charities (''the Newton Fund''). Investment in funds is maintained for when future cash is required.

ARMED FORCES EDUCATION TRUST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

Investment policy and objectives

The Trust has a long-term investment policy and set of objectives for its surplus funds, both of which are regularly reviewed by the Board. The Trust's investment policy is to seek the best financial return from investing surplus funds balanced with an acceptable level of risk. Having considered the options available and reviewed a number of potential investment managers and funds, the Trustees determined that its surplus funds should be invested in the Newton Income and Growth Fund for Charities (''the Newton Fund''). The Newton Fund is a multi-asset fund that seeks to maximise returns through income and capital growth. The Trust's investment in the Newton Fund was valued at £2.29m as at 31 August 2022. During the financial year the Newton Fund made a 2% loss, compared with a 24% gain in the previous year, reflecting the current volatility of the markets.

The Board regularly reviews the performance of the Newton Fund in absolute terms and against a number of benchmarks. It considered that the overall performance of the Trust's investment has been reasonable in light of the current economic climate.

Future plans

The key factors likely to affect the future financial performance of the Trust are the on-going receipt of rental income from the Trust's principal asset and the performance of the Trust's investment in the Newton Fund.

The Trust will continue to provide a range of individual, collective and collaborative grants, tailored to the needs of Service children wherever they are in the world. Looking ahead, the Trust aims to ensure its funds are allocated to those cases that will benefit most in terms of improving the outcomes of children and young adults. This requires a high level of awareness by the Trust of the factors impacting Service children and their families. In addition, the Trust aims to continue improving the allocation of its funds by learning from the feedback and outcome assessments of past recipients of funding. The Trust will seek to continue broadening awareness of its services so that grant applications are received from across all of the Armed Services community.

Structure, governance and management

Governing document

The Forces Children Education Trust was established to take forward the work of the Royal School Hampstead Trust (charity number 312286). On 7 December 2016 the Royal School Hampstead Trust transferred all of its assets (including cash and freehold property less liabilities) amounting to £13,070,677, to the Forces Children Education Trust. On 6 July 2017 the Forces Children Education Trust changed its name to the Armed Forces Education Trust (''the Trust'').

The Trust is governed by its written constitution dated 3 June 2016. The affairs of the Trust are managed by the Trustees, of which there must be a minimum of five. There is no maximum number of Trustees that may be appointed by the Trust.

The Trustees who served during the year and up to the date of signature of the fnancial statements were: The Trustees who served during the year and up to the date of signature of the fnancial statements were:
Mr A Behagg Chair
Mr M Willis
Mrs J Lycet
Mrs M Clohessy Treasurer
Mr T Flesher
Mr I Buckle
Ms L G Buckingham Robinson
Mr D J Toriat

ARMED FORCES EDUCATION TRUST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

Recruitment and appointment of new trustees

The appointment of Trustees is a matter reserved for the Board of Trustees, based on vacancies occurring through the end of an allotted term, or a resignation, and an agreed succession plan based on a set of criteria. The Board may appoint a new Trustee at any properly convened meeting of the Trustees and the appointment is confirmed at the Annual General Meeting following the election of the new Trustee. The Chair is elected from and by the Trustees.

New Trustees are given a documented and personal induction programme. Trustees are able to attend a range of training courses and seminars, either at external institutions, or internally organised with external contributors as required.

Organisational structure

The Board meets five times a year, with additional meetings arranged if required.

Day to day management of the Trust's affairs is delegated to the Trust's Chief Executive Officer, Mrs C Hickman. In addition, the Trust benefitted from the services of Mrs L Abbott, its education adviser, to facilitate policy and decision-making with regard to individual and collective grants, and from Mr D Caleb, its property adviser to facilitate oversight of its principal property investment. The Trustees consider that they, together with the Chief Executive Officer, comprise the key management of the Trust in charge of directing, controlling, running and operating the Trust on a day-to-day basis. None of the Trustees receives any remuneration in respect of their services as Trustees. Staff pay is reviewed by the Trustees annually using external benchmarking and comparison data.

Risk management

The Trustees review and update the schedule of risks facing the Trust at least annually but monitor principal risks at every Board meeting. The Board considers a schedule of risks, their likelihood and potential damage together with preventative measures and mitigating actions. The Board considers that the principal risks facing the Trust are as follows:

The key strategies to manage these risks involve developing a closer relationship with the leaseholder of the Trust's principal asset and the regular monitoring of investment policy and performance.

Safeguarding

The Trust has a safeguarding policy which is regularly reviewed. Among other things, it covers measures to protect the Trustees and the Chief Executive Officer who is at the forefront of requests for grants. In addition, safeguarding is on the agenda of each Board meeting.

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

The Trustees report was approved by the Board of Trustees.

Alan Behagg

Dated: 12 December 2022

~~Mr A Behagg~~ Alan Behagg (Dec 16, 2022, 2:42pm) Trustee

ARMED FORCES EDUCATION TRUST

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 AUGUST 2022

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

The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Trust and of the incoming resources and application of resources of the Trust for that year.

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

The Trustees are responsible for keeping sufficient accounting records that disclose with reasonable accuracy at any time the financial position of the Trust and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ARMED FORCES EDUCATION TRUST

INDEPENDENT AUDITOR'S REPORT

TO THE TRUSTEES OF ARMED FORCES EDUCATION TRUST

Opinion

We have audited the financial statements of Armed Forces Education Trust (the 'charity') for the year ended 31 August 2022 which comprise the statement of financial activities, the statement of financial position and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 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

ARMED FORCES EDUCATION TRUST

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF ARMED FORCES EDUCATION TRUST

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the 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.

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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustee report.

We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:

Responsibilities of Trustees

As explained more fully in the trustees' responsibilities statement, 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 the trustees 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.

ARMED FORCES EDUCATION TRUST

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF ARMED FORCES EDUCATION TRUST

Auditor's responsibilities for the audit of the financial statements

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

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

Our approach was as follows:

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. These include Health and Safety and other charity legislative requirements. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

ARMED FORCES EDUCAnON TRUST INDEPENDENT AUDITOR'S REpoKf ICOlfflNUED} TO THE TRUSTEES OF ARMED FORCES EDUCATION TRusr Owing to the inherent limitations of an audit. there is an unavoidable risk that we May not have detected some material mi5Statements in the financial statements. even though we have properly planned and performed our audit in accordance with auditin8 Standards. For example. the fvrther removed noTrcompliance with laws and regulations lirregularitiesl is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing stantlartls would identify it. The risk i5 a150 greater regarding ifregularities occuirin8 due to fraud rather than error. as frautl involves intentional ￿￿ealMent. forgery, collusion. omission or mi5representstion. We are not responsible for preventin8 non-compliance and cannot be expected to detect non-compliance with all laws and re8ulations. A further descrip￿On of our responsibilities is available on the Financial Reportin8 Council's web51te at= https'.l/ www.frc.org.uk/Our-WorklAuditlAudit-and-assurance/Standards-and-8uidance/Standards-and-gyidan¢e- forauditorslAuditors-responsibilities-for-audiVDescriptiorpof-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor's report. Use of our report This report 15 made solely to the chaflty's trustees. a5 a body. in actordante with of Part 4 of the Charities Act 2011. Our audit work has been Ltndertaken so ihai we mi8ht state to the charity's tru5tee5 those matters we are required to state to ihem in an auditor's report and for no othei purpose. To ihe fullest extent perrnitted by law. we do not atcept or assume responsibility to anyone other than the charity and ihe charity's trustes, 35 a body. for our audit work. lor this report. or for the opinions we have formed. Lucy Filer FCA (Senio statutory Audiiorl for and on behalf of TC Group Statutory Audltor Oflice.. Christchurch 21 December 2022

ARMED FORCES EDUCATION TRUST

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 AUGUST 2022

Unrestricted
funds
2022
Notes
£
Income from:
Donatons and legacies
3
250
Investment income
4
425,290
Total income
425,540
Expenditure on:
Charitable actvites
5
486,377
Net gains/(losses) on investments
9
168,152
Net movement in funds
107,315
Fund balances at 1 September 2021
13,868,505
Fund balances at 31 August 2022
13,975,820		 Total
2021
£
500
409,557
410,057
291,164
391,174
510,067
13,358,438
13,868,505

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

ARMED FORCES EDUCATION TRUST

STATEMENT OF FINANCIAL POSITION

AS AT 31 AUGUST 2022

Notes
Fixed assets
Investment propertes
10
Investments
11
Current assets
Debtors
12
Cash at bank and in hand
Creditors: amounts falling due within
one year
13
Net current assets
Total assets less current liabilites
Creditors: amounts falling due afer
more than one year
14
Net assets
Income funds
Unrestricted funds		 2022
£
£
11,785,000
2,287,126
14,072,126
-
310,192
310,192
(295,328)
14,864
14,086,990
(111,170)
13,975,820
13,975,820
13,975,820		 2021
£
£
11,560,000
2,343,974
13,903,974
1,171
250,258
251,429
(236,863)
14,566
13,918,540
(50,035)
13,868,505
13,868,505
13,868,505

The financial statements were approved by the Trustees on .............................

Alan Beha .............................. gg ..............................

Alan Behagg (Dec 16, 2022, 2:42pm) Mr A Behagg Maria Clohessy (Dec 16, 2022, 12:15pm) Mrs M Clohessy Trustee Trustee

FOR THE YEAR ENDED 31 AUGUST 2022

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS

1 Accounting policies

Charity information

Armed Forces Education Trust is a charity registered in England and Wales and is a Charitable Incorporated Organisation. The address of the principal office is PO Box 684, Farnham, GU9 1LP.

1.1 Accounting convention

The financial statements have been prepared in accordance with the Charities Act 2011 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016). The Trust is a Public Benefit Entity as defined by FRS 102.

The Trust has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.

The financial statements are prepared in sterling, which is the functional currency of the Trust. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the Trustees have a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.

1.4 Incoming resources

Income is recognised when the Trust is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the Trust has been notified of the donation, unless performance conditions require deferral of the amount.

Legacies are recognised on receipt or otherwise if the Trust has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

1 Accounting policies

(Continued)

1.5 Resources expended

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required insettlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Grants offered subject to conditions which not been met at the year end date are noted as a commitment but not accrued as expenditure.

1.6 Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in profit or loss.

1.7 Fixed asset investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

1.8 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9 Financial instruments

The Trust has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Trust's statement of financial position when the Trust becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

1 Accounting policies

(Continued)

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Trust’s contractual obligations expire or are discharged or cancelled.

1.10 Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

1.11 Taxation

The charity is exempt from tax on its charitable activities.

1.12 Judgements and key sources of estimation uncertainty

The value of investment property is re-assessed annually by the trustees. Changes to fair value are applied accordingly.

2 Critical accounting estimates and judgements

In the application of the Trust’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

3 Donations and legacies

Unrestricted Unrestricted
funds funds
2022 2021
£ £
Donatons 250 500
Investment income
Investment
Investment
income income
2022 2021
£ £
Rent received 425,290 409,557

4 Investment income

5 Charitable activities

Charitable
actvites
2022
£
Grants to insttutons
186,934
Grants to individuals
256,579
Salaries
-
Insurance
-
Other establishment
-
Auditors' remuneraton
-
Legal and other professional fees
-
Costs of Trustees' meetngs
-
443,513		 Support
costs
Governance
costs
2022
2022
£
£
-
-
-
-
31,405
-
1,426
-
4,007
-
-
4,580
-
1,023
-
423
36,838
6,026		 Total
2022
£
186,934
256,579
31,405
1,426
4,007
4,580
1,023
423
486,377		 Total
2021
£
150,082
102,387
27,102
1,033
5,077
4,320
1,119
44
2022
£
-
-
31,405
1,426
4,007
-
-
-
36,838
291,164

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

6 Grants payable
The total grants payable to insttutons during the year were as follows:
2022 2021
Alexander First School 15,484 -
Buntngsdale Primary School (7,179) 10,500
Carswell Primary School - (648)
Carterton Primary School (1,750) -
Clarendon 11,453 13,363
Credenhill Primary 7,500 -
Curridge Primary (2,282) 4,564
Firhill 20,000 -
Forres 29,000 -
Gateway School 1,500 -
Hermitage Primary School - 1,500
Knocknagoney Primary School (1,090) 9,600
Litle Troopers 6,000 -
Newton Tony Primary - (1,818)
Oxfordshire CC 13,200 -
Peel primary 4,000 -
Raigmore Primary School - 18,444
Reading Force - 10,000
Salisbury Plain Academies - (39,838)
SCiP 48,000 -
Shrivenham Primary School (2) 13,277
South Farnborough Junior School 6,995 6,480
SSCE Cymru 34,246 -
St Mary's Hadleigh - 6,500
St Michaels Primary School - 13,890
Stamfordham Primary - 6,594
Stoke on Tern Primary School - 6,480
Talavera Infants - 7,342
Talavera Juniors - 18,720
Upton by Chester High - 14,640
Wellington Academy 2,220 15,540
Zouch Academy (361) 14,952
Total grants to insttutons 186,934 150,082

Grants are accrued at the date they are approved by the trustees and communicated to recipients, based on the information available at the time of grant application. If circumstances change, the recipient is required to inform the charity. This can result in a change to the initial value of the grant previously agreed. The negatives balances above represent a change in the amounts accrued due to unforeseen circumstances.

The total grants payable to collaborative and individuals during the year was £256,579 (2021 £102,387).

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

7 Trustees

None of the Trustees (or any persons connected with them) received any remuneration or benefits from the Trust during the year.

During the year Trustee's had expenses for travel and subsistence reimbursed for a total of £436 (2021: £44).

8 Employees

There was 1 employee during the year (2021 - 1).

No staff received emoluments in excess of £60,000.

Staff costs represent the remuneration of key management personnel.

9 Net gains/(losses) on investments

Unrestricted
funds
2022
£
Net gain on investments
(56,848)
Revaluaton of investment propertes
225,000
168,152
Investment property
Fair value
At 1 September 2021
Net gains or losses through fair value adjustments
At 31 August 2022		 Total
2021
£
391,174
-
391,174
2022
£
11,560,000
225,000
11,785,000

10 Investment property

The fair value of the investment property has been arrived at on the basis of a valuation carried out in October 2022 by House & Son Chartered Surveyors, who are not connected with the Trust. The valuation was based on the estimated amounts a willing buyer would purchase the property for at arm's-length. The Trustees consider the value to be appropriate at 31 August 2022. The cost of the investment property to the charity was £11,589,735.

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

11 Fixed asset investments

Listed
investments
£
Cost or valuaton
At 1 September 2021 2,343,974
Valuaton changes (56,848)
At 31 August 2022 2,287,126
Carrying amount
At 31 August 2022 2,287,126
At 31 August 2021 2,343,974

There were no investment assets outside the UK.

All investments were listed on a UK Stock Exchange or incorporated in the UK and therefore all investments are treated as investment assets in the UK.

The fair value of listed investments is that quoted per the Stock Exchange or as quoted for an identical asset in an active market. Income generated from the investment fund is retained by the fund manager and reinvested in stocks and shares. Their value is reflected in the value of the fund.

12 Debtors

12
Debtors
Amounts falling due within one year:
Other debtors
13
Creditors: amounts falling due within one year
Grant creditors
Accruals and deferred income		 2022
£
-
2022
£
1,625
293,703
295,328		 2021
£
1,171
2021
£
6,637
230,226
236,863

Included within accruals are grants agreed for future periods of £289,123 (2021 - £225,905).

ARMED FORCES EDUCATION TRUST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2022

14 Creditors: amounts falling due after more than one year

Creditors: amounts falling due afer more than one year
Accruals and deferred income 2022
£
111,170		 2021
£
50,035
Included within accruals are grants agreed for future periods of £111,170 (2021 - £50,035).

15 Related party transactions

There were no disclosable related party transactions during the year (2021 - none).

16 Operating lease

The charity is the lessor to a 50 year operating lease ending 1 September 2061. Investment income for future periods is based on rental fees payable for the previous year plus any changes in RPI.