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2022-12-31-accounts

ANNUAL REPORT OF THE TRUSTEE AND FINANCIAL STATEMENTS

F O R TH E YEA R TO 3 1 DECE M BER 2022

(Registered Charity No. 1187700)

CO N T EN TS

Page
Annual Report of the Trustee 1-12
Independent Auditor’s Report 13-16
Statement of Financial Activities (including Income and Expenditure 17
Account)
Balance Sheet 18
Statement of Cash Flows 19
Notes to the Financial Statements 20-33

ANNUAL REPORT OF THE TRUSTEE AND FINANCIAL STATEMENTS

T H E P R UD E N C E T R UST

A N N U A L R E P O R T O F TH E TR U S TE E

F O R TH E Y E A R TO 3 1 D E CE M B E R 2 0 2 2

The Trustee Directors present their report and independently audited financial statements of The Prudence Trust (“the Trust” or “the Charity”), for the year to 31 December 2022. These have been prepared in accordance with the accounting policies set out in note 1 and comply with applicable charity law.

1. REFERENCE AND ADMINISTRATIVE DETAILS

The Prudence Trust, (registered charity number 1187700) is based and administered in the United Kingdom. The registered address is 16 Berkeley Street, London, W1J 8DZ.

Trustee:

The Trustee of the Trust who held office during the period and continues to serve at the date of this report is:

The Trustee did not hold any beneficial interest in the Trust at 31 December 2022 or at any time during or since that period.

Key Management:

The Directors of the Corporate Trustee (“Trustee Directors”) are in charge of directing and controlling the Trust. Day to day operations of the Trust are delegated to the Director, Tara Leathers.

Trustee Directors:

The following persons act as Directors of the Trustee

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2 . OB J E C T I V E S A N D A C T I VI T I E S F OR T H E P U B LIC B E N E F IT

The objects of the Trust are restricted specifically to the application of Trust funds, at such time or times and in such manner, for the public benefit, as the Trustee Director may in their discretion think fit for any exclusively charitable purposes in any part of the world. The Charity operates as a grant-making charity, with a view to support charitable projects and organisations with grants of varying sizes and durations.

The Trustee Directors have defined a programme of grant-making to charities which will achieve one or more of the following:

During 2022 the Trustee Directors confirmed the funding priorities for its first years of operation. These are to:

The emphasis will be on young people in the UK aged 11-25 years, although this will not exclude support to other groups.

The Trustee Directors have pursued a broad strategy of ensuring proper due diligence in the assessment of potential grants and ensuring that grants are made subject to appropriate terms and conditions.

Statement of Public Benefit

As a grant-funder, the Charity’s activities will provide public benefit to the individuals and communities who are beneficiaries of the Charity’s funded projects. The Charity’s public benefit is not limited with reference to geography, by the charging of fees or otherwise. The Trustee Directors are aware of the Charity Commission guidance on Public Benefit and confirm that they have complied with the duty in Section 4 of the Charities Act 2011 to have due regard to it. They consider the information which follows in this annual report, about the Charity’s aims, activities and achievements in the areas of interest that the Charity supports, demonstrates the benefit to its beneficiaries and through them to the public, that arise from those activities.

Grant Making Policies

Updates to the grant making and social investment policy to guide the Trustee’s decisions in achieving the charitable objectives was approved by trustees on 9 February 2023. Grantmaking is also guided by some further funding parameters (approved in November 2021) which allow Trustee Directors to properly select appropriate grantees and impose prudent terms on grants, including, as appropriate. monitoring and evaluation of the way in which ANNUA L RE PO RT OF THE TRUS T EE AND F INANCIAL S TA TEMENTS 2

funds are applied by grantees. The Trustees’ grant making policy was generally to consider making donations by way of direct funding and also by way of grants to charitable organisations recognised as such in their respective jurisdictions, for projects that are exclusively charitable under English law.

3. ACHIEVEMENT AND PERFORMANCE

The main aims during the period were to:

  1. Build the grant-making activities of the charity in line with the strategic aims

  2. Expand our knowledge an increase our networks

  3. Monitor our investments against the objectives

During this period, the following was achieved:

1. Build the grant-making activities of the charity

In 2022 the Charity considered a number of new grants to advance the Charity’s funding priorities detailed in section 2. The total of grants awarded in 2022 was £6.62m (2021: £3.95m). A full list of grants is below.

To achieve this increased level of grant-making, and the monitoring of grants made in prior years, the team was expanded to four during 2022 to include a grants manager and a team executive assistant.

Across the charity’s strategic aims, some of the key grant activities were:

1.1. Resilience-building to prevent mental illness

Youth work is an important setting to help young people build support around themselves. New grants in this area include two to Oxfordshire Youth for their resilience-building programme and mental health ambassadors. The charity also made a grant to Student Minds for the support they offer both to students and to universities to strengthen their mental health support.

Grants from prior years which continue to support young people in a youth setting are the wellbeing support and creative activities in a number of Onside Youth Zones and the Prince’s Trust art-themed engagement programmes.

We’ve also been pleased to see the impact of East London Dance’s after school and holiday youth programme, the Roundhouse’s community programme with young refugees and asylum seekers and Ebony Horse Club’s youth worker.

A new grant to Place2Be allowed them to enhance their Children & Young People’s Mental Health Week in February 2023, and a similar grant to Student Minds supported University Mental Health Day in March 2023.

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1.2. Improve young people’s access to support

Our grants in this area have tried to reach children and young people in and out of school and to help give a greater choice of support for mental health struggles.

In schools, we have made a further grant to the Anna Freud Centre for the next stage of piloting their remote early support service for pupils, teachers and parents. We continue to monitor a prior grant to Place2Be to expand their mental health support into more schools.

The Charity held its first open funding round called ‘More Places to Go for Help’ in the Spring of 2022. This funding was designed to increase the availability of support services for young people aged 11-25 with signs of depression or anxiety. The grants aimed to enable charities, based in London or offering UK-wide online services, which are already offering excellent services to young people to do even more.

Five grants were made to: Groundworks’ mental wellbeing hub, the Nest; to Body & Soul’s online mental health and wellbeing courses; to Young Roots for their personalised support for asylum seekers; to The Mix for their digital counselling; and to Jigsaw4U to expand their therapeutic support for young people. We brought these grantees together in November to share their expertise and the challenges they are facing in delivering support.

In the Autumn the Charity made a number of grants in the field of social prescribing for young people’s anxiety and depression. There is growing evidence that social prescribing, where people are matched with a non-medical activity that suits their individual needs, can lead to improved mental and physical health and reduce the need for GP consultations.

Eight grants were made to Dose of Nature for their weekly walks psychological support; to Empire Fighting Chance for their Boxing therapy programme; Raw Material Music and Media for their music programme; The Music Works to evaluate the outcomes of their music programme; The Wave Project for their surfing therapy; to Comics Youth for their projects using comic books and illustration; to Designs in Mind for their 10 week arts programme; and to OTR Bristol for their broad programme of activities for young people’s mental wellbeing.

A grant was also made to Young Minds to enable them to explore digital mental health offers and how well they are serving young people.

1.3. Build the evidence of what works to prevent and treat mental illness.

The Charity’s Mental Health Advisory Panel, chaired by Prof Peter Fonagy, has continued to advise the Trustee Directors on mental health research grants. In early 2022, grants were made to the charity’s four research partners (University of Bristol, University of Oxford, University College London and King’s College London) for three research projects:

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Trustees also agreed grants for a Prudence Trust Fellowship in Adolescent Mental Health at each research partner. The first four fellows have now been appointed and have started their research in late 2022 or early 2023.

The full list of grants made across the year is below. All grants were made to registered charities or community interest companies.

Trustees also agreed grants for a Prudence Trust Fellowship in Adolescent Mental Health
at each research partner. The first four fellows have now been appointed and have started
their research in late 2022 or early 2023.
The full list of grants made across the year is below. All grants were made to registered
charities or community interest companies.		 Trustees also agreed grants for a Prudence Trust Fellowship in Adolescent Mental Health
at each research partner. The first four fellows have now been appointed and have started
their research in late 2022 or early 2023.
The full list of grants made across the year is below. All grants were made to registered
charities or community interest companies.		 Trustees also agreed grants for a Prudence Trust Fellowship in Adolescent Mental Health
at each research partner. The first four fellows have now been appointed and have started
their research in late 2022 or early 2023.
The full list of grants made across the year is below. All grants were made to registered
charities or community interest companies.
Mental Health: Research
University College
London		 Research- Increasing social prescribing
referrals		 £896,467
Universityof Bristol Research- ImprovingSleep £790,322
Universityof Oxford Research – Adolescent parents, depression
andparenting		 £439,775
MQ Core costs £100,000
Mental Health: Access to Support
Jigsaw4u Therapeutic support foryoung people £310,176
Anna Freud Centre Expansion of remote schools early
intervention for pupils, parents and
teachers		 £300,000
The Wave Project Sustainabilityof the surf therapy project £300,000
Empire Fighting
Chance		 Expandingthe BoxingTherapy programme £289,770
The Music Works Evaluation and sustainability for the music
programme		 £273,807
Groundwork London Support to expand the support at the Nest £263,755
Body& Soul Online mental wellbeingcourses £256,537
Raw Material Music
and Media		 Music and mediaprogramme £252,858
The Mix Expansion of digital counselling £250,000
YoungRoots Personalised support for refugees and
asylum seekers		 £248,493
YoungMinds Review of digital mental health support £200,000
OTR Bristol Community partnership programme £193,271
Ormiston Families Talking and creative therapy sessions for
children of those inprison		 £150,000
Dose of Nature Therapeutic nature walkprogramme £150,000
Youth Access Core costs £100,000
Comics Youth Creativeprogramme foryoung people £90,000
Designs in Mind Artisticprogramme foryoung people £90,000

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Kent Community
Foundation		 Youth mental healthprojects in Kent £34,000
Focus Bath Counsellingsupport in Bath schools £30,000
Student Minds EnhancingUniversityMental Health Day £30,000
PROMISEWorks Core costs £30,000
AT The Bus Developingagrowthplan £25,000
Gingerbread Wellbeingworkshops for singleparents £15,000
Somerset and
Wessex Eating
Disorder Association		 Children & young people’s early
intervention counsellor		 £15,000
Mental Health: Prevention
Student Minds Core costs £150,000
Anna Freud Centre Creating an animation on trauma for
children and young people affected by
conflict		 £120,000
Amber Foundation Team leader at a new centre in Kent £50,000
Place2Be Enhancing Children & Young People’s
Mental Health Week 2023		 £30,615
Oxfordshire Youth BuildingResilienceprogramme £30,000
Dalai Lama Centre
for Compassion		 Compassion Matters course in schools £30,000
Oxfordshire Youth Mental Health Ambassadors £30,000
Gardening with
Disabilities Trust		 Access to gardening for disabled young
people		 £15,000
Carefree Breaks for YoungCarers £15,000
James' Place Charity Scopingfor targeted marketing project £10,000
Anna Freud Centre Development of UKTC animation on
trauma for CYP affected by conflict and
war		 £10,000
Environment
Royal Welsh
Agricultural Society		 Da Byw 2022 £10,000
Total Grants £6,624,846

2. Deepen our knowledge and increase our network

The Trustee Directors have also been supported in grant-making by experts who have supported specific grant rounds. The Directors were supported in scoping the funding and assessing applications by a range of experts from frontline services, clinical provision, research and those with personal experience of mental illness and accessing services. We brought together grant committees for the “More Places to Go for Help” open funding round and a round on social prescribing for youth mental health.

The charity is interested in the intersection of youth mental health research and the delivery ANNUA L RE PO RT OF THE TRUS T EE AND F INANCIAL S TA TEMENTS 6

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of mental health prevention and early intervention activities. In December the charity held an event, “Conversations on Mental Health Research” as a way of bringing together researchers, clinicians and charities who are delivering services. The discussion centred on how activities which have been demonstrated to work in research studies can be translated into practice, and on how excellence in support to young people can be more clearly evidenced.

3. Monitor investments against the objectives

The Investment & Audit Committee oversee the charity’s investments, supported by an investment consultant, JT Financial Management Limited.

During the year, as part of diversifying the charity’s assets, the trustee directors appointed a third investment manager. The details are outlined in the Financial Review.

4. FINANCIAL REVIEW

The Statement of Financial Activities on page 16 shows total incoming resources for the period of £13,427,941 (2021: £49,493,999) and expenditure on charitable activities of £7,088,383 (2021: £4,317,591). Direct charitable expenditure of £6,624,846 (2021: £3,949,949) was incurred in the year by way of awarding grants. Governance costs amounted to £19,227 (2021: £21,742) and are included within charitable activities. The balance of charitable activities comprised support costs totalling £444,310 (2021: £345,900). The increase in support costs was primarily driven by additional staff being recruited.

The Trust spent £965,672 (2021: £864,825) on investment management fees. The total reserve at 31 December 2022 amounted to £177,159,827 (2021: £190,253,543).

At the beginning of 2022 the Charity held its investments across two portfolios with 85% held with Brown Advisory and 15% with Veritas Investment Partners (UK) Limited. In June 2022 Ruffer LLP were appointed as a third manager and held 25% of the investments with Brown Advisory holding 50% and Veritas Investment Partners (UK) holding 25% by the end of July.

The investment managers operate under a discretionary mandate with advice provided by JTFM Limited.

As at 31 December 2022 the funds held with Brown Advisory depreciated 9.19% over the year on a time weighted return basis, Veritas Investment Partners (UK) Limited depreciated 15.67% over the year on a time weighted return basis and Ruffer LLP returned 1.42% over the year on a time weighted return basis. The total investment income for the year across all portfolios decreased to £1,992,483 (2021: £4,424,964) as fewer interest yielding investments were held throughout the year.

The benchmark of inflation as measured by the UK Consumer Price Index (“CPI”) plus 4.0% totalled 14.89% for the year, of which none of the investment managers were able to outperform against a high inflationary environment. The Trustee Directors have reviewed the performance of the portfolios and are satisfied with the returns to date given the wider economic turbulence.

Reserves policy and going concern

The Trustee Directors have examined the Charity’s requirement for resources in light of the main risks to the organisation and have no outstanding commitments or cash demands which are not adequately covered by existing resources. The net unrestricted assets of the ANNUA L RE PO RT OF THE TRUS T EE AND F INANCIAL S TA TEMENTS 7

Charity are regarded as free reserves and the funds at 31 December 2022 will be retained to make grants in accordance with the Charity’s charitable objects and any policies. The Trustee Directors consider that the freely expendable funds are appropriate and adequate taking into account plans for grants to be awarded in future years. The Trustee Directors have agreed that at least £10m of reserves is held in cash and/or liquid investments that can be realised and their settlement proceeds are available within 5 business days.

The geo-political and macro-economic effects of the war in Ukraine, rising costs and inflation continued to impact the Charity throughout 2022 resulting in a material depreciation in the valuation of the Charity’s investments of £18,655,708 (10.97%) during the year to 31 December 2022. The Trustees do not believe however that this will have an impact on going concern given surplus reserves of £66,128,581 and net assets of £177,159,827. The Trustee Directors consider the adoption of the going concern basis in preparing these financial statements continues to be appropriate.

Investment Policy

The investment objective is to maintain and grow the real value of the assets and to generate stable, sustainable, distributable returns (capital and income), sufficient to at least maintain the purchasing power of those distributions.

The long-term total return objective is to achieve inflation as measured by UK Consumer Price Index (“CPI”) plus 4.0% per annum to be measured over 5 year rolling periods.

Remuneration Policy

The Trust aims to ensure that staff are paid appropriately according to the nature of the work and the experience, knowledge and skills needed to carry out their job.

The Trust aims to remunerate at a median level or above when benchmarked against similar organisations in the sector. The charity is committed to principles ensuring that pay and conditions of employment do not discriminate unlawfully and are free from bias.

The Trustees determine the salary for the Director and seek to pay a fair salary to attract and retain a skilled and expert senior leader for the organisation taking into account the median range for similar organisations in the UK Charity sector. Trustees ensure that the Director’s performance is reviewed and reported at least annually by the Chair of the Board of Trustees. The Director is responsible for determining the salaries of other staff in line with the remuneration policy above and as approved in the budget.

5. PLANS FOR THE FUTURE

The Trustees do not propose to deviate from the current objectives and activities of the Charity as detailed in Section 2 of this report. Trustees have approved a grants plan for 2023-24 to deliver on the areas of focus. The executive team have set out a schedule of grant rounds until December 2023. Over the course of the next three years the Charity anticipates making a smaller number of grants than in 2022, and these grants will generally be larger in size..

The charity expects to support a second group of Prudence Trust Fellows who would be recruited during 2023 and make a cohort of eight Fellows in adolescent mental health.

In March, the charity intends to award grants to support youth work organisations and their staff who are dealing with an increased capacity and severity of mental health need amongst young people who take part in their activities.

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Further grants will be awarded during 2023, with an emphasis on both face to face and digital early intervention, as well as activities which support the prevention of mental health struggles.

The charity will ensure that the trustee board is appropriate, informed and supported, by reviewing the composition and skills of sub-committees, including how it further involves young people in research and grant-making.

The Mental Health Advisory panel scope and membership will be reviewed and expanded. It is planned that the panel will provide guidance on both research and frontline grants as well as the link between them – i.e. the implementation of evidence-based approaches. We anticipate increasing the panel size to 15-20 members, to include young people with experience of mental illness and using services.

The Prudence Trust profile and networks will be built further with the aim of attracting high quality applications for open rounds and to identify opportunities for collaboration with other funders.

The charity will move to new premises in the summer of 2023 which will give greater scope for convening grantees and experts in our fields of interest.

The trustees will continue to develop and refine their strategies, policies and procedures in future.

A further donation of £12m was received by the Trust in February 2023.

6. STRUCTURE, GOVERNANCE AND MANAGEMENT

The Charity is a trust governed by its declaration of trust dated 20 May 2019 and is registered as a charity with the Charity Commission for England and Wales.

The Charity is controlled by its sole corporate trustee, the Prudence Trust Company Ltd. The charity resolved to appoint the Prudence Trust Company Ltd as sole corporate trustee in June 2020. Charity Commission approval for this appointment was received in September 2020.

The Trustee Directors liaise regularly and meet at least quarterly to discuss and develop the Charity’s goals and strategy and to review grant proposals and general grant requests.

In the reporting period the Trust appointed an investment and audit sub-committee with oversight of investment, audit, risk management and financial performance. The committee meets at least twice a year.

The number of Trustees shall be a minimum of three at any one time, or one Trustee if said trustee is a Trust corporation, and new Trustees shall be appointed in writing by the Founding Trustee. The range of skills represented on the Trustee Board will be kept under review as the Charity develops over time.

Induction and Training

As part of their training, Trustee Directors are given an information pack which includes the Charity's Constitution. Trustee Directors are offered annual training on the Charity Commission guidance on Trustees' Responsibilities. All Trustee Directors are aware of their legal duties and obligations in respect of the management of the Charity, including in relation to the protection of its assets.

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Statement of Trustees’ Responsibilities

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

Law applicable to charities in England and Wales requires the Trustee to prepare financial statements for each financial year which give a true and fair view of the charity's financial activities during the period and of its financial position at the end of the period. In preparing financial statements giving a true and fair view, the Trustee should follow best practice and:

The Trustee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011 and where relevant, the Charities Act 2022, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustee Directors have signed fit and proper declarations in line with HMRC guidance. Charity Governance Code

In addition, each year the Trustee Directors give due consideration to Good Governance – A Code for the Voluntary and Community Sector, ensuring that the seven main principles of the Code are adhered to. These are:

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The Trustee recognises that good governance plays an essential part in securing the future of the Charity and confirm that the said main principles of the Code are followed by them in leading, directing and managing the Charity.

No Trustee Director received any remuneration during the year to 31 December 2022.

The Trust does not carry out fundraising activities.

Internal Controls

The Trustee has overall responsibility for ensuring that the Charity has appropriate systems of internal controls. They are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements follow best practice and all applicable law regulation and guidance. The Trustee is also responsible for the Charity safeguarding its assets and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The system of internal controls is designed to provide reasonable, but not absolute, assurance against material misstatement or loss.

Risk Management & Corporate Governance

A risk assessment has been performed during the preparation of this report and the Financial Statements. The risk assessment undertaken comprises of:

This continuing process will identify risk areas to which the Charity is vulnerable and highlight any necessary safeguards that will need to be put in place. The current version of the Charity’s Risk Register was approved by the Board of Trustee Directors in February 2023

The risk register is reviewed every six months by the Board. Mitigation plans are in place for all risks and are overseen by the Investment & Audit Committee.

Principle risks for the Charity were identified as:

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Related Party Transactions

The Trust has no subsidiary undertakings and has not entered into any co-operation agreements with other Charities in pursuit of its charitable objectives. Where the Trust engages in a transaction with which one of the Trustee Directors is connected, the conflicted Trustee Director recuses themselves from the decision making process. Any related party transactions are disclosed in note 13 to the Financial Statements.

Approved by the Trustee and signed on their behalf by:

Guy Elliott

Date: 13 June 2023

Director of the Prudence Trust Company Limited (Trustee)

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INDEPENDENT AUDITOR’S REPORT

TO THE TRUSTEE OF THE

THE PRUDENCE TRUST

Opinion

We have audited the financial statements of The Prudence Trust (the ‘charity’) for the year ended 31 December 2022 which comprise the statement of financial activities, balance sheet, statement of cash flows 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).

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 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 trustee’s 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 Prudence Trust'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 trustee with respect to going concern are described in the relevant sections of this report.

Other Information

The other information comprises the information included in the trustee’s annual report, other than the financial statements and our auditor’s report thereon. The trustee is ANNUA L RE PO RT OF THE TRUS T EE AND F INANCIAL S TA TEMENTS 13

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responsible for the other information contained within the annual report. 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. 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

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

Responsibilities of trustee

As explained more fully in the statement of trustee’s responsibilities set out in the trustee’s annual report, the trustee is 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 trustee determines 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 trustee is 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 trustee either intends to liquidate the charity or to cease operations, or has no realistic alternative but to do so.

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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 regulations made under section 154 of that Act.

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 extent to which our procedures are capable of detecting irregularities, including fraud are set out below.

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

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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. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available 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 charity's trustee as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity's trustee those matters we are required to state to them in an auditor’s 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 charity and the charity's trustee as a body, for our audit work, for this report, or for the opinions we have formed.

Date 19 June 2023

Sayer Vincent LLP, Statutory Auditor

Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

Sayer Vincent LLP is eligible to act as auditor in terms of section 1212 of the Companies Act 2006

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THE PRUDENCE TRUST

STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR TO 31 DECEMBER 2022

Note Unrestricted Restricted Total Total
Funds Funds Funds Funds
2022 2022 2022 2021
£ £ £ £
Income from:
Donations 2 390,940 11,033,468 11,424,408 45,069,035
Investments 3 741,861 1,250,622 1,992,483 4,424,964
Charitable activity 11,050 - 11,050 -
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Income 1,143,851 12,284,090 13,427,941 49,493,999
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Expenditure on:
Charitable activities 4 3,828,692 3,259,691 7,088,383 4,317,591
Raising funds: investment management 6 399,576 566,096 965,672 864,825
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Expenditure 4,228,268 3,825,787 8,054,055 5,182,416
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net income/(expenditure) before
(losses)/gains on investments (3,084,417) 8,458,303 5,373,886 44,311,583
Net (losses)/gains on investments 7 (8,469,137) (10,186,571) (18,655,708) 25,301,442
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net income/(expenditure) (11,553,554) (1,728,268) (13,281,822) 69,613,025
Other recognised gains/(losses) (4,988) 193,094 188,106 (3,422)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net movement in funds (11,558,542) (1,535,174) (13,093,716) 69,609,603
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Reconciliation of funds:
Total funds brought forward 77,693,436 112,560,107 190,253,543 120,643,940
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total funds carried forward 66,134,894 111,024,933 177,159,827 190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

All of the above results are derived from continuing activities. There were no recognised gains and losses for either period other than those stated above. Movement in funds are disclosed in Note 15 to the Financial Statements. A comparative Statement of Financial Activity is included as Note 17.

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THE PRUDENCE TRUST BALANCE SHEET

AS AT 31 DECEMBER 2022

THEPRUDENCE TRUST
BALANCE SHEET
AS AT 31 DECEMBER2022
Note 2022 2021
£ £
Fixed assets
Investments and cash under management 7 181,412,789 189,525,371
Tangible Assets 8 6,313 2,045
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total fixed assets 181,419,102 189,527,416
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
Current assets
Debtors 9 23,171 99,359
Cash at bank 3,291,835 4,151,875
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Current Assets 3,315,006 4,251,234
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
Current liabilities
Creditors - amounts falling due within one year 10 (3,905,606) (1,503,289)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net current (liabilities)/assets (590,600) 2,747,945
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
Total assets less current liabilities 180,828,502 192,275,361
Non-current liabilities
Creditors – amounts falling due in more than one year 11 (3,668,675) (2,021,818)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total net assets 177,159,827 190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
The funds of the charity:
Unrestricted funds 66,134,894 77,693,436
Restricted funds 111,024,933 112,560,107
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total charity funds 177,159,827 190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

The financial statements were approved and authorised for issue by the Trustee and were signed on their behalf by:

Guy Elliott

Beatrice Hollond

Director of Prudence Trust Company Limited Director of Prudence Trust Company Limited (Trustee) (Trustee)

Date: 13 June 20 23

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THE PRUDENCE TRUST

STATEMENT OF CASH FLOWS

FOR THE YEAR TO 31 DECEMBER 2022

Note 2022 2021
Net cash flow from Operating Activities £ £
Net movement in funds for the year (13,093,716) 69,609,603
Less: Investment income and deposit interest (1,992,483) (4,424,964)
Depreciation charge 8 1,578 511
Net loss/(gain) on investment assets 18,655,708 (25,301,442)
Decrease/(increase) in debtors 76,188 (64,930)
Increase in creditors 4,049,173 3,401,374
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
7,696,448 43,220,152
Cash flows from investing activities
Investment income 3 1,992,483 4,424,964
Purchase of tangible assets (5,846) (2,556)
Purchase of investments (193,724,775) (230,677,464)
Proceeds from sale of investments 7 186,112,442 162,474,096
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(5,625,696) (63,780,960)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Change in cash and cash equivalents in the year £2,070,752 £(20,560,808)
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
Reconciliation of net cash flow to movement in net funds
Net cash resources at 1 January 2022 12,502,293 33,063,101
Net increase/(decrease) in cash 2,070,752 (20,560,808)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net cash resources at 31 December 2022 £14,573,045 £12,502,293
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
Analysis of net funds:
Cash held in investment portfolio 7 11,281,210 8,350,418
Cash at Bank 3,291,835 4,151,875
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£14,573,045 £12,502,293
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

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THE PRUDENCE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR TO 31 DECEMBER 2022

1. ACCOUNTING POLICIES

Basis of Preparation of Financial Statements

The Prudence Trust (“the Trust”), registered charity number 1187700, is based and administered in the United Kingdom. The registered address is 16 Berkeley Street, London, W1J 8DZ. The nature of the Trust’s operations and principal activities are set out in the Trustees’ Annual Report.

The financial statements have been prepared in accordance with 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) (“Charities SORP FRS 102”), the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and where relevant, the Charities Act 2022, and UK Generally Accepted Accounting Practice.

The financial statements have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The Trust constitutes a public benefit entity as defined by Charities SORP FRS 102.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

In applying the financial reporting framework, the Trustee has made a number of subjective judgements, for example in respect of significant accounting estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The nature of the estimation means the actual outcomes could differ from those estimates. Any significant estimates and judgements affecting these financial statements are detailed within the relevant accounting policy below.

Incoming Resources

Investment income is derived from interest and dividends receivable from investments and is accounted for in the period in which the Trust is entitled to receipt. Interest from deposit accounts are included as and when received only. All incoming resources are included in the SOFA when the Trust is entitled to the income and the amount can be quantified with reasonable accuracy.

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Voluntary donations include donations under Gift Aid with the associated tax credits included when receivable. Interest from deposit accounts are included when received.

Resources Expended

All expenditure is included on an accruals basis and is recognised when there is a legal or constructive obligation committing the Trustee to the expenditure. Irrecoverable VAT is charged against the activity for which expenditure was incurred.

Charitable activities include governance costs made during the period and are expended through the SOFA when the offer is conveyed to the recipient.

Cost of raising funds relate to the costs incurred by the Trust in managing its investment portfolios.

Governance costs relating to the general running of the Trust, as opposed to the management functions inherent in generating funds.

Grants payable

Grants payable are made to third parties in furtherance of the Trust's objects. Single or multi- year grants are accounted for when either the recipient has a reasonable expectation that they will receive a grant and the Trustee has agreed to pay the grant without condition, or the recipient has a reasonable expectation that they will receive a grant and that any condition attaching to the grant is outside of the control of the Trust.

Fixed asset investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. Any change in fair value will be recognised in the statement of financial activities. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading “Net gains/ (losses) on investments” in the statement of financial activities. The Trust does not trade in options, derivatives or other complex financial instruments. However the Trust’s investment managers may trade in such financial instruments as part of their investment portfolio management.

Tangible fixed assets

Items of equipment are capitalised where the purchase price exceeds £1,000. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use.

Tangible fixed assets are included at their cost value and depreciated using the straight line method over 5 years.

Status of funds

Restricted funds are to be used for specific purposes as laid down by the donor. Income arising from the investment of those funds and expenditure which meets the criteria set out by the donor is charged to the fund.

Unrestricted funds are donations and other incoming resources received or generated for the charitable purposes.

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Foreign currency

Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Transactions denominated in foreign currencies are converted at the rate of exchange ruling at the date of the transaction. All translation differences are taken to the statement of financial activities as they arise.

Taxation

The Trust is not subject to any taxes on its charitable activities.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised as expenditure.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.

Provisions

Provisions are recognised when the Trust has an obligation at the Balance Sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.

Going concern

The geo-political and macro-economic effects of the war in Ukraine, rising costs and inflation continued to impact the Charity throughout 2022 resulting in a material depreciation in the valuation of the Charity’s investments of £18,655,708 (10.97%) during the year to 31 December 2022. The Trustees do not believe however that this will have an impact on going concern given surplus reserves of £66,128,581 and net assets of £177,159,827. The Trustee Directors consider the adoption of the going concern basis in preparing these financial statements continues to be appropriate.

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For the year ended 31 December 2022

Total
2. INCOME FROM DONATIONS Unrestricted Restricted 2022
£
Donations received 325,940 11,033,468 11,359,408
Gift Aid Relief 65,000 - 65,000
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£390,940 £11,033,468 £11,424,408
For the year ended 31 December 2021
Total
Unrestricted Restricted 2021
£
Donations received £69,035 £45,000,000 £45,069,035
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
For the year ended 31 December 2022
Total
3. INCOME FROM INVESTMENTS Unrestricted Restricted 2022
£
UK quoted securities income 140,386 167,719 308,105
Overseas quoted securities income 570,694 1,031,034 1,601,728
Bank interest 30,781 51,869 82,650
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£741,861 £1,250,622 £1,992,483
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
For the year ended 31 December 2021
Total
Unrestricted Restricted 2021
£
UK quoted securities income 1,554,202 2,243,596 3,797,798
Overseas quoted securities income 271,368 355,201 626,569
Deposit interest 364 233 597
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£1,825,934 £2,599,030 £4,424,964
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ

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4. EXPENDITURE ON CHARITABLE ACTIVITIES

Grants payable:

The Trust awarded grants totalling £6,624,846 to thirty four UK registered charities and four UK Universities during the year to 31 December 2022 (2021: £3,949,949 to thirteen UK registered charities (note 18)). The grants awarded were in the following areas of focus of the Trust with the cumulative amount per area shown:

Total Total
2022 2021
£ £
Mental Health: Research 2,226,564 1,610,000
Mental Health: Access to support 3,897,667 1,085,699
Mental Health: Prevention 490,615 1,054,250
Environment 10,000 200,000
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Grants payable 6,624,846 3,949,949
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Grants have been awarded restricted and unrestricted funds as follows:
Restricted 3,259,282 450,000
Unrestricted 3,365,564 3,499,949
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
6,624,846 3,949,949
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Support Costs:
Staff costs (note 5) 270,493 178,135
Office and Admin costs 97,910 77,559
Professional fees 64,085 82,756
Travel, Events and Subsistence 11,822 7,450
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Support costs 444,310 345,900
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Support costs are allocated between restricted and unrestricted funds as follows:
Restricted 409 30
Unrestricted 443,901 345,870
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
444,310 345,900
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ

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Total Total
2022 2021
£ £
Governance Costs:
Legal fees 5,187 12,142
Audit fees 14,040 9,600
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Governance costs: 19,227 21,742
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Governance costs are allocated to unrestricted funds.
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Charitable activities 7,088,383 4,317,591
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ

Auditor remuneration in respect of their audit of the Financial Statements for the year to 31 December 2022 totalled £9,750 excluding VAT. (2021: £8,000 excluding VAT)

5. STAFF COSTS

During the year to 31 December 2022, the average number of employees was 4 (2021: 2). The associated costs of employment are as follows:


costs of employment are as follows:
Total Total
2022 2021
£ £
Gross Salaries 204,925 140,018
Employers Social Security 25,731 16,800
Employers Pension contribution 23,001 10,251
Staff benefits and insurance 16,836 11,066
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£270,493 £178,135
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ

The total amount of benefit received by key management personnel was £134,698 (2021: £122,056). Key management personnel represent the Trustees and the Foundation Director. One employee earned between £100,000 and £110,000 during the year (2021: 1 earned between £100,000 and £110,000)

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For the year ended 31 December 2022 For the year ended 31 December 2022 For the year ended 31 December 2022
Total
6. EXPENDITURE ON INVESTMENT MANAGEMENT Unrestricted Restricted 2022
£
JTFM Limited – Financial consultant 30,900 - 30,900
Veritas Investment management fees 218,392 99,446 317,838
Ruffer LLP - 232,764 232,764
Brown Advisory investment management fee 150,284 233,886 384,170
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£399,576
£566,096		 £965,672
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Ruffer LLP was appointed in June 2022. The fees shown above represent a seven month period.
For the year ended 31 December 2021
Total
Unrestricted Restricted 2021
£
JTFM Limited – Financial consultant 34,800 - 34,800
Veritas Investment management fees 126,994 91,496 218,490
CCLA investment management fee 247,593 357,683 605,276
Brown Advisory investment management fee 2,385 3,874 6,259
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£411,772
£453,053		 £864,825
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
7. FIXED ASSET INVESTMENTS 2022 2021
£ £
Quoted investments 170,131,579 181,174,953
Cash held as part of portfolios 11,281,210 8,350,418
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total investments and cash under management £181,412,789 £189,525,371
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ
Net (loss)/gain on investments £(18,655,708) £25,301,442
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ
Market value at 1 January 181,174,953 87,670,143
Additions at cost 193,724,775 230,677,464
Disposals (186,112,442) (161,456,134)
Indirect investment management fees (gross of rebate) - (1,017,962)
Net realised investment (loss)/gain (3,351,609) 21,090,670
Net unrealised investment loss/gain (15,304,099) 4,210,772
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Market Value at 31 December £170,131,578 £181,174,953
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ

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8. TANGIBLE FIXED ASSET 2022 2021
£ £
Fixtures, fittings and equipment at cost
Balance at 1 January 2022 2,556 -
ÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄ
Purchases of fixtures, fittings and equipment
Computer equipment 5,846 2,556
ÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄ
Balance at 31 December 2022 8,402 2,556
ÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄ
Accumulated depreciation
Balance at 1 January 511 -
Charge for the year 1,578 511
ÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄ
Balance at 31 December 2022 2,089 511
ÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄ
Net Book Value at 31 December 2022 £6,313 £2,045
ÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍ
Tangible fixed assets are depreciated over a five year period using the straight line method.
The fixed assets are still being used by the Trust.
9. DEBTORS 2022 2021
£ £
Prepayments 23,171 9,800
Investment management fee rebate - 89,559
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£23,171 £99,359
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
10. CREDITORS - amounts falling due within one year 2022 2021
£ £
Accounts payable 320,105 80,901
Accruals 50,303 14,615
Grants payables 3,535,198 1,407,773
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£3,905,606 £1,503,289
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ
11. CREDITORS - amounts falling due in more than one year 2022 2021
£ £
Grants payable £3,668,675 £2,021,818
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

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12. GRANTS PAYABLE

During the year the Trustee awarded thirty eight new multi-year commitments. The following amounts outstanding as at 31 December 2022:


amounts outstanding as at 31 December 2022:
Amount Amounts
Organisation falling due falling due in
within one more than
year one year Total
£
University College London 300,000 446,467 746,467
Bristol University 263,441 263,441 526,882
University of Oxford Fellowship 75,000 250,000 325,000
Anna Freud Centre 220,000 100,000 320,000
Place2Be 152,000 152,000 304,000
Bristol University Fellowship 100,000 200,000 300,000
The Wave Project 100,000 200,000 300,000
Empire Fighting Chance 96,590 193,180 289,770
The Music Works 89,870 183,937 273,807
Oxford University 172,595 97,077 269,672
Raw Material Music and Media 35,140 217,718 252,858
Jigsaw4u 103,378 105,448 208,826
Kings College London Fellowship 150,000 250,000 200,000
University College London Fellowship 150,000 50,000 200,000
Groundwork London 65,939 131,877 197,816
The Prince’s Trust 196,490 - 196,490
OTR Bristol 62,529 130,742 193,271
Body & Soul 85,512 85,512 171,024
Young Roots 82,831 82,831 165,662
The Mix 75,000 75,000 150,000
Dose of Nature 50,000 100,000 150,000
Student Minds 80,000 50,000 130,000
OnSide 125,750 - 125,750
Create 57,028 58,445 115,473
Ormiston Families 50,000 50,000 100,000
YoungMinds 100,000 - 100,000
Youth Access 50,000 50,000 100,000
Core Arts 90,000 - 90,000
Designs in Mind 30,000 60,000 90,000
Comics Youth 30,000 60,000 90,000
East London Dance 75,000 - 75,000
MQ 50,000 - 50,000
Amber Foundation 50,000 - 50,000
Dulwich Picture Gallery 35,105 - 35,105
Roundhouse Trust 15,000 15,000 30,000
Focus Bath 30,000 - 30,000
Dalai Lama Centre for Compassion 10,000 10,000 20,000
Ebony Horse Club 16,000 - 16,000
Gardening with Disabilities Trust 15,000 - 15,000
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
£3,535,198 £3,668,675 £7,203,873
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

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13. RELATED PARTY TRANSACTIONS

During the year two donations totalling £420,000 (2021: £140,000) were made to Anna Freud Centre where the spouse of one of the Trustee Directors, Julia Samuel, is the Chair. Julia recused herself from the decision-making process related to these grants.

No Trustee Director received any remuneration or reimbursement of expenses during the year to 31 December 2022 (2021: £nil).

Trustee Liability insurance of £2,462 was paid by the Charity on behalf of the Trustee Director (2021: £467)

A Trustee Director, Beatrice Hollond is a Non-Executive Director of Brown Advisory. Beatrice Hollond recused herself from any decisions on appointing Brown Advisory as an Investment Manager and the decision was made independently of her Directorship and with the assistance of external and independent investment consultants.

During the year, a Trustee received the services of one of the employees of the Trust. The terms and provisions of these services were agreed by way of a consultancy agreement with fees charged to the Trustee that are above the cost incurred by the Trust in providing these services and agreed with the Trustee and the Trust at arm’s length. The fee income for the Trust for the year was £11,050 (2021 nil).

Aggregate donations from related parties were £260,000 (2021: £Nil).

14. ULTIMATE CONTROLLING PARTY

The Trustee Directors consider that the Trust is jointly controlled by the Directors of The Prudence Trust Company and therefore there is no one ultimate controlling party.

Balance Income Expenditure Balance
15. FUNDS brought and and carried
forward Gains Losses forward
£ £ £ £
For the year ended 31 December 2022:
Unrestricted 77,693,436 1,095,911 (12,654,453) 66,134,894
Restricted 112,560,107 12,477,431 (14,012,605) 111,024,933
ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ
£190,253,543 £13,573,342 £(26,667,058) £177,159,827
ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ
For the year ended 31 December 2021:
Unrestricted 69,604,280 12,368,489 (4,279,333) 77,693,436
Restricted 51,039,660 62,428,341 (907,894) 112,560,107
ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄ
£120,643,940 £74,796,830 £(5,187,227) £190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ

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For the year ended 31 December 2022 ended 31 December 2022
Total
Analysis of net assets between funds: Unrestricted Restricted 2022
£ £ £
Fixed assets 70,016,987 111,402,115 181,419,102
Debtors 23,171 - 23,171
Cash at Bank 500,324 2,791,511 3,291,835
Creditors (4,405,588) (3,168,693) (7,574,281)
ÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄ
Total Funds £66,134,894 £111,024,933 £177,159,827
ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ
For the year ended 31 December 2021
Total
Unrestricted Restricted 2021
£ £ £
Fixed assets 78,048,064 111,479,352 189,527,416
Debtors 43,924 55,435 99,359
Cash at Bank 2,751,271 1,400,604 4,151,875
Creditors (3,149,823) (375,284) (3,525,107)
ÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄ
Total Funds £77,693,436 £112,560,107 £190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍ

Restricted funds are to be used for specific purposes as laid down by the donor and must be used to furthering the charitable objectives and not for day to day operations of the Trust.

Income arising from the investment of those funds and expenditure which meets the criteria set out by the donor is charged to the fund.


out by the donor is charged to the fund.
16. FINANCIAL INSTRUMENTS 2022 2021
£ £
The carry amounts of the Trust’s financial instruments are as follows:
Financial assets
Measured at fair value through SOFA:
-Fixed asset quoted investments 170,131,579 181,174,953
-Tangible Fixed assets 6,313 2,045
-Cash under management 11,281,210 8,350,418
-Cash at bank and in hand 3,291,835 4,151,875
Financial liabilities
Measured at amortised cost
-Creditors 7,574,280 3,525,107
════════════════════ ════════════════════
The net gains attributable to the Trust’s financial instruments are
summarised as follows:
Income and expense
Measured at fair value through SOFA:
-Net gains (including changes in fair value) (18,467,602) 25,298,021

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════════════════════ ════════════════════
17.COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES
Unrestricted Restricted Total
Funds Funds Funds
2021 2021 2021
£ £ £
Income from:
Donations 69,035 45,000,000 45,069,035
Investments 1,825,934 2,599,030 4,424,964
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Income 1,894,969 47,599,030 49,493,999
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Expenditure on:
Charitable activities 3,867,561 450,030 4,317,591
Raising funds: investment management 411,772 453,053 864,825
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total Expenditure 4,279,333 903,083 5,182,416
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net income before gains on investments (2,384,364) 46,695,947 44,311,583
Net gains on investments 10,472,131 14,829,311 25,301,442
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net income 8,087,767 61,525,258 69,613,025
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Other recognised losses 1,389 (4,811) (3,422)
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Net movement in funds 8,089,156 61,520,447 69,609,603
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Reconciliation of funds:
Total funds brought forward 69,604,280 51,039,660 120,643,940
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
Total funds carried forward 77,693,436 112,560,107 190,253,543
ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ ÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍ

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18. COMPARATIVE GRANT AWARDS

OMPARATIVE GRANT AWARDS OMPARATIVE GRANT AWARDS OMPARATIVE GRANT AWARDS
Grants Payable 2021
Mental Health: Research
Kings College
London Fellowship		 Fellowship scheme for a researcher in
adolescent mental health		 £400,000
Bristol University
Fellowship		 For a researcher in adolescent mental
health		 £400,000
University College
London Fellowship		 For a researcher in adolescent mental
health		 £400,000
University of Oxford
Fellowship		 For a researcher in adolescent mental
health		 £400,000
Create To provide and evaluate arts programmes
in adolescentpsychiatric settings		 £10,000
Mental Health: Access to Support
Pace2Be To help them expand their offer of
counselling and whole-school support to
more schools		 £456,000
Core Arts Capital costs for their art school canal boat
to help promotepositive mental health		 £180,000
Create To provide and evaluate arts programmes
in adolescentpsychiatric settings		 £151,579
Anna Freud Centre Schools Support Service, offering remote
support to young people, parents and
teachers		 £140,000
Dulwich Picture
Gallery		 For their social prescribing programme
with the Tessa Jowell Health Centre		 £92,120
The Mix Digital counsellingservice foryoung people £50,000
ClimbingOut Residential programme for young people
followinga trauma		 £16,000
Mental Health: Prevention
The Prince’s Trust Get Started with Arts programme with
young people		 £450,000
OnSide To provide Wellbeing Youth Workers and
Artsprogrammes in some Centres		 £377,250
East London Dance Youth danceprogrammes £150,000
Roundhouse Trust To run their community arts programme £45,000
EbonyHorse Club Expand theiryouth work £32,000
Environment
Sustainable Food
Trust		 To helpdevelopthe Global Farm Metric £200,000

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19. KEY SERVICE PROVIDERS

Bankers:

C Hoare & Co 37 Fleet Street, Temple. London, EC4Y 1BT

J.P. Morgan Bank Luxembourg S.A. – London Branch PO Box 68214, 1 Knightsbridge, London, SW1P 9UH

J.P. Morgan Bank Luxembourg S.A 6 Route de Treves, L-2633 Senningerberg, Luxembourg

Investment Managers:

Veritas Investment Partners (UK) Limited Riverside House, 2a Southwark Bridge Road, London, SE1 9HA

Brown Advisory

18 Hanover Square, 1[st] Floor, London, W1S 1JY

Ruffer LLP, 80 Victoria Street, London SW1E 5JL

Solicitors:

Womble Bond Dickinson

4 More London Riverside, Greater London, SE1 2AU

Accountants:

Rawlinson & Hunter LLP Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ

Independent Auditor:

Sayer Vincent LLP Invicta House, 108-114 Golden Lane, London, EC1Y 0TL

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