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2022-12-31-accounts

LLOYD'S PATRIOTIC FUND

REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED

31 DECEMBER 2022

LLOYD’S PATRIOTIC FUND

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022

Page
Report of the Trustees 1-8
Statement of the Trustees' responsibilities 9
Report of the investment manager 10-11
Report of the independent auditors 12-14
Statement of financial activities 15
Balance sheet 16
Cash flow statement 17
Notes to the financial statements 18-24

LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022

The trustees of Lloyd's Patriotic Fund (The Fund) have pleasure in presenting their report together with the audited financial statements of the Fund for the period ended 31 December 2022.

TRUSTEES AND OFFICIALS

Registered number 210173
Address Lloyd’s of London
One Lime Street
London
EC3M 7HA
020 7327 1000
Trustees Mr Ed Butler (Chair)
Mr Bruce Carnegie-Brown (ex-officio)
Mr Alexander Findlay (retired October 2022)
Mr William Roscoe
Air Commodore Wendy Rothery (Deputy Chair)
Mr Duncan Welham
Mr Richard Williams MC
Mrs Caroline Sandeman-Allen
Mrs Michelle Alston
Mr Neil Maidment
Dr Paul Hughes (appointed February 2023)
Mr Simon Maxwell (appointed February 2023)
Secretary Ms Michaele Hawkins (retired June 2021)
Ms Sarah Chamberlain (appointed July 2021, resigned September
2021)
Miss Jessica Tamman (appointed October 2022)
Investment Advisors Cazenove Capital Management
12 Moorgate
London
EC2R 6DA
Auditors Simpson Wreford & Partners
Suffolk House
George Street
Croydon
CR0 0YN
Bankers National Westminster Bank PLC
PO Box 12258
1 Princes Street
London
EC2R 8PA

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

STRUCTURE, GOVERNANCE AND MANAGEMENT

Frequency of meetings and quorate meetings

Lloyd’s Patriotic Fund (LPF) was established in 1803 constituted by a Trust Deed dated 28 May 1875 and is a registered charity subject to the provisions of the Charities Act 2011. The financial statements have been prepared in accordance with the accounting policies set out on pages 18 and 19 and comply with the Fund’s Trust Deed and applicable law.

LPF is also guided by a separate term of reference which cover matters such as number of trustees, frequency of meetings and quorate meetings.

Responsibility for carrying out the objectives of LPF rests with the trustees. The Fund is supported by a Secretariat working under the direction of the trustees, employed by the Corporation of Lloyd’s and supported by the wider Global Community Engagement team. Delegated authority is given to the Global Community Engagement team at Lloyd’s, an outsourced finance team (Simpson Wreford & Partners) and Lloyd’s Treasury and Investment Management to advise and assist as per LPF’s Delegated Authority documentation. With the exception of audit fees, bank charges, insurance and investment management fees which are borne directly by the Fund, all administration costs of the Fund are borne in full by the Corporation of Lloyd's.

The disbursement of the Fund is at the sole discretion of the trustees unless funds have been given for a specific purpose.

Trustees

There were nine trustees as at 31 December 2022. Two trustees were appointed after the year end in readiness for the 2023 trustee meetings.

According to the governing document, upon the death, retirement or resignation of a trustee or when the number of trustees falls to seven, the trustees are required to appoint new trustees up to a maximum of fourteen. In accordance with the governing document the Board of Trustees did not fall below seven or exceed fourteen trustees at any one time.

The maximum term of office is nine years and trustees are asked to serve a minimum of three years.

All trustees give their time freely and no trustee remuneration was paid in the year from the funds of LPF. Any reasonable travel expenses were covered for trustees as a cost borne to the Corporation of Lloyd’s.

Governance

New trustees are appointed by the Board of Trustees following approval from the Council of Lloyd’s.

As a charity established to provide charitable grants on behalf of the Lloyd’s market, trustees are drawn from across the Lloyd’s market with the aim of representing different market constituencies – underwriters, brokers and members of Lloyd’s governing body. Trustees external to the Lloyd’s market are also on the board and the majority of trustees have military experience directly or indirectly.

LPF also aims to be a diverse board of trustees representing different voices as outlined in its Recruitment Policy which is reviewed every three years. With a formal external recruitment process implemented in June 2019 potential trustees can apply. LPF has a Trustee Recruitment subcommittee who formally interview potential candidates and decide who to put forward to the board. The board collectively agree what skills and knowledge gaps exist on the board and recruit candidates based on their experience and expertise, knowledge and interest in the charitable sector.

Consideration is given to relevant experience such as military service as well as knowledge of Lloyd’s

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

and the London insurance market, their interest or experience in the military charitable sector and experience of charity governance.

Potential trustees are invited to meet with the Trustee Recruitment subcommittee (including the Chair and the Global Community Engagement team). Before agreeing to become a trustee they will take part in a trustee induction session with the Global Community Engagement team to be informed of LPF’s structure, objectives and activities and their responsibilities as a trustee. This induction ensures that all new trustees follow good practice and guidance from the Charity Commission. All new trustees are required to sign LPF’s Code of Conduct as part of their onboarding process.

Once appointed, trustees will be supported by the Secretary and the Board of Trustees in any area of induction or training needed. Regular updates are provided at the meetings with regards to governance issues and changes to charity regulations.

All trustees complete a Register of Interests and a skills audit on an annual basis as well as alerting the Chair and Global Community Engagement team when there is a new potential conflict of interest.

Trustees meet three times a year as this is sufficient for the size and nature of the organisation. Four trustees present at a meeting shall be quorum. As stated in the original Trust Deed all matters and questions shall be determined by a majority vote of the trustees present at any meeting but in the event of a tie, the Chair shall have a second or casting vote.

At the trustee meetings the trustees agree the broad strategy and areas of activity for the Fund including consideration of governance, grant giving, charity partnerships, investment, reserve and risk management policies and performance. The day-to-day administration of grants and the processing and handling of applications prior to consideration by the relevant subcommittee is delegated to the Global Community Engagement team at the Corporation of Lloyd’s. The Charity Partners selection committee of trustees meet annually to review all applications for grants and shortlist applications and recommendations to take forward to trustee meetings.

LPF has a number of subcommittees of which trustees and the Global Community Engagement team are a part and they are each chaired by a trustee. These include:

Lead trustees are allocated to lead on: the Risk Register, LPF’s investments and attend the Charities Investment Advisory Committee and act as lead trustees for charity partners.

Minutes are taken at each meeting and are circulated to trustees along with action points and responsibilities and are kept as a record.

Risk Management

The trustees have considered the major risks to which the charity is exposed and reviewed those risks and established systems and procedures to manage those risks.

The Risk Register outlines the major risks to which the charity is exposed. The Risk Register is reviewed annually and trustees are also alerted to any new risks.

As Lloyd's employees, all individuals administering LPF are able to raise issues relating to fraud and financial crime in accordance with Lloyd's Whistleblowing procedures.

LPF has a Conflicts of Interests policy and procedure which all trustees are familiar with and follow. This is reviewed every three years.

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

OBJECTIVES AND ACTIVITIES

Founded in 1803, Lloyd’s Patriotic Fund is the oldest military charity of its kind, supporting the armed forces community on behalf of the Lloyd’s market. We focus on improving the transition to civilian life for veterans and their families who need the most help.

Today, Lloyd’s Patriotic Fund unites support from the market to aid the successful transition to civilian life for veterans and their families to ensure successful futures.

Lloyd’s Patriotic Fund partners with military charities who are best placed to meet the mental health and employment needs of the military community. In addition, Lloyd’s Patriotic Fund has an annual grant giving programme to award small grants to support charities that enable veterans and their families to build successful civilian lives and careers.

Each year, 17,000 personnel leave the UK Armed Forces and return to civilian life and their families. For the majority the transition is successful, however a high proportion of veterans find this more difficult, putting them in a vulnerable position.

The trustees confirm that they have referred to the advice contained in the Charity Commission’s general guidance on public benefit when reviewing the Trust’s aims and objectives and in planning future activities.

The Fund is divided into a number of individual funds established for public benefit to achieve the Fund’s strategic priorities.

General Fund (1803)

This Fund provides assistance to officers and men and women of the Royal Navy, the Army, Royal Marines and Royal Air Force or their families (partners, widows, orphans, dependants and relatives) who, at the trustees’ discretion, are fitting recipients.

The Hugh Stewart McCorquodale Memorial Fund (1901)

A bequest of 1,000 guineas made by Lieutenant Hugh Stewart McCorquodale, killed during the South African War, whereby the use of income is at the discretion of trustees.

Edwin Hampson Mackintosh Fund (1916)

Lieutenant Edwin Hampson Mackintosh killed on the first day of the Battle of Loos, bequeathed £1k with the stipulation that the income is used for the benefit of officers of the Royal Navy or Royal Marines or their dependants.

Janson Fund (1918) – now formally part of the general fund as of 28 January 2021

A gift of £10k was made by the then Chair Percy Janson. Trustees designated that the capital or income be used primarily to assist officers of the Royal Navy, the Army and Royal Marines or their dependants in the form of grants towards the education and maintenance of their children.

Charles Skey Fund (2013)

In May 2013 Charles Skey, former trustee and Chair of Lloyd’s Patriotic Fund, made a bequest of £1m to Lloyd’s Patriotic Fund. Mr Skey expressed the wish that the capital is invested and untouched and that the income is used for the general charitable purposes of the Fund. All income arising from the fund is expended during the year.

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

ACHIEVEMENTS

Fundraising

The Fundraising subcommittee continue to focus on its fundraising “slip” campaign. The aim of this is to increase financial support from the Lloyd’s market for LPF in collaboration with the Royal British Legion Lloyd’s and City branch. This campaign focuses on donations from companies in the Lloyd’s market. This approach has been in place since February 2019 following a review which set up the fund with a new approach to fundraising, grant giving and the way it works with its charity partners.

Partnerships and Grant Giving

LPF continues to work closely with charities which support veterans and their families transitioning to civilian life through employability and mental health programmes.

Donations are provided for strategic charity partnerships to undertake an agreed project, subject to rigorous due diligence checks and a detailed Grant Agreement. The effectiveness of the grants and partnerships are monitored through 6-monthly reporting produced by charity partners and presented to trustees, and consistent relationships with the Global Community Engagement team at the Corporation of Lloyd’s. Individual trustees are responsible for leading the engagement with charity partners including project updates and visits where possible, regular meetings and approving the mid-project and end of project update reports to all trustees.

In addition LPF gave out small grants of £10k each to charities and projects that help improve the transition for “at risk” groups (such as bereaved families, or early service leavers families) which focuses on mental health and building resilience, employment support and financial independence to enable veterans and their families to build successful civilian lives and careers. A thorough grant application process took place and the Charity Selection subcommittee made the decision to award five small grants with the support of the trustee board, at the July 2022 meeting.

Long-term partnerships

LPF donated £100,000 each to Forces Employment Charity and Combat Stress for the final year of the 3-year partnerships (£200,000 in total p.a.). This equated to £150,000 each in the 18 month period ended 31 December 2022. This was funded by a £150,000 donation from the Society of Lloyd’s and investment income.

Forces Employment Charity

Forces Employment Charity exists to provide life-long, life-changing support, job opportunities and training to the UK Armed Forces Community. Funding from LPF has enabled the Families Programme to support 524 non-serving spouses and partners into employment throughout the 18 month period ended 31 December 2022. The highly skilled Families Employment Advisors’ support has resulted in 96% of beneficiaries increasing their job search skills. Significantly, in a year of extremely high inflation rates, 79% of beneficiaries increased their social mobility with 140 entering new employment. Highlights for the Families Programme include hosting the inaugural Celebrating Forces Families Awards, and Forces Employment’s TechVets opening to families’ registrations.

Combat Stress

LPF have supported Combat Stress to conduct pioneering research to create an evidence base of occupational therapy input that will enhance the civilian lives and careers of veterans with traumarelated mental health conditions. The partnership will conclude in May 2023. The research paper produced by the Occupational Health

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

Therapist at Combat Stress is currently under peer review for journal submission, with support from York St John University.

In addition, the Royal College of Occupational Therapists signed the Armed Forces Covenant due to the recognition of the work with military veterans and have requested several submissions to summarise the interventions and findings of the Occupational Therapists work within this demographic.

Approximately 500 veterans were directly supported through the programme in the 18 month period ended 31 December 2022.

Small Annual Grant Giving

During the period four charities - The Contact Group (hosted by Help for Heroes), Care After Combat, Give Us Time and Fighting with Pride - were supported through the annual small grant giving programme with grants totalling £78k.

LPF is supporting these charities to deliver programmes that support veterans and their families with employment and mental health. These grants were donated between November and December 2022.

FINANCIAL REVIEW

Funding Sources and Reserves Policy

The revenue of the Fund is generated from investment income and legacies and donations from individuals and companies.

The General Fund of LPF received a donation of £150k from the Council of Lloyd’s to support the grant giving programme.

The charity aims to maintain the real capital value of its investments in its reserves whilst fully expending its donation and investment derived income in pursuit of its aims and objectives. Trustees have a reserves policy of holding circa £125k in reserve at all times (plus or minus 10%). A resolution will need to be passed to approve taking the cash reserves lower than £100k. This allows cover for any unbudgeted expenditure during the year. Trustees wish to keep at least 70% of the assets in investments that can be realised within three months and a minimum of 2% of total assets should be kept in cash or near cash investments at all times.

Risk analysis

The Fund’s principal risk is the reduction in funding and inability to fundraise. This could manifest through the Council of Lloyd’s ceasing funding to the Fund, the Fund losing their ability to fundraise or if the Fund’s investment portfolio weakens, meaning that dividends significantly reduce.

LPF have significant mitigation processes in place which means that these scenarios are very unlikely. The Lloyd’s charities risk register and regular risk reviews mean that controls are in place for each risk. This is supported in kind by the Lloyd’s Corporation Risk & Regulatory team. LPF also have a cash reserve meaning in any circumstance which this may occur, they are able to honour their grant giving requirements within their current partnership contracts. Grant agreements also feature termination clauses which protect LPF from these risks and protect any reputational issues.

Investment policy and management

The invested funds of Lloyd’s Patriotic Fund are held in funds managed by Cazenove Capital Management whereby the costs of the investment management are borne directly by the Fund and amount to £19k for the 18 month period ended 31 December 2022 (year ended 30 June 2021: £12k).

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

The cash element and any surplus funds from the General Fund and sub-funds are placed with Morgan Stanley Funds PLC (Gartmore).

Fees are deducted based on the whole portfolio on a daily average market value at a rate of 0.35% subject to VAT. There is also underlying fund management charges which are deducted from investment income or capital.

Investments are reviewed on a regular basis during the year by the relevant lead trustee and monitored by the Board of Trustees to ensure that they are meeting the trustees’ long term objectives of maximising income available for charitable purposes whilst protecting the capital value of the fund.

Bi-annual review meetings are held with the Fund’s advisory investment manager, Cazenove Capital Management as part of the Charities Investment Advisory Committee as well as additional meetings with the lead trustees for LPF’s investments.

A report on the investments by Cazenove Capital Management is included on pages 10-11.

The overall gross annual investment income amounted to £178k for the 18 month period ended 31 December 2022 (year ended 30 June 2021: £87k).

The excess of income over expenditure for the year amounted to £179k for the 18 month period ended 31 December 2022 (year ended 30 June 2021: £285k) and during the period the market value of the Foundation’s investment portfolio increased to a total of £3,980k (2021: £3,488k).

Ethical Policies

The trustees regularly review their level of exposure to ethically sensitive investments and agreed that the total sector exposure to ethically sensitive stocks should remain under 10%. The exposure level to ethically sensitive investments continues to be low and investment managers continue to engage with companies to encourage them to manage their ESG impact. The exposure rating was reviewed in 2020 by the lead trustees for LPF’s investments who also sit on the Charities Investment Advisory Committee. The trustees do not wish to adopt an exclusionary policy but individual investments may be excluded if perceived to conflict with the Fund's purpose. It is ensured that all investments are held with acceptable evidence of ESG integration and the board’s ethical investments approach is monitored by the board of trustees regularly.

Commitments and Liabilities

LPF has made a commitment to spend the annual donation from the Council of Lloyd’s on charitable partnerships that achieve the strategy of LPF. The selected charity partners receive committed expenditure amounts as detailed below. Additional annual grant giving will be given each year for smaller donations between £10k and £20k (subject to charity application).

From 2023 onwards, LPF will be supporting the following charity partners through grant funding over 3 years - Forces Employment Charity (previously RFEA), for £100k per year, Scotty’s Little Soldiers for £85k per year and The Ripple Pond, for £10k per year. This was agreed by Trustees in the October 2022 meeting. Partnerships with Forces Employment Charity and Scotty’s Little Soldiers began in January 2023 and The Ripple Pond in April 2023.

Any potential reduction in future investment income as a result of financial market pressures will not materially affect any current project commitments. Trustees will continue to monitor the markets closely and have the option to drawdown funds as they see fit.

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LLOYD’S PATRIOTIC FUND

REPORT OF THE TRUSTEES FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

PLANS FOR FUTURE PERIODS

The plans for the financial year 2023 include:

Public Benefit

The Trustees take full account of the published Charity Commission general guidance on public benefit and are satisfied that the aims of the charity are carried out wholly in pursuit of its charitable aims for the public benefit. Lloyd’s Patriotic Fund’s grant-making is of measurable benefit to individuals. Applications can be made by all military and ex-military charities that support serving and ex-service armed forces personnel and their dependants who are in need.

Acknowledgement

The Trustees wish to record their sincere thanks to members of the Corporation of Lloyd's staff who assist with the administration of the financial statements of the Fund and to the Corporation of Lloyd's which bears the majority of administration costs.

The Trustees are grateful to the Corporation of Lloyd’s for their agreement to provide LPF with an annual donation from the Council of Lloyd’s on behalf of the Lloyd’s market.

The Trustees are grateful to the individuals and companies who supported the Fund with donations which amounted to £251k for the 18 month period ended 31 December 2022 (year ended 30 June 2021: £213k) during the year.

The Trustees also wish to thank our charity partners for all their tireless support and help to the military community, veterans and their families.

Approved by the Board of Trustees on 13 July 2023 and signed on its behalf by: -

Ed Butler Chair

Wendy Rothery Deputy Chair

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LLOYD’S PATRIOTIC FUND

STATEMENT OF THE TRUSTEES' RESPONSIBILITIES FOR THE PERIOD ENDED 31 DECEMBER 2022

Trustees' responsibilities statement

The trustees are responsible for preparing the Trustees’ Annual 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 & 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 charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the trustees are required to:

The trustees are 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, the Charities (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.

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LLOYD’S PATRIOTIC FUND

REPORT OF THE INVESTMENT MANAGER TO THE TRUSTEES OF LLOYD'S PATRIOTIC FUND FOR THE PERIOD ENDED 31 DECEMBER 2022

Overview

Investment Objective

The portfolio is designed to maximise income whilst protecting the real value of capital over the medium to long term. The portfolio is managed on an advisory basis with Cazenove Capital Ltd providing investment advice on an ad hoc basis, custody, reporting and administration services. The portfolio uses a broad range of investments and may allocate a high proportion of its assets to equity or equity-like investments in pursuing its aims. Whilst the majority of the portfolio is invested in readily tradable assets, illiquid assets are considered part of the investable universe and the portfolio may have some exposure. Cash, fixed income and other defensive assets will normally account for only a small part of the portfolio.

Portfolio Summary

Description Market Value £ Portfolio Weight %
Equities 2,398,826
60.3%
UK 954,281
24.0%
ASI UK All Share Tracker Fund 505,305
12.7%
Trojan Income Fund 448,976
11.3%
Global 1,444,544
36.3%
Fidelity Global Dividend 744,174
18.7%
Vanguard FTSE All-World ETF 700,370
17.6%
Multi-asset 1,012,780
25.4%
Multi-Asset Fund 96,290 2.4%
Responsible Multi-Asset Fund 916,490 23.0%
Property 453,752
11.4%
Charities Property Fund 453,752
11.4%
Cash 112,948
2.8%
Sterling cash 37,948
0.9%
JPMorgan Liquidity Fund 75,000
1.9%
Total 3,979,958
100%

Source: Cazenove Capital as of 31.12.2022.

Economic and Market outlook

Central bankers may well start to sound less anxious about inflation in 2023. However, investors must still contend with the slowdown that will result from the steep rises in interest rates we have seen over the past year. If inflation cools quickly, this slowdown could be relatively shallow and short-lived, as central banks signal a willingness to cut interest rates to support growth. Schroders’ economists anticipate that the Federal Reserve may be in a position to cut rates in the second half of 2023, with the Bank of England and European Central Bank to follow. However, the path of inflation remains far from certain. Markets could become more volatile if it becomes apparent that interest rates will need to rise higher - or stay high for longer – than is currently anticipated.

Beijing has surprised investors by quickly dismantling the coronavirus restrictions that have been weighing on Chinese activity for over two years. At some point, this is likely to result in a strong rebound in economic activity, potentially boosting global demand and complicating efforts to bring inflation under control. However, the timing of this recovery remains unclear and China could face a prolonged period of weakness as it experiences a Covid “exit wave.” This uncertain outlook is reflected in the performance of commodities, which are still highly dependent on Chinese demand. Prices jumped late last year as it emerged that Covid restrictions would be eased: they have since retreated as it has become more likely that the boost to activity may be delayed.

Russia’s bombardment of Ukrainian cities over the holiday season is a sad reminder that there is little prospect of a de-escalation of the conflict any time soon. By contrast, it looks increasingly likely that

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LLOYD’S PATRIOTIC FUND

REPORT OF THE INVESTMENT MANAGER TO THE TRUSTEES OF LLOYD'S PATRIOTIC FUND FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

both sides are preparing for renewed offensives in the spring. Besides the humanitarian cost, this will have global economic implications as the world grapples with continued uncertainty over energy and agricultural supplies. There are other international flashpoints to worry about. Taiwan is likely to remain a source of tension between China and the US and could lead to further disruption in global trade and supply chains. Iran’s nuclear programme, alongside the challenge from domestic unrest, could also be a source of instability in the Middle East.

Cazenove Capital Management, 31 December 2022

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LLOYD’S PATRIOTIC FUND

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF LLOYD'S PATRIOTIC FUND FOR THE PERIOD ENDED 31 DECEMBER 2022

Opinion

We have audited the financial statements of Lloyd’s Patriotic Fund (the ‘charity’) for the period ended 31 December 2022 which comprise the Statement of Financial Activities, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and 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 charity’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report, including the trustees’ report, other than the financial statements and our auditor’s report thereon. The trustees are 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.

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LLOYD’S PATRIOTIC FUND

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF LLOYD'S PATRIOTIC FUND FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

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 trustees’ report.

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require 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 financial statements which 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.

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 is detailed below:

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LLOYD’S PATRIOTIC FUND

REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF LLOYD'S PATRIOTIC FUND FOR THE PERIOD ENDED 31 DECEMBER 2022 (continued)

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

Use of our report

This report is made solely to the charity’s trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity’s trustees 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 trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Simpson Wreford & Partners Statutory Auditor Suffolk House George Street Croydon CR0 0YN

Date………………………………………….. 4 August 2023

Simpson Wreford & Partners is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

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LLOYD’S PATRIOTIC FUND

STATEMENT OF FINANCIAL ACTIVITIES FOR THE PERIOD ENDED 31 DECEMBER 2022

Note
INCOME:
Donations and legacies
2
Investment income
3
Total income
EXPENDITURE:
Investment management fees
Charitable activities:
Donations and grants payable
6
Other expenses
Total expenditure
Net income / (expenditure) and net
movement in funds
Realised gain / (loss) on
investments
7
Unrealised gain / (loss) on
investments
7
Net gain / (loss) on investments
7
NET MOVEMENT IN FUNDS
Total funds brought forward
Total funds carried forward		 Unrestricted
Funds
Restricted
Funds
Endowment
Funds
General
Fund
£’000
Mackintosh
income
£’000
Mackintosh
Fund
£’000
McCorquodale
Fund
£’000
Skey
Fund
£’000
401
-
-
-
-
123
6
-
2
47
524
6
-
2
47
(12)
(1)
-
-
(6)
(378)
-
-
-
-
(3)
-
-
-
-
(393)
(1)
-
-
(6)
131
5
-
2
41
-
-
-
-
-
(117)
-
15
2
(15)
(117)
-
15
2
(15)
14
5
15
4
26
2,693
16
120
46
1,246
2,707
21
135
50
1,272		 Period
ended 31
December
2022 Total
£’000
401
178
579
(19)
(378)
(3)
(400)
179
-
(115)
(115)
64
4,121
4,185		 Year
ended 30
June
2021 Total
£’000
383
87
470
(12)
(170)
(3)
(185)
285
39
361
400
685
3,436
4,121

The notes on pages 18 to 24 form part of these financial statements.

15

LLOYD’S PATRIOTIC FUND

BALANCE SHEET FOR THE PERIOD ENDED 31 DECEMBER 2022

Note
INVESTMENTS
At market value
7
CURRENT ASSETS
Short term deposits
Cash at bank
Total
CURRENT LIABILITIES
8
Creditors
Total expenditure
NET CURRENT ASSETS
NET ASSETS
FUNDS		 Unrestricted
Funds
Restricted Funds
Endowment funds
General
Fund
£’000
Mackintosh
income
£’000
Mackintosh
Fund
£’000
McCorquodale
Fund
£’000
Skey
Fund
£’000
2,676
-
135
46
1,123
23
-
-
-
-
14
21
-
4
149
37
21
-
4
149
(6)
-
-
-
-
(6)
-
-
-
-
31
21
-
4
149
2,707
21
135
50
1,272
2,707
21
135
50
1,272		 Period
ended 31
December
2022 Total
£’000
3,980
23
188
211
(6)
(6)
205
4,185
4,185		 Year
ended 30
June
2021 Total
£’000
3,488
23
652
675
(42)
(42)
633
4,121
4,121

Approved and authorised for issue by the Board of Trustees on 13 July 2023 and signed on its behalf by

Ed Butler Wendy Rothery Chair Deputy Chair

The notes on pages 18 to 24 form part of these financial statement

16

LLOYD’S PATRIOTIC FUND

CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2022

Note
Net cash used in operating activities
9
Cash flows from investing activities:
Interest and dividends
Purchase of investments
Proceeds from sale of investments
Net cash provided by investing activities
Change in cash and cash equivalents in year
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
Cash and cash equivalents consist of:
Cash within investments
Short term deposits
Cash at bank
Total		 Period ended
31 December
2022
£’000
Year ended
30 June
2021
£’000
(35)
128
178
87
(598)
(1,739)
-
1,699
(420)
47
(455)
175
704
529
249
704
38
29
23
23
188
652
249
704

17

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022

1. ACCOUNTING POLICIES

Basis of accounting

The charity constitutes a public benefit entity as defined by FRS 102. In preparing the financial statements the fund follows best practice as laid down in the Statement of Recommended Practice “Accounting and Reporting by Charities” (Charities SORP FRS 102) in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.They are drawn up on the historical accounting basis except that investments held as fixed assets are carried at market value.

Going concern

The financial statements have been prepared on a going concern basis as the trustees believe that no material uncertainties exist. The trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the charity to be able to continue as a going concern.

Donations and legacies

Donations and legacies are included in the statement of financial activities when receivable.

Investment income

Dividends from equity investments are taken into account on the due date of payment; all other income is included by reference to the amount due in respect of the accounting period.

Gains and losses on investments

Gains or losses on disposals in the year are calculated by reference to the carrying value of the holding as at the date of sale.

Grants

Grants are accounted for by reference to the amount due in respect of the accounting period.

Administration expenses

The costs of the administration of the Fund are borne in full by the Corporation of Lloyd's with the exception of investment management fees, audit fees and bank charges. No remuneration was paid to the Trustees from Lloyd’s Patriotic Fund, nor were any Trustees expenses reimbursed to them from the Fund. Reasonable travel expenses for trustees were reimbursed from the Corporation of Lloyd’s.

Taxation

The Foundation is established as an exempt approved charity for taxation purposes.

Investments

Investments are stated at their market value at the date of the balance sheet. Gains and losses on investments are taken directly to the statement of financial activities.

Debtors

Debtors are recognised at the settlement amount due.

Short term deposits

Short term deposits include short term highly liquid investments with a short maturity of three months or less from the date of acquisition.

18

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022

1. ACCOUNTING POLICIES (CONTINUED) Creditors

Creditors are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount.

Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are recognised at amortised cost or as specified in the preceding accounting policies. As there are currently no long term financial instruments, the transaction value and settlement value will be the same.

Allocation between funds

The Charles Skey Fund has its own portfolio of investments which is reported separately. The remaining portfolio is allocated to the other individual funds in proportion to their share of the Fund account balance at the beginning of the period.

2. DONATIONS AND LEGACIES

General donations
Donation from the Corporation of Lloyd’s		 Period
ended 31
December
2022
£’000
247
154
401		 Year
ended 30
June
2021
£’000
213
170
383

3. INVESTMENT INCOME

Equity Fund Investments
Property fund
UK fixed interest investments		 Period
ended 31
December
2022
£’000
144
34
-
178		 Year
ended 30
June
2021
£’000
66
21
-
87

4. AUDITOR’S REMUNERATION

The auditor’s remuneration constituted an audit fee of £2k (2021: £2k) and non-audit fees of £nil (2021:£nil).

As noted in the report of the Trustees, the auditor was paid for the provision of bookkeeping services. This was for an amount of £5k (2021: £nil) and was paid by the Corporation of Lloyd’s.

5. STAFF COSTS AND NUMBERS

The average number of employees was nil (2021: nil). No remuneration was paid in either the current or prior period.

19

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022

6. ANALYSIS OF CHARITABLE EXPENDITURE

Funded from unrestricted funds:
Give Us Time
Combat Stress
Care after Combat
Army Families Fed
Supporting Wounded
Higher Ground Project
RFEA
Fighting with pride
The Ripple Bond
Help for Heroes
Building Heroes ED
Felix Fund
7.
QUOTED INVESTMENTS
Market value brought forward
Net (sales) and purchases
Net unrealised gain/(loss) for the
year
Net realised gain/(loss) for the
year
Movements on cash account
Market value carried forward
Market value brought forward
Net (sales) and purchases
Net unrealised gain/(loss) for the
year
Net realised gain/(loss) for the
year
Movements on cash account
Market value carried forward		 Equity
£’000
2,995
598
(105)
-
-
3,488
Equity
£’000
2,575
40
364
39
-
3,018		 Period
ended 31
December
2022
£’000
15
150
27
-
-
-
150
15
-
21
-
-
378
2022
Property
Cash
£’000
£’000
464
29
-
-
(10)
-
-
-
-
9
454
38
2021
Property
Cash
£’000
£’000
441
9
-
-
-
-
-
-
-
20
441
29		 Year
ended 30
June
2021
£’000
-
50
-
10
10
10
50
-
10
-
19
11
170
Total
£’000
3,488
598
(115)
-
9
3,980
Total
£’000
3,025
40
364
39
20
3,488

20

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)

8. CREDITORS

CREDITORS
Accruals
Deferred income		 Period
ended 31
December
2022
£’000
6
-
6		 Year
ended 30
June
2021
£’000
12
30
42

9. RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net movement in funds
Less interest and dividend income shown within investing
activities
(Gain) / loss on investments
Decrease / (increase) in debtors
(Decrease) / increase in creditors
Net cash (outflow) / inflow from operating activities		 Period
ended 31
December
2022
£’000
64
(178)
115
-
(36)
(35)		 Year
ended 30
June
2021
£’000
685
(87)
(403)
-
(67)
(128)

10. DISCLOSURE OF RELATED PARTY TRANSACTIONS & TRUSTEE REMUNERATION

The trustees receive no remuneration and no expenses were reimbursed within the financial period (2021 – none). Reasonable travel expenses for trustees were reimbursed from the Corporation of Lloyd’s.

There were no related party transactions in the year 2022.

11. FUNDING COMMITMENTS

LPF has made a commitment to spend the annual donation from the Council of Lloyd’s on charitable partnerships that achieve the strategy of LPF. The selected charity partners receive committed expenditure amounts as detailed below. Additional annual grant giving will be given each year for smaller donations between £10k and £20k (subject to charity application).

From 2023 onwards, LPF will be supporting the following charity partners through grant funding over 3 years - Forces Employment Charity (previously RFEA), for £100k per year, Scotty’s Little Soldiers for £85k per year and The Ripple Pond, for £10k per year. This was agreed by Trustees in the October 2022 meeting. Partnerships with Forces Employment Charity and Scotty’s Little Soldiers began in January 2023 and The Ripple Pond in April 2023.

21

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)

12. FUNDS

Founded in 1803 to assist the many casualties of the Napoleonic Wars, Lloyd’s Patriotic Fund is the oldest military charity of its kind and has been providing support to the Armed Forces Community on behalf of the Lloyd’s market for over 200 years.

General Fund (1803)

This Fund provides assistance to officers and men and women of the Royal Navy, the Army, Royal Marines and Royal Air Force or their families (partners, widows, orphans, dependants and relatives) who, at the trustees’ discretion, are fitting recipients.

The Hugh Stewart McCorquodale Memorial Fund (1901)

A bequest of 1,000 guineas made by Lieutenant Hugh Stewart McCorquodale, killed during the South African War, whereby the use of income is at the discretion of trustees.

Edwin Hampson Mackintosh Fund (1916)

Lieutenant Edwin Hampson Mackintosh killed on the first day of the Battle of Loos, bequeathed £1k with the stipulation that the income is used for the benefit of officers of the Royal Navy or Royal Marines or their dependants.

Janson Fund (1918) – now formally part of the general fund as of 28 January 2021

A gift of £10k was made by the then Chair Percy Janson. Trustees designated that the capital or income be used primarily to assist officers of the Royal Navy, the Army and Royal Marines or their dependants in the form of grants towards the education and maintenance of their children.

Charles Skey Fund (2013)

In May 2013 Charles Skey, former trustee and Chair of Lloyd’s Patriotic Fund, made a bequest of £1m to Lloyd’s Patriotic Fund. Mr Skey expressed the wish that the capital is invested and untouched and that the income is used for the general charitable purposes of the Fund. All income arising from the fund is expended during the period.

13. CHANGE IN ACCOUNTING PERIOD

The Fund extended its current reporting period to 31 December, in order to align its reporting date with other Lloyd’s charities.

The comparative figures have been presented for the year ended 30 June 2021 and are therefore not directly comparable with the figures for the 18 month period ended 31 December 2022.

The change in accounting reference date was undertaken with the authority of the Trustees.

22

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)

14. ANALYSIS OF COMPARATIVE INFORMATION WITHIN THE STATEMENT OF FINANCIAL ACTIVITES

INCOME:
Donations and legacies
Investment income
Total income
EXPENDITURE:
Investment management fees
Charitable activities:
Donations and grants payable
Other expenses
Total expenditure
Net income / (expenditure) and net
movement in funds
Realised gain / (loss) on investments
Unrealised gain / (loss) on investments
Net gain / (loss) on investments
NET MOVEMENT IN FUNDS
Total funds brought forward
Transfer between funds
Total funds carried forward		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Endowment Funds
General
Fund
£’000
Janson
Fund £’000
Mackintosh
income
£’000
Mackintosh
Fund
£’000
McCorquodale
Fund
£’000
Skey
Fund
£’000
383
-
-
-
-
-
55
1
3
-
1
27
438
1
3
-
1
27
(8)
-
-
-
-
(4)
(170)
-
-
-
-
-
(3)
-
-
-
-
-
(181)
-
-
-
-
(4)
257
1
3
-
1
23
(3)
-
-
-
-
42
245
-
-
13
5
98
242
-
-
13
5
140
499
87
3
13
6
163
2,106
87
13
107
40
1,083
88
(88)
-
-
-
-
2,693
-
16
120
46
1,246		 Year
ended 30
June 2021
Total
£’000
383
87
470
(12)
(170)
(3)
(185)
285
39
361
400
685
3,436
-
4,121

23

LLOYD’S PATRIOTIC FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 (continued)

15. ANALYSIS OF COMPARATIVE INFORMATION IN THE BALANCE SHEET

INVESTMENTS
At market value
CURRENT ASSETS
Short term deposits
Cash at bank
Total
CURRENT LIABILITIES
Creditors
Total expenditure
NET CURRENT ASSETS
Transfer between funds
NET ASSETS
FUNDS		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Endowment Funds		 Skey
Fund
£’000
1,143
-
108
108
(5)
(5)
103
-
1,246
1,246		 Year
ended 30
June 2021
Total
£’000
3,488
23
652
General
Fund
£’000
Janson
Fund £’000
Mackintosh
income
£’000
Mackintosh
Fund
£’000
McCorquodale
Fund
£’000
2,097
84
-
120
44
23
-
-
-
-
522
4
16
-
2
545
4
16
-
2		 675
(37)
-
-
-
-		 (42)
(37)
-
-
-
-		 (42)
508
4
16
-
2
88
(88)
-
-
-		 633
-
2,693
-
16
120
46		 4,121
2,693
-
16
120
46		 4,121

24