2021-12-31-accounts

Registered Number: 210829

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FINANCIAL STATEMENTS

31 DECEMBER 2021

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

CONTENTS

	Page
Report of the Trustees	1-6
Statement ofTrustees' Responsibilities	7
Independent Auditors’ Report	8-114
Statement of Financial Activities	12
Balance Sheet	13
Statement of Cash Flows	14
NotestotheFinancialStatements	15-24

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2021

REFERENCE AND ADMINISTRATIVE INFORMATION

Trustees

The Rt Hon Lord Arbuthnot of Edrom The Rt Hon Lord Geidt of Crobeg GCB GCVO OBE QSO Lieutenant General Sir Mark Mans KCB CBE DL Air Marshal Sir Baz North KCB OBE David Rosier MA (Oxon) (resigned 23/11/2021) Vice Admiral Sir David Steel KBE DL John Chatfeild-Roberts (appointed 23/11/2021)

General Secretary/Office of the Charity

Commander S E J David MBE RN (Rtd) Magdala Mill Lane Titchfield Hampshire PO15 5RD

Bankers

Barclays Bank, Cheltenham Branch, Cheltenham and North Cotswold Group, 128 High Street, Cheltenham, Gloucestershire GL50 1EL.

Auditors

Messrs Pitt Godden & Taylor LLP, Unit 3 Ambrose House, Meteor Court, Barnett Way, Barnwood, Gloucester, GL4 3GG

Solicitors

Messrs Herbert Mallam Gowers, Solicitors of Oxford, 126 High Street, OX1 4DG.

Investment Managers

BlackRock Investment Management (UK) Ltd, 12 Throgmorton Avenue, London EC2N 2DL

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

TRUSTEE REPORT AND FINANCIAL STATEMENTS

The Trustee Report and Financial Statements for the year 1st January 2021 to 31st December 2021 have been prepared in accordance with the guidelines published by the Charity Commission. These guidelines are contained in the Statement of Recommended Practice: 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) issued in October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.

OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT

The objective of the Trust is to promote the welfare and efficiency of the Forces of the Crown either by the provision of facilities for recreation or by any other means. The Trustees confirm that they comply with the duty in the Charities Act 2011 to have regard to the Charity Commission’s general guidance on public benefit when carrying out the Trust’s objective and aims and in grant making policy and awards.

The Trust's primary aim is to provide recreational and welfare amenities and facilities that are likely to be of lasting benefit to the Armed Forces but which are not provided by public funds and which are beyond the resources of other non-public funds. The Trust further aims to support units on operations and to benefit the maximum number of Service personnel whilst being mindful of the needs of smaller, less well-found sports associations and isolated units.

The Trust does not fundraise and, therefore, the Trustees aim for prudent stewardship of the Trust's assets to achieve Lord Nuffield’s express wish that the Trust be maintained for such time as there is need. The Trustees judge that continuing restrictions on and shortfalls in the public funding of recreational facilities for the Armed Services mean that there will be a continuing, long-term need to meet.

GRANT MAKING POLICY

Under a Memorandum of Understanding between the Trust and the three Armed Services, grant applications for non-public (charitable) funding are scrutinised by the Armed Services, who make the decision on which might be suitable for funding from the Services’ own charitable funds or by the Trust for the public benefit of promoting the welfare and efficiency of the Forces of the Crown.

At their November meeting the Trustees make a funding allocation to the Armed Services for the forthcoming year. That allocation is then sub-divided and paid to the Royal Navy, Army and Royal Air Force on a proportional basis relative to the Regular and Operational Reserve personnel numbers in each Service.

Each of the Services then applies for Major Grants (£15,001 to £50,000) from within their allocation. These applications are considered at the March Trustee meeting where the Trustees are joined by the serving Principal Personnel Officers of the Royal Navy, Army and Royal Air Force who are best qualified to advise on the relative priority of the various applications received. Approved Major Grants are paid by the individual Services from within their allocation. The balance of each Service's allocation is available for Minor Grants (up to £15,000 or £30,000 for mini-buses) which can be approved and paid by the individual Services from their allocations subject to the grant criteria agreed between the Trust and the Armed Services.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

GRANT MAKING POLICY (Continued)

Over and above the annual allocations to the Armed Services, the Trustees are also willing to consider Capital Grants (over £50,000) for projects from any Service, subject only to the project's suitability and the availability of funds. The Trust also makes special grants as circumstances require and gives Operational Welfare Grants with the object of providing a quick and flexible response to meet the particular needs of those serving in the Regular or Reserve forces deployed in an emergency to areas of conflict or disaster.

Additionally, the Trust makes an allocation to The Ulysses Trust which then considers and approves grants for Reservists or Reserve formations undertaking adventurous activity.

Grants made and the annual allocations are one-off donations to the applicants, all of which are charities in their own right.

ACHIEVEMENTS AND PERFORMANCE

The Charity's Trustees have had due regard to the Charity Commission's guidance on public benefit.

For 2021, the Trustees allocated £1,836,900 for grants (2020: £2,046,900) and £71,225 for administration (2020: £68,235).

Since 1939, grants paid out by the Trust for the direct benefit of those serving in the Armed Forces total some £67 million which would be valued at some £275 million at present day value.

One Special Grant (to the Boleh Trust), 2 Capital Grants, and 175 Major and Minor Grants were awarded from the Trust’s allocations to the Services, and 28 Reservist grants were made by the Ulysses Trust. For information, a full list of grants made by the Trust or from delegated allocations is appended to this report. Grants were made to HM Ships and Naval Establishments; Royal Marine Units; Army Garrisons and Units and RAF Stations and Establishments (including Reserve Units} worldwide and to individual Sports Associations, Service Sports Clubs or teams of all three Services. All grants made were institutional and made to recipient formations with charitable status. The number of units supported in 2021 (207) was an increase from 2020 (165) reflecting the continuing demand for Trust support within the Armed Forces, However, the Ulysses Trust, which supports Reservist Adventurous Training (AT) and Expeditions, was again severely curtailed in its grant-making as a result of most expeditions/AT being cancelled or unable to be scheduled. However, in-year COVID-19 relaxations enabled over £85,000 of grants to be made by funds already forwarded to the Ulysses Trust. The November 2021 meeting of the Trustees again agreed to allow the remaining underspend to be carried forward to 2022. The Ulysses Trust hopes to increase grants to units significantly once COVID-19 restrictions are fully eased. On a more positive note, the RN and Army managed to spend their allocations. The RAF Sports Federation, which receives half of the annual allocation to the RAF, introduced a new capital spend plan spread over several years which, allied to COVID-19 restrictions, resulted in a large underspend for 2021. However, increased grant-making is expected in 2022.

The Trust has achieved its objective and measures its aims further by feedback from recipient units, their Commanding Officers and higher levels of the chain of command, including from the three Service Principal Personnel Officers.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

FINANCIAL REVIEW

The Trust receives its funding solely from its investment portfolio and bank interest. The Trust monitors monthly reports from the Investment Managers and the Trustees meet formally with the Fund Managers twice a year to review the performance of the Trust Funds and to ensure that investments held have been acquired in accordance with the powers of the Trustees and any directions they have given. Investment policy is reviewed annually by the Trustees.

The Trustees authorised the Fund Managers to hold any investment defined under the Financial Services Act 1986, subject only to the proviso that such investment and its degree was permitted by regulations or operational guidance given by the Charity Commission, within a prudent, widely diversified portfolio. The Trust does not set environmental, social or governance (ESG) policies for its Fund Managers, but adopts the overarching ESG policies set by BlackRock Investment Management (UK) Ltd for its Charities Investment Sector.

The performance of the Trust's portfolio is evaluated against a bespoke composite index. In a period of major global stock market volatility across 2021 due to the economic impact of COVID-19, as well as BREXIT implementation, the portfolio still saw an outtum of 12.89% (gross) in 2021 (against a composite benchmark index return of 13.44%), whilst the 3-year annualised return of 11.44% outperformed the benchmark by 1.22%, meeting the Trustees’ objective of outperforming the composite benchmark by 1% annualised over 3 years. The Trustees also benchmark the Trust's 3-year rolling average capital value against its 1998 capital value adjusted for CPI (RPI before 2018) and capital grant expenditure. On that basis, the Trust's average capital value was £8.16 million above the benchmark (2020: £6.38 million).

At 31 December 2021 the Trust's investments were valued at £49,253,271 (2020: £47,742,696) after the withdrawal of £3,500,000 for grants and administration. On a dividends receivable basis, as required by the SOFA, the Trust’s income for the year was £500,291 (2020: £87,141). This income comprised investment and property income. The increase in dividend income from 2020 is due to the Trust’s portfolio allocation reverting back from accumulation share classes to income share classes which pay out a regular dividend to the investor.

The total investment management fees for 2021 were £222,887 (2020: £193,512) prior to the rebate.

RESERVES

in May 1997 the Charity Commission confirmed that both the capital and income of the fund could be expended on furthering the objects of the Charity. Given the structured nature of the Trust's grant-making procedures and the ability of the Trust to apply both capital and income to meet need, the Trustees do not designate specific reserve funds. The total amount of reserves held at 31 December 2021 was £49,398,615 (2020: £46,920,509) as there is no restriction in place. The amount of free cash reserves were £3,519,271 (2020: £1,040,520).

RISK MANAGEMENT

The Trustees at their meeting on 23rd November 2021 reviewed the major risks to which the charity was exposed and were satisfied that procedures had been established to manage these risks. Trustees were reminded of the risk from cyber-crime and advised to ensure that they were up-to-date with any training required.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

RISK MANAGEMENT- (continued)

The major risk arising from the performance of the investment portfolio and manager has been mitigated by using hedging policies and diversification of asset classes. The Trust receives monthly reports from the investment manager and a regular review of investment policies and performance is undertaken. This is underwritten by a written management agreement.

The Trust retains expert investment managers and the Trust’s money is held separately from the Fund Manager's own.

PLANS FOR FUTURE PERIODS

As previously stated, the Trustees see a long-term need to continue grant-making activity in support of the morale of the Armed Services in furtherance of the late Lord Nuffield’s endowment and express wishes. The Trustees seek the advice of the Principal Personnel Officers and the Central Funds of the Armed Services on the nature and extent of future grant requirements.

For 2022 the Trustees approved grants of £3,341,966, which included the annual allocations to the Services and Reserves of £972,900 as well as £2,369,066 for Capital projects.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Trust is an unincorporated trust founded by the late Lord Nuffield in 1939 and originally operated under the terms of a Trust Deed made on the 14th October 1939. This was superseded by a Charity Commissioners’ Scheme that was sealed on 13th February 1997. The Trust Deed provides for 6 Trustees, 3 of whom should be officers or former officers of the Regular Armed Forces and 3 of whom should be persons who have a special knowledge of commerce, industry or finance. This structure reflects the original wishes of the Trust’s founder. Trustees are appointed by the Board of Trustees and normally may serve until the age of 70 but, exceptionally, may serve beyond that age by Special Resolution of the Board of Trustees. There are no sub-committees of the Board. From 19th March 2013, by Special Resolution of the Board, Trustees appointed in the category of officers or former officers of the Regular Armed Forces may serve only for a maximum of 10 years.

New Trustees receive an induction pack which outlines the history, structure, objects and procedures of the Charity. In addition, new Trustees receive copies of the previous years Minutes of Meetings and Trustee Report and Financial Statements plus Charity Commission publications relevant to their duties with the Trust and their prior experience of Trustee duties.

Trustees receive no remuneration and Trustee travel expenses are reported in the Notes to the Accounts. Potential conflicts of interest are declared at each Trustee meeting and where Trustees have an interest in or association with potential grant recipients they take no part in the grant decision.

The Trustee Board meets twice per year and all matters relating to the Trust's activities are decided by the Board, other than the following delegations:

• a. The day-to-day administration of the Trust, the processing of grant applications and the administration of grants is delegated to the General Secretary within a budget set and monitored by the Board.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

REPORT OF THE TRUSTEES (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

STRUCTURE, GOVERNANCE AND MANAGEMENT- (continued)

• b. The processing and approval of Minor Grants and the payment of Major Grants approved by the Board are delegated to the Armed Services (see Grant-making Policy).

The Genera! Secretary is the Trust's sole employee and the Trust is administered from the General Secretary's home. The General Secretary is employed under a contract benchmarked against the REWARD Survey of Charitable Salaries and comparator military salaries and benefits. Triennial reviews are carried out with the remuneration benchmarked against charitable salary surveys and comparator military salaries and benefits.

The current General Secretary decided not to take a Defined Contribution Pension, but instead receives a 12% increase in salary in lieu.

As part of its Grant-making activity, the Trust cooperates with Armed Services’ unit charities, the major Central Charitable Funds of the 3 Armed Services and other Armed Services-related charities.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

STATEMENT OF TRUSTEES’ RESPONSIBILITIES FOR THE YEAR ENDED 34 DECEMBER 2021

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

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

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

• — select suitable accounting policies and then apply them consistently;

• observe the methods and principles in the applicable Charities SORP;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards and statements of recommended practice have been followed subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue in business.

The Trustees are responsible for keeping 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 comply with the Charities Act 2011, the applicable Charitias (Accounts and Reports) Regulations, 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.

Approved by the Trustees on 30th March 2022 and signed on their behalf by:

The Rt Hon Lord Arbuthnot of Edrom

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INDEPENDENT AUDITORS' REPORT

TO THE TRUSTEES OF THE NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FOR THE YEAR ENDED 31 DECEMBER 2021

Oplnion

We have audited the financial statements of The Nuffield Trust for the Forces of the Crown for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet and the related notes. 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:

• Give a true and fair view of the state of the charity's affairs as at 31 December 2021, and of its incoming resources and application of resources, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• • have been prepared in accordance with the requirements of the Charities Act 2011.

Basis of 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 accounts section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts 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 materia! uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditors report thereon. The Trustees are responsible for the other information. Our opinion on the accounts does not cover the other information and 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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INDEPENDENT AUDITORS’ REPORT (Continued)

TO THE TRUSTEES OF THE NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FOR THE YEAR ENDED 31 DECEMBER 2021

Matters on which we are required to report by exception

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

• the information given in the financial statements is inconsistent in any material respect with the Trustees’ Report; or

• • sufficient accounting records have not been kept; or

• _ the financial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of the Trustees

As explained more fully in the Statement of Trustees’ Responsibilities set out on page 7, the Trustees are responsible for the preparation of financial statements and for being satisfied that they give a true and fair view, and for such internal contro! as the Trustee's 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 cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

We have been appointed as auditors under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materia! 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud, and non-compliance with laws and regulations, was as follows:

• We identified the laws and regulations relevant to the charity from discussions with the secretary and from our knowledge of grant-making charities in similar sectors. The laws that we consider may have a direct material effect on the financial statements or the operation of the charity include the Charities Act 2011, employment, & data protection.

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INDEPENDENT AUDITORS’ REPORT (Continued)

TO THE TRUSTEES OF THE NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FOR THE YEAR ENDED 31 DECEMBER 2021

• We ensured that the audit engagement team collectively has the appropriate competence, capabilities and skills to identify non-compliance with the applicable laws and regulations noted above.

• We assessed the extent of compliance with these laws and regulations through enquiries with the secretary and inspecting legal costs.

We assessed the susceptibility of the charity's financial statements to material misstatement, including obtaining an understanding of how fraud may occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, and * considering the internal controls in place to mitigate fraud risks and non-compliance with laws and regulation.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify unusual or unexpected transactions; * assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

« reviewed a sample of transactions from the clients records for authorisation from the Trustees;

• reviewed the bank statements for evidence of review by the Trustees.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to the underlying supporting documentation;

• reading the minutes as to actual and potential litigation and claims;

• checking for correspondence from the Charity Commission.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Other matters which we are required to address

Your attention is drawn to the fact that the charity has prepared accounts 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)" in preference to the Accounting and Reporting by Charities: Statement of Recommended Practice issued on 1 April 2005 which is referred to in the extant regulations but has now been withdrawn.

This has been done in order for the accounts to provide a true and fair view in accordance with Generally Accepted Accounting Practice effective for reporting periods beginning on or after 1 January 2019.

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INDEPENDENT AUDITORS’ REPORT (Continued)

TO THE TRUSTEES OF

THE NUFFIELD TRUST FOR THE FORCES OF THE CROWN

FOR THE YEAR ENDED 31 DECEMBER 2021

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 auditors’ report and for no other purposes. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and its Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Pitt Godden & Taylor LLP Unit 3 Ambrose House Chartered Accountants Meteor Court Statutory Auditor Barnett Way Barnwood 30th March 2022 Gloucester GL4 3GG

Pitt Godden & Taylor LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2021

		Unrestricted	Unrestricted
		Funds	Funds
	Note	2021	2020
		£	£
INCOME
- Investment income	2	500,291	87,141
Total income		500,291	87,141
EXPENDITURE
Costs of raising funds:
- Investment management costs	3	78,958	21,884
Expenditure on charitable activities:
- Grants made	4	3,320,182	2,115,135
Total expenditure		3,399,140	2,137,019
Net (expenditure) before gains on investments		(2,898,849)	(2,049,878)
Net gain on investment assets	8	5,376,955	1,188,862
NETMOVEMENT IN FUNDS		2,478,106	(861,016)
Reconciliation offunds
Total funds brought forward		46,920,509	47,781,525
Total funds carried forward		49,398,615	46,920,509
Allamountsrelatetocontinuingoperations.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

BALANCE SHEET

AS AT 31 DECEMBER 2021

		Unrestricted	Unrestricted
		funds	funds
	Note	2021	2020
		£	£
FIXED ASSETS
Tangible fixed assets	7	855	1,141
Investments	8	49,253,271	47,742,696
		49,254,126	47,743,837
CURRENT ASSETS
Debtors	9	5,078	4,975
Cash at bank and in hand		3,514,343	1,035,545
TOTAL CURRENT ASSETS		3,519,421	1,040,520
LIABILITIES
Creditors falling due withinoneyear	10	(3,374,932)	(1,863,848)
NETCURRENT ASSETS/(LIABILITIES)		144,489	(823,328)
TOTAL ASSETS LESSCURRENT LIABILITIES		49,398,615	46,920,509
The funds ofthe charity
Unrestricted income funds		49 398,615	46,920,509
TOTALCHARITYFUNDS		49,398,615	46,920,509

Approved by the Board of Trustees for issue on 30th March 2022 and signed on its behalf by:

The Rt Hon Lord Arbuthnot of Edrom Chairman

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

STATEMENT OF CASH FLOWS FOR THE YEAR ENDING 31 DECEMBER 2021

		Unrestricted	Unrestricted
		funds	funds
	Note	2021	2020
		£	£
Net cash used in operating activities	13	(1,887,873)	(2,399,254)
Cash flows from investing activities:
Interest and dividends received		500,291	87,141
Proceeds from sales of investments		44,590,939	22,997,206
Purchase of investments		(40,724,559)	(21,821,000)
Netcash provided by investing activities		4,366,671	1,263,347
Change in cash and cash equivalents in the year		2,478,798	(1,135,907)
Cash and cash equivalent brought forward		1,035,545	2,171,452
Cashandcashequivalentscarriedforward		3,514,343	1,035,545

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

1 ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared under the historical cost convention, as modified by the inclusion of investments at market value, and in accordance with the Statement of Recommended Practice: 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) issued in October 2019, the Financia! Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.

The financial statements have been prepared in order to give a ‘true and fair view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent provided to provide a ‘true and fair’ view. The 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 lreland (FRS 102) issued in October 2019.

The charity constitutes a public benefit entity as defined by FRS 102.

The trustees consider that there are no material uncertainties about the Trust's ability to continue as a going concern.

The financial statements are presented in Sterling which is the functional currency of the Charity. The figures are rounded to the nearest £.

The Charity is a Trust registered with the Charity Commission for England and Wales. The principal place of business is Magdala, Mill Lane, Titchfield, Hampshire PO15 5RD.

Income recognition

All income is recognised once the charity has entitlement to the income. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon the notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due. This is normally upon notification by our investment manager of the dividend yield of the investment portfolio.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to the expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Overheads and other costs not directly attributable to particular functional activity categories are apportioned over the relevant categories on the basis of management estimates of the amount attributable to that activity in the year on a basis consistent with use of the resources. The irrecoverable element of VAT is included with the item of expenses to which it relates.

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NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

1 ACCOUNTING POLICIES (continued)

Expenditure recognition

Grants payable are payments to third parties in the furtherance of the charitable objectives of the Charity. Single or multi-year grants are accounted for when either the recipient has a reasonable expectation that they will receive a grant and the trustees have agreed to pay the grant without condition, or the recipient has a reasonable expectation that they will receive a grant and any condition attaching to the grant is outside the control of the Charity.

Provision for grants are made when the intention to make a grant has been communicated to the recipient but there is uncertainty about either the timing of the grant or the amount of grant payable.

Governance costs comprise the costs of running the Charity, including strategic planning for its future development, external audit and all costs of complying with constitutional and statutory requirements, such as costs of Trustees’ meetings and for preparing statutory financial statements and satisfying public accountability.

Administrative costs have generally been split on a 50:50 basis between support and governance costs to reflect the time spent by the General Secretary on each activity. All support and governance costs have been allocated to the main grant giving activity.

Charitable activities

The expenditure on charitable activities includes grants made, governance costs, and support costs.

Tangible fixed assets and depreciation

All assets costing more than £100 are capitalised and valued at historical cost. Depreciation is calculated to write off the cost less estimated residuat value of tangible assets over their estimated useful lives at 25% reducing balance.

Investments

Investments comprise listed investments and are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their market value as at the balance sheet date using the closing quoted market price. All gains or losses on investments sold during the year are taken to the statement of financial activities as they arise. Realised gains and losses are calculated as the difference between sales proceeds and their opening carrying value or purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value. Realised and unrealised gains and losses are combined in the Statement of Financial Activities.

The Charity does not acquire put options, derivatives, or other complex financial instruments.

The main form of financial risk faced by the charity is that of volatilty in equity markets and investment markets due to wider economic conditions.

Cash held by the investment managers is disclosed within cash at bank and in hand.

-16-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

1. ACCOUNTING POLICIES (continued)

Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the tates of exchange ruling at the balance sheet date, or if appropriate at the forward contract rate. Nonmonetary assets denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the date of acquisition of the assets. Transactions denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction, or at the contracted rate if the transaction is covered by a forward exchange contract. All revaluation differences and realised foreign exchange differences are taken to the SOFA.

2 INVESTMENT INCOME

Investment income, representing income from UK and overseas assets, derive from:

		2021	2020
		£	£
Listed	investments	500,104	84,889
Bank	interest	187	2,252
		500,291	87,141

All income relates to unrestricted funds.

1. INVESTMENT MANAGEMENT COSTS

The investment management costs represent the fees chargeable to the portfolio by the investment managers during the year. These fees are offset by rebates of the management charges made on certain Blackrock in-house funds in year.

The investment management fee for certain BlackRock in-house funds are deducted internally on a daily basis within the price of the fund. These internal fees are offset against the Trust’s Annual Management Fee calculation.

Consequently, the overall investment management costs are not recorded separately in these financial statements.

Notional investment management costs based on the percentage fee charges on the portfolio’s average value in 2021 would amount to £222,887 (2020: £193,512) before the rebated offsets described above.

-17-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

4 ANALYSIS OF CHARITABLE EXPENDITURE

The charity undertakes its charitable activities through grant making to the armed services.

Armed services

----- Start of picture text -----
Grants Support and Total Total 2020
funded Governance
activity costs
£ £ £ £
3,243,740 76,442 3,320,182 2,115,135
----- End of picture text -----

All expenditure relates to unrestricted funds. (2020 analysis: Grant funded activity - £2,046,900, Support and Govemance costs - £68,235),

5 GRANTS

Grants comprise of allocations, awarded to the Services and other institutions, and capital & special grants (as described in the Grant Making Policy in the Report of the Trustees) and are analysed as follows:

	2021	2020
	£	£
Allocations:
- Royal Navy	176,460	171,716
-Army	521,624	523,780
- Royal AirForce	164,816	167,404
- Reserve Forces	110,000	110,000
- Reserve Forces - adjustments to grants	(118,226)	(15,000)
Capital Grants:
- Triservice	226,700	-
- Royal Navy	255,000	600,000
- Royal Air Force	432,366	264,000
-Army	1,300,000	200,000
- Boleh Trust	40,000	25,000
- Union Jack Club	85,000	-
- Operation Christmas Box	50,000	-
	3,243,740	2,046,900

Grants approved are included in the financial statements. To the extent that such grants are not fully expended, surpluses are credited to grant expenditure following completion or cancellation of the project which for the year amounted to £118,226 (2020 - £15,000).

The total number of capital and special grants actually paid during the year by the Trust and by each of the recipient Services or Institutions from within their allocations, from the allocation made in November 2020 are summarised:-

-18-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

5 GRANTS - continued

	2021	2020
	No	No
Boleh Trust	4	1
Interservice	1	1
Capital grant - Royal Navy	1	-
Capital grant - Royal Air Force	1	-
Royal Navy	68	58
Army	81	71
Royal Air Force	26	34
Ulysses Trust	28	2
	207	167

The detailed information for 2021 is set out in 'Special/capital grants and grants awarded from services allocations 2020', attached to these financial statements from page 25 onwards.

-19-

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NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

7 TANGIBLE FIXED ASSETS

TANGIBLE FIXED ASSETS
	Fixtures
	and Fittings
	£
Cost
At 1 January 2021	12,736
Additions	-
At 31 December 2021	12,736
Depreciation
At 1 January 2021	11,595
Depreciation charge	286
At 31 December 2021	11,881
Net book value
At 31 December 2021	855
At31December2020	1,141

• 8 INVESTMENTS

Fixed asset investments, which are held to provide an investment return, represent securities listed on recognised stock exchanges, with the exception of unit trust investments. All investments are carried at their fair value,. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade at cost (that is their transaction value).

	2021	2020
	£	£
Market value at 1 January 2021	47,742,696	47,730,040
Acquisitions Sale proceeds	40,724,559 (44,590,939)	21,821,000 (22,997,206)
Net change in market value	5,376,955	1,188 862
Market value at 31 December 2021	49,253,271	47,742,696
Investments are analysed as follows:	£	£
UK investments	32,194,347	35,079,206
Overseas investments	17,058,924	12,663,490
	49,253,271	47,742,696

-21-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

8 INVESTMENTS (Continued)

INVESTMENTS (Continued)
	2021	2020
	£	£
UK equities	18,788,740	27,507,011
Overseas equities	17,058,924	8,195,417
Other	7,390,377	6,755,417
UK fixed interest	6,015,230	5,284,851
	49,253,271	47,742,696

The historical cost of the investments at 31 December 2021 amounts to £45,169,482 (2020: £40,061 ,484).

The main risk to the Trust from financial instruments lies in the combination of uncertain investment markets and volatility in yield.

The Trustees have instructed their investment managers to invest the portfolio to maximise the longterm total return, whilst having regard to the level of risk stated below.

The Trustees have recognised that investing funds for real, long-term returns requires significant investment in equities and other assets which may involve an element of risk and that the asset values can and will fall at times. During 2021 following a review of the Strategic Asset Allocation, the Trust's portfolio was reverted back to income share classes from accumulation share classes.

The investment manager undertakes prudent investment suitable for a charitable trust in a broad investment portfolio to spread risk.

The investments made must only be in well-diversified readily-realizable investments which fall within categories permitted by the charity commission regulations or operational guidance and to such a degree as is permitted by regulations. This will reduce liquidity risk. The Trust does not hold investments in markets subject to exchange controls or trading restrictions.

The Trustees have set a Performance Objective and Composite Benchmark against which the investment managers will be compared. Additionally the Trustees compare the performance over rolling 3 year periods to the ARC Charity Indices. The capital value will be compared to a benchmark figure adjusted for inflation and any withdrawals.

• 9 DEBTORS

DEBTORS
				2021	2020
				£	£
Prepayments	and	accrued	income	5,078	4,975
				5,078	4,975

-22-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

10	CREDITORS - amounts falling due within one year	2021	2020
		£	£
	Grants payable	3,341,966	1,845,126
	Social security and othertaxes	4,562	1,756
	Accruals	28,404	16,966
		3,374,932	1,863,848
			Charitable
			Commitments
			Accrued
	Movements in provisions and funding commitments		£
	forgrants during the year
	Grant commitments at the start ofthe year		1,845,126
	New grant commitments charged to the SOFA in year		3,223,740
	Grants paid during the year		(1,726,900)
	Amount of grant commitments recognised		3,341,966
	asat31December2021

11 TAXATION

The Trust is a registered charity and therefore is not subject to taxation.

12 RELATED PARTY TRANSACTIONS

A grant of £110,000 was allocated to The Ulysses Trust of which Sir Mark Mans is a Vice Patron for 2022. The grant agreed for 2021 was reduced by £118,226 due to the Trust being unable to complete some of its activities due to the Covid-19 pandemic.

A grant of £85,000 was allocated to the Union Jack Club. Sir David Steel is president and Chairman of the Union Jack Club. Sir David Steel is also patron of The Boleh Trust, which was allocated a grant of £40,000.

-23-

NUFFIELD TRUST FOR THE FORCES OF THE CROWN

NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2021

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

		2021	2020
		£	£
	Net movement in funds	2,478,106	(861,016)
	Add back depreciation charge	286	381
	Deduct interest income shown in investing activities	(500,291)	(87,141)
	(Gain) on investments	(5,376,955)	(1,188,862)
	Decrease/(increase) in debtors	(103)	84,972
	Increase/(decrease) in creditors	1,511,084	(347,588)
	Net cash used in operating activities	(1,887,873)	(2,399,254)
14	CATEGORIES OF FINANCIAL ASSETS & LIABILITIES
		2021	2020
		£	£
	Carrying amount of financial assets
	Financial assets that are debt instruments measured
	at amortised cost	-	-
	Financial assets that are equity instruments measured
	at fairvalue through the statement offinancial activities	49,253,271	47,742,696
	Carrying amount of financial liabilities
	Financialliabilitiesmeasuredatamortisedcost	3,374,932	1,863,848

• 24 -

SPECIAL/CAPITAL GRANTS AND GRANTS AWARDED FROM SERVICES’ ALLOCATIONS 2021

ROYAL NAVY

	since build and commissioning.
Centre	Middle Wallop
	HURWORTH
Centre Royal Marines
30Commando ee Exploitation Group Royal Marines	SRS - Depioyable Physical Training	Equipment 2,939.50 ra
Association
Association
Centre Royal Marines
Marines Cycling
Association
	Kitchen & BBQ Facilities
Autonomous System
Trials Team
Marlnes

Flight Deck Operations
47 Commando Ralding 5 Bike Lockers i istMine TV for MCM1 squadron divisional office 199.99 ————————_ Squadron
Centre Royal Marines
Exploitation Group HQ
Centre Roya! Marines
	_	3,931.27
Manchester URNU/HMS_ ter TIS		Rec room refurbishment Recroomselatehmek
Unit Belfast	Northern ireland
HuntingSquadron
Joint ForceCommand	Repurpose the JFC Naples UK community facilitydomestic kitchen for
Attraction
HMS Cambria Improvement ofmess and recreational spaces within HMS Cambria HMSVigilant(Submarine	WardroomAV Equipment occ ne[Nona
Centre	anderect

----- Start of picture text -----
||||||| |---|---|---|---|---|---| |HMS|Victorious|Multi-Mess|Multi-Media|System.|1,775.97| |[Siimamercey) [enn||| |not|Crew)|

----- End of picture text -----

Total: 68 Units

ARMY

----- Start of picture text -----
|||| |---|---|---| |102|Bn|REME| |"105|Regt|RA| |REME|Kart|Team|

----- End of picture text -----

5 Regt RA		Purchase MTBs	3,600
QRH	~—~~“‘~‘édPurchaseMTS C—“‘“‘“‘CSC;;;C‘d’S:SCCCéC,GOOS
PPRUEast	«	TVsforAccomBlock=
Chicksands ClayTarget ayy err		Purchase 4 ClayTarget Traps [Puctasedayers	11,130
~__HDSA
208 FH		Purchase MTBs	5,200
infantrySailingAssn

Total: 81 Units

RAF

		Wellbeing and WellnessGarden (Army contribution (£1k)towards
		Parachute Engineering Sqn- Sports Equipment and Gamesfor a
		£9,407.20, RN - £537.55 and RAF Contribution £6,271.47. (MAJOR
		GRANT)
Southwick Park ON	Defence School of Policing and Guarding (DSPG)- Set up a Resilience [Room mycontiognsaes) Peele
Op Biloxi - Romania, RAF Brize Norton i	Via	Purchase ofoutdoorwelfare items (BBQs, benches, parasols, darts board, sound system and board games} forOp Biloxi personnel. [n cients,	items.
		cost in excess of£11k with remainderfrom Stn LIG funds. Requested
		£4,478 but rounded down to £4k as items such as pictures and other
		small items excluded.
		Pool Table, Wood baskets
		aircraft to increase club capacity (£19k). Joint service contribution;
_		RAF 12K, Army £7K. (MAJOR GRANT)
		NAAFI £20k, RAF Ben Fund £5k - NT£2,384
		wheel balancer, MIG welder, pressure washer.
RAF Digby Provision ofdesks and chairs to RAF DigbyGaming welfare facility, 4,512.90 <a Army £1,934.11)
SaddleClub

:

Total: 30 Units

RESERVES (ULYSSES TRUST) - ADVENTUROUS TRAINING & EXPEDITIONS

Total: 28 Units

Grand Total: 207 Units