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2020-12-31-accounts

ANNUAL REPORT AND ACCOUNTS 2020 &b)))) 11) THE BEIT TRUST

THE BEIT TRUST

Charity Registration number: 232478

Trustees, Committees and Office Holders

Chairman Sir Alan Munro KCMG, appointed Trustee 1979; Chairman 1994 Trustees CJ Driver Esq BA BEd MPhil FRSA, appointed May 1998 (ret. Nov. 2020) Professor CBD Lavy OBE MD MCh FRCS, appointed November 2007 Sir Kieran Prendergast KCVO CMG, appointed November 2008 A Duncan Esq MA, appointed June 2011 Ms LLM Bull BA BPL MA, appointed November 2016 JG Munro Esq, appointed July 2020 Secretary Sir Andrew Pocock KCMG, appointed November 2016 Representative in Africa DEB Long Esq, appointed January 2018

Finance Committee Members

Sir Kieran Prendergast KCVO CMG, appointed 2009; Chairman 2011 A Duncan Esq MA, appointed October 2011 Ms LLM Bull BA BPL MA, appointed May 2018 The Revd PH Wolton MA, appointed April 2013 (ret. Nov. 2020) JG Munro Esq, appointed 28 October 2020 Sir Andrew Pocock KCMG, appointed November 2016 Mrs FM Irwin BSc FCA, appointed May 2018

Addresses of The Beit Trust

In the UK Beit House Grove Road Woking Surrey GU21 5JB In Africa 5 Ludlow Road Newlands Harare Zimbabwe Auditors Azets Audit Services Limited Ashcombe Court Woolsack Way Godalming Surrey GU7 1LQ Investment Cazenove Capital Management Managers 1 London Wall Place London EC2Y 5AU

TRUSTEES ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

THE 114th YEAR OF THE BEIT TRUST

Charity Registration Number 232478

PART 1 – FOUNDATION, GOVERNANCE & MANAGEMANT FOUNDATION

The Trust was established in 1906 by the Will of Alfred Beit, a financier and philanthropist. He had many interests and left a substantial legacy to a wide range of charitable causes.

His Will specifically established The Beit Railway Fund, to promote regional communications via the development of the railway system in Southern Africa.

It also provided, should Trustees decide that the Fund was no longer needed for its primary purpose, that the income could be applied to “education, public or other charitable purposes”. This now forms the mandate for the modern operations of the Trust.

In 1954, the Trust was reconstituted by a British Act of Parliament. Under Section 3 of The Act, the Beit Trust became an incorporated body. With the advent of Federation in the same year, the country of Malawi was included as a beneficiary in the Trust’s "Specified Area", joining Zambia and Zimbabwe.

Alfred Beit

1

GOVERNANCE

Trustees

The Beit Trust Act specifies six Trustees. Vacancies are filled as they arise. The current Board has its full complement. Trustees must have a broad knowledge of Southern Africa, and the Board has expertise in the fields of international relations, commerce, medicine and education.

Trustees' Responsibilities Statement

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 its incoming resources and application of resources 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 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Recruitment, Induction and Training of New Trustees

The Secretary inducts new Trustees and helps with training if there is no previous experience of charity Trusteeship. A new Trustee, Mr JG Munro, was appointed in July 2020, to succeed Mr CJ Driver. In addition to experience in Southern Africa, business and communications, he also runs the Munro family charity.

The Trust’s Objectives

Alfred Beit set out the Trust’s objectives in his Will. These were re-affirmed in The Beit Trust Act 1954. The Trust’s benevolent mandate is exclusively for Zambia, Zimbabwe and Malawi. It does not fundraise. The 1906 Beit bequest, and its prudential management for 114 years, remains the Trust’s sole funding source.

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In 1946, the Trustees changed the focus from communications infrastructure to assistance in education (including now postgraduate scholarships, school buildings, teacher training, libraries, books and computers); health (including hospitals, clinics, medical equipment, support for regional trainee surgeons, medical electives and in-country secondments for junior doctors); welfare (including care homes for the elderly); and culture and conservation (notably the conservation of endangered species).

The Trust takes care to evaluate its priorities and ensure its ways of working remain effective in achieving its objectives. It does so, for Trust-funded projects, through regular spot-checks by Trustees, the Secretary, the Harare-based Representative and the Trust’s regional Correspondents; and, in the broader context, through consultations with a wide range of other well-informed interlocutors.

Project grants seldom exceed £50,000. The Trustees rarely make grants to other UK grant-making charities, but occasionally provide funds for crisis relief . In 2020, they established a Covid Emergency Fund, which disbursed over £50,000 to the BeitCURE hospitals in Blantyre and Lusaka (and to other institutions) for personal protective equipment and other priorities. The Fund remains available for further use.

BeitCURE Hospital Lusaka. The new hostel funded by The Beit Trust

Public Benefit

Trustees confirm that in the exercise of their powers and duties they have complied with their responsibility to have due regard to Charity Commission guidance on public benefit (outlined above, and throughout this report).

MANAGEMENT

The Trust’s Organisation

Trust Headquarters is Beit House in Woking, Surrey. Their Representative in Africa works with his two staff from an office in Harare. There are four salaried staff in the UK and three in Zimbabwe. They receive a salary uplift of RPI per annum plus a performance review every three years.

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Trustees meet every six months to agree broad strategy on investments, reserves and risk management, and to consider grant applications. They are supported by a Committee of regional Correspondents, three per beneficial country. These are all volunteers and essential to the Trust’s cost-effective performance. The Correspondents Committee Meeting is held six weeks before Trustee Boards, to give expert advice on each grant application.

£1.45 million was made available in 2020 for new projects recommended in-country by the Correspondents. In addition, Trustees every year customarily allocate over £1.2 million to long-term recurrent grants, for academic and medical scholarships and bursaries, student hardship relief, library books, school computers and contingency support. The bursaries were largely unpaid this year. Restrictions due to the Covid pandemic prevented secondments by all but two junior doctors, and all medical electives in the region.

The Trust’s Finance Committee meets four weeks prior to the Boards. Cazenove Capital, the portfolio investment managers, attend and address finance and investment policy matters. In November, the Finance Committee submits to the Trustees, for their approval, a proposed budget of income and expenditure for the coming year.

Investment Policy

The Trustees’ policy, through prudential investment and management, is to maintain and increase the Trust’s capital base in real terms; while using dividend earnings and capital growth to continue beneficial operations in perpetuity. The Trust’s diversified investments are managed by Cazenove Capital, monitored by the Trust’s Finance Committee. In 2020, Beit dividend income was £2.31m (£3.71m in 2019).

The Trust’s investment objective, set in 2011, has been dividend returns of RPI+4%. Performance has varied, but returns in 2020 have been below this benchmark due to Covid-related market disruption.

Trustees take a total return approach to the Beit portfolio. Excluding invested cash balances, the portfolio ended the 2020 calendar year at £112.0m (£114.8m in 2019). Total Trust expenditure in 2020 was £2.92m (£3.80m in 2019). Reductions in valuation, income and expenditure reflect the financial impact of Covid-19.

Grants Policy

Applications for grants are considered on merit. Trustees seldom give grants to government organisations. Instead, they support independent institutions, in particular schools, hospitals and health centres. Trustees seek to maintain, as far as possible, an equitable distribution of grants between the three countries.

Strict rules are applied to infrastructure grants, to ensure that detailed and serviceable plans are submitted before a grant is paid. A proportion of the funding is routinely withheld until the Trust is sure that a project can be satisfactorily completed, to or below budget. Regular visits within the beneficial area by Correspondents, the Representative, Trustees and the Secretary allow an application to be judged before Trustees consider it; progress reviewed while under construction; and work assessed when finished. Trustees place particular emphasis on the sustainability of new projects in staffing and maintenance terms.

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Reserve Policy

Trustees maintain a Reserve Fund of at least one year’s expenditure, which on average is £3 million. This is intended to sustain beneficial spend in case of unforeseen financial developments; and, more practically, to achieve greater flexibility of management. Alfred Beit’s Will permits Trustees to retain income for expenditure in future years; and Trustees have been further influenced by the obiter dicta from Cowan v. Scargill:

“When the purpose of a Trust is the provision of financial benefits, powers of investment must be exercised so that the funds yield the best return by way of income and capital appreciation for present and future beneficiaries judged in relation to rules of investment and circumstances of the charity.”

Trustees, having taken guidance from the Charity Commission, have directed that Beit Trust policy is to commit annual income from investments towards benevolent and associated administrative expenditure. Since commitments take time to fulfil, at the end of any one year there is likely to be a carry-forward, which is included in the Reserve Fund. Trustees may decide to draw on this in future years, to smooth and manage benevolent cash-flows. In addition, Trustees from time to time make donations for specific large projects or needs, which form a direct charge to the Reserve Fund.

The level of total reserves at 31 December 2020 was £109m , consisting of unrestricted general reserves of £112.7m, less the pension reserve of £3.7m. The Pension Fund represents the unfunded defined benefit pension scheme liability. The unrestricted reserves consist of a Capital Fund of £108.9m, which can be used in accordance with the Trust’s charitable objectives at the discretion of Trustees; and a Reserve Fund of £3.8m, which consists of funds set aside by Trustees for specific major grants.

Ethical and Socially Responsible Investment Policy

Trustees abide by the restrictions against holding ordinary shares in mining stocks stipulated in Alfred Beit’s Will. They delegate to their investment managers, Cazenove Capital, the responsibility for taking environmental, social and governance (ESG) issues into account when assessing the selection, retention and realisation of investments. They expect the fund manager to engage with companies on ESG issues; observe best practice; exercise voting rights accordingly; and monitor the implementation of this policy.

CHARITABLE VENTURES ASSOCIATED WITH THE BEIT TRUST IN 2020

Beit Trust Postgraduate Scholarships

During 2020, the Trust provided 20 new Scholarships at British and South African institutions, through generous academic partnerships with leading universities. Joint scholarships continued with Rhodes, Stellenbosch and UCT in South Africa; and with Cambridge, Edinburgh, Glasgow, Leeds, Oxford and Strathclyde Universities in the UK. New partnerships were initiated with the Blavatnik School of Government in Oxford (in conjunction with Wadham College); and with the University of St Andrews (in Computer Science).

The Trust provided £80,000 in hardship support to financially constrained undergraduate and postgraduate students from the beneficial area. A total of 97 emergency Beit Bursaries were awarded by hardship committees at four South African universities, plus others granted by the Beit Representative.

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COSECSA

Since 2009, the Trust has helped the College of Surgeons of East, Central and Southern Africa (COSECSA). It has sponsored at least one aspiring surgeon per year, per country, throughout their five-year training. In 2020, 12 Beit-COSECSA scholarships were held by four surgeons each from Zambia, Zimbabwe and Malawi.

Beit Trust Black Rhino Conservation Project

The only significant black rhino population in the beneficial countries is in Zimbabwe. It remains endangered by continued poaching and encroachment on reserves. In 2020, Trustees allocated a further £10,000 to the Lowveld Rhino Trust.

Book Aid International (BAI) is a registered UK charity which supplies a broad range of books, educational materials and assistance to libraries in developing countries worldwide. The Trust gave BAI a grant of £75,000 for book provision to Zambia, Zimbabwe and Malawi.

Biblionef (South Africa) is a literary charity working out of Cape Town. It supplies book packs to schools in Southern Africa. The Trust provided support of up to £30,000.

PERFORMANCE

Expenditure in 2020

The Trustees approved grants totalling £2,408,043 (£3,122,096 in 2019). This included the last of six annual tranches for expenditure on projects under the Zimbabwe Medical Audit, with actual expenditure in 2020 of £65,923. The table below is a summary of grants paid. Further details are in Parts 3 (Note 6) and 4.


Parts 3 (Note 6) and 4.
Parts 3 (Note 6) and 4.
Scholarships Conservation
PAID & bursaries Education Health Welfare & culture Total
£ £ £ £ £ £
General grants 129,945 162,567 78,660 37,328 16,900 425,400
One-off projects
-		 - 57,726 - 20,000 77,726
Zimbabwe 188,903 135,912 68,900 111,708 - 505,423
Malawi 102,428 244,900 85,599 1,500 7,500 441,927
Zambia 194,738 319,650 275,788 9,500 91,100 890,776
Total 616,014 863,029 566,673 160,036 135,500 2,341,252

Support and Governance costs in 2020

Salaries, national insurance, pensions, ex-gratia payments and allowances to Trust staff and pensioners increased by 2.5% to £473,281 (£461,619 in 2019). Harare office expenses decreased to £56,691 (£86,503 in 2019). Correspondents’ expenses decreased to £15,431 (£35,911 in 2019). Woking office

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costs decreased to £27,847 (£59,581 in 2019). This included the Auditor’s fee of £9,600, including VAT (£12,000 in 2019).

The Financial Statement

Financial Statement
Income & expenditure for the year
Income
Expenditure
Grants approved
Less grants written back
Woking & Harare office costs, including
exchange rate differences
Investment Manager’s fees
Tours
Total expenditure
Total (deficit)		 2,408,043
(310,389)		 2020
£
2,321,162
2,097,654
557,819
254,112
14,203		 3,122,096
(220,499)		 2019
£
3,742,952
2,901,597
607,703
271,708
18,710
2,923,788
(602,626)		 3,799,718
(56,766)

The year-end value of the Beit portfolio, including cash balances after the expenditure outlined above, was £112,969,161 (£116,381,091 in 2019), showing a net decrease of 3 %.

Pensions and Gratuities

Trustees established a Defined Benefit arrangement in 2014 for new employees. Given the very small number of present and retired Beit servants, Trustees have not established a separate Pension Fund. The unfunded pension liability was calculated by actuaries, The Cartwright Group, as £3,676,464 at 31 December 2020.

The Trustees’ policy on accounting for this liability is set out in detail at Note 19 (Part 3, page 3.13).

Risk Assessment

Trustees considered the major risks to which the charity could be exposed, and reviewed mitigation. They are not aware of any irregularities, including fraud, involving management or employees. Nor are they aware of any instances of actual or possible non-compliance with laws, regulations, contracts or agreements that might result in the Trust suffering significant penalties or other loss.

The Trust faces both financial and operational risk. The financial risk in maintaining and enhancing the capital value of its endowment is addressed through a professionally managed, diversified portfolio of high-quality assets across a wide variety of asset classes and markets. Performance and risk mitigation are reviewed twice a year by the Trust’s Finance Committee.

The major operational risks are twofold: that Beit funding is not used effectively to achieve impact; and from political and financial fragility in the region. The Trust uses its Harare Representative, network of regional Correspondents, and twice-annual tours by Trustees and Trust officials to monitor both; while contingency plans to respond to the latter are routinely reviewed.

Trustees have also considered the unprecedented impact of the Covid-19 pandemic on the Trust’s investments. The Trust retains a strong balance sheet. Its total returns policy allows access to capital to

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fund its ongoing commitments, despite reductions in dividend income. Trustees are committed to maintaining support for existing obligations – grants, scholarships, wages and pensions – to keep the Trust a going concern; and have adjusted spend on its continuing beneficial work to accommodate financial and economic circumstances, which they monitor closely.

Tours in 2020

A Trustee toured the beneficial countries in April. The September tour was postponed in the face of Covid travel and other restrictions.

CONCLUSION

In 2020 The Beit Trust, despite Covid restraints and disruption, continued to deliver on its mandate and objectives: providing support to its beneficial countries; helping institutions remain viable which might otherwise founder; boosting human capital wherever possible; and as a catalyst to self-improvement. It remained committed, in the words of former Chairman Sir Otto Beit, to underwriting work of “substantial and permanent importance.”

As it does so, the Trust remains apolitical and operates without consideration of sex, race or religion.

Approved by Trustees on 08 July 2021 and signed on their behalf by:

Sir Alan Munro, Chairman of Trustees

8

Independent Auditor’s Report to the Trustees of The BEIT Trust

Opinion

We have audited the financial statements of The BEIT Trust (“the charity”) for the year ended 31 December 2020 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the 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” (“FRS 102”) (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 trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The trustees are responsible for the other information. The other information comprises the information included in the trustees’ annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 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 1443 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the charity and the industry, we identified that the principal risks of non- compliance with laws and regulations related to the carrying value of investments; the carrying value of the defined benefit pension scheme liability; the recognition of income; and the recognition of grant obligations and expenditure. We considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Charities Act 2011, FRS 102 and the Charity SORP. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to increase income or reduce expenditure and management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investments or the defined benefit pension scheme liability. Audit procedures performed included:

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members to enable them to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities 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.

Signed:

Alex Temlett

Azets Audit Services Limited Statutory Auditor

Ashcombe Court Woolsack Way Godalming Surrey GU7 1LQ

Date: 08 July 2021

Azets Audit Services Limited is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

3.1

ANNUAL REPORT

THE BEIT TRUST

PART 3 - FINANCIAL STATEMENTS

Statement of financial activities for the year ended 31 December 2020

Notes
Income and expenditure - Unrestricted funds
Income
Investments
3
Other
4
Total income
Expenditure
Raising funds
5
Charitable activities
Grants and donations
6
Support costs
7
Other
Governance costs
8
Total expenditure
Net (expenditure) before
investment (losses) / gains
Net (losses) / gains on investments
Net (expenditure) / income
Other recognised (losses)
Actuarial (losses) on defined benefit
pension scheme
19
Net movement in funds
Reconciliation of funds
Total funds brough forward
Total funds carried forward
20		 Total funds
Total funds
2020
2019
£
£
2,317,859
3,734,840
3,303
8,112
2,321,162
3,742,952
254,112
271,708
2,097,654
2,901,597
378,914
451,880
2,476,568
3,353,477
193,108
174,533
2,923,788
3,799,718
(602,626)
(56,766)
(2,610,803)
8,390,410
(3,213,429)
8,333,644
(258,445)
(228,891)
(3,471,874)
8,104,753
112,444,634
104,339,881
108,972,760
112,444,634

The notes on pages 3.4 to 3.15 form part of these financial statements

3.2

THE BEIT TRUST

Balance sheet at 31 December 2020

Notes
Fixed assets
Tangible assets
14
Investments
15
Current assets
Debtors
16
Cash at bank and in hand
17
Liabilities:
Creditors falling due within one year
18
Net current assets
Total assets less current liabilities
Unfunded defined benefit pension scheme liability
19
Net assets
Funds
Unrestricted funds
Pension reserve		 2020
2019
£
£
173,734
187,385
111,985,167
114,804,331
112,158,901
114,991,716
357,660
462,120
915,919
1,385,879
1,273,579
1,847,999
783,256
977,062
490,323
870,937
112,649,224
115,862,653
3,676,464
3,418,019
108,972,760
112,444,634
112,649,224
115,862,653
(3,676,464)
(3,418,019)
108,972,760
112,444,634

Approved by the Board of Trustees on 08 July 2021 and signed on its behalf by:

Sir Kieran Prendergast Chairman of the Finance Committee

The notes on pages 3.4 to 3.15 form part of these financial statements

3.3

THE BEIT TRUST

Cash flow statement for the year ended 31 December 2020

Notes
Operating activities
Net (expenditure) before
investment (losses) / gains
Depreciation charge
Decrease / (increase) in debtors
(Decrease) in creditors
Net cash (outflow) from operating activities
Capital expenditure and financial
investment
Proceeds from sale of investments
Payments to acquire tangible fixed assets
Purchase of investments
Net cash flow movement from investing activities
Management of liquid resources
Net movement in funds on short term deposit
(Decrease) / increase in cash
21
Cash and cash equivalents at 31 December 2019
Cash and cash equivalents at 31 December 2020		 2020
2019
£
£
(602,626)
(56,766)
20,488
20,174
104,460
(19,423)
(193,806)
(11,647)
(671,484)
(67,662)
30,334,115
31,299,039
(6,837)
(5,131)
(31,783,539)
(30,464,821)
(1,456,261)
829,087
1,657,785
(642,735)
(469,960)
118,690
1,385,879
1,267,189
915,919
1,385,879

The notes on pages 3.4 to 3.15 form part of these financial statements

3.4

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

The Beit Trust is registered with the Charity Commissioners (No. 232478). The Registered Office is Beit House, Grove Road, Woking, Surrey, GU21 5JB, UK

(1) Basis of preparation

The financial statements have been prepared under the historical cost convention as modified by the inclusion of fixed asset investments at market value. The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Reporting

Standard applicable in the UK and Republic of Ireland issued in October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and UK Generally Accepted Accounting Practice.

The Trust 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.

As outlined in the Trustees’ Annual Report, the Trustees have also considered the long term impact of the Covid 19 pandemic and do not believe that this will affect the Trust's ability to continue as a going concern.

(2) Principal accounting policies

The principal accounting policies remain unchanged from the previous year. The net liability on the unfunded pension scheme has been included on the balance sheet in compliance with FRS 102.

(a) Investments

Investments are included at closing mid-market value at the balance sheet date.

Gains and losses on disposal and revaluation of investments are taken to the Statement of Financial Activities.

(b) Investment income

Investment income is accounted for in the year in which the Trust is entitled to receipt.

(c) Expenditure

Liabilities are recognised as expendediture is incurred as soon as there is a legal or constructive obligation committing the charity to the expenditure. All expenditure is included on an accruals basis and has been classified under headings that aggregate all costs related to the category.

Raising funds comprise costs of managing the investment portfolio.

Grants payable are to third parties in furtherance of the Trust's charitable objectives. Provisions for grants are made in the year in which the grant is approved by the Trustees, and any over or under provision adjusted once the final amount of the grant has been paid.

3.5

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(c) Expenditure (cont'd)

Overhead and support costs are allocated first between charitable activity and governance. Support costs comprise costs for processing grants and applications, including Harare office costs, trustees' tours and foreign currency translation differences. Governance costs comprise those incurred in meeting the Trust's constitutional and statutory obligations. The costs of the Woking office are apportioned between support and governance costs based upon staff time expended.

(d) Foreign currencies

Transactions in foreign currencies are translated at the rate prevailing at the date of the transaction. Balances denominated in foreign currencies are retranslated at the rate of exchange prevailing at the balance sheet date. All differences are taken to the statement of financial activities.

(e) Tangible fixed assets and depreciation

All assets costing more than £100 are capitalised.

Depreciation is charged so as to write off the cost of tangible fixed assets, other than freehold land for which the estimated cost is £52,000, on a straight line basis over the expected useful economic lives of the assets concerned. The annual rates generally applicable are:

Freehold building 2% Motor vehicles 25% Computer equipment 33⅓% Fixtures, fittings and equipment 10%

The freehold building, Beit House, Woking, was valued on 22 March 2019 at £425,000, but is carried in the balance sheet at historical cost less depreciation. Trustees intend to have the property valued again in 2022.

(f) Debtors and creditors receivable / payable within one year

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

(g) Pensions

The Trust operates an unfunded defined benefit scheme for all staff. The net actuarial liability representing the net deficit on the scheme is included on the balance sheet in accordance with the requirements of FRS 102. Other pension costs are accounted for as they are paid to retired employees.

3.6

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(h) Fund accounting

The following funds held by the Trust are all unrestricted:

Capital fund - this fund can be used in accordance with the charitable objectives at the discretion of the Trustees.

Reserve fund - this fund is set aside by the Trustees out of general funds for specific major grants. Any excess of income over expenditure in a given year is transferred to this fund.

Pension fund - this fund represents the unfunded defined benefit pension scheme liability.

(i) Key judgements

The trustees consider the only key judgements to be the pension assumptions (described in Note 19).

(3) Investments
Dividends and bond interest
Cash deposits
Other bank current and deposit accounts		 2020
2019
£
£
2,311,731
3,714,677
2,589
14,550
3,539
5,613
2,317,859
3,734,840
(4) Other
Rent for flat
(5) Raising funds
Investment Managers' fees		 2020
2019
£
£
3,303
8,112
2020
2019
£
£
254,112
271,708

3.7

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(6) Grants and donations

Grants and donations paid, written back, voted and unspent in 2020. (See details in Part 4)

Unrestricted funds
General grants, scholarships
and bursaries
One off projects
Zimbabwe
Malawi
Zambia		 Unspent
Grants
Unspent
New
Unspent
grants
paid
grants
grants
grants
brought
in the
written
voted
carried
forward
year
back
in 2019
forward
£
£
£
£
£
-
911,469
258,871
1,214,217
43,877
-
77,726
-
130,426
52,700
204,789
316,520
(3,484)
244,200
135,953
210,500
339,499
5,000
282,200
148,201
468,652
696,038
50,002
537,000
259,612
883,941
2,341,252
310,389
2,408,043
640,343

£2,097,654 charged in the statement of financial activities is derived from new grants voted in 2020 less unspent grants written back.

(7) Support costs
Notes
Harare office
11
Woking office
13
Overseas tours
12
Difference on exchange
(8) Governance costs
Woking office
13		 2020
2019
£
£
233,823
260,249
136,776
147,488
14,203
18,710
(5,888)
25,433
378,914
451,880
2020
2019
£
£
193,108
174,533

3.8

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(9) Analysis of support and governance costs

Support costs
Governance costs		 Staff
Other
Depreciation Total
Total
costs
costs
2020
2019
£
£
£
£
£
292,791
67,674
18,449
378,914
451,880
180,490
10,579
2,039
193,108
174,533
473,281
78,253
20,488
572,022
626,413
(10) Employee costs
Wages and salaries
National insurance
Zimbabwe National insurance
Zimbabwe Medical Aid Society costs
Pensions
Ex gratia payments in lieu of pensions		 2020
2019
£
£
255,926
261,636
13,548
15,117
574
835
20,349
19,253
120,176
107,802
62,708
56,976
473,281
461,619

Ex gratia payments made to certain retired employees are reviewed annually.

The Trust Secretary, Sir Andrew Pocock, earned in excess of £60,000 per annum both in 2020 and 2019. During 2020 he paid £1,951 rent whilst occupying a flat owned by the Trust. He is a member of the Trust pension scheme.

The Trust's key management personnel received remuneration totalling £127,726 (2019, £125,493)

The six Trustees have not received any remuneration from the Trust, but are reimbursed for their travelling and other expenses incurred on Trust business as disclosed in notes 12 and 13.

The total number of employees in 2020, by location, was: Harare - 3; Woking - 4 (2019, Harare - 3; Woking - 4).

3.9

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(11) Harare office expenses
Salaries
Zimbabwe National Insurance
Zimbabwe Medical Aid Society costs
Pensions
Ex gratia payments in lieu of pensions
Property (rent, light, heat and maintenance)
Office administration
Representatives' local travel and motor expenses
Correspondents' and Scholarship Board expenses
Legal & professional
Audit and accountancy
Bank charges
Depreciation
(12) Overseas tours
Trustees' visits to Zimbabwe, Malawi and Zambia
Representative's visits
Secretary's visits		 2020
2019
£
£
89,405
96,048
574
835
20,349
19,253
37,440
36,210
30,480
30,096
11,140
12,643
4,213
3,815
4,938
5,842
15,431
35,911
2,500
2,500
1,099
1,066
1,370
1,146
14,884
14,884
233,823
260,249
2020
2019
£
£
10,225
9,472
3,978
3,603
-
5,635
14,203
18,710

One Trustee visited the beneficial countries in 2020. The Representative made a number of visits within the Trust's countries to ensure that the Trust funds were being expended for the purpose originally requested, as well as accompanying the Trustee on tour.

3.10

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(13) Woking office expenses
Salaries
National Insurance
Pensions
Ex gratia payments in lieu of pensions
Property (rent, rates, light, heat and maintenance)
Office administration
Secretary's support expenses
Secretary's travel and motor expenses
Trustees' travel and meeting expenses
Audit fees
Legal and professional
Bank charges
Depreciation
Allocated as:
Support costs
Governance costs		 2020
2019
£
£
166,521
165,588
13,548
15,117
82,736
71,592
32,228
26,880
6,533
6,223
9,509
12,163
406
1,490
17
305
67
1,793
9,600
12,000
3,000
3,500
115
80
5,604
5,290
329,884
322,021
136,776
147,488
193,108
174,533
329,884
322,021

3.11

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(14) Tangible assets

Cost
Brought forward
Total funds brough forward
Additions
Disposals
Carried forward
Total funds carried forward
Accumulated depreciation
Brought forward
Total funds brough forward
Charge for year
Disposals
Carried forward
Total funds carried forward
Net book values
Total funds carried forward
at 31 December 2019		 Freehold
Fixtures
land &
Motor
Computer fittings &
building
vehicle
equipment
equipment
Total
£
£
£
£
£
231,974
54,725
6,160
28,883
321,742
1,440
-
794
4,603
6,837
-
-
-
(338)
(338)
233,414
54,725
6,954
33,148
328,241
81,006
27,362
4,848
21,141
134,357
3,628
13,681
1,259
1,920
20,488
-
-
-
(338)
(338)
84,634
41,043
6,107
22,723
154,507
148,780
13,682
847
10,425
173,734
150,968
27,363
1,312
7,742
187,385

3.12

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(15) Investments
Listed investments
Market value at 1 January 2020
Additions
Disposals
Increase / (Decrease) in uninvested cash
Net Unrealised investment gain
Market value at 31 December 2020
Cost at 31 December 2020
Apart from the investment in
Vanguard S&P 500 UCITS ETF (10.8%)
no single investment comprises more than 5% of the Trust's assets.
The investments as at 31 December were divided as follows:
UK equities and unit trusts
Overseas equities and unit trusts
UK fixed interest
Alternative investments
Property unit trusts
Cash on deposit awaiting investment		 2020
2019
£
£
114,804,331
106,605,404
31,783,539
30,464,821
(34,026,420) (28,343,434)
(1,657,785)
642,735
1,081,502
5,434,805
111,985,167
114,804,331
99,702,858
96,722,780
2020
2019
£
£
22,376,566
39,605,290
60,494,809
41,249,039
4,886,244
5,486,087
11,165,843
13,181,234
11,090,768
11,653,959
1,970,937
3,628,722
111,985,167
114,804,331

3.13

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(16) Debtors
Prepayments and accrued income
Other debtors
(17) Cash at bank and in hand
United Kingdom:
Current accounts
Deposit accounts
In hand
Zimbabwe, Malawi and Zambia:
Current accounts
In hand
Including £16,682 (2019 - £33,745) in foreign currencies
(18) Liabilities: creditors falling due within one year*
Schroder Investment Management Limited
Accruals
Unspent grants carried forward
Other creditors		 2020
2019
£
£
356,238
461,246
1,422
874
357,660
462,120
2020
2019
£
£
150,524
82,678
748,302
1,269,188
411
268
3,126
9,324
13,556
24,421
915,919
1,385,879
2020
2019
£
£
65,588
69,169
69,832
16,460
640,343
883,941
7,493
7,492
783,256
977,062

3.14

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

----- Start of picture text -----
|||| |---|---|---| |(19) Unfunded defined benefit pension scheme liability|2020|2019| |£|£| |Unfunded defined benefit pension scheme liability|3,676,464|3,418,019|

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

The Trust operates a defined benefit pension scheme. This is an unfunded arrangement where benefits are paid out of the Trust's portfolio when due. An actuarial valuation was undertaken as at 31 December 2020 establishing a liability of £3,676,464.

Other key assumptions that have been used in the calculations are:

----- Start of picture text -----
|||| |---|---|---| |2020|2019| |Rate of increase in salaries - current trustee directives|3.05%|3.10%| |Rate of increase in deferred pensions - current trustee directives|3.05%|3.10%| |Rate of increase in ex gratia payments - current trustee directives|2.25%|2.10%| |Discount rate - current AA-rated UK Government Bond yield|1.35%|2.00%| |Inflation assumption - current published information|3.05%|3.10%|

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

Changes in the present value of the plan liabilities are as follows:

----- Start of picture text -----
||||| |---|---|---|---| |2020|2019| |£|£|£|£| |Present value of plan liabilities at 1 January 2020|3,418,019|3,189,128| |Current service cost|103,028|112,902| |Benefits paid|(182,884)|(164,778)| |Interest on plan liabilities|67,562|86,988| |Actuarial losses|270,739|174,536| |Loss on plan changes|-|19,243| |Actuarial losses on defined benefit| |pension scheme|258,445|228,891| |Present value of plan liabilities at 31 December 2020|3,676,464|3,418,019|

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

The scheme is unfunded and holds no assets.

3.15

THE BEIT TRUST

Notes to the financial statements for the year ended 31 December 2020

(20) Movements on unrestricted funds during the year

Total funds brough forward
Net (expenditure) before
investment (losses) / gains
Actuarial (losses) on defined benefit
pension scheme
Transfer to reserve fund
from capital fund
Net (losses) / gains on investments
Total funds carried forward		 Capital
Reserve
Pension
Total funds
Total funds
fund
fund
Reserve
2020
2019
£
£
£
£
£
111,483,846
4,378,807 (3,418,019) 112,444,634 104,339,881
(602,626)
-
-
(602,626)
(56,766)
-
-
(258,445)
(258,445)
(228,891)
602,626
(602,626)
-
-
-
(2,610,803)
-
-
(2,610,803)
8,390,410
108,873,043
3,776,181 (3,676,464) 108,972,760
112,444,634

The Reserve Fund is a fund of unspent income from previous years which may be used for major projects or for such beneficial activities as the Trustees may determine. Net expenditure is transferred into this fund.

(21) Analysis of changes in net funds
Cash at bank and in hand
Cash on deposit awaiting investment		 Net funds
Net funds
at 1.1.20
Cash flows
at 31.12.20
£
£
£
1,385,879
(469,960)
915,919
3,628,722
(1,657,785)
1,970,937
5,014,601
(2,127,745)
2,886,856