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2021-06-30-accounts

THE RHODES TRUST

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

The Rhodes Trust

For the year ended 30 June 2021

CONTENTS

Page
Trustees’ Report 2-20
Legal and administrative information 21
Report of the Independent Auditors 22-24
Consolidated Statement of Financial Activities 25
Balance Sheets 26
Consolidated Statement of Cash Flows 27
Accounting Policies 28-32
Notes to the Financial Statements 33-46

The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

The Board of Trustees of The Rhodes Trust (“the Charity” or “the Trust”) present their annual report for the year ended 30 June 2021 under the Charities Act 2011, together with the audited consolidated financial statements for that year.

Further information about the activities of The Rhodes Trust may be found at www.rhodeshouse.ox.ac.uk.

THE RHODES TRUST

Under his Will, Cecil John Rhodes left his residuary estate to his Trustees and Executors with certain defined provisions, including directions concerning awards of Scholarships. Modifications were subsequently made to those directions by the Rhodes Estate Act 1916, by the Rhodes Trust Act 1929, and by The Rhodes Trust (Modification) Order 1976 in accordance with Section 78 (4) of the Sex Discrimination Act 1975 (b).

By The Rhodes Trust Act 1946, The Rhodes Trustees were constituted a body corporate with perpetual succession under the name of The Rhodes Trust and their powers defined. By the same Act other funds and properties deriving from the Rhodes estate were invested in the name of the body corporate and were constituted an aggregate fund called ‘The Public Purposes Fund’ for the charitable purposes set out below.

Under the provisions of the 1946 Act, The Rhodes Trust comprised two funds, subsequently with separate registrations with the Charity Commission: The Cecil Rhodes Trust Scholarship Fund (314119), and the Public Purposes Fund (232492). Following a Uniting Order in 2003 these two Funds filed a single set of accounts until the year ended 30[th] June 2017. A further charitable fund, The Rhodes Trust Horizon Fund, established under the provisions of the 1946 Act and registered with the Charity Commission in 2014, filed separate accounts until the year ended 30[th] June 2017. A further linking order was granted by the Charity Commission in June 2018 which brings all three charitable funds under a single charity registration (232492).

GROUP STRUCTURE

The Rhodes Trust (“the Charity”) comprises the three charitable funds: the Public Purposes Fund, the Cecil Rhodes Scholarship Fund, and the Rhodes Trust Horizon Fund, which are linked under charity registration number 232492. In addition, the group accounts include:

All four overseas entities are registered charities in their own jurisdictions.

The Rhodes Trust also receives the local support of the Oxonian India Foundation, a S8 Company registered in India. The Trust has no controlling interest in the Company and it is not consolidated.

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

OBJECTIVES AND ACTIVITIES

At the broadest level, the charitable objects of The Rhodes Trust are to promote and advance education and other charitable purposes in such ways as are exclusively charitable as The Rhodes Trust in its uncontrolled discretion shall determine. Each of the three component charitable funds has separately defined objects:

The primary purpose of the Cecil Rhodes Scholarship Fund is to provide scholarships to enable students from many countries (including selected countries of the Commonwealth, and from Germany and the United States) to undertake either second undergraduate or post-graduate degrees, primarily at the University of Oxford. The Will of Cecil John Rhodes specified certain numbers and allocations of scholarships. Each scholarship covers both tuition fees and maintenance during the tenure of the scholarship.

The Public Purposes Fund (PPF) has as its objects the promotion or advancement in any part of the British Commonwealth of Nations or in the United States of America of any educational or other charitable purposes in such manner as The Rhodes Trust shall think fit, including giving financial support to individuals, institutions or organisations as will, in its opinion, promote or advance the cultural or social welfare of the people of the British Commonwealth or the furtherance of good relations amongst the various peoples of the British Commonwealth or between those peoples and the peoples of the United States of America. This fund is now constituted by the 1946 Act and has been supplemented by various donor benefactions. Alongside the Cecil Rhodes Scholarship Fund, it now supports a substantial proportion of the scholarships, including those allocated to the various jurisdictions as specified by the Will of Cecil Rhodes. The assets of the PPF include Rhodes House, which is maintained by this fund as a central convening and focal point for all Rhodes Scholars, and for the administration of all activities of the Trust.

The Rhodes Trust Horizon Fund was established in 2014 under the terms of the 1946 Rhodes Trust Act, with very broad objects to promote and advance education and other charitable purposes in any part of the world in exclusively charitable ways. It facilitates the global expansion of the scholarship programme and enables the Trust to enter into international partnerships which assist in advancing cultural and social welfare. The Rhodes Trust Horizon Fund finances new scholarships in countries not covered when the scholarships were originally established by Cecil Rhodes. Its key partnership activities include the Atlantic Institute (2016), the Schmidt Science Fellows (2017) and Rise (2019) (see below).

THE RHODES SCHOLARSHIP PROGRAMME

Prospective Scholars are invited to apply for Scholarships in their country through a standardised, but constituency tailored, on-line system. Each candidate will provide a statement, curriculum vitae, academic record, and references in support of their application, and the documentation is reviewed by the local selection committee. The local selection committee will then select those candidates they wish to interview, and the candidates will attend one or more interviews in the local country. The 2020 selection round was almost entirely conducted remotely, using video conferencing software, as a result of travel restrictions and social distancing measures arising from the COVID 19 pandemic. The successful candidates are then recommended to the Trustees for the award of a Rhodes Scholarship. The award is usually subject to acceptance onto a course of study by a Department or Faculty of the University of Oxford, and by a College. Continuation of the Scholarship is conditional upon continuing academic achievement and satisfactory personal conduct. Each Scholar’s progress is monitored in several ways. The Trust receives copies of the University termly reports for each Scholar. At least once a year, each Scholar is seen by the Warden, with additional engagement with the Dean and Registrar.

For the academic year ended 30[th] June 2021 there were up to 245 Scholars (2020: 212) being fully financially supported whilst a further 12 (2020: 12) were receiving support by the Trust paying 4[th] year fees. 106 new Scholars have started their programme in Oxford in October 2021 (2020: 99).

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

OTHER PARTNERSHIP ACTIVITIES

The Mandela Rhodes Foundation

The Mandela Rhodes Foundation (MRF) is one of Nelson Mandela’s three official legacy organisations, founded in 2003 in partnership with The Rhodes Trust. Its purpose is to build exceptional leadership capacity in Africa. MRF provides young leaders from across the continent with a one- to two-year scholarship to study at universities in South Africa and to participate in a residential Leadership Development Programme. The MRF is independent of Rhodes Trust, but half its Trustees are nominated by the Rhodes Trust and include one current Rhodes Trustee and the Warden. The Rhodes Trust receives regular reports on its activities.

The primary commitment of the Trust to the Foundation has been the benefaction of £10 million over 15 years, to provide an initial endowment and to meet the running costs of the Foundation. This commitment was fully settled in the year ending 30[th] June 2019.

Since its founding in 2003 MRF has provided scholarships to over 500 Mandela Rhodes Scholars from 30 African countries. 18 MRF Scholars have also gone on to win Rhodes Scholarships.

The Trust is currently working with the MRF on a joint Memorandum of Understanding towards a long term collaborative arrangement, with particular emphasis on our joint ambitions to support African students and promote leadership for positive social impact on the African continent.

The Atlantic Institute

In June 2016, the Trust entered into a partnership with the Atlantic Philanthropies to support the existing Rhodes Scholarships, and host a new international network of Atlantic Fellows at the Atlantic Institute at Rhodes House. Atlantic Fellows are mid-career leaders from a wide variety of backgrounds and disciplines, and share a common focus on creating fairer, healthier, more inclusive communities and societies.

The Atlantic Institute:

In 2020 and 2021 the Institute responded to the impact of the COVID 19 pandemic by providing targeted ‘Solidarity Grants’ to support the work of Fellows in vulnerable communities. 44 such grants were awarded in the financial year ended 2021, and videography was commissioned for 25 of the projects.

Schmidt Science Fellows

Schmidt Science Fellows is an initiative of Schmidt Futures, delivered in partnership with the Rhodes Trust. Schmidt Futures was founded by Eric and Wendy Schmidt. The Schmidt Science Fellows Program vision is a world where interdisciplinary science flourishes without limit, accelerating discoveries to benefit the world, and driving innovation that improves quality of life for all.

The program aims to support an acceleration of interdisciplinary science by

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

The fourth year cohort of 28 Fellows were selected in April 2021 using a virtual selection process, bringing the total community to 84 Fellows.

The operations teams for both the Atlantic Institute and Schmidt Science Fellows programmes are principally based with the Rhodes Trust’s team at Rhodes House in Oxford.

Rise

Rise is a partnership between The Rhodes Trust and Schmidt Futures. Rise’s mission is to increase opportunity for exceptional young people worldwide by supporting them to serve their communities throughout their lives.

Rise is global and seeks young people between the ages of 15 and 17. The programme is designed to encourage a lifetime of service and learning through scholarships, career services, and funding opportunities to help these potential leaders serve others for decades to come. The programme also seeks to build a lifelong community of students, teachers, and institutions across service orientated sectors.

Each Rise Finalist will receive targeted educational support to an agreed value, and Winners will receive a lifetime of programmatic, need based financial and other personalised support aimed at ensuring they are able to deliver social impact throughout their lives.

Following a virtual selection process, the first cohort of 100 Winners from 42 countries will be announced in October 2021.

PUBLIC BENEFIT

The Trustees confirm that they have complied with the duty in Section 17(5) of the Charities Act 2011, to have due regard to the guidance issued by the Charity Commission on public benefit.

The Trustees consider that the provision of scholarships for the advancement of education, stipends for science leaders, and the development of collaborative leadership skills and other educational support across all the partnerships offer public benefit.

TRUSTEES

The Rhodes Trust Act 1946 incorporated the Trustees as a body corporate with perpetual succession.

The present Trustees, and any past Trustees who served during the year, are given below.

The Trustees are responsible for ensuring adherence to the Trust’s objectives. They define strategy and policy and decide on all matters that affect the general operation of the Scholarships and all other partnership activities of the Trust. The Warden is the Secretary to the Trustees and Chief Executive Officer of the Trust. She presents the Trustees with proposals for action, implements policies, and makes decisions on individual Scholars as well as exercising a general pastoral function for Scholars in residence. She also maintains relationships with the Rhodes community worldwide and, along with the senior management team, is responsible for the day-to-day administration of all the operations and partnerships of the Trust. Each partnership is governed independently by its own governing board, which comprise individual Rhodes Trustees, members of the Senior Leadership Team, and members of the external funding body.

The Trustees, all of whom held office throughout the whole of the year ended 30 June 2021, unless otherwise stated, were:

Professor Sir John Bell GBE (Chairman) Professor Dapo Akande Mr Andrew Banks Mr Douglas A. Beck Ms Neeti Bhalla

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

Professor Elleke Boehmer Mr Mike Fitzpatrick Dame Helen Ghosh DCB Mr Donald Gogel Mr Glen James Dr Tariro Makadzange Ms Swati Mylavarapu Professor Karen O’Brien Mr Chris Oechsli Dr Catherine O’Regan Mr Dilip Shanghvi (to 1[st] January 2021) Mr Peter Stamos Mr Robert Sternfels Judge Karen Stevenson

Past Trustees who have agreed, because of their long service and contribution to the Trust, to serve as Emeritus Trustees in an advisory capacity, and who receive papers and attend meetings include the following:

Mr Michael McCaffery (Emeritus) Mr Julian Ogilvie Thompson (Emeritus – up to 6[th] March 2020) Sir John Hood KNZM (Emeritus) Mr John McCall MacBain O.C. (Emeritus) Mr John Wylie AM Mr Dominic Barton Mr Nicholas Oppenheimer Professor Ngaire Woods CBE

Details of the members of the individual committees of the Trustees are available on the Trust’s website at www.rhodeshouse.ox.ac.uk.

In accordance with the Will of the Founder, the Rhodes Trustees are responsible for the strategic direction of the Trust in all of its aspects. Certain of the Trustees currently hold appointments within the University of Oxford and its constituent colleges, although all serve in their personal capacity. The Trustees consider that the smooth operation of the Trust is facilitated by some of their number holding appointments in the University. At the same time they are mindful of potential conflicts of interest and procedures are in place to guard against any such conflicts.

Trustees Training

The Trustees are very supportive of training for any Trustee. Each Trustee receives the Charity Commission guidance CC3 ‘The Essential Trustee’. The Trustees, all drawn from the senior levels of business, industry, and academia, are normally familiar with the responsibilities of a Trustee.

Before any appointment, a prospective new Trustee will have been identified, carefully considered by the Governance Committee of the Trust, and a discussion held at a Trustees’ meeting. He/she will subsequently be interviewed by the Chairman and the Warden, and usually the Chairman of the Governance Committee, to confirm their suitability as a Trustee, and that there are no conflicts of interest with the Trust. From these meetings any training needs will also be identified. Assuming the Chairman, Warden, and Governance Committee find the person suitable, the Board will formally pass a resolution for their appointment at their next meeting.

A full trustee induction programme is given to all trustees at the start of their term of office, including presentations from the Warden and members of the Senior Leadership Team across every aspect of the Trust and our partner organisations.

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

GOVERNANCE AND MANAGEMENT

The Trustees noted the publication in 2017 of the Charity Governance Code and undertook a review of the Trust’s governance approach and procedures against the code during the year, and judged that the Trust was satisfactorily applying the principles of the code, and also with the changes introduced in the update of 2020, most notably the principle of Equality, Diversity and Inclusion. This principle is a central tenet of its core values, and of its strategic plan, and an understanding of the responsibilities and impact of the historic Rhodes legacy forms a significant part of the programmatic support for Trustees, Scholars and staff. During the year to 30[th] June 2021 all members of staff were invited to undertake a programme of shared learning workshops on Diversity, Equity and Inclusion led by the Warden, staff and external consultants.

Organisational management

The Rhodes Trust is governed and administered globally by four bodies: the Trustees (including committees), the Warden, National Secretaries, and Trust staff. Together, these bodies provide the framework within which Scholarship promotion, Scholar selection, alumni outreach, fundraising, and other new partnership activities of the Trust take place. For its operation, the Trust depends crucially upon volunteers in alumni bodies, selection committees, and fund-raising, and is very grateful for their contributions.

The Committee responsibilities are as follows:

1. Audit and Risk Committee

The Audit and Risk Committee advises the Trustees on all aspects of risk management: identification, mitigation and response. The Committee determines whether there is a need for an annual internal audit of the Trust’s financial operations, appoints the external auditors, and receives the external audit report on behalf of the Trustees.

2. Finance and Investment Committee

The Finance and Investment Committee advises the Trustees on all aspects of investment policy, strategy, investment risk management and controls. It liaises with external asset managers to ensure effective asset allocation and investment. The Committee reviews the budget and monitors expenditure against it.

3. Governance Committee

The Governance Committee advises the Trustees and the Warden on governance arrangements, Trustee and staff evaluations, related governance and management issues, and oversees the process of shortlisting for Trustee positions, including the Chair of the Trustees.

The Committee supports the Chair of Trustees in facilitating the process by which Warden and senior staff set annual priorities and key performance indicators, and advises the Chair of Trustees in evaluating the Warden’s performance annually against established priorities and indicators, as well as setting the Warden’s salary.

4. Campaign Committee

The Campaign Committee advises the Trustees and Warden on development strategy and leads the fundraising efforts of the Trust, including participation in defining public messaging around capital campaigns, annual fundraising, and the bequest programme, as well as leading the fundraising efforts of the Trust through personal financial contributions, recruiting volunteers and monitoring overall execution of the development strategy.

5. Academic Committee

The Academic Committee offers advice to the Warden and the Trustees on all aspects of what is necessary to ensure that the Rhodes Scholarship remains in perpetuity a scholarship of the highest quality and

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

standing, as well as issues related to the Trust’s relationship with the University of Oxford and its divisions and departments, and on matters relating to individual Scholars, including progression to DPhil.

It offers advice to the Warden concerning which degrees to finance, Scholarship numbers and distribution across programmes, and monitoring performance of the Scholarship, and setting performance goals and indicators where appropriate.

6. Scholarship Committee

The Scholarship Committee advises the Warden and the Trustees on all aspects of what is necessary to ensure that the Rhodes Scholarship remains in perpetuity a scholarship of the highest quality and standing, especially with regard to matters of Scholarship distribution, Scholar selection, and external perception of the Scholarships.

7. Building Committee

The Building Committee advises the Trustees on the feasibility, design and implementation of the redevelopment of Rhodes House, and receives reports from the Building Control Group on progress and detailed developments as the building work progresses, as well as approving design and budget expenditure requests above predetermined limits.

8. Remuneration Committee

The Remuneration Committee was constituted in 2021, and comprises the Chairs of the Board, Audit and Risk Committee, Finance and Investment Committee, and Governance Committees supplemented by UK based Trustees with relevant experience. A remuneration specialist will be co-opted onto the Committee.

This Committee is responsible for determining and overseeing the remuneration of the Senior Leadership Team and the implementation and delivery of the Human Resources Strategy.

In addition to the above committees, the partnership activities of the Atlantic Institute, Schmidt Science Fellows and Rise are governed jointly by the Atlantic Institute Governing Body, and the SSF and Rise Program Joint Committees respectively, all of which include representation from the partner funder, the Warden and members of The Rhodes Trust’s Senior Leadership Team.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

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

The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Trust and the group and of the incoming resources and application of resources of the Trust and the group 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 Trust and enable them to ensure that the financial statements comply with the Charities Act 2011, applicable accounting regulations and the provisions of the Will and subsequent

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021 ____________

applicable legislation. They are also responsible for safeguarding the assets of the Trust and the group 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 Trust and financial information included on the Trust’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

SENIOR MANAGEMENT AND REMUNERATION

Key management personnel are the trustees (who are not remunerated) and the senior management team as follows:

Dr Elizabeth Kiss: Warden and CEO Peter Anderson: Chief Operating Officer and Chief Financial Officer Dr Doyin Atewologun: Dean of the Rhodes Scholarship Mary Eaton: Director of Scholar Affairs and Registrar Rodolfo Lara Torres: Director of Global Engagement and Programmes Babette Littlemore: Director of Communications (Maternity leave from 16th August 2021) Ben Russell: Director of Communications (Maternity cover from 16th August 2021) Louise Dearnley: Director of Selection and Outreach Yvonne O’Brien: Executive Director of The Atlantic Institute Dr Megan Kenna: Executive Director of the Schmidt Science Fellows

The remuneration structure of the senior management team is determined by regular benchmarking of appropriate remuneration against equivalent reward structures available within the collegiate university and external appropriate salary and benefits paid for equivalent roles.

Recruitment consultants are employed as part of the senior executive search and their advice is sought on appropriate rewards required to attract the best candidates for the roles.

The remuneration of the Warden is determined by the Governance Committee, as advised by the Remuneration Committee, and her performance is evaluated annually.

All senior staff receive ongoing performance management and an annual appraisal which provides feedback from the Warden or line manager about how they have contributed to the achievement of the Trust’s strategy and any personal development areas they may have.

The remuneration of other staff is determined by their line managers in consultation with the Warden. The Remuneration Committee is responsible for advising the Warden and Trustees on overarching pay policy.

VOLUNTARY WORKERS

The Trust is very fortunate in being able to draw upon a number of overseas volunteers who administer the Scholarship selection process and serve on the selection committee in their respective countries at little cost to the Trust. These volunteers are drawn from the ranks of the community of Rhodes Scholars, and from a much wider community of men and women prominent in public life and across all of the professions in their respective countries. The Trustees recognise and acknowledge with gratitude the considerable contribution made by these volunteers to the successful administration of the selection of Rhodes Scholars across the world.

The Trust is also very fortunate to benefit from the work of many volunteers in its alumni activities, and in helping to guide and encourage philanthropic support for the Rhodes Scholarship, as well as in the governance of the Trust.

A recent example was the Rise selection process which was supported by over 200 volunteer selectors drawn from across the Rhodes Community, including 65 Rhodes Scholar alumni.

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

FUNDRAISING

The fundraising activities of the Charity are directed at the community of Rhodes Scholars, current and former, and to philanthropists, foundations and organisations that share our mission or which have an interest in the strategic projects or geographic constituencies in relation to which we are seeking to raise funds. No direct approaches are made to the general public or to vulnerable persons. Our fundraising staff are employed directly or on a consultancy basis in the UK and overseas, and make every effort to comply with all appropriate legislation to the extent that it is applicable to the activities of the Trust, in compliance with the Fundraising Regulator’s voluntary regulation scheme and the Charities (Protection and Social Investment) Act 2016, and with our internal Global Engagement Team Policies and Protocols. No complaints have been received and our Campaign Committee oversees our adherence to legislation and policies.

ACHIEVEMENTS IN THE YEAR

The Trust is working towards the implementation of the 125[th] Anniversary Strategic Plan, approved by the Trustees in June 2019, with the ambition that by its 125[th] anniversary in 2028, the Rhodes Scholarship will be:

The world’s preeminent graduate fellowship , known for

This year’s key objectives and achievements against those objectives, accomplished within a second year significantly impacted by the COVID 19 pandemic, which further the legal purposes of the Trust are summarised below:

Selection and Outreach

Scholar Experience

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

Scholar studies over the next 3 academic years from COVID 19. Notably 32 Scholars will be supported in this way through 2021/2.

Lifelong Fellowship

Atlantic Institute (AI)

Schmidt Science Fellows

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

The Mandela Rhodes Foundation (MRF)

Rise

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

Global Expansion

Resources

FINANCIAL REVIEW AND RESULTS FOR THE YEAR

The audited accounts for the year ended 30 June 2021 have been prepared in accordance with the Statement of Recommended Practice ‘Accounting and Reporting by Charities’ (Charities SORP FRS102), as well as the requirements of the Charity Commission Total Return Order, and accompany this report. The independent auditors’ report is given on pages 22 to 24 and the principal accounting policies adopted by the Trust are set out pages 28 to 32. The results for the year are presented in the Statement of Financial Activities and the Balance Sheet represents the combined assets and liabilities of all the funds within The Rhodes Trust.

At 30 June 2021 the Trust’s net assets were £546.6m (2020: £475.6m) an increase of £71.0m for the year. Total resources expended during the year were £28.9m (2020: £28.8m), with planned expansion of activities of the Atlantic Institute curtailed by pandemic restrictions. The direct and indirect cost of the Scholarship programme was £17.9m (2020: £16.8m).

The Trust’s trading subsidiary, Rhodes House Limited, broke even in the year, with severely restricted activities in light of the pandemic and construction activities at Rhodes House. It contributed £30k (2020: £122k) to the Trust in respect of rent, management charges and gift aided profit. The Trustees reduced the rent charged in the year, in light of the fact that the building was not available for commercial event activity.

The Trust’s Australian subsidiary, Rhodes Scholarships in Australia Pty Ltd, received donations of AUS $235k (£128k) (2020 AUS $9.2m (£5.1m)) for the support of Australian scholars. Australian Endowment Funds are invested in the Trust pooled investment portfolio and amounted to £15.2m at 30[th] June 2021 (2020: £13.2m). This increase in value is due to the positive investment return in the year.

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

The Canadian subsidiary, Rhodes Scholarships in Canada, received donations of CAD $0.7m (£0.4m) (2020: CAD $0.7m (£0.4m)) for the support primarily of Israeli scholars. Canadian Endowment Funds are invested in the Trust pooled investment portfolio and amounted to £3.6m at 30[th] June 2021 (2020: £2.8m).

INVESTMENT POLICY AND PERFORMANCE

The powers of the Trustees by which they are governed, including the powers of investment, are set out in clauses 10 to 13 of the Rhodes Trust Act, 1946.

The strategy of the Trustees continues to be to manage the assets in such a way as to ensure the continuance of the Trust in perpetuity. It is the aim of the Trustees to restrict capital risk through diversification and to try to maximise total return through capital appreciation or by income generation depending upon economic conditions.

In order to optimise future investment performance, following the adoption of a Total Return investing basis on the authority of a Charity Commission Order, the Trustees adopted a policy of investment pooling under the authority of the Trustee Act 2000 with effect from 30 June 2007.

The investments of the Trust are held in a range of investment vehicles to manage return and risk. The Pooled Endowment Investments portfolio comprises cash, investments in the Oxford Endowment Fund (a unitised investment fund), private equity funds, corporate bonds, fixed income funds and hedge funds.

During the year, the Investment Committee continued to manage asset allocation and liquidity through the use of the Rainy Day Fund, managed by Barclays, within the Pooled Endowment Investments portfolio. At 30[th] June 2021 17% of the Pooled Endowment Investments portfolio was managed by Barclays (2020: 19%), 75% in the Oxford University Endowment Fund (2020: 79%), and 1% in legacy private equity holdings and 7% in cash (2020: total 2%).

During the 12 months to 30[th] June 2021, the capital value of the Trust’s pooled investment portfolio (including short-term deposits) increased from £359m to £415m, including £67.9m of realised and unrealised gains on the investments and £7.2m of donations invested in the year. This represents a substantial recovery of value following the significant fall in March 2020. This recovery clearly meets the investment performance objective of a real return (ie after inflation) by delivering a real return in excess of 12%. The Trust successfully managed its asset allocation to respond to market volatility.

The separately managed and ring fenced portfolios held by Barclays for the Capital Project Fund and the Atlantic Short Term Funds are invested in accordance with mandates that are appropriate to their term. Performance of the Capital Project Fund is largely protected from market volatility as it is invested in capital preservation assets of cash and bonds. A rump of Atlantic Institute Funding still held in the Pooled Endowment Investments portfolio and valued at £12.1m as at 30[th] June 2021 has benefitted from the 12% real return noted above, and the Short Term Funds held with Barclays provide quarterly reimbursement funding for the activities of the Atlantic Institute, whilst ensuring reasonable investment returns through asset allocation weighted 73% to risk assets.

TOTAL RETURN ACCOUNTING

The Charity Commission issued a Total Return Order (The Order) for the Cecil Rhodes Trust Scholarship Fund on 30 March 2007. The Fund was valued at the time of the Order at £30.4m, using cash and sundry assets, investment properties, and investments at cost at 1 July 1989, together with uplift from cost to market value of the last two categories.

Under this Order the Trust adds together the capital gains, losses and income for the year and determines the allocation between capital and income, and the total return is allocated to the Unapplied Total Return (UTR) Fund.

In 2014 the Trustees determined that the draw down on the Cecil Rhodes Trust Scholarship Fund be set at 4% of the fund value, to preserve the long term capital value of the endowment (in real terms) whilst

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The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

balancing the needs of current beneficiaries. In 2018, the Trustees approved the amendment of the draw down rate to mirror the rate being applied in the transfer to income from the expendable endowment funds. This rate is currently 4.5%.

The balance on the Scholarship Fund at 30 June 2021 was £54.4m (2020: £47.7m). The details of the movements are disclosed in Note 22.

RESERVES POLICY

Total funds of £546.6m at 30 June 2021 comprise Endowed Funds of £425.5m (2020: £344.1m), Restricted Funds of £115.9m (2020: £127.5m), and £5.2m (2020: £4.0m) of Free Reserves as defined by the Charity Commission. The Trustees authorised the re-classification of the Atlantic Scholarship Fund, valued at £25.4m, from restricted to endowment fund as at 30[th] June 2021, in order to better reflect the substance and intent of the original gift. This is shown as a transfer between funds in these financial statements.

The Trustees monitor carefully the allocation of investment returns from the endowment to income so that the Trust can meet its expenditure needs. The purpose is to limit expenditure to a level that can be sustainably funded by investment returns above inflation, thereby maintaining the real value of the endowment in perpetuity and ensuring inter-generational equity. This is reviewed each year and implemented via the annual budget which is approved at the June Trustee Board meeting.

Unrestricted reserves are held in order to ensure that the Trust is able to meet any expenditure that cannot be met from funds given explicitly to fund specific scholarships or activities. It is thus the policy of the Trustees to increase the funds held in the Public Purposes Income Fund, in order to support the working capital needs of the operations of the Trust, by way of increased gift aided profits from Rhodes House Ltd that will be generated by the forthcoming conference and accommodation centre, and by the generation of operational surpluses. The Public Purposes Capital Fund can be used to support any activity undertaken by the Public Purposes Fund, but is largely invested and thus not fully available to fund working capital. The Trustees have considered the level of free reserves at 30[th] June 2021 and are satisfied that they are sufficient to meet the Trust’s present needs.

The Horizon Fund includes deficit unrestricted funds of £1,887k (2020: £1,584k) arising from the provision for future Scholar costs. The provision is initially charged to unrestricted funds. The costs are then charged to the appropriate fund as they fall due for payment.

RISK MANAGEMENT

The Trustees have a formal risk management process to assess, annually, business risks and implement risk management strategies, led by the Audit and Risk Committee which reports to the Board of Trustees at least three times per annum. This has involved identifying the types of risks the Trust faces (including Governance and Management, Academic and Pastoral, Human Resources, Operational, ICT, Commercial, Development, Construction risks), prioritising them in terms of potential impact and likelihood of occurrence, and identifying means of mitigating the risks. As part of this process the Trustees have reviewed the adequacy of the Trust’s current internal controls and the costs of operating particular controls relative to the benefits obtained. Procedures have been established for reporting failings immediately to appropriate levels of management and to the Trustees.

The key risks identified by the Trustees are:

1. The risk that the financial performance of the Trust’s investments is insufficient to meet the Trust’s financial commitments.

The endowment investment portfolio is overseen by The Rhodes Trust Finance and Investment Committee which is comprised of Trustees and other senior investment professionals. The Committee reviews investment strategy, asset allocation, performance, liquidity and risk three times per annum, or more frequently as required.

The majority of the Trust’s assets are managed by Oxford University Endowment Management (OUEM) in a globally diversified, strategic asset allocation based portfolio. OUEM was founded by Oxford

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University, with input from the Trust, in 2007 to create a unitised endowment portfolio managed full time by OUEM professionals with appropriate fiduciary oversight. The investment process and governance of OUEM are based on the best practices of top global endowments and foundations. The Rhodes Trustees consider that the OUEM investment portfolio and programme are well suited to the Trust’s long term investment objectives, and is adequately diversified.

Alongside the investment in OUEM, the Committee oversees a complementary portfolio, managed by Barclays plc, with a shorter duration mandate focussed on liquidity, to manage the risk posed by the illiquidity of the endowment portfolio in a market downturn.

2. The Scholarship loses its reputation as the world’s leading scholarship. This could arise, e.g., through damaging incidents, or through the financial offer of other Scholarships more conspicuously eclipsing Rhodes.

The Academic Committee maintains an active review of:

The Trust continues to invest in developing the Character, Service and Leadership programme attended by all first and second year Scholars, led by the Warden and Dean of Scholarships, and supported by current and Senior Scholars and distinguished guest speakers.

The Trust has a public relations strategy and escalation procedure for media engagement with the engagement of external advisors as necessary, and engaged branding consultants in 2021 to consider the international positioning of the Rhodes Trust in philanthropic and charitable circles.

The Scholarship Committee has established a review process with respect to Scholars Elect, before the awarding of the Scholarship is confirmed, and continues to support selectors in order to ensure the continued excellence of Rhodes selection processes.

3. Failure to identify or support serious mental health issues.

The Trust has strong pastoral care arrangements in place under the close supervision of the Warden, Registrar, and the Dean of Scholarships. They engage regularly with all Scholars and look out for any signs of difficulty that Scholars may be encountering with their work or personal issues.

A separate panel of counsellors is in place to support Scholars with differing needs, and the Trust provides financial assistance via the Scholar Support Fund for expert counselling and ad-hoc hardship funding.

The Warden and Trustees continue to work with Oxford University to offer high quality support for Scholars.

4. The Rhodes House Capital Project, in which the premises are being substantially developed, fails to deliver the world class facilities envisioned, and is unable to generate the commercial returns anticipated.

The Building Committee and the Building Control Group continue to provide strategic and operational support to the management of the project, led by the Director of Estates. The construction work has been able to continue throughout the pandemic with limited disruption from labour and materials shortages. The asbestos removal and archaeological investigations have concluded on time and budget.

Page 16

The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

A Rhodes House Conference Centre Launch Planning group will meet quarterly in the 15 months prior to completion to ensure coordinated planning takes place across all operational departments. The Director of Estates has supplemented his existing team with an additional experienced hire to support the pivot to the phase post completion of construction.

5. The investment in the digital transformation of Rhodes Trust systems fails to deliver the anticipated operational and community benefits, and associated data security risks are inadequately managed.

A Data Governance Group comprising key staff will report directly in to the Audit and Risk Committee. The IT team has been expanded to bring in house expertise in the Salesforce software that has been developed in conjunction with an external partner over the last 2 years. An experienced Head of IT was appointed in late 2020, bringing expertise and focus to this area of risk management.

FUTURE PLANS

The 10 year strategic plan that was approved in 2019 addressed the following four principal themes:

1. Selection and Outreach

By 2028 the Rhodes Scholarship will enhance its position as the world’s most respected and prestigious graduate fellowship, known for world-class global outreach and selection processes that identify the next generation of public-spirited young people committed to solving humanity’s challenges.

The key priorities for achieving this goal:

2. Scholar Experience

By 2028 the Rhodes Scholarship will enhance its globally competitive position among graduate scholarships by ensuring parity in and excellence across all dimensions of the experience for all Scholars.

The key priorities for achieving this goal:

3. Lifelong Fellowship

By 2028 the Rhodes Scholarship will become a vibrant lifelong fellowship that meaningfully and measurably contributes to Scholars learning, service and impact across every stage of their lives and careers and that fosters cross-generational mentoring and support.

The key priorities for achieving this goal:

Page 17

The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

4. Global expansion

By 2028, the Rhodes Scholarship will achieve the 125[th] anniversary goal of 125 endowed Rhodes Scholarships per year, available to students all over the world, by adding 25 new funded Rhodes Scholarships and securing endowment for 4 currently “flow” funded Scholarships. It will become a more diverse, collaborative and impactful global community by supporting and connecting the Atlantic Fellows, Schmidt Science Fellows, Mandela Rhodes Scholars and additional partner programmes over time.

The key priorities for achieving this goal:

The Strategic plan also considered the impact and resources required.

Impact

The Trust is committed to finding innovative ways to answer the question: “how is the world different and better because of the Rhodes Trust?”

The key priorities for achieving this goal:

Confronting/Embracing/Responding to Legacy

Over the six months to June 2021, working alongside our core partners and alumni associations, we have launched a number of activities and initiatives focused on legacy, equity, and inclusion:

Page 18

The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

Next Steps

We are launching three advisory groups to help us gather and synthesise ideas from across and beyond the global Rhodes community to guide our key areas of action and accomplish our goals. These groups will focus on critical questions in three areas:

In addition to supporting the work of these Advisory Groups, we will continue to pursue other strategic goals and activities related to legacy, equity, and inclusion. These include:

Page 19

The Rhodes Trust TruSt￿S. Annual Rewrt For the year ended 30 Jur 2021 Resour The necessary restxJr￿ and infrastnthr• to ddiver the 125° AnnTversary stratsgy indude.. Global infrastrudure to support staff indudirwJ db3it81 notsw)rks and office en¥ironfflent Rhodes Trust seen as a 'Great Place to Work. for the Tnjst arKI its pathers Fiscal disCA￿lne. adhering to the guardrails of the Trust's 4.5% eThJowff￿n1 spending polw (with the expet#atK)n of mwng to 4.25% from 20231. caMpa￿n to raise £200m over 10 year5 dI￿ded be￿n stholarship endowment1£140ml, programme endowrwnts1£1 Sml. eX￿￿lable fundirvj for thg Scholars Fund1£15m over 10 ye8rsl. and the Capital Project {£3]m). COVID 2019 In comm(￿ with OxFord Unwersty and the colleges. the Tnjst ck)5ed Rhodgs Hous8 during thkdown to staff and Sth￿ars. and the majority ofslaff wern effecvely rn4epknyed to home working wherever possible. Laptcys wer8 issued to all staff and additKm81 hrywthiNJ 8qulw￿t needs fv1fi11gd indudirKJ provision of office lumituTr and sth"onery. Staff have o)ntinued to express satisfaction Trmth the ￿Ve1 of support offer8d during 2020 and 2021 as remote working (K￿dIt￿n5 continl￿. 10( down regutations have been lifted, Rhodes HoLbse has made availabb& to stsff and Schokrs tlndgr dosely monitored soaal distsnung and cleaning regirrns. A staff consultation prccess is oJrr8nUy und8Th¥ay to address both the short tem) and longer temi implications of a hybrid working to optirrw the beneffts of bakirrArrfJ the operational needs ofthe Trust with those of OLtr Scholars and staff. This hybrid vffjthng vlill bg implgmentsd ovgr thg nexi 16 nY)nths as the Capital Project cx)nstructb)n phasing permits and new areas of Rhc¥Jes House are retumed to us by the main contraclor as they compl8le 88th stsge of the pKoject. AppTOV8d and ￿gned on thall of the Trusle8s rj) 12/11 2021. Profe r Sir John B•ll Chaimian of the Twst8es Page 20

The Rhodes Trust Trustees’ Annual Report For the year ended 30 June 2021

LEGAL AND ADMINISTRATIVE INFORMATION

The current advisers are:

BANKERS:

NatWest Bank plc Minns Business Park 7 West Way Oxford OX2 0JB

Barclays Bank plc 1 Churchill Place Canary Wharf London E14 5HP

SOLICITORS:

Farrer and Co LLP 66 Lincoln’s Inn Fields London WC2A 3LH

Lewis Silkin LLP King Charles House Park End Street Oxford OX1 1JD

INDEPENDENT AUDITORS:

Saffery Champness LLP 71 Queen Victoria Street London EC4V 4BE

REGISTERED AND PRINCIPAL ADDRESS:

Rhodes House South Parks Road Oxford OX1 3RG

WARDEN AND SECRETARY TO THE TRUSTEES:

Dr Elizabeth Kiss

Page 21

The Rhodes Trust Independent auditors’ report to the trustees For the year ended 30 June 2021

Opinion

We have audited the financial statements of The Rhodes Trust (the ‘parent charity’) and its subsidiaries (together the ‘group’) for the year ended 30 June 2021 which comprise the Consolidated Statement of Financial Activities, Consolidated and Charity Balance Sheets, Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group or the parent 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 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.

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.

22

The Rhodes Trust Independent auditors’ report to the trustees For the year ended 30 June 2021

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 Statement of Trustees’ Responsibilities set out on page 8, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group and the parent 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 group or the parent charity or 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 the Charities Act 2011 and report in accordance with regulations made under that Act.

Our objectives are to obtain reasonable assurance about whether the group and parent 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 are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent charity’s financial statements to material misstatement and how fraud might occur, including through discussions with the trustees and informed management, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent charity by discussions with trustees and informed management, and updating our understanding of the sector in which the group and parent charity operate.

Laws and regulations of direct significance in the context of the group and parent charity include the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and guidance issued by the Charity Commission for England and Wales.

23

The Rhodes Trust Independent auditors’ report to the trustees For the year ended 30 June 2021

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the parent charity’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent charity’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the parent 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 parent charity 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 parent charity and the parent charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Saffery Champness LLP Chartered Accountants Statutory Auditors

71 Queen Victoria Street London EC4V 4BE

Date: 24 November 2021

Saffery Champness LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

24

The Rhodes Trust Consolidated Statement of Financial Activities For the year ended 30 June 2021

Notes
INCOME AND ENDOWMENTS FROM:
Donations and legacies
1
Charitable activities
2
Other trading activities
3
Investments
Investment income
4
Total return allocated to income
17
Other(foreign exchange gain)
Total income
EXPENDITURE ON:
Charitable activities:
Promotion and advancement of education
5
Raising funds:
7
Fundraising
Trading expenditure
Finance costs
20
Investment management costs
Total Expenditure
Net Income/(Expenditure) before gains
Net gains on investments
15
Net Income
Transfers between funds
22
Net movement in funds for the year
Fund balances brought forward
22
Funds carried forward at 30 June		 Unrestricted
Funds
£'000s
686
1,470
-
213
5,645
-		 Restricted
Funds
£'000s
784
4,830
-
-
9,388
-		 Endowed
Funds
£'000s
11,261
-
-
-
(15,033)
-		 2021
Total
£'000s
12,731
6,300
-
213
-
-		 2020 restated
Total
£'000s
96,661
6,347
292
883
-
184
8,014
3,014
512
10
205
-		 15,002
22,458
1,086
-
-
438		 (3,772)
-
-
-
-
1,250		 19,244
25,472
1,598
10
205
1,688		 104,367
25,142
1,433
220
793
1,252
727 1,524 1,250 3,501 3,698
3,741 23,982 1,250 28,973 28,840
4,273 (8,980) (5,022) (9,729) 75,527
- 19,048 61,642 80,690 23,825
4,273 10,068 56,620 70,961 99,352
(3,054)
1,219
3,980		 (21,648)
(11,580)
127,447		 24,702
81,322
344,130		 -
70,961
475,557		 -
99,352
376,205
5,199 115,867 425,452 546,518 475,557

The notes on pages 33 to 46 form part of these financial statements. All amounts relate to continuing activities.

All gains and losses recognised in the year are included in the statement of financial activities.

The restatement of the prior year accounts relating to the reclassification of the OUEM distribution is fully detailed in note 15.

Page 25

Th• Rhod•s Tru•t tsn$olldat•d and Charbty 8alanc• Sh••ts A• at 30 Juno 2021 2020 Intangi￿e a$86ts T8ngibl8 as¥8ts 10 11 165 31.371 165 31,371 19. 19,856 12 13 14 414041 358.915 37,605 802B4 342,918 37.605 80.284 Capital pfLi8cI in￿5]rI￿nts Att￿nt￿st￿)rt tenn in¥eslments 89.685 Totsl Ffjx•d AM•t• UIIREpif ASSErs Debtus Inveslments Cash ai b8r gnd In h8ThJ 496.740 .743 16 17J91 17,533 11.078 11.287 702 15.764 13291 11943 16.( Total CuTh•ntAwts 27.840 27,753 UABILMES Credrtors." Arn￿18 du8Trhhkn >w 19 143WJI IS4791 (3.1361 13.4S31 NEf CURREMf ASSErs 24997 24.7C6 24.3tKI TOTAL ASSEfs LESS CURRENT LIABILMES $74427 521.444 )5.043 CREDITORS: t•lMng •ll•r mw• th•D 4X y•W (30JMI iyJ,(xyJi j.c￿} 21 116WJ 115.8871 115.8871 TOTAL NEf ASSETS S$18 $27.$10 475.557 459,156 FUNDS EndowTr•rtfvnd• 344.1 327.976 11U67 114837 127.447 127200 4t99 511 475.557 4S9,156 Pml88SCf SlrJthn Bdl, Chairman

The Rhodes Trust

Consolidated Statement of Cash Flows For the year ended 30 June 2021

Cash flows from operating activites
Net movement in funds
Adjustments for:
Depreciation
Gains on investments
Investment management costs
Investment income
Receipt of endowment
(Increase)/decrease in debtors
Increase in creditors
Increase in provisions
Net cash (used in)/provided by operating activities
Cash flows from investing activities
Proceeds from the sale of property, plant and equipment
Cash withdrawn
Purchase of fixed assets (tangible and intangible)
New money invested
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Receipt of endowment
Net cash provided by financing activities
Change in cash and cash equivalents in the reporting period
32
Cash and cash equivalents at the beginning of the reporting period
Cash and cash equivalents at the end of the reporting period		 2021
£'000s
70,961
722
(80,690)
1,964
(213)
(11,261)
(6,313)
2,254
1,000		 2020 restated
£'000s
99,352
368
(23,825)
2,204
(883)
(25,222)
12,867
967
2,374
(21,576) 68,201
0
27,338
(12,322)
(7,463)		 -
19,781
(3,754)
(107,941)
7,553 (91,914)
11,261 25,222
11,261 25,222
(2,762)
16,060		 1,509
14,551
13,298 16,060

The notes on pages 33 to 46 form part of these financial statements.

Page 27

The Rhodes Trust Accounting Policies For the year ended 30 June 2021 _________________

ACCOUNTING POLICIES

The address of the registered office of The Rhodes Trust is Rhodes House, South Parks Road, Oxford, OX1 3RG.

1. Scope of the financial statements

The financial statements present the Consolidated Statement of Financial Activities (SOFA), the Consolidated and Trust Balance Sheets and the Consolidated Statement of Cash Flows for the Trust, which comprises the Public Purposes Fund, the Cecil Rhodes Scholarship Fund, and the Rhodes Trust Horizon Fund, (which are linked under charity number 232492), and the wholly owned subsidiary of the Public Purposes Fund, Rhodes House Ltd (company no 06539418), The Rhodes Scholarships in New Zealand Limited, Rhodes Scholarships in Australia PTY Limited, Rhodes Scholarships in Canada Limited, and Rhodes Scholarship for Southern Africa Secretariat NPC respectively consolidated on a line by line basis. The New Zealand and Australian subsidiaries are corporate trustees of underlying trust funds. The Canadian subsidiary is a non-share capital corporation. The South African entity is a non-profit corporation. No separate SOFA has been presented for the Trust alone as it is not deemed to be materially different from the consolidated SOFA. A summary of the results and financial position of each of the three charitable funds of the Trust and of each of its subsidiaries for the reporting year can be found in Note 16.

2. Basis of accounting

The Trust’s individual and consolidated financial statements have been prepared in accordance with United Kingdom Accounting Standards, in particular ‘FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102), as revised in 2019.

The Trust is a public benefit entity for the purposes of FRS 102 and a registered charity. The Trust has therefore also prepared its individual and consolidated financial statements in accordance with the laws applicable to charities in England and Wales and ‘The Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with FRS 102’ (Charities SORP (FRS 102)).

The consolidated financial statements have been prepared to give a true and fair view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following Charities SORP (FRS 102) rather than Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) which has been withdrawn.

The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the measurement of investments and certain financial assets and liabilities at fair value, with movements in value reported within the SOFA. Given that the funding is predominantly from endowment returns, there are no material uncertainties about going concern. The principal accounting policies adopted are set out below and have been applied consistently throughout the year, except where noted.

3. Accounting judgements and estimation uncertainty

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The following judgements and estimates are considered by the Trustees to have the most significant effect on amounts recognised in the financial statements:

28

The Rhodes Trust Accounting Policies For the year ended 30 June 2021

4. Income recognition

All income is recognised once the Trust has entitlement to the income, the economic benefit is probable and the amount can be reliably measured.

Income from donations, grants and legacies

Donations and grants that do not impose specific future performance-related or other specific conditions are recognised on the date on which the Trust can demonstrate legal entitlement to the resource, the amount can be reliably measured and the economic benefit to the Trust of the donation or grant is probable. Donations and grants subject to performance-related conditions are recognised as and when those conditions are met. Donations and grants subject to other specific conditions are recognised as those conditions are met or their fulfilment is wholly within the control of the Trust and it is probable that the specified conditions will be met. Pledged donations in excess of £30,000 that are executed under deed are included upon execution of the deed, with the future pledge instalments discounted at the Trust’s cost of borrowing (2.67% for the year ended 30 June 2021).

Legacies are recognised following grant of probate and once the Trust has received sufficient information from the executor(s) of the deceased’s estate to be satisfied that the gift can be reliably measured and that the economic benefit to the Trust is probable.

Donations, grants and legacies accruing for the general purposes of the Trust are credited to unrestricted funds.

Donations, grants and legacies which are subject to conditions as to their use that are imposed by the donor or set by the terms of an appeal are credited to the relevant restricted fund or, where required to be held as capital, to the endowment funds. Where donations are received in kind (as distinct from cash or other monetary assets), they are measured at the fair value of those assets at the date of the gift.

Investment income

Interest on bank balances is accounted for on an accruals basis with interest recognised in the period to which the interest relates.

Distributions from Oxford University Endowment Management are accounted for when declared, and are now treated as realised gains. This presentation reflects the substance of the underlying transaction, but represents a change from the prior year, when the distribution was included as Income. The prior year figures are shown as restated where appropriate.

5. Expenditure

Expenditure is accounted for on an accruals basis. A liability and related expense is recognised when a legal or constructive obligation commits the Trust to expenditure that will probably require settlement, the amount of which can be reliably measured or estimated.

Grants awarded that are not performance-related are charged as an expense as soon as a legal or constructive obligation for their payment arises. Grants subject to performance-related conditions are expensed as the specified conditions of the grant are met.

The movement in the liability recognised in relation to future Scholar costs is accounted for as an expense in the period. The liability is estimated on the basis of two years of fees and stipend for the cohort of Scholars elected but not yet on course at the balance sheet date, and for the remaining tenure of Scholars already on course. The movement in provision is taken to unrestricted funds, and only charged to the appropriate restricted income fund as actually expended.

All expenditure including support costs and governance costs are allocated or apportioned to the applicable expenditure categories in the SOFA.

29

The Rhodes Trust Accounting Policies For the year ended 30 June 2021

Support costs, which include governance costs (costs of complying with constitutional and statutory requirements) and other indirect costs are apportioned to expenditure categories in the SOFA based on the estimated amount attributable to that activity in the year, either by reference to staff time or the use made of the underlying assets, as appropriate. Irrecoverable VAT is included with the item of expenditure to which it relates.

Intra-group transactions between the Trust and its subsidiaries are excluded from income and expenditure in the consolidated financial statements.

6. Tangible fixed assets

Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Under FRS 102, the Trust elected to use the fair value of Rhodes House as a ‘deemed cost’ as at 30 June 2015. The buildings are subject to annual depreciation and no further revaluations are anticipated.

Expenditure on the enhancement of buildings amounting to more than £10,000 together with expenditure on equipment costing more than £2,500 is capitalised.

Expenditure on assets under construction includes associated net interest on borrowings, which is taken straight to the balance sheet and included within additions.

Other expenditure on equipment incurred in the normal day-to-day running of the Trust and its subsidiaries is charged to the SOFA as incurred.

7. Depreciation

Depreciation is provided to write off the cost of all relevant tangible fixed assets, less their estimated residual value, in equal annual instalments over their expected useful economic lives as follows:

Freehold properties, including major extensions 2% p.a.
Building improvements 2%
Plant and Machinery 5%
Motor Vehicles 25%
Fixtures and Fittings and Computer Systems 25%

Freehold land is not depreciated. The cost of maintenance is charged in the SOFA in the period in which it is incurred.

At the end of each reporting period, the residual values and useful lives of assets are reviewed and adjusted if necessary. In addition, if events or change in circumstances indicate that the carrying value may not be recoverable then the carrying values of tangible fixed assets are reviewed for impairment.

Capital expenditure on the building development project is classified as an asset under construction, and is not depreciated until the building is brought in to use.

8. Intangible Fixed Assets

Expenditure on intangible assets including brand renewal and the website is capitalised where the impact is expected to be significant over a period of time, and amortised at 25% p.a.

9. Investments

Listed investments are initially measured at cost and subsequently measured at fair value at each reporting date. Fair value is based on the quoted price at the balance sheet date without deduction of estimated future selling costs.

Investments such as hedge funds and private equity funds which have no readily identifiable market value are initially measured at cost and subsequently measured at fair value at each reporting date without deduction of estimated future selling costs. Fair value is based on the most recent valuations available from the respective fund managers.

30

The Rhodes Trust Accounting Policies For the year ended 30 June 2021

Changes in fair value and gains and losses arising on the disposal of investments are credited or charged to the Gains on Investments section of the SOFA and are allocated to the fund holding or disposing of the relevant investment in aggregate.

Investment distributions and new endowment cash received is treated as Cash Allocated for Investment, and is included within the portfolio in Other Investments.

Distributions from Oxford University Endowment Management are treated as realised gains.

10. Investments held on behalf of other members of the Group

Investments that are held on behalf of other members of the Group are accounted for as investments of the relevant subsidiary entity.

11. Other financial instruments

Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

Debtors and creditors

Debtors and creditors receivable or payable within one year of the reporting date are carried at their transaction price. Debtors and creditors that are receivable or payable in more than one year and not subject to a market rate of interest are measured at the present value of the expected future receipts or payment discounted at a market rate of interest.

12. Foreign currencies

The functional and presentation currency of the Trust, including its trading subsidiary Rhodes House Limited is the pound sterling. The Australian, New Zealand, Canadian and South African subsidiaries report in their local currency.

Transactions denominated in foreign currencies during the year are translated into pound sterling using the spot exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into pound sterling at the rates applying at the reporting date.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rates at the reporting date are recognised in the income and expenditure section of the SOFA, under Other income if a gain, and within Support Costs if an overall loss in the year, with the exception of gains or losses arising from the revaluation of accrued, pledged donation income. These gains/(losses) are credited/(charged) to income from Donations.

The net foreign exchange loss recognised in income for the year ended 30 June 2021 was £0.20m (2020: net gain £0.18m).

13. Total Return accounting

The Trust’s statutes authorise the Trust to adopt a ‘total return’ basis when accounting for the Scholarship Fund, which is a permanent endowment. The Trust can use its discretion to apply any part of the accumulated total return on the investment as income for spending each year. Until this power is exercised, the total return is accumulated as a component of the endowment known as the unapplied total return that can either be retained for investment or released to income at the discretion of the Board of Trustees.

The Trust’s expendable endowment funds are similarly invested and accounted for on a total return basis, with the investment return being credited to the endowment fund, and a transfer to income being released to the related income fund. Investment management costs are charged to the endowment or invested income fund, but all other costs are charged to the related income fund.

31

The Rhodes Trust Accounting Policies For the year ended 30 June 2021

14. Fund accounting

The total funds of the Trust and its subsidiaries are allocated to unrestricted, restricted or endowment funds based on the terms set by the donors or set by the terms of an appeal. Endowment funds are further sub-divided into permanent and expendable endowment funds.

Unrestricted funds can be used in furtherance of the objects of the Trust at the discretion of the Board of Trustees, but within the charitable purposes of the Public Purposes Fund and Horizon Fund respectively. The Board of Trustees may decide that part of the unrestricted funds shall be used in future for a specific purpose and this will be accounted for by transfers to appropriate designated funds.

Restricted funds comprise gifts, legacies and grants where the donors have specified that the funds are to be used for particular purposes of the Trust. They consist of either gifts where the donor has specified that both the capital and any income arising must be used for the purposes given or the income on gifts where the donor has required or permitted the capital to be maintained and with the intention that the income will be used for specific purposes within the Trust’s objects.

Permanent endowment funds arise where donors specify that the funds are to be retained as capital for the permanent benefit of the Trust. Any part of the total return arising from the capital that is allocated to income will be accounted for as unrestricted funds unless the donor has placed restrictions on the use of that income, in which case the total return arising will be accounted for as a restricted fund.

Expendable endowment funds are similar to permanent endowment in that they have been given, or the Trust has determined based on the circumstances in which they have been given, for the long term benefit of the Trust. However, the Trustees may at their discretion determine to spend all or part of the capital.

15. Cost allocation

With the exception of investment management charges which are charged directly to the endowment fund or invested income fund, in proportion to the investment holding at the start of the period, all expenditure is allocated directly to the relevant income fund. Thus direct scholar costs, which include fees, stipends and other direct expenses of a scholarship, are charged directly to the restricted funds, with any deficit in the year funded by transfer from unrestricted funds. Other operational costs are apportioned over the operational activities and then to the relevant funds.

16. Borrowing Costs

Interest payable on the bond issued in order to fund the building development project is capitalised, net of the return on any funds invested pending drawdown to fund the construction costs, and will be depreciated in accordance with the depreciation policy, once the building has been brought into use.

17. Pension costs

The costs of retirement benefits provided to employees of the Trust through two multi-employer defined benefit pension schemes are accounted for as if these were defined contribution schemes as information is not available to use defined benefit accounting in accordance with the requirements of FRS 102. The Trust's contributions to these schemes are recognised as a liability and an expense in the period in which the salaries to which the contributions relate are payable.

In addition, a liability is recognised at the balance sheet date for the discounted value of the expected future contribution payments under the agreements with these multi-employer schemes to fund the past service deficits.

The Trust also contributes to a 401(K) Safe Harbour pension plan for its six US employees. This is a defined contribution plan.

18. Cashflow Statement

The Trust has taken advantage of the exemption under FRS102 not to disclose its own statement of cashflows. The group prepares a consolidated Cashflow Statement and the consolidated accounts, in which the Trust’s results are included, are available to the public.

32

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

DONATIONS AND LEGACIES
Unrestricted funds
Restricted funds
Endowed funds		 2021
£'000s
686
784
11,261		 2020
£'000s
640
70,799
25,222
12,731 96,661

The Scholars Fund campaign contributed £1,204k (2020: £1,463k) towards revenue expenditure on identified priorities in the course of the year. See Note 22 for detailed breakdown of donations received by fund.

2
INCOME FROM CHARITABLE ACTIVITIES
Scholarship funding
Atlantic Institute Grant Funding
RISE Grant Funding
Schmidt Science Fellows Grant Funding
Contributions to co-funded College scholarship costs		 2021
£'000s
1,134
68
459
3,975
663		 2020
£'000s
870
-
412
4,369
696
6,300 6,347

The Trust has entered into a number of co-funding agreements with the University and with several Colleges, whereby fees and stipend costs are shared. Grant funding is received to support partnership programmes, namely The Atlantic Institute, Schmidt Science Fellows and the RISE Programme.

3
INCOME FROM OTHER TRADING ACTIVITIES
Subsidiary company trading income: Rhodes House Ltd
Other trading income
4
INVESTMENT INCOME
Unrestricted funds
Interest on fixed term deposits and cash
Bank interest
Restricted funds
Bank interest
Total Investment income
5
ANALYSIS OF EXPENDITURE ON CHARITABLE ACTIVITIES
2021
Scholarship programme
Grants to Individuals
Indirect Scholar support
Other programmes:
Atlantic Institute - Grants to Individuals
Atlantic Institute - Other Programme Costs
Schmidt Science Fellows - Grants to Individuals
Schmidt Science Fellows - Other Programme Costs
RISE - Other Programme Costs
Other programmes including Schwarzman Leadership Programme
Total expenditure on charitable activities
2020
Scholarship programme
Grants to Individuals
Indirect Scholar support
Other programmes:
Atlantic Institute - Grants to Individuals
Atlantic Institute - Grants to Institutions
Atlantic Institute - Other Programme Costs
Schmidt Science Fellows - Grants to Individuals
Schmidt Science Fellows - Other Programme Costs
RISE - Other Programme Costs
Other programmes including Schwarzman Leadership Programme
Total expenditure on charitable activities		 Direct
Staff Costs
£'000s
-
1,262		 2021
£'000s
-
-		 2020
£'000s
279
13		 2021
£'000s
11,418
6,575
- 292
2021
£'000s
205
8		 2020 restated
£'000s
793
86
213 879
- 4
- 4
213 883
Direct
Non-staff Costs
£'000s
11,418
988		 Support Costs
£'000s
-
4,325
1,262
-
1,393		 12,406
354
896		 4,325
-
343		 17,992
354
2,632
1,393
-
955		 1,250
1,521
1,448		 343
-
50		 2,986
1,521
2,453
955
176		 2,970
129		 50
111		 3,975
417
176
-		 129
101		 111
-		 417
101
3,786 16,855 4,829 25,470
Direct
Staff Costs
£'000s
-
1,271		 Direct
Non-staff Costs
£'000s
11,610
1,659		 Support Costs
£'000s
-
2,226		 2020
£'000s
11,610
5,156
1,271
-
-
1,121		 13,269
158
61
1,912		 2,226
-
-
337		 16,766
158
61
3,370
1,121
-
830		 2,131
1,466
2,023		 337
-
50		 3,589
1,466
2,903
830
51		 3,489
150		 50
133		 4,369
334
51
-		 150
84		 133
-		 334
84
3,274 19,122 2,745 25,142

Page 33

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

6 GRANT COMMITMENTS

Future Scholar costs

The Trust recognises the commitment made to fund Scholars that have been elected in the year, but who have not yet taken up their scholarship. Grants to individuals made under the Scholarship programme includes the charge relating to the increase in the provision to reflect an estimated two years of fees and stipends for the incoming cohort, and one year of fees and stipends for second and third years. This provision is disclosed in Note 21.

7 ANALYSIS OF EXPENDITURE ON RAISING FUNDS

7
ANALYSIS OF EXPENDITURE ON RAISING FUNDS
2021
Expenditure on raising funds
Fundraising
Trading expenditure
Finance Costs (see Note 20)
Investment management costs
Total expenditure on raising funds
2020
Expenditure on raising funds
Fundraising
Trading expenditure
Finance Costs
Investment management costs
Total expenditure on raising funds
8
ANALYSIS OF SUPPORT COSTS
2021
Administration
Finance
Human resources
IT and communications
Investment management
Legal & professional
Governance costs
Depreciation
Loss/(profit) on fixed assets
Interest cost on pension provision
Exchange rate loss
Pension deficit liability movement
2020
Administration
Finance
Human resources
IT and communications
Investment management
Legal & professional
Governance costs
Depreciation
Interest cost on pension provision
Pension deficit liability movement		 Direct
Staff Costs
£'000s
1,098
-
-
-		 Direct
Non-staff Costs
£'000s
500
4
-
-		 Support Costs
£'000s
-
6
205
1,688		 2021
£'000s
1,598
10
205
1,688
1,098 504 1,900 3,502
Direct
Staff Costs
£'000s
930
-
-
-		 Direct
Non-staff Costs
£'000s
503
213
-
-		 Support Costs
£'000s
-
8
793
1,252		 2020
£'000s
1,433
220
793
1,252
930 716 2,053 3,698
Charitable
Activites
£'000s
1,816
28
236
1,041
-
356
68
690
(0)
44
201
350		 Raising
Funds
£'000s
2
-
-
-
1,688
-
4
-
-
-
-
-		 2021
Total
£'000s
1,818
28
236
1,041
1,688
356
72
690
(0)
44
201
350
4,829 1,695 6,524
Charitable
Activites
£'000s
1,269
40
213
860
-
126
59
286
47
(154)		 Raising
Funds
£'000s
4
-
-
-
1,252
-
4
-
-
-		 2020
Total
£'000s
1,272
40
213
860
1,252
126
63
286
47
(154)
2,745 1,259 4,005

Shared Services, including Human Resources, Finance and IT costs are attributed according to the proportion of workload. Depreciation costs are attributed according to the use made of the underlying assets. Interest and other finance charges are attributed according to the purpose of the related financing.

Governance costs comprise:
Auditors' remuneration - audit services
Auditors' remuneration - other services
Auditors' remuneration - tax advisory services
Other governance costs		 2021
£'000s
63
1
8
1		 2020
£'000s
50
1
10
2
72 63

Page 34

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

The aggregate staff costs for the year were as follows.
Salaries and wages
Social security costs
Pension costs:
Defined benefit schemes
Defined contribution schemes
Other benefits
Pension deficit liability movement
Total Staff Costs
Less Staff Costs disclosed in Note 5 as Support Costs for Atlantic Institute, RISE and Schmidt Science Fellows
The average number of employees on a gross headcount basis was as follows:
Full time
Part time
Total
The total pension provision held at 30th June 2021 is £2.0m (2020: £1.6m) as per Note 21. See Note 26 for full details.		 2021
£'000s
5,530
589
800
58
84
350		 2020
£'000s
4,446
457
586
46
65
(154)
7,411
(504)		 5,447
(520)
6,907 4,927
2021
80
10		 2020
64
9
90 73

The Trustees do not receive any remuneration from the Trust in respect of their services. No trustee expenses (2020: £1k) were settled or reimbursed in the year in respect of expenses incurred in attending trustee meetings.

Redundancy payments are accounted for in the period in which the employee was informed of the decision. Where redundancy costs are uncertain, the figure in the accounts represents a best estimate. These costs are met from unrestricted funds. No such payments were made in the year, as payment in lieu of notice (2020: £86k).

The Trust benefits from the services of volunteers as described on page 9 of the Trustees' Annual Report, particularly in the process of Scholar selection in the national constituencies.

The number of employees during the year whose gross pay and benefits (excluding employer NI and pension contributions) fell within the following bands was:

2021 2020
£60,000-£70,000 4 1
£70,000-£80,000 4 2
£80,000-£90,000 3 3
£90,000-£100,000 2 6
£100,000-£110,000 3 3
£110,000-£120,000 5 1
£120,000-£130,000 1 1
£130,000-£140,000 1 -
£150,000-£160,000 1 1
£170,000-£180,000 - 1
£180,000-£190,000 3 1
£190,000-£200,000 1 -
£200,000-£210,000 - 1
£250,000-£260,000 - 1
£280,000-£290,000 1 -

Aggregate employee benefits of key management personnel, including pension contributions, amounted to £1,682k in the year (2020: £1,593k). Key management personnel are detailed on page 9 of the Trustees Annual Report.

Group and Charity
Cost
At start of year
Additions
At end of year
Amortisation
At start of year
Amortisation charge for the year
At end of year
Net book value carried forward
Net book value brought forward		 2021
£'000s
331
117		 2020
£'000s
331
-
447 331
251
32		 168
83
282 251
165 80
80 163

Page 35

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

11 TANGIBLE FIXED ASSETS

Group and Charity
Cost
At start of year
Additions
Disposals
At end of year
Depreciation and impairment
At start of year
Depreciation charge for the year
Depreciation on disposals
At end of year
Net book value 2021
Net book value 2020		 Freehold
land and
buildings
£'000s
14,792
1,606
-		 Assets
under
construction
£'000s
3,891
9,025
-		 Plant and
machinery
£'000s
63
-
-		 IT Systems
£'000s
2,306
1,575
-		 Fixtures,
fittings and
equipment
£'000s
691
-
(19)		 Total
£'000s
21,742
12,205
(19)
16,398 12,915 63 3,881 672 33,929
881
150
-		 -
-
-		 13
3
-		 332
524
-		 661
13
(19)		 1,886
690
(19)
1,032 - 16 855 655 2,558
15,366 12,915 47 3,026 17 31,371
13,911 3,891 50 1,974 30 19,856

Assets under construction are the costs associated with the Rhodes House capital project, amounting to additions of £9,025k (2020: £2,127k), including fees and capitalised borrowing costs net £658k (2020: £8k).

The new building development is not expected to come in to use until year ending 30th June 2023, when depreciation of the asset will commence.

12 POOLED ENDOWMENT INVESTMENTS

All investments are held at fair value.
Group investments
Valuation at start of year
New money invested
Amounts withdrawn
Investment management fees
Increase in value of investments
Group investments at end of year
Investment held on behalf of subsidiaries
Investments in subsidiaries
Charity investments at end of year
Group investments comprise:
Private equity investments
Listed investments
Global multi-asset funds (including OUEF)
Property, alternative and other investments
Fixed term deposits, bonds and cash
Total group investments		 2021
£'000s
358,915
7,258
(18,136)
(1,377)
67,981		 2020 restated
£'000s
320,319
37,392
(15,209)
(1,154)
17,567
414,641
(18,676)
0		 358,915
(15,997)
0
395,965 342,918
2021
£'000s
4,773
17,071
331,415
2,283
59,098		 2020 restated
£'000s
18,805
13,753
272,594
3,740
50,023
414,641 358,915

The Oxford University Endowment Fund (OUEF) is a global multi-asset fund.

The above investments include £2,205k (2020: £nil) of funds belonging to the 2nd Century Founder Compound fund which have been invested by The Trust in a segregated portfolio with OUEM.

Group and Charity
Valuation at start of year
Bond interest @ 2.67%
Amounts withdrawn
Reinvested income
Investment management fees
Valuation at end of year		 2021
Total
£'000s
37,605
(801)
(4,702)
205
(63)		 2020
Total
£'000s
38,836
(801)
(1,155)
793
(69)
32,244 37,605

Investments all held in fixed term deposits, bonds and cash. These funds are ring-fenced and invested pending expenditure on the development of Rhodes House.

Page 36

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

15 GAINS ON INVESTMENTS

14 ATLANTIC SHORT TERM INVESTMENTS

Group and Charity
Valuation at start of year
New money invested
Amounts withdrawn
Investment management fees
Increase in value of investments
Valuation at end of year
Investments comprise:
Listed investments
Property, alternative and other investments
Fixed term deposits, bonds and cash
Total group investments		 2021
Total
£'000s
80,284
-
(2,997)
(311)
12,709		 2020
Total
£'000s
7,033
69,706
(2,616)
(97)
6,259
89,685 80,284
2021
£'000s
57,705
4,193
27,787		 2020
£'000s
56,020
10,750
13,514
89,685 80,284

These funds are ring-fenced and finance the operational activities of the Atlantic Institute. These grant funds are expected to be spent down over a 12-15 year period and are thus described as short-term.

GAINS ON INVESTMENTS
Gain on pooled endowment investments (note 12)
Gain on Atlantic short term investments (note 14)		 2021
Total
£'000s
67,981
12,709		 2020 restated
Total
£'000s
17,567
6,259
80,690 23,825

The distribution of £19.6m (2020: £13.3m) from OUEM, a unitised fund, is treated as a realised gain within the Pooled Endowment Investment Portfolio. Instead of the standard distribution, the Trust elected to receive the enhanced distribution of 7% in the year.

The distribution was reported as dividend income in the financial statements for the year ended 30 June 2020. The 2020 figures have been restated in these financial statements so as to be comparable.

The results and the assets and liabilities of the parent and subsidiaries at the year end were as follows.

2021
Income
Expenditure
Donation to Trust under gift aid
Transfers
Net gains on investments
Result for the year
Total assets
Total liabilities
Net funds at the end of year
Income
Expenditure
Net gains on investments
Result for the year
Total assets
Net funds at the end of year		 £'000s
-
(2,403)
-
-
9,121
Cecil Rhodes
Scholarship
Fund		 £'000s
4,278
(13,920)
8
(327)
44,325
Rhodes Trust
Public
Purposes
Fund		 £'000s
41
(33)
(8)
-
-
Rhodes House
Ltd		 £'000s
14,271
(11,435)
-
327
24,140
27,302
169,498
(1,175)
168,323
0
-
£'000s
0
(88)
-
-
(88)
31
31
Rhodes
Scholarships for
Southern Africa
Secretariat NPC
Rhodes Trust
Horizon Fund
6,717 34,364 -
54,379
-		 355,880
(51,074)		 28
(28)
54,379 304,806 0
£'000s
46
(719)
2,529
Rhodes
Scholarships
in Australia
PTY Ltd		 (0)
£'000s
6
(2)
-
Rhodes
Scholarships
in New
Zealand Ltd		 £'000s
397
(255)
576
Rhodes
Scholarships
in Canada
1,856 3 718
15,284 62 3,632
15,284 62 3,632

Page 37

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

2020 restated
Income
Expenditure
Donation to Trust under gift aid
Transfers
Net gains on investments
Result for the year
Total assets
Total liabilities
Net funds at the end of year
Income
Expenditure
Transfers
Net gains on investments
Result for the year
Total assets
Net funds at the end of year		 £'000s
-
(2,253)
-
-
2,414
Cecil Rhodes
Scholarship
Fund		 £'000s
22,255
(14,078)
66
(12)
11,375
Rhodes Trust
Public
Purposes Fund		 £'000s
342
(276)
(66)
-
-
Rhodes House
Ltd		 £'000s
80,475
(10,686)
-
-
9,226
Rhodes Trust
Horizon Fund
161 19,605 - 79,016
47,661
-		 317,542
(47,188)		 30
(30)		 142,827
(1,806)
47,661 270,354 0 141,021
£'000s
85
(421)
-
663
Rhodes
Scholarships in
Australia PTY
Ltd		 -
£'000s
3
(1)
-
-
Rhodes
Scholarships in
New Zealand
Ltd		 £'000s
413
(332)
12
147
Rhodes
Scholarships in
Canada		 -
£'000s
-
-
-
-
-
Rhodes
Scholarships for
Southern Africa
Secretariat NPC
327 2 241 -
13,429 59 2,914 119
13,429 59 2,914 119

Rhodes House Ltd

The Rhodes Trust Public Purposes Fund holds the whole of the issued share capital of Rhodes House Ltd, a company incorporated in the UK. The company hires out Rhodes House for functions. Included in the above costs are £5k (2020: £20k) of rental charges and £17k (2020: £36k) of management fees charged from the Rhodes Trust which are eliminated upon consolidation. A new operating agreement was signed in the year between the Rhodes Trust and the subsidiary. In light of the building work being undertaken in Rhodes House, access to the building was severly curtailed in the year, and the Trustees agreed a rent reduction for the year. Included in the above income is £41k of venue hire to the Atlantic Institute which is eliminated upon consolidation. The profits of the subsidiary are distributed to the parent charity under gift aid.

Rhodes Trust Horizon Fund

The incorporated board of trustees, The Rhodes Trust, is the sole trustee of The Rhodes Trust Horizon Fund. The funds of the Horizon Fund are invested in the main Rhodes Trust investment portfolio, and income and returns are paid out to the Horizon Fund accordingly. Costs in relation to the Scholars funded from Horizon funds are incurred in the PPF in the first instance and re-charged to Horizon. This charity is linked for reporting purposes with both the Scholarship and Public Purposes Funds. The three funds are thus combined as the 'Charity' in the balance sheet and notes of these financial statements.

Rhodes Scholarships in Australia PTY Ltd

The Rhodes Trust is the sole shareholder of an Australian charitable company, which promotes and provides Rhodes Scholarships to Australian scholars and donors. The Australian funds are invested in the main Rhodes Trust investment portfolio and income and returns are credited to the Australian funds intercompany account at the end of the year.

Rhodes Scholarships in New Zealand Ltd

The Rhodes Trust is the sole shareholder of a New Zealand charitable company that promotes and provides Rhodes Scholarships to New Zealand scholars and donors.

Rhodes Scholarships in Canada

The Rhodes Trust is the sole shareholder of a Canadian charitable company, which promotes and provides Rhodes Scholarships to Canadian scholars and donors. The Canadian funds are invested in the main Rhodes Trust investment portfolio and income and returns are credited to the Canadian funds intercompany account at the end of the year.

Rhodes Scholarships for Southern Africa Secretariat NPC

The Rhodes Trust controls the appointments to the Board of this South African Not for Profit Company. The company supports the operations of the South African National Secretary and fundraising function. The Rhodes Trust for South Africa, however, is not consolidated into the group accounts, as it is not directly controlled by The Rhodes Trust.

The transactions between The Rhodes Trust Public Purposes Fund, The Rhodes Trust Horizon Fund and the Trust's subsidiaries in Australia, New Zealand, Canada and South Africa are many and varied, given the interconnected operations. Staff are employed by the Rhodes Trust, and recharges are made to the subsidiaries as appropriate. Direct and indirect Scholars costs are incurred within the Trust, and re-charged to the subsidiaries, depending on the geographic constitutency of origin, and the allocation of a particular student to a fund. Overheads are re-charged as appropriate.

Page 38

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

17 STATEMENT OF INVESTMENT TOTAL RETURN

With approval from the Charity Commission, the Trustees adopted a policy of total return accounting for the investment return on the Scholarship Fund, with effect from 30th June 2007. The investment return to be applied as income was originally set by the Trustees at 4% of the brought forward fund value. During the year ended 30th June 2018, the Trustee Board approved a change to the rate to be applied, to bring the Scholarship Fund in line with the policy being applied to all other endowment funds of the Trust, which is currently 4.5%. The amount applied as income for spending is included within the income section of the SOFA on the basis that this gives a clearer understanding of the financial position of the group. The preserved (frozen) value of the invested endowment capital represents its open market value at 1 July 1989 together with all subsequent endowments valued at the date of the gift.

Trust for Investment
Scholarship Fund
2021
£'000s
At the beginning of the year:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Movements in the reporting period:
Gift of endowment funds
-
Investment return: realised and unrealised gains and losses
-
Less: Investment management costs
-
Total
-
Unapplied total return allocated to income in the reporting period
-
Expendable total return income transferred
-
-
Transfers from expendable endowments
-
-
Net movements in reporting period
-
At end of the reporting period:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Trust for Investment
Scholarship Fund
2020 restated
£'000s
At the beginning of the year:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Movements in the reporting period:
Gift of endowment funds
-
Investment return: realised and unrealised gains and losses
-
Less: Investment management costs
-
Total
-
Unapplied total return allocated to income in the reporting period
-
Expendable total return income transferred
-
-
Transfers to expendable endowments
-
-
Net movements in reporting period
-
At end of the reporting period:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Pe
Gift component of the permanent endowment
Gift component of the permanent endowment
Pe
Gift component of the permanent endowment
Gift component of the permanent endowment		 Trust for Investment
Scholarship Fund
2021
£'000s
At the beginning of the year:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Movements in the reporting period:
Gift of endowment funds
-
Investment return: realised and unrealised gains and losses
-
Less: Investment management costs
-
Total
-
Unapplied total return allocated to income in the reporting period
-
Expendable total return income transferred
-
-
Transfers from expendable endowments
-
-
Net movements in reporting period
-
At end of the reporting period:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Trust for Investment
Scholarship Fund
2020 restated
£'000s
At the beginning of the year:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Movements in the reporting period:
Gift of endowment funds
-
Investment return: realised and unrealised gains and losses
-
Less: Investment management costs
-
Total
-
Unapplied total return allocated to income in the reporting period
-
Expendable total return income transferred
-
-
Transfers to expendable endowments
-
-
Net movements in reporting period
-
At end of the reporting period:
30,428
Unapplied total return
-
Expendable endowment
-
Total Endowments
30,428
Pe
Gift component of the permanent endowment
Gift component of the permanent endowment
Pe
Gift component of the permanent endowment
Gift component of the permanent endowment		 Unapplied
Total
Return
£'000s
-
17,233
-
rmanent Endowme		 Total
£'000s
30,428
17,233
-
nt		 Expendable
Endowment
£'000s
-
-
296,469		 Total
Endowments
£'000s
30,428
17,233
296,469
30,428
-
-
-		 17,233
-
9,121
(184)		 47,661
-
9,121
(184)		 296,469
11,261
52,521
(1,066)		 344,130
11,261
61,642
(1,250)
-
-
-		 8,936
(2,219)
-		 8,936
(2,219)
-		 62,717
-
(12,814)		 71,653
(2,219)
(12,814)
-
-		 (2,219)
-		 (2,219)
-		 (12,814)
24,701		 (15,033)
24,701
- (2,219) (2,219) 11,887 9,668
-
30,428
-
-		 6,717
-
23,950
-		 6,717
30,428
23,950
-		 74,604
-
-
371,073		 81,321
30,428
23,950
371,073
30,428 23,950 54,379 371,073 425,452
Unapplied
Total
Return
£'000s
-
17,071
-
rmanent Endowme		 Total
£'000s
30,428
17,071
-
nt		 Expendable
Endowment
£'000s
-
-
270,346		 Total
Endowments
£'000s
30,428
17,071
270,346
30,428
-
-
-		 17,071
-
2,414
(158)		 47,500
-
2,414
(158)		 270,346
25,222
13,457
(886)		 317,846
25,222
15,871
(1,043)
-
-
-		 2,257
(2,095)
-		 2,257
(2,095)
-		 37,793
-
(11,099)		 40,050
(2,095)
(11,099)
-
-		 (2,095)
-		 (2,095)
-		 (11,099)
(571)		 (13,194)
(571)
- (2,095) (2,095) (11,670) (13,765)
-
30,428
-
-		 161
-
17,233
-		 161
30,428
17,233
-		 26,123
-
-
296,469		 26,285
30,428
17,233
296,469
30,428 17,233 47,661 296,469 344,130

With effect from year ended 30th June 2017, the Trust has adopted a policy of allocation from expendable endowment to income in order to protect the capital value of those endowments and ensure inter-generational equity, in a similar way to the application of total return to income for the Scholarship Fund.

£12,814k was transferred to income under this policy in year ended 30th June 2021 (2020: £11,099k). This equates to 4.5% of brought forward fund value, but is calculated on a quarterly basis.

DEBTORS

Amounts falling due within one year:
Trade debtors
Prepaid fees, stipends and amounts owed by Scholars
Amounts held by National Secretaries
Amounts owing by group undertakings: UK
Amounts owing by group undertakings: Overseas
Accrued Income
Prepayments
Other debtors
Amounts falling due in more than one year:
Accrued income		 2021
Group
£'000s
791
400
343
-
-
10,040
221
516
5,080		 2020
Group
£'000s
533
288
228
-
-
7,170
219
122
2,517		 2021
Charity
£'000s
791
396
367
471
45
10,040
219
123
5,080		 2020
Charity
£'000s
512
288
351
111
-
7,170
219
119
2,517
17,391 11,078 17,533 11,287

Accrued income for the group falling due in more than year represents pledged donations, at present value, of which £421k falls due in more than five years (2020: £675k).

18

Page 39

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

19
CREDITORS: falling due within one year
Trade creditors
Amounts owed to group undertakings: UK
Amounts held on behalf of group undertakings
Taxation and social security
Accruals and deferred income
Other creditors
20
CREDITORS: falling due after more than one year
Loan Notes		 2021
Group
£'000s
3,250
-
-
171
1,945
24		 2020
Group
£'000s
1,197
-
-
112
1,113
713		 2021
Charity
£'000s
3,247
61
72
171
1,923
5		 2020
Charity
£'000s
1,184
12
309
142
1,097
709
5,390 3,136 5,479 3,453
2021
Group
£'000s
30,000		 2020
Group
£'000s
30,000		 2021
Charity
£'000s
30,000		 2020
Charity
£'000s
30,000
30,000 30,000 30,000 30,000

In October 2018, the Rhodes Trust Public Purposes Fund issued £30m of unsecured loan notes in order to fund the building of a conference and convening centre, administration and accommodation facilities within the Rhodes House site. Fixed interest payments are payable at 2.67% p.a. twice yearly, and the capital is due for repayment in October 2048. Interest of £800k (2020: £800k) was payable on the loan notes in the year, £596k (2020: £8k) has been capitalised and is included within fixed asset additions, net of income earned on invested cash funds (see Note 11). The balance, £205k (2020: £793k), has been expensed and is included within expenditure on raising funds.

21
PROVISIONS FOR LIABILITIES AND CHARGES
Provision for future Scholar costs
At start of year
Charged in the Statement of Financial Activities
Settled in the year
At end of year
Provision for pension deficit liability
At start of year
Charged in the Statement of Financial Activities
Settled in the year
At end of year
Total provisions		 2021
Group
£'000s
14,330
845
(239)		 2020
Group
£'000s
11,848
2,482
-		 2021
Charity
£'000s
14,330
845
(239)		 2020
Charity
£'000s
11,848
2,482
-
14,936 14,330 14,936 14,330
£'000s
1,558
480
(86)		 £'000s
1,665
(60)
(47)		 £'000s
1,558
480
(86)		 £'000s
1,665
(60)
(47)
1,951 1,558 1,951 1,558
16,887 15,887 16,887 15,887

A provision is carried for the commitment made to Scholars elected in the year, but not taking up their scholarship until the following Autumn. An estimate of two years' of average fees and stipends is provided for, and for the remaining tenure of Scholars currently on course.

The provision for future Scholar costs includes a sum of £255k (2020: £494k) which has been committed to the additional costs to be incurred in the support of Scholars whose academic studies have been adversely affected by COVID 19, for stipend extensions and additional expenses. £238,646 (2020: £nil) has been used to cover expenses incurred in the year.

A provision is carried, at present value, for the estimated future deficit funding element of the contributions payable under the agreements for additional contributions to fund past service deficits for both USS and OSPS. See Note 26.

22 ANALYSIS OF MOVEMENTS ON FUNDS

Endowment Funds - Permanent
3101 Scholarship Endowment Fund
Total Permanent Endowment
Endowment Funds - Expendable
Public Purposes Fund
3302 Public Purposes Capital Fund
3303 Second Century Founder Capital Fund (MMF)
3304 New Zealand Partnership Capital Fund
3332 Oppenheimer South Africa Capital Fund
3323 Atlantic (Rhodes Schol Prog) Fund
3346 RSA Second Century Founder MMF Capital Fund
3312 Banks Partnership Capital Fund
3350 2nd Century Founder Compound Fund
Various Partnership Funds
Subtotal
Horizon Fund
3322 Rhodes Scholarships for UAE
3321 Malaysia Capital Fund
3324 Said SJLP Capital Fund
3319 China Capital Fund
3333 West Africa Capital Fund
3348 Alagil Saudi Arabia Capital Fund
Various Partnership Funds
Subtotal
Total Endowment Funds - Charity		 At 1 July
2020
£'000s
47,661		 New Money
£'000s
-		 Investment &
Operating
Income
£'000s
-		 Resources
expended
£'000s
(184)		 Transfers
£'000s
(2,219)		 Gains/
(losses)
£'000s
9,121		 At 30 June
2021
£'000s
54,379
47,661 - - (184) (2,219) 9,121 54,379
133,397
34,382
9,794
7,975
-
13,863
5,873
-
25,444		 26
-
-
(173)
-
-
5
2,000
98		 -
-
-
-
-
-
-
-
-		 (468)
(133)
(38)
(25)
-
(55)
(20)
-
(74)		 (5,643)
(1,601)
(456)
(296)
25,371
(1,333)
(239)
-
(887)		 23,192
6,579
1,874
1,217
-
2,728
982
205
3,249		 150,505
39,227
11,175
8,697
25,371
15,203
6,601
2,205
27,829
230,727
11,560
5,361
5,798
12,536
3,586
4,096
6,649		 1,956
-
-
-
968
3,755
4,395
(118)		 -
-
-
-
-
-
-
-		 (812)
(45)
(21)
(22)
(49)
(14)
(16)
(23)		 14,916
(538)
(250)
(258)
(589)
(170)
(191)
(278)		 40,026
2,212
1,026
1,090
2,429
704
784
1,145		 286,813
13,189
6,117
6,607
15,295
7,861
9,068
7,375
49,588 9,000 - (190) (2,275) 9,390 65,512
327,976 10,955 - (1,187) 10,421 58,537 406,703

Page 40

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

Rhodes Scholarships in Australia PTY Ltd
3317 Australia Capital Fund
3338 Queensland Capital Fund
Rhodes Scholarships in Canada
3341 Canadian Endowment Capital Fund
3344 Canadian Israel Fund
3343 Canadian Second Century Founder Fund
3345 Genereux CSLP Capital Fund
Total Expendable Endowment
Total Endowment Funds - Group
Restricted Funds
Scholarship Fund
3601 Scholarship Endowment Income Fund
Public Purposes Fund
3623 Atlantic (Rhodes Schol Prog) Fund
3651 Atlantic Building Fund
Various Partnership Income Funds
Subtotal
Horizon Fund
3626 Atlantic Horizon (Institute) Fund
Various Partnership Income Funds
Subtotal
Total Restricted Funds - Charity
Rhodes Scholarships in Australia PTY Ltd
3617 Australia Income Fund
3638 Queensland Income Fund
Rhodes Scholarships in New Zealand Ltd
3694 New Zealand Funds
Rhodes Scholarships in Canada
3641 Canadian Income Fund (Annual Fund)
3644 Canadian Israel Fund
3643 Canadian Second Century Founder Fund
3645 Genereux CSLP Income Fund
Total Restricted Funds - Group
Unrestricted Funds
Public Purposes Fund
3802 PPF Income Fund
3840 Horizon Fund Unrestricted Funds
Total Unrestricted Funds - Charity and Group
Total Funds - Group		 At 1 July
2020
£'000s
10,360
2,967		 New Money
£'000s
-
(10)		 Investment &
Operating
Income
£'000s
-
-		 Resources
expended
£'000s
(40)
(11)		 Transfers
£'000s
(482)
(133)		 Gains/
(losses)
£'000s
1,982
547		 At 30 June
2021
£'000s
11,820
3,359
13,326
458
1,837
385
147		 (10)
17
299
-
-		 -
-
-
-
-		 (51)
(2)
(8)
(1)
(1)		 (615)
(22)
(92)
(18)
(7)		 2,529
90
384
74
28		 15,179
542
2,420
440
168
2,828 316 - (12) (138) 576 3,570
296,469 11,261 - (1,066) 11,887 52,521 371,073
344,130 11,261 - (1,250) 9,668 61,642 425,452
-
22,704
10,600
878		 -
-
-
158		 -
-
-
459		 (2,219)
(1,632)
-
(9,020)		 2,219
(25,371)
-
7,909		 -
4,299
-
-		 -
-
10,600
384
34,182
90,443
2,575		 158
-
485		 459
68
4,302		 (10,652)
(3,338)
(6,860)		 (17,462)
-
2,230		 4,299
14,749
-		 10,984
101,922
2,731
93,018 485 4,370 (10,199) 2,230 14,749 104,653
127,200 642 4,830 (23,070) (13,013) 19,048 115,637
102
-		 56
-		 0
-		 (535)
(133)		 482
133		 -
-		 106
(0)
102
59
42
44
-
-		 56
5
81
-
-
-		 0
1
0
-
-
-		 (668)
(2)
(82)
(136)
(18)
(7)		 615
-
22
92
18
7		 -
-
-
-
-
-		 106
62
63
0
-
-
86 81 0 (243) 138 - 63
127,447 784 4,831 (23,983) (12,260) 19,048 115,867
At 1 July
2020
£'000s
5,564
(1,584)		 New Money
£'000s
686
-		 Investment &
Operating
Income
£'000s
1,060
416		 Resources
expended
£'000s
(2,488)
(1,046)		 Transfers
£'000s
2,219
372		 -
Gains/
(losses)
£'000s
-
-		 -
At 30 June
2021
£'000s
7,041
(1,842)
3,980 686 1,476 (3,534) 2,592 - 5,199
475,557 12,731 6,307 (28,767) - 80,690 546,518
- - - (0) - 545,971,446

New money includes gains/(losses) arising from the revaluation of accrued, pledged donation income.

Significant transfers between funds include the allocation of income from endowment to the corresponding income fund, as per accounting policy 13 on Total Return Accounting. Of the transfers from endowment funds in the year, £15,033k (2020: £13,194k) relates to this allocation to income.

Scholarship costs are charged to the relevant restricted fund in the first instance, with any deficit in the year funded by transfers from unrestricted funds, amounting to £3,159k (2020: £196k) in the year. This treatment is now consistently applied, which represents a change in presentation from the prior year.

The Atlantic Scholarship Fund was re-classified by the Trustees as an endowment fund in the year, to better reflect the substance and intent of the original gift. The value transferred was £25,371k.

A comparative note for the prior year can be found in note 31.

Page 41

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

23 FUNDS DETAILS

The following is a summary of the purposes of specific material funds

Endowment Funds - Permanent: This fund has a corresponding income fund, which is accounted for within Restricted Funds. Scholarship Endowment Fund This fund was established in the Will of Cecil Rhodes to provide a scholarship programme at the University of Oxford, for the constituencies of the Commonwealth, Germany, Hong Kong, and the United States. Endowment Funds - Expendable Each of these funds has a capital and a corresponding income fund, which is accounted for within Restricted Funds. Public Purposes Fund Public Purposes Fund This fund has broader educational objectives than the Scholarship Fund, but with the same geographic restriction. In addition to supporting any scholarship costs not met by other funds, it bears the costs of Rhodes House, which it owns, and holds shares in the trading subsidiary, Rhodes House Ltd. Second Century Founder Fund This major endowment supports a large proportion of the Canadian, and other scholarships. New Zealand Partnership Fund This fund supports the costs of three New Zealand Rhodes Scholars per annum. Oppenheimer South Africa Fund This fund supports the costs of scholarships in South and Southern Africa. RSA Second Century Founder MMF Fund Funds that form part of the Second Century Founder Fund that are received via Australia are held in a separate fund in the Public Purposes Fund. Banks Partnership Fund This fund currently supports the costs of Rhodes Scholars from Bermuda or Florida, USA. Atlantic (Rhodes Schol Prog) Fund Grant funding by Atlantic Philanthropies in support of the general scholarship programme. 2nd Century Founder Compound Fund This fund is invested in a ring-fenced portfolio designed to settle the bond liability that matures in 2048 (see note 12). Various Partnership Funds Various partnership agreements establish funds to support scholarships at specific colleges or geographic constituencies or grant funding for leadership programmes.

Horizon Fund Rhodes Scholarships for the UAE A major endowment supporting scholarships for scholars from the United Arab Emirates. Malaysia Capital Fund This fund supports the Malaysian scholarship. Said SJLP Capital Fund This fund supports the Syria, Jordan, Lebanon and Palestine scholarships. China Capital Fund This fund supports the China scholarships. West Africa Capital Fund This fund supports the West African scholarships. Alagil Saudi Arabia Capital Fund This fund supports the Saudi Arabian scholarships. Various Partnership Funds Various partnership agreements establish funds to support scholarships at specific colleges or geographic constituencies.

Restricted Funds Atlantic Horizon (Institute) Fund Grant funding received by Atlantic Philanthropies of the Atlantic Institute, included in the Horizon Fund. Atlantic Building Fund Funds received from Atlantic Philanthropies towards the funding of the Rhodes House development project.

24 ANALYSIS OF NET ASSETS BETWEEN FUNDS

2021
Intangible fixed assets
Tangible fixed assets
Pooled endowment investments
Capital project investments
Atlantic short term investments
Net current assets
Long term liabilities and provisions
2020
Intangible fixed assets
Tangible fixed assets
Pooled endowment investments
Capital project investments
Atlantic short term investments
Net current assets
Long term liabilities and provisions		 Unrestricted
Funds
£'000s
165
-
-
32,244
-
19,677
(46,887)		 Restricted
Funds
£'000s
-
-
12,165
-
89,685
14,016
-		 Endowment
Funds
£'000s
-
31,371
402,476
-
-
(8,394)
-		 2021
Total
£'000s
165
31,371
414,641
32,244
89,685
25,299
(46,887)
5,199 115,867 425,452 546,518
Unrestricted
Funds
£'000s
80
-
-
37,605
-
12,182
(45,887)		 Restricted
Funds
£'000s
-
-
33,367
-
80,284
13,796
-		 Endowment
Funds
£'000s
-
19,856
325,548
-
-
(1,273)
-		 2020
Total
£'000s
80
19,856
358,915
37,605
80,284
24,705
(45,887)
3,980 127,447 344,130 475,557

25 RELATED PARTY TRANSACTIONS

Including pledges accrued in the year, donations totalling £2,739k from trustees were recognised in income during the year ended 30 June 2021 (2020: £428k). Of these donations £113k were unrestricted and £2,626k were restricted as follows:

There are no other related party transactions requiring disclosure. See Note 16 for the results of subsidiaries.

26 PENSION SCHEMES

The Trust participates in two principal pension schemes for its staff – the Universities Superannuation Scheme (USS) and the University of Oxford Staff Pension Scheme (OSPS). The assets of each scheme are held in separate trustee-administered funds. USS and OSPS are contributory mixed benefit schemes (i.e. they provide benefits on a defined benefit basis – based on length of service and pensionable salary – and on a defined contribution basis – based on contributions into the scheme). Both are multi-employer schemes and the Trust is unable to identify its share of the underlying assets and liabilities relating to defined benefits of each scheme on a consistent and reasonable basis.

Therefore, in accordance with the accounting standard FRS 102 paragraph 28.11, the Trust accounts for the schemes as if they were defined contribution schemes. As a result, the amount charged to the Income and Expenditure Account represents the contributions payable to the schemes in respect of the accounting period. In the event of the withdrawal of any of the participating employers in USS or OSPS, the amount of any pension funding shortfall (which cannot be otherwise recovered) in respect of that employer will be spread across the remaining participating employers and reflected in the next actuarial valuation of the scheme.

The Trust has also made available the National Employment Savings Trust for employees who are eligible under automatic enrolment regulations to pension benefits but not eligible for either USS or OSPS.

Page 42

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

Actuarial valuations

Qualified actuaries periodically value USS and OSPS defined benefits using the ‘projected unit method’, embracing a market value approach. The resulting levels of contribution take account of actuarial surpluses or deficits in each scheme. The financial assumptions were derived from market conditions prevailing at the valuation date. The results of the latest actuarial valuations, published prior to the balance sheet date, and the assumptions which have the most significant effect on the results were:

USS OSPS
Date of valuation: 31/03/2018 31/03/2019
Date valuation results published: 16/09/2019 19/06/2020
Value of liabilities: £67.3bn £848m
Value of assets: £63.7bn £735m
Funding surplus / (deficit): (£3.6bn) (£113m)
Principal assumptions:
ꞏ Discount rate CPI - 0.73% to CPI +2.52%a Gilts +0.5%- 2.25%b
ꞏ Rate of increase in salaries n/a RPI
ꞏ Rate of increase in pensions CPIc Average RPI/CPId
Assumed life expectancies on retirement at age 65:
ꞏ Males currently aged 65 24.6 yrs 21.7 yrs
ꞏ Females currently aged 65 26.1 yrs 24.4 yrs
ꞏ Males currently aged 45 26.6 yrs 23.0 yrs
ꞏ Females currently aged 45 27.9 yrs 25.8 yrs
Funding Ratios:
ꞏ Technical provisions basis 95% 87%
ꞏ Statutory Pension Protection Fund basis 76% 74%
ꞏ ‘Buy-out’ basis 56% 60%
Employer contribution rate (as % of pensionable salaries): 21.1% increasing to 23.7% on 01/10/21 19%
Effective date of next valuation: 31/03/2020 31/03/2022

a. The discount rate (forward rates) for the USS valuation was:

Years 1-10: CPI + 0.14% reducing linearly to CPI – 0.73% Years 11-20: CPI + 2.52% reducing linearly to CPI + 1.55% by year 21 Years 21 +: CPI + 1.55%

b. The discount rate for the OSPS valuation was:

Pre-retirement: Equal to the UK nominal gilt curve at the valuation date plus 2.25% p.a. at each term. Post-retirement: Equal to the UK nominal gilt curve at the valuation date plus 0.5% p.a. at each term.

c. Pensions increases (CPI) for the USS valuation were:

Term dependent rates in line with the difference between the Fixed Interest and Index Linked yield curves, less 1.3% p.a.

d. Increases to pensions in payment for the OSPS valuation were:

RPI inflation is derived from the geometric difference between the UK nominal gilt curve and the UK index-linked curve at the valuation date, less 0.3% p.a. at each term. CPI inflation is derived from the RPI inflation assumption, less the Scheme Actuary’s best estimate of the long-term difference between RPI and CPI inflation as applies from time to time (1.0% p.a. as at 31 March 2019).

For pension increases linked to inflation, a pension increase curve is constructed based on either the RPI, CPI or the average of the RPI and CPI inflation curves described above, adjusted to allow for the different maximum and minimum annual increases that apply, and the Scheme Actuary’s best estimate of inflation volatility as applies from time to time.

e. The USS and OSPS employer contribution rates include provisions for the cost of future accrual of defined benefits, deficit contributions, administrative expenses and defined contributions.

Of the employer contributions to USS, 2% are deemed to be deficit contributions from 1 October 2019 to 30 September 2021, and 6% from 1 October 2021 to 31 March 2028.

Sensitivity of actuarial valuation assumptions

Surpluses or deficits which arise at future valuations may impact on the Trust’s future contribution commitment. The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:

USS
Assumption Change in assumption Impact on USS liabilities
Initial discount rate increase by 0.1% decrease by £1.2bn
Asset values reduce by 10% increase by £6.4bn
RPI – CPI spread increase by 0.1% decrease by £0.7bn
Rate of mortality moreprudent assumption(mortalityrated down bya furtheryear) increase by£1.6bn
OSPS
Assumption Change in assumption Impact on OSPS technicalprovisions
Valuation rate of interest decrease by 0.25% increase by £45m
RPI increase by0.25% Increase by£40m

Deficit Recovery Plans

In line with FRS 102 paragraph 28.11A, the Trust has recognised a liability for the contributions payable for the agreed deficit funding plan. The principle assumptions used in these calculations are tabled below:

2021 2021 2020 2020
USS OSPS USS OSPS
Finish Date for Deficit Recovery Plan 31/03/2028 30/01/2028 31/03/2028 30/01/2028
Average staff number increase/(decrease) 0% (20%) in year 1 18% in year 1 (20%) in year 1
(50%) in years 2&3 no change thereafter
Average staff salary increase 2% per annum 2% per annum 2% per annum 2% per annum
Average discount rate over period 2.80% 2.80% 2.80% 2.80%
Effect of 0.5% change in discount rate £35.9k £0.8k £35.3k -
Effect of 1%change in staffgrowth £19.0k £0.1k £15.1k -

As shown in note 21, a provision of £2.0m has been made at 30 June 2021 (2020: £1.6m) for the present value of the estimated future deficit funding element of the contributions payable under these agreements, using the assumptions shown. The provision is expected to reduce as the deficit is paid off according to the pension recovery scheme. The USS provision is based on the deficit recovery plan agreed for the March 2018 valuation, as the March 2020 valuation recovery plan had not been agreed at the balance sheet date. The March 2020 USS valuation and associated deficit recovery plan was announced in September 2021, and is subject to consultation. The plan involves a reduction in the contributions from those previously agreed in the March 2018 recovery plan.

A copy of the full actuarial valuation report and other further details on the USS scheme are available on the USS website www.uss.co.uk. Similar reports and details on the OSPS scheme are available on the University of Oxford website http://www.admin.ox.ac.uk/finance/epp/pensions/schemes/osps/.

Defined Contribution Pension Scheme

The group also operates a defined contribution staff pension scheme for its US employees. The assets of the scheme are held separately in independently administered funds. The pension costs charge represents contributions payable by the group to the funds and amounted to £22k (2020: £18k).

Page 43

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

Pension charge for the year

The pension charge recorded by the Trust during the accounting period (excluding pension finance costs) was equal to the contributions payable after allowance for the deficit recovery plan as follows:

Scheme 2021 2020
£'000s £'000s
Universities Superannuation Scheme 800 586
University of Oxford Staff Pension Scheme 24 24
US Staff 401k Safe Harbour Plan 22 18
National Employment Savings Trust 12 4
Movement on the Pension scheme deficit contribution liabilities 350 (154)
Total 1,208 478

No pension contributions were payable at the balance sheet date (2020: NIL).

27 TAXATION

The Rhodes Trust is able to take advantage of the tax exemptions available to charities from taxation in respect of income and capital gains received to the extent that such income and gains are applied to exclusively charitable purposes. No liability to corporation tax arises in the Trust's subsidiary company because the directors of this company have committed to make donations each year to the Trust equal to the taxable profits of the company under the Gift Aid scheme. The Trust is however subject to withholding tax by foreign authorities on income from certain of its foreign investments, which are received net of withholding tax. No provision for taxation has been included in the financial statements.

28 FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS
2021 2020
Group £'000s £'000s
Financial assets measured at fair value 536,570 477,506
2021 2020
Charity £'000s £'000s
Financial assets measured at fair value 517,894 461,510

Financial assets measured at fair value comprise investment securities.

29 CAPITAL COMMITMENTS Planning permission was obtained for the capital building project on the 11th August 2020. The Trustees have entered into a contract with building contractors giving rise to a capital commitment of £17.3m as at 30th June 2021 (2020: £nil).

30
COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES (RESTATED)
Consolidated
INCOME AND ENDOWMENTS FROM:
Donations and legacies
Charitable activities
Other trading activities
Investments
Investment income
Total return allocated to income
Other (foreign exchange gain)
Total income
EXPENDITURE ON:
Charitable activities:
Promotion and advancement of education
Raising funds:
Fundraising
Trading expenditure
Finance costs
Investment management costs
Total Expenditure
Net Income/(Expenditure) before gains
Net gains/(losses) on investments
Net Income/(Expenditure)
Transfers between funds
Net movement in funds for the year
Fund balances brought forward as previously stated
Funds carried forward at 30 June 2020		 Unrestricted
Funds
£'000s
640
1,239
281
879
4,893
184		 Restricted
Funds
£'000s
70,799
5,107
11
4
8,301
-		 Endowed
Funds
£'000s
25,222
-
-
-
(13,194)
-		 2020 restated
Total
£'000s
96,661
6,347
292
883
-
184
8,116
6,499
1,002
197
793
-		 84,223
18,643
431
23
-
208		 12,028
-
-
-
-
1,043		 104,367
25,142
1,433
220
793
1,252
8,491 19,305 1,043 28,840
(375) 64,917 10,984 75,527
- 7,954 15,871 23,825
(375) 72,872 26,856 99,353
(16) 587 (571) -
(391)
4,370		 73,458
53,989		 26,285
317,846		 99,353
376,205
3,980 127,447 344,130 475,557

Page 44

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

31 COMPARATIVE ANALYSIS OF MOVEMENTS ON FUNDS (RESTATED)

Endowment Funds - Permanent
Scholarship Endowment Fund
Total Permanent Endowment
Endowment Funds - Expendable
Public Purposes Fund
Public Purposes Capital Fund
Second Century Founder Capital Fund (MMF)
New Zealand Partnership Capital Fund
Oppenheimer South Africa Capital Fund
RSA Second Century Founder MMF Capital Fund
Banks Partnership Capital Fund
Various Partnership Funds
Subtotal
Horizon Fund
Rhodes Scholarships for UAE
Malaysia Capital Fund
Said SJLP Capital Fund
China Capital Fund
Various Partnership Funds
Subtotal
Total Endowment Funds - Charity
Rhodes Scholarships in Australia PTY Ltd
Australia Capital Fund
Queensland Capital Fund
Rhodes Scholarships in Canada
Canadian Endowment Capital Fund
Canadian Israel Fund
Canadian Second Century Founder Fund
Genereux CSLP Capital Fund
Total Expendable Endowment
Reclassification (see note 4)
Total Endowment Funds - Group
Restricted Funds
Scholarship Fund
Scholarship Endowment Income Fund
Public Purposes Fund
Atlantic (Rhodes Schol Prog) Fund
Atlantic Building Fund
Various Partnership Income Funds
Subtotal
Horizon Fund
Atlantic Horizon (Institute) Fund
Various Partnership Income Funds
Subtotal
Total Restricted Funds - Charity
Rhodes Scholarships in Australia PTY Ltd
Australia Income Fund
Queensland Income Fund
Rhodes Scholarships in New Zealand Ltd
New Zealand Funds
Rhodes Scholarships in Canada
Canadian Income Fund (Annual Fund)
Canadian Israel Fund
Canadian Second Century Founder Fund
Genereux CSLP Income Fund
Reclassification (see note 4)
Total Restricted Funds - Group		 At 1 July
2019
£'000s
47,500		 New Money
£'000s
-		 Investment &
Operating
Income
£'000s
1,834		 Resources
expended
£'000s
(158)		 Transfers
£'000s
(2,095)		 Gains/
(losses)
£'000s
580		 At 30 June
2020 restated
£'000s
47,661
47,500 - 1,834 (158) (2,095) 580 47,661
113,910
34,265
9,761
7,830
14,233
5,830
24,967		 19,335
-
-
128
0
26
142		 4,661
1,323
377
184
549
197
718		 (400)
(114)
(32)
(16)
(47)
(17)
(62)		 (5,053)
(1,511)
(431)
(210)
(961)
(226)
(840)		 945
418
119
58
90
62
518		 133,397
34,382
9,794
7,975
13,863
5,873
25,444
210,796
11,521
5,352
5,782
7,653
13,499		 19,632
-
-
-
4,462
800		 8,009
445
168
185
330
444		 (688)
(38)
(14)
(16)
(39)
(38)		 (9,232)
(508)
(181)
(211)
(372)
(491)		 2,210
141
36
58
502
118		 230,727
11,560
5,361
5,798
12,536
14,332
43,806 5,262 1,572 (146) (1,763) 856 49,588
302,102 24,893 11,415 (991) (13,089) 3,646 327,976
At 1 July
2019
£'000s
10,325
2,945		 New Money
£'000s
-
13		 Investment &
Operating
Income
£'000s
399
105		 Resources
expended
£'000s
(34)
(9)		 Transfers
£'000s
(455)
(120)		 Gains/
(losses)
£'000s
126
33		 At 30 June
2020
£'000s
10,360
2,967
13,269
451
1,491
384
148		 13
6
311
-
(1)		 504
18
62
15
6		 (43)
(2)
(6)
(1)
(0)		 (575)
(20)
(58)
(17)
(6)		 159
5
36
5
1		 13,326
458
1,837
385
147
2,474 316 100 (9) (100) 47 2,828
270,346 25,222 10,185 (886) (11,670) 3,272 296,469
- - (12,019) - - 12,019 -
317,846 25,222 (0) (1,043) (13,765) 15,871 344,130
-
23,170
10,600
452		 -
-
-
500		 -
884
-
454		 (2,095)
(1,622)
-
(4,871)		 2,095
-
-
4,343		 -
272
-
-		 -
22,704
10,600
878
34,222
17,660
2,019		 500
69,706
436		 1,338
410
4,653		 (6,492)
(3,722)
(6,295)		 4,343
-
1,763		 272
6,388
-		 34,182
90,443
2,575
19,679 70,142 5,064 (10,017) 1,763 6,388 93,018
53,901 70,641 6,402 (18,604) 8,200 6,660 127,200
(168)
-		 71
-		 1
-		 (257)
(120)		 455
120		 -
-		 102
-
(168)
57
155
44
-
-		 71
1
86
-
-
-		 1
2
12
-
-
-		 (377)
(1)
(231)
(69)
(17)
(6)		 575
-
20
69
17
6		 -
-
-
-
-
-		 102
59
42
44
-
-
199
-		 86
-		 12
(1,294)		 (323)
-		 112
-		 -
1,294		 86
-
53,989 70,799 5,122 (19,305) 8,888 7,954 127,447
- 43,966

Page 45

The Rhodes Trust Notes to the financial statements For the year ended 30 June 2021

Unrestricted Funds
Public Purposes Fund
PPF Income Fund
Horizon Fund Unrestricted Funds
Total Unrestricted Funds - Charity and Group
Total Funds - Group		 At 1 July
2019
£'000s
5,850
(1,480)		 New Money
£'000s
640
-		 Investment &
Operating
Income
£'000s
1,371
419		 Resources
expended
£'000s
(7,174)
(523)		 Transfers
£'000s
4,877
-		 Gains/
(losses)
£'000s
-
-		 At 30 June
2020
£'000s
5,564
(1,584)
4,370 640 1,790 (7,698) 4,877 - 3,980
376,205 96,661 6,912 (28,047) - 23,825 475,557

A summary of the purposes of specific material funds is found in note 23.

32
ANALYSIS OF CHANGES IN NET DEBT
2021
Cash in hand
Short-term investments, readily convertible to cash
Loans falling due after more than one year
Total
2020
Cash in hand
Loans falling due after more than one year
Total		 At 1 July
2020
£'000s
16,060
-
(30,000)		 Cashflows
£'000s
(11,946)
9,184
-		 Other non-cash
changes
£'000s
-
-
-		 At 30 June
2021
£'000s
4,114
9,184
(30,000)
(13,940) (2,762) - (16,702)
At 1 July
2019
£'000s
14,551
(30,000)		 Cashflows
£'000s
1,509
-		 Other non-cash
changes
£'000s
-
-		 At 30 June
2020
£'000s
16,060
(30,000)
(15,449) 1,509 - (13,940)

Page 46