THE ERIC F. SPARKES CHARITABLE TRUST
(Registered Charity - Registration Number:- 233085)
TRUSTEES’ REPORT AND ACCOUNTS
FOR THE YEAR ENDED 31st DECEMBER 2022
Reference and Administrative Information
Trustees
Mr J.M. Davies Miss J.C. P. Davies
Charity Correspondent and Principal Address
Miss J.C.P.Davies 20 Essex Street LONDON WC2R 3AL
Investment Advisors
Charles Stanley & Co Ltd Broadwalk House Southernhay West EXETER EX1 1TS
Bankers
Barclays Bank plc
Independent Examiner
T. E. Reynolds FCA 23 Gillham Wood Road BEXHILL-ON-SEA East Sussex TN39 3BN
Index
Page
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2 Report of Trustees
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5 Independent Examiner’s Report 6 Statement of Financial Activities 7 Balance Sheet 8 Cash flow
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9 Notes to the accounts
1
THE ERIC F. SPARKES CHARITABLE TRUST
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31st DECEMBER 2022
The Trustees present their annual report along with the financial statements of the charity for the year ended 31st December 2022. The financial statements have been prepared in accordance with the accounting policies set out in Note 1 to the accounts and comply with the charity’s trust deed, the Charities Acts 2011 and 2022 and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland published January 2022.
Objectives and activities for the public benefit
The purposes of the Trust are to provide support to other charities to enable them to achieve their objectives by making donations to appropriate institutions. The trustees confirm that they have referred to the Charity Commission’s guidance on public benefit when reviewing the Trust’s aims and objectives, in planning future activities, and in setting the donation policy for the year.
The Trust furthers its charitable purposes for the public benefit through its donations to other charities.
Donation policy
The Trust has established its donation policy to achieve its objects for the public benefit. Donations are made primarily to charities that the Trust has supported annually for years and are focussed on the young favouring local rather than national charities. The Trustees consider national guidelines on equality and diversity when making donations
A review of our activities: How our donations have delivered public benefit
The charitable organisations to which donations were made are detailed in Note 4 to the accounts.
Financial review
The Trust’s work is entirely reliant on income and investment returns from its endowments. The permanent endowment (the E. F. Sparkes bequest) is invested on a total return basis.
The combination of high inflation, rising interest rates, the turmoil in the markets generated by the October “mini-budget” and the war in Ukraine has meant that 2022 has been a difficult year for investors generally. In spite of these factors, whilst the Fund has underperformed the FTSE 100 index, it has out performed the two investment trust indices used as performance comparators (COIF Charities Investment Fund and the relevant AIC sector averages). As was to be expected under the circumstances the Fund performance was not able to match the RPI increase in the year.
Grants made during the year totalled £32,960 (2022 - £29,350). The increase in the level of investment income available to the Trust has enabled the Trustees to increase the level of grants. This has resulted in a deficit of income compared to expenditure which has not, as in previous years, been offset by gains on the value of the investment portfolio. The Trustees are of the view that this deficit is acceptable in view of what is considered to be a temporary situation and the importance to the grant recipients in the grants made by the Trust.
At 5[th] October 2023 the value of the Trust’s investments totalled £1,166,772 compared to £1,113,836 at 31[st] December 2022
Investment policy and performance
The Trust operates a total return approach to the investment of the permanent endowment.
When determining the level of funds available for donations the trustees have considered the amount of income required to maintain the current level of charitable activity and the likely needs of future beneficiaries. Additionally, when reaching on the level of available funds the trustees have taken professional advice from their investment advisers regarding the market outlook, investment trends and yield and the prospect for future capital growth.
Our investment advisors (Charles Stanley) are instructed to invest to maximise the total
return on the investment portfolio.
2
THE ERIC F. SPARKES CHARITABLE TRUST
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31st DECEMBER 2022 (continued)
Investment policy and performance (continued)
The high levels of stock market volatility, the continuing uncertainty regarding world economic prospects and the stability of certain banks continues to make the management of investments difficult. The charity is a long-term investor and the trustees, on professional advice, continue to hold a mixed portfolio of equities, bonds, cash and other investments designed to provide a level of stable income and the possibility of investment gains.
Details of the investment performance of the fund compared to previous years and other indices is set out below and is rebased to 100 at 1[st] January in the relevant year and calculated on a total return basis:
| return basis: | |
|---|---|
| 2022 2021 | |
| E.F.Sparkes Trust (including cash) | 91.7 109.4 |
| COIF Charities Investment Fund | 89.5 117.2 |
| AIC Sector Equity Income NAV | 84.6 116.5 |
| FTSE 100 | 97.0 118.9 |
| RPI | 113.4 104.0 |
The performance of the Fund reflects the overall decline in markets over the year and has shown better performance than similar mixed funds.
Risk management
The Trustees have considered the major strategic, business and operational risks that the charity faces. As a result of this examination the Trustees have identified poor investment performance as the major risk that could adversely impinge on the Fund. The Trustees confirm that processes have been established to enable regular reports to be produced so that the necessary steps can be taken to lessen this and other risks. As part of their consideration of operation risks the Trustees have identified that risks arising from data protection failures represent a low level of risk as the charity only holds data on other charities rather than personal data of possible donees.
Reserves policy
The Trustees aim to maintain sufficient reserves to generate sufficient investment income, on a total return basis, to maintain the Trust’s level of donations in real terms on an ongoing basis. In view of the potentially volatile nature of stock markets a prudent approach is taken with regard to unrealised gains on investments when assessing the amount of available investment income to be distributed as donations each year.
Plans for the future
The E.F. Sparkes Trust is a lasting testimony to the generosity and charitable concerns of the donors, the Sparkes Family. The core of the trustees’ approach is to support other charities operating in the areas set out in the Trust’s donation policy.
Structure, governance and management
The Trust is a registered charity, number 233085, and is constituted under a trust deed dated 19[th] November 1963. The Trust was established by an initial gift from Eric Frank and Doris May Sparkes to provide funds to enable grants to be made to charitable institutions and for charitable purposes at the absolute discretion of the Trustees.
The Trust does not actively fund raise and seeks to continue the charitable work desired by the donors through the careful stewardship of its existing resources.
Trustees are appointed by the existing Trustees and serve for an unspecified period. The induction process for any newly-appointed Trustee comprises a meeting with the existing Trustees at a premeeting separate in advance of the new Trustee’s first attendance at a meeting of the Trustees.
3
THE ERIC F. SPARKES CHARITABLE TRUST
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31st DECEMBER 2022 (continued)
Structure, governance and management (continued)
At this meeting the existing Trustees brief the new Trustee on investments, the grant making process, powers and responsibilities of the Trustees and provide a welcome pack. This welcome pack includes a brief history of the Trust, copy of the recent minutes of the meetings of the Trustees, a copy of the last three years’ annual reports and accounts, a copy of the governing trust deeds and a copy of the Charity Commission’s guidance ‘The Essential Trustee: What You Need to Know’.
Conflicts of interest
Trustees are required to disclose all relevant interests and register them with the other trustees and, in accordance with the Trust's policy, withdraw from decisions where a conflict of interest arises. Neither the Trust nor any of the trustees have interests with the organisations to which the Trust has given grants and, if there were such interests, these would be disclosed.
Trustees remuneration.
All of the trustees give their time freely and no trustee information was paid in the year. Details of transactions in the year between the Managing Trustees and the Charity are set out in Note 7 to these accounts
Reference and administrative information
The names of the Trustees throughout the year and at the date of this report along with other key information are set out on Page 1.
Trustees’ responsibilities in relation to the financial statements
The charity trustees are responsible for preparing a trustees’ annual report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England and Wales requires the charity trustees to prepare financial statements for each year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, of the charity for that period. In preparing the financial statements, the trustees are required to:
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the applicable Charities SORP;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures that must be disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the Charities Acts 2011 and 2022, the applicable Charities (Accounts and Reports) Regulations, and the provisions of the Trust deed. They are also responsible for safeguarding the assets of the charity and taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements.
J. M. DAVIES Trustee
J. C. P. DAVIES Trustee
31[st] October 2023
4
THE ERIC F. SPARKES CHARITABLE TRUST FUND
INDEPENDENT EXAMINER’S REPORT TO THE TRUSTEES OF THE E. F. SPARKES CHARITABLE TRUST FOR THE YEAR ENDED 31[ST] DECEMBER 2022
I report to the Trustees on my examination of the accounts of the E. F. Sparkes Charitable Trust (the Trust) for the year ended 31 December 2022, which are set out on pages 6 to 12.
Responsibilities and basis of report
As the charity trustees of the Trust you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Acts 2011 and 2022 (‘the Acts’).
I report in respect of my examination of the Trustee’s accounts carried out under section 145 of the 2011 Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act
Independent examiner's statement
I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
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accounting records were not kept in respect of the Trust as required by section 130 of the Act; or
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the accounts do not accord with those records; or
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the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a ‘true and fair view’ which is not a matter considered as part of an independent examination.
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
T E. REYNOLDS FCA
23 Gillham Wood Road BEXHILL-ON-SEA East Sussex TN39 3BN
31st October 2023
5
THE ERIC F. SPARKES CHARITABLE TRUST
Statement of Financial Activities for the year ending 31 December 2022
| Notes Income and endowments Investment income 2 Interest receivable Donations Total income Expenditure Costs of raising funds - Management and administration 3 Expenditure on charitable activities - Grants payable 4 Total expenditure Net income/(expenditure) before gains and losses on investments Net gains/(losses) on investments 5 - Realised gains/(losses) on investments sold in year - Unrealised gains/(losses) on year end revaluation Net movement in fund Fund at 1st January brought forward Fund at 31st December carried forward |
2022 £ 36,810 30 675 37,515 15,701 15,701 28,560 44,261 (6,747) (2,993) (132,983) (135,976) (142,723) 1,377,893 £1,235,170 0.32 |
2021 £ 34,901 - 584 |
|---|---|---|
| 35,485 | ||
| 16,117 | ||
| 16,117 | ||
| 29,350 | ||
| 45,467 | ||
| (9,982) | ||
| 7,872 93,429 |
||
| 101,301 | ||
| 91,319 1,286,574 |
||
| £1,377,893 | ||
| -0.35 |
The notes on pages 9 to 12 form part of these accounts
6
THE ERIC F. SPARKES CHARITABLE TRUST
| Balance Sheet as at 2022 2021 Notes £ £ Fixed assets Investments 5 1,113,836 1,289,724 Current assets Debtors: interest and taxation recoverable 12 38 Balances at banks 74,156 65,176 Balances with other financial institutions 52,221 27,671 Total current assets 126,389 92,885 Liabilities Creditors: amounts falling due within one year (5,055) (4,716) Total current assets less current liabilities 121,334 88,169 Net assets £1,235,170 £1,377,893 Total charity funds -0.13 -0.11 Unrestricted income and capital fund £1,235,170 £1,377,893 0.45 -0.24 31 December 2022 |
Balance Sheet as at 2022 2021 Notes £ £ Fixed assets Investments 5 1,113,836 1,289,724 Current assets Debtors: interest and taxation recoverable 12 38 Balances at banks 74,156 65,176 Balances with other financial institutions 52,221 27,671 Total current assets 126,389 92,885 Liabilities Creditors: amounts falling due within one year (5,055) (4,716) Total current assets less current liabilities 121,334 88,169 Net assets £1,235,170 £1,377,893 Total charity funds -0.13 -0.11 Unrestricted income and capital fund £1,235,170 £1,377,893 0.45 -0.24 31 December 2022 |
Balance Sheet as at 2022 2021 Notes £ £ Fixed assets Investments 5 1,113,836 1,289,724 Current assets Debtors: interest and taxation recoverable 12 38 Balances at banks 74,156 65,176 Balances with other financial institutions 52,221 27,671 Total current assets 126,389 92,885 Liabilities Creditors: amounts falling due within one year (5,055) (4,716) Total current assets less current liabilities 121,334 88,169 Net assets £1,235,170 £1,377,893 Total charity funds -0.13 -0.11 Unrestricted income and capital fund £1,235,170 £1,377,893 0.45 -0.24 31 December 2022 |
|---|---|---|
| 2022 £ 1,113,836 12 74,156 52,221 126,389 (5,055) 121,334 £1,235,170 -0.13 £1,235,170 0.45 |
||
| 38 65,176 27,671 |
||
| 92,885 (4,716) |
||
| 88,169 | ||
| £1,377,893 | ||
| -0.11 £1,377,893 |
||
| -0.24 |
JOHN M. DAVIES Trustee
JOSEPHINE C. P. DAVIES Trustee
Date:- 31st October 2023
The notes on pages 9 to 12 form part of these accounts
7
THE ERIC F. SPARKES CHARITABLE TRUST
Statement of Cash Flows for the year ending 31 December 2022
| Notes Net movement in fund Deduct investment income received 2 Deduct interest received Deduct gains/add back losses on investments 5 Decrease/(increase) in debtors Increase/(decrease) in creditors Net cash used in operating activities Cash flows from investing activities - Dividends and interest 2 - Purchases of investments 5 - Sales of investments 5 Net cash provided by investing activities Change in cash and cash equivalents for the year Cash and cash equivalents brought forward Cash and cash equivalents carried forward Cash and cash equivalents comprises balances at:- Balances at banks - Barclays Bank plc Balances at other financial institutions - Charles Stanley |
2022 £ (142,723) (36,810) (30) 135,976 26 339 (43,221) 36,840 (103,436) 143,347 76,751 33,530 92,847 £126,377 0 74,156 74,156 52,221 52,221 £126,377 -0.44 |
2021 £ 91,319 (34,901) - (101,301) 0 192 |
|---|---|---|
| (44,691) | ||
| 34,901 (247,475) 246,022 |
||
| 33,448 | ||
| (11,243) 104,090 |
||
| £92,847 | ||
| 0 65,176 |
||
| 65,176 | ||
| 27,671 | ||
| 27,671 | ||
| £92,847 | ||
| 0.26 |
The notes on pages 9 to 12 form part of these accounts
8
THE ERIC F. SPARKES CHARITABLE TRUST
Notes to the accounts for the year ended 31 December 2022
1 Accounting policies
(a) Basis of preparation and assessment of going concern
The accounts (financial statements) have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these accounts. The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effecitve 1 January 2019) and the Charities Acts 2011 and 2022.
The trust constitutes a public benefit entity as defined by FRS 102.
The trustees consider that there are no material uncertainties about the Trust’s ability to continue as a going concern.
(b) Funds structure
The charity has a single unrestricted fund which the trustees are free to use for any purpose in furtherance of the charitable objectives.
(c) Income recognition
All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised either once notification has been received of the dividend due or when the dividend is credited to the Trust's bank accounts.
(d) Expenditure recognition
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably.
All expenditure is accounted for on an accruals basis. All expenses including support costs and governance costs are allocated or apportioned to the applicable expenditure headings.
Grants payable are payments made to third parties in the furtherance of the charitable objects of the Trust. In the case of an unconditional grant offer this is accrued once the recipient has been notified of the grant award. Grants awards that are subject to the recipient fulfilling performance conditions are only accrued when the recipient has been notified of the grant and any remaining unfulfilled condition attaching to that grant is outside of the control of the Trust.
Provisions for grants are made when the intention to make a grant has been communicated to the receipient but there is uncertainty as to the timing of the grant or the amount payable.
(e) Irrecoverable VAT
Irrecoverable VAT is charged against the expenditure heading for which it is incurred.
9
THE ERIC F. SPARKES CHARITABLE TRUST
Notes to the accounts for the year ended 31 December 2022
(f) Costs of raising funds
The costs of raising funds consist of the costs of managing the investment portfolio plus various administrative costs incurred in the operation of the Trust.
(g) Fixed asset investments
Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.
The Trust does not acquire put options, derivatives or other complex financial instruments.
The main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.
(h) Realised gains and losses
All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value. Realised and unrealised investment gains and losses are combined in the Statement of Financial Activities.
2 Investment income received
| Investment income received Equities -UK Equities - International Property Funds Alternative investments Fixed Interest Mixed investments Management and administration Portfolio management fees Accountancy fees Administrative expenses |
2022 £ 10,019 14,684 1,117 3,655 6,106 1,229 £36,810 2022 £ 14,475 525 701 £15,701 |
2021 £ 12,005 13,199 552 3,242 4,608 1,295 |
|---|---|---|
| £34,901 | ||
| 2021 £ 14,559 550 1,008 |
||
| £16,117 |
3 Management and administration
10
THE ERIC F. SPARKES CHARITABLE TRUST Notes to the accounts for the year ended 31 December 2022
| 4 Grants payable in the year All Saints Youth Project Bede Birmingham Fellowship of the Handicapped Birmingham Peoples Centre Birmingham Settlement Aston Braille Chess Association Brecon Mountain Rescue Calthorpe Community Garden CASE Children & Families in Grief Children's Hospice South West Children's Hospice Ty Hafan Cardiff Children Today Clothing solutions Coram Derby Toc H Children's Camp Devon Air Ambulance Trust Devon Safer Communities Trust Dream Holidays Elim Pentacostal Church Exe Access Eastside Community Trust/Felix Road Adventure Playground Free Representation Unit (FRU) Go Beyond Grove Adventure Playground Home Start Torridge & North Devon Lake District Search and Mountain Rescue Organisation Little Hicups Llamau Malakai Kids Midland Sports Centre for the Disabled Trust Ltd Narthex Sparkhill New Horizon Youth Centre Pecan Regenerate Refuge Ronald McDonald Houses Rowcroft Hospice Royal National Lifeboats Institution Seeing Senghenydd Youth Drop in Centre Siblings Together Stroke Association Support Through Court/PSU Swansea Samaritans Tarka Child Contact Centre The Migraine Trust Time and Talents Torquay Museum Volunteering Matters YMCA South Devon |
2022 £ 800 550 - 350 450 500 200 - 500 300 300 1,100 200 500 1,850 2,200 450 - 600 - - 550 - 1,000 800 1,100 1,000 210 500 2,000 200 1,100 500 500 1,000 - 300 700 400 1,100 1,000 800 200 250 350 550 500 550 - - 550 28,560 £ |
2021 £ 750 500 300 300 400 - - 750 500 250 250 1,000 150 - 1,750 2,000 400 550 500 250 500 500 500 - 750 1,000 - - 500 2,500 200 1,000 - - - 3,000 250 650 400 1,000 - 750 200 250 300 500 500 500 2,000 500 500 |
|---|---|---|
| 29,350 £ |
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THE ERIC F. SPARKES CHARITABLE TRUST
Notes to the accounts for the year ended 31 December 2022
5 Investments - at fair value
| Investments - at fair value | |
|---|---|
| Equities -UK Equities - International Property Funds Alternative investments Fixed Interest Mixed investments Total at fair value Year to 31 Dec 2020 |
Gain/(loss) Gain/ At Purchases Sales on sales (Loss) on At 01-Jan-22 (at cost) proceeds in year revaluation 31-Dec-22 £ £ £ £ £ £ 341,830 7,499 (43,519) (3,735) (28,013) 274,062 583,495 46,433 (62,659) (9,596) (41,233) 516,440 40,853 2,498 0 0 (16,089) 27,262 97,101 15,000 0 0 (3,635) 108,466 192,022 32,006 (29,170) 11,343 (41,724) 164,477 34,423 0 (8,000) (1,005) (2,289) 23,129 |
| £1,289,724 £103,436 £(143,348) £(2,993) £(132,983) £1,113,836 |
|
| £1,186,969 £247,475 £(246,022) £7,872 £93,430 £1,289,724 |
All investments are carried at their fair value. Investment in equities and fixed interest securities are all traded in quoted public markets, primarily the London Stock Exchange. Holdings in common investment funds, unit trusts and open-ended investment companies are at the bid price. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade at cost (that is their transaction value)
6 Analysis of assets between funds
| Capital investments Net current assets |
General Fund 2022 2021 £ £ £ 1,113,836 1,113,836 1,289,724 121,334 121,334 88,169 £1,235,170 £1,235,170 £1,377,893 Total funds |
General Fund 2022 2021 £ £ £ 1,113,836 1,113,836 1,289,724 121,334 121,334 88,169 £1,235,170 £1,235,170 £1,377,893 Total funds |
|---|---|---|
| £1,377,893 |
7 Related party transactions and trustees' expenses and remuneration
The trustees all give freely their time and expertise without any form of remuneration or other benefit in cash or kind (2021 - £NIL). Expenses paid to the trustees in the year totalled £NIL (2021 - £NIL).
Additionally trustees incurred costs of £675 on behalf of the Trust (2021 - £585) which they have waived as a donation to the fund. This amount has been added to Donations and to the relevant expense headings.
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