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2023-12-31-accounts

2023 Annual Report & Accounts

Responding to evolving needs, transforming lives and communities

Table of Contents

Page Contents

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BENEFACT TRUST LIMITED

Explanation of Terms

Throughout the annual report, the following terms are used as defined below:

Benefact Trust, the Trust or the Charity

BG plc

Benefact Group

Benefact Trust Limited

Benefact Group plc, the direct subsidiary of Benefact Trust Limited

Benefact Group plc and all its direct and indirectly owned subsidiaries

Benefact Trust group of companies Benefact Trust Limited and all its direct and indirectly owned subsidiaries

EIO plc

EEF

Ecclesiastical Insurance Office plc, a direct subsidiary of Benefact Group plc, and the principal operating subsidiary

Expendable Endowment Fund (registered charity number 263960-1), a charitable trust linked to the Trust for registration and accounting purposes

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BENEFACT TRUST LIMITED

About us

Benefact Trust Limited (the Trust) was established in 1972 in England and Wales as a company limited by guarantee and is a registered charity. The Trust is one of the UK’s largest grant-making charities.

The Trust promotes the Christian religion and provides grants and support to Christian churches and charitable organisations, strengthening communities and seeking to help those in areas of greater need and deprivation. As one of the few charities prepared to fund projects at an early stage, the Trust also acts as a ‘catalyst’ funder and is uniquely placed to provide early practical advice that can help applicants unlock additional project funding. During 2023, the Trust’s grant programmes were evolved to help meet the wider scope of need and demand faced by beneficiaries and communities. In addition, the Trust continued to support charities and organisations providing effective front-line crisis intervention.

Benefact Trust is the owner of Benefact Group plc (BG plc) which in turn owns Ecclesiastical Insurance Office plc (EIO plc) and other subsidiaries. The Trust receives the majority of its income from the companies it owns; it does not fundraise. The Trust is governed by a board of trustees who set its strategic direction and fully recognise their responsibility to deliver on its objects in a way that enhances public trust. Among the trustees, the Board aims to have senior Church of England and Methodist clerics, which helps the board to understand and reflect its beneficiary base, but it is completely independent of these churches. A full list of the Trust’s related undertakings is presented in note 45 to the financial statements.

We seek to celebrate and share the successes of beneficiaries and to recognise and support their challenges. In doing so, we seek the views of our large beneficiary network in shaping our grant-giving programmes, so that we can realise our vision to be one of the UK’s most impactful Christian grant-making charities and fulfil our mission to help Christian organisations have a positive and transformative impact on the lives and communities they support.

The Trust is the sole trustee of the Expendable Endowment Fund (EEF). Its charitable purposes are to advance the exclusively charitable purposes of the Trust (i.e the advancement of the Christian Religion, and to contribute to charitable institutions, associations, funds or objects, and to carry out any charitable purposes) for the public benefit. The EEF’s primary activity in the advancement of its objects is grant-giving.

The Trust also receives donations from Methodist Insurance PLC, which are designated to support grants to the Methodist Connexion, Methodist districts and circuits and to individual Methodist Churches. Applications for these grants are considered by the Trust’s Methodist Grant Giving Committee.

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BENEFACT TRUST LIMITED

A Message from our Chair

Over the last year, we have been on a transformative journey. An increase in beneficiary need in a very difficult economic and geo-political environment, drove us to evolve our strategic funding approach to address escalating community and social challenges, as well as urgent humanitarian crises. Over 1,400 grants were awarded amounting to £23.4m. These grants were funded partly by donations received in the year totalling £13m from the profits of the Benefact Group and made possible by the collective efforts of our 2,000 or so Benefact Group colleagues across the UK, Ireland, Australia and Canada. The Trust also received a £0.5m donation from Methodist Insurance PLC which will support our Methodist Grants programme. On behalf of the Trust’s many beneficiaries, may I offer a sincere “thank you” to each and every one of you.

A Year of Profitable Performance

The performance of Benefact Group - now operating in three distinct divisions, Insurance, Asset Management, and Broking & Advisory - reflects not only its financial success but also its profitable growth ambitions and the depth of its charitable commitment, a testament to our shared dedication to supporting communities in need. The Benefact Group reported a profit before tax in the year of £34.4m*, benefiting from an improvement in investment markets during the latter part of the year. An additional donation of £8m in respect of Benefact Group’s 2023 performance will be paid to the Trust in due course.

Managing the Expendable Endowment Fund

In the past year, the Expendable Endowment Fund (EEF), a linked charity, of which Benefact Trust is the sole trustee,

delivered strong investment results on a portfolio valued at some £117.1m at the end of the year. The Trustee of the EEF reorganised the investment portfolio, switching £25m from debt instruments into a short-dated bond fund, to enable greater flexibility in responding to changing funding needs. The balance of the portfolio is mainly invested in global equities and open-ended investment company funds. The EEF released £4.0m in income to the Trust to augment its funds available for grant making. The Trustee of the EEF also reviewed the overall size of the EEF portfolio, recognising that it should continue to represent an appropriate buffer to cover any grant funding gaps in years when the Benefact Group’s donation to the Trust falls short of expectations. When the EEF portfolio’s valuation exceeds the appropriate buffer, the Trust will consider asking the Trustee of the EEF to make a grant to the Trust from the surplus, for the benefit of the EEF’s (and the Trust’s) beneficiaries.

Ambition, growth, and future funding

Looking ahead, Benefact Group’s ambitious target, to double in size profit-wise, is a trajectory that holds immense promise for our future funding capabilities. As the Asset Management and Broking & Advisory divisions grow, we anticipate that their contribution, alongside that of the Insurance division, will create a more stable and enduring support structure for the Trust.

The Trust continues to support beneficiaries overseas, directly awarding grants totalling £1.8m (2022: £1.2m) in Ireland. Through its devolved grant giving arrangements in Canada and Australia, CAD $0.8m (2022: CAD $0.75m) and AUD $0.1m (2022: AUD $0.25m) were awarded respectively.

BENEFACT TRUST LIMITED

*This is the profit before tax reported under International Financial Reporting Standards (IFRS), which is the accounting basis used to prepare the Benefact Group plc’s financial statements. This result may differ when consolidated into the Trust’s consolidated financial statements, which are prepared under UK Generally Accepted Accounting Practice (UKGAAP).

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Through its Methodist Grants programme, the Trust awarded grants totalling £2.5m (2022: £2.6m) to support the mission and ministry of the Methodist Church in Britain and Ireland.

“Our collective efforts are creating a remarkable journey, helping individuals and communities to flourish”

Personal reflections

Having personally engaged with beneficiaries, I have gained invaluable insights into the changing needs of the people we support. The stories shared and challenges faced highlight the importance of our work. It is this understanding that drives our collective determination to make a meaningful difference and you will find the Trust’s updated strategy for the 2024-2026 period on pages 9 and 10.

I want to express sincere gratitude to our departing trustees, Caroline Banszky, The Very Revd Jane Hedges, Stephen Hudson, Sir Stephen Lamport, The Venerable Karen Lund, Chris Moulder and David Smart, for their invaluable contributions while extending a warm welcome to our new trustees - Ian Moore, Patrick Rudden and Nick Sykes.

In closing, I extend heartfelt recognition to the unwavering commitment of the board and the Trust’s team members and Benefact Group colleagues, whose dedication has been the bedrock of our charitable impact. Together, we have navigated challenges, celebrated triumphs and laid the groundwork for a brighter future where our collective efforts continue to transform lives and communities.

My thanks to Helen Gray, our Trust Director since May of 2023, and her small but high-performing Grant-making and Marketing & Communications teams. Helen has proved an accomplished ambassador for the Trust and a capable leader, motivating team members and empowering them in their respective roles. Their contributions have truly made a difference.

Tim Carroll Benefact Trust Chair

2 May 2024

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BENEFACT TRUST LIMITED

Strategic Highlights from our Trust Director

Navigating change with purpose

As we reflect on 2023, a year marked by evolving challenges, I am privileged to share insights gained since joining the Trust in May 2023 and through beneficiary visits.

I had the honour of meeting Maksym Dotsenko, the President of the Ukrainian Red Cross Society, during his visit to London. His firsthand accounts shed light on the grim reality of living in a war zone, amidst the deepening conflict in Ukraine.

Closer to home, my visits with staff at Depaul Ireland, a charity supporting homeless individuals in their journey toward independent living, and the team at Good Faith Partnership, driving the Warm Welcome Campaign to address the cost-of-living crisis, reinforced the impact of our grant-making. It became clear that our support often provides a lifeline for those in dire need.

It is also evident that social need is becoming increasingly complex. Mental health, homelessness, poverty, loneliness and isolation, and climate change have risen to the forefront, each demanding more support and strategic intervention. This has been reflected in a significant increase in demand for funding and it is a poignant reminder of the urgency in our mission to support vulnerable communities.

Amidst these challenges, I am heartened by the spirit of collaboration within the sector. The Christian Funders’ Forum, where over 40 grant funders unite to address diverse social needs both overseas and at home, exemplifies the power of collective giving. Notably, initiatives like the 2023 Big Give campaign demonstrated how collaboration amplifies our capacity to make a meaningful impact. Several members,

including Benefact Trust, also supported the Warm Welcome Campaign, ensuring thousands of people experiencing poverty across the UK had access to warm, safe spaces over the winter months.

“Our grants are more than funds; they’re stories of lives changed and communities united. In the face of challenges, together, we make a meaningful difference.”

In 2022, the Trust laid the groundwork for growth, building a robust foundation for the journey ahead. Our strategic approach in 2023 embraced growth while remaining attuned to the evolving needs of our beneficiaries. The launch of two new grant programmes (Community Impact and Building Improvement programmes) was instrumental in addressing these needs with agility and adaptability. Looking forward, the Trust will embark on a new strategic chapter, as we continue to transform lives and communities by increasing our grant-making and delivering even greater impact.

I would like to extend my deepest gratitude to the Trust team, our beneficiaries and colleagues who have risen to the challenge and made this all possible.

I would also like to extend my sincere appreciation to the Board of Trustees for their warm welcome. Their invaluable guidance and steadfast support have been crucial to our success.

Helen Gray Benefact Trust Director

2 May 2024

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BENEFACT TRUST LIMITED

Strategic Report

Our Vision, Mission and Values

Our Board of Trustees sets the strategic direction of Benefact Trust, ensuring our strategy aligns closely with the Trust’s overarching goals and that we prioritise actions which enhance public trust. In our planning processes, we consider the Charity Commission’s guidance on public benefit, including the comprehensive framework outlined in Public Benefit: Running a Charity (PB2).

Recognising the importance of good governance, we have worked hard to make sure it is at the heart of our operations. This ensures that the Trust operates with efficiency, effectiveness, and sustainability, in compliance with the Charity Governance Code.

During 2023, the Trust updated its vision, mission, and values, aligning them with its current position and future aspirations. Moving forward, our vision, mission, and values serve as guiding principles, driving our efforts to fulfil our charitable objectives and make a positive impact in the community. Our vision, mission and values are as follows:

Vision:

A society in which everyone can flourish, inspired by Christian values.

Mission:

Funding and empowering Christian organisations and charities to support communities and drive positive social change.

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Our Strategy 2024 – 2026

In 2023, Benefact Trust conducted a comprehensive strategic review to shape its 20242026 Strategy and Business Plan.

The new strategy for 2024-2026 focuses on growth in grant-making and impact. The key strategic priorities reflect a beneficiary centred approach that listens and responds to the changing needs of the voluntary sector, our charity partners and most importantly their beneficiaries. It remains important that we help to build resilience in the Christian charitable sector as the current social and economic challenges are complex and will continue to adversely impact many charities for years to come.

The strategy reflects our primary aim of empowering Christian organisations to have a positive and transformative impact on lives and communities. Our grant-giving programmes evolved in 2023 reflecting the changing needs of our charity partners and their beneficiaries. Another strategic review of the Trust’s grant programmes will be undertaken in 2025/26.

The strategy is underpinned by five strategic goals and the outcomes to be delivered at the end of the planning period (31 December 2026) are shown on the following pages:

Strategic goal Key outcomes we aim to deliver by 2026
Growth in grant
making		 • Annual grant-making will increase year on year, for three
consecutive years, refecting growing demand for support.
This will include a new ‘strategic partnership’ grant
programme enabling the Trust to increase its impact in key
social areas.
• The Trust will continue to respond proactively to crises both
at home and abroad with a focus on providing humanitarian
aid to vulnerable communities in crisis through the Trust’s
Crisis Response programme.
• The Trust will have undertaken a strategic review of its
grant-making programmes, informed by impact data and
benefciary feedback, to coincide with the next chapter of
the Trust’s strategic plan (2027-2030).
Demonstrating and
enabling greater
impact		 • Impact reporting and frameworks will continue to be
embedded across all grant programmes. This will be aided by
the implementation of a new grant management system in
2024.
• Impact measurement and analysis will be used to
continually improve the Trust’s benefciary ofer and to
evidence the Trust’s own impact to key stakeholders. This will
include the publication of externally facing impact reports.
• The Trust will take a leading role in sharing its learning
on impact practice with other Christian funders and its
benefciaries, with the aim of enabling and celebrating the
Christian charitable sector’s positive and transformative
impact on communities.

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BENEFACT TRUST LIMITED

Our Strategy 2024 – 2026

Strategic goal

Key outcomes we aim to deliver by 2026

Building operational resilience

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Our Plans for 2024

In 2024, the key initiatives that will be prioritised are:

Strategic goal Strategic initiatives
Growth in grant
making		 • Deliver a new £2m strategic partnership fund to proactively
address key social issues.
• Gather benefciary feedback to support the development of
the new Grants Management System (GMS) and to better
understand benefciary needs.
Demonstrating and
enabling greater
impact		 • Steps in the Trust’s impact measurement and reporting are
contingent on the implementation of the new GMS. In 2024
the Trust will therefore consolidate impact measurement
progress made in 2023.
Raising the profle
and awareness of
Benefact Trust		 • Position the Trust as an impactful, progressive and a
trusted charity through the publication of selected thought
leadership articles to support our benefciaries.
• Build the Benefact Trust brand reach, engagement, and
profle through a network of expert ambassadors.
• Grow and establish strong, positive relationships with
key faith leaders and charitable organisations to ensure
the Trust’s grant-making has a transformative impact on
communities.
• Explore and maximise joint funding opportunities to
increase the impact of the Trust’s grant-making.
• Build brand reach and profle to refect the Trust’s scale of
giving and impact, to extend reach and engagement with
benefciaries and audiences.
Building operational
resilience		 • Invest in the development of the Trust’s staf and trustees
to best support the Trust’s work, the delivery of its strategic
goals and to respond to emerging opportunities.
• Implement a new grant management system to create
team efciencies, enhance impact reporting, and improve
the benefciary experience.
Appraisal of
investments		 • Undertake an informed and objective review of the
adequacy of the return received/targeted from the Benefact
Group of businesses when weighed against the risk.
• Strengthen the legal and governance arrangements of the
EEF, a linked charity.

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Our Achievements in 2023

We made significant progress in meeting the objectives we had set for 2023:

We made signifcant progress in meeting the objectives we had set for 2023:
Providing solid foundations
Strengthen The trustees undertook to review the operational resilience of the Trust.
operational As part of this activity, the internal processes have been reviewed and
resilience a number of recommendations were made to strengthen the Business
Continuity Plans regarding systems, people and premises. This includes
an agreement with Benefact Group to provide support, if required,
for any urgent payment processes the Trust may require, in the event
of a signifcant issue. These recommendations are currently being
implemented. In addition, key staf dependencies were identifed and
reviewed by the Nominations Committee.
Review of the Service and fees by the Trust’s legal advisers were reviewed and the
Trust’s Advisors value for money assessed. The governance arrangements relating to
the Expendable Endowment Fund (‘EEF’), a separate charitable trust
linked to the Trust for registration and accounting purposes, were
strengthened. A review of the external Investment Adviser is currently
being undertaken and should be completed by mid-2024.
Review rate Due to the volatility of investment markets during 2023, this objective
of return on was postponed until early 2024. The review is underway and will be
investment completed by mid-2024.
Enabling greater impact

Embedding Impact plans were developed for both the Building Improvement and Community Impact grant programmes. impact The annual internal impact report was enhanced to illustrate the impact of our giving in greater depth. Grant review A strategic review of the Trust’s grant programmes was undertaken in 2022 resulting in the launch of the Building Improvement and implementation Community Impact grant programmes in February 2023. Both programmes attracted high quality applications reflecting a broad range of projects and social need.

Adding value

Deepen and The Trust’s first thought leadership podcast on ‘How to secure funding’ share expertise was recorded in August 2023. A thought leadership article, entitled ‘The funding landscape for churches and charities’ followed generating good media coverage. This demonstrated the value of thought leadership as part of the Trust’s profile-raising strategy.

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Building strategic partnerships Building strategic partnerships
Denominational
network building		 The Trust team maintained and developed regular contact with key
faith leaders across denominations to build the Trust’s denominational
network. This work is ongoing and will help to strengthen the Trust’s
profle and identify potential strategic funding opportunities.
Growing our
Christian sector
network and
insight and
explore joint
Christian funder
campaigns		 Through active engagement in the Christian Funders’ Forum (a forum
of over 40 Christian funders and charities) the Trust has contributed
to several joint funding initiatives helping to amplify the impact of its
grant-making. This has included the Christmas Big Give’s Together Fund
and two jointly funded projects in Scotland. The Trust will continue to
seek further opportunities to work collaboratively.
Investing in our future
People
development		 During the year, the trustees reviewed their succession plans and
implemented a new skills audit. Development opportunities for trustees
were considered by the Nominations Committee and a training plan
identifed and implemented. A succession plan for staf was also
considered by the Nominations Committee.
Across the staf team, personal development plans have been updated
and specifc training opportunities identifed and delivered e.g. media
training. The team continues to access mandatory training including
regular safeguarding training resulting in a high performing team.
Grants
management
system upgrade		 A review of the Trust’s grant management systems resulted in the
identifcation of and recommendation to transition to a new system
in 2024. The new grant management system will enable the team to
work more efciently, access timely grant management information
and better record impact and evaluation data. It is recognised that the
successful delivery of this project in 2024 will have far reaching benefts
for both benefciaries and the Trust team.
Growing reputation
Building brand
reach		 A strategic marketing communications plan was implemented to
extend reach and engagement across all marketing channels. This
refected the Trust’s wider scope and impact. Social media audiences
grew, email response rates increased, and engagement increased
consistently. Podcasts also helped generate new and wider reaching
press coverage.
Building our
ambassador
networks		 A plan to identify and engage ambassadors was developed.
Ambassadors will help to shine a light on key social issues and highlight
how the Church and charity sectors respond.

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Our Grant-Giving

The Trust’s principal source of income derives from its ownership of Benefact Group. As insurance is a risk business, the trustees recognise that the donations that the Trust receives may fluctuate. The EEF holds significant assets to advance its charitable purposes which are, in summary, to advance the exclusively charitable purposes of the Trust for the public benefit. The Trust received donations totalling £13.0m from the Benefact Group during the year. Our financial support to churches and other charitable institutions increased to £23.4m (2022: £22.8m) reflecting strong demand for beneficiary support.

The Trust aims to help those in areas of greatest need. At the heart of the Trust’s grant-making is the Christian belief that individuals reach their full potential in community and that the opportunity to flourish should be available to all. Increasingly, our grants target people in need but they also strengthen the churches, schools and charities who deliver that help. Grants awarded to beneficiaries from such areas in greater need are increased above the normal level, with grant programmes factoring deprivation into the grant calculation.

Our focus and impact

Challenges faced by our beneficiaries

Our beneficiaries continued to face a range of challenges in 2023. Double digit inflation, high energy costs, an inability to retain and attract volunteers, cuts in local authority spend and growing rates of poverty all impacted our beneficiaries. Christian places of worship also experienced a range of challenges: fostering and growing congregations, maintaining historic buildings, embracing the green agenda – all while

facing increasing costs and income pressures.

Our focus

Despite these challenges, our commitment to supporting social needs and the beneficiaries we work with remained unwavering. We adapted and expanded our focus in our grant funding approach with the launch of our Community Impact Grants to address emerging social need and, together with our other grant programmes, enabled the Trust to award 1,418 grants totalling £23.4m overall. Key areas of support emerged for the Trust such as:

Social challenges:

Reflecting the increasing challenges facing today’s communities, the most common aim shared by 95% of our Community Impact Grants in 2023 was addressing social challenges facing communities.

Responding to the enduring effects of the pandemic and the subsequent costof-living crisis, many of these grants went to organisations addressing the effects of poverty and supporting marginalised and vulnerable populations. This was through the provision of a wide range

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of vital services, such as housing, community centres, financial advice, food banks, community cafes and baby banks.

Another key area of focus for these grants was improving the mental health and wellbeing of communities through activities such as counselling and therapy and mental health training for clergy and volunteers.

Reflecting the increasing challenges faced by children and young people , many of our Community Impact Grants also focused on improving the lives of young people through activities such as youth work and mentoring and funding family support workers.

Turkey-Syria Earthquake and £100,000 to provide aid following the flooding in Libya. We also awarded £225,000 in response to the cost-of-living crisis and continued the Trust’s support for those affected by the conflict in Ukraine with further grants totalling £275,000.

International giving:

Our international impact extended through grants awarded by Ecclesiastical Canada and Ansvar Australia, totalling CAD $800,000 and AUD $125,000, respectively. These grants supported environmental conservation, food security, and welfare initiatives, reaching vulnerable youth and families.

Impact in numbers: key statistics from 2023

A 44% increase in the number of grants awarded from 2022 to 2023 signifies the growing demand for our support and the reach of our new programmes.

£8.5 million was awarded for Community Impact, including over 300 grants addressing social issues, including mental health, marginalised and vulnerable populations and children and young people’s needs.

Building improvement support:

Our commitment to community projects and heritage preservation was evident through Building Improvement Grants, with nearly 650 grants awarded to keep church buildings in good repair, preserve heritage features, enhance accessibility, and improve operational sustainability. Energy efficiency was a key focus within these grants in 2023, with 40% of projects receiving funding to implement energy efficiency measures, such as heating upgrades and solar panels.

Crisis response support:

Responding quickly to humanitarian crises, our Crisis Response Grants provided £850,000 to strategic initiatives, including £250,000 to provide relief for victims of the

Building Improvement Grants allocated over £2.8 million through nearly 650 grants providing essential support to protect and enhance churches and Christian charity buildings, ensuring their continued use and the safeguarding of their heritage.

Methodist Insurance PLC donated £0.5 million which enabled the Trust’s Methodist Grant Giving Committee to award over £2.5 million in grants, supporting 21 Methodist districts.

As we reflect on 2023, it is evident that our strategic focus and innovative grant programmes have not only met the evolving needs of our beneficiaries but have also made a tangible and impactful difference in the lives of individuals and communities.

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Our Grants Programmes

Our Community Impact Grants

programme focuses on wider community support, addressing social challenges and supporting Christian communities to flourish.

The Building Improvement Grants programme ensures the continued use of churches and Christian charity buildings, supporting outcomes that enhance experience, efficiency, accessibility, sustainability, and heritage preservation.

The Methodist Grants programme enriches the Methodist Church’s mission and ministry. Encouraging growth, engagement, accessibility and prioritises repair and maintenance projects crucial for ongoing mission and ministry.

Our Heritage Skills for Christian Buildings Grants programme supports apprenticeships, scholarships, and training to pass down knowledge essential for the conservation of historic Christian buildings.

The Crisis Response Grants programme stands ready to address evolving needs during humanitarian crises. A closed programme, collaborating with partners, it provides relief and supports initiatives such as the Warm Welcome Campaign during the cost-of-living crisis.

Recurrent Grants (closed programme) awards annual grants to dioceses and cathedrals.

In 2023, these programmes reflected our commitment to positive change, growth, and adaptability. Each grant is a testament to our vision of a better future where vulnerable communities are empowered, heritage is preserved, and Christian organisations thrive.

Total grants awarded by programme

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||| |---|---| |Community Impact Grants|£8.5m| |Building Improvement Grants|£2.8m| |Methodist Grants|£2.5m| |Heritage Skills for Christian Buildings Grants|£0.3m| |Crisis Response Grants|£0.9m| |Recurrent Grants|£7.3m| |General Grants |£0.9m| |Other Grants *|£0.2m| |Total|£23.4m|

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Our Grant-Giving at a glance

Number and Value of Grants Awarded

£173.9m donated in grants over the past 10 years

Over 1,400 grants, totalling £23.4m were awarded in 2023. This represents an increase of 2.7% compared with 2022 and an increase of 21.3% compared with 2021 in the total value of grants awarded.

All key performance indicators relating to grant processing were met or exceeded in 2023. Details of the Trust’s KPIs can be found on page 21.

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£23.4m
Grants awarded
in 2023
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Impact of our Giving

Stories that highlight the human impact of the projects the Trust has supported and the remarkable work of our beneficiaries.

Community Impact Grant

Community Impact Grant

Azalea - £48,500

Hope Housing - £35,700

Helping people transition from homelessness to safe and stable accommodation.

Supporting and empowering women surviving sex trafficking.

Community Impact Grant

Community Impact Grant

Community Chaplaincy Association - £180,000

West London Mission - £54,000

Expanding the network of Community Chaplaincies, which seeks to build a community in which ex-prisoners can make a new start and contribute to a healthier society for all.

Accessible, low-cost mental health counselling for people living on low incomes in London.

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Building Improvement Grant

Harbour Church Portsmouth - £14,300

Refurbishing and modernising the church to ensure it is a warm and welcoming place for all.

Building Improvement Grant

C3 Trust UK - £7,200

A church run community centre in a hugely disadvantaged area of Sheffield, making their building more accessible and functional for their community.

Building Improvement Grant

Shankill Parish Lurgan AKA ‘The Big Church’ - £22,850

Safeguarding the largest church in Ireland so it can continue to be a safe place to build faith and community.

Methodist Grant

Stockbridge Christian Centre - £52,000

Turning a 1960s built church into a multi-functional and accessible space for the whole community.

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Heritage Skills for Christian Buildings Grants

The Cathedrals’ Workshop Fellowship - £69,550

Providing workplace learning for apprentice cathedral stonemasons, ensuring the preservation of this vital heritage skill.

Crisis Response Grant

Warm Welcome Campaign - £125,000

Funding churches across the UK to open warm spaces. Over 550,000 people used warm spaces last winter. Warm spaces provided not only food and warmth but also a community of support.

Methodist Grant

Bugle Methodist Church, St Austell, Cornwall - £60,000

Supporting the refurbishment of the Sunday School building to provide a modern, welcoming, and eco-friendly community space.

Crisis Response Grant

British Red Cross - £150,000

Providing home-based care services in all regions of Ukraine, including rural and remote areas, to support those affected by the conflict, and to educate and train members of the public in home-based care to improve the availability of support networks.

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Measuring the success of our Grants Programmes

We measure the success of our grants programmes using impact surveys which are completed by beneficiaries in the year that they concluded the work for which their grant was awarded (or annually in the case of multi-year grants). The table below provides an overview of 2023 impact survey results, indicating that all programme level KPIs were achieved. The overall survey response rate in 2023 was 74%.

1. Grant-giving

1. Grant-giving
KPI Target Result
% of grant applications up to £10k processed within 2 months At least 90% 96.3%
% of grant applications over £10k and up to £150k processed
within 4 months		 At least 90% 99.5%
% of grant applications over £150k processed within 6 months At least 90% 100%
% of applications received in the year that were successful At least 85% 95%
% of benefciaries reporting that they fnd the current programmes
suitable for their organisation		 At least 75% of
respondents		 93%
% of benefciaries reporting that their experience working with the
Benefact Trust team was good or excellent		 At least 80% of
respondents		 98%

2. Grant programmes

Grant programme KPI Target Result
Community
Impact Grants		 % of benefciaries reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• Growing congregations and Christian
communities
• Helped address social challenges
• Enabled wider community use of church
buildings
• Empowering Christian education		 At least
80% of
respondents		 95%

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Grant programme KPI Target Result
Building
Improvement
Grants		 % of benefciaries reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• More accessible / improved user experience
• Better equipped to meet operational
requirements
• Heritage has been preserved or promoted
• Building is protected and remains in good
condition
• More energy efcient or environmentally
sustainable		 At least
82% of
respondents		 99%
Methodist Grants % of benefciaries reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• More accessible / improved user experience
• Better equipped to meet operational
requirements
• Heritage has been preserved or promoted
• Building is protected and remains in good
condition
• More energy efcient or environmentally
sustainable		 At least
80% of
respondents		 96%
General Grants* % of benefciaries reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• Enabled church growth (numerically or
spiritually)
• Helped address social challenges
• Enabled continued use or wider community
use of church facilities
• Protected or promoted heritage		 At least
80% of
respondents		 96%

*The General Grants programme closed for applications in February 2023 with the introduction of the Community Impact and Building Improvement grants programmes.

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Grant programme KPI Target Result
Transformational* % of benefciaries reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• Organisational reach has been extended to a
greater number of people and/or over a wider
geographical area
• There has been signifcant progress in
realising organisational vision and/or
strategic aims
• There has been a step-change or growth for
the organisation
• There has been beneft beyond the
immediate organisation (such as for partner
organisations or the wider community).		 At least
80% of
respondents		 100%
Brighter Lives* % of respondents reporting that at least one of the
following programme outcomes has been achieved
as a result of their grant:
• Supporting existing/emerging specialist
services for those struggling with mental
health issues
• Train/equip/resource churches/charities in
mental health awareness/frst aid, groups and
services
• Provide personal mental health and wellbeing
support for clergy and other church leaders/
workers		 At least
80% of
respondents		 97%

*Although no grants were awarded under these programmes in 2023, they have been included as projects funded under these programmes completed during 2023

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2023 Grant-Giving data

The geographical, denominational, and charitable spread of grants made, which are shown in the following tables and on page 17, are largely determined by the Trust’s objects and the pattern of applications received by the Trust.

The grants made reflect the number of applications received by the Trust and the size of the project covered by each application as well as the decisions made by trustees about those applications. The trustees recognise that assessing trends in grant-making data can be difficult when so much of that data is externally driven.

The Church of England receives the highest percentage of grants made by the Trust as it is the Established Church in England with a much higher number of parishes and church buildings to support than any other denomination across the UK and Ireland. Many of the applications received are not just about maintaining church buildings but also involve adapting them for community use, thus helping those communities to develop and thrive. Many applications involve the provision by churches and other local groups of services to the community, such as helping people experiencing homelessness, supporting asylum seekers and refugees, providing groups to tackle loneliness among older people, or activities for young people and families.

As part of the Trust’s strategy, the trustees have set a strategic aim to grow the Trust’s denominational network and encourage applications from denominations outside the Church of England, through raising awareness of the charity’s grant-giving and building strategic relationships.

Value of Grant-Giving by Denomination

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Value of Grants Awarded by Location of Beneficiary Project

----- Start of picture text -----
Scotland £0.9m
North East England - £0.6m
Northern Ireland - £0.6m
North West England - £1.8m
Yorkshire and the Humber - £1.8m
East Midlands - £1.1m
Republic of Ireland - £1.2m
West Midlands - £1.3m
East of England - £2.0m
Wales - £0.5m London - £2.2m
South West England - £2.1m
In addition, the Trust awarded £4.9m in grants
South East England - £2.6m supporting national projects
----- End of picture text -----

Grant-Giving by Geographical Spread

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BENEFACT TRUST LIMITED

Financial Review

Parent Charity

The charity statement of financial activities is shown on page 59.

Our total net expenditure in the year was £0.4m (2022: net expenditure £12.6m).

Total income
Total expenditure
Net gains/(losses) on investments
Taxation
Net (expenditure)/income in
the year
Transfers between funds
Gross transfers to the endowment
fund
Gross transfers to the unrestricted
fund
Net movement in funds		 2023
2022
Unrestricted
funds
£000
Endowment
funds
£000
Total
funds
£000
Unrestricted
funds
£000
Endowment
funds
£000
Total
funds
£000
14,064
3,719
17,783
15,327
8,945
24,272
(24,986)
(347)
(25,333)
(24,172)
(356)
(24,528)
-
7,258
7,258
-
(12,198)
(12,198)
-
(133)
(133)
-
(112)
(112)
(10,922)
10,497
(425)
(8,845)
(3,721)
(12,566)
-
-
-
(2,000)
2,000
-
3,956
(3,956)
-
3,550
(3,550)
-
(6,966)
6,541
(425)
(7,295)
(5,271)
(12,566)

Net expenditure in the unrestricted fund increased to £10.9m (2022: £8.8m), as a consequence of the challenging economic environment in 2023. Despite a £1.3m fall in income in the year, driven by reduced gift aid received, the Trust was able to increase its charitable giving from the unrestricted fund to £23.4m (2022: £22.8m), supported by £4.0m donated from the EEF, a linked charity, and by drawing on reserves.

Income received by the EEF fell £5.2m in the year to £3.7m, the prior year having included £5.0m gift aid received in specie. Improvements in investment markets during the last quarter of the year positively impacted the EEF’s performance, resulting in net income in the year of £10.5m (2022: £3.7m net expenditure), primarily driven by net gains on investments of £7.3m (2022: net losses of £12.2m).

Income

Total income received in 2023 fell to £17.8m (2022: £24.3m), as a result of a £7.0m decrease in gift aid received by the Trust from Benefact Group. This was partially offset by a £0.6m increase in donations received, principally from Methodist Insurance PLC, which was designated by the Trust for Methodist causes.

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Expenditure

Charitable giving increased to £23.4m in 2023 (2022: £22.8m). This includes £8.5m awarded through our Community Impact Grants programme, £2.8m through our Building Improvements Grants programme, and £7.3m through our Recurrent Grants programme.

Operating expenses increased to £1.5m (2022: £1.4m). We aim to keep operating expenses below 7.5% of total charitable giving and have achieved this as follows:

Target 2023 2022 2021
< 7.5% 6.6% 5.9% 5.4%

Funds

Total funds at 31 December 2023 were £123.8m (2022: £124.2m) consisting of £6.7m in the unrestricted fund (2022: £13.7m) and £117.1m (2022: £110.6m) in the EEF.

Despite the reduction in funds in the unrestricted fund, the Trust, supported by the EEF, continues to have adequate available resources to continue its charitable activities. The going concern statement for the Trust is included in the Trustees’ Report.

Reserves

The objective of our reserves policy is to ensure that the Trust has sufficient liquid resources to meet its grant commitments and maintain flexibility in its grant-giving. Our principal source of income is the gift aid that we receive from our main trading subsidiary, EIO plc. As the insurance market is cyclical, and the income that we receive can fluctuate, we hold reserves to ensure that we can continue with our grant-giving in the event of a reduction in income. Our reserves policy is set by reference to the amount of cash and readily realisable assets that we hold in the general and designated unrestricted funds.

In setting the policy, the trustees consider the potential volatility in income arising from charitable giving risk, the management of which is outlined in the Principal Risks and Uncertainties section of this report.

The trustees have determined that the level of reserves that the Trust should hold in its unrestricted funds, in the form of cash and readily realisable assets, should be sufficient to cover six months forecast cash outflows. Target reserves at 31 December 2023 were £10.1m.

At 31 December 2023, the Trust held reserves of £13.0m, including £7.0m of gift aid income that was received in December. The majority of the Trust’s charitable giving is paid in the second half of the year, due to the timing of Recurrent Grant payments to diocese and cathedrals. The excess reserves held at the 2023 year-end will support the Trust’s charitable giving in the second half of 2024, and the trustees therefore do not intend to take action to reduce the level of reserves held at this time.

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BENEFACT TRUST LIMITED

Trading Subsidiaries

The consolidated statement of financial activities is shown on page 78.

Net Income

The principal activities of the Trust’s trading subsidiaries throughout and at the end of the year remain the provision of general insurance and a range of financial services in the UK and overseas. A list of these undertakings is given in note 45 to the financial statements.

The trading subsidiaries reported net income of £27.2m¹ (2022 restated: £19.3m net income¹). The increase on the prior year was materially driven by fair value gains on investments, reflecting improved market conditions towards the end of the year. This includes a loss of £1.1m on the derecognition of Lloyd & Whyte Group Limited (L&W) as an associate, as a result of the Benefact Trust group of companies increasing its ownership of, and obtaining control of, L&W during the year.

The trading subsidiaries’ general insurance business reported a profit before tax of £24.3m¹ (2022 restated: £30.9m profit¹) despite being impacted by weather-related claims, development of prior year liability claims and, a major fire claim. Gross written premiums increased by over 10% supported by strong retention, new business and rate increases. The trading subsidiaries life business reported a profit before tax of £0.5m¹ (2022 restated: £5.3m loss¹).

The broking and advisory division reported a loss before tax of £2.5m¹ (2022: £5.0m profit¹), excluding the loss on disposal of L&W as an associate. Performance in the year was impacted by the amortisation of the goodwill arising from the acquisition of L&W.

The trading subsidiaries’ asset management division reported a loss before tax of £6.5m¹ (2022: £3.5m loss[1] ) as income generated from assets under management was impacted by uncertainty in investment markets. As markets improved towards the end of the year, assets under management returned to 2022 levels.

Details of the key performance indicators for Benefact Group plc are found in the Strategic Report of its annual report and accounts. Copies of these accounts are available from the registered office, as shown on page 153, and are provided to members of the Trust.

During the year, the trading subsidiaries directly distributed £3.1m (2022: £2.7m) for charitable purposes.

No fund or subsidiary was materially in deficit at the end of the year.

1 This is the result under UK Generally Accepted Accounting Practice (UKGAAP) which is the accounting basis under which the consolidated financial statements of the Trust are prepared. The majority of the trading subsidiaries prepare their own financial statements under International Financial Reporting Standards (IFRS).

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Consolidated Funds

The consolidated balance sheet is shown on page 80. At the year-end date, total net assets of the Benefact Trust group of companies were £771.0m (restated 2022: £747.6m).

The net assets of the Benefact Trust group of companies includes a recognisable net pension asset of £19.8m (2022: £15.3m). The Trust’s trading subsidiaries operate two defined benefit pension schemes, both of which are closed to future accrual. The unrestricted surplus in the schemes decreased by £1.7m in the year due to actuarial losses arising from changes in financial assumptions offsetting the positive return on investments. However, the recognisable surplus in the schemes increased due to a reduction in the discount rate and changes in underlying assumptions. Further details relating to the trading subsidiaries’ defined benefit pension schemes are included in note 40 to the consolidated financial statements.

Factors affecting Future Financial Position and Performance

The principal factor affecting the future position and performance of the Trust is the performance of its trading subsidiaries, which are the principal donor and source of funding for its charitable activities.

An easing of the inflationary pressures that have dominated the past few years, and expectations that central banks will begin to cut interest rates, is helping investment markets to recover. However, geo-political uncertainty remains, and the Benefact Trust group of companies may be exposed to volatility in the financial markets either directly through the EEF or indirectly through its trading subsidiaries.

Benefact Group takes a long-term view of risk, and due to the underlying resilience of its businesses it will continue to pursue its growth ambitions and continue to invest for the future.

More details of the principal risks and uncertainties to which the Trust is exposed, and how it manages them, are included in the Principal Risks and Uncertainties section of this report.

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BENEFACT TRUST LIMITED

Investments

Benefact Trust is the ultimate parent undertaking of Benefact Group, and full details of the Trust’s investments in related undertakings are disclosed in note 45. The Trust’s principal source of income is the gift aid it receives from EIO plc. The Board regularly discusses the rate of return it expects on its investment with the Benefact Group and monitors performance over a rolling 5, 7 and 10 year period.

The EEF, which is linked for registration and accounting purposes to the Trust, was established to assist in diversifying its asset base to reduce the concentration risk arising from its ownership of a financial services group. Gradually building the size of the EEF has enabled the Trust (as the EEF’s sole trustee) to grow a separate, more stable, income stream, for the benefit of the EEF’s (and the Trust’s) beneficiaries. During 2023, the Trust (as the EEF’s sole trustee) considered the long-term strategy for the appropriate size of the EEF, balancing reserving and diversification requirements, with the needs of beneficiaries to receive income. After deliberation, it was determined that the target size of the EEF would be calculated based on an amount of £25m plus three years of grant making.

The EEF is invested through two investment fund managers: EdenTree Asset Management Limited (EdenTree) and Rathbones Investment Management Limited (Rathbones), who operate under the same investment policy. The performance of the investment managers is assessed against a benchmark over 1, 3, 5 and 10-year periods, dependent on the duration of their appointment. Owl Private Office Holdings Limited provides expert investment advice to the Trust (in the Trust’s capacity as sole trustee of the EEF).

Investment Policy

The principal investment objective of the EEF is to maximise long-term investment returns through a diversified portfolio with an acceptable risk profile. During the year, the Corporate Trustee of the EEF reviewed its Investment Policy after taking legal advice and professional advice from Owl Private Office. After careful deliberations, it was agreed that both investment managers would be given identical global equity investment mandates where £50m would be invested in actively managed global equities, managed by EdenTree, and £35m to be managed by Rathbones. In addition, £25m would be invested in EdenTree’s Short Dated Bond Fund which would improve the liquidity of the portfolio.

During the year, the Corporate Trustee of the EEF agreed to amend its Investment Policy to exclude investment in fossil fuels. The EEF continues to adopt a screened approach to responsible and sustainable investment across three disciplines:

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  - tobacco, and

  - fossil fuel exploration and production and thermal coal.

Via its fund managers the EEF seeks to exhibit high standards of stewardship and, to engage proactively on ESG issues including, climate change, human and labour rights (including Modern Slavery), business ethics and corporate governance.

Investment Performance

The value of the EEF increased to £117.1m (2022: £110.6m) at 31 December 2023 and generated £3.7m dividend and interest income in the year. The EEF donated £4.0m (2022: £3.8m) to the Trust during the year, to support its charitable giving.

At the start of 2023, investment markets were dominated by fears of a global recession. As central banks battled against high levels of inflation, frequent interest rate rises meant investment markets remained volatile for much of the year. Yet by the end of 2023, with gross domestic product in the United States running at around 2.8%, the UK unemployment rate low at 3.7% and a housing market that has been remarkably resilient in the face of higher interest rates, stock markets were optimistic, finishing 2023 up 17% in sterling terms. The improvement in stock market performance in the last quarter of the year contributed to net investment gains in the EEF of £7.3m in the year (2022: £12.2m net investment losses).

At the year end, the portfolio managed by EdenTree stood at £81.0m (2022: £75.7m), of which £49.6m (2022: £62.8m) was in a discretionary portfolio and £31.4m (2022: £12.9m) in EdenTree’s open-ended investment company (OEIC) funds. During the year, the EdenTree portfolio delivered a positive return of +11.5%, versus the composite benchmark’s return of +13.1%.

Over the longer-term the discretionary portfolio managed by EdenTree has marginally underperformed its benchmark over 3 and outperformed over the longer-terms of 5 and 10 years.

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The discretionary portfolio managed by Rathbones stood at £36.1m (2022: £34.9m) at the year end. It delivered a positive return of +6.7% over the year, which was 6.4% behind the composite benchmark. The portfolio’s performance suffered due to the difficult market conditions. The Rathbones portfolio has underperformed the benchmark over 3 years, but has outperformed it over 5 years. As Rathbones commenced managing the EEF investments in 2018, benchmarking of its performance over 10 years is not applicable.

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Climate Change and Environment

The table below provides details of the carbon footprint of the combined operations of the Trust and the companies that it owns. This information is presented in line with the Streamlined Energy and Carbon Reporting (SECR) requirements:

Emissions source 2023 2023 2023 2023 2022 2022 2022 2022
UK Non-UK Total Scope 1 & 2
tCO2/
employee
UK		 Non-UK Total Scope 1 & 2
tCO2/
employee
Scope 1: fuel,
fuorinated gas losses
and fuel combustion in
ofces and company
vehicles		 142 7 149 143 23 166
Scope 2: electricity and
cooling in premises
(location based)		 696 84 780 584 92 676
Scope 2: electricity and
cooling in premises
(market based)		 97 75 172 82 92 174
Scope 3: business
travel, waste, water use		 439 568 1,007 734 217 951
Total CO2e 678 650 1,328* 0.56* 959 332 1,291* 0.61*

In 2023 total energy use was 4,153,785 kWh of which 3,962,931 kWh is UK and 190,853 kWh is non-UK based. In 2022, total energy use was 4,139,168 kWh, of which 3,775,241 kWh was UK and 363,927 kWh was non-UK based.

Through offsetting, the Benefact Trust group of companies was able to achieve net zero for its scope 1 and 2 emissions in 2023. Further details of the ways in which emissions are offset are included in a separate TCFD report available on the website of Benefact Group plc.

Footprint Methodology

These emissions are measured and reported according to Green House Gases (GHG) protocols, to SECR standards. The Benefact Trust group of companies has reported on all emission sources required under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. Its GHG reporting year runs from September 2022 to August 2023. The emissions reporting boundary is defined as all entities and facilities either owned by or under operational control of the Benefact Group. That is, emissions relating to its premises and associated travel by employees based at those premises.

Scopes 1, 2 and 3 emissions have been calculated using UK government greenhouse gas reporting emission factors (Department for Environment, Food and Rural Affairs), and

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independently verified according to ISO – 14064-3:2019 Specifications with Guidance for the Validation and Verification of Greenhouse Gas Statements.

The Benefact Trust group of companies’ 2023 footprint is based on 90% complete data by headcount. It has assessed the risk of incomplete data and taken a management decision to extrapolate on a basis agreed by the carbon footprint verifier. This is an improvement on 2022’s report (89%) and the Benefact Trust group of companies is committed to continuing to improve this position.

The overall footprint is slightly higher than in 2022 reflecting an increase in headcount due to acquisitions during the year. Scope 3 emissions are larger owing to increased business travel. The carbon intensity of the Benefact Trust group of companies’ investments continues to be a key part of its footprint and opportunity for influence. The Benefact Trust group of companies self-generated energy sufficient to save 32.9 tCO2e.

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Non-Financial and Sustainability Information Statement

The non-financial and sustainability reporting requirements relating to climate disclosures contained in section 414CB of the Companies Act 2006 are addressed below.

Benefact Trust is exposed to climate risk through the impact on its beneficiaries, through investments held by the EEF and through its ownership of the Benefact Group.

The Trust’s charitable giving strategy, which is incorporated into its Strategy and Business Plan 2024-2026, recognises the wide range of challenges facing its beneficiaries, including those arising from climate risk, and seeks to increase the Trust’s impact in these areas.

The EEF has a screened approach to responsible and sustainable investment: investment in fossil fuels is excluded; an Environment, Social and Governance (ESG) portfolio risk overlay is applied; and investments that seek to have a positive impact are looked upon favourably. Further details of the EEF’s investment policy can be found in the Investments Section of the Strategic Report.

The principal risks, governance and risk management of climate risks for Benefact Group are summarised below. More detailed information on Benefact Group’s approach to environmental matters is included in a separate TCFD report available on Benefact Group plc’s (BG plc) website.

BG plc’s Group Risk Committee is responsible for the oversight of climate risk for Benefact Group. There is strong governance and oversight of climate risk and it is subject to effective and robust controls.

Climate risks are managed according to a four-step cyclical process.

Benefact Group uses stress and scenario analysis to assess its principal climate risks. Its principal climate risks are:

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Benefact Group launched its roadmap to net zero in 2022. It is committed to running the business in a sustainable way to tackle climate change, reducing its direct impact on the environment and seeking to use renewable sources of energy. It is committed to encouraging others to do more, and a key part of its strategy is to help its customers across all of its business divisions understand and tackle their climate risks.

Benefact Group assesses its performance against voluntary ClimateWise reporting which is aligned to Taskforce on Climate-related Financial Disclosures (TCFD) reporting and independently audited. The annual carbon footprint for the Benefact Trust group of companies is disclosed on page 33.

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Principal Risks and Uncertainties

The major risks to which the Trust is exposed are reviewed by the Board with the aid of external advisers. The Board can choose whether or not to accept a particular risk, manage it or to mitigate against it. It is recognised that it is not possible or cost-effective to mitigate all risks fully and therefore some risks are accepted. The direct and indirect risks associated with the current cost-of-living crisis continues to be considered by the trustees, as the impacts continue to affect the social and economic environment. All identified risks are monitored and assessed on an ongoing basis and actions taken where appropriate. The principal risks identified are detailed below together with a summary of the key mitigants in place to manage the risks.

Charitable Giving Risk

The risk of detriment to the Trust as a result of overexposure to one source of funding and capital, alongside the underperformance of the investments of the Trust or performance of the Benefact Group, which could adversely impact its ability to undertake charitable giving.

How they are managed

The Trust formally sets out its expectations of the Benefact Group. This is reviewed regularly and there is ongoing monitoring of the performance against these expectations.

The Finance and Investment Committee is responsible for setting investment criteria and overseeing and reviewing the performance of the investment portfolio.

A formal policy between the Trust and the Benefact Group specifies how the level of income donated via Gift Aid is determined and this is subject to regular review. Regular reporting is received from the Trust’s principal asset, the Benefact Group, on its performance and through the trustees who act as ‘common directors’ with Benefact Group plc.

Limits have been established for the permitted range of investments held within the EEF to ensure a diversified portfolio with an acceptable risk profile. The EEF has two Investment Fund managers, EdenTree and Rathbones, to enable further diversification. Independent investment advice is provided to the Trust (as sole trustee of the EEF) by Owl Private Office, who provide investment monitoring reports twice a year to the Trust (acting in its capacity as sole trustee of the EEF). These appointments are regularly reviewed.

The Trust’s reserves policy, which can be found under the Financial Review section of this report, details the Trust’s policy to maintain liquidity to ensure it can meet its grant commitments. This policy is reviewed at least annually. The Trust regularly reviews its strategy and diversification needs to ensure the level of this risk remains acceptable.

As the sole corporate trustee of the EEF, the Trust has determined that the target size of the EEF would be calculated based on an amount of £25m plus three years’ of grant making. The EEF will continue to provide diversification of the Trust’s assets to reduce the degree of concentration risk.

With the continuing economic challenges and volatility in the Investment Markets during the year, the risk continues to be very closely monitored, however it remains very remote. Regular updates were sought from the CEO of the principal asset and updates on investment performance from the Investment Advisor. A number of scenarios continue to be considered in respect of differing levels of income, to determine the appropriate action to be taken to ensure longevity of future charitable giving.

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Regulatory Risk

The risk of public censure or regulatory intervention, as a consequence of failing to comply with relevant legislation, regulation and policies, ultimately leading to loss of public trust in the Trust.

How they are managed

The Trust has a dedicated resource to provide regular updates on relevant legislative or regulatory items to the Board and there is a regular formal training programme for all trustees. External expertise, including through the Trust’s solicitors, is also utilised where required.

The level of this risk has remained unchanged over the course of the year.

Reputational Risk

The risk of damage to the reputation of the Trust in the eyes of its stakeholders and the broader community through the actions of any people associated with the Trust, its investments or from sectoral scandals resulting in a loss of confidence from the people and groups that the Trust seeks to assist. This includes consideration through the year of the recent rebrand of the Trust.

How they are managed

Reputational risk is continually monitored by the Trust and regular updates are provided to the Board through the reporting provided at its meetings. The Trust has developed a Reputational Management Strategy to protect its reputation.

The Trust has a dedicated Head of Communications and Marketing and a Communications Officer, and communications protocols are in place to ensure that any potential issues are managed appropriately and proactively. Ongoing monitoring of media is conducted to identify any potential issues.

After the successful rebrand in the prior year, the level of residual risk remains stable, with the trustees continuing to monitor any indirect reputational impacts from the ownership of the trading subsidiary, as well as any direct impacts from the Trust itself.

Strategy Risk

This is the potential for failing to, or being unable to, formulate and/or deliver an appropriate strategy, resulting in a failure to achieve the Trust’s objectives, which are detailed under the ‘Our Strategy’ section in this report.

How they are managed

The Trust has a three-year Strategy and Business Plan, details of which can be found under the ‘Our Strategy 2024-2026’ section of this report. The trustees regularly review the effectiveness of the various strategic initiatives employed, and annually reviews its Strategy plan. Advice is also sought from external parties as part of this process.

An annual review of Board composition, skills and processes is undertaken to ensure their ongoing appropriateness and to identify any areas for improvement.

The trustees reviewed the Trust’s strategy during the year, and agreed the strategy for the following three years. This risk continues to be monitored closely in light of the economic challenges and the potential challenges on income as detailed above under the Charitable Giving Risk.

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Operational Risk

This is the risk of loss arising from inadequate or failed internal processes, people and systems, or from external events. This includes business continuity events, financial crime, information security breaches and third-party failure, which could result in a failure to meet the Trust’s objectives, full details of which can be found under the ‘Our Strategy 2024-2026’ section of this report.

How they are managed

The operational risks are managed through a robust control framework to ensure effective management. This includes ongoing training and induction processes for the trustees and staff and as well as those who provide arm’s length support services to the Trust.

Business Continuity plans are in place and are subject to regular review.

The agreements in place with relevant third parties are regularly reviewed and updated to reflect the changing environment.

Operational Resilience has been tested in the past couple of years, from the Covid-19 pandemic, with no detrimental impacts for the Trust or beneficiaries.

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Section 172 Statement

This statement provides an overview of how the trustees have fulfilled their duties to promote the success of Benefact Trust Limited and had regard to the matters set out in Section 172(1) of the Companies Act 2006, which is detailed below:

  1. A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

  2. (a) the likely consequences of any decision in the long term,

  3. (b) the interests of the company’s employees,

(c) the need to foster the company’s business relationships with suppliers, customers and others,

(e) the desirability of the company maintaining a reputation for high standards of business conduct, and

Our Stakeholders

We have identified and regularly review our stakeholders, as documented in the Trust’s Governance Framework and Board Charter and our Strategy and Three-Year Business Plan. These stakeholders are at the core of the trustees’ decision making.

Key stakeholders are our members, beneficiaries and other Christian partners, the Benefact Group, our employees staff (seconded from EIO plc), suppliers, the wider community and environment, and the Trust and Benefact Group’s Regulators. Examples of the way the trustees have engaged with some of these stakeholder groups throughout the year are set out below.

Our Approach to the Long-Term Success of the Company

We recognise that the long-term success of the Trust, and our ability to continue to help people, charities, and good causes, is dependent upon having regard to the interests of our stakeholders and ensuring that good governance is at the heart of the Trust’s activities.

As the Trust receives its donated income from the Benefact Group, and receives grants from the EEF, trustees’ decision making takes into account any potential impact on the Trust’s sustainability and its ability to continue to carry out its charitable objects for the public benefit.

The trustees finalised a review of the Trust’s grant-giving in 2023, having successfully engaged with beneficiary representatives to understand their views, to inform the development of the Trust’s grant-making strategy, and ensure its grants are directed effectively to support the Christian community and beneficiaries. Our new Community Impact Grants programme, together with our new Building Improvements Grants programme, replaced our General Grants, Thematic Grants and Transformational Grants programmes, and were approved by the Board and launched in early 2023.

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Crisis Response

In 2023, Benefact Trust awarded eight grants to the value of £850,000 toward a number of crisis response initiatives. The Crisis Response programme is a closed programme where the Trust provides strategic grants to organisations providing direct relief to people in crisis situations in the UK, Ireland or overseas.

Cost-of-Living Crisis

In July and December 2023, the trustees approved grants totalling £225,000 to the Good Faith Foundation for the Warm Welcome Campaign and The Trussell Trust to support food banks offering tailored advice and support to disadvantaged communities.

Natural Disasters

In February and September 2023, the trustees approved grants totalling £350,000 to British Red Cross and World Vision to assist in their response to the earthquakes in Turkey and Syria, and the floods in Libya.

Ukraine Response

In February, March and September 2023, the Trustees approved an overall amount totalling £275,000 to be donated to the British Red Cross, Irish Red Cross, and Depaul International, running emergency appeals in response to the Ukrainian crisis.

Further detail on the Trust’s grant-giving, strategy and investments can be found in the Strategic Report on page 8.

For more detail on the Company’s strategic objectives and how the Board operates please refer to the Strategic Report, on page 8, and Trustees’ Report, on page 45.

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Principal Decisions

The trustees have the necessary skills and experience required to identify the impacts of their decisions on the Trust’s stakeholders, and, where relevant, the likely consequences of those decisions in the long term.

In line with the Miscellaneous Reporting Regulations 2018, and in accordance with the approach taken during the financial year under review, having considered the Trust’s principal risks and uncertainties as detailed in the Strategic Report, the Trust made the following principal decision during the year ended 31 December 2023:

Crisis Response Grants programme

The Trust’s Crisis Response Programme was established in 2021 as a closed programme and therefore operated without the use of any strict criteria/key performance indicators. This had previously enabled the Trust to respond flexibly to crisis situations, however the trustees deemed it necessary to define the programme further to ensure effective prioritisation of the Trust’s funds.

At its October 2023 meeting, the trustees reviewed the Crisis Response Grants programme and 2024 budget. The trustees reviewed the approach regarding Crisis Response grants (grants awarded based on scale and severity rather than type of crisis) and agreed that it was content with the approach, but noted that emphasis ought to be placed on intentionally evaluating the need and impact of crisis response funding.

Our Strategy in Action

The table below is a summary of key decisions and actions that have been taken during the year in respect of strategic and company performance and how they have had regard to the interests of, and impact on, stakeholders.

Our Key Stakeholders Methods of engagement and outcomes

Members

The Trust was registered as a company limited by guarantee and, in accordance with its articles of association, can have a maximum of 50 registered members. The interests of the Trust and its members are aligned with the common purpose of carrying out the objects of the Trust. This ensures that the views of beneficiaries and the wider Christian and charitable community are communicated to, and considered by, the Board as a whole.

There are open channels of communication between the Company and its members. The Company holds an annual general meeting (AGM). In 2023, the Trust was able to hold the AGM in person once again (with the option of joining remotely) and Members were invited to engage with the business of the AGM and raise questions.

The Trust provides members with the option to receive an annual newsletter setting out the Trust’s grant-giving and developments.

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Beneficiaries and other Christian partners

The Board’s composition includes at least two trustees who are representative of the Trust’s beneficiary base. This helps to ensure that the views of beneficiaries are communicated to, and considered by, the trustees. In addition, the Trust’s Methodist Grant Giving Committee includes at least three members with an understanding of the Methodist Church, helping to ensure that the Methodist Grants programme provides the support needed for Methodist churches and ministries.

We actively engaged with our beneficiaries and stakeholders to inform the development of our grant making strategy. We also engaged in, and became more active members of, the Christian Funders’ Forum by hosting and participating in their meetings, helping us to understand the challenges and opportunities across the sector.

During 2023, we worked closely with known charity partners to respond to the cost-of-living crisis to support the most vulnerable in our communities.

The Benefact Group

As the ultimate owner of the Benefact Group, trustees maintain an open and constructive relationship with the trading subsidiaries. The Trust aims to have at least two common directors who are on the Board of the Trust and Benefact Group. This enables the trustees to receive regular updates from, and maintain oversight of, the Trust’s subsidiaries. There is also regular engagement between the Chair of the Board and the Chair of EIO plc, as well as with EIO plc’s Group Chief Executive Officer (Group CEO) who provides an update to the trustees at every Board meeting.

The Group CEO presents a report at every Board meeting, providing trustees with a high-level overview of the financials, and a general update of any key developments, from across the Benefact Group. In addition, throughout the year presentations were given by other Benefact Group executives to help trustees better understand strategic initiatives implemented throughout the Benefact Group.

The trustees were invited to attend the Benefact Group’s leadership conference in June, which enabled them to maintain their oversight of the Trust’s subsidiaries.

Employees

The Charity does not have any The Board receives regular updates from employees. Instead, all staff who individuals on a range of matters. In undertake work on the Trust’s behalf addition, the Trust Director provides a are employed by EIO plc. The Section quarterly resource update to the Board. 172 Statement for EIO plc explains EIO’s policy and strategy in relation to its employees.

Nevertheless, the Board understands that individuals who work on behalf of the Trust are its most valuable assets, given their specialist knowledge and propensity to go above and beyond.

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Suppliers

The Trust does not have a supply chain itself but uses the services of EIO plc under the terms of its Shared Services Agreement. The Charity recognises its responsibility, as well as that of its subsidiary, to ensure business activities are undertaken in accordance with regulatory requirements and best practice. The Board and the Audit and Risk Committee therefore received regular updates on the performance of its subsidiary throughout the year.

For further information on the Trust’s recognition of its responsibility towards its supply chain, please see its Modern Slavery Act Statement available on its website.

Community and Environment

As detailed in the Strategic Report, directors are focused on long term and strategic charitable giving.

The Trust launched its new Community Impact Grants programme which aims to fund work that will have a positive and transformative impact on lives and communities, with particular focus on:

  1. growing church congregations and communities;

  2. addressing social challenges facing communities; and

  3. improvement of church buildings to enable wider community use.

The trust also launched the Building Improvement Grants programme, providing essential support to protect and enhance church and Christian charity buildings and to support energy efficiency/ renewable energy measures.

The Trust (as the EEF’s sole trustee), reviewed the EEF’s investment assets, which included looking at the ESG policy and impact investment, amongst other things. Recommendations from this review in relation to these matters will continue in 2024.

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Regulators

We recognise the importance of open and honest dialogue with regulators and are committed to complying with applicable legislation and regulation. As a registered charity, the Trust is regulated by the Charity Commission. Trustees receive regular reports on evolving legal, regulatory and compliance matters at each board meeting, incorporating a detailed impact and progress assessment.

The Trust (via the Finance and Investment Committee) considered the Charity Commission’s guidance regarding investing charity money. A gap analysis was undertaken to ensure that the Trust was in line with the Commission’s expectations and the outcome demonstrated compliance with the new guidance.

The Strategic Report of Benefact Trust Limited was approved by the Board and signed on its behalf by

Tim Carroll Chair 2 May 2024

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Trustees’ Report

(incorporating the Directors’ Report for the year ended 31 December 2023)

The trustees, who are the directors of the charitable company for Companies Act 2006 purposes, are pleased to present their annual report and review together with the audited financial statements of the Charity and the Benefact Trust group of companies for the year ended 31 December 2023. In this report they are referred to as the trustees or, collectively, as the Board.

The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Trust’s articles of association, 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 (FRS 102) (effective 1 January 2019).

As permitted by Section 414 C (11) of the Companies Act 2006, some matters required to be included in the Trustees’ report have instead been included in the Strategic Report. These disclosures are incorporated by reference in this Trustees’ report. The Strategic Report can be found on pages 8 to 45.

Governance

Corporate Governance

We are committed to applying the highest standards of corporate governance and believe that the affairs of the Trust should be conducted in accordance with best practice. We comprehensively review our governance practices and procedures in the light of the Charity Governance Code (the Code), which was most recently refreshed in December 2020. We confirm that the Trust is compliant with the Code.

Governing Document

Benefact Trust was incorporated (as Allchurches Trust Limited) in 1972 in England and Wales. It is a company limited by guarantee not having a share capital and is a registered charity.

The governing documents are the articles of association.

In accordance with the articles of association, Benefact Trust in a general meeting may admit any person to membership provided the total number of members does not exceed 50. In the event of Benefact Trust being wound up, the liability of each of the members is limited to £1. A member has the ability to affect the governance of the charity by voting at its AGM (including on the election, re-election and removal of trustees and on any changes to the Charity’s articles of association) and thereby influence the way the charity is run. Members are also responsible for receiving and adopting the Charity’s report and accounts; voting on the appointment or removal of external auditors; and voting on any changes to the Charity’s name or articles of association.

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Organisation

The body responsible for the management, actions and decisions of Benefact Trust is the Board of trustees. The Board meets at least five times a year.

The Board seeks to ensure that all activities comply with UK law and regulatory guidance and achieve agreed charitable objectives. Its work includes setting the strategic direction of the Trust, developing its objectives and policies, reviewing the performance of trading subsidiaries and delivering the outcomes for which the Trust was established.

The Board has established a Finance and Investment Committee, an Audit and Risk Committee, a Nominations Committee, a Grants Committee and a Methodist GrantGiving Committee.

The Finance and Investment Committee has three scheduled meetings a year and primarily oversees the Trust’s investment strategy and its financial affairs. Its members are Mr Tim Carroll (Chair), Mr Francois Boisseau, Mr Patrick Rudden and Mr Nick Sykes. Mr David Smart, Mr Stephen Hudson and Ms Caroline Banszky retired as members of the Committee in May 2023, July 2023 and April 2024 respectively.

The Audit and Risk Committee has four scheduled meetings a year. It is responsible for the appropriateness of the Trust’s financial reporting, the rigour of the external audit processes and the effectiveness of the risk management framework. Its members are Mr Ian Moore (Chair) and Mr Tim Carroll. Mr Stephen Hudson retired as Chair and a member of the Committee in July 2023, Mr Chris Moulder retired as a member of the Committee in July 2023 and Sir Stephen Lamport retired from the Committee in March 2024.

The Nominations Committee has two scheduled meetings a year. Its remit includes reviewing the structure, size, composition and effectiveness of the Board and its committees; overseeing the recruitment and induction of new trustees; and the professional development of all the existing trustees; and considering succession planning and the membership needs of the Trust. Its members are Mr Tim Carroll (Chair), Mr David Paterson and Revd Paul Davies. Mr Stephen Hudson and The Very Revd Jane Hedges retired as members of the Nominations Committee in July and October 2023 respectively.

The Grants Committee has five scheduled meetings a year. It is responsible for overseeing and advising the Board on the further development of the Trust’s grant-giving strategy, processes and other arrangements; and advising and making recommendations to the Board on grant applications. Its members are Revd Paul Davis (Chair), Mr Tim Carroll and Mr David Paterson. The Venerable Karen Lund retired as a member of the Committee in March 2024.

The Methodist Grant-Giving Committee has three scheduled meetings per year. Its remit is to consider applications from, and grants to, Methodist beneficiaries. Its members are Revd Linda Barriball (Chair), Mr David Crompton, and Mrs Louise Wilkins. Mr Stephen Hudson resigned from the Committee in July 2023.

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The day-to-day management of the Trust is undertaken by its senior executive staff, Trust Director (appointed in May 2023) and the Company Secretary.

Board procedures have been established setting out a framework for the conduct of trustees, with clear guidelines as to the handling of any conflicts of interest and the standard of behaviour, responsibilities, and best practice expected of them in fulfilling their obligations to the Charity.

Trustees are able, where appropriate, to take independent professional advice at no personal expense so that they are able to fulfil their role. No trustee sought independent professional advice in the current or prior year. Trustee remuneration and expenses are disclosed in notes 9 and 26 to the financial statements.

Appointments to the Board

We aim to have a diverse group of trustees, with a balance of necessary skills and experience, who are broadly representative of the communities the Trust serves. Dialogue with stakeholders that Benefact Trust serves takes place in identifying potential candidates for the Board. The Board will advertise and engage external search consultants, as per its Board Equality, Diversity and Inclusion Policy.

In accordance with the articles of association, the Board may at any time appoint any person to be a trustee either to fill a casual vacancy or in addition to the existing trustees. Any such person appointed must retire at the following AGM and will be eligible for election by the members. In certain circumstances, the articles of association permit a member to propose a trustee for election in general meetings.

The names of the trustees at the date of this report are stated on page 153.

Mr Tim Carroll, Revd Paul Davis and Mr David Paterson will retire by rotation and, being eligible, offer themselves for re-election at the forthcoming AGM. Mr Chris Moulder and Mr Stephen Hudson retired from the Board at the AGM on 6 July 2023. Mr David Smart resigned from the Board on 2 May 2023 and the Very Revd Jane Hedges resigned from the Board on 17 October 2023. Sir Stephen Lamport, and The Venerable Karen Lund resigned from the Board on 5 March 2024 and Ms Caroline Banszky resigned from the Board on 26 April 2024.

On 5 May 2023, Mr Francois Boisseau was appointed to the Board as a common director of the Trust and the Benefact Group and will seek election at the forthcoming AGM. On 22 June 2023, Mr Ian Moore, Mr Patrick Rudden and Mr Nick Sykes were appointed to the Board and will seek election at the forthcoming AGM.

The trustees are covered by qualifying third-party indemnity provisions which were in place throughout the year and remain in force at the date of this report.

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Board Equality, Diversity and Inclusion

The primary responsibility of the trustees is to conduct the affairs of Benefact Trust in a manner which best enables the Trust to fulfil its charitable objectives. Appointments to the Board of the Trust are made which will best enable the trustees to discharge that responsibility.

We recognise the benefits of having a diverse Board. We believe that recognising and encouraging diversity, including in respect of gender, is essential to strengthening the Trust’s ability to meet its objectives.

When considering our approach and commitment to the principles of equality, diversity and inclusion, we have agreed the following commonly used definitions:

The Board has already taken steps over the last few years to increase the degree of diversity on the Board.

In 2021, the Board set the following objectives, which were re-confirmed in March 2023:

During the year, the Board met its targets for female and UKME representation on the Board, However, following recent retirements in Spring 2024, the Board recognise that it is now faces diversity challenges which it is actively addressing. The Board is satisfied that its composition reflects the wider Christian family. The Trust engages agencies to assist with trustee and executive recruitment searches. The Board, via its Nominations Committee, reviews its objectives yearly.

Trustees’ Induction and Training

On acceptance of a position on the Board, all trustees receive a comprehensive welcome pack, which includes their appointment letter and terms. All trustees are required to undertake a formal and comprehensive induction to the Trust and its trading subsidiaries upon joining the Board.

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The induction is a two-stage process and is primarily undertaken by the Secretariat. The programme is also offered to other trustees as a refresher every two years and when a programme is being run. New trustees also meet individually with the Chair, Senior Independent Director and each of the Executive Directors of EIO plc.

In addition, all trustees participate in a continuing professional development programme.

Board Evaluation

The trustees have agreed to undertake an external Board Evaluation at least every three years, the most recent carried out during 2022/23.

The main findings arising from the evaluation related to improvements to impact assessments for grant-making; reviewing the ESG strategy; developing an overarching risk appetite statement aligned to the Trust’s strategy; enhancing the assessment of skills for trustees and staff and building skill gaps and training into succession plans; and a continued focus on improving diversity.

In response to the findings, the Trust is actively targeting impact reporting as a strategic initiative during 2024 and 2025. The overarching risk appetite statement has been developed and approved by the Board and an enhanced skills assessment has been agreed and used to assess the skill gaps of the Board. A succession plan for staff has also been reviewed by the Nominations Committee. The Board will continue to focus on Board diversity following a number of resignations in Spring 2024.

All trustees receive an annual individual review with the Chair. The Chair is appraised by the Board, in his absence, led by the Senior Independent Trustee.

Related Parties

Related parties of the Trust include its subsidiary undertakings. A full list of the Trust’s related undertakings is disclosed in note 45 to the financial statements. All subsidiaries listed are included in the consolidated financial statements.

Where it is sensible and appropriate to do so in terms of efficiency and the prudent use of resources, the Trust uses facilities and services provided by EIO plc for administrative support. Some of the services provided are donated by EIO plc and others are recharged.

None of the trustees receive any remuneration or other benefit from their work with the Trust. Details of remuneration received by trustees in their capacity as non-executive directors of subsidiary undertakings is disclosed in note 26.

A conflicts register is maintained by the Company Secretary to monitor and manage any potential conflicts of interest. Training on the Companies Act 2006 and Charities Act 2011 has been given to all trustees and they are regularly reminded of their duties. Any conflicts are declared at the first board meeting at which the trustee becomes aware of the potential conflict and are then recorded in the conflicts register. The Board considers all conflicts in line with the provisions set out in the Company’s articles of association. The trustees are required to review their interests recorded in the conflicts register twice a year.

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Remuneration Policy

The day-to-day management of the Trust is undertaken by its senior executive staff, Trust Director (appointed in May 2023) and the Company Secretary, who, with the trustees, are the Trust’s key management personnel.

Remuneration of key management personnel is disclosed in note 10 to the financial statements.

All trustees give their time freely and no remuneration was received by any trustee in the year. The articles of association include a power to pay a chairperson but no such fee has been paid to date. Details of trustees’ expenses are disclosed in note 9 to the financial statements.

Benefact Trust itself has no employees, but uses staff employed by a subsidiary company to undertake its charitable activities. These employee costs are recharged to the Trust. The remuneration policy for the Benefact Group can be found in the Group Remuneration Report of the Benefact Group plc annual report and accounts which are available from the registered office, as shown on page 153.

Charitable Giving Policy

The Board regularly reviews its charitable giving policy to ensure it reflects the changing circumstances of the Trust, its strategic direction, its objects and its beneficiaries’ needs, and thereby advances public benefit. A copy of the Trust’s charitable giving policy can be found on the homepage of our website.

During 2023 delegated grant-making authority enabled the Head of Grants to approve small grants with a value of up to £10,000, with larger grants of up to £150,000 being considered and approved by the Grants Committee. All grants in excess of £150,000 were referred to the Board for discussion and final approval. All grant payments were checked and signed off by the Trust Director prior to funds being released.

Consideration of applications under the Methodist Grants Programme, which seek to promote the mission and ministry of the Methodist Church in Great Britain and the Methodist Church in Ireland, is delegated by the Board to the Methodist Grant-Giving Committee. All charitable giving made under this delegated authority is disclosed to the Board at its next meeting.

Charitable Giving by Subsidiaries

The trading subsidiaries of Benefact Trust have an organised programme of direct community investment independent of the Trust, which is managed centrally by EIO plc’s Impact team and at business unit level by local management. Through this programme they seek to fulfil their position as responsible businesses, to build and support their customers and brand, and to engage their people. It operates in two key ways: (i) supporting projects and partnerships important to customers and communities; and (ii) providing charitable support for employees to give to causes close to their hearts.

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Political Donations

As a charity, the Trust is not permitted to make political donations. It is the policy of the Trust’s main trading subsidiaries not to make political donations.

Climate Change and Environment

Information about the approach to climate change and the environment is provided in the Strategic Report.

Going Concern

A review of the financial position and performance of the Trust and its trading subsidiaries has been outlined in the Strategic Report together with a description of the principal risks and uncertainties faced by the Trust.

The Trust has considerable financial resources: the unrestricted fund has cash at bank and in hand of £13.0m and no borrowings (2022: cash at bank and in hand of £19.5m and no borrowings); and the EEF has financial investments of £114.0m, 100% of which are liquid (2022: financial investments of £109.6m, 100% of which are liquid).

The Trust’s subsidiary group has considerable financial resources: financial investments, excluding funeral plan investments, of £955.1m, 81% of which are liquid (2022: £964.5m, 76% of which liquid) and cash and cash equivalents of £164.8m (2022: £144.5m). Liquid financial investments consist of listed equities and open-ended investment companies, government bonds and listed debt. The subsidiary group continues to have a strong risk management framework and solvency position, is well placed to withstand significant market disruption and has proved resilient to stress testing.

Despite economic pressures and challenges, given the liquidity position of the Benefact Trust group of companies, and the capital strength of Benefact Group, there is a reasonable expectation that the Benefact Trust group of companies has adequate resources and is well placed to manage its risks successfully and continue in operational existence for at least 12 months from the date of this report.

Accordingly, the trustees continue to adopt the going concern basis in preparing the annual report and accounts.

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Statement of Trustees’ Responsibilities

The trustees (who are also directors of Benefact Trust Limited for the purposes of company law) are responsible for preparing the Trustees’ Annual Report (including the Strategic Report) and the financial statements in accordance with applicable law and regulation.

Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have prepared the financial statements in accordance with United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company 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 charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor and the Disclosure of Information to the Auditor

In accordance with Section 418, trustees’ reports shall include a statement, in the case of each director in office at the date the directors’ report is approved, that:

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In accordance with Section 489 of the Companies Act 2006, a resolution proposing that PwC LLP be appointed as auditor of the Trust will be put to the annual general meeting.

Equality, Diversity and Inclusion

Benefact Trust and its subsidiaries are committed to nurturing a culture and work environment in which all colleagues can fulfil their potential. Benefact Group’s Equality and Diversity Standard and Guidance sets out expectations for an open and inclusive workplace. The care and wellbeing of all our colleagues is placed at the heart of our employment policies.

Throughout the employee lifecycle from recruitment onwards, the Benefact Trust group of companies carefully consider adjustments to processes and practices and look for solutions to remove barriers for those colleagues with disabilities.

When needed, we engage with third-party and Occupational Health specialists who provide us with expert advice and ensure we are offering the best support we can. Through our adjusted work approach we provide an environment in which colleagues with additional needs can fully participate in all opportunities provided by the Benefact Trust group of companies from continued employment to training, job moves and promotions. We offer a range of support for colleagues to help them maintain a healthy work and home life including: flexible working practices, virtual GP service, Employee Assistance Programme, Flu Vaccinations and Eye tests as well as a wide variety of flexible benefits such as dental care and critical illness insurance.

Further information on diversity and inclusion can found in the Responsible Business Report of the Benefact Group plc annual report and accounts which are available from the registered office, as shown on page 153.

The Trustees’ Report of Benefact Trust Limited was approved by the Board and signed on its behalf by

Tim Carroll Chair 2 May 2024

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Independent Auditors’ Report to the Members of Benefact Trust Limited

Report on the Audit of the Financial Statements

Opinion

In our opinion, Benefact Trust Limited’s group financial statements and parent charitable company financial statements (the “financial statements”):

We have audited the financial statements, included within the Annual Report & Accounts (the “Annual Report”), which comprise: the consolidated and charity balance sheets as at 31 December 2023; the consolidated statement of financial activities (incorporating a consolidated income and expenditure account) and the charity statement of financial activities (incorporating an income and expenditure account) and the consolidated and charity statements of cash flows for the year then ended; and the notes to the financial statements, which include a description of significant accounting policies.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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’s and the parent charitable company’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the trustees’ use of the

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going concern basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the parent charitable company’s ability to continue as a going concern.

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

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic Report and Trustees’ Report, we also considered whether the disclosures required by the UK Companies Act 2006 and Charities Act 2011 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic Report and Trustees’ Report

In our opinion, based on the work undertaken in the course of the audit the information given in the Strategic Report and the Trustees’ Report for the period ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and parent charitable company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic Report and the Trustees’ Report.

Responsibilities for the financial statements and the audit

Responsibilities of the trustees for the financial statements

As explained more fully in the Statement of Trustees’ Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The trustees are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the financial statements, the trustees are responsible for assessing the group’s and parent charitable company’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 charitable company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and its industry/environment, we identified that the principal risks of non-compliance with laws and regulations related to breaches in UK regulation, such as those governed by the Prudential Regulation Authority and the Financial Conduct Authority, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue or expenditure and management bias in accounting estimates specifically the valuation of specific general insurance contract liabilities including Physical and Sexual Abuse (“PSA”) reserves. Audit procedures performed by the engagement team included:

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There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in financial statements. 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 for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the parent charitable company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

We have no exceptions to report arising from this responsibility.

Colin Bates (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors

Bristol

2 May 2024

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CHARITY STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT)

for the year ended 31 December 2023

Income and endowments from:
Charitable giving - grants
Gross transfers to the unrestricted
fund
Net gains/(losses) on investments
11
Total expenditure
Taxation
7
Gross transfers to the endowment
fund
Transfers between funds
Total funds carried forward
Total funds brought forward
Donations
3
Notes
Total income
Dividend and interest income
4
Investments
Net (expenditure)/income in the year
undertaking
Raising funds
Gift aid from subsidiary
Expenditure on:
Charitable activities
5
Other expenditure on
charitable activities
6
15
15
Net movement in funds		 -
(12,198)
(12,198)
(24,172)
(356)
(112)
-
(22,821)
(1,351)
-
(1,351)
(22,821)
(24,528)
-
7,258
7,258
(10,922)
(425)
(24,986)
(347)
(25,333)
(133)
-
(133)
Total
Total
(356)
-
(356)
(347)
-
(112)
(8,845)
(3,721)
10,497
(12,566)
(347)
-
(23,447)
8,945
3,719
24,272
funds
2023
870
269
17,783
-
870
-
269
funds
funds
funds
funds
Unrestricted
Unrestricted
Endowment
Endowment
funds
2022
£000
£000
£000
£000
£000
£000
14,064
3,719
13,000
-
194
13,000
15,000
5,000
20,000
3,913
58
3,945
4,003
15,327
-
(1,539)
-
(1,539)
(23,447)
-
6,697
117,097
123,794
13,663
110,556
124,219
13,663
110,556
124,219
20,958
115,827
136,785
-
(2,000)
2,000
(5,271)
(12,566)
-
-
3,550
(3,550)
-
-
(3,956)
3,956
(6,966)
6,541
(425)
(7,295)

The accompanying notes on pages 62 to 77 are an integral part of this charity statement of financial activities. All income relates to continuing operations. The charity had no other recognised gains or losses during the current or prior year other than those included in the charity statement of financial activities.

59

BENEFACT TRUST LIMITED

CHARITY BALANCE SHEET

at 31 December 2023

Unrestricted funds
Restricted funds
Total funds
Endowment funds
15
General funds
15
Designated funds
15
The funds of the charity:
Total net assets
Creditors: amounts falling due after one year
14
Total assets less current liabilities
Net current assets
Creditors: amounts falling due within one year
14
Liabilities
Total current assets
Cash at bank and in hand
13
Debtors
12
Current assets
Total fixed assets
Investments
11
Notes
Fixed assets		 114,090
109,665
114,040
50
£000
£000
£000
funds
funds
funds
funds
£000
Total
Total
Unrestricted
2023
2022
Endowment
114,090
109,665
114,040
50
15,908
20,225
2,934
12,974
165
317
160
5
16,073
20,542
3,094
12,979
(4,962)
(3,794)
(37)
(4,925)
11,111
16,748
3,057
8,054
(1,407)
(2,194)
-
(1,407)
125,201
126,413
117,097
8,104
123,794
124,219
117,097
6,697
4,519
11,681
-
4,519
2,178
-
2,178
1,982
117,097
110,556
117,097
-
6,697
-
6,697
13,663
123,794
124,219
117,097
6,697

The analysis of the prior year comparatives by fund is included in the related notes on pages 75-76.

The financial statements of Benefact Trust Limited, registration number 1043742, on pages 59 to 77 were approved and authorised for issue by the Board on 2 May 2024 and signed on its behalf by:

Tim Carroll Chairman

Revd Paul Davis Trustee

60

BENEFACT TRUST LIMITED

CHARITY STATEMENT OF CASH FLOWS

for the year ended 31 December 2023

Change in cash and cash equivalents due to exchange rate movements
Cash and cash equivalents at the end of the reporting period
13
Net cash provided by/(used in) investing activities
Change in cash and cash equivalents in the reporting period
Cash and cash equivalents at the beginning of the reporting period
Analysis of changes in net debt
Change in cash and cash equivalents in the reporting period
Purchase of investments
Proceeds from the sale of investments
Dividend and interest income from investments
Cash flows from investing activities:
Net cash used in operating activities
Increase in creditors
Taxation paid
(Increase)/decrease in debtors
Dividend and interest income from investments
(Gains)/losses on investments
Adjustments for:
Gift aid from subsidiary undertaking received in specie
Notes
Net expenditure for the reporting period		 384
1,641
133
112
(3)
172
(3,913)
(4,003)
(7,258)
12,198
-
(5,000)
£000
£000
2023
2022
(425)
(12,566)
(11,082)
(7,446)
(76,396)
(17,624)
79,229
10,713
4,000
3,823
6,833
(3,088)
(4,249)
(10,534)
(4,249)
(10,534)
20,225
30,767
(68)
(8)
20,225
15,908

61

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

1 Accounting policies for charity parent only

Benefact Trust Limited is incorporated in England and Wales. It is a company limited by guarantee and a registered charity. The material accounting policies adopted in preparing the charity financial statements are set out below.

Basis of preparation

The financial statements of the charity have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102); Financial Reporting Standard 102 (FRS 102); and the Companies Act 2006 (the Act). The historical cost convention has been applied, as modified by the revaluation of certain financial assets measured at fair value through profit and loss.

The charity meets the definition of a public benefit entity under FRS 102.

A review of the financial position and performance of the charity and its trading subsidiaries has been outlined in the Financial Review section of the Strategic Report, together with a description of the principal risks and uncertainties faced by the charity.

The Trust has considerable financial resources: the unrestricted fund has cash at bank and in hand of £12,974,000 and no borrowings (2022: £19,546,000 and no borrowings); and the Expendable Endowment Fund (EEF) has financial investments of £114,040,000, 100% of which are liquid (2022: financial investments of £109,615,000, 100% of which are liquid). The charity's subsidiaries have considerable financial resources which are sufficient to meet their own financial obligations as outlined in consideration of the going concern status of the Benefact Trust group of companies in the Trustees' Report. As a consequence, the trustees have a reasonable expectation that the charity is well placed to manage its business risks successfully and continue in operational existence for at least 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts of the charity.

The charity financial statements are stated in sterling, which is the charity's functional and presentational currency.

Fund structure

Unrestricted funds of the charity consist of general funds and designated funds. General funds are available to the trustees to apply for the general purposes of the charity, in addition to each of the priorities adopted by the charity as set out in the Strategic Report. Designated funds are unrestricted funds that have been set aside by the trustees for a particular purpose, as set out in note 15. The EEF is registered with the Charity Commission as a charitable trust linked to the Trust (charity registration number 263960-1) for registration and accounting purposes. The Trust, as the Sole Trustee of the EEF, has the power to convert endowment funds to expendable income. The Trust remains the reporting charity and produces only one set of accounts which includes the EEF.

Change in accounting policy

IFRS 9 Financial Instruments

The charity previously applied the recognition and measurement principles of IAS 39 Financial Instruments: Recognition and Measurement when accounting for financial instruments.

Under FRS 102, the charity is permitted to change the method in which it accounts for financial instruments to IFRS 9 Financial Instruments if, in doing so, the financial statements provide more relevant and reliable information on the entity's financial position, performance and cashflows.

The trustees consider IFRS 9 to provide a more accurate reflection of the risk borne by the charity by implementing a forward-looking expected credit loss model and hence have elected to adopt IFRS 9 from 1 January 2023.

In accordance with the transition requirements of IFRS 9, the comparative period has not been restated and continues to be reported under IAS 39. On transition there were no changes to the classification and measurement of the financial instruments held by the charity. If there had been any measurement differences arising from transition these would have been reported in opening funds at 1 January 2023.

The following table summarises the classification and measurement impacts of IFRS 9 on transition:

Financial asset
Cash at bank and in hand
Debtors
Debt securities
Equity securities		 Measurement category Carrying amount
Fair value through
profit or loss
Fair value through
profit or loss
Fair value through
profit or loss
Fair value through
profit or loss
Amortised cost
Loans and receivables
Amortised cost
Loans and receivables
Original (IAS 39)
New (IFRS 9)		 IFRS 9
IFRS 9
20,225
317
9,516
-
9,516
100,099
-
100,099
317
-
20,225
-
£000
£000
As previously
Impact of
reported (IAS 39)
£000

62

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

1 Accounting policies for charity parent only (continued)

Income

Donations and gift aid

Donations and gift aid are recognised on an accruals basis at the point at which it is probable that the charity will receive the income and the amount receivable can be reliably measured.

Donated services

Donated services are an estimate of the fair value of management and administration costs incurred by subsidiary undertakings on behalf of the charity but not recharged. They are recognised on an accruals basis. An equal amount is included in expenditure on charitable activities.

Dividend and interest income

Dividends on equity securities are recognised on the ex-dividend date. Interest is recognised as it accrues. Dividends from overseas equities are grossed-up for irrecoverable withholding tax.

Unrealised gains and losses are calculated as the difference between carrying value and the original cost, and the movement during the year is recognised within net gains/(losses) on investments in the statement of financial activities. The value of realised gains and losses includes an adjustment for previously recognised gains or losses on investments disposed of in the accounting period.

Expenditure

Charitable giving

Charitable giving consists of grants approved in the year, net of returned grant payments and grant offers withdrawn. Charitable giving is recognised when the grant application is approved. Returned grants are recognised when received. Withdrawn grants are recognised when the withdrawal of the grant offer is communicated. Charitable giving which is contingent upon the satisfaction of certain conditions within the charity's control is not recognised until those conditions have been satisfied. Where conditions exist outside of the charity's control and the charity has no reasonable expectation that the condition will not be met, the charitable giving is recognised.

Expenditure is classified under the following headings in the statement of financial activities:

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

Taxation

Benefact Trust Limited and its linked charitable trust, the EEF, is a UK registered charity and is therefore exempt from corporation tax under Chapter 3 of Part 11 of the Corporation Tax Act 2010 or section 256 of the Taxation for Chargeable Gains Act 1992, to the extent that surpluses are applied to its charitable purposes. Irrecoverable tax withheld from overseas dividend income in the EEF is recognised when the dividend is received.

Transfers between funds

Transfers between the funds are recognised when cash is transferred.

Financial instruments

From 1 January 2023 the charity has chosen to change its accounting policy for financial instruments from IAS 39 Financial Instruments: Recognition and Measurement to the recognition and measurement provisions of IFRS 9 Financial Instruments, issued by the International Accounting Standards Board as adopted by the UK, and the disclosure requirements of section 11 and 12 of FRS 102.

The charity's IFRS 9 accounting policies are described below:

(i) Classification and measurement

All financial assets under IFRS 9 are initially recognised at fair value, plus or minus (in the case of a financial asset not at fair value through profit or loss (FVTPL)) transaction costs that are directly attributable to the acquisition of the financial instrument. Classification and subsequent measurement of financial assets depends on the charity’s business model for managing the financial assets and the contractual terms of the cash flows.

The trustees consider that the carrying value of those financial assets and liabilities not carried at fair value in the financial statements approximates to their fair value.

Debt instruments

All debt instruments held by the charity are measured at FVTPL. Changes in the fair value of equity instruments at FVTPL are recognised in net gains/(losses) on investments in the statement of financial activities.

Equity instruments

By default, the charity classifies and measures equity investments at FVTPL. Changes in the fair value of equity instruments at FVTPL are recognised in net gains/(losses) on investments in the statement of financial activities.

63

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

1 Accounting policies for charity parent only (continued)

Financial instruments (continued)

(ii) Impairment

The charity recognises a forward-looking loss allowance for expected credit losses (ECL) on financial assets measured at amortised cost. ECL is an unbiased, probability-weighted estimate of credit losses and considers all reasonable and supportable information. The impairment methodology applied depends on whether there has been a significant increase in credit risk or default.

The charity has elected to apply the simplified approach permitted by IFRS 9 and recognises lifetime ECL for trade receivables. The ECL on these financial assets are estimated using a provision matrix based on the charity's historical credit loss experience, adjusted for current and forecast economic conditions.

For all other financial instruments, the charity recognises a lifetime ECL when there has been a significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased significantly since initial recognition, the charity measures the loss allowance for that financial instrument at an amount equal to a 12-month ECL. A lifetime ECL represents the expected losses that will result from all possible default events over the expected life of a financial instrument. A 12-month ECL represents the portion of the lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. A financial asset is written off to the extent there is no reasonable expectation of recovery. Any subsequent recovery in excess of the financial asset’s written down value is credited to net income/(expenditure).

Impairment losses are presented within other expenditure on charitable activities in the statement of financial activities.

Prior year comparatives have not been restated for the impacts of IFRS 9 and are reported under IAS 39. The accounting policies adopted by the charity when applying IAS 39 in the prior year are described below:

(i) Classification and measurement

IAS 39 requires certain financial assets and liabilities to be classified into separate categories, for which the accounting treatment differs.

The classification depends on the nature and purpose of the financial assets and liabilities, and is determined at the time of initial recognition. Financial instruments are initially measured at fair value. Their subsequent measurement depends on their classification:

The trustees consider that the carrying value of those financial assets and liabilities not carried at fair value in the financial statements approximates to their fair value.

Investments

Financial assets at fair value

Investments are classified into this category if they are managed, and their performance evaluated, on a fair value basis. Purchases and sales of these investments are recognised on the trade date, which is the date that the charity commits to purchase or sell the assets, at their fair value adjusted for transaction costs.

The fair values of investments are based on quoted bid prices. Where there is no active market, fair value is established using a valuation technique based on observable market data where available.

Investment in subsidiary undertakings

Investment in subsidiary undertakings are accounted for at historic cost less impairment.

Cash at bank and in hand

Cash at bank and in hand includes short term deposits at amortised cost, which are highly liquid investments with original maturities of three months or less. Cash at bank and in hand equates to cash and cash equivalents in the statement of cash flows.

2 Critical accounting judgements and key sources of estimation uncertainty

There were no critical accounting judgements or estimates made in the current or prior year.

3 Donations

During the year, the charity received a donation of £500,000 (2022: £nil) from Methodist Insurance PLC which was designated by the trustees.

The charity received £370,000 (2022: £269,000) of donated services which the trustees have estimated as the fair value of management and administration costs incurred by subsidiary undertakings on behalf of the charity, but which are not recharged. An equal amount is included within expenditure on charitable activities.

64

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

4 Dividend and interest income

cash deposits, net
Equity securities
Income from financial assets at
fair value
- listed
Debt securities
- listed
Income from financial assets at
amortised cost
- cash at bank and in hand and
of exchange movements		 funds
funds
£000
£000
£000
£000
£000
£000
2022
Unrestricted
funds
2023
Endowment
Total
funds
funds
funds
Unrestricted
Endowment
Total
-
3,330
3,330
-
3,369
3,369
-
384
384
-
586
586
194
(34)
160
58
29
87
58
3,945
4,003
194
3,719
3,913

5 Charitable giving - grants

Other Grants
Methodist Grants
Other Grants
Heritage Skills for Christian Buildings
Crisis Response Grants
Brighter Lives
Transformational Grants
General Grants
Recurrent Grants
Heritage Skills for Christian Buildings
Crisis Response Grants
2023
Building Improvement Grants
Methodist Grants
General Grants
Community Impact Grants
Recurrent Grants
2022 (Re-presented)*		 207
2
137
346
275
850
45
137
7,477
18
137
1,005
Grants to
Shared
institutions
costs
costs
Total
Support
£000
£000
£000
£000
2,807
89
137
3,033
9
137
421
2,548
45
137
2,730
960
22
137
1,119
8,505
213
137
8,855
7,295
23,447
443
1,096
24,986
£000
institutions
costs
costs
Total
2,763
(128)
13
119
4
Grants to
Shared
Support
3,348
2,160
65
119
2,344
8,477
48
119
4,991
78
120
5,189
3,144
85
119
42
119
48
120
1,590
8,309
1,751
159
18
119
296
2,596
£000
£000
£000
22,821
397
954
24,172

*Prior year comparatives have been re-presented to reflect charitable giving by grant programmes.

**Other Grants includes returned grants on closed programmes.

The charity does not make grants to individuals.

65

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

During the year the charity made the following material institutional grants, where material is defined as over £100,000 in aggregate:

Heritage Skills for Christian Buildings
Community Impact Grants
St Saviour's Church, Hanley Road, London
Community Chaplaincy Association, Goodrich, Herefordshire
National Schools Singing Programme/Diocese of Leeds, Leeds, West Yorkshire
The Salmon Youth Centre, London
Trevi, Plymouth, Devon
YMCA England and Wales, London
YMCA London City and North, London
YMCA Wellington and District, Telford, Shropshire
St Michael's Church, Cootehil, County Cavan
Holy Trinity Church, Clapham, London
Youth Initiatives NI, Belfast, County Antrim
Holy Trinity Church, Weston, Southampton
Kilcock and Newtown Church, Kilcock, County Kildare
Binscombe Church, Godalming, Surrey
St Edward the Confessor Catholic Church, Romford, Greater London
City Church Chelmsford (Part of Danbury Mission Church CIO), Essex
Kings Church Bangor, Bangor, County Down
Merchants Quay Ireland, Dublin, County Dublin
Oasis Community Partnerships, London
Building Improvement Grants
Newport Pagnell Baptist Church, Buckinghamshire
The Methodist Church in Great Britain, London
Stones Methodist Church, Ripponden, West Yorkshire
The King's Foundation, London
York Minster
Drighlington Methodist Church, Drighlington, West Yorkshire
All We Can, London
Methodist Centenary Church, Dublin, County Dublin
Greenbank Parish Church, Glasgow, Lanarkshire
Methodist Grants*
Methodist Church in Ireland, Belfast, County Antrim
St Macartan's Cathedral, Monaghan Town, County Monaghan
St Mark's Methodist Church, Tottenham, London		 112
125
100
225
112
120
300
150
138
100
100
150
105
195
200
180
108
109
100
2023
£000
2,729
100
260
152
1,150
512
100
100
100
130
120
100
71
1,800
101
172

*Grants to these beneficiaries are classified within different grant programmes but in aggregate exceed £100,000.

66

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

The Diocese of Chichester
The Diocese of Chelmsford
The Diocese of Durham
Leicester Cathedral
The Diocese of Bath and Wells
Recurrent Grants
Depaul International, London
The Good Faith Foundation, Ascot, Berkshire
The Diocese of Bristol
The Diocese of Canterbury
The Diocese of Blackburn
Subtotal carried onto page 68
The Diocese of Birmingham
The Diocese of Chester
The Diocese of Coventry
The Diocese of Lincoln
The Diocese of Manchester
The Diocese of Oxford
The Diocese of Southwell and Nottingham
The Diocese of St Albans
The Diocese of Leicester
The Diocese of Lichfield
The Diocese of Derby
The Diocese of Exeter
The Diocese of Leeds
The Diocese of Liverpool
The Diocese of London
The Diocese of Newcastle
The Diocese of Norwich
The Diocese of Peterborough
The Diocese of Rochester
The Diocese of Salisbury
The Diocese of Sheffield
The Diocese of Southwark
Crisis Response Grants*
British Red Cross, London
The Trussell Trust, Salisbury, Wiltshire
World Vision UK, Milton Keynes, Buckinghamshire		 £000
2023
100
125
375
100
125
152
258
157
168
151
113
22
106
113
144
103
119
198
119
129
235
123
165
320
206
106
111
192
106
128
165
104
145
226
825
129
4,513

*Grants to these beneficiaries are classified within different grant programmes but in aggregate exceed £100,000.

67

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

Leicester Cathedral
Total of grants that are not individually material in aggregate:
Other Grants
National Churches Trust, London
General Grants
St Michael le Belfrey Church, York, North Yorkshire
General Grants
Community Impact Grants
Total grants
Methodist Grants
Other Grants
Heritage Skills for Christian Buildings
Crisis Response Grants
Recurrent Grants
Total material grants
Building Improvement Grants
York Minster
The Diocese of Worcester
Recurrent Grants (continued)
Subtotal from page 67
The Diocese of Winchester
The Diocese of York
The Representative Body of the Church in Wales
York Minster		 £000
2023
107
4,513
121
147
159
22
150
130
5,069
10
120
280
130
11,517
680
2,295
2,226
5,776
103
25
748
77
11,930
23,447

*Grants to these beneficiaries are classified within different grant programmes but in aggregate exceed £100,000.

Examples of grants paid are included in the Strategic Report. A full list of beneficiaries of charitable grants awarded in the year is available on the Trust's website.

68

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

During the prior year the charity made the following material institutional grants, where material is defined as over £100,000 in aggregate:

Methodist Grants
Ashbourne Methodist Church, Ashbourne, Derbyshire
Nafferton Methodist Church, Nafferton, North Humberside
Newquay Methodist Church, Newquay, Cornwall
Grange Methodist Church, Grange-over-Sands, Cumbria
Methodist Connextion, London
Tewkesbury Methodist Church, Tewkesbury, Gloucestershire
Trustees of the Methodist Church in Ireland, Belfast
QEST (Queen Elizabeth Scholarship Trust), London
Baby Basics UK, Sheffield, South Yorkshire
British Red Cross, London
Depaul International, London
Depaul UK, London
Church Revitalisation Trust, London
Church Urban Fund, London
The Good Faith Foundation, Ascot, Berkshire
The Representative Body of the Church of Ireland
Sanctuary Foundation, London
The Salvation Army, London
The Trussell Trust, Salisbury, Wiltshire
The Diocese of Blackburn
The Diocese of Canterbury
Subtotal carried onto page 70
The Diocese of Bath and Wells
The Diocese of Chelmsford
Sheffield Cathedral
The Diocese of Birmingham
Heritage Skills for Christian Buildings
Crisis Response Grants
Recurrent Grants
The Diocese of Chester
The Diocese of Bristol		 _Re-presented_
2022
£000
100
100
150
100
1,450
120
100*
144
2,120
144
50
150
150
100
140
280
100
85
20
150
100
192
129
165
1,325
121
25
295
172
129
1,228

*Prior year comparatives have been re-presented to reflect charitable giving by grant programme.

**Grants to these beneficiaries are classified within different grant programmes but in aggregate exceed £100,000.

69

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

Recurrent Grants
Subtotal from page 69
The Diocese of Chichester
The Diocese of Coventry
The Diocese of Derby
The Diocese of Durham
The Diocese of Ely
The Diocese of Exeter
The Diocese of Guildford
The Diocese of Leeds
The Diocese of Leicester
The Diocese of Lichfield
The Diocese of Lincoln
The Diocese of Liverpool
The Diocese of London
The Diocese of Manchester
The Diocese of Newcastle
The Diocese of Norwich
The Diocese of Oxford
The Diocese of Peterborough
The Diocese of Portsmouth
The Diocese of Rochester
The Diocese of Salisbury
The Diocese of Sheffield
The Representative Body of the Church in Wales
The Diocese of Southwark
The Diocese of Southwell and Nottingham
The Diocese of St Albans
Windsor Leadership, Windsor
The Diocese of Truro
The Diocese of Winchester
The Representative Body of the Church of Ireland
The Diocese of Worcester
The Diocese of York
General Grants
Church of the Holy Family, Oxford, Oxfordshire
Helping Hands Community Outreach Project, Portadown, County Armagh
LifeLine Church, Dagenham, Essex
The Branch Trust, Chipping Norton, Oxfordshire		 2022
_Re-presented_
£000
1,228
174
118
136
179
103
147
110
268
136
226
141
188
366
235
121
127
219
121
112
146
119
166
182
258
147
188
104
138
94
122
168*
6,287
150
130
5
171
100
556

*Prior year comparatives have been re-presented to reflect charitable giving by grant programme.

**Grants to these beneficiaries are classified within different grant programmes but in aggregate exceed £100,000.

70

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

5 Charitable giving - grants (continued)

Sportily, Gloucester, Gloucestershire
Spurgeons, Rushden, Northamptonshire
Street Connect, Glasgow
Safe Spaces England and Wales, London
Sanctuary Foundation, London
Sanctuary Mental Health Society (DBA Sanctuary Mental Health Ministries), London
Baby Basics UK, Sheffield, South Yorkshire
Helping Hands Community Outreach Project, Portadown, County Armagh
Innervation Trust Ltd, Tewkesbury, Gloucestershire
Linking Lives UK, Earley, Berkshire
Through the Roof, Morden, Surrey
Yorkshire North and East Methodist District, Acomb, North Yorkshire
Youth Ministry in Communion (St Andrew's, Fulham), Fulham, London
Youthscape, Luton, Bedfordshire
Sheffield Cathedral
Rose Castle Foundation, Carlisle, Cumbria
The Ecumenical Council for Corporate Responsibility (ECCR), Kington, Herefordshire
The Family Works, Owlerton, South Yorkshire
The Liverpool Diocesan Board of Finance, Liverpool, Merseyside
The Methodist Church in Great Britain, London
Transformational Grants
ACET UK, Chester, Cheshire
Premier Christian Media Trust, London
Quakers in Britain (Britain Yearly Meeting of The Religious Society of Friends), London
Restored, Teddington, Middlesex
NAYBA, Bagshot, Surrey
Total material grants
Total of grants that are not individually material in aggregate:
Methodist Grants
Heritage Skills for Christian Buildings
Brighter Lives
Helping Hands Community Outreach Project, Portadown, County Armagh
Spurgeons, Rushden, Northamptonshire
The Diocese of Bristol
Youthscape, Luton, Bedfordshire**
Recurrent Grants
General Grants
Crisis Response Grants
Transformational Grants
Brighter Lives
Other Grants		 _Re-presented_
120
100
250
150
210
250
162
92
100
200
160
4,412
150
150
102
100
375
150
134
165
250
202
2022
375
200
120
£000
145
17
10
10
30*
67
14,911
476
15
265
2,022
2,588
579
2,093
(128)
7,910
22,821

*Prior year comparatives have been re-presented to reflect charitable giving by grant programme.

**Grants to these beneficiaries are classified within different grant progammes but in aggregate exceed £100,000.

71

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

6 Other expenditure on charitable activities

Other charitable expenditure in the current year consists of £443,000 shared costs and £1,096,000 support costs incurred in the charity's grant making activities and can be analysed as follows:

2023
Shared costs
Governance costs
Support costs:
Information technology
Finance
Corporate
Buildings
Other
Other expenditure on charitable activities
2023
Shared costs
Governance costs
Support costs:
Information technology
Finance
Corporate
Buildings
Other
Other expenditure on charitable activities		 Community
Impact Grants
Building
Improvement
Grants
Methodist
Grants
Heritage Skills
for Christian
Buildings Basis of allocation
£000
£000
£000
£000
213
89
45
Mixed allocation
9
37
37
37
Equal allocation
37
9
9
9
4
4
4
Equal allocation
Equal allocation
4
9
10
10
10
11
11
11
Equal allocation
Equal allocation
11
10
137
137
137
66
66
66
Equal allocation
66
137
350
226
182
146
Crisis
Response
Grants
Recurrent
Grants
General
Grants
Basis of allocation
Other Grants
£000
£000
£000
£000
18
45
22
2
Mixed allocation
37
37
37
37
Equal allocation
9
9
9
4
4
4
4
9
Equal allocation
Equal allocation
10
10
10
11
11
11
11
10
Equal allocation
Equal allocation
137
137
137
66
66
66
66
137
Equal allocation
155
182
159
139

*Mixed allocation includes costs that are allocated either by time spent or are equally allocated across the grant programmes.

72

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

6 Other expenditure on charitable activities (continued)

Other charitable expenditure in the prior year consists of £397,000 shared costs and £954,000 support costs incurred in the charity's grant making activities and can be analysed as follows:

Other expenditure on charitable activities
Other
Corporate
Buildings
Information technology
Finance
Governance costs
Support costs:
Shared costs
2022 (Re-presented*)
Other expenditure on charitable activities
Other
Corporate
Buildings
Information technology
Finance
Governance costs
Support costs:
Shared costs
2022 (Re-presented*)		 General Grants
Transformational
Grants
Brighter Lives
Other Grants
£000
204
198
184
132
119
120
119
119
Equal allocation
44
45
44
44
Equal allocation
7
7
7
7
Equal allocation
8
8
8
8
Equal allocation
7
7
7
7
Equal allocation
4
4
4
4
Equal allocation
49
49
49
49
85
78
65
13
Mixed allocation
£000
£000
£000
Basis of allocation
167
137
161
168
119
119
119
120
Equal allocation
44
44
44
45
Equal allocation
7
7
7
7
Equal allocation
8
8
8
8
Equal allocation
7
7
7
7
Equal allocation
4
4
4
4
Equal allocation
49
49
49
49
48
18
42
48
Mixed allocation
Methodist
Grants
Heritage Skills for
Christian
Buildings
Crisis
Response
Grants
Recurrent
Grants Basis of allocation
£000
£000
£000
£000

*Prior year comparatives have been re-presented to reflect charitable giving by grant programme.

**Mixed allocation includes costs that are allocated either by time spent or are equally allocated across the grant programmes.

73

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

7 Taxation

Benefact Trust Limited and its linked charitable trust, the EEF, is a registered charity and is exempt from corporation tax. The £133,000 (2022: £112,000) tax charge recognised in the statement of financial activities relates to irrecoverable withholding tax on dividends received from overseas equity investments held by the EEF.

8 Employee information

The charity itself has no employees, but uses staff employed by a subsidiary company to undertake its charitable activities. The employee costs recharged by the subsidiary company to the charity are shown below.

The average monthly number of full-time equivalent employees of the subsidiary company who carried out the charity's activities during the year was eleven (2022: nine). All employees were employed in the United Kingdom in both the current and prior year.

Social security costs
Wages and salaries
Pension costs - defined contribution plans		 661
58
620
48
72
2023
73
£000
2022
£000
740
792

In the current year, two employees received employee benefits within the £70,001-£80,000 band, two employees received employee benefits within the £80,001-£90,000 band, and one employee received employee benefits within the £90,001-£100,000 band. In the prior year, two employees received employee benefits within the £60,001-£70,000 band and one employee received employee benefits within the £120,001£130,000 band.

9 Trustee remuneration

The trustees did not receive any remuneration from the charity during the current or prior year. Three trustees (2022: two trustees), who during the year were also non-executive directors of a subsidiary undertaking, received remuneration from that subsidiary in respect of their services as non-executive directors of that subsidiary. Details of the remuneration they received are disclosed in note 26 to the consolidated financial statements.

During the year the charity reimbursed expenses totalling £5,000 (2022: £3,000) which were incurred by six trustees primarily in respect of travel (2022: five trustees primarily in respect of travel).

In addition, the charity paid direct expenses totalling £4,000 (2022: £9,000) which were incurred by five trustees primarily in respect of travel, subsistence and training (2022: nine trustees, primarily in respect of travel, subsistence and training).

None of the trustees was a member of the trading subsidiaries' defined benefit pension schemes during the current or prior year.

10 Key management remuneration

Key management remuneration of the charity, including employee benefits, pensions and social security costs, in the year was £329,000 (2022: £377,000). As the charity itself has no employees, and its key management are employed by a subsidiary company. Details of the key management of the charity can be found in the Trustees' Report.

74

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

11 Investments

Financial assets at fair value
Equity securities
- listed
Debt securities
- listed
Total investments at fair value
Investment in subsidiary
Total investments
Total investments at historic cost
Financial assets at historic cost		 funds
funds
funds
funds
funds
Unrestricted
Total
£000
2022
Total
Unrestricted
Endowment
2023
funds
£000
£000
£000
£000
£000
Endowment
-
112,463
112,463
-
100,099
100,099
-
1,577
1,577
-
9,516
9,516
-
114,040
114,040
-
109,615
109,615
50
-
50
50
-
50
50
-
50
50
-
50
50
114,040
114,090
50
109,615
109,665

The value of the investment in subsidiary on a historical cost basis is £50,000 (2022: £50,000). At the year end the subsidiary had consolidated net assets of £532,039,000 (2022 restated: £523,251,000). The comparative net assets of the subsidiary have been restated due to the change in accounting policy for insurance contracts as detailed in note 49.

No investments in the EEF were classified as level 3 in the current or prior year.

Details of the charity’s investment policy can be found in the Strategic Report.

Reconciliation of the movement in financial assets:

2023
At 1 January
2022
Additions at cost
Gift aid from subsidiary undertaking received in specie
At 31 December
Fair value losses
Sale proceeds
At 31 December
Sale proceeds
Fair value gains
At 1 January
Additions at cost		 50
-
-
-
(79,229)
7,258
(79,229)
7,258
109,615
76,396
£000
109,665
76,396
£000
£000
funds
At historic cost
Unrestricted
Endowment
funds
Total
funds
At fair value
50
114,090
114,040
Unrestricted
funds
109,952
109,902
17,624
17,624
50
-
5,000
5,000
-
(10,713)
(12,198)
(10,713)
(12,198)
-
-
£000
At fair value
£000
£000
At historic cost
funds
funds
Total
Endowment
50
109,665
109,615

75

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

12 Debtors

Prepayments and accrued
income
Other debtors		 funds
funds
funds
funds
funds
funds
£000
£000
£000
£000
£000
£000
Unrestricted
Endowment
Total
Unrestricted
Endowment
Total
2023
2022
2
160
162
5
309
314
3
-
3
3
-
3
5
160
165
8
309
317

No expected credit loss has been recognised in the current or prior year.

13 Cash at bank and in hand

Short term deposits
Cash at bank and in hand		 -
Total
funds
£000
15,866
42
funds
funds
Endowment
funds
£000
2,934
Unrestricted
Endowment
2023
2022
Unrestricted
£000
£000
£000
Total
funds
£000
funds
19,280
679
12,932
19,959
266
-
42
266
2,934
15,908
19,546
679
12,974
20,225

14 Creditors

2023 2022
Unrestricted Endowment Total Unrestricted Endowment Total
funds funds funds funds funds funds
£000 £000 £000 £000 £000 £000
Amounts falling due within
one year:
Accruals for grants payable 4,767 - 4,767 3,608 - 3,608
Amounts due to related parties 2 - 2 6 - 6
Other creditors 156 37 193 133 47 180
4,925 37 4,962 3,747 47 3,794
Amounts falling due after one
year:
Accruals for grants payable 1,407 - 1,407 2,194 - 2,194
1,407 - 1,407 2,194 - 2,194

76

BENEFACT TRUST LIMITED

NOTES TO THE CHARITY FINANCIAL STATEMENTS

15 Summary of fund movements

Gross transfers to endowment funds
Fund balance at 1 January 2022
Fund balance at 1 January 2023
Fund balance at 31 December 2023
Expenditure
Taxation
Fair value losses on investments
Income
Gross transfers to designated funds
Gross transfers to unrestricted funds
Gross transfers to unrestricted funds
Fund balance at 31 December 2022
Gross transfers to designated funds
Income
Expenditure
Taxation
Fair value gains on investments		 3,727
funds
£000
(2,000)
(3,956)
-
2,000
-
-
229
funds
Total
Unrestricted funds
General
funds
Designated
Endowment
£000
£000
£000
124,219
13,521
3,719
17,783
11,681
110,556
1,982
543
(25,333)
-
(133)
(133)
(22,410)
(347)
(2,576)
-
7,258
-
7,258
-
4,519
2,178
117,097
123,794
-
2,000
(21,550)
-
14,612
-
15,313
-
115,827
-
-
(11)
11
-
233
3,317
(112)
(112)
8,945
24,272
-
(2,000)
(12,198)
(12,198)
-
(3,550)
(356)
(24,528)
6,346
14
(2,622)
136,785
1,982
110,556
124,219
11,681

The general unrestricted fund consists of funds available to the trustees to apply for the general purposes of the charity, in addition to each of the priorities it has adopted as set out in the Strategic Report.

The designated fund has been designated by the trustees for the furtherance of purposes or projects of or relating to the Methodist Church. The source of these funds is the donations that the charity receives from Methodist Insurance PLC (see note 3). During the current year, the trustees designated £2,772,000 (2022: £258,000) and transferred £nil (2022: £2,000,000) into the EEF.

The endowment fund is a restricted capital fund of expendable endowment that is retained to strengthen the charity's reserves and provide diversification of its assets. During the year £3,956,000 was transferred from the EEF to the unrestricted fund to support its charitable giving activities.

16 Related party transactions

Transactions between the charity and its subsidiaries, which are related parties, are shown below. A full list of related undertakings is disclosed in note 45. Transactions between the charity and its trustees, who are related parties, are disclosed in note 9.

2023 2022
£'000 £000
Gift aid received 13,000 20,000
Expenses recharged (820) (768)
Investment management fees paid (177) (182)
Amounts due to related parties (2) (6)

In addition, the charity received donated services from a trading subsidiary in the current and prior year. Further details are provided in note 3.

77

BENEFACT TRUST LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING A CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT)

for the year ended 31 December 2023

trading subsidiaries
Profit on disposal of subsidiary
27
Notes
Income from:
Donations
Other trading activities
activities
19
Income arising from trading
Total income
Expenditure on:
Raising funds
Grants
activities
Other expenditure on charitable
Total expenditure
Other
Charitable activities
Investments
Dividend, interest and rental
20
income
Expenditure arising from trading
Charitable donations paid by
19
21
22
Net gains/(losses) on investments
Taxation
a. arising from the charity
23
Net income/(expenditure) in the
year
b. arising from trading activities
23
undertaking
activities
Gift aid from subsidiary
Loss on disposal of associate
33		 2023
2022
_Restated_
£000
£000
£000
£000
£000
£000
funds
funds
funds
funds
funds
funds
Endowment
Total
Unrestricted
Endowment
Total
Unrestricted
500
-
500
-
-
-
705,425
-
705,425
693,536
-
693,536
43,224
3,719
46,943
32,778
3,945
36,723
-
-
-*
-
5,000
5,000
749,149
3,719
752,868
726,314
8,945
735,259
(3,137)
(2,730)
-
(2,730)
-
(347)
(347)
-
(356)
(356)
(23,447)
-
(23,447)
(22,821)
-
(22,821)
(1,169)
-
(1,169)
(1,081)
-
(1,081)
(720,860)
(646,037)
-
(646,037)
-
(720,860)
-
(3,137)
(673,025)
(672,669)
(356)
(748,613)
(347)
(748,960)
7,258
16,265
(97,977)
(12,198)
(110,175)
-
-
-
34,944
-
34,944
(133)
(5,239)
4,841
9,007
(5,106)
(112)
4,729
(1,130)
-
(1,130)
-
-
-
13,804
3,307
10,497
(8,268)
(4,547)
(3,721)
(23,922)
10,497
(13,425)
(23,845)
(3,721)
(27,566)
19,298
-
27,229
19,298
27,229
-
(4,547)
(3,721)
(8,268)
3,307
10,497
13,804

*The comparative financial statements have been restated as detailed in note 49.

78

BENEFACT TRUST LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING A CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT) (CONTINUED)

for the year ended 31 December 2023

Notes
Gross transfers to endowment
funds
Gross transfers to unrestricted
funds
41
41
17
Transistion adjustment on
adoption of IFRS 9
Minority interests
Transfer between funds
Other recognised gains/(losses)
Gains on revaluation of fixed
assets
Actuarial gains/(losses) on
retirement benefits
40
Currency translation differences
42
Other (losses)/gains
43
Net movement in funds
excluding minority interests
Total funds brought forward
41
Total funds carried forward
Tax attributable to other
recognised gains/(losses)
Gains/(losses) on net investment
hedges
42
22		 3,956
(3,956)
-
3,550
(3,550)
-
Unrestricted
Endowment
Total
Unrestricted
Endowment
Total
_Restated_
2023
2022
£000
£000
£000
£000
£000
£000
funds
funds
funds
funds
funds
funds
-
-
-
(2,000)
2,000
-
850
-
850
-
-
-
4,535
-
4,535
(6,876)
-
(6,876)
(4,033)
-
(4,033)
5,659
-
5,659
(8,782)
-
(8,782)
(8,782)
-
(8,782)
-
2,545
4,859
-
4,859
(4,514)
-
(4,514)
(2,038)
-
(2,038)*
2,545
2,654
6,541
9,195
(14,965)
(5,271)
(20,236)
478
-
478
-
-
-
535,245
110,556
645,801
550,210
115,827
666,037
538,377
117,097
655,474
535,245
110,556
645,801

*The comparative financial statements have been restated as detailed in note 49.

The accompanying notes on pages 83 to 152 are an integral part of this consolidated statement of financial activities. Included within the current year are the operations of Lloyd and Whyte Group Limited (L&W), which was acquired on 30 June 2023. Further infomration on the acquisition can be found in note 34. Included within the prior year results are the operations of SEIB Insurance Brokers Limited which was disposed of on 30 December 2022. Further information on the disposal can be found in note 27.

79

BENEFACT TRUST LIMITED

CONSOLIDATED BALANCE SHEET

at 31 December 2023

Minority interests
43
41
Translation and hedging reserve
Designated funds
Revaluation reserve
Non-charitable trading reserves
41
42
41
Total funds (excluding minority interests)
41
Endowment funds
Restricted funds
The funds of the charity:
Net assets excluding retirement benefit obligations
40
Total net assets including retirement benefit obligations
Net current assets
Creditors: amounts falling due after one year
37
37
Net pension asset
40
Subordinated liabilities
39
Provisions for liabilities
38
Tangible assets
Unrestricted funds
General funds
41
Total funds
Investment property
30
Investment in associate
33
Investments
Fixed assets
Total assets less current liabilities
31
Notes
Intangible assets
28
29
Cash at bank and in hand
36
Other retirement benefit obligations
Creditors: amounts falling due within one year
Total fixed assets
Debtors
35
Total current assets
Liabilities
Current assets		 130,813
140,846
408
12,611
1,559,514
1,526,932
_Restated_
2023
2022
£000
32,316
127,525
14,764
16,633
funds
£000
Total
funds
Total*
1,760,051
1,802,311
166,096
182,749
296,024
293,608
462,120
476,357
(82,798)
(117,298)
359,059
379,322
2,139,373
2,161,370
(2,479)
(1,377,072)
(25,853)
(1,372,773)
(25,818)
(3,544)
755,966
737,238
(4,960)
15,338
19,788
(4,801)
747,616
770,953
2,178
1,982
19,650
19,511
856
501,849
511,174
4,519
11,681
222
535,245
538,377
110,556
117,097
655,474
645,801
101,815
115,479
770,953
747,616

*The comparative financial statements have been restated as detailed in note 49.

The consolidated financial statements of Benefact Trust Limited registration number 1043742, on pages 78 to 152 were approved and authorised for issue by the Board on 2 May 2024 and signed on its behalf by:

Tim Carroll

Revd Paul Davis

Chairman

Trustee

80

BENEFACT TRUST LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2023

Decrease/(increase) in debtors
Proceeds from the sale of investment property by trading subsidiaries
Loss on disposal of intangible assets
Dividend and interest income from investments
Finance costs
(Decrease)/Increase in creditors
Increase in provisions
Repayment of loan by associate undertaking
Dividend and interest income from parent charity investments
Proceeds from the sale of property, plant and equipment
Cumulative translation differences recycled to statement of financial activities
Cash flows from investing activities:
Purchases of property, plant and equipment
Disposal of subsidiary, net of cash disposed
Net cash provided by/(used in) investing activities
Loan issued to associate undertaking
Net income/(expenditure) for the reporting period
Profit on disposal of group undertaking
Revaluation of property, plant and equipment
Depreciation of property, plant and equipment
Loss before tax on disposal of interest in associate
Adjustments for:
(Decrease)/increase in retirement benefit obligation
Tax expense/(income)
(Gains)/losses on financial investments and investment property
Adjustment for pension funding
Amortisation and impairment of intangible assets
Gain on disposal of property, plant and equipment
Acquisition of business, net of cash acquired
Acquisition of subsidiary, net of cash acquired
Proceeds from the sale of investments by parent charity
Movement on expected credit loss provision
Purchase of financial investments by trading subsidiaries
Net cash provided by operating activities
Proceeds from the sale of financial investments by trading subsidiaries
Dividends received by trading subsidiaries
Interest received by trading subsidiaries
Tax paid by trading subsidiaries
Share of profit of associate
Purchase of investments by parent charity
Purchases of intangible assets		 3,382
183,876
(35)
2,311
1,705
165
-
10,340
318,440
(35,351)
1,027
6,217
-
(34,944)
3,466
3,483
5,239
(4,729)
183
-
13,804
(8,268)
(28)
(11,486)
£000
£000
2023
2022
_Restated_
(16,230)
11,934
5,907
-
(35)
-
-
181,846
1,300
(4,780)
(6,616)
17,785
20,944
110,175
1,130
-
(506,944)
21,257
(37,031)
(27,889)
265
2
(39)
(212,218)
13,068
8,757
(365)*
(1,463)
29,651
9,907
-
686
(1,115)
-
-
(55,345)
4,000
3,823
44
(3,853)
(3,752)
40
10,713
-
36,355
79,229
(1,417)
20,415
(76,396)
(17,624)
(2,734)
(4,179)
19,590
(30,700)

*The comparative financial statements have been restated as detailed in note 49.

81

BENEFACT TRUST LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

for the year ended 31 December 2023

Analysis of changes in net debt
Notes
Dividends paid to non-controlling interests of subsidiaries
Net cash used in financing activities
Change in cash and cash equivalents in the reporting period
Change in cash and cash equivalents due to exchange rate movements
Cash and cash equivalents at the beginning of the reporting period
Change in cash and cash equivalents in the reporting period
Cash and cash equivalents at the end of the reporting period
36
Payment of group tax in excess of standard rate
Payment of finance lease liabilities
Cash flows from financing activities:
Interest paid by trading subsidiaries		 £000
£000
2023
2022
_Restated_
(8,782)
(8,782)
(60)
-
(210)
(172)
(1,652)*
(1,705)
(10,704)
(10,659)
18,793
(11,709)
(2,140)
3,026
166,096
174,779
18,793
(11,709)
182,749
166,096

*The comparative financial statements have been restated as detailed in note 49.

82

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 Accounting policies for consolidated financial statements

The material accounting policies adopted in preparing the consolidated financial statements are set out below. Where an accounting policy specifically relates to the charity, it is not repeated here, and reference should be made to note 1 to the charity's financial statements.

Basis of preparation

The consolidated financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS 102) The Financial Reporting Standard applicable in the UK and Republic of Ireland ; the Companies Act 2006 (the Act); and 'Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019). The historical cost convention has been applied, modified to include certain items at fair value as permitted by section 404 of the Act. The format of the financial statements has been adapted to comply with the SORP as permitted by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410).

The principal activities of the trading subsidiaries of the charity remain the transaction of insurance and the provision of financial services. All funds within the trading subsidiaries support their trade. Note 47 includes certain disclosures relevant for groups containing insurance companies in accordance with Financial Reporting Standard 103 (FRS 103), Insurance Contracts.

The parent charity meets the definition of a public benefit entity under FRS 102.

As stated in the Trustees' Report, the directors consider that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Items included in the financial statements of each of Benefact Trust's subsidiaries are measured in the currency of the primary economic environment in which that entity operates (the 'functional currency'). The consolidated financial statements are stated in sterling, which is the charity’s functional and presentational currency.

Changes in accounting policy

IFRS 9 Financial Instruments

The Benefact Trust group of companies previously applied the recognition and measurement principles of IAS 39 Financial Instruments: Recognition and Measurement when accounting for financial instruments.

Under FRS 102 the Benefact Trust group of companies is permitted to change the method in which it accounts for financial instruments to IFRS 9 Financial Instruments if, in doing so, the financial statements provide more relevant and reliable information on the entity's financial position, performance and cashflows.

The trustees consider IFRS 9 to provide a more accurate reflection of the risk borne by the business by implementing a forward-looking credit loss model and hence have elected to adopt IFRS 9 on 1 January 2023.

IFRS 9 introduces a new model for the classification and measurement of financial instruments, a single, forward-looking "expected credit loss" impairment model and a reformed approach to hedge accounting. The following table summarises the classification and measurement impacts of IFRS 9 on transition:

Other loans
Derivatives
Structured notes
Debt securities
Equity securities
Investment contract
assets
Other assets
Cash at bank and in hand
Financial asset*		 Measurement category Carrying amount
Amortised cost
Amortised cost
Fair value through profit or loss
Fair value through profit or loss
Fair value through profit or loss
Amortised cost
Fair value through profit or loss
Amortised cost
Amortised cost
Amortised cost
Fair value through profit
or loss
Fair value through profit
or loss
Fair value through profit
or loss
Fair value through profit
or loss
Hedge accounted derivatives
Fair value through profit or loss
Fair value through profit
or loss
Fair value through other
comprehensive income
*Original (IAS 39)
New (IFRS 9)		 655
100
-
478
-
79,424
32,834
166,096
79,424
32,356
166,096
£000
56,137
468,749
-
-
-
56,137
655
100
485,213
468,749
469,236
-
-
£000
£000
469,236
485,213
-
As previously
Impact of
31 December 2022
31 December 2022
reported (IAS 39)
IFRS 9
IFRS 9**

*Derivatives accounted for as a hedge of a net investment in a foreign operation (net investment hedge) were, and continue to be measured at fair value through other comprehensive income (FVOCI). Derivatives not accounted for as a net investment hedge or acquired principally for the purpose of selling in the near term are measured at fair value through profit or loss (FVTPL).

**The impact on adoption of IFRS 9 is due to the recognition of an expected credit loss by a trading subsidiary. The reclassifications of the financial instruments on adoption of IFRS 9 did not result in any changes to measurements. No changes have arisen from the more principles-based hedge accounting requirements.

***Fair value through other comprehensive income is recognised in other recognised gains/(losses) in the statement of financial activities.

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17 Accounting policies for consolidated financial statements (continued)

IFRS 9 Financial Instruments (continued)

The comparative information has not been restated and continues to be reported under IAS 39 Financial Instruments . The reclassifications and adjustments arising from the new expected credit loss provisions are therefore not reflected in the restated balance sheet as at 31 December 2022, but are recognised in the opening balance sheet on 1 January 2023. The net impact to non-charitable trading reserves as a result of the adoption on 1 January 2023 was an increase of £0.5m on amortised cost loans and receivables resulting from the replacement of credit loss provisions measured under IAS 39 to expected credit loss provisions in accordance with the IFRS 9 credit loss model.

IFRS 17 Insurance Contracts

The Benefact Trust group of companies applies FRS 103 Insurance Contracts when accounting for its insurance contracts.

FRS 102 and FRS 103 permit the Benefact Trust group of companies to change the way it accounts for insurance contracts if the change makes the financial statements more relevant to the economic decision-making needs of users and no less reliable. The trustees consider IFRS 17 Insurance Contracts to be a more robust and consistent way of accounting for insurance contracts and have elected to align its accounting for insurance contracts with the policies adopted by its trading subsidiary, Ecclesiastical Insurance Office plc (EIO plc), who adopted IFRS 17 from 1 January 2023. FRS 103 provides a degree of flexibility in accounting for insurance contracts, and the trustees consider that the requirements of IFRS 17 can be adopted within the requirements of FRS 103.

IFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Key relevant concepts for the Benefact Trust group of companies are:

The changes in accounting policy for the general insurance business have been applied using a full retrospective approach. Under the full retrospective approach (FRA), on 1 January 2022 the Benefact Trust group of companies has identified, recognised and measured each group of insurance contracts as if IFRS 17 requirements had always applied and derecognised previously reported balances that would not have existed if IFRS 17 had always been applied.

For the trading subsidiaries life business, judgement has been applied when determining whether the FRA is practicable and whether reasonable and supportable information exists. It has been concluded the FRA was impracticable primarily due to the lack of certain data and certain assumptions and calculations would not be possible without the use of hindsight. Therefore, the fair value approach (FVA) has been applied. The FVA uses the fair value of a group of insurance contracts and the fulfilment cash flows at the date of transition to calculate the unearned profit or loss at the transition date.

Comparative figures in the financial statements have been restated to reflect the impact of the adoption of IFRS 17. The effects of adopting IFRS 17 are disclosed in note 49.

Basis of consolidation

Subsidiaries

Subsidiaries are those entities over which the charity, directly or indirectly, has control, with control being achieved when the charity has power over the investee, is exposed to variable return from its involvement with the investee and has the ability to use its power to affect its returns. The results and cash flows relating to subsidiaries aquired or disposed of in the year are included in the consolidated statement of financial activities, and the consolidated statement of cash flows, up to the date of disposal. All inter-company transactions, balances and cash flows are eliminated.

The Benefact Trust group of companies uses the purchase method of accounting to account for business combinations. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the acquisition date. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Minority interests are measured at a proportionate share of the identifiable net assets of the acquiree. Goodwill is measured as the excess of the aggregate consideration transferred, the fair value of contingent consideration, the minority interests and, for an acquisition achieved in stages, the fair value of previously held equity interest over the fair value of the identifiable net assets acquired.

Associates

Associates are those entities over which the Benefact Trust group of companies has significant influence and are neither subsidiaries nor interests in joint ventures. The assets, liabilities and results of associates are incorporated in these financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognised in the consolidated balance sheet at cost and adjusted thereafter to recognise the Benefact Trust group of companies' share of the net income/(expenditure) and other recognised gains/(losses) of the associate. When the Benefact Trust group of companies' share of losses of an associate exceeds its interest in that associate, the Benefact Trust group of companies discontinues recognising its share of further losses. Additional losses are recognised by a provision only to the extent that the Benefact Trust group of companies has incurred legal or constructive obligations or made payments on behalf of the associate.

Foreign currency translation

The assets and liabilities of foreign operations are translated from their functional currencies into the Benefact Trust group of companies' presentational currency using year end exchange rates, and their income and expenses using average exchange rates for the year. Exchange differences arising from the translation of the net investment in foreign operations are taken to the translation reserve. On disposal of a foreign operation, such exchange differences are transferred out of this reserve, along with the corresponding movement on net investment hedges, and are recognised in the statement of financial activities as part of the gain or loss on sale.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 Accounting policies for consolidated financial statements (continued)

Income and expenditure arising from trading subsidiaries

Income and expenditure from insurance contracts

(i) Product classification

Contracts under which the trading subsidiaries accept significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder or other beneficiary if a specified uncertain future event (the insured event) adversely affects the policyholder are classified as insurance contracts. Contracts that do not transfer significant insurance risk are classified as investment or service contracts. All of the trading subsidiaries life business contracts written up to April 2013 are classified as insurance contracts. The book closed to new business in 2013 and reopened for business in 2021. Life business contracts written from August 2021 are classified as investment contracts.

Insurance contracts issued and reinsurance contracts held may be initiated by the trading subsidiaries, or they may be acquired in a business combination or in a transfer of contracts that do not form a business. All references in these accounting policies to ‘insurance contracts’ and ‘reinsurance contracts’ held include contracts issued, initiated, or acquired by the trading subsidiaries, unless otherwise stated.

(ii) Separating components

The trading subsidiaries assess their insurance and reinsurance products to determine whether they contain distinct components which must be accounted for under FRS 102. After separating any distinct components, the trading subsidiaries apply IFRS 17 which has been adopted within the requirements of FRS 103 to all remaining components of the host insurance contract. The trading subsidiaries' insurance and reinsurance contracts do not include any components that require separation.

(iii) Level of aggregation

Insurance and reinsurance contracts are aggregated into portfolios and split into annual cohorts and profitability groups for measurement and presentational purposes. The portfolios are comprised of contracts with similar risks which are managed together. Judgement is applied when determining portfolios and includes drivers such as geography, lines of business (where these are separate components) and legal entities within the Benefact Trust group of companies.

The trading subsidiaries' life insurance business comprises whole of life insurance contracts with similar risks which are managed together. These are aggregated into a single portfolio of insurance contracts.

Each annual cohort of business or portfolio recognised is further divided into groups based on the expected profitability, determined at initial recognition:

Contracts are considered onerous if the fulfilment cashflows allocated to that group of contracts in total are a net outflow.

As the fair value approach has been applied on transition to the trading subsidiaries' life insurance business, the trading subsidiaries are not required to recognise separate annual cohorts for contracts issued more than one year apart.

(iv) Recognition and derecognition

An insurance contract issued by the trading subsidiaries is recognised from the earliest of:

When a contract is recognised, it is added to an existing group of contracts. However, if the contract does not qualify for inclusion in an existing group, it forms a new group to which future similar contracts are added. Groups of contracts are established on initial recognition and their composition is not revised once all contracts have been added to the group.

Insurance contracts are derecognised when:

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17 Accounting policies for consolidated financial statements (continued)

(iv) Recognition and derecognition (continued)

When a modification is not treated as a derecognition, the trading subsidiaries recognise amounts paid or received for the modification with the contract as an adjustment to the relevant liability for remaining coverage (LRC).

(v) Contract boundaries

The concept of contract boundary is used to determine what cash flows should be considered in the measurement of groups of insurance contracts. The measurement of a group of contracts includes all the future cash flows within the boundary of each contract in the group.

(vi) Risk adjustment

The risk adjustment reflects the compensation required by the trading subsidiaries for bearing uncertainty about the cash flows that arise from non-financial risks. A combination of techniques are used to measure the risk adjustment, aligning to latest risk appetite approach. The risk adjustment, in relation to life insurance, is calculated at entity level.

(vii) Insurance revenue

General Measurement Model (GMM)

As the trading subsidiaries provide services under the group of insurance contracts, the LRC is reduced and insurance revenue is recognised. The amount of insurance revenue recognised in the reporting period depicts the transfer of promised services at an amount that reflects the portion of consideration the trading subsidaries expect to be entitled to in exchange for those services. Insurance revenue comprises the following:

Premium Allocation Approach (PAA)

In addition to the the above, under the premium allocation approach, insurance revenue for the period is the amount of expected premium receipts (excluding any investment component and after adjustment to reflect the time value of money and the effect of financial risk, if applicable) allocated to the period for services provided. The trading subsidiaries allocate the expected premium receipts to each period of insurance contract services, on the basis of the passage of time or, if the expected pattern of release of risk during the coverage period differs significantly from the passage of time, on the basis of the expected timing of incurred insurance service expenses. Changes to the basis of allocation are accounted for prospectively as a change in accounting estimate.

(viii)Insurance service expenses

Insurance service expenses incurred by the trading subsidiaries include fulfilment cash flows and acquisition cash flows which are costs directly attributable to insurance contracts and comprise both direct costs and the allocation of fixed and variable overheads. Insurance service expenses are recognised within expenditure arising from trading activities in the consolidated statement of financial activities and are comprised of the following:

Amortisation of insurance acquisition cash flows is done on a straight line basis and is reflected in insurance service expenses, included within expenditure arising from trading activities, in the same amount as insurance acquisition cash flows recovery reflected within insurance revenue, included within income arising from trading activities, as described above. Other expenses not meeting the above categories are included in expenditure arising from trading activities in the consolidated statement of financial activities.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 Accounting policies for consolidated financial statements (continued)

General insurance

(ix) Measurement model – Premium Allocation Approach (PAA)

The trading subsidiaries apply the PAA model when measuring the LRC of groups of insurance and reinsurance contracts when the following criteria are met at inception:

Insurance contracts:

Reinsurance contracts held:

The vast majority of the trading subsidiaries' general insurance business has a duration of one year or less and the PAA model is eligible automatically. Where the PAA model is not automatically eligible, financial modelling is performed comparing the financial effects under the two models. Where the financial effects are not expected to be materially different under the GMM and PAA, the relevant unit of account is treated as PAA eligible.

Initial recognition

On initial recognition of each group of contracts, the carrying amount of the LRC is measured as the premiums received less any insurance acquisition cash flows allocated to the group at that date. For reinsurance contracts held, the measurement of the reinsurance contract held includes all expected cash flows within the boundary of the reinsurance contract, including those cash flows related to recoveries from future underlying insurance contracts that have not yet been issued by the trading subsidiaries, but are expected to be issued during the coverage period of the reinsurance contract held.

Subsequent recognition

For insurance contracts issued, at each of the subsequent reporting dates, the LRC is:

For reinsurance contracts held, at each of the subsequent reporting dates, the trading subsidiaries apply the same accounting policies to measure a group of reinsurance contracts held, adapted where necessary to reflect features that differ from those of insurance contracts. To identify onerous contracts, the PAA facts and circumstances test uses the latest signed-off Corporate Strategic Plan of the Benefact Group, identifying sets of contracts with a gross combined operating ratio (COR) > 100% (including risk adjustment), when aligned to the relevant period being tested. Where the trading subsidiaries recognise a loss on initial recognition of an onerous group of underlying insurance contracts, or when further onerous underlying insurance contracts are added to a group, the trading subsidiaries establish a lossrecovery component of the asset for remaining coverage for a group of reinsurance contracts held representing the expected recovery of the losses.

A loss-recovery component is subsequently reduced to zero in line with reductions in the onerous group of underlying insurance contracts to reflect that the loss-recovery component shall not exceed the portion of the carrying amount of the loss component of the onerous group of underlying insurance contracts that the trading subsidiaries expect to recover from the group of reinsurance contracts held.

If at any time during the coverage period, facts and circumstances indicate that a group of contracts is onerous, then the trading subsidiaries recognise a loss within expenditure arising from trading activities in the consolidated statement of financial activities and increase the LRC to the extent that the current estimates of the fulfilment cash flows that relate to remaining coverage exceed the carrying amount of the LRC. Measurement of the loss component arising from the identification of onerous contracts is based on the future expected profitability calculation attributed to the annual cohort(s) which are indicated to be loss making.

The trading subsidiaries recognise the LIC of a group of insurance contracts at the discounted amount of the future cash flows relating to claims incurred but not yet settled and attributable expenses.

Discount rates are applied to reflect the time value of money and characteristics of the liability cash flows and contracts (including liquidity).

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17 Accounting policies for consolidated financial statements (continued)

Subsequent recognition (continued)

The change in the LIC due to the effects of the time value of money and financial risk is recognised within the consolidated statement of financial activities within expenditure arising from trading activities when it is a loss and within income arising from trading subsidiaries when it is a gain.

The loss arising from onerous contracts is recognised as part of the expenditure arising from trading activities in the consolidated statement of financial activities. If there are no changes in expectations in subsequent periods, the release of the loss component is recognised within expenditure arising from trading activities in the consolidated statement of financial activities in line with the pattern of earned premium.

Insurance acquisition cash flows

Insurance acquisition cash flows are costs considered directly attributable to selling, underwriting or starting a portfolio of insurance contracts and are presented within the LRC recognised within provisions for liabilities in the consolidated balance sheet. Insurance acquisition cash flows include direct costs and indirect costs. The PAA provides an option to expense insurance acquisition cash flows as incurred, however the Benefact Trust group of companies has chosen not to apply this option. Insurance acquisition cash flows are amortised over the coverage period of the group of insurance contracts to which they relate.

Under IFRS 17, insurance acquisition cash flows for insurance contracts, insurance receivables and payables, and provisions for levies that are attributable to existing insurance contracts are included in the measurement of insurance contracts issued.

Net income/expenses from reinsurance contracts

Net income earned or expenses incurred by the trading subsidiaries from reinsurance contracts represents the insurance service result for groups of reinsurance contracts held and comprises of the allocation of reinsurance premiums and other incurred directly attributable claims and expenses.

Reinsurance premiums and expenses are recognised using the principles used to determine insurance revenue and expenses. The amount of reinsurance expenses recognised in the reporting period depicts the transfer of received insurance contract services at an amount that reflects the portion of ceding premiums that the trading subsidiaries expect to pay in exchange for those services.

The estimates of the present value of future cash flows of the reinsurance contracts held will reflect the risk of non-performance by the reinsurer and the risk adjustment for reinsurance contracts held and is measured and recognised separately from insurance contracts issued.

In addition, the allocation of reinsurance premiums includes changes in the reinsurance assets arising from retroactive reinsurance contracts held and voluntary reinstatement ceded premiums.

Reinsurance expenses reflect the allocation of reinsurance premiums paid or payable for receiving services in the period.

Reinsurance cash flows that are contingent on claims on the underlying contracts are treated as part of the claims that are expected to be recovered under the reinsurance contract held.

Life insurance

(x) Measurement Model – General Measurement Model (GMM)

The GMM is the default method used to measure insurance contracts under IFRS 17.

Initial recognition

On initial recognition, the carrying amount of the LRC is measured as the sum of discounted probability-weighted fulfilment cash flows within the contract boundary, an explicit risk adjustment and a contractual service margin (CSM), representing the unearned profit of the contract to be recognised as revenue over the coverage period. If the portfolio of contracts is expected to be onerous at inception, the loss is recognised immediately within expenditure arising from trading activities in the consolidated statement of financial activities and the CSM is set to zero.

Subsequent measurement

The carrying amount of the LRC is updated at each reporting date to reflect the re-measurement of the fulfilment cash flows to reflect estimates based on current assumptions. The changes in fulfilment cash flows are reflected either in the insurance service result or by adjusting the CSM, depending upon their nature. If the fulfilment cash flows exceed the CSM, the portfolio of contracts becomes onerous, and the loss is recognised immediately within expenditure arising from trading activities in the consolidated statement of financial activities.

The LIC of a group of insurance contracts is recognised at the discounted amount of the fulfilment cash flows relating to claims incurred but not yet settled and attributable expenses.

Insurance acquisition cash flows

For life insurance contracts held by the trading subsidiaries, acquisition costs comprise direct costs such as initial commission and the indirect costs of obtaining and processing new business. As with general insurance business, those attributable are included in the measurement of insurance contracts issued and reinsurance contracts held.

88

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17 Accounting policies for consolidated financial statements (continued)

Non-insurance revenue and expenses

Fee and commission income

Income generated from the trading subsidiaries' insurance broking activities is recognised at the inception date of the insurance cover. An estimate is made for the amount of fees and commission that may be clawed back as a result of policy cancellations or amendments. Where commission or fees are received in advance of the inception date of cover, deferred income is recognised. Receivables are recognised in trade debtors on inception date of cover in respect of fees or commissions that the trading subsidiaries have an unconditional right to receive.

Fees charged for investment management services are recognised as revenue when the services are provided. Management fees charged in respect of funeral plans are only refundable where the plan is cancelled within 30 days, and are recognised in full when the plan is sold with provision being made for the expected level of cancellations that give rise to a refund.

Income from investments

Investment income consists of dividends, interest and rents receivable for the year. Dividends on equity securities are recognised on the ex-dividend date. Interest and rental income is recognised as it accrues. Dividends from overseas equities are grossed-up for the irrecoverable withholding tax suffered.

Unrealised gains and losses are calculated as the difference between carrying value and the original cost, and the movement during the year is recognised in the consolidated statement of financial activities. The value of realised gains and losses includes an adjustment for previously recognised unrealised gains or losses on investments disposed of in the accounting period.

Insurance contract liabilities

Deferred acquisition costs for insurance contracts, insurance receivables and payables, and provisions for levies that are attributable to existing insurance contracts were previously separately recognised. Following the change in accounting policy, applying the requirements of IFRS 17, these balances are now included in the measurement of insurance contracts issued and reinsurance contracts held.

Insurance contract liabilities are measured as the sum of the LIC and LRC. The LIC represents the obligation to pay valid claims for insured events that have occurred, which may also include events that have already occurred but have not been reported to the trading subsidiaries'. The LRC represents the trading subsidiaries liability for insured events that have not yet occurred under the insurance contract under IFRS 17. Insurance revenue in each reporting period represents the change in the LRC that relates to services for which the trading subsidiaries expect to receive consideration.

Investment contract liabilities

For products that have no significant insurance risk and are therefore classified as investment contracts a liability measured at fair value is recognised. The fair value of these liabilities is estimated based on an arms-length transaction between willing market participants with consideration given to the cost of the minimum repayment guarantee to the policyholders. The cost of the guarantee is determined using risk free rates of return, with the associated volatility assumption and allowing for the costs of administration associated with this low risk investment strategy.

Taxation

Taxation comprises current and deferred tax. Tax is included in calculating the net income/(expenditure) for the year except to the extent it relates to items recognised in other gains/(losses), in which case it is recognised in other gains/(losses). Irrecoverable tax withheld from overseas dividend income is recognised when the dividend is received.

Current tax is the expected tax payable by the trading subsidiaries on their taxable results for the period, after any adjustment in respect of prior periods.

Deferred tax is recognised in respect of timing differences, being the difference between when gains and losses are included in tax assessments and when they are recognised in the financial statements. Deferred tax is measured using tax rates expected to apply when the related deferred tax asset is realised, or when the deferred tax liability is settled, based on tax rates and laws which have been enacted or substantively enacted at the year end date.

Deferred tax assets are recognised to the extent that it is more likely than not that future taxable profits will be available against which the future reversal of timing differences can be offset.

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets and liabilities acquired at the date of acquisition. Goodwill is capitalised in the balance sheet and amortised through the statement of financial activities over its estimated useful economic life, on a straight-line basis. Goodwill is tested annually for impairment and carried at cost less accumulated amortisation less accumulated impairment losses. The amortisation and impairment charge for the period is included in the statement of financial activities within expenditure arising from trading activities. Gains and losses on the disposal of a subsidiary or associated undertaking will include any attributable unamortised goodwill relating to the entity sold.

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17 Accounting policies for consolidated financial statements (continued)

Intangible assets (continued)

Computer software

Computer software is carried at historical cost less accumulated amortisation and impairment, and amortised over a useful life of between three and ten years, using the straight-line method. Amortisation and impairment charges incurred for the period are included in the statement of financial activities within expenditure arising from trading subsidiaries.

Other intangible assets

Other intangible assets consist of acquired brand, customer and distribution relationships, and are carried at cost at acquisition less accumulated amortisation and impairment after acquisition. Amortisation is on a straight-line basis over the weighted average estimated useful life of the intangible assets acquired. Amortisation and impairment charges incurred for the period are included in the statement of financial activities within expenditure arising from trading activities.

Tangible assets

Owner-occupied properties are stated at fair value and movements are taken to the revaluation reserve, net of deferred tax. When such properties are sold, the accumulated revaluation surpluses are transferred from this reserve to non-charitable trading reserves.

Where the fair value of an individual property is below original cost, any revaluation movement arising during the year is recognised within net gains/(losses) on investments in the statement of financial activities. Valuations are carried out at least every three years by external qualified surveyors.

All other items classified as tangible fixed assets are carried at historical cost less accumulated depreciation and impairment.

Depreciation is calculated to write down the cost of the assets to their residual values over their estimated useful lives as follows:

Computer equipment 3 - 5 years straight line Motor vehicles 4 years straight line or 27% reducing balance Fixtures, fittings and office equipment 3 - 10 years, or length of lease straight line

Investment property

Investment property comprises land and buildings which are held for long-term rental yields. It is carried at fair value with changes in fair value recognised in the statement of financial activities within net gains/(losses) on investments. Investment property is valued annually by external qualified surveyors at open market value. Where the Benefact Trust group of companies disposes of a property, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the statement of financial activities within net gains/(losses) on investments.

Financial instruments

From 1 January 2023 the Benefact Trust group of companies has chosen to change its accounting policy from IAS 39 Financial Instruments: Recognition and Measurement to the recognition and measurement provisions of IFRS 9 Financial Instruments, issued by the International Accounting Standards Board as adopted by the UK.

The accounting policies under IFRS 9 are as follows:

(i) Classification and measurement

All financial assets under IFRS 9 are to be initially recognised at fair value, plus or minus (in the case of a financial asset not at fair value through profit or loss (FVTPL) transaction costs that are directly attributable to the acquisition of the financial instrument. Classification and subsequent measurement of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows.

(a) Debt instruments

There are three measurement categories into which the Benefact Trust group of companies classifies its debt instruments:

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17 Accounting policies for consolidated financial statements (continued)

(a) Debt instruments (continued)

(b) Equity instruments

There are two measurement categories into which the Benefact Trust group of companies classifies its equity instruments:

(ii) Impairment

The Benefact Trust group of companies recognise a forward-looking loss allowance for expected credit losses (ECL) on financial assets measured at amortised cost or FVOCI. ECL is an unbiased, probability-weighted estimate of credit losses and considers all reasonable and supportable information. The impairment methodology applied depends on whether there has been a significant increase in credit risk or default.

The Benefact Trust group of companies elects to apply the simplified approach permitted by IFRS 9 and recognises a lifetime ECL for trade receivables and lease receivables. The ECL on these financial assets are estimated using a provision matrix based on the Benefact Trust group of companies historical credit loss experience, adjusted for current and forecast economic conditions.

For all other financial instruments, the Benefact Trust group of companies recognises a lifetime ECL when there has been a significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased significantly since initial recognition, the Benefact Trust group of companies measures the loss allowance for that financial instrument at an amount equal to 12month ECL. Lifetime ECL represents the expected losses that will result from all possible default events over the expected life of a financial instrument. A 12-month ECL represents the portion of the lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. A financial asset is written off to the extent there is no reasonable expectation of recovery. Any subsequent recovery in excess of the financial asset’s written down value is credited to net income/(expenditure).

Impairment losses are presented within expenditure arising from trading activities in the consolidated statement of financial activities.

The Benefact Trust group of companies IAS 39 accounting policies applied in the prior year are described below:

IAS 39 requires certain financial assets and liabilities to be classified into separate categories, for which the accounting requirements differ.

The classification depends on the nature and purpose of the financial assets and liabilities, and is determined at the time of initial recognition. Financial instruments are initially measured at fair value. Their subsequent measurement depends on their classification:

Offset of financial assets and financial liabilities

Financial assets and liabilities are offset, and the net amount reported in the balance sheet, when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

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17 Accounting policies for consolidated financial statements (continued)

Financial instruments (continued)

(i) Financial assets at fair value through profit or loss

Financial investments are classified into this category if they are managed, and their performance evaluated, on a fair value basis. Purchases and sales of these investments are recognised on the trade date, which is the date that the Benefact Trust group of companies commits to purchase or sell the assets, at their fair value adjusted for transaction costs. Financial investments within this category are classified as held for trading if they are derivatives that are not accounted for as a net investment hedge or are acquired principally for the purpose of selling in the near term.

The fair values of investments are based on quoted bid prices. Where there is no active market, fair value is established using a valuation technique based on observable market data where available.

Investments

Derivative financial instruments and hedging

Derivative financial instruments include foreign exchange contracts and other financial instruments that derive their value from underlying equity instruments.

All derivatives are initially recognised in the balance sheet at their fair value, which usually represents their cost, including any premium paid. They are subsequently remeasured at their fair value, with the method for recognising changes in the fair value depending on whether they are designated as hedges of net investments in foreign operations. All derivatives are carried as assets when the fair values are positive and as liabilities when the fair values are negative.

The notional or contractual amounts associated with derivative financial instruments are not recorded as assets or liabilities in the balance sheet as they do not represent the fair value of these transactions. Collateral pledged by way of cash margins on futures contracts is recognised as an asset in the balance sheet within cash at bank and in hand.

Certain trading subsidiary derivative transactions, while providing effective economic hedges under the trading subsidiaries' risk management positions, do not qualify for hedge accounting under FRS 102 and are therefore treated as held for trading. Their fair value gains and losses are recognised immediately in net gains/(losses) on investments in the consolidated statement of financial activities. The fair value gains and losses for derivatives which are hedge accounted under FRS 102 are included in other recognised gains/(losses) in the statement of financial activities.

(ii) Financial assets at amortised cost

Financial assets at amortised cost include loans and cash held on deposit for more than three months. These are carried at amortised cost using the effective interest method. Loans are recognised when cash is advanced to borrowers. To the extent that a loan is uncollectable, it is written off as impaired. Subsequent recoveries are credited to net income/(expenditure).

(iii) Financial assets at fair value through other recognised gains/(losses)

Derivative instruments for hedging of net investments in foreign operations

On the date a foreign exchange contract is entered into, the trading subsidiaries designates certain contracts as a hedge of a net investment in a foreign operation (net investment hedge) and hedges the forward foreign currency rate.

Hedge accounting is used for derivatives designated in this way, provided certain criteria are met. At the inception of the transaction, the trading subsidiaries document the relationship between the hedging instrument and the hedged item, as well as the risk management objective and the strategy for undertaking the hedge transaction. The trading subsidiaries also document their assessment of whether the hedge is expected to be, and has been, highly effective in offsetting the risk in the hedged item, both at inception and on an ongoing basis.

Gains and losses on the hedging instrument, relating to the effective portion of the net investment hedge, are recognised in other recognised gains/(losses) and accumulated in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in net income/(expenditure), and is included in net gains/(losses) on investments.

Gains and losses on the hedging instrument, relating to the effective portion of the hedge accumulated in the foreign currency translation reserve, are reclassified to net income/(expenditure) on disposal of the related investment.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.

Provisions and contingent liabilities

Provisions are recognised when the trading subsidiaries have a present legal or constructive obligation, as a result of past events, and it is probable that an outflow of resources, embodying economic benefits, will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Where the trading subsidiaries expect a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when it is virtually certain that the reimbursement will be received.

92

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 Accounting policies for consolidated financial statements (continued)

Provisions and contingent liabilities (continued)

The trading subsidiaries recognise a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract.

Contingent liabilities are disclosed if there is a possible future obligation as a result of a past event, or if there is a present obligation but either an outflow of resources is not probable or the amount cannot be reliably estimated.

Subordinated liabilities

Subordinated liabilities are recognised initially at fair value, being the issue proceeds net of premiums, discounts and transaction costs incurred. All borrowings are subsequently measured at amortised cost using the effective interest rate method. The amortisation is recognised as an interest expense using the effective interest rate method.

Employee benefits

Pension obligations

The trading subsidiaries operate a number of defined benefit and defined contribution plans, the assets of which are held in separate trusteeadministered funds.

For defined benefit plans, the pension costs are assessed using the projected unit credit method. Under this method, the cost of providing pensions is charged to the consolidated statement of financial activities so as to spread the regular cost over the service lives of employees. The pension obligation is measured as the present value of the estimated future cash outflows using a discount rate based on market yields for highquality corporate bonds. The resulting pension plan surplus, where recoverable, or deficit appears as an asset or obligation in the balance sheet. Any asset resulting from this calculation is limited to the present value of economic benefits available in the form of refunds from the plan or reductions in future employer contributions to the plan. Independent actuarial valuations are carried out at the end of each reporting period.

Current and past service costs, gains and losses on curtailments and settlements and net interest expense or income (calculated by applying a discount rate to the net defined benefit liability or asset) are recognised through net income/(expenditure). Actuarial gains and losses are recognised in full in the period in which they occur in the statement of financial activities within other recognised gains/(losses).

Contributions in respect of defined contribution plans are recognised as expenditure in the statement of financial activities as incurred.

Other post-employment obligations

Some trading subsidiaries provide post-employment medical benefits to their retirees. The expected costs of these benefits are accrued over the period of employment using an accounting methodology similar to that for defined benefit pension plans. Interest expense (calculated by applying a discount rate to the net obligations) is recognised through net income/(expenditure). Actuarial gains and losses are recognised immediately in the statement of financial activities within other recognised gains/(losses). Independent qualified actuaries value these obligations at the end of each reporting period.

Other benefits

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the balance sheet date.

Use of Alternative Performance Measures (APM)

The trading subsidiaries use certain key performance indicators which provide useful information and aim to enhance understanding of their performance. The key performance indicators should be considered complementary to, rather than a substitute for, financial measures defined under IFRS 17. Note 48 provides details of how these key performance indicators reconcile to the results reported under IFRS 17.

Leases

Leases, where a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases. Payments made as lessees under operating leases are charged to net income/(expenditure) on a straight-line basis over the period of the lease. Rental income received as a lessor under operating leases is credited to net income/(expenditure) on a straight-line basis over the period of the lease. Benefits that the Benefact Trust group of companies receives as a lessee or provides as a lessor as an incentive to enter into an operating lease agreement are recognised on a straight-line basis over the period of the lease.

Leases, where a significant portion of the risks and rewards of ownership are transferred to the Benefact Trust group of companies, are classified as finance leases. Assets obtained under finance lease contracts are capitalised as tangible assets and are depreciated over the period of the lease. Obligations under such agreements are included within other creditors net of finance charges allocated to future periods. The interest element of the lease payments is charged to net income/(expenditure) over the period of the lease. Assets held under finance leases are not significant to these financial statements.

18 Critical accounting estimates and judgements in applying accounting policies

The trading subsidiaries make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and judgements are regularly reviewed and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The trading subsidiaries' management have considered the current economic environment in their estimates and judgements.

The critical accounting estimates and judgements made by the trading subsidiaries relate to:

(a) The ultimate liability arising from claims made under general business insurance contracts

93

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18 Critical accounting estimates and judgements in applying accounting policies (continued)

Full details of the critical accounting estimates and judgements that are made by the trading subsidiaries can be found in the notes to the financial statements of the annual report and accounts of Benefact Group plc, which are available from the registered office on page 153.

19 Trading activities

The income and expenditure arising from trading activities relates to the activities of the charity's trading subsidiaries and associates.

A full list of the charity's trading subsidiaries and associates is provided in note 45. The results of the trading subsidiaries are included in unrestricted funds in the consolidated statement of financial activities.

The income arising from trading activities includes insurance revenue, as reconciled within note 47 (iv), and fee and commission income for asset management and broking and advisory services, which includes prepaid funeral plan distribution and administration.

The expenditure arising from trading activities includes insurance service expenses, as reconciled within note 47 (v), net expense from reinsurance contracts, and expenses for asset management and broking and advisory services, which includes prepaid funeral plan distribution and administration.

Gross written premiums are used as the measure for turnover of the general insurance and life insurance businesses. Fee and commission income earned in relation to services provided by the trading subsidiaries to third parties is the measure of turnover for asset management and broking and advisory activities, which includes prepaid funeral plan distribution and administration. Further information on the gross written premiums, which are alternative performance measures, are detailed in note 48.

Share of profit on associate
Other income and (charges)
Income arising from trading activities
-
-
-
writtenpremiums
Insurance gross
Australia
United Kingdom and Ireland
176
16,046
55,769
16,046
106,937
-
2023
176
Reconciliation of turnover to income arising from trading subsidiaries:
Turnover
Change in the gross unearned premium provision
Investment return
Life
business
Asset
Management
Broking and
advisory
55,769
£000
£000
£000
-
General
business
£000
405,402
102,668
Recoveries of incurred claims and other insurance service expenses
Recoveries of losses on onerous contracts and reversal of those losses
Finance income from reinsurance insurance contracts held
Other adjustments to insurance revenue
-
615,007
Trading subsidiaries' turnover
Canada		 -
-
-
writtenpremiums
Insurance gross
176
16,046
55,769
106,937
-
Life
business
Asset
Management
Broking and
advisory
£000
£000
£000
-
General
business
£000
405,402
102,668
-		 102,668
£000
477,393
Total
106,937
16,046
176
55,769
615,007		 686,998
(29)
(3)
832
686,998
(35,861)
46,024
(91)
7,190
365
705,425

94

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19 Trading activities (continued)

United Kingdom and Ireland
Australia
Canada
Trading subsidiaries' turnover
Reconciliation of turnover to income arising from trading subsidiaries:
Turnover
Change in the gross unearned premium provision
General Measurement Model insurance revenue
Other adjustments to insurance revenue
Investment return
Recoveries of incurred claims and other insurance service expenses
Recoveries of losses on onerous contracts and reversal of those losses
Finance expense from reinsurance insurance contracts held
Share of profit on associate
Other income and (charges)
Income arising from trading activities
-
-
Life
business
Asset
Management
Broking and
advisory
-
-
-
£000
2022
written premiums
Insurance gross
65
16,431
41,004
-
558,544
41,004
General
business
£000
350,085
99,698
108,761
£000
£000
65
16,431		 -
-
Life
business
Asset
Management
Broking and
advisory
-
-
-
£000
written premiums
Insurance gross
-
41,004
General
business
£000
350,085
99,698
108,761
£000
£000
65
16,431		 99,698
£000
Total
407,585
108,761
65
16,431
41,004
558,544		 616,044
641
25
(7)
616,044
111,888
814
(6,704)
1,463
(30,619)
(9)
693,536

(b) Expenditure arising from trading subsidiaries

Insurance service expenses
Allocation of reinsurance premiums
Finance (expense)/income from insurance contracts issued
Reinsurance administration costs
Other operating expenses
Other finance costs		 (141,241)
(2,308)
(422,854)
(130,676)
44,370
(6,800)
(128,373)
2022
£000
2023
£000
(400,103)
(148,093)
(24,102)
(5,013)
(1,704)
(720,860)
(646,037)

95

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19 Trading activities (continued)

Net gains/(losses) on investments
Total expenditure
Profit/(loss) retained and transferred to reserves
Taxation
Total assets
Balance sheet
Turnover
Total income
Dividend and interest income
Other income
Equity
Total equity and liabilities
Liabilities
Other comprehensive expense
Gift aid paid to parent charity
Insurance service expenses
Other expenditure
Charitable donations
Profit and loss account		 _Restated_
36,117
561,294
£000
£000
514,954
102,668
(24)
617,598
2023
2022
32,845
106,553
6,533
Ecclesiastical
44,390
Insurance
Insurance
Ecclesiastical
36,717
4,308
3,365
18,088
8,224
Office plc
Limited
Life Limited
Ansvar
£000
£000
£000
Total*
Total
(446,637)
(415,128)
694,833
(61,817)
569,759
115,200
9,874
(150,371)
(347,609)
(184,630)
(56,216)
(3,952)
(244,798)
(2,893)
(68)
-
(2,961)
(2,687)
703,964
(5,702)
7,763
3,804
4,901
(535,132)
-
(10,090)
(14,138)
(3,482)
(19)
(1,311)
(13,000)
(13,000)
-
-
(662,887)
(599,695)
(118,101)
(9,654)
(4,812)
8,730
16,468
(96,697)
(8,414)
(1,676)
(20,000)
17,494
(792)
3,810
20,512
(17,836)
1,250,244
236,469
205,724
1,692,437
1,632,157
1,021,400
979,761
52,816
671,037
652,396
152,908
561,037
57,184
689,207
179,285
1,632,157
1,692,437
205,724
236,469
1,250,244

These results have been included in the consolidated statement of financial activities after consolidation adjustments.

*The comparative figures have been restated as detailed in note 49.

**These are the results of the trading subsidiaries under UKGAAP, the accounting basis used to prepare the consolidated financial statements of the Trust. The majority of the trading subsidiaries prepare their financial statements under IFRS.

96

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19 Trading activities (continued)

(d) Results of trading subsidiaries engaged in broking and advisory services**

Total equity and liabilities
Liabilities
Equity
Total assets
Balance sheet
(Loss)/profit retained and
transferred to reserves
Other comprehensive expense
and changes in equity
Taxation
Total expenditure
Other expenditure
Charitable donations
Total income
Other income
Dividend and interest income
Turnover
Profit and loss account		 2,776
972
(81)
-
-
(81)
138
2,248
390
-
5,105
25,121
27,948
58,174
43,991
£000
£000
£000
£000
£000
Limited
Limited
Limited
Total
Total
Services
Group
Holdings
Planning
Whyte
Lycetts
Ecclesiastical
Lloyd &
2023
2022*
(176)
(42)
(7,262)
(25,312)
(25,165)
(57,739)
-
(157)
(19)
(40,048)
5,162
27,369
28,338
60,869
44,963
-
-
(2,626)
(2,626)
(2,029)
(1,156)
(1,699)
434
(709)
(881)
(7,262)
(25,469)
(25,184)
(57,915)
(40,090)
(828)
1,145
(1,666)
1,191
(353)
726,338
622,607
594,777
95,585
35,976
588,362
96,549
22,699
707,610
602,891
6,415
(964)
13,277
18,728
19,716
726,338
622,607
594,777
95,585
35,976

These results have been included in the consolidated statement of financial activities after consolidation adjustments.

*The prior year comparatives do not contain the results of Lloyd & Whyte Group Limited (L&W) which was accounted for as an associate until 30 June 2023 when it became an subsidiary. Further information on the acquisition can be found in note 34. The current year contains the results of L&W from 30 June 2023. The prior year comparative contains the results of SEIB Insurance Brokers Limited who was disposed of on 30 December 2022. Further information on the disposal can be found in note 27.

**These are the results of the trading subsidiaries under UKGAAP, the accounting basis used to prepare the consolidated financial statements of the Trust. The majority of the trading subsidiaries prepare their financial statements under IFRS.

97

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19 Trading activities (continued)

(e) Results of trading subsidiaries engaged in asset management**

Profit and loss account
Turnover
Dividend and interest income
Total income
Charitable donations
Other expenditure
Total expenditure
Taxation
Losses retained and transferred
to reserves
Balance sheet
Total assets
Equity
Liabilities
Total equity and liabilities		 2023
£000
(22)
_Restated_
2022
Investment
Asset
EdenTree
EdenTree
Limited
Limited
Total
Total
Management
Management
£000
£000
£000
7,063
10,926
17,989
18,457
35
(5)
30*
18,435
(57)
7,098
10,921
18,019
(11,226)
(13,239)
(24,465)
(21,904)
-
(55)
(55)
(21,961)
(147)
352
205
720
(11,226)
(13,294)
(24,520)
(4,275)
(2,021)
(6,296)
(2,806)
24,340
12,071
36,411
22,359
8,672
8,581
17,253
9,548
15,668
3,490
19,158
12,811
22,359
24,340
12,071
36,411

These results have been included in the consolidated statement of financial activities after consolidation adjustments.

**These are the results of the trading subsidiaries under UKGAAP, the accounting basis used to prepare the consolidated financial statements of the Trust. The majority of the trading subsidiaries prepare their financial statements under IFRS.

98

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20 Dividend, interest and rental income

c. rental income
exchange gains and losses
and cash deposits net of
Other income
b. other income received
a. cash at bank and in hand
Income from financial assets at
amortised cost
- listed
- government bonds
Debt securities
- unlisted
- listed
Equity securities
Income from financial assets at
fair value through profit or loss		 -
8,665
-
8,665
9,019
-
9,019
2,552
2,249
2,586
(34)
2,220
29
3,121
5,556
-
5,556
3,121
11,131
384
11,515
10,749
586
11,335
3,811
-
3,811
323
-
323
2,761
-
2,761
874
-
874
8,714
3,369
12,083
6,472
3,330
9,802
£000
£000
£000
£000
£000
£000
Endowment
Total
funds
Unrestricted
Endowment
Total
Unrestricted
funds
funds
funds
funds
funds
2023
2022
Restated*
43,224
3,719
46,943
32,778
3,945
36,723

*The comparative figures have been restated as detailed in note 49.

21 Net gains/(losses) on investments

Restated*
2023 2022
Unrestricted Endowment Total Unrestricted Endowment Total
funds funds funds funds funds funds
£000 £000 £000 £000 £000 £000
Net gains/(losses) on investments 15,623 7,258 22,881 (76,768) (12,198) (88,966)
Net losses on investment
property (6,616) - (6,616) (21,209) - (21,209)
9,007 7,258 16,265 (97,977) (12,198) (110,175)

*The comparative figures have been restated as detailed in note 49.

99

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22 Taxation

The charity is a UK registered charity and is therefore exempt from corporation tax under Chapter 3 of Part 11 of the Corporation Tax Act 2010 or section 256 of the Taxation for Chargeable Gains Act 1992, to the extent that surpluses are applied to its charitable purposes.

Taxation arises from the activities of the charity's trading subsidiaries.

(a) Tax charged/(credited) to net income/(expenditure) for the year

Current tax on net income/(expenditure) for the year
UK corporation tax
Overseas tax
Adjustments in respect of prior years
UK corporation tax
Foreign tax
Total current tax
Deferred tax
Origination and reversal of timing differences
Impact of change in tax rate on opening liability
Adjustment in respect of prior years
Total deferred tax
Total tax on net income/(expenditure) for the year		 _Restated_
2023
2022
£000
£000
1,058
1,427
5,485*
2,235
6,543
3,662
(1,902)
(315)
12
16
(1,890)
(299)
4,653
3,363
(690)
(10,980)
(103)
-
1,379
2,888
586
(8,092)
5,239
(4,729)

A change in the UK standard rate of corporation tax from 19% to 25% became effective from 1 April 2023. Deferred tax has been provided at an average rate of 25% (2022: 23.5%).

Tax on the trading subsidiaries net income/(expenditure) before tax differs from the United Kingdom standard rate of corporation tax for the reasons set out in the following reconciliation:

Loss on reclassification of associate to subsidiary
Tax relief for donations from Ecclesiastical Insurance Office plc
Net income/(expenditure) before tax
Tax calculated at the UK standard rate of tax of 23.5% (2022: 19%)
Impact of differential between current and deferred tax rate
Overseas taxes in excess of UK headline rate
Factors affecting charge/(credit) for the year:
Decrease in deferred tax asset not provided
Non-taxable income
Expenses not deductible for tax purposes
Total tax expense/(credit)
Adjustments to tax (credit)/charge in respect of prior periods		 2023
2022
£000
£000
_Restated_
19,043*
(12,996)
266
-
(3,058)
(3,800)
4,475
(2,469)
1,210
(952)
653
222
(103)
7,965
8,221
(5,658)
(8,490)
(50)
(511)
2,589
5,239
(4,729)

*The comparative figures have been restated as detailed in note 49.

100

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22 Taxation (continued)

(b) Tax charged/(credited) to other recognised gains/(losses)

Total tax charged/(credited) to other recognised gains/(losses)
Actuarial movements on retirement benefit plans
Fair value movements on hedge derivatives
Deferred tax charged/(credited) on:
Fair value movements on owner-occupied property
Fair value movements on hedge derivatives
Current tax charged/(credited) on:		 1,134
(1,719)
338
(485)
216
-
350
(341)
2023
2022
£000
£000
2,038
(2,545)

23 Net income/(expenditure) in the year

Net income/(expenditure) in the year
2023 2022
Unrestricted Endowment Unrestricted Endowment
funds funds funds funds
Net income/(expenditure) for the year has been arrived at after £000 £000 £000 £000
charging/(crediting)
Net foreign exchange (gains)/losses (863) (67) 1,383 (6)
Depreciation of tangible fixed assets 3,466 - 3,483 -
Amortisation of goodwill 3,532 - 1,093 -
Impairment of intangibles 1,429 - - -
Amortisation of intangible assets 6,973 - 4,814 -
Operating lease rentals 5,820 - 5,817 -
Fair value (gains)/losses on investments designated at fair value
through profit and loss (15,623) (7,258) 76,768 12,198
Fair value losses on investment property 6,651 - 21,209 -

The amortisation and impairment of goodwill is included in 'expenditure arising from trading activities' in the consolidated statement of financial activities.

24 Auditor's remuneration

Fees payable to the charity’s auditor and its associates for other services:
Fees payable to the charity's auditor for the audit of the charity's annual accounts
- The audit of the charity's subsidiaries
Total audit fees
- Other assurance services
Total non-audit fees
Total auditor's remuneration
- Audit-related assurance services		 2023
2022
£000
£000
106
50
2,810
1,312
2,916
1,362
76
87
529
332
605
419
3,521
1,781

Amounts disclosed are net of services taxes, where applicable. Audit-related assurance services include Prudential Regulatory Authority (PRA) and other regulatory audit work of the charity's subsidiaries.

Audit fees of the charity and of the charity's subsidiaries for the year ended 31 December 2023 include amounts related to the implementation of IFRS 17 Insurance Contracts in the year ending 31 December 2023, the impacts of which are disclosed in note 49.

101

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25 Employee information

The average monthly number of employees of the Benefact Trust group of companies, including Executive Directors of the trading subsidiaries, during the year by geographical location was:

United Kingdom and Ireland
Australia
Canada		 2023
2022
No.
No.
1,411
79
1,906
166
137
78
2,150
1,627
Capitalised staff costs
The above figures do not include termination benefits of £862,000 (2022: £278,000).
Other post-employment benefits
Pension costs - defined contribution plans
Wages and salaries
Pension costs - defined benefit plans
Social security costs		 2022
£000
132
230
108,495
11,911
10,625
126,627
10,271
8,358
867
872
2023
£000
149,906
128,482
(37)
(502)
149,869
127,980

Due to the high number of qualified and skilled staff the Statement of Recommended Practice's requirement to disclose the number of employees who received emoluments over £60,000 is commercially sensitive to the trading activities of the Benefact Trust group of companies and, with the agreement of the charity's trustees, is not made here.

102

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26 Key management remuneration

Three (2022: two) trustees received remuneration in their capacity as non-executive directors of subsidiary undertakings. Details of the emoluments received are as follows:

Francois Boisseau
Sir Stephen Lamport
Chris Moulder
Total emoluments paid to trustees in their capacity as non-executive directors of
subsidiary undertakings		 78
71
2023
2022
77
71
82
78
_Restated_
£000
£000**
237
220

*Sir Stephen Lamport resigned as trustee on 5 March 2024 but continues as a director of a subsidiary undertaking.

**Francois Boisseau was appointed as a trustee of the charity on 5 May 2023. He received renumeration as a non-executive director of a subsidiary undertaking in the prior year which has been disclosed for comparative purposes.

***Chris Moulder retired as trustee on 6 July 2023 but continues as a director of a subsidiary undertaking.

None of the trustees was a member of the trading subsidiaries' defined benefit pension schemes during the current or prior year.

The key management remuneration of the charity is disclosed in note 10. The key management remuneration of the trading subsidiaries can be found in note 39 of the Benefact Group plc annual report and accounts which are available from the registered office, as shown on page 153.

27 Disposal of subsidiary

In the prior year, EIO plc disposed of South Essex Insurance Holdings Limited and its wholly owned subsidiary, SEIB Insurance Brokers Limited, to a related party. The related party was an associate of Benefact Group.

Consideration received or receivable
Carrying amount of net assets sold
Gain on disposal before and after tax		 2022
£000
45,197
(10,253)
34,944

The gain on disposal has been presented within the consolidated statement of financial activities.

The carrying amounts of assets and liabilities as at the date of disposal were:

Net assets
Goodwill and other intangibles
Property, plant and equipment
Other assets
Cash and cash equivalents
Total assets
Provisions for other liabilities
Current tax liabilities
Deferred income
Other liabilities
Total liabilities		 7,496
1,809
370
2022
£000
8,842
18,517
(1,010)
(51)
(362)
(6,841)
(8,264)
10,253

103

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

28 Intangible assets

Cost
Impairment losses in the year
At 31 December 2023
At 31 December 2023
Net book value
At 31 December 2022
Additions
Disposals
At 1 January 2023
At 31 December 2023
Acquisition
Exchange movements
Accumulated amortisation
Exchange movements
Disposals
At 1 January 2023
Provided in the year		 £000
£000
888
(5)
(174)
(424)
96,141
50,570
14,071
10
software
£000
intangible
assets
Total
1,846
Other
Computer
Goodwill
£000
31,500
61,823
-
(434)
64,557
-
-
42,800
42,800
-
(169)
202,900
57,764
93,323
51,813
2,815
1,429
-
(3)
(125)
4,158
1,429
-
-
(122)
28,523
10,505
-
(259)
22,177
13,125
63,825
3,532
-
(259)
15,937
32,055
75,375
27,383
61,268
28,393
24,430
41,827
127,525
2,977
946
32,316

The intangible assets of the Benefact Trust group of companies relate to the trading subsidiaries. The parent charity has no intangible assets.

Goodwill arose on the acquisition of subsidiary undertakings and on the acquisition of business. £nil of the goodwill balance (2022: £23,400) relates to the acquisition of Lycetts Holdings Limited during 2011. £879,000 of the goodwill balance (2022: £1,032,000) relates to the acquisition of Robertson-McIsaac Limited in 2019. £1,656,000 of the goodwill balance (2022: £1,921,000) relates to the acquisition of G.D Anderson & Co in 2022.

On 30 June 2023 the Benefact Trust group of companies gained control over L&W. £57,787,000 of goodwill in relation to this acquisition is held on the balance sheet at year end. Further information on the acquisition can be found in note 34 to the accounts. Since 30 June, L&W have made a further acquisition resulting in an additional £589,000 of goodwill at year end.

On 28 June 2023 Lycetts acquired the book of business of BBA Insurance Brokers resulting in £357,000 of goodwill at year end.

£670,000 (2022: £893,000) of the other intangible assets balance in the current year relates to the acquisition of the assets of Funeral Planning Services Limited and has a remaining useful life of three years. £40,256,000 (2022: £nil) of the intangible assets relates to the acquisition of the assets of L&W. The acquired brand has a remaining useful life of twelve years. The acquired customer relationships has a remaining useful life of nine years.

104

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29 Tangible assets

Disposals
At 1 January 2023
Additions
Exchange movements
Net book value
At 31 December 2023
Cost or valuation
Exchange movements
Revaluation
Acquisitions
Accumulated depreciation
At 1 January 2023
Charge for the year
Disposals
At 31 December 2023
At 31 December 2022
At 31 December 2023		 £000
Computer
-
(12)
(215)
(305)
1,465
12,526
-
684
221
3,091
3,996
£000
£000
buildings
equipment
Land and
£000
Motor
Office
£000
vehicles
equipment
Total
885
1,475
16,293
-
-
44
569
613
(146)
-
(56)
-
(90)
885
-
-
-
31,759
(532)
2,350
13,142
36,575
1,525
19,558
-
(43)
-
9,145
508
7,342
16,995
1,505
3,466
213
-
(9)
1,748
-
(301)
(126)
(436)
-
(40)
(83)
19,942
-
10,841
595
8,506
14,764
967
8,951
1,465
2,350
930
11,052
16,633
2,301
3,381

The tangible assets of the Benefact Trust group of companies relate to the trading subsidiaries. The parent charity has no tangible assets.

Included within land and buildings is a property held for sale at 31 December 2023 with a value of £1,750,000.

All properties, other than those held for sale, were last revalued at 31 December 2023. Valuations were carried out by Cluttons LLP, an independent professional firm of chartered surveyors, who have recent experience in the location and type of properties. Valuations were carried out in accordance with The RICS Global Valuation Standards dated 31 January 2022.

The value of land and buildings on a historical cost basis is £1,464,000 (2022: £1,464,000).

Included within net book value of motor vehicles is £926,000 (2022: £965,000) in respect of assets held under finance leases.

105

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30 Investment property

Fair value at 1 January
Disposals
Fair value losses
Fair value at 31 December		 2023
2022
£000
£000
140,846
163,355
(3,382)
(1,300)
(6,651)
(21,209)
140,846
130,813

The investment property of the Benefact Trust group of companies relates to the trading subsidiaries. The parent charity has no investment property.

The trading subsidiaries' investment properties were last revalued at 31 December 2023 by Cluttons LLP, an independent professional firm of chartered surveyors who have recent experience in the location and type of properties. Valuations were carried out in accordance with The RICS Global Valuation Standards dated 31 January 2022. There has been no change in valuation technique during the year.

The value of the investment property on a historical cost basis is £136,201,000 (2022: £139,339,000).

Included within investment property are long leasehold properties with a net book value of £17,319,000 (2022: £18,836,000).

There are no restrictions on the realisability of investment property, nor on the remittance of income and proceeds of disposal. At the year end, there were no significant contractual obligations relating to investment properties.

Investment property transactions are included in operating activities in the consolidated statement of cash flows.

106

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 Investments

Financial assets at amortised cost
- forwards
- options
Financial assets at fair value through profit or loss
Equity securities
- listed
- unlisted
- listed
Debt securities
- government bonds
Derivative financial instruments:
Other loans
Total investments
Structured notes
Investment contract assets		 824
655
100
-
2023
2022
£000
£000
_Re-presented_
362,726
368,879
90,190
99,870
318,249
262,842
202,251
206,394
94,970
56,137
457,688*
485,213
1,526,898
1,480,090
34
79,424
34
79,424
1,559,514
1,526,932

*Prior year comparatives have been re-presented to reflect the current year disclosures for composition of OEICs and debt securities. OEIC's previously included in equity securities but relating to bond OEICs, and debt securities previously included in government bonds but relating to listed debt, have been re-presented to better reflect the nature of the assets.

107

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 Investments (continued)

Reconciliation of the movement in financial assets:

Redemption and repayments
2022 Re-presented
Fair value at 1 January
Exchange losses
Fair value at 31 December
Disposal proceeds
Fair value gains
Transfers
Exchange gains
Fair value at 31 December
Additions at cost
Disposal proceeds
Gift aid from subsidiary to Endowment fund
Fair value at 1 January
Additions at cost
Fair value losses
Redemptions and repayments
2023*		 Unrestricted funds -
(79,229)
(248,753)
-
(81,584)
(10,969)
-
(207)
7,258
28,979
76,396
279,952
109,615
1,559,514
At fair value
Endowment fund
Total funds
profit or loss
through
£000
£000
(10,969)
-
(207)
-
(169,524)
-
-
(81,584)
21,721
-
201,154
2,402
1,370,475
79,424
At fair value
£000
cost
profit or loss
At amortised
£000
through
1,412,857
35		 114,040
1,526,932
1,093,805
25,322
-
(1,242)
12,722
-
(55,763)
-
506,946
55,344
(155,199)
(5,000)
-
(27,036)		 109,902
1,229,029
(12,198)
(67,961)
-
(28,278)
(10,713)
(165,912)
-
12,722
17,624
579,914
-
5,000
1,370,475
79,424		 109,615
1,559,514

*Prior year comparatives have been re-presented to reflect the current year disclosures for composition of OEICs and debt securities. OEIC's previously included in equity securities but relating to bond OEICs, and debt securities previously included in government bonds but relating to listed debt, have been re-presented to better reflect the nature of the assets.

Fair value gains/(losses) through profit or loss in the unrestricted fund excludes £854,000 fair value gains (2022: £2,903,000 fair value gains) on derivatives classified as financial liabilities.

108

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

32 Derivative financial instruments

The trading subsidiaries utilise derivatives to mitigate equity price risk arising from investments held at fair value, foreign exchange risk arising from investments denominated in foreign currencies, and foreign exchange risk arising from investments denominated in sterling that contain underlying foreign currency exposure. These 'non-hedge' derivatives either do not qualify for hedge accounting or the option to hedge account has not been taken.

A trading subsidiary has also formally designated certain derivatives as a hedge of its net investments in Australia and Canada. A gain of £4,860,000 (2022: loss of £4,514,000) in respect of these 'hedge' derivatives has been recognised in the hedging reserve within unrestricted funds, as disclosed in note 42. The trading subsidiaries have formally assessed and documented the effectiveness of derivatives that qualify for hedge accounting in accordance with FRS 102.

Hedge derivatives
Forwards (Australian dollar)
Foreign exchange contracts
Equity/Index contracts
Options
Forwards (Canadian dollar)
Foreign exchange contracts
Forwards (Euro)
Non-hedge derivatives		 54,584
759
-
1,156
1,224
-
-
52,960
100
824
120,115
Contract/
notional
amount
2023
Fair value
asset
liability
2022
Fair value
notional
Fair value
Fair value
asset
£000
Contract/
amount
£000
-
£000
-
£000
100
-
liability
£000
655
-
£000
-
93,712
2,475
-
55,742
48,442
-
3,234
197,996
755
227,659
824
2,380

All derivatives in the current and prior period expire within one year. All contracts designated as hedging instruments were fully effective in the current and prior year.

The notional amounts above reflect the aggregate of individual derivative positions on a gross basis and so give an indication of the overall scale of the derivative transactions. They do not reflect current market values of the open positions.

Derivative fair value assets are recognised within investments (note 31) and derivative fair value liabilities are recognised within creditors (note 37).

109

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

33 Investment in associate

On 30 June 2023, Benefact Group acquired an additional 10.1% of the issued ordinary share capital of its associate undertaking L&W, increasing its ownership to 50.1% and so obtaining control of the entity. See note 34 for further details of the business combination. The resulting treatment of derecognising the investment in associate is as follows:

Fair value loss*
Dividends received
Share of net income for the period
Derecognition on step acquisition
At 31 December 2023
At 31 December 2022
At 1 January 2022
Dividends received
Share of net income		 Share of net
assets
2,547
9,601
12,148
Goodwill
Total
£000
£000
£000
(1,000)
-
(1,000)
1,463
-
1,463
(1,130)
-
(1,130)
(900)
-
(900)
365
-
365
(9,601)
(10,946)
(1,345)
3,010
9,601
12,611
-
-
-

At the year end date the Benefact Trust group of companies' interest in L&W was as follows:

Revenue
Benefact Trust group of companies' share of:
Liabilities
Assets
Share of net assets		 £000
9,297
£000
2022
2023
11,602
-
-
48,311
(45,301)
3,010
-

*The remeasurement to fair value of Benefact Group's existing 40.0% interest in L&W resulted in a loss of £1,130,000 as below:

Fair value of shares held at 30 June 2023
Carrying value of associate		 2023
10,946
(12,076)
(1,130)

L&W holds 20.0% of the issued ordinary share capital of De Novo Risk Solutions Limited and 35.0% of the issued ordinary share capital of Provenance IB Ltd. De Novo Risk Solutions Limited and Provenance IB Ltd are both unlisted companies incorporated in the United Kingdom. They are accounted for using the equity method in these consolidated financial statements as set out in the accounting policies in note 17. The investment in associate held by L&W at 31 December 2023 is £408,000.

110

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34 Acquisition of subsidiary

On 30 June 2023, the Benefact Group acquired a further 10.1% of the issued ordinary share capital of L&W, taking its shareholding to 50.1% granting it control. L&W is an unlisted company incorporated in the United Kingdom, and the holding company of a group whose primary activity is insurance brokerage services. Prior to 30 June 2023, the Benefact Trust group of companies owned 40.0% of L&W shares and the investment was accounted for as an associate in accordance with FRS 102. The acquisition is part of the Benefact Group's strategy to double in size and continue to diversify.

The following summarises the consideration for L&W and the amounts of the assets acquired and liabilities recognised at the acquisition date:

Borrowings
Current tax liabilities
Deferred income
Other liabilities
Less cash balances acquired
Cash flow analysis
Cash consideration
Fair value of pre-existing interest in L&W
Total consideration
Non controlling interest
Fair value of subsidiary
Fair value of identifiable net assets
Goodwill
Investment in associate
Other assets
Cash
Total identifiable net assets
Property, plant and equipment
Provisions for other liabilities
Liabilities
Deferred tax assets
Intangible assets
Assets
Cash		 613
288
29,930
23,197
572
42,800
2023
£000
(1,438)
(83,511)
(2,607)
(1,288)
(41,991)
97,400
(130,835)
10,946
(33,435)
2,782
13,728
13,665
27,393
33,435
(23,197)
2,782
60,828
(20,415)

The remeasurement to fair value of the Benefact Group's existing 40.0% interest in L&W resulted in a loss of £1,130,000. This amount has been included within loss on disposal of associate within the consolidated statement of financial activities.

The goodwill recognised comprises the value of expected synergies arising from the acquisition. None of the goodwill recognised is expected to be deductible for income tax purposes.

111

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

35 Debtors

(a) Amounts falling due within one year
Amounts due from related parties
Trade debtors
Other debtors
Reinsurers' contract assets
Accrued rent and interest
Other prepayments and accrued income
Current tax recoverable
Reinsurers' contract assets
Total debtors
Other prepayments and accrued income
(b) Amounts falling due after one year
Trade debtors
Deferred tax assets
Other debtors		 2023
2022
_Restated_
£000
£000
615
1,790
3,761
1,295
20,640
20,792
127,365
161,411
16,254
4,436
12,296
8,486
6,045*
4,412
186,976
202,622
8,563
92,743
78,713
2,105
2,405
2,000
2,147
10,060
1,221
77
106,632
93,402
293,608
296,024

*The comparative figures have been restated as detailed in note 49.

Trade debtors are the debtors arising from the insurance broking activities of trading subsidiaries.

(c) Expected credit losses

There has been no significant change in the recoverability of the trading subsidiaries' trade debtors, for which no collateral is held. The trustees consider that the amounts are recoverable at their carrying values, which are stated net of an allowance for doubtful debts for those debtors that are individually determined to be impaired.

The trading subsidiaries have recognised an expected credit loss of £2,000 (2022: £nil) in respect of financial assets.

112

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

36 Cash at bank and in hand

Short-term bank deposits
Cash at bank and in hand		 Unrestricted
Endowment
Unrestricted
Endowment
2023
2022
64,015
2,934
66,949
67,939
679
68,618
-
115,800
97,478
-
97,478
115,800
£000
£000
£000
£000
£000
£000
funds
funds
Total
funds
funds
Total
179,815
2,934
182,749
165,417
679
166,096

Included within short term deposits of the trading subsidiary are cash deposits of £3,810,000 (2022: £8,810,000) pledged as collateral by way of cash margins on open derivative contracts and cash to cover derivative liabilities.

Included within cash at bank and in hand are trading subsidiary cash deposits of £12,557,000 (2022: £15,109,000) pledged as collateral by way of cash calls from reinsurers, and £18,633,497 (2022: £13,380,000) of restricted cash held on an agency basis.

37 Creditors

(a) Amounts falling due within one year
Derivative liabilities
Accruals and deferred income
Other creditors
Corporation tax
Amounts due to related parties
Other creditors
Accruals and deferred income
(b) Amounts falling due after one year		 £000
£000
2023
2022
2,380
3,234
50,108
42,563
60,049
36,559
4,761
442
-
-
Restated*
117,298
82,798
1,072
1,350
1,407
2,194
3,544
2,479

*The comparative figures have been restated as detailed in note 49.

Deferred income arises from the operations of the trading subsidiaries.

113

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

38 Provisions for liabilities

Notes
Technical provisions
Life business technical provisions
Investment contract liabilities
Provisions for liabilities
47
Deferred tax liabilities		 2023
2022
603,111
385
456
730,283
6,404
4,884
_Restated_
596,270
£000
725,813
£000
41,359*
40,880
1,377,072
1,372,773

*The comparative figures have been restated as detailed in note 49.

All provisions relate to the trading subsidiaries.

Technical provisions and life business technical provisions arise on the general insurance and life insurance business of the trading subsidiaries. Further details of these provisions are provided in note 47 (VI).

(a) Provisions for liabilities

At 1 January 2023
Acquisition
Exchange differences
Current
Non-current
At 31 December 2023
Additional provisions
Used during year		 provisions
£000
Contingent
Other
and legal
Regulatory
£000
£000
consideration
Total
£000
2,464
-
4,884
1,125
2,420
-
(256)
3,615
(3,637)
315
316
provisions
(5)
-
(5)
-
3,978
-
(3,893)
1,440
47
1,172
2,398
2,834
6,404
-
739
2,398
-
1,172
5,665
2,095
739

Regulatory provisions

The trading subsidiaries operate in the financial services industry and are subject to regulatory requirements in the normal course of business, including contributing towards any levies raised on UK general and long-term business. The provisions reflect an assessment by the trading subsidiaries of their share of the total potential levies.

In addition, from time to time the trading subsidiaries may be subject to complaints from customers and threatened or actual legal proceedings. Whilst the majority relate to cases where there has been no customer detriment, the trustees recognise that the trading subsidiaries have provided, and continue to provide, advice and services across a wide spectrum of regulated activities. The trustees therefore believe it prudent to hold a provision for the estimated costs of customer complaints relating to services provided. The Benefact Trust group of companies continues to reassess the ultimate level of complaints expected and the appropriateness of the provision, which reflects the expected redress and associated administration costs that would be payable in relation to any complaints the trading subsidiaries may uphold.

The Benefact Trust group of companies does not disclose amounts in relation to contingent liabilities associated with cases where the likelihood of any payment is remote. The Benefact Trust group of companies also does not disclose an estimate of the potential financial impact or effect of contingent liabilities where it is not currently practicable to do so. The Benefact Trust group of companies is committed to promptly report incidents or cases to the relevant regulator or authority in certain circumstances.

Other provisions

The provision for other costs relates to costs in respect of dilapidations.

Contingent consideration

The provision for contingent consideration relates to the provision held within L&W, recognised on acquisition.

114

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

38 Provisions for liabilities (continued)

(b) Deferred tax

(b) Deferred tax (b) Deferred tax (b) Deferred tax
At 1 January
Charged/(credited) to net income/(expenditure)
Credited to net income/(expenditure) - resulting from reduction in tax rate
At 31 December
Charged/(credited) to other recognised gains/(losses)
Charged to other recognised gains - resulting from reduction in tax rate
Exchange differences
Transfer on acquisition/ disposal of subsidiary		 _Restated_
£000
£000
2023
2022
30,820
41,340
(103)
-
689
(8,092)
32,796
30,820
108
-
1,580
(2,204)
274
(286)
(572)*
62
Deferred tax assets included in debtors
Deferred tax liabilities included in provisions for liabilities
Net provision for deferred tax
Unrealised investment gains
Deferred tax is provided as follows:
Other timing differences
Retirement benefit obligations
Net provision for deferred tax
Depreciation in excess of capital allowances		 2023
2022
£000
8,563
10,060
(41,359)
(40,880)
(32,796)
(30,820)
(33,908)
(34,899)
6,942
(3,747)
(2,595)
7,147
(32,796)
(30,820)
(2,083)
(473)
£000
Restated*

*The comparative figures have been restated as detailed in note 49.

The Benefact Trust group of companies expects a net deferred tax liability of £4,182,000 (2022: £184,000), net deferred tax liability) to reverse within 12 months of the year end date. The reversal is expected to arise from the sale of investments, claiming of capital allowances, settlement of overseas claims costs, and other temporary timing differences.

(c) Investment contract liabilities

Investment contract liabilities £000
£000
603,111
2023
2022
596,270
603,111
596,270

Investment contract liabilities represents amounts due to policyholders and, if applicable, the cost of the minimum repayment guarantee. Investment contract liabilities are repayable on demand or at short notice and are therefore classified as current. These liabilities are matched with highly liquid investments.

115

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

39 Subordinated liabilities

6.3144% EUR 30m subordinated debt 2023
2022
£000
£000
25,853
25,818
25,853
25,818

Subordinated debt consists of a privately-placed issue of 20-year subordinated bonds by a trading subsidiary, maturing in February 2041 and callable after February 2031. Subordinated debt is stated at amortised cost.

40 Retirement benefit obligations

(a) Defined contribution pension plans

The trading subsidiaries operate a number of defined contribution pension plans, for which contributions are disclosed in note 25.

(b) Defined benefit pension plans

The trading subsidiaries' main defined benefit plan is operated by EIO plc for UK employees. The plan closed to new entrants on 5 April 2006. The terms of the plan for future service changed in August 2011 from a non-contributory final salary scheme to a contributory scheme in which benefits are based on career average revalued earnings. The scheme closed to future accrual on 30 June 2019. Active members in employment at this date retained certain enhanced benefits after the plan closed to future accrual, including benefits in relation to death in service and ill health retirement. They also retain the link to final salary whilst they remain employed by EIO plc. From 1 July 2019, active members in employment joined one of the trading subsidiaries' defined contribution plans. The scheme previously had two discrete sections: the EIO Section and the Ansvar Section. With effect from 1 January 2021, the two discrete sections of the scheme have been combined.

The assets of the main defined benefit plan are held separately from those of the trading subsidiary by the Trustee of the Ecclesiastical Insurance Office plc Staff Retirement Benefit Fund (the 'Fund'). The Fund is subject to the Statutory Funding Objective under the Pensions Act 2004. An independent qualified actuary appointed by the Trustee is responsible for undertaking triennial valuations to determine whether the Statutory Funding Objective is met. Pension costs for the plan are determined by the Trustee, having considered the advice of the actuary and having consulted with the employer. The most recent triennial valuation was at 31 December 2022. No contribution is expected to be paid by EIO plc in 2024.

Actuarial valuations were reviewed and updated by an actuary at 31 December 2023 for FRS 102 purposes. The surplus in the scheme attributable to the former EIO Section has been assessed against the economic benefit available as a reduction in future contributions in accordance with FRS 102. This has resulted in the recognisable surplus being restricted by £50,273,000. EIO plc has an unconditional right to a refund of the surplus attributable to the former Ansvar Section of the Fund, which has been recognised in full in accordance with FRS 102.

In addition to the trading subsidiaries' main defined benefit plan, Lycett, Browne-Swinburne & Douglass Limited (LBSD), also operates a defined benefit plan. The plan was closed to new members subsequent to the 1 January 2011 renewal, and was closed to future accrual on 30 September 2021. From 1 October 2021, active members in employment joined one of the trading subsidiaries' defined contribution plans. The most recent triennial valuation was at 1 January 2021. The contribution expected to be paid by the trading subsidiary into the plan during the next financial year is £528,000 (2022: £500,000).

The actuarial valuation for the LBSD plan was reviewed and updated by an actuary at 31 December 2023. As LBSD does not have an unconditional right to a refund of the surplus in the scheme the recognisable surplus has been restricted by £1,260,000 in accordance with FRS 102.

In the current year, actuarial losses arising from changes in financial assumptions of £8,240,000 (2022: actuarial gains of £159,143,000) have been recognised in the statement of financial activities. This has mainly resulted from a 0.27% decrease in the discount rate, partially offset by inflation linked pension increases. In the prior year, these gains resulted from a 2.87% increase in the discount rate assumption.

Experience losses of £2,546,000 have been recognised in the current year (2022: losses of £12,025,000). In the current year, this is due to updating for actual member experience in the trading subsidiaries' main defined benefit plan and from actual inflation exceeding the inflation assumptions. In the prior year, the experience loss was the result of actual inflation exceeding the inflation assumptions in the trading subsidiaries main defined benefit plan. A review and update to certain demographic assumptions resulted in an actuarial gain of £5,654,000 (2022: £2,993,000 actuarial gain) being recognised in the current year.

116

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

40 Retirement benefit obligations (continued)

The Trustees of the trading subsidiaries' main defined benefit plan set the investment objectives and strategy for the Fund based on independent advice and in consultation with the employer. Key factors addressed in setting strategy include the Fund’s liability profile, funding level and strength of employer covenant. Their key objectives are to ensure the Fund can meet members’ guaranteed benefits as they fall due, reduce the risk of assets failing to meet its liabilities over the long term and manage the volatility of returns and overall funding level.

A blend of diversified growth assets comprising equities, listed infrastructure and property and protection assets - bonds, gilts and cash - are deployed to balance the level of risk to that required to provide, with confidence, a sufficient return and liquidity to continue to meet members' obligations as they fall due. The Trustees have identified the key risks faced by the Fund in meeting this objective to be equity price risk, falls in bond yields and rising inflation.

A liability driven investment (LDI) allocation is maintained as a risk management tool to preserve some future protection for the Fund against falling yields and rising inflation, designed to hedge 75% of the interest and inflation rate risk of the guaranteed benefits of the Fund. Exposure of the Fund's assets to interest rates and inflation counter-balances exposure of the Fund's liabilities to these factors and has suppressed, but not eliminated, volatility in the funding position.

The Trustees of the trading subsidiaries' main defined benefit plan regularly monitor investment performance and strategy to ensure the structure adopted continues to meet their objectives and to highlight opportunities to reduce investment risk and volatility where practical and affordable. Their aim is to establish a long-term funding target in line with guidance from the Pensions Regulator. The Trustees intend that this long term target will be reached through investment performance only and without requiring further contributions from the employer. During 2023, the Trustees of the trading subsidiaries' main defined benefit plan maintained their strategy to incrementally reduce the Fund's exposure to market volatility and better protect the funding position including some modest property disposals in the year.

The Trustees of the trading subsidiaries' main defined benefit plan adopt a Responsible and Sustainable Investment Policy with regards to the Fund’s equities. This includes an 'absence of harm' exclusion policy, as well as an aspiration to reduce the portfolio’s carbon intensity over time.

Fair value of plan assets
The amounts recognised in the balance sheet are determined as follows:
Present value of funded obligations
Net asset in the balance sheet
Restrictions on asset recognised
Net pension liability
Net pension asset
The following is the analysis of the net pension asset/(deficit) for financial reporting purposes:		 2023
2022
£000
£000
316,165
311,236
(244,844)
(238,191)
71,321
73,045
(51,533)
(57,707)
19,788
15,338
19,788
15,338
-
-
19,788
15,338

117

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

40 Retirement benefit obligations (continued)

Gains from changes in demographic assumptions
(Losses)/gains from changes in financial assumptions
The amounts recognised in the consolidated statement of financial activities are as follows:
Return on plan assets, excluding interest income
The amounts recognised in actuarial gains/(losses) on retirement benefits are as follows:
Change in asset restriction
Past service cost
Current service cost
Effect of interest on asset ceiling
Interest expense on scheme liabilities
Interest income on plan assets
Experience losses on liabilities
Total, included in expenditure arising from trading activities
Administration cost		 2023
2022
£000
167
-
257
573
949
768
2,752
332
11,128
7,349
(14,593)
(8,150)
£000
872
660
(2,546)
(12,025)
(119,180)
5,654
2,993
621
8,926
(39,907)
(8,240)
159,143
(8,976)
4,415

The movements in the fair value of plan assets and the present value of the defined benefit obligations over the year are as follows:

Plan assets
At 1 January
Interest income
Return on plan assets, excluding interest income
Employee contributions
Pension benefits paid and payable
Contributions paid
Administrative expenses
At 31 December
Defined benefit obligation
At 1 January
Current service cost
Interest cost
Past service cost
Pension benefits paid and payable
Employee contributions
Experience losses on liabilities
Gains from changes in demographic assumptions
Losses/(gains) from changes in financial assumptions
At 31 December
Change in asset ceiling
At 31 December
Asset ceiling
At 1 January
Effect of interest on the asset ceiling		 2023
2022
_Re-presented_
311,236
435,736
14,593
8,150
621
(119,180)
-
3
(10,031)
(13,312)
695
607
(949)
(768)
£000*
£000
316,165
311,236
238,191
393,689
257
573
11,128
7,349
167
-
(10,031)
(13,312)
-
3
2,546
12,025
(5,654)
(2,993)
8,240
(159,143)
244,844
238,191
(8,926)
39,907
57,707
17,468
2,752
332
51,533
57,707

*Prior year comparatives have been re-presented to reflect the current year disclosures for presentation of administration costs.

118

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

40 Retirement benefit obligations (continued)

The principal actuarial assumptions (expressed as weighted averages) were as follows:

2023 2022
% %
Discount rate 4.50 4.77
Inflation (RPI) 3.13 3.30
Inflation (CPI) 2.64 2.79
Future salary increases 3.85 4.09
Future increase in pensions in deferment 3.27 3.37
Future average pension increases (RPI) 3.00 3.05
Future average pension increases (CPI) 2.07 2.10
Mortality rate 2023 2022
The average life expectancy in years of a pensioner retiring at age 65, at the balance sheet date, is as
follows:
Male 22.2 22.8
Female 23.7 24.1
The average life expectancy in years of a pensioner retiring at age 65, 20 years after the balance
sheet date, is as follows:
Male 23.0 23.5
Female 24.7 25.3
Other
Property
Derivative financial instruments - unquoted
UK quoted - index-linked
UK public sector quoted - fixed interest
UK non-public sector quoted - fixed interest
Liability driven investments - unquoted
Debt instruments
Overseas quoted
Equity instruments
UK quoted
Cash and other*
Plan assets are as follows:		 53,531
45,773
44,333
47,651
13,623
37,268
£000
£000
2023
2022
20,559
21,241
9,768
-
81,223
69,651
54,095
46,988
97,864
93,424
1,245
1,268
37,932
41,984
(144)
(588)
111,550
90,892
316,165
311,236

*Includes accrued income, prepayments and other debtors and creditors.

119

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

40 Retirement benefit obligations (continued)

The actual return on pension plan assets was a gain of £15,214,000 (2022: loss of £111,030,000).

The underlying assets of the liability driven investments are primarily UK government bonds and interest rate repurchase agreements at various rates and terms.

The fair value of unquoted securities is measured using inputs for the asset that are not based on observable market data. The fair value is estimated and approved by the Trustee based on the advice of investment managers. Property is valued annually by independent qualified surveyors using standard industry methodology to determine a fair market value. All other investments either have a quoted price in active markets or are valued based on observable market data.

(c) Post-employment medical benefits

EIO plc operates a post-employment medical benefit plan, for which it chooses to self-insure. The method of accounting, assumptions and the frequency of valuation are similar to those used for the defined benefit pension plans.

The amounts recognised in the balance sheet are determined as follows:

Total expense charged to net income
At 31 December
Present value of unfunded obligations and net obligations in the balance sheet
The amounts recognised through net income/(expenditure) are as follows:
Interest cost
Total, included in employee benefits expense
Benefits paid
Movements in the net obligations recognised in the balance sheet are as follows:
Net actuarial gains, recognised in actuarial losses on retirement benefits
At 1 January		 £000
£000
4,801
4,960
2023
2022
230
132
(130)
(2,100)
(269)
(120)
4,960
7,058
4,801
4,960
230
132
230
132

The weighted average duration of the net obligations at the end of the reporting period is 10.0 years (2022: 10.5 years).

An actuarial loss of £172,000 has been recognised in the current year due to the decrease in the discount rate. The has been offset by an actuarial gain of £183,000 arising from changes in mortality assumptions, and a £109,000 gain due to changes in inflation.

The principal actuarial assumptions were as follows: 2023 2022
% %
Discount rate 4.50 4.77
Medical cost inflation 7.14 7.31

120

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

41 Summary of reserve movements

Fund balance
at 1 January
2023
Fair value
gains on
investments
Expenditure
IFRS 9
transition*
Income
Fund balance at
31 December
2022
Taxation
Fair value
gains on
property
Fund balance
at 31
December
2023
Minority
interests
Gains on net
investment
hedges
Currency
translation
differences
Net reserve
transfers
Gift aid paid to
charity parent
Tax attributable
to other
recognised
(losses)/gains
Actuarial gains
on retirement
benefit
obligations
Loss on
disposal of
associate		 11,681
1,982
110,556
222
502,327
19,511
646,279
-
-
-
(216)
-
(8,782)
(687)
-
-
-
-
-
-
-
7,258
-
9,007
-
16,265
-
-
-
(8,782)
-
-
-
478
(2,576)
-
-
(22,410)
13,000
(347)
-
-
-
-
-
478
748,085
521
3,719
-

752,868
£000
and hedging
£000
£000
fund
General
Designated
Endowment
Revaluation
Non-charitable
Translation
Unrestricted funds
11,681
110,556
222
501,849
19,511
645,801
Total
fund
reserve
trading reserve
reserve
£000
£000
£000
fund
£000
-
-
-
-
2,229
(3,956)
-
-
(1,135)
-
-
-
-
-
1,727
543
-
-
(133)
-
-
1,982
4,535
(2,038)
-
850
-
-
-
4,535
-
850
4,859
(4,033)
(5,239)
-
-
4,859
-
(13,000)
-
(5,106)
(723,627)
-
(748,960)

(1,130)
-
-
-
-
(1,130)
-
-
(4,033)
-
19,650
655,474
511,174
856
2,178
4,519
117,097

*The impact on adoption of IFRS 9 has been disclosed within note 17.

121

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

41 Summary of reserve movements (continued)

Taxation
Fund balance at
31 December
2022 (restated)
Losses on net
investment
hedges
Minority
interests
Actuarial losses
on retirement
benefit
obligations
Tax attributable
to other
recognised
gains/ (losses)
Currency
translation
differences
Net reserve
transfers
Fair value losses
on investments
Expenditure
Gain on disposal
of subsidiary
Gift aid paid to
charity parent
Income
Fund balance at 1
January 2022
(restated)		 -
(8,782)
-
-
-
-
-
-
-
-
-
(8,782)
-
1,718
827
-
-
-
-
(4,514)
(4,514)
-
-
(6,876)
-
3,306
-
-
-
-
5,660
5,660
-
-
(12,198)
-
(97,977)
-
(110,175)
(2,622)
(356)
-
(648,497)
(21,550)
(1,756)
(1,550)
-
-
5,000
-
-
-
(112)
-
-
-
15,000
-
14
3,945
-
730,987
-
735,259
313
6,346
115,827
268
511,445
17,538
666,036
14,612
£000
£000
£000
£000
£000
£000
fund
fund
reserve
trading reserve
reserve
Total
fund
£000
Translation
Designated
Endowment
Revaluation
Non-charitable
and hedging
Unrestricted funds
General
(673,025)
4,729
-
-
-
(46)
46
(20,000)
-
4,841
-
-
34,944
-
34,944
-
-
(6,876)
2,545
1,982
110,556
11,681
222
501,849
19,511
645,801

*The comparative figures have been restated as detailed in note 49.

See note 15 for further information on the general unrestricted, designated and endowment funds.

The revaluation reserve represents the cumulative net fair value gains on the trading subsidiaries' freehold property.

122

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

42 Translation and hedging reserve

At 31 December 2023
Attributable tax
Gains on net investment hedges
Attributable tax
Losses on net investment hedges
Gains on currency translation differences
At 1 January 2022 (restated*)
At 31 December 2022
Losses on currency translation differences
At 1 January 2023		 (687)
(4,033)
-
(4,033)
-
4,859
4,859
-
£000
£000
Translation
Hedging
£000
18,794
717
19,511
(687)
reserve
reserve
Total
14,761
4,889
19,650
825
-
-
(4,514)
(4,514)
5,659
-
5,659
13,135
825
4,406
17,541
18,794
717
19,511

*The comparative figures have been restated as detailed in note 49.

The translation reserve arises on consolidation of the Benefact Trust group of companies' foreign operations. The hedging reserve represents the cumulative amount of gains and losses on hedging instruments in respect of the trading subsidiaries' net investments in foreign operations.

43 Minority interests

Minority interests comprise 95.6% (2022: 95.6%) of the 106,450,000 (2022: 106,450,000) 8.625% Non-cumulative Irredeemable Preference shares (NcIPs) in EIO plc.

On 30 June 2023 Benefact Group acquired a further 10.1% of the issued share capital of L&W, taking its shareholding to 50.1%. As a result a minority interest of £13,664,000 has been recognised.

123

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

44 Financial commitments

Capital commitments

At the year end, the Benefact Trust group of companies had capital commitments of £2,358,000 (2022: £76,000) relating to development costs. The charity had no capital commitments in the current and prior year.

Operating lease commitments

Amounts receivable

The trading subsidiaries lease premises under non-cancellable operating lease agreements. The future aggregate minimum lease rentals receivable under non-cancellable operating leases are as follows:

Within 1 year
Between 1 & 5 years
After 5 years		 2023
2022
£000
£000
8,261
8,124
21,519
24,297
13,397
16,554
43,177
48,975

Amounts payable

The trading subsidiaries lease premises and equipment under non-cancellable operating lease agreements. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Within 1 year
Between 1 & 5 years
After 5 years
Operating lease rentals charged to net income/(expenditure) in the period		 2023
2022
£000
£000
5,423
4,375
17,944
11,164
18,579
17,252
41,946
32,791
5,820
5,817

124

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

45 Related undertakings

The charity's interest in related undertakings at 31 December 2023 is as follows:

2023 2023 2022
Company Holding of Holding of
Registration Share shares by shares by
Company Number Capital Charity Subsidiary Charity Subsidiary Activity
Subsidiary undertakings
Incorporated in the United Kingdom
Benefact Broking & Advisory Holdings Limited1 14493617 Ordinary - 100% - 100% Investment holding company
Benefact Group plc1 1718196 Ordinary 100% - 100% Investment holding company
Benefact Management Services Limited1 3 1811698 Ordinary - 100% - 100% Dormant company
Cleddau Holdings Limited2 4 06537988 Ordinary - 50.09% - 40% Investment holding company
Cleddau Insurance Services Limited2 4 06542667 Ordinary - 50.09% - 40% Insurance agents and brokers
Davies Craddock (Holdings) Limited2 4 06523912 Ordinary - 50.09% - 40% Investment holding company
Davies Craddock Limited2 4 06403519 Ordinary - 50.09% - 40% Insurance
Direct Corporate Risks Limited2 4 12939587 Ordinary - 50.09% - 40% Insurance
EdenTree Asset Management Limited1 11923964 Ordinary - 100% - 100% Investment management
Ecclesiastical Insurance Office plc1 24869 Ordinary - 100% - 100% Insurance
Preference - 4.35% - 4.35%
Ecclesiastical Financial Advisory Services Limited1 4 2046087 Ordinary - 100% - 100% Independent financial advisory
Ecclesiastical Group Healthcare Trustees Limited1 4 10988127 Ordinary - 100% - 100% Trustee company
EdenTree Holdings Limited1 14496067 Ordinary - 100% - 100% Investment holding company
EdenTree Investment Management Limited1 2519319 Ordinary - 100% - 100% Investment management
Ecclesiastical Life Limited1 0243111 Ordinary - 100% - 100% Life insurance
Ecclesiastical Planning Services Limited1 02644860 Ordinary - 100% - 100% Funeral plan administration
E.I.O. Trustees Limited1 3 0941199 Ordinary - 100% - 100% Trustee company
Ecclesiastical Underwriting Management Limited1 3 02368571 Ordinary - 100% - 100% Insurance management services
Farmers & Mercantile Insurance Brokers Limited1 5 03142714 Ordinary - - - 100% Insurance agents and brokers
G.D. Anderson & Co Limited1 4 00776446 Ordinary - 100% - 100% Insurance agents and brokers
Insurance Broking Finance Limited2 5 04981657 Ordinary - 50.09% - - Insurance agents and brokers
Lycett, Browne-Swinburne & Douglass Limited1 00706042 Ordinary - 100% - 100% Insurance agents and brokers
Lycetts Financial Services Limited1 02057974 Ordinary - 100% - 100% Independent financial advisory
Lycetts Holdings Limited1 4 05866203 Ordinary - 100% - 100% Investment holding company
Lycetts Risk Management Services Limited1 4 10906990 Ordinary - 100% - 100% Risk management services
Lloyd & Whyte Community Broking Limited2 4 04640518 Ordinary - 50.09% - 40% Insurance agents and brokers
Lloyd & Whyte (Financial Services) Limited2 4 10 02092560 Ordinary - 50.09% - 40% Financial intermediary
Lloyd & Whyte Group Limited2 01143899 Ordinary - 50.09% - 40% Insurance agents and brokers
Lloyd & Whyte Limited2 4 03686765 Ordinary - 50.09% - 40% Insurance agents and brokers
Membership Plans Limited2 4 06322047 Ordinary - 50.09% - 40% Insurance agents and brokers
Mi Speciality Limited2 07313009 Ordinary - 50.09% - 40% Insurance
Naturesave Policies Limited2 4 02797137 Ordinary - 50.09% - 40% Insurance
Northcott Beaton Limited2 4 6 04773132 Ordinary - - - 40% Insurance agents and brokers
Playle-Russell (Special Risks) Limited2 4 03779860 Ordinary - 50.09% - 40% Insurance
Robertson-McIsaac Limited1 4 03544899 Ordinary - 100% - 100% Insurance agents and brokers
SEIB Insurance Brokers Limited1 4 06317314 Ordinary - 50.09% - 40% Insurance agents and brokers
South Essex Insurance Holdings Limited1 4 06317313 Ordinary - 50.09% - 40% Investment holding company
Specialist Broking Retail Limited2 4 10301653 Ordinary - 50.09% - 40% Insurance agents and brokers
Stride Limited2 4 01122247 Ordinary - 50.09% - 40% Insurance agents and brokers
The Medical Insurance Advisory Bureau Limited2 4 07217140 Ordinary - 50.09% - 40% Insurance agents and brokers

The financial statements of EIO plc and Benefact Group plc, the parent companies of the main trading groups, are publicly available, therefore a detailed analysis of their results is not presented here. Copies of the financial statements are available from the registered office as shown on page 153.

125

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

45 Related undertakings (continued)

The charity's interest in related undertakings at 31 December 2023 is as follows:

2023 2022
Company Holding of Holding of
Registration Share shares by shares by
Company Number Capital **Charity Subsidiary ** Charity Subsidiary Activity
Subsidiary undertakings
Incorporated in Australia
Ansvar Insurance Limited7 007216506 Ordinary - 100% - 100% Insurance
Ansvar Risk Management Services Limited7 623695054 Ordinary - 100% - 100% Risk management services
Ansvar Insurance Services Pty Limited7 8 162612286 Ordinary - 100% - 100% Dormant company
Associated undertakings
Incorportated in the United Kingdom
De Novo Risk Solutions Limited2 9 10246240 Ordinary - 20% - - Insurance agents and brokers
Provenance IB Ltd2 4 11131702 Ordinary - 35% - 25% Insurance agents and brokers

1 Registered office: Benefact House, 2000, Pioneer Avenue, Gloucester Business Park, Brockworth, Gloucester, GL3 4AW, United Kingdom

2 Registered office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA

3 Exempt from audit under s480 of the Companies Act 2006

4 Exempt from audit under s479A of the Companies Act 2006

5 Entity was dissolved on 19 December 2023

6 Entity was dissolved on 26 December 2023

7 Registered office: Level 5, 1 Southbank Boulevard, Melbourne, VIC 3006, Australia

8 Exempt from audit

9 Lloyd and Whyte Group Limited, a subsidiary of Benefact Group Plc, acquired 20% of the ordinary share capital of De Novo Risk Solutions Limited on 30 November 2023.

10 On 26 April 2024 the business and certain assets of Lloyd & Whyte (Financial Services) Limited were disposed of.

126

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

46 Related party transactions

Other related parties of the Benefact Trust group of companies include the trading subsidiaries' pension schemes. Prior year also includes transactions with associated undertakings.

2023 2022
£000 £000
Income from transactions with other related parties 750 6,361
Expenditure arising from transactions with other related parties (1,362) (55,345)
Amounts owed by other related parties 615 81,107
Amounts due to other related parties - -

In the prior year, expenditure arising from transactions with other related parties consisted of loan advances to related parties totalling £55,345,000, of which £44,220,000 related to the purchase of South Essex Insurance Holdings Limited and its wholly owned subsidiary, SEIB Insurance Brokers Limited (together SEIB) by L&W.

In the prior year amounts owed by related parties included £79,310,000 of loans disclosed in note 31.

47 Financial risk and insurance disclosures in respect of trading subsidiaries

I. Fair value hierarchy

The fair value measurement basis used to value those financial assets and financial liabilities held at fair value is categorised into a fair value hierarchy as follows:

Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities. This category includes listed equities in active markets, listed debt securities in active markets and exchange-traded derivatives.

Level 2: fair values measured using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes listed debt or equity securities in a market that is not active and derivatives that are not exchange-traded.

Level 3: fair values measured using inputs for the asset or liability that are not based on observable market data (unobservable inputs). This category includes unlisted debt and equities, including investments in venture capital, and suspended securities. Where a look-through valuation approach is applied, underlying net asset values are sourced from the investee, translated into the Benefact Trust group of companies' functional currency and adjusted to reflect illiquidity where appropriate, with the fair values disclosed being directly sensitive to this input.

Instruments move between fair value heirachies primarily due to increases or decreases in market activity or changes to the significance of unobservable inputs to valuation, and are recognised at the date of the event or change in circumstances which caused the transfer. During the year there was a transfer from level 1 to level 2 due to a change in observable inputs.

Financial assets at fair value through profit or loss
Debt securities
Equity securities
Financial investments
At 31 December 2023
Analysis of fair value measurement bases
Structured notes
Derivatives
Funeral plan investments
Total financial assets at fair value		 340,297
516,844
2,079
-
824
-
824
250,106
(1)
518,922
90,191
-
Level 1
Level 2
Level 3
Total
457,685
-
457,685
£000
£000
£000
£000
end of the reporting period based on
Fair value measurement at the
-
94,970
-
94,970
-
766,950
555,558
90,190
1,412,698

127

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

Debt securities
Equity securities
Financial investments
At 31 December 2022 (re-presented)
Financial assets at fair value through profit or loss
Structured notes
Analysis of fair value measurement bases*
Funeral plan investments
Derivatives
Total financial assets at fair value through profit or loss		 492,684
1,299
334,230
56,138
£000
(1)
493,982
-
56,138
-
end of the reporting period based on
Fair value measurement at the
Total
£000
£000
£000
Level 1
Level 2
Level 3
234,033
-
100,197
755
-
755
-
-
485,213
-
485,213
726,717
543,405
100,196
1,370,318

*In the current year the derivative liabilities of the trading subsidiaries were measured at fair value through profit or loss in the statement of financial activities. In the prior year the derivative liabilities of the trading subsidiaries were measured at fair value through other recognised gains/(losses) in the statement of financial activities. Derivative liabilities are categorised as level 2 (see note 32).

Prior year comparatives have been re-presented to reflect the current year disclosures for composition of OEICs. OEICs previously included in equity securities but relating to bond OEICs have been re-presented in debt securities to better reflect the nature of the assets.

The valuation techniques used for instruments categorised in levels 2 and 3 are described below.

Listed debt and equity securities not in active market (level 2)

These financial assets are valued using third-party pricing information that is regularly reviewed and internally calibrated based on management's knowledge of the markets.

Non-exchange-traded derivative contracts (level 2)

The trading subsidiaries' derivative contracts are not traded in active markets. Foreign currency forward contracts are valued using observable forward exchange rates corresponding to the maturity of the contract and the contract forward rate. Over-the-counter equity or index options and futures are valued by reference to observable index prices.

Structured notes (level 2)

These financial assets are not traded on active markets. Their fair value is linked to an index that reflects the performance of an underlying basket of observable securities, including derivatives, provided by an independent calculation agent.

Funeral plan investments (level 2)

The trading subsidiaries' holds investments in respect of funeral plan policies which are predominantly invested in individual whole-of-life insurance policies. These are valued using valuations provided by the insurance policy provider.

Unlisted equity securities (level 3)

These financial assets are valued using observable net asset data, adjusted for unobservable inputs including comparable price-to-book ratios based on similar listed companies, normalised for performance measures where appropriate, and management's consideration of constituents as to what exit price might be obtainable.

The valuation is sensitive to the level of underlying net assets, the Euro exchange rate, the price-to-book ratio chosen, an illiquidity discount and a credit rating discount applied to the valuation to account for the risks associated with holding the asset. If the illiquidity discount or credit rating discount applied changes by +/-10%, the value of unlisted equity securities could move by +/-£10,527,000 (2022: +/-£11,041,000).

128

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

Unlisted debt (level 3)

Unlisted debt is valued using an adjusted net asset method whereby management uses a look-through approach to the underlying assets supporting the loan, discounted using observable market interest rates of similar loans with similar risk, and allowing for unobservable future transaction costs.

The valuation is most sensitive to the level of underlying net assets, but it is also sensitive to the interest rate used for discounting and the projected date of disposal of the asset, with the exit costs sensitive to an expected return on capital of any purchaser and estimated transaction costs. Reasonably likely changes in unobservable inputs used in the valuation would not have a significant impact on total funds or on net income/(expenditure).

II. Financial risk and capital management

The principal financial risks to which the Benefact Trust group of companies is exposed arise from the financial assets, financial liabilities, reinsurance assets and insurance liabilities of the trading subsidiaries. In particular, the key financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance contracts. The most important components of financial risk are interest rate risk, credit risk, currency risk and equity price risk.

There has been no change from the prior period in the nature of the financial risks to which the trading subsidiaries are exposed. The continued conflict in Ukraine, Middle East and and the cost of living crisis means there is continued uncertainty in relation to the economic risks to which the trading subsidiaries are exposed. This includes equity price volatility, movements in exchange rates and long-term UK growth prospects. The management and measurement of financial risks is informed by either stochastic modelling or stress testing techniques.

(a) Interest rate risk

The trading subsidiaries' exposure to interest rate risk arises primarily from movements on financial investments that are measured at fair value and have fixed interest rates, which represent a significant proportion of the Benefact Trust group of companies' assets, subordinated debt which has a fixed interest until 2030, and from insurance liabilities discounted at a market interest rate. Investment strategy is set in order to control the impact of interest rate risk on anticipated trading subsidiary cash flows and asset and liability values. The fair value of the trading subsidiaries' investment portfolio of fixed income securities reduces as market interest rates rise as does the present value of discounted insurance liabilities, and vice versa.

Interest rate risk concentration is reduced by adopting asset-liability duration matching principles where appropriate.

For the trading subsidiaries' life insurance business, consisting of policies to support funeral planning products, benefits payable to policyholders are independent of the returns generated by interest-bearing assets held by the trading subsidiaries. Therefore, the interest rate risk on the invested assets supporting these liabilities is borne by the trading subsidiaries. This risk is mitigated by purchasing fixed interest investments with durations that match the profile of the liabilities. For funeral plan policies, benefits are linked to the Retail Price Index (RPI). Assets backing these liabilities are also linked to the RPI, and include index-linked gilts and corporate bonds. For practical purposes it is not possible to exactly match the durations due to the uncertain profile of liabilities (for example mortality risk) and the availability of suitable assets, therefore some interest rate risk will persist. The trading subsidiaries monitor their exposure by comparing projected cash flows for these assets and liabilities and making appropriate adjustments to their investment portfolio.

Where the trading subsidiaries invest funeral plan funds in a policy with an independent, third party, life insurance company, the trading subsidiaries have no net exposure to interest rate risk.

(b) Credit risk

Credit risk is the risk of non-payment of obligations by counterparties and financial markets borrowers. Areas where the trading subsidiaries are exposed to credit risk are:

The trading subsidiaries are exposed to minimal credit risk in relation to all other financial assets.

The carrying amount of financial and reinsurance assets represents the trading subsidiaries' maximum exposure to credit risk. The trading subsidiaries structure the levels of credit risk they accept by placing limits on their exposure to a single counterparty. Limits on the level of credit risk are regularly reviewed. The trading subsidiaries where available, also manage their exposure to credit risk in relation to credit risk ratings. Investment grade financial assets are classified within the range of AAA to BBB ratings, where AAA is the highest possible rating. Financial assets which fall outside this range are classified as sub-investment grade. 'Not rated' assets capture assets not rated by external agencies.

129

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

(b) Credit risk (continued)

The trading subsidiaries' cash balances are regularly reviewed to identify the quality of the counterparty bank and to monitor and limit concentrations of risk.

The debt securities portfolio consists of a range of mainly fixed interest instruments including government securities, local authority issues, corporate loans and bonds, overseas bonds, preference shares and other interest-bearing securities. Limits are imposed on the credit ratings of the corporate bond portfolio and exposures regularly monitored. Trading subsidiaries' investments in unlisted securities represent less than 1% of this category in the current and prior year.

Reinsurance is used to manage insurance risk. This does not, however, discharge the trading subsidiaries' liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the trading subsidiaries remain liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on a regular basis through the year by reviewing their financial strength.

The following table provides information regarding the credit risk exposure of the trading subsidiaries' current debt securities, reinsurance debtors and cash credit with external credit ratings from Standard & Poors or an equivalent rating from a similar agency.

A
AA
Not rated
Below BBB
BBB
AAA		 At 31 December 2023
At 31 December 2022
Debt
securities
Reinsurance
debtors
Debt
securities
101,858
124,057
206
-
-
-
-
£000
152,744
5,902
3,863
-
£000
£000
£000
Reinsurance
debtors
£000
3,608
42,616
88,810
17,435
26,253
10,655
-
18,903
84,146
6,878
52,646
-
38,724
62,049
-
207,068
Cash
£000
Cash
9,087
3,500
9
8,497
8,567
_Re-presented _
-
-
189,722
102,779
26,837
166,844
18,126
145,871
493,982
518,922

*Cash includes amounts held on deposit classified within financial investments and disclosed within note 31. Cash balances which are not rated relate to cash amounts in hand.

**Prior year comparatives have been re-presented to reflect the current year disclosures for composition of OEICs. OEICs previously included in equity securities but relating to bond OEICs have been re-presented in debt securities to better reflect the nature of the assets.

The trading subsidiaries' credit risk policy details prescriptive methods for the collection of premiums and control of intermediary and policyholder debtor balances. The level and age of debtor balances are regularly assessed via monthly credit management reports. These reports are scrutinised to assess exposure by geographical region and counterparty of aged or outstanding balances. Any such balances are likely to be major international brokers that are in turn monitored via credit reference agencies and considered to pose minimal risk of default. The trading subsidiaries have no material concentration of credit risk in respect of amounts due from insurance intermediaries and policyholders.

Purchase of a whole-of-life assurance policy does not discharge the trading subsidiaries' liability to provide a funeral. If a third party life insurance company fails to pay a claim on notification of death of the insured life, for any reason, the trading subsidiaries remain liable for the funeral fee payable to the funeral director. The trading subsidiaries purchase life assurance policies from reputable, authorised life insurance companies, which are regulated by the PRA and FCA, and considers the risk of non-payment to be remote.

Insurance Debtors
Current
0-30 days
30-90 days
More than 90 days		 10,068
1,980
2023
2022
£000
£000
134,790
125,532
17,262
12,860
6,629
9,068
168,749
149,440

130

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

(b) Credit risk (continued)

Reinsurance Debtors
30-90 days
Current
0-30 days
More than 90 days		 £000
£000
2023
2022
1,637
6,824
7,720
1,271
1,388
20,845
3,084
2,194
18,126
26,837
Amounts arising from expected credit losses on financial assets are as follows:
Balance at 31 December
Balance at 1 January
Movement in the year		 £000
2023
2022
1,027
-
(1,025)
-
£000
2
-

(c) Equity price risk

The trading subsidiaries are exposed to equity price risk because of financial investments held by the trading subsidiaries which are stated at fair value through profit and loss. The trading subsidiaries mitigate this risk by holding a diversified portfolio across geographical regions and market sectors, and through the use of derivative contracts from time to time which would limit losses in the event of a fall in equity markets.

The concentration of equity price risk by geographical listing, before the mitigating effect of derivatives, to which the trading subsidiaries are exposed is as follows:

Europe
UK
US
Total		 2023
2022
£000
£000
234,855
89,483
Europe
99,375
237,043
UK
-
13,771
Hong Kong
340,297
Total
334,230

131

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

(d) Currency risk

The trading subsidiaries operate internationally and their main exposure to foreign exchange risk is noted below. The foreign operations generally invest in assets and purchase reinsurance denominated in the same currencies as their insurance liabilities, which mitigates the foreign currency exchange rate risk for these operations. As a result, foreign exchange risk arises from recognised assets and liabilities denominated in other currencies and net investments in foreign operations. The trading subsidiaries mitigate this risk through the use of derivatives when considered necessary.

The trading subsidiaries' exposure to foreign currency risk within the investment portfolios arises from purchased investments that are denominated in currencies other than sterling.

The trading subsidiaries foreign operations create two sources of foreign currency risk:

The forward foreign currency risk arising on translation of these foreign operations is hedged by the derivatives which are detailed in note 32. The trading subsidiaries have designated certain derivatives as a hedge of their net investments in Canada and Australia, which have Canadian and Australian dollars respectively as their functional currency.

The largest currency exposures, before the mitigating effect of derivatives, with reference to net assets/liabilities are shown below, representing effective diversification of resources:

2023 2022
£000 £000
Can $ 67,554 Aus $ 71,584
Aus $ 61,822 Euro 41,246
Euro 52,558 Can $ 74,188
USD $ 11,652 USD $ 2,399
HKD $ 185 HKD $ 15

The figures in the table above, for the current and prior years, do not include currency risk that the trading subsidiaries are exposed to on a 'look through' basis in respect of collective investment schemes denominated in sterling. The trading subsidiaries enter into derivatives to hedge currency exposure, including exposures on a 'look through' basis. The open derivatives held by the trading subsidiaries at the year end to hedge currency exposures are detailed in note 32.

(e) Liquidity risk

Liquidity risk is the risk that funds may not be available to pay obligations when due. The trading subsidiaries are exposed to daily calls on their available cash resources mainly from claims arising from insurance contracts. The trading subsidiaries have robust processes in place to manage liquidity risk and have available cash balances, other readily marketable assets and access to funding in case of exceptional need. This is not considered to be a significant risk to the Benefact Trust group of companies.

A maturity analysis for the non-derivative net financial liabilities of the trading subsidiaries' life business liabilities is as follows:

Life business provision
At 31 December 2022 (Restated*)
Life business provision
At 31 December 2023		 Within
Between
After
1 year
1 & 5 years
5 years
Total
£000
£000
£000
£000
41
133
282
456
40
126
219
385
Maturing:

*The comparative figures have been restated as detailed in note 49.

132

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

(f) Market risk

The trading subsidiaries are exposed to market risk (comprising interest rate, currency and equity price risk). The sensitivity of net income/(expenditure) and reserves to movements in market risk variables, each considered in isolation and before the mitigating effect of derivatives, is shown in the table below. This table does not include the impact of variables on retirement benefit schemes.

Potential increase/(decrease) Potential increase/(decrease)
increase in net Potential changes
income/(expenditure) in funds
Re-presented*
Variable Change in 2023 2022 2023 2022
variable £000 £000 £000 £000
Interest rate risk -100 basis points 814 (3,618) (4) (8)
+100 basis points 906 4,786 3 7
Currency risk -10% 4,065 3,466 16,070 13,123
+10% (3,326) (2,836) (13,148) (10,737)
Equity price risk +/- 10% 25,522 27,073 - -

*Prior year comparatives have been re-presented to reflect the current year disclosures from composition of OEICs. OEICs previously included in equity securities but relating to bond OEICs have been re-presented in debt securities to better reflect the nature of the assets.

The following assumptions have been made in preparing the above sensitivity analysis:

(g) Capital management

The Benefact Trust group of companies' primary objectives when managing capital are to:

The trading subsidiaries are subject to insurance solvency regulations in all the territories in which they issue insurance and investment contracts, and capital is managed and evaluated on the basis of both regulatory and economic capital.

The UK regulated subsidiaries are required to comply with rules issued by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The PRA expects a firm, at all times, to hold Solvency II Own Funds in excess of its calculated Solvency Capital Requirement (SCR). Quantitative returns are submitted to the PRA, in addition to an annual narrative report, the Solvency and Financial Condition Report (SFCR) which is published on the Benefact Group's website. A further report, the Regular Supervisory Report (RSR) is periodically submitted to the PRA.

Benefact Group's Solvency II Own Funds will be subject to a separate independent audit, as part of the process for Solvency II reporting to the PRA. Benefact Group expects to meet the PRA's deadline for submission to the PRA of 17 May 2024, and its SFCR will be made available on its website shortly after.

2023 2022
£000 £000
Solvency II Own Funds (unaudited) 597,763 594,198

III. Insurance risk

Through the general insurance and life insurance operations of the trading subsidiaries, the Benefact Trust group of companies is exposed to a number of insurance risks. The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount and timing of the resulting claim. Factors such as the business and product mix, the external environment including market competition and reinsurance capacity all may vary from year to year, along with the actual frequency, severity and ultimate cost of claims and benefits. This subjects the trading subsidiaries to underwriting and pricing risk (the risk of failing to ensure disciplined risk selection and to obtain the appropriate premium), claims reserving risk (the risk of actual claims payments exceeding the amount being held in technical provisions) and reinsurance risk (the risk of failing to access and manage reinsurance capacity at a reasonable price).

133

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

III. Insurance Risk (continued)

More detailed information relating to the insurance risk arising from the trading subsidiaries can be found in note 3 of Benefact Group plc's annual report and accounts, which is available from the registered office on page 153.

(i) Risk mitigation

Statistics demonstrate that the larger and more diversified the portfolio of insurance contracts, the smaller the relative variability in the expected outcome will be. The trading subsidiaries' underwriting strategy is designed to ensure that the underwritten risks are well diversified in terms of type and amount of risk and geographical spread. In all operations pricing controls are in place, underpinned by sound statistical analysis, market expertise and appropriate external consultant advice. Gross and net underwriting exposure is protected through the use of a comprehensive programme of reinsurance using both proportional and non-proportional reinsurance, supported by proactive claims handling. The overall reinsurance structure is regularly reviewed and modelled to ensure that it remains optimal to the trading subsidiaries' needs. The optimum reinsurance structure provides the trading subsidiaries with sustainable, long-term capacity to support its specialist business strategy, with effective balance sheet and profit and loss protection at a reasonable cost.

Catastrophe protection is purchased following an extensive annual modelling exercise of gross and net (of proportional reinsurance) exposures. In conjunction with reinsurance brokers the trading subsidiaries utilise the full range of proprietary catastrophe models and continue to develop bespoke modelling options that better reflect the specialist nature of the portfolio. Reinsurance is purchased in line with the trading subsidiaries' risk appetite.

(ii) Concentrations of risk

The core business of the trading subsidiaries is general insurance, with the principal classes of business written being property and liability. The miscellaneous financial loss class of business covers personal accident, fidelity guarantee and loss of money, income and licence. The other class of business includes cover of legal expenses and also a small portfolio of motor policies, but this has been in run-off in the United Kingdom since November 2012. The whole-of-life insurance policies support funeral planning products.

The table below summarises written premiums for the financial year, before and after reinsurance, by territory and class of business. Further details on gross and net written premiums, which is an alternative performance measure, are detailed in note 48.

Net
Canada
Gross
Net
Total
Gross
Net
Australia
Gross
Net
United Kingdom and Ireland
Gross
2022
Net
Total
Gross
Net
Canada
Gross
Net
Australia
Gross
Net
United Kingdom and Ireland
Gross
2023
Territory		 77,759
48,247
29,512
-
-
-
47,852
73,958
32,979
-
-
-
106,937
9,182
37,275
1,313
82
-
225,905
57,703
43,194
1,337
434
-
102,668
137,933
75,916
11,816
64
176
297,481
79,966
24,668
3,287
176
405,578
£000
£000
£000
£000
£000
£000
Property
Liability
loss
Other
Whole-of-life
General insurance
Life
insurance
Miscellaneous
Total
financial
429,142
156,139
26,005
3,721
176
615,183
351,516
195,362
142,703
13,129
146
176
108,761
47,335
31,914
-
-
-
79,249
73,779
34,982
-
-
-
5,886
36,037
868
101
-
42,892
55,266
42,978
918
536
-
99,698
350,150
119,847
68,128
10,259
100
65
198,399
255,418
71,575
20,006
3,086
65
558,609
384,463
149,535
20,924
3,622
65
173,068
136,079
11,127
201
65
320,540

134

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

IV. Insurance revenue

Contracts measured under PAA
Total insurance revenue
For the year ended 31 December 2023
Contracts not measured under PAA
Amounts relating to the changes in the LRC
CSM recognised in net income/(expenditure) for the services provided
Expected incurred claims and other expenses after loss component allocation
Change in the risk adjustment for non-financial risk for the risk expired after loss
component allocation
CSM recognised in net income/(expenditure) for the services provided
For the year ended 31 December 2022
Contracts not measured under PAA
Expected incurred claims and other expenses after loss component allocation
Amounts relating to the changes in the LRC
Change in the risk adjustment for non-financial risk for the risk expired after loss
component allocation
Total insurance revenue
Contracts measured under PAA		 General
insurance
insurance
Total
Life
£000
£000
£000
-
717
717
-
(590)
(590)
-
20
20
-
147
147
579,975
-
579,975
579,975
147
580,122
-
-
-
-
58
58
25
-
25
25
58
83
528,558
-
528,558
528,583
58
528,641

135

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

V. Insurance services expenses

Changes that relate to past service
Total insurance service expenses
Insurance acquisition cash flows amortisation
Losses on onerous contracts and reversal of those losses
Changes that relate to current service
Incurred claims and benefits excluding investment components
Changes that relate to current service
For the year ended 31 December 2022
Changes that relate to past service
Total insurance service expenses
Losses on onerous contracts and reversal of those losses
Insurance acquisition cash flows amortisation
Incurred claims and benefits excluding investment components
For the year ended 31 December 2023		 -
137
137
(24,547)
-
(24,547)
155
-
155
116,289
-
116,289
308,069
-
308,069
£000
£000
£000
insurance
insurance
Total
General
Life
399,966
137
400,103
(18,331)
-
(18,331)
-
(12,573)
(12,573)
105,478
-
105,478
-
347,499
781
-
781
347,499
435,427
(12,573)
422,854

136

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets

Current
Non-current
Reinsurance assets
Current
Non-current
General insurance contract liabilities for incurred claims
General insurance contract assets for remaining coverage
Net
Reinsurance contract assets for remaining coverage
Total reinsurers’ share of insurance liabilities
Recoverable from reinsurers
Reinsurance contract assets for incurred claims
Total gross insurance contract liabilities
General Insurance contract liabilities for remaining coverage
Life insurance contract liabilities for remaining coverage
Gross
General Insurance contract liabilities for incurred claims
Life insurance contract liabilities for remaining coverage
Total net insurance liabilities
Gross insurance liabilities		 2023
2022
90,994
93,645
£000
£000
_Restated_
385
456
634,819*
636,638
726,198
730,739
40,180
37,650
179,928
202,474
220,108
240,124
454,891
434,164
50,814
55,995
385
456
506,090
490,615
127,365
161,411
92,743
78,713
306,411
399,204
419,787
331,535

*The comparative figures have been restated as detailed in note 49.

Gross insurance liabilities, also referred to as technical provisions, are included in provisions for liabilities (note 38). Reinsurers' share of insurance liabilities is included in debtors (note 35).

137

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

Losses on onerous contracts and reversal of those losses
Changes that relate to current service
Changes that relate to past service
At 1 January 2022
Incurred claims and other insurance service expenses
Insurance acquisition cash flows amortisation
Insurance service expenses
Changes that relate to past service
Allocation of reinsurance premiums
Recoveries of losses on onerous contracts and reversal of
those losses
Insurance service result before reinsurance contracts
held
Recoveries of incurred claims and other insurance
service expenses
Finance expense from reinsurance contracts held
Net expense/(income) from reinsurance contracts
Premiums received
Insurance acquisition cash flows
Total cash flows
Claims and other directly attributable expenses paid
Premiums paid
Insurance revenue
Finance income from insurance contracts issued
Net insurance financial result
At 31 December 2022
Amounts received
Exchange differences
Total amounts recognised in statement of financial
activities		 claims
coverage
£000
£000
£000
liabilities
liabilities
liabilities
for
for
for
remaining
incurred
remaining
coverage
Insurance contract liabilities
General
General
Life		 coverage
claims
Total
£000
£000
£000
assets
assets
for
for
remaining
incurred
General
General
contract assets
Reinsurance
89,713
604,297
21,243		 512,487
(39,633)
(163,133)
781
-
-
(18,331)
-
-
-
(12,573)
-
-
347,499
-
105,478
-
-
(528,583)
-
(58)		 -
-
781
-
-
(18,331)
-
-
(12,573)
-
(528,641)
347,499
-
-
-
-
105,478
-
106,259
329,168
(12,573)		 -
-
422,854
(12,631)
329,168
(422,324)		 (105,787)
-
-
-
-
-
-
-

-
-
-
-
-
-
-		 (814)
130,675
-
130,675
(814)
-
(110,692)
5,606
(117,492)
6,800
-
5,606
-
-
-
-
-
-
-
(44,370)
-		 (44,370)
-
6,704
6,704
136,661
(111,886)
24,775
-
-
-
-
(44,370)		 -
(37,666)
6,704
(422,324)
284,798
(12,631)		 (118,678)
136,661
(105,182)
537,656
-
-
(113,529)
-
-
-
(266,642)
(8,156)
-
-
-
-
-
-
2,129
14,185
-		 -
-
537,656
-
-
(113,529)
70,338
-
-
(274,798)
(133,635)
-
(133,635)
(1,043)
(4,497)
10,774
-
70,338
424,127
(266,642)
(8,156)		 (133,635)
86,032
70,338
93,645
636,638
456		 (37,650)
(202,474)
490,615

138

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

At 31 December 2023
Total cash flows
Amounts received
Premiums paid
Claims and other directly attributable expenses paid
Insurance acquisition cash flows
Premiums received
Exchange differences
Net insurance financial result
Total amounts recognised in statement of financial
activities
Finance income from reinsurance contracts held
Finance expense from insurance contracts issued
Net expense/(income) from reinsurance contracts
Recoveries of losses on onerous contracts and reversal
of those losses
Changes that relate to past service
Recoveries of incurred claims and other insurance
service expenses
Allocation of reinsurance premiums
Insurance service result before reinsurance contracts
held
Insurance service expenses
Insurance acquisition cash flows amortisation
Changes that relate to current service
Changes that relate to past service
Losses on onerous contracts and reversal of those losses
Incurred claims and other insurance service expenses
Insurance revenue
At 1 January 2023
Adjustment on initial application of IFRS 9
At 31 December 2022		 £000
£000
£000
coverage
claims
coverage
remaining
incurred
remaining
for
for
liabilities
liabilities
liabilities
for
Insurance contract liabilities
General
General
Life		 £000
£000
£000
coverage
claims
Total
remaining
incurred
for
for
assets
assets
Reinsurance
contract assets
General
General
93,645
636,638
456		 490,615
(37,650)
(202,474)
(505)
-
-		 (505)
-
-
93,140
636,638
456		 490,110
(37,650)
(202,474)
-
-
116,289
-
-
137
-
(24,547)
-
155
-
-
-
308,069
-
(579,975)
-
(147)		 155
-
-
116,289
-
-
137
(24,547)
-
-
-
-
-
-
308,069
-
-
(580,122)
137
116,444
283,522		 -
-
400,103
(10)
283,522
(463,531)		 (180,019)
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 31,024
91
-
91
-
31,024
(72,035)
(77,048)
5,013
148,094
148,094
-
-
-
-
-
24,102
-
-
-
-		 24,102
-
(7,190)
(7,190)
-
-
107,174
153,198
(46,024)
-
24,102
-		 16,912
-
(7,190)
307,624
(463,531)
(10)		 (55,933)
(53,214)
153,198
-
-
-
-
-
-
-
(296,134)
(61)
(133,747)
-
-
596,793
-
-
(1,661)
(13,309)
-		 70,540
-
70,540
(296,195)
(156,657)
-
(156,657)
-
-
596,793
-
-
(133,747)
-
-
929
5,220
(8,821)
463,046
(296,134)
(61)		 (156,657)
70,540
80,734
90,994
634,819
385		 506,090
(40,180)
(179,928)

139

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(a) General business insurance contracts

(i) Reconciliation of the liability for remaining coverage

Insurance contracts issued

Insurance contracts issued
At 1 January 2022
Losses on onerous contracts and reversal of those losses
Insurance acquisition cash flows amortisation
Insurance revenue
Insurance service expenses
Total cash flows
Insurance acquisition cash flows
Premiums received
Total amounts recognised in statement of financial activities
At 31 December 2023
Total cash flows
Exchange differences
Premiums received
Insurance acquisition cash flows
Total amounts recognised in statement of financial activities
Insurance service expenses
Exchange differences
Insurance revenue
Insurance acquisition cash flows amortisation
Losses on onerous contracts and reversal of those losses
At 31 December 2022
Adjustments on initial application of IFRS 9
At 1 January 2023		 PAA
GMM
Excluding
Liability for
£000
£000
£000
£000
component
component
coverage
Total
loss
Loss
remaining
89,713
87,181
1,782
750
(528,558)
-
(25)
-
806
-
105,478
781
105,478
-
(528,583)
(25)
105,478
806
(25)
106,259
(422,324)
(423,080)
806
(50)
(113,529)
-
537,656
-
-
2,050
537,656
79
-
2,129
-
(113,529)
424,127
424,127
-
-
90,278
2,667
700
93,645
(505)
-
-
(505)
700
93,140
89,773
2,667
155
-
116,289
155
-
-
(579,975)
116,289
-
-
(579,975)
-
116,289
155
-
116,444
(463,686)
155
-
(463,531)
(1,531)
(130)
-
(133,747)
-
-
596,793
-
-
(1,661)
596,793
(133,747)
463,046
463,046
-
-
90,994
87,602
2,692
700

Reconciliation of insurance acquisition cash flows asset

At 1 January
Cash flows recognised as an asset during the year
Amounts derecognised on initial recognition of groups of insurance contracts
Exchange differences
At 31 December		 2023
2022
£000
£000
1,161
56,435
50,194
32,610
(27,530)
38,288
(27,843)
(963)
56,435
65,917

140

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(ii) Reconciliation of the liability for incurred claims

Insurance contracts issued

At 1 January 2022
Changes that relate to past service
Incurred claims and other insurance service expenses
Insurance service expenses
Finance income from insurance contracts issued
Insurance service result before reinsurance contracts held
Changes that relate to past service
Incurred claims and other insurance service expenses
At 31 December 2022
Total cash flows
Claims and other directly attributable expenses paid
Total amounts recognised in statement of financial activities
Net insurance financial result
Insurance service expenses
Insurance service result before reinsurance contracts held
Net insurance financial result
Finance expense from insurance contracts issued
Claims and other directly attributable expenses paid
At 31 December 2023
Total cash flows
Exchange differences
Exchange differences
Total amounts recognised in statement of financial activities		 present value
adjustment
Estimates of
Risk
£000
£000
£000
cash flows
financial risk
Total
of future
for non-
604,297
496,941
107,356
(18,331)
347,499
329,841
17,658
21,054
(39,385)
329,168
350,895
(21,727)
329,168
350,895
(21,727)
(44,370)
-
(44,370)
(44,370)
(44,370)
-
306,525
(21,727)
284,798
(266,642)
(266,642)
-
11,681
2,504
14,185
(266,642)
(266,642)
-
636,638
548,505
88,133
(24,547)
293,527
14,542
(3,659)
(20,888)
308,069
283,522
289,868
(6,346)
283,522
289,868
(6,346)
24,102
24,102
-
24,102
24,102
-
307,624
313,970
(6,346)
(296,134)
(296,134)
-
(11,362)
(1,947)
(13,309)
(296,134)
(296,134)
-
634,819
554,979
79,840

141

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(iii) Reconciliation of the asset for remaining coverage

Reinsurance contracts held

Reinsurance contracts held
At 31 December 2023
Total cash flows
Premiums paid
Exchange differences
Total amounts recognised in statement of financial activities
Recoveries of losses on onerous contracts and reversal of those losses
Net expense from reinsurance contracts
Allocation of reinsurance premiums
Recoveries of incurred claims and other insurance service expenses
At 31 December 2022
Total cash flows
Premiums paid
Exchange differences
Total amounts recognised in statement of financial activities
Recoveries of losses on onerous contracts and reversal of those losses
Net (expense)/income from reinsurance contracts
Allocation of reinsurance premiums
Recoveries of incurred claims and other insurance service expenses
At 1 January 2022		 -
814
814
(130,675)
-
(130,675)
(6,800)
-
(6,800)
38,157
1,476
39,633
£000
£000
£000
recovery
recovery
component
component
Total
Excluding
loss
Loss
(137,475)
814
(136,661)
(137,475)
814
(136,661)
133,635
-
133,635
972
71
1,043
133,635
-
133,635
35,289
2,361
37,650
-
(91)
(91)
(148,094)
-
(148,094)
(5,013)
-
(5,013)
(153,107)
(91)
(153,198)
(153,107)
(91)
(153,198)
156,657
-
156,657
(812)
(117)
(929)
156,657
-
156,657
38,027
2,153
40,180

142

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(iv) Reconciliation of the asset for incurred claims Reinsurance contracts held

Net income/(expense) from reinsurance contracts
Recoveries of incurred claims and other insurance service expenses
At 1 January 2022
Exchange differences
Total amounts recognised in statement of financial activities
Amounts received
Changes that relate to past service
Exchange differences
At 31 December 2023
Total cash flows
Amounts received
Total amounts recognised in statement of financial activities
At 31 December 2022
Net insurance financial result
Recoveries of incurred claims and other insurance service expenses
Total cash flows
Finance expense from reinsurance contracts held
Net insurance financial result
Finance income from reinsurance contracts held
Net income/(expense) from reinsurance contracts
Changes that relate to past service		 of future
for non-
£000
£000
£000
Estimates of
Risk
present value
adjustment
cash flows
financial risk
Total
135,229
27,904
117,492
8,921
108,571
(5,606)
163,133
6,404
(12,010)
111,886
114,975
(3,089)
(6,704)
-
(6,704)
(6,704)
-
(6,704)
108,271
(3,089)
105,182
-
4,497
3,558
939
(70,338)
(70,338)
(70,338)
-
(70,338)
176,720
202,474
25,754
(19,275)
(11,749)
(31,024)
77,048
5,427
71,621
52,346
(6,322)
7,190
7,190
-
46,024
7,190
7,190
-
53,214
59,536
(6,322)
(70,540)
-
(5,220)
(70,540)
(4,385)
(835)
(70,540)
(70,540)
-
179,928
161,331
18,597

(v) Reserving methodology

Reserving for non-life insurance claims is a complex process and the trading subsidiaries adopt recognised actuarial methods and, where appropriate, other calculations and statistical analysis. Actuarial methods used include the chain ladder, Bornhuetter-Ferguson and average cost methods.

Chain ladder methods extrapolate paid amounts, incurred amounts (paid claims plus case estimates) and the number of claims or average cost of claims, to ultimate claims based on the development of previous years. This method assumes that previous patterns are a reasonable guide to future developments. Where this assumption is felt to be unreasonable, adjustments are made or other methods such as Bornhuetter-Ferguson or average cost are used. The Bornhuetter-Ferguson method places more credibility on expected loss ratios for the most recent loss years. For smaller portfolios the materiality of the business and data available may also shape the methods used in reviewing reserve adequacy.

The selection of results for each accident year and for each portfolio depends on an assessment of the most appropriate method. Sometimes a combination of techniques is used. The average weighted term to payment is calculated separately by class of business and is based on historical settlement patterns.

143

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(vi) Risk Adjustment for non-financial risk

The Risk Adjustment for non-financial risk is the compensation the trading subsidiaries require for bearing the uncertainty about the amount and timing of the cash flows that arise from non-financial risk as they fulfil insurance contracts. Uncertainty is assessed using actuarial methods to quantify the variability in undiscounted net outcomes on an ultimate horizon.

The trading subsidiaries' risk appetite is to hold claims reserves, including a net Risk Adjustment, equating to at least a 75% probability of sufficiency. This approach generally results in a favourable release of provisions in the current financial year, arising from the settlement of claims relating to previous financial years.

Overall, it is estimated that the booked net Risk Adjustment provides for a confidence level of approximately 90% (2022: 90%), which is established by comparing the uplift for the booked net Risk Adjustment to the uncertainty distribution. Percentile estimates for loss distributions are highly uncertain as they contain a large number of judgments on possible future outcomes. This means that the percentile may see some fluctuation year on year due to inherent volatility.

(vii) Calculation of provisions for latent claims

The trading subsidiaries adopt commonly used industry methods including those based on claims frequency and severity and benchmarking.

(viii) Discounting

General insurance outstanding claims provisions have been discounted by applying currency and term specific discount rates in the following territories:

Mean term of
Discount rate liabilities (years)
Restated* Restated*
Geographical territory 2023 2022 2023 2022
UK and Ireland 4.0% to 5.3% 3.6% to 5.4% 7.5 7.5
Canada 3.5% to 4.7% 4.5% to 5.2% 4.3 4.3
Australia 3.9% 3.8% 3.6 3.9

*The comparative financial statements have been restated as detailed in note 49.

The above rates of interest are based on government bond yields of the relevant currency and term at the reporting date. Adjustments are made, where appropriate, to reflect the illiquidity of the liabilities. At the year end the undiscounted gross outstanding claims liability was £738,352,000 (2022 restated: £734,839,000).

The impact of discount rate changes on reinsurance contracts held is presented within income arising from trading activities in the consolidated statement of financial activities. The impact of discount rate changes on insurance contracts issued is presented within expenditure arising from trading activities in the consolidated statement of financial activities.

(ix) Assumptions

The trading subsidiaries follow a process of reviewing their reserves for outstanding claims on a regular basis. This involves an appraisal of each reserving class with respect to ultimate claims liability for the recent exposure period as well as for earlier periods, together with a review of the factors that have the most significant impact on the assumptions used to determine the reserving methodology. The work conducted is subject to an internal peer review and management sign-off process.

The most significant assumptions in determining the undiscounted general insurance outstanding claims provision are the anticipated number and ultimate settlement cost of claims, and the extent to which reinsurers will share in the cost. Factors which influence decisions on assumptions include legal and judicial changes, significant weather events, other catastrophes, subsidence events, exceptional claims or substantial changes in claims experience and developments in older or latent claims. Significant factors influencing assumptions about reinsurance are the terms of the reinsurance treaties, the anticipated time taken to settle a claim and the incidence of large individual and aggregated claims.

(x) Changes in assumptions

There are no significant changes in approach but we continue to evolve estimates in light of underlying experience.

144

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(xi) Sensitivity of results

The sensitivity of net income/(expenditure) before tax to reasonably possible final settlement assumptions used to calculate the general insurance outstanding claims provision is shown in the following table. No account has been taken of any correlation between the assumptions.

Change in Potential (decrease)/
variable increase in the result
2023 2022
Gross Net Gross Net
£000 £000 £000 £000
Deterioration in loss ratio +1% (5,791) (3,301) (5,280) (3,040)
Improvement in loss ratio -1% 5,791 3,301 5,280 3,040
Increase in net liability for incurred claims excluding risk adjustment +10% (55,498) (39,365) (54,851) (37,179)
Decrease in net liability for incurred claims excluding risk adjustment -10% 55,498 39,365 54,851 37,179
Increase in risk adjustment* +1% (6,590) (4,842) (6,531) (4,642)
Decrease in risk adjustment* -1% 6,590 4,842 6,531 4,642

At 31 December 2023, it is estimated that a fall of 1% in the discount rates used would increase the Group's net outstanding claims liabilities and decrease profit before tax and equity by £14,314,000 (2022 restated: £16,444,000).

(xii) Claims development tables

The nature of liability classes of business is that claims may take a number of years to settle and before the final liability is known. The table below shows the development of the undiscounted estimate of ultimate net claims cost for these classes across all territories.

Estimate of net ultimate claims Estimate of net ultimate claims
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
At end of year 59,633 42,739 47,402 45,920 44,053 44,230 45,459 47,289 47,599 52,252
One year later 47,690 40,397 41,631 41,706 37,456 39,842 37,509 47,102 45,575
Two years later 47,428 37,740 37,740 37,797 32,867 37,243 36,193 45,079
Three years later 41,494 32,297 36,337 34,818 31,647 39,164 37,579
Four years later 35,164 28,506 35,217 36,431 32,884 39,248
Five years later 33,233 27,418 32,993 36,550 31,722
Six years later 33,309 30,544 33,896 38,618
Seven years later 34,245 30,296 34,297
Eight years later 35,233 29,231
Nine years later 34,173
Current estimate of
ultimate claims 34,173 29,231 34,297 38,618 31,722 39,248 37,579 45,079 45,575 52,252 387,774
Cumulative payments
to date (28,362) (22,255) (24,486) (25,187) (17,612) (19,729) (13,594) (8,214) (4,468) (1,553) (165,460)
Outstanding liability 5,811 6,976 9,811 13,431 14,110 19,519 23,985 36,865 41,107 50,699 222,314
Effect of discounting (53,593)
Present value 168,721
Discounted liability in respect of earlier years 108,849
Total discounted net liability for liability classes 277,570
Total discounted gross liability for non-liability classes and all expenses 177,321
Total discounted net liability included in provisions in the balance sheet 454,891

145

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(b) Life business insurance provision

(i) Reconciliation of the liability for remaining coverage

Insurance contracts issued

Changes that relate to future service
Changes in estimates that result in onerous contract losses or reversal
of losses
Experience adjustments
Insurance service result
Changes that relate to current service
Net insurance financial result
Finance income from insurance contracts issued
Changes in estimates that adjust the CSM
Contracts initially recognised in the period
Changes that relate to future service
CSM recognised in profit or loss for the services provided
Changes in estimates that adjust the CSM
Contracts initially recognised in the period
Experience adjustments
Changes that relate to current service
CSM recognised in profit or loss for the services provided
At 1 January 2022
Claims and other directly attributable expenses paid
Total amounts recognised in statement of financial activities
Net insurance financial result
Finance income from insurance contracts issued
Total amounts recognised in statement of financial activities
Total cash flows
Claims and other directly attributable expenses paid
At 31 December 2023
Insurance service result
Change in the risk adjustment for non-financial risk for the risk
expired
Change in the risk adjustment for non-financial risk for the risk
expired
Changes in estimates that result in onerous contract losses or reversal
of losses
At 31 December 2022
Total cash flows		 1,224
-
(13,855)
-
-
(13,855)
-
-
-
-
cash flows
financial risk
margin
Total
of future
for non-
service
present value
adjustment
Contractual
Estimates of
Risk
1,522
21,243
19,267
454
£000
£000
£000
£000
1,224
-
-
-
-
-
-
-
(13,855)
1,224
-
(12,631)
-
-
-
-
-
-
(12,631)
(13,855)
1,224
-
-
-
-
-
-
-
-
-
-
-
-
-
(12,631)
(13,855)
1,224
-
(5,002)
(1,676)
(1,478)
(8,156)
(8,156)
(5,002)
(1,676)
(1,478)
410
2
44
456
(30)
-
-
(30)
-
-
-
-
20
-
20
-
20
-
(10)
-
-
-
(30)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(30)
20
-
(10)
-
-
-
-
-
(10)
(30)
20
(61)
(43)
(20)
2
(43)
(20)
2
(61)
337
2
46
385

146

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

VI. Insurance liabilities and reinsurance assets (continued)

(ii) Assumptions

The most significant assumptions in determining life reserves are as follows:

Mortality

An appropriate base table of standard mortality is chosen depending on the type of contract. Where prudent, an allowance is made for future mortality improvements based on trends identified in population data. For both 2023 and 2022 the base tables used were ELF16F and ELT16M with a 1% improvement applied each year.

Discounting

The nominal discount rate curve is calculated on a bottom up basis. The risk free curve is based on the UK government bond yield curve. A liquidity premium based on the return on a notional index of fixed interest assets, including gilts and corporate bonds, is added to the risk free curve. The liquidity premium is adjusted for credit risk and differences in liquidity between the notional assets and the liabilities.

Restated*
2023 2022
Non-Profit Life Business 3.2% to 5.1% 2.8% to 4.8%

*The comparative figures have been restated as detailed in note 49.

Funeral plans renewal expense level and inflation

Numbers of policies in force and both projected and actual expenses have been considered when setting the base renewal expense level. The unit renewal expense assumption for in-force business is £14.27 per annum (2022: £17.94 per annum).

Expense and benefit inflation curves are set with reference to GBP inflation swaps of various terms, and using linear interpolation between available swap terms.

Tax

It has been assumed that current tax legislation and rates enacted at 1 January 2024 will continue to apply. All in-force business is classed as protection business and is expected to be taxed on a profits basis.

(iii) Changes in assumptions

Projected investment returns have been revised in line with the changes in the actual yields of the underlying assets. As a result, liabilities have increased by £0.6m (2022: £15.0m decrease).

The assumed future expenses of running the business have been revised based on expenses that are expected to be incurred by the long-term insurance business. The effect on insurance liabilities of the changes to renewal expense assumptions (described above) was a £0.5m decrease (2022: £0.3m decrease).

(iii) Sensitivity analysis

The sensitivity of net income/(expenditure) before tax to changes in the key assumptions used to calculate the long-term insurance liabilities is shown in the following table. No account has been taken of any correlation between the assumptions.

Change in Potential (decrease)/ Potential (decrease)/
variable increase in the result
Restated*
2023 2022
Variable £000 £000
Deterioration in mortality +10% (820) (890)
Improvement in mortality -10% 960 1,040
Increase in fixed interest/cash yields +1% pa (340) (260)
Decrease in fixed interest/cash yields -1% pa 360 230
Worsening of base renewal expense level +10% 20 30
Improvement in base renewal expense level -10% (20) (30)
Increase in expense inflation +1% pa 50 80
Decrease in expense inflation -1% pa (40) (60)

*The comparative figures have been restated as detailed in note 49.

147

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

47 Financial risk and insurance disclosures in respect of trading subsidiaries (continued)

(iv) Maturity analysis

(iv) Maturity analysis
Within Between After
1 year 1 and 5 years 5 years Total
£000 £000 £000 £000
At 31 December 2023
CSM release after accretion 4 13 29 46
At 31 December 2022 (restated*)
CSM release after accretion 4 12 28 44

*The comparative figures have been restated as detailed in note 49.

48 Reconciliation of Alternative Performance Measures

The Benefact Trust group of companies use gross and net written premiums in addition to the figures prepared in accordance with UK GAAP when presenting the performance of its insurance subsidiary, EIO plc. These measures are commonly used within the insurance industry and management believe it provides useful information and enhances users understanding of the insurance result.

Users of the accounts should be aware that similarly titled APM reported by other companies may be calculated differently. For that reason, the comparability of APM across companies might be limited.

Insurance revenue
Change in the gross unearned premium provision
The tables below provide a reconciliation of the gross written premiums to insurance revenue:
General Insurance
General Measurement Model insurance revenue
Change in the gross unearned premium provision
Net written premiums
Insurance revenue
Outward reinsurance premiums written
Gross written premiums
General Measurement Model insurance revenue		 2023
£000
615,007
(35,861)
2022
£000
558,544
(30,619)
-
25
527,950
579,146
263,667
(35,861)
320,475
238,069
-
25
351,340
(30,619)
579,146
527,950
Insurance revenue
47
Insurance revenue
47		 2023
£000
£000
Investment
Life
return
Insurance
General
£000
579,146
147
832
£000
580,122
£000
(3)
2022
charges
Total
Other income and
£000
Insurance
527,950
58
642
£000
£000
£000
(9)
528,641
Investment
Other income and
£000
return
charges
General
Life
Total

148

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

49 Prior year restatement

From 1 January 2023 the Benefact Trust group of companies has changed its accounting policy for insurance contracts and adopted the requirements of IFRS 17 Insurance Contracts. FRS 103 provides a degree of flexibility in accounting for insurance contracts, and the trustees consider that the requirements of IFRS 17 can be adopted in full within the requirements of FRS 103.

The Benefact Trust group of companies consider the new accounting policy to be a more robust and consistent way of accounting for insurance contracts which aligns the accounting of insurance contracts with its trading subsidiary, EIO plc, which adopted IFRS 17 from 1 January 2023.

The change in accounting policy is required to be applied retrospectively (FRA) where it is practicable to do so. Where it is impracticable to do so, IFRS 17 permits the use of a modified retrospective approach or a fair value approach (FVA). For the trading subsidiaries' life insurance business, it has been concluded that applying the FRA is impracticable and that the FVA is the most appropriate method to apply on transition. The FVA uses the fair value of a group of insurance contracts (determined by applying the requirements of IFRS 13 Fair Value Measurement) and the fulfilment cash flows at the date of transition to calculate the unearned profit or loss at the transition date. The choice between applying the modified retrospective approach and the fair value approach impacts the amount of unearned profit or loss recognised at the transition date and future profitability.

The effects of the restatement are detailed in this note, and are included throughout the financial statement comparatives, where appropriate. On transition on 1 January 2022, the Benefact Trust group of companies recognised an increase in non-charitable trading reserves of £5,188,000, primarily due to changes that apply IFRS 17 principles to reserving for general insurance liabilities and the application of revised expense allocation models, offset by the establishment of a contractual service margin (CSM) in the life business.

Other trading activities
Gift aid from subsidiary undertaking
Income from:
2022
Income arising from trading activities
Investments
income
Dividend, interest and rental
Total income
Raising funds
Expenditure on:
Grants
Charitable activities
Other expenditure on charitable activities
trading subsidiaries
Charitable donations paid by
Other
Expenditure arising from trading activities
Total expenditure
Net losses on investments
Net income/(expenditure) in the
year
a. arising from the charity
b. arising from trading activities
Taxation
Gain on disposal of subsidiary		 funds
funds
£000
£000
£000
£000
428,487
-
-
-
5,000
5,000
As restated
Unrestricted
As reported
Restatement
Endowment
As reported
As restated
693,536
-
693,536
Total
funds
Unrestricted
funds
£000
32,778
36,723
3,945
33,409
265,049
(631)
726,314
8,945
735,259
461,896
264,418
-
(356)
(356)
-
(22,821)
-
(22,821)
-
(22,821)
-
(1,081)
-
(1,081)
(2,730)
-
(2,730)
(2,730)
(646,037)
-
(646,037)
(424,678)
-
(221,359)
(1,081)
-
(672,669)
(356)
(673,025)
(451,310)
(221,359)
4,957
4,841
(112)
(12,198)
(110,175)
(97,977)
(50,379)
4,729
(47,598)
(116)
34,944
-
34,944
-
34,944
(4,547)
(3,721)
(8,268)
108
(4,655)
19,298
-
19,298
-
(23,845)
(23,845)
(3,721)
(27,566)
(4,655)
23,953
(4,547)
(3,721)
(8,268)
108
(4,655)

149

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

49 Prior year restatement (continued)

As reported Restatement As restated As reported As restated
Unrestricted Unrestricted Endowment Total
2022 funds funds funds funds
£000 £000 £000 £000 £000
Transfers between funds
Gross transfers to endowment funds (2,000) - (2,000) 2,000 -
Gross transfers to unrestricted funds 3,550 - 3,550 (3,550) -
Other recognised gains/(losses)
Actuarial gains/(losses) on retirement benefits (6,876) - (6,876) - (6,876)
Other (losses)/gains
Currency translation differences 5,410 249 5,659 - 5,659
Gains/(losses) on net investment hedges (4,514) - (4,514) - (4,514)
Tax attributable to other recognised gains/(losses) 2,545 - 2,545 - 2,545
Minority interests (8,782) - (8,782) - (8,782)
Net movement in funds excluding minority interests (10,559) (4,406) (14,965) (5,271) (20,236)
Total funds brought forward 545,022 5,188 550,210 115,827 666,037
Total funds carried forward 534,463 782 535,245 110,556 645,801

150

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

49 Prior year restatement (continued)

Subordinated liabilities
Total funds
Creditors: amounts falling due after one year
Provisions for liabilities
Net pension asset
Other retirement benefit obligations
The funds of the charity:
General funds
Designated funds
Revaluation reserve
Non-charitable trading reserves
Translation and hedging reserve
Endowment funds
Minority interests
Net assets excluding retirement benefit obligations
Total net assets including retirement benefit obligations
Unrestricted funds
Intangible assets
Fixed assets
Investment property
Investments
Tangible assets
Investment in associate
Total fixed assets
Cash at bank and in hand
Current assets
Debtors
Liabilities
Total current assets
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Restricted funds
Total funds (excluding minority interests)		 £000
£000
funds
2022
2022
Total
Restatement
As restated
-
32,316
-
140,846
-
14,764
-
12,611
12,611
-
1,559,514
1,559,514
32,316
14,764
140,846
As reported
Total
funds
£000
-
1,760,051
1,760,051
-
166,096
166,096
(279,562)
296,024
575,586
(279,562)
462,120
741,682
87,264
(82,798)
(170,062)
(192,298)
379,322
571,620
(192,298)
2,139,373
2,331,671
(25,818)
-
(25,818)
-
(3,544)
(3,544)
193,080
(1,372,773)
(1,565,853)
782
737,238
736,456
-
(4,960)
(4,960)
-
15,338
15,338
782
747,616
746,834
-
11,681
11,681
-
222
222
-
1,982
1,982
249
19,511
19,262
533
501,849
501,316
782
535,245
534,463
-
110,556
110,556
782
645,801
645,019
-
101,815
101,815
782
747,616
746,834

151

BENEFACT TRUST LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

49 Prior year restatement (continued)

(i) Changes to classification and measurement

The adoption of IFRS 17 did not change the classification of the trading subsidiaries insurance contracts. However, IFRS 17 establishes specific principles for the recognition and measurement of insurance and reinsurance contracts. IFRS 17 introduces a GMM that bases the measurement of a group of contracts on the present value of future cash flows with a risk adjustment for non-financial risk and a CSM representing unearned profit recognised in profit or loss over the period insurance service is provided (the coverage period). Entities have the option to use a simplified measurement model, the PAA, for short-duration contracts; this model is applicable to all the trading subsidiaries general insurance and reinsurance contracts except in limited circumstances where the GMM is required.

IFRS 17 accounting under the PAA is similar to the accounting policies previously applied to insurance contracts, but differs as follows:

(ii) Restatement of statement of financial activities

The adoption of IFRS 17 has resulted in the following prior year restatements in the consolidated statement of financial activities:

(iii)Restatement of balance sheet

50 Post balance sheet events

On 6 February 2024 the trading subsidiaries acquired the entire issued share capital of Access Insurance Limited.

152

BENEFACT TRUST LIMITED

Reference and administrative details

Board of trustees Timothy Carroll, BA, MBA, FCII Chair
Francois Boisseau, Msc, FCA
Revd Paul Davis, BA
Ian Moore, MA, PhD
David Paterson, BA
Patrick Rudden, MA
John Nicholas Sykes, MA (Hons), MBA, FCA
Company Secretary Mrs Rachael J. Hall FCIS
Registered and Head Office Benefact House,
2000 Pioneer Avenue,
Gloucester Business Park,
Brockworth,
Gloucester GL3 4AW
Company Registration Number 1043742
Charity Registration Number 263960
Independent Auditor PricewaterhouseCoopers LLP,
2 Glass Wharf,
Temple Quay,
Bristol,
BS2 0FR
Bankers National Westminster Bank plc,
21 Eastgate Street,
Gloucester GL1 1NH
Legal advisors Farrer & Co,
66 Lincoln's Inn Fields, London
WC2A 3LH
Veale Wasbrough Vizards LLP
Narrow Quay House, Narrow Quay
Bristol
BS1 4QA
Investment Managers EdenTree Asset Management Limited,
24 Monument Street,
London,
EC3R 8AJ
Rathbones Investment Management Limited,
8 Finsbury Circus,
London,
EC2M 7A2

153

BENEFACT TRUST LIMITED

Company registration number 1043742 Charity registration number 263960