## **RMIG ENDOWMENT TRUST** # **ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022** **Charity Number: 290883** ## **RMIG ENDOWMENT TRUST** |Contents|Page| |---|---| |Trustees’ Annual Report|3| |Statement of Trustees Responsibilities|12| |Auditor’s Report|13| |Statement of Financial Activities|16| |Balance Sheet|17| |Statement of Cash Flows|18| |Notes to the Financial Statements|19| Page 2 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** The trustee is pleased to submit its report for the year ended 31[st] March 2022. ## **Reference and Administrative Information** ## **Name and Registered Office** The name of the charity is the RMIG Endowment Trust (the “Charity”) and its principal office is located at 60 Great Queen Street, London, WC2B 5AZ. ## **Trustees** The trustee who served during the whole of the year was: - The Masonic Charitable Foundation (“MCF”) (Corporate Trustee, Registered Charity No. 1164703, Company Number 09751836) The trustees of the MCF who served during the year were: - John Boyington, CBE - Sinead Brophy - Charles A.G. Cunnington - Timothy D. Dallas-Chapman (resigned 9[th] December 2021) - Simon D’O. Duckworth, OBE, DL - Clive Emerson - Dr Simon Fellerman - Alan P. Graham, MBE - Antony D.G. Harvey - Christopher Head - Michael R. Heenan (Treasurer) - Richard M. Hone, QC (President) - James H. Newman, OBE (resigned 28[th] April 2021) - Stephen Robinson - Howard Ian Sabin (resigned 9[th] December 2021) - David Southern (appointed 10[th] June 2021) - Nigel J. Vaughan - David C. Watson (resigned 9[th] December 2021) - Andrew G. Wauchope - Sir Paul Williams, OBE, KStJ, DL (Deputy President and Chairman) - Howard G. Wilson James H. Newman resigned as Chairman of the MCF on 31[st] March 2021 and Trustee of the MCF on 28[th] April 2021, and Sir Paul Williams was appointed Chairman on 1[st] April 2021. Page 3 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Executive** The Executive during the year to 31[st] March 2022 were: - Les Hutchinson, Chief Executive - Charles Angus, Group Finance Director - Annette Campbell, Company Secretary (resigned 5[th] February 2022) - Brenda Nurse, Company Secretary (appointed 1[st] March 2022) ## **Auditor** Knox Cropper LLP, Chartered Accountants, 65 Leadenhall Street, London, EC3A 2AD ## **Bankers** Clydesdale Bank Plc, Unit 8, 3 The Chase, John Tate Road, Hertford, Herts SG13 7NN ## **Investment Advisors** Asset Risk Consultants Limited, 7 New Street, St. Peter Port, Guernsey, GY1 2PF ## **Investment Managers** Thesis Unit Trust Management Ltd, Exchange Building, St John's Street, Chichester, West Sussex PO19 1UP ## **Solicitors** Stone King LLP, Boundary House, 91 Charterhouse Street, London, EC1M 6HR Page 4 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Structure, Governance and Management** ## **Organisation** The Charity is governed under the terms of a trust deed dated 29[th] November 1984 which constitutes an unincorporated charity. The trust deed has been varied a number of times to accommodate changes in trustees, with the latest variation dated 5[th] April 2019 appointing the MCF and its chairman as trustees of the Charity. Following the granting of trust corporation status to the MCF, the chairman resigned as a trustee of the Charity on 12[th] December 2019. ## **Governance and Management** The MCF is the sole trustee of the Charity. Details of the processes for the appointment, induction and training of the MCF’s trustees are given in the annual report and accounts of that company. All governance and management capabilities are provided by the MCF and details of the relevant committees and processes are provided in the annual report and accounts of that company. Trustees and committees of the MCF address the specific needs of the Charity as part of their roles and responsibilities for the MCF. The trustee board and the main committees meet as follows: |**Board/Committee**|**Purpose**|**Meetings per**
**year **| |---|---|---| |Trustee Board|Main decision-making body with ultimate responsibility for the
Charity|4| |Audit and Risk|Identification and mitigation of risk, oversight of external audit|2| |Finance|Ensuring adequate procedures are in place to manage all
aspects of financial planning, controlling and reporting.|4| |Investments|Maintaining investment strategies to meet the requirements of
the Charity, appointment and monitoring of fund managers|4| |Property|Development and execution of strategies to optimise the returns
from the Charity’s property portfolio|4| |Strategy|Development and implementation of strategies to support the
Charity’s objectives.|4| The Charity does not employ any staff, with services being provided by staff employed by the MCF. ## **Objectives and Activities** ## **The objects of the Charity** The primary purpose of the Charity is to apply its resources for any charitable purpose connected with the Royal Masonic School for Girls (the “School”) or the education of its pupils who are daughters or adopted daughters of English Freemasons considered to be in need. The resources consist of funds donated by Freemasons to the Royal Masonic Institution for Girls and transferred by that charity to the trustees on establishment of the Charity on 29[th] November 1984, together with property and real estate at Rickmansworth Park which houses the School. Page 5 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **The main activities** Since its establishment, a policy of the Charity has been to ensure the proper maintenance of the property and real estate to optimise the running of the School. The Charity provides scholarships and bursaries on a “need or means tested” basis to daughters or adopted daughters of Freemasons in accordance with the trust deed. When setting the objectives and planning the work of the Charity for the year, the trustee has given careful consideration to the Charity Commission’s general guidance on public benefit. In meeting its objects, the trustee has been mindful of the public benefits which the Charity and the School can jointly provide to local, provincial and national organisations by the use of the grounds, sports facilities and the various halls and buildings. ## **Achievements and Performance** During the period, the Charity expended £3.17 M on supporting the School (2021: £1.33 M). Major areas of repair and refurbishment included: refurbishment of the ceiling and roof of the dining hall, replacement of the heating system in the remaining K houses, fire containment work including the replacement/repair of 381 fire doors in the G block and K houses and refurbishment of the roof, fascias, soffits guttering to Cadogan House. ## **Financial Review** ## **Review of the Year** ## Unrestricted Fund The School was adversely impacted by Covid-19 and government-imposed lockdown during the previous year and requested support from the Charity. Negotiations are in progress with regard to a six-year interim lease commencing from 1[st] September 2020 followed by a reversionary long term lease, and a rent free period is anticipated which will include the period from 1[st] September 2020 to 31[st] August 2022. As the rent free period will be spread over the six-year term of the interim lease rent of £1.27 M has been accrued as at 31[st] March 2022. Total expenditure for charitable purposes amounted to £3.22 M (2021: £1.40 M). A transfer of £5.20 M was made from the endowment fund to fund expenditure in the current year and part of the cost planned for 2022/23. The surplus for the year of £3.85 M (2021: £2.13 M) was transferred to reserves. ## Endowment Fund Dividend income of £0.16 M (2021: £0.24 M) was generated from the investment portfolio with costs of £0.05 M (2021: £0.06 M). Net gains from the Charity’s investment in the MCF CAIF amounted to £1.01 M (2021: £2.60) and withdrawals of £5.20 M were made to fund the transfer to the unrestricted fund (2021: £3.56 M). £3.21 M was written back to the value of the social investment property (the buildings leased to the School) following the repairs undertaken during the year, but a further provision of £2.4 M was made in recognition of the increased scope and cost required to complete the programme of backlog works. Page 6 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Reserves Policy** As at the 31 March 2022 the total level of reserves was £15.37 M, of which £10.53 M related to endowment funds and the remainder of £4.85 M related to the working capital within the unrestricted general reserve. The Charity’s policy is to apply its resources for any charitable purpose connected with the School or the education of its pupils who are daughters or adopted daughters of English Freemasons in accordance with the trust deed. The Charity has commissioned a report from a firm of professional surveyors to consider the condition of the School buildings in anticipation of a new tenant repairing lease, from which significant dilapidations have been identified for rectification. The expected cost for this is estimated at £16.01 M and full provision has been made for this against the value of the investment property as laid out in note 6 to the accounts. In order to provide increased availability of funds, the trustee board agreed to adopt a Total Return basis for utilising investment returns on 12[th] December 2019, replacing the previous policy of applying in-year income only for the purpose of supporting the School. The surplus over the original endowment has been transferred to a separate reserve for the total unapplied return. The social investment property has been valued through the discounting of expected future lease payments using a yield of 5.5% as the cost of capital, less the residual value of the provision for backlog repairs. This provision is being released back to the endowment fund in line with the works being completed and charged to the unrestricted general reserve. The provision for backlog repairs is reviewed on an annual basis, and adjusted as required in accordance with the evolving cost for the planned works. ## **Investment Policy and Performance** The investment strategy was to provide sufficient income to support the Charity’s primary objectives whilst maintaining its real value to ensure that purchasing power does not diminish in the long-term. The trustee recognised that this required a medium to high risk asset allocation, with up to 85% of the portfolio invested in equities. Risk was mitigated through a diverse portfolio of fixed interest securities, equities, unit trusts and open-ended investment companies. Following the trustee’s decision to adopt a Total Return basis, the requirement to maximise the income component of the investment return was removed, and the Charity was able to adopt the MCF investment strategy and to transfer its funds to the MCF CAIF. The MCF global investment strategy seeks to protect the capital value of investments that are required to fund operations for a two-year time horizon (the “Cash Reserve”) and to invest all remaining funds for long term growth, on a total return basis, with an overall objective of making a return of RPI plus 3% net of all expenses. The Cash Reserve is provided by Royal London Asset Management and utilises three of their funds, which provide a mix of instruments, including cash instruments, Treasury Bills, covered (secured) bonds, corporate bonds, Supranationals and mortgage-backed securities. The performance objectives of the three funds are: - Short Term Money Market Fund: - Cash Plus Fund: - Enhanced Cash Plus Fund: - SONIA - SONIA plus 0.50% gross of fees - SONIA plus 1.00% gross of fees Page 7 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Investment Policy and Performance (Continued)** The MCF sponsored the launch of the Masonic Charitable Foundation Investment Fund CAIF, which took place on 1[st] October 2018. This is a unit trust with a highly efficient tax wrapper in which the MCF and all its subsidiary charities own their shares in the form of units. Units will be sold as required in order to top up the Cash Reserve on a quarterly basis. The investment strategy is directed for “Steady Growth”, which is a medium-high risk strategy. Risk is managed through diversification, with the funds split between four different fund managers operating on multi asset mandates but utilising differing investment management styles. The overall fund manager is Thesis Unit Trust Management Limited and the custodian in Northern Trust. The asset allocation for the CAIF was amended on 1[st] April 2019 by the investment committee following advice from Asset Risk Consultants. The strategic and actual asset allocations as at 31[st] March 2022 are shown in the following table: |hown in the following table:|||| |---|---|---|---| |**Asset Class**|**Strategic**
**Allocation**|**Benchmark**|**Actual 31st**
**March**
**2022**| |Cash|0.00%|SONIA|3.20%| |FixedIncome|7.50%|FTSEUK World Gov. BondIndexGBP|4.40%| |International Equity|28.75%|MSCI World ex UK NR GBP|56.40%| |Int’nl Equity GBP hedged|12.00%|MSCI World ex UK Hedged NR GBP|3.40%| |U.K. Equity|18.00%|MSCI UK Equity NR GBP|18.50%| |Emerging Market Equity|12.50%|MSCI Emerging Markets Equity NR GBP|2.80%| |Global EquityHedge|13.75%|HFRXGlobal EquityHedge GBP|0.00%| |Alternative Investments|3.75%|HFRX Global Hedge Fund GBP|7.80%| |Property|3.75%|IA UK Direct Property TR|3.50%| ||100.00%||100.0%| Performance under the new arrangements is shown in the table overleaf. Note that performance for periods before launch on 1[st] October 2018 is derived from the historical returns of the constituent fund managers: Page 8 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Investment Policy and Performance (Continued)** ||**MCF CAIF**|**RLAM**
**Short Term**|**RLAM**
**Cash Plus**|**RLAM**
**Enhanced**|**CCLA**| |---|---|---|---|---|---| |Fund at 31stMarch 2022|£7.57 M|£Nil|£Nil|£Nil|£Nil| |Investment approach|Steady
Growth Multi-
Asset|Capital
Protection|Capital
Protection|Capital
Protection|Income &
long-term
Capital
Growth| |Benchmark|Composite|SONIA|SONIA|SONIA|MSCI/AREF
UK other
balanced
property| |Peer Group|ARC Charity
GBP Steady
Growth|None|None|None|ARC Charity
GBP Steady
Growth| |Return for the year|10.30%|0.13%|(0.09)%|(0.65)%|19.30%| |Benchmark return for year|9.80%|0.14%|0.14%|0.14%|9.70%| |Peergroupreturn foryear|7.10%|N/A|N/A|N/A|7.10%| |3 year return|33.00%|0.38%|0.64%|0.80%|27.00%| |3 year benchmark|26.90%|0.28%|0.28%|0.28%|2.50%| |3 year peer group|22.40%|N/A|N/A|N/A|22.40%| The CAIF has continued to perform strongly during the year, hitting a peak of just over £133.00 per unit at 31[st] December. It fell back in the final quarter due to geopolitical and inflationary concerns, but recovered strongly in the latter part of March. As at 31[st] March 2022, the CAIF was valued at £129.73 per unit. Page 9 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Principal Risks and Mitigation** The principal risks identified and agreed actions to mitigate are shown in the following table: |**Risk **|**Consequence**|**Mitigation **| |---|---|---| |Significant unexpected
financial loss from
operations|Reputational damage, loss of
confidence with key stakeholders
and impact upon continuing financial
sustainability|Strong financial procedures,
particularly budgetary planning and
control. Oversight from the Finance
Committee.| |Inadequate liquidity to
meet financial
commitments|Poor service to beneficiaries and
reputational damage. Withdrawal of
key servicesfromsuppliers|Cash flow forecasting and liquidity
planning within the Investment
Strategy| |Significant long-term loss
in the value of the
investment portfolio|Impacts financial sustainability and
reputational damage with donors|Appointment of Asset Risk
Consultants as expert investment
advisors, providing monthly
performance reporting and
analysis. Oversight from
investment and property
committees.| |Grants made outside the
Charity’s Objects and
operating guidelines|Reputational damage, loss of
confidence with key stakeholders
and potential trustee liability|Strong procedures and controls for
processing grants. Oversight from
Masonic Support and Charity
Grants committees| |Cyberattack on IT
systems|All key operations are compromised|United Grand Lodge of England
(“UGLE”) and IT network providers
have strong security procedures in
place covering access, protection,
backups and disaster recovery
facilities. Mandatory cybersecurity
training in place for all staff| |Data protection breach|Reputational damage and significant
financial penalties|Data protection policy, IT security
and HR policies in place| |Fraud|Financial loss, reputational damage,
adverse impact upon staff|Financial procedures, segregation
of duties, authority limits, IT
security, increased awareness
amongst staff| |Unavailability of office
accommodation|Operations compromised|UGLE Business Continuity Plan| |Loss of paper records
from fire/flooding|Breach of legal obligations, adverse
impact upon operations, potential
financialpenalties|Reduced reliance on paper records
with increased use of IT.| |Lack of compliance with
employment legislation|Breach of legal obligations, potential
financial penalties, breakdown of
staff morale and adverse impact
upon service provision|HR procedures and staff
handbook. Induction processes for
new staff. Ongoing management
training and Personal Development
Review| |Undue reliance on key
persons|Operational breakdown, adverse
impact upon staff morale, poor
service to beneficiaries and potential
reputationaldamage|HR procedures: organisational and
succession planning.
Comprehensive documentation of
procedures and controls| Risks are actively monitored by the Executive and the senior leadership team, and formally reviewed by the audit and risk committee at their biannual meetings. Page 10 ## **RMIG ENDOWMENT TRUST** ## **TRUSTEE’S ANNUAL REPORT** ## **Plans for Future Periods** The MCF plans to continue to operate the Charity in a prudent manner that meets the needs of its beneficiaries over the long term. It recognises the requirement to work closely with the School to resolve the backlog of repairs to its infrastructure that have built up over many years and will prioritise the development and execution of a 6-year plan to address these issues in a sustainable manner. Negotiations are still in progress with regard to a replacement lease. The plan is to put in place a six-year interim lease, on terms similar to the previous lease, commencing with effect from 1[st] September 2020. This lease will run in tandem with the programme to address the backlog repairs. A long-term (99 year) tenant repairing reversionary lease will be executed simultaneously and will commence upon the expiry of the interim lease on 1[st] September 2026. Page 11 ## **RMIG ENDOWMENT TRUST** ## **STATEMENT OF TRUSTEE’S RESPONSIBILITIES** ## **Statement of Responsibilities** The trustee is responsible for preparing the trustee’s report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (U.K. “GAAP”). The law applicable to charities in England and Wales, the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed require the trustee to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and of the income and expenditure of the Charity for that year. In preparing these financial statements, the trustee is required to: - select suitable accounting policies and then apply them consistently; - observe the methods and principles in Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS102); - make judgements and estimates that are reasonable and prudent; - state whether United Kingdom accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue to operate. The trustee is responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable it to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. It is also responsible for safeguarding the assets of the Charity and for taking reasonable steps for the prevention and detection of fraud and other irregularities. ## **Auditor** A resolution proposing that Knox Cropper LLP be reappointed as auditor will be put to the members. ## **Approval by Trustee** This report, was approved by the trustee on 15[th] September 2022 and signed on their behalf by ## **Sir Paul Williams, OBE, KStJ, DL** Chairman, MCF Page 12 ## **RMIG ENDOWMENT TRUST** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEE OF THE RMIG ENDOWMENT FUND** We have audited the financial statements of the RMIG Endowment Fund (the “Charity”) for the year ended 31 March 2022 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the Charity's affairs as at 31 March 2022 and of its incoming resources and application of resources for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the Charities Act 2011. ## **Basis of opinion** We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## **Conclusions relating to going concern** In auditing the financial statements, we have concluded that the trustee’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the trustee with respect to going concern are described in the relevant sections of this report. ## **Other information** The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustee is responsible for the other information. Page 13 ## **RMIG ENDOWMENT TRUST** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEE OF THE RMIG ENDOWMENT FUND** Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ## **Matters on which we are required to report by exception** We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion: - the information given in the financial statements is inconsistent in any material respect with the trustee’s report; or - sufficient accounting records have not been kept; or - the financial statements are not in agreement with the accounting records; or - we have not received all the information and explanations we require for our audit. ## **Responsibilities of Trustee** As explained more fully in the Trustee’s Responsibilities Statement set out on page 12, the trustee is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustee is responsible for assessing the Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustee either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. ## **Auditor’s responsibilities for the audit of the financial statements** We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Page 14 ## **RMIG ENDOWMENT TRUST** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEE OF THE RMIG ENDOWMENT FUND** 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: - The Charity is required to comply with charity law and, based on our knowledge of its activities, we identified that the legal requirement to accurately account for any restricted funds was of key significance. - We gained an understanding of how the charity complied with its legal and regulatory framework, including the requirement to properly account for any restricted funds, through discussions with management and a review of the documented policies, procedures and controls. - The audit team, which is experienced in the audit of charities, considered the charity’s susceptibility to material misstatement and how fraud may occur. Our considerations included the risk of management override. - Our approach was to check that all restricted income was properly identified and separately accounted for and to ensure that only valid and appropriate expenditure was charged to restricted funds. This included reviewing journal adjustments and unusual transactions. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. ## **Use of the audit report** This report is made solely to the Charity’s trustee, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken, so that we might state to the Charity’s trustee those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Charity’s trustee as a body, for our audit work, for this report or for the opinions we have formed. Knox Cropper LLP Statutory Auditor 65 Leadenhall Street London EC3A 2AD Knox Cropper LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006. Page 15 ## **RMIG ENDOWMENT TRUST** ## **STATEMENT OF FINANCIAL ACTIVITIES** ## **YEAR ENDED 31 MARCH 2022** (Including an Income and Expenditure Account) |Note
**INCOME**
Donations
Investment income
2
**Total income**
**EXPENDITURE**
Investment management costs
**Charitable activities**
Masonic grants
3
Non-Masonic grants
3
**Total expenditure**
Net gains/(losses) on investments
7
**Net income/(expenditure)**
Transfers between funds
10
**NET MOVEMENT IN FUNDS**
Total funds brought forward
**Total funds carried forward**|Unrestricted
Endowment
Total
Total
funds
funds
Funds
Funds
2022
2022
2022
2021
£'000
£'000
£'000
£'000
0
0
0
335
1,876
156
2,032
161| |---|---| ||1,876
156
2,032
496| ||0
(48)
(48)
(56)| ||0
(48)
(48)
(56)| ||0
(0)
(0)
(10)
(3,222)
0
(3,222)
(1,391)| ||(3,222)
(0)
(3,222)
(1,401)| ||| ||(3,222)
(48)
(3,270)
(1,457)| ||0
1,823
1,823
3,827| ||(1,346)
1,931
585
2,866
5,200
(5,200)
0
0| ||3,854
(3,269)
585
2,866| ||991
13,798
14,789
11,923| ||4,845
10,529
15,374
14,789| All income and expenditure derive from continuing activities and all gains/losses are included in the statement of financial activities The notes on pages 19 to 28 form part of these financial statements. The prior year figures are analysed by fund in note 13 on page 27. Page 16 |**RMIG ENDOWMENT TRUST**
**BALANCE SHEETas at 31 March 2022**
Note
**FIXED ASSETS**
Investment properties
6
Investments
7
**CURRENT ASSETS**
Debtors
8
Cash at bank and in hand
**CURRENT LIABILITIES**
Creditors falling due within one year
9
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS CURRENT LIABILITIES**
Creditors falling due after one year
9
**Total net assets**
**CHARITABLE FUNDS**
**Endowment funds**
Permanent endowment
10
Total unapplied return
10
**Unrestricted funds**
General reserves
10
**Total charitable funds**|March 2022
March 2021
£'000
£'000
2,951
2,138
7,576
11,659| |---|---| ||10,527
13,797| ||1,283
0
4,484
1,739| ||5,767
1,739| ||(443)
(747)| ||5,324
992| ||15,851
14,789
(477)
0| ||15,374
14,789| ||10,909
10,909
(380)
2,889| ||10,529
13,798| ||4,845
991| ||15,374
14,789| The financial statements were approved and authorised for issue by the Trustee Board on 15th September 2022 and signed on their behalf by: …………………………………….. ……………………………………. Sir Paul Williams, OBE, DL Michael Heenan Chairman Treasurer The notes on pages 19 to 28 form part of these financial statements Page 17 ## **RMIG ENDOWMENT TRUST** ## **CASH FLOW STATEMENT** |||||| |---|---|---|---|---| ||**CASH FLOW STATEMENT**|**YEAR**|**ENDED 31 MARCH 2022**|| |||Note|2022|2021| ||||£'000|£'000| ||**Operating Activities**|||| ||**Net cash (used in) Operating Activities**|A|(5,157)|(1,102)| ||**Cash flows from investing activities**|||| ||Dividends and interest from investments||2,032|161| ||Proceeds from the sale of investments||5,200|3,556| ||Purchase of investments||0|(279)| ||**Net cash provided by/(used in) Investing Activities**||7,232|3,438| ||**Cash flows from financing activities**|||| ||Bank loans taken out/(repaid)||670|(1,033)| ||**Change in cash and cash equivalents in the reporting**|||| ||**period**||2,745|1,303| ||Cash and cash equivalents at the beginning of the|||| ||reporting period||1,739|436| ||**Cash and cash equivalents at the end of the reporting**|||| ||**period**|12|4,484|1,739| ||**Notes on the cash flow statement**|||| |A|**Reconciliation of net income/(expenditure) to net**|||| ||**cash flow from operating activities**|||| ||Net movement in Funds as per the Statement of|||| ||Financial Activities||585|2,866| ||Adjustments for:|||| ||Impairment of investment property||(813)|(1,229)| ||Dividends, interest and rents from investments||(2,032)|(161)| ||Other movements in investments||(1,117)|(2,782)| ||(Increase) in debtors||(1,283)|0| ||(Decrease)/increase in creditors||(497)|204| ||**Net cash (used in) Operating Activities**||(5,157)|(1,102)| Page 18 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** ## **1. ACCOUNTING POLICIES** ## (a) **Statement of compliance** The financial statements of the RMIG Endowment Trust (the “Charity”) have been prepared in accordance with applicable UK accounting standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland” (“FRS 102”). Additionally, they comply with the Statement of Recommended Practice “Accounting and Reporting by Charities” (FRS 102 second edition) published in 2019 (the “SORP”) in all material respects. The Charity meets the definition of a public benefit entity under FRS 102. ## (b) **Basis of preparation** The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments, on a basis consistent with previous years. The functional currency of the Charity is considered to be Pounds Sterling because that is the currency of the primary economic environment in which the Charity operates. ## (c) **Going concern** The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of one year from the date of approval of these financial statements. The trustees of the Charity have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the Charity to continue as a going concern. The trustees are of the opinion that the Charity will have sufficient resources to meet its liabilities as they fall due. ## (d) ## **Incoming resources** Revenue is recognised when the significant risks and rewards of ownership have been transferred, the amount of revenue can be measured reliably, it is probable that future economic benefits will flow to the Charity and when the specific criteria relating to each of the Charity’s revenue channels have been met, as described below: - i. Rental and income is accounted for on an accruals basis under the terms of the lease with the School. - ii. Interest on fixed-interest securities is accounted for on an accruals basis. - iii. Dividends on equities are recognised on receipt of payment. Page 19 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** ## (d) **Resources expended** Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to that expenditure, it is probable that settlement will be required and the amount of any obligation can be measured reliably. All resources expended are recognised on an accruals basis, with the exception of grants as noted below. Grants are recognised as expenditure in the year in which the grant is formally approved by the Charity and has been communicated in writing to the recipient, except to the extent that it is subject to conditions that enable the Charity to revoke the award. ## (e) **Allocation and apportionment of costs** Support costs include central functions and have been allocated to activity cost categories on a basis consistent with the use of resources. ## (f) **Employee benefits** All staff are employed by the parent charity, The Masonic Charitable Foundation. No charge is made to the Charity in respect of staff providing services to the Charity. No remuneration is paid to trustees and no expenses reimbursed. ## (g) **Fund accounting** Unrestricted funds may be utilised for any purpose in accordance with the charitable objectives of the Charity. The trustees took the decision at the end of the previous year to move the endowment fund to a total returns basis, resulting in a change of policy. Investment income and management fees are retained within the CAIF and the endowment fund. Withdrawals from the CAIF are transferred to the general fund from the total unapplied return section of the endowment fund. ## (h) **Investments** Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently, they are stated at market value. All realised and unrealised gains and losses are recognised within the Statement of Financial Activities. Investments which the Charity holds for resale or pending their sale and cash or cash equivalents with a maturity date of less than one year, which are held for investment purposes, are disclosed as current asset investments. ## (i) **Financial assets and liabilities** The Charity has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. Financial assets and liabilities are recognised when the Charity becomes a party to the contractual provisions of the instrument. Page 20 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** Financial assets and liabilities which qualify as basic financial instruments are initially recognised at the settlement amount after any trade discounts. They are subsequently valued at amortised cost and assessed for impairment at the end of each reporting period. Where settlement is not expected within 12 months of the balance sheet date, then the asset or liability is discounted using the long term return of inflation plus 4 percent used as the target for the Charity’s investment portfolio **.** Basic financial instruments include debtors, cash and creditors within the balance sheet. ## (j) **Taxation** The Charity is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and it is considered to pass the test set out in paragraph 1, schedule 6 of the Finance Act 2010, and therefore it meets the definition of a charity for U.K. Corporation Tax purposes. The Charity is unable to recover Valued Added Tax (VAT) incurred on expenditure. The amount of VAT that cannot be recovered is included within the underlying cost to which it relates. ## (k) **Social Investment Property** The social investment property has been valued through the discounting of expected future lease payments using a yield of 5.5% as the cost of capital, less the residual value of the provision for backlog repairs. This provision is being released back to the endowment fund in line with the works being completed and charged to the unrestricted general reserve. The provision for backlog repairs is reviewed on an annual basis, and adjusted as required in accordance with the evolving cost for the planned works. Gains or losses are recognised within the Statement of Financial Activities. No depreciation is provided on social investment properties. Page 21 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** |2.
**INVESTMENT INCOME**
Interest on bank deposits
Income from investment portfolios
Rental income - Royal Masonic School
Rental income - other
Income - other
3.
**CHARITABLE ACTIVITIES**
**Masonic**
Foundation scholarships & bursaries
**Non-Masonic**
Property expenses
Support Costs
4.
**SUPPORT COSTS**
Administrative costs
Interest and bank charges
Governance costs|Unrestricted Endowment
Total
Total
funds
funds
Funds
Funds
2022
2022
2022
2021
£'000
£'000
£'000
£'000
4
0
4
3
0
156
156
240
1,872
0
1,872
(90)
0
0
0
8
0
0
0
0
1,876
156
2,032
161
Unrestricted
Endowment
Total
Total
funds
funds
Funds
Funds
2022
2022
2022
2021
£'000
£'000
£'000
£'000
0
0
0
10| |---|---| ||0
0
0
10| ||3,172
0
3,172
1,335
50
0
50
56| ||3,222
0
3,222
1,391| ||Unrestricted
Endowment
Total
Total
funds
funds
Funds
Funds
2022
2022
2022
2021
£'000
£'000
£'000
£'000
0
0
0
0
23
0
23
38
27
0
27
18| ||50
0
50
56| ## 5. **STAFF COSTS** The Charity employed no staff during the year (2021: None). No staff recharges have been made from the MCF to the Charity. No trustees received remuneration from the Charity during the year (2021: £ Nil). No trustees’ expenses were incurred during the year (2021: £ Nil). Page 22 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** |**YEAR ENDED 31 MARCH 2022**
6.
**SOCIAL INVESTMENT PROPERTY**
Balance at 1 April 2021
Additional provision for backlog repairs
Utilisation of provision for backlog repairs
Balance at 31 March 2022
7.
**INVESTMENTS**
Fixed Asset Investments:
- Managed Funds
MCF CAIF
**MOVEMENTS IN INVESTMENTS**
**Listed**
Balance at 1 April 2021
Additions
Disposals
Investment income reinvested
Management fees charged to the fund
Gains/(losses)
Balance at 31 March 2022
**RECONCILIATION TO SOFA**
Gains on listed investments
Provision for backlog repairs on social investment property|March 2022
March 2021
£'000
£'000
2,138
909
(2,401)
0
3,214
1,229| |---|---| ||2,951
2,138| ||March 2022
March 2021
£'000
£'000
7,576
11,659| ||7,576
11,659| ||11,659
12,154
0
279
(5,200)
(3,556)
156
240
(48)
(56)
1,009
2,598| ||7,576
11,659| ||1,009
2,598
814
1,229| ||1,823
3,827| Page 23 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** |8.
**DEBTORS**
Prepayments and accrued income
Amounts owed by group undertakings
9.
**CREDITORS**
**Falling due within one year**
Bank loans and overdrafts
Trade creditors
Amounts owed to group undertakings
Other creditors
Accruals
**Falling due after more than one year**
Bank loans|March 2022
March 2021
£'000
£'000
1,265
0
18
0| |---|---| ||1,283
0| ||March 2022
March 2021
£'000
£'000
193
0
233
52
0
9
0
674
17
12| ||443
747| ||March 2022
March 2021
£'000
£'000
477
0| ||477
0| A new bank loan was taken out on 7[th] April 2021 for an amount of £835,817. It is repayable in 52 monthly instalments ending 10[th] August 2025. Interest is chargeable at a fixed rate of 3.31% Page 24 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** |10.**MOVEMENT IN FUNDS**
**Endowment funds**
Permanent endowment
Total unapplied return
**Unrestricted funds**
General reserves
**Total funds**
**PRIOR YEAR**
**Endowment funds**
Permanent endowment
Total unapplied return
**Unrestricted funds**
General reserves
**Total funds**|Balance at Income Expenditure
Gains/ Transfers
Balance at
1 April
(losses)
31 March
2021
2022
£'000
£'000
£'000
£'000
£'000
£'000
10,909
0
0
0
0
10,909
2,889
156
(48)
1,823
(5,200)
(380)| |---|---| ||13,798
156
(48)
1,823
(5,200)
10,529| ||991
1,876
(3,222)
0
5,200
4,845| ||991
1,876
(3,222)
0
5,200
4,845| ||| ||14,789
2,032
(3,270)
1,823
0
15,374| ||Balance at Income Expenditure
Gains/ Transfers
Balance at
1 April
(losses)
31 March
2020
2021
£'000
£'000
£'000
£'000
£'000
£'000
10,909
0
0
0
0
10,909
2,156
518
(56)
3,827
(3,556)
2,889| ||13,065
518
(56)
3,827
(3,556)
13,798| ||(1,142)
(22)
(1,401)
0
3,556
991| ||(1,142)
(22)
(1,401)
0
3,556
991| ||| ||11,923
496
(1,457)
3,827
0
14,789| Page 25 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** |11.**ASSETS AND LIABILITIES**
**Endowment funds**
Permanent endowment
Total unapplied return
**Unrestricted funds**
General reserves
**Total funds**
**PRIOR YEAR**
**Endowment funds**
Permanent endowment
Total unapplied return
**Unrestricted funds**
General reserves
**Total funds**|Investment Investments
Current Liabilities &
Fund
Properties
Assets
Provisions
Total
£'000
£'000
£'000
£'000
£'000
909
10,000
0
0
10,909
2,042
(2,424)
2
0
(380)| |---|---| ||2,951
7,576
0
0
10,529| ||0
0
5,765
(920)
4,845| ||0
0
5,765
(920)
4,845| ||| ||2,951
7,576
5,767
(920)
15,374| ||Investment Investments
Current Liabilities &
Fund
Properties
Assets
Provisions
Total
£'000
£'000
£'000
£'000
£'000
909
10,000
0
0
10,909
1,229
1,659
0
(1)
2,887| ||2,138
11,659
0
(1)
13,796| ||0
0
1,739
(746)
993| ||0
0
1,739
(746)
993| ||| ||2,138
11,659
1,739
(747)
14,789| ## 12. **RELATED PARTY DISCLOSURES** As described in the trustees report the Charity has a close working relationship with the Royal Masonic School for Girls (the “School”). Two trustees of the ultimate holding company are also governors of the School. At the balance sheet date, a total amount of £Nil due from the Charity to the School (2021: £673,935) was included in other creditors (note 9). The Charity is currently in the process of agreeing a long-term lease with the School, and the heads of terms document has been used for the purpose of valuing the social investment property as per note 6 of the financial statements. Page 26 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** ## 13. **STATEMENT OF FINANCIAL ACTIVITIES** ## **12 MONTHS ENDED 31 MARCH 2021** (Including an Income and Expenditure Account) |Note
**INCOME**
Donations
Investment income
2
**Total income**
**EXPENDITURE**
Investment management costs
**Charitable activities**
Masonic grants
3
Non-Masonic grants
3
**Total expenditure**
Net gains/(losses) on investments
7
**Net income/(expenditure)**
Transfers between funds
10
**NET MOVEMENT IN FUNDS**
Total funds brought forward
**Total funds carried forward**|Unrestricted Endowment
Total
Total
funds
funds
Funds
Funds
2021
2021
2021
2020
£'000
£'000
£'000
£'000
57
278
335
0
(79)
240
161
1,799| |---|---| ||(22)
518
496
1,799| ||0
(56)
(56)
(58)| ||0
(56)
(56)
(58)| ||(10)
0
(10)
(17)
(1,391)
0 (1,391)
(1,583)| ||(1,401)
0 (1,401)
(1,600)| ||| ||(1,401)
(56) (1,457)
(1,658)| ||0
3,827
3,827 (14,858)| ||(1,423)
4,289
2,866 (14,717)
3,556
(3,556)
0
0| ||2,133
733
2,866 (14,717)| ||(1,142)
13,065
11,923
26,640| ||991
13,798
14,789
11,923| Page 27 ## **RMIG ENDOWMENT TRUST** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **YEAR ENDED 31 MARCH 2022** ## 14. **ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS LESS DEBT** |**Cash and cash equivalents**
Cash at bank and in hand
**Borrowings**
Bank loans due within one year
Bank loans due after one year
**Total cash and cash equivalents less debt**|At 1 April
Cash Flow
Non-Cash At 31 March
2021
Changes
2022
£'000
£'000
£'000
£'000
1,739
2,745
0
4,484| |---|---| ||1,739
2,745
0
4,484| ||0
0
(193)
(193)
0
(670)
193
(477)| ||0
(670)
0
(670)| ||| ||1,739
2,075
0
3,814| ## 15. **ULTIMATE CONTROLLING PARTY** The ultimate controlling party is the Masonic Charitable Foundation (Registered Charity No. 1164703, Company Number 09751836), which is the sole member of the company. Consolidated accounts for the MCF, which include the accounts of the Charity, can be obtained from the registered office of the Charity. Page 28