ANNUAL REPORT & ACCOUNTS 2013 - The Royal British...
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ANNUAL REPORT & ACCOUNTS 2013 | 2013
Transcript of ANNUAL REPORT & ACCOUNTS 2013 - The Royal British...
ANNUAL REPORT & ACCOUNTS 2013
THE ROYAL BRITISH LEGION
AN
NUA
L REPORT & ACCOUN
TS | 2013
The Poppy Appeal 39.5
Donations and legacies 36.1
Events, lotteries and trading 17.3
Fees charged to Care Home residents 13.3
Grants to pay for welfare services and Remembrance 6.6
Membership subscriptions 5.5
Investment income 4.6
Other income 1.7
TOTAL 124.6
Running our Care Homes and Break Centres 21.5
Providing welfare services to our beneficiaries 51.2
Supporting our Membership 8.2
Campaigning on behalf of our beneficiaries 8.7
Remembrance 5.5
Comradeship 0.9
Raising the money 25.1
Governing the charity 1.4
TOTAL 122.5
What we own (£m)Buildings used by the charity 71.9
Buildings occupied by third parties 88.8
Working capital used to run the organisation 40.7
Investments held to ensure we honour our commitments 103.8
Other assets and liabilities (4.3)
TOTAL 300.9
Fig 1 – how the income was raised £m Fig 2 – how the money was spent £m
18%
42%7%
7%
4%
20%
1%
32%
29%
14%
11%
4%4%
5%1% 1%
Where the money comes from Where the money goes
...we spend
77 on charitable
activities
p
For Every
1raised...
£
1
The Trustees are pleased to present their report and audited accounts for The Royal British Legion
(the Legion or the Charity) and its subsidiaries (the Group) for the year ended 30 September 2013.
1
Photograph : E l l io t Payne
F ron t cover image : R t Hon Mark F r ancois, MP, Minis t er o f S t a t e for t he Armed For ces jo ins Na t ional Chai rman John C r is for d a t t he opening o f t he Legion’s f i r s t ‘Pop In’ adv ice cen t r e .
The 4th of August 2014 will mark the 100th anniversary of Britain’s entry into the First World War, a time when, in the words of Sir Edward Grey: “The lamps are going out all over Europe; we shall not see them lit again in our lifetime.”But a candle of hope was lit in 1921 when The British Legion was founded by veterans in the aftermath of WW1. Nearly a century on, Service men and women, veterans and their families still call on us for help with almost every aspect of their daily lives. In our role as the national custodian of Remembrance, our mission remains to honour the fallen and support the living.Many of the challenges facing veterans returning from WW1 affect serving personnel, veterans and their families today. Whether it’s finding employment or housing, coping with financial stress, or living with physical and psychological challenges, the Legion is still ready and able to assist, standing shoulder to shoulder with all who Serve.In 2013, we introduced improvements to help more of today’s Armed Forces community access our services more easily and effectively. We rolled out new online self-help tools and launched a new freephone helpline. We also opened the first of sixteen high street information and advice centres located close to Service communities, in addition to outreach sites around the country. This is just the start of our journey to become a more agile, responsive and effective Armed Forces charity. Encouraged by our campaign, every local authority in Wales and Scotland, and almost all the local authorities in England, have now signed Armed Forces Community Covenants. In practice, this means the principles of the Armed Forces Covenant will be upheld at a local level; a commitment which will positively affect the lives of Service people for years to come.
The 2013 Festival of Remembrance reached a record viewing audience of 6.5 million, no doubt thanks to the moving contribution of the last surviving British Dambuster, Squadron Leader Johnnie Johnson DFM, and the poignant performance of The Poppy Girls. Commemorative events will take centre stage in the coming year as nations, communities and individuals come together to remember the start of the First World War. 2014 will also mark the 70th anniversary of a number of significant Second World War engagements, including the Normandy Landings and the Battles of Kohima and Imphal in north-east India.Our beneficiaries are at the heart of everything we do – and we’re making the Legion work better for them. We’re making it easier for people to find the Legion, and easier too for our beneficiaries to find the support they need that helps them regain the control and independence they want in their lives. We aim to provide a fully integrated service in ways that we have never done before, working in collaboration with other Service charities and organisations that can support our beneficiaries.
JOHN CRISFORDNATIONAL CHAIRMAN
CHRIS SIMPKINSDIRECTOR GENERAL
John Cr isford Nat ional Chairman
Chris Simpkins Director General
Foreword
3F ORE WORD
Our VisionThe nation fully embraces and upholds the welfare, interests and memory of
the Armed Forces community.
Our MissionTo be the No. 1 provider of welfare,
comradeship, representation and Remembrance for the Armed Forces community.
06 DIRECT SUPPORT
16 REMEMBRANCE
24 COMRADESHIP
28 REPRESENTATION
34 FUNDRAISING
38 THE FUTURE
39 FINANCIALS
Contents
5C ON T E N T S
WE WILL Develop our knowledge base
WE WILL Start the process of opening new Area Offices across the UK
WE WILL Develop volunteer roles across the Legion
WE WILL Expand our dementia care services through the Admiral Nurse Service
DIRECT SUPPORT
We said:
See what we did >>
7DIRE C T SUPPOR T
The first of 16 new ‘Pop In’ advice centres in the heart of
Liverpool offers a welcoming space for Service personnel, veterans and their
families to get practical help and advice.
This year we answered 206,626 requests for help. We helped Felix, who was injured in a car crash, we gave Bill a holiday when he needed a break and we helped Emma-Jayne secure her children’s financial future. Last year we made big changes so that we could help more people than ever before.
Our online tools are now backed up by a vast knowledge base of information, giving access to guidance 24 hours a day. Our new freephone number is answered by friendly, informed staff and our first high street Area Office was officially opened in December 2013.
Our Pop In adv ice cen t r e in L iverpool
What we did:
There are now three integrated ways to contact the Legion:
IN PERSONAt a high street advice centre or outreach location
BY PHONE Via our new freephone number:
0808 802 8080
ONLINEUsing our self-help and webchat resources
DIRECT SUPPORT
9DIRE C T SUPPOR T
Felix’s storyEx-Royal Artillery Gunner, Felix Agbotsu was en route to take part in a charity event in 2004 when he was involved in a car crash that fractured his spine and left him paralysed from the neck down.
When his time at the National Spinal Injury Centre at Stoke Mandeville Hospital came to an end, Felix spent 18 months as an in-patient at one of our Care Homes, Lister House.
“The support and care I received from Lister House was fantastic,” explains Felix.
“The staff really helped me to adjust to life as a quadriplegic.”When Felix left Lister House we funded adaptations to his mobility vehicle, without which he would have been housebound. We have also helped Felix with specialist mobility equipment, including a bed hoist.
“I’ve received help from the Legion for almost 10 years now,” he says, “and they’ve always been very supportive. They’ve made my life much easier.”
“The Legion have always been very supportive. They’ve made my life much easier.”
Felix Agbotsu
• Our volunteer roles have also undergone a big change. As a result we are now seeing more people face to face. Complex needs are being identified earlier, and picked up and addressed more quickly. We are also holding a growing number of surgeries in outreach locations across the UK to widen the contact points through which we can be reached. We can now be found within military bases, alongside charity partners and in local authority spaces.
• Alongside our colleagues at Poppyscotland, we’re working hard to ensure that beneficiaries throughout the UK experience a consistent level of support. We’re also making Pop In centres available for charity partners to use. By being more collaborative, we hope to offer a more rounded service for anyone walking through our door.
• We are empowering people to help themselves. This year we worked with the Ministry of Defence and the independent charity Standard Life Charitable Trust to create a new toolkit called MoneyForce, which brings financial planning into basic training for the first time and helps Service families and Service leavers achieve financial fitness. We also introduced a new website platform at www.moneyforce.org.uk
• We helped Service leavers find civilian employment through SORTED!, a consortium of seven Armed Forces charities coming together to help people find and retain work. The consortium’s website is www.sorted.org.uk
• Meanwhile, our own employment support scheme, CivvyStreet, awarded grants to help beneficiaries with training, tools and courses. It can be found at www.civvystreet.org
Help in so many ways
DIRECT SUPPORT
11DIRE C T SUPPOR T
DIRECT SUPPORT
doctors at the Centre to mitigate the effects of roadside bombs and IEDs. Our partnership with Imperial College London sits alongside our commitment to the Defence Recovery Capability supporting all wounded, injured and sick Service personnel.
• Ben Upton leads our Admiral Nurse Service in the West Midlands, helping family carers navigate through the dementia journey. “The needs of the carers and the person with dementia can be complex. We take a holistic approach. The positive experience I’ve had working with this client group and this generation has been nothing but amazing. I’d never do anything else.”
• Lorna Pancott is an Activities Co-ordinator at Bennet House, our Break Centre in Northern Ireland. “During the summer and over the Easter period we have Service and ex-Service families on much-needed family breaks. We have daily outings, tenpin bowling, craft classes, and picnic lunches. I enjoy every part of my job. When people are on their own, they can be quite introverted on the day they arrive but by the end of it they’ve made a friend, they’ve done different things and they’ve gone away refreshed and with a totally different mindset. Over 10,000 people have enjoyed a free holiday with us this year.Pr ince Har r y a t Imper ia l Col lege London
The Ba t t le Back Cen t r e ( L i l leshal l )
The Win t er s f ami ly en joyed a Legion Family Break
in 2008, is one of the largest we have made and recognises this growing veterans’ need.
• The Battle Back Centre, a specialist recovery centre in Shropshire, is run jointly between the Legion and the MOD. It uses sports and adventurous training activities to give injured personnel the confidence and self-esteem they need to resume their Service career or return to Civvy Street.
• His Royal Highness Prince Henry of Wales, officially opened The Royal British Legion Centre for Blast Injury Studies at Imperial College London in October 2013. Civilian engineers and scientists undertake pioneering work alongside military
• We continue to invest in dementia care. We have broken turf on a new dementia wing at Dunkirk Memorial House, our Care Home in Somerset. The new wing will provide space for 30 beds, all with en suite shower rooms, and is set to open in 2014.
• The Royal Star and Garter Home in Surrey opened its new dementia wing in October 2013, funded by a £2 million grant from the Legion. 26 specially equipped en suite rooms now form a specialist dementia unit. The grant, approved by the Trustees
Investment
Ex-Royal Marine Ady Cole, one of the course directors says: “We get the trust of the guys quite quickly, then assess their needs. Some of those are obviously physical but many are psychological, and that’s what we concentrate on. A lot of good work is done over a cup of tea.”
13D IRE C T SUPPOR T
Emma-Jayne and Kaitlin’s storyEmma-Jayne Webster and her daughter Kaitlin’s world changed forever on 2 September 2009 when Lance Corporal Richard James Brandon of the Corps of Royal Electrical and Mechanical Engineers (REME), Emma-Jayne’s fiancé and Kaitlin’s father, was killed by a roadside IED in Afghanistan.
“The Royal British Legion helped me by finding out where I stood legally on things with regard to finances, and obtaining what I’d been told by Richard before he died that me and the children would be entitled to. The Legion eased the burden and offered a lot of advice about things that I didn’t know how to sort out. They helped me secure the children’s futures really, and get the money I needed.”
Bill’s storyBill Speakman VC, one of five living holders of the Victoria Cross, served in the Army for 25 years. He was awarded the Victoria Cross for his heroic actions during an engagement in the Korean War, leading charge after charge and keeping the enemy at bay long enough for his company to withdraw safely.
Bill became the first VC invested by Queen Elizabeth II. “I was really nervous and I could tell she was too,” recalls Bill.
“She asked me how I was and I replied, ‘I’m fine ma’am’.”After he retired, Bill developed osteoarthritis, which limited his mobility; we secured funding for an electric scooter to help him get around. We also helped Bill move to Cornwall after his doctor suggested the warmer weather could help ease his condition and he has enjoyed a holiday at Byng House, one of our Break Centres.
“The Legion has helped me in so many different ways. I would recommend anyone in the Armed Forces to contact them if they need help.”
“The Legion helped me secure the children’s futures”
Emma-Jayne Webster
“The Legion has helped me in so many different ways.”
Bill Speakman VC
DIRECT SUPPORT
15DIRE C T SUPPOR T
REMEMBRANCE
WE WILL Honour and commemorate the sacrifices made by the Armed Forces community in service of the nation
WE WILL Ensure people of all ages understand the importance of Remembrance, so those sacrifices are never forgotten
WE WILL Continue to plan and raise funds for the expansion of visitor facilities at the National Memorial Arboretum
Zoe Tapper and Adr ian Les t er a t S i lence in t he Square 2013
Remembrance sits at the heart of British life and culture. People of all ages, abilities, beliefs and backgrounds join together throughout the year, and especially in November, to acknowledge those who have given their lives on active service to the nation. It is also a time to reflect upon the service and sacrifices made daily by the entire Armed Forces family, and the human cost of conflict in general. Ensuring that Remembrance continues as a national observance with contemporary relevance and meaning is key to our mission as its acknowledged custodian.The moving sight of 10,000 veterans and civilians taking part in the ceremonial march past the Cenotaph drew millions of television viewers on Remembrance Sunday. Organised by the Legion, the 2013 event saw, for the first time, the amalgamated 16/5th Queen’s Royal Lancers taking part in the dispersal from Whitehall. This regimental association is most notably recognised for having the final British soldier to be killed in action during WW1, Private George Edwin Ellison of the 5th Royal Irish Lancers. Pte Ellison was shot by a sniper 90 minutes before the Armistice came into effect on 11 November, 1918.
We said: What we did:
Our ‘Silence In The Square’ event on 11 November drew thousands of people to Trafalgar Square. They reflected while listening to the vocal stylings of tenor Paul Potts, before observing the Two Minutes Silence and casting poppy petals in the Trafalgar Square fountains.
17RE ME MBR A NC E
REMEMBRANCE
The Poppy Gi r ls
2.5m YOUNG PEOPLE RECEIVED OUR FREE SCHOOLS PACK
A record number of viewers, 6.5 million, watched the Festival of Remembrance on BBC Television. Produced by the Legion, the Festival saw The Poppy Girls, five talented young singers from military families, perform the official Poppy Appeal single The Call (No Need to Say Goodbye) in front of Her Majesty The Queen. Megan, Florence, Alice, Bethany and Charlotte were drawn from auditions, which attracted 1,000
hopefuls. The Poppy Girls also sang to Prime Minister David Cameron at 10 Downing Street and appeared on the BBC’s The One Show.Our free ‘Schools Pack’ of learning resources focused on a ‘then and now’ Remembrance theme in the run-up to this Centenary year, and was enthusiastically received by some 2.5m young people.
The Fes t iva l o f Remembrance 2013
The Poppy Girls
19RE ME MBR A NC E
There is hardly a soul in the UK whose ancestors were not directly affected by the First World War, and all of us live with its effects today. Losses were felt in towns and villages up and down the country, as more than one million lives were sacrificed by men and women from the British Empire.
The Legion will be at the forefront of Centenary commemorations throughout 2014-2018. We are working with organisations and individuals across the UK to develop a meaningful and appropriate range of Centenary events, partnerships and projects. These will reflect our welfare and Remembrance values and engage with communities at national, regional and local levels.
2014 will also see major commemorative events taking place in June to mark the 70th anniversary of the Normandy Landings. The Legion will be leading national observances at Bayeux Cathedral and Cemetery and assisting with other British commemorations as the Normandy Veterans Association prepare for their final reunion prior to laying up their colours later this year.
Veterans Mar ch Pas t a t t he Ceno t aph
REMEMBRANCE
Commemorative events
21RE ME MBR A NC E
REMEMBRANCE
Dambus ter s c r es t s a t t he NMA National Memorial Arboretum
The nation’s year-round centre of Remembrance, the National Memorial Arboretum (NMA) in Staffordshire, attracts hundreds of thousands of visitors each year, including many school groups.
• New visitor facilities are planned for the site including a dedicated education centre, Remembrance interpretation area, and an event space. We are currently reviewing construction plans to ensure best value for money is achieved and new funding initiatives are being developed.
• Already home to more than 200 dedicated memorials, the NMA recently welcomed the Legion’s new Never Forget memorial; a memorial to the wartime service of the Religious Society of Friends (or Quakers) and the Bevin Boys memorial. The Bevin Boys memorial was designed by former Bevin Boy, Harry Parkes and commemorates the 48,000 young men, many of them conscripts, who joined regular miners down the coal mines in the dangerous but vital work to keep supplies of coal flowing during World War II.
• A ceremony to remember and give thanks to those who gave their lives in the Service of their country in 2012 took place in July 2013, after 52 new names were added to the Portland stone walls of the Armed Forces Memorial. All 52 names were read out during the service and the families of the fallen laid wreaths at the base of the memorial.
In May 2013, Legion staff and volunteers at the National Memorial Arboretum planted 11,000 commemorative crests, each with a personal message of tribute and thanks from members of the public, to mark the 70th anniversary of the Dambusters raid.
Armed For ces Memor ia l
23RE ME MBR A NC E
WE WILL Continue to strengthen our links with the Armed Forces, raising the Legion’s profile at all levels of the Service community
We said:
COMRADESHIPNational Memor ia l A rbore t um, Armed For ces Day
See what we did >>
25C OMR A DE SH IP
This year we introduced free Legion membership for serving men and women and launched Service leaver membership - a year’s free membership for those about to leave the Armed Forces. The schemes help us ensure military personnel are up to date with the range of support services and challenge events we offer.
We joined forces with the House of Lords, the English-Speaking Union, Air Cadets, Army Cadets and Sea Cadets to bring together 47 veterans and 146 cadets for a special debate in the House of Lords. Three teams of cadets and veterans passionately and eloquently discussed the legacy of the First World War and how it has shaped the nation today. It was only the seventh time in history that non-members of the Lords had been allowed to debate in the chamber. The cadets, between 14 and 18 years of age, demonstrated the importance of Remembrance to young people today.
• Support for the Legion at Combined Services Rugby matches during the November Remembrance period saw Tri-Service teams take on the mighty Barbarians and Exeter University, proudly sporting poppy-branded shirts. The matches also gave supporters the chance to don their own poppy-emblazoned gear – part of our exciting new range of Poppy Shop products and clothing.
• The Legion began because the Armed Forces community needed a voice. Today, 320,000 members show their support for the work we do, connected through Branches and Clubs around the UK and overseas. Our members make an invaluable contribution to our work and share the common cause of supporting the Service community.
• As part of our plans to commemorate the Centenary of the First World War, we are encouraging people to plant poppy seeds across the UK. The idea, conceived by the Greenhithe and Swanscombe Branch in Kent, is to cover the nation in poppies as a poignant tribute.
The branch instigated the project and found that their idea really took off. They were sending out poppies to other Legion branches, schools and community groups in a bid to get as many people as possible involved in Centenary commemorations. Branch Treasurer Graham Mentor-Morris says, “We contacted an awful lot of people, including communities and local government departments, and got DEFRA approval.” The campaign has even earned the backing of Prime Minister David Cameron. The whole Legion family is now involved in the campaign and we’ve teamed up with B&Q to sell poppy seeds nationwide with a donation from every packet sold going to support our work. Graham says that the branch is thrilled with the campaign’s success so far and the way in which it has captured so many people’s imaginations. “The branch is very happy,” he says. “We want thousands upon thousands of bright red poppies growing everywhere for the Centenary. It’s a silent, very inexpensive tribute and everybody can get involved. It’s such a simple thing.”
B & Q s t a f f onboard wi t h t he Poppy Seed campaign
House o f Lords 2013 / Pho tography Annabel Moel le r
What we did:
COMRADESHIP
320,000ROYAL BRITISH LEGION MEMBERS
Combined Ser v ices Rugby cap t a ins Sergean t Jane Leonard and Chie f Pe t t y O f f i cer Dave Pascoe wear ing Legion br anded k i t
Cadets and veterans came together for a spirited debate
in the House of Lords.
27C OMR A DE SH IP
WE WILL Extend the Legion’s campaigning influence to achieve the greatest impact for our beneficiaries
WE WILL Ensure that the principles of the Armed Forces Covenant are not forgotten
We said:
What we did:
REPRESENTATION
Our focus in the past year has been on encouraging local authorities to sign Armed Forces Community Covenants – and we’ve enjoyed standout success.
Community Covenants are voluntary statements of mutual support between civilian and Armed Forces communities that reinforce the nation’s Armed Forces Covenant at a local level.We successfully lobbied for their introduction in 2011, and since then every local authority in Wales and Scotland, and almost all the local authorities in England, have pledged their support. This has been achieved by working closely with local councils to raise awareness of the importance of their serving and ex-Service personnel and their families. We have produced a ‘Best Practice Guide to Community Covenants’ for councils, which contains lots of helpful ideas and examples of how councils can transform their relationship with the local Armed Forces community and implement tangible and practical measures. Examples of positive developments include additional priority for social housing to the Armed Forces community; allowing children to go on the list for a school place before they have an exact moving date; recognition of the Armed Forces community as a group to be considered in setting strategic priorities and placing greater importance on those with injuries sustained as a result of service.
See what else we did >>
29RE PRE SE N TAT ION
Our team in Wales worked with BLESMA to place pressure on the Welsh Government to encourage rehabilitation investment in NHS services. This resulted in the recent announcement of a new clinical pathway for veterans in need of prosthetics.
We also held awareness-raising events in Parliament for MPs with constituencies in Wales, the Midlands and London. The events gave local beneficiaries the chance to speak to their representatives about their experiences post-Service and the support they received from us.
“It was an honour and a privilege to be asked by the Legion to speak to Welsh MPs in the Houses of Parliament. It is my opinion that absolutely nothing can change if we as voices, veterans who feel neglected and isolated, do not address the basic issues that are causing us to feel neglected: unwanted, unneeded and unloved. I credit the Legion as they provided me with a platform to talk to MPs about my own experience. I was then able to express that there needs to be more of a ‘coming together’ which is focused on prevention, treatments and support services for ex-Service veterans.” Andy Davies, beneficiary
Area Manager for London, Ryan Allain and beneficiaries Jeffrey Button and David Forbes following a Legion event at the Houses of Parliament
REPRESENTATION
ENGLAND
70% SCOTLAND
88% WALES
41%
ENGLAND
95% SCOTLAND
100% WALES
100%
LOCAL AUTHORITIES THAT HAD SIGNED A COMMUNITY COVENANT AT THE END OF
2012
LOCAL AUTHORITIES THAT HAD SIGNED A COMMUNITY COVENANT AT THE END OF
2013
Community Covenants
31RE PRE SE N TAT ION
Volunteers and the cast of Strictly Come Dancing
at London Poppy Day.
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FUNDRAISING
The closest thing to crazy that she’s ever been...daredevil
Katie Melua jumped out of a plane at 13,000ft to enjoy an
airborne Poppy Picnic.
To our incredible volunteers, Poppy Appeal Organisers, runners, cyclists, cake bakers, Poppy Lottery players, triathletes, singers, street collectors, rugby players, Strictly Come Dancers, sky-divers, picnickers, and more, who help us raise money all year-round...
THANK YOU! for your amazing support – we couldn’t do it without you.
Daredevil singer Katie Melua jumped out of a plane at 13,000ft to enjoy an airborne Poppy Picnic with our extreme human flight team Jump4Heroes, while boy band Union J launched our Poppy Picnic campaign in the company of military families. Supporters took on challenge events across the country; from the Virgin Money London Marathon to the Karrimor Great Trail Challenge in the Lake District; and from Pedal to Paris to the Great North Run. Marks and Spencer, Sainsbury’s, Barclays plc, Premiership football clubs and Coventry Building Society are just a few of our growing stable of corporate supporters who help us in a surprising variety of ways, from providing contactless handheld terminals for London Poppy Day (Barclays) to selling our popular Poppy Brooches in their retail outlets (M&S). We look forward to continuing and growing this area of support in the future.
Nichola Rowlands a t t he V i r g in Money London Mara t hon
Hol ly Bannis t er-Haynes a t Pedal t o Par is
35F UNDR A IS ING
Meanwhile, our new range of poppy and British-themed merchandise is going down a storm, with online shoppers flocking to www.poppyshop.org.uk. Our designer sportswear is a big hit and the Buckley brooch has proved a phenomenal success; worn by stars from Jessica Ennis-Hill to Joan Collins. Young Royals also favoured the brooch, with The Duchess of Cambridge, Zara Phillips and Her Royal Highness Princess Beatrice all spotted wearing one. Princess Beatrice was also a guest at the annual Poppy Ball this year, while her sister, HRH Princess Eugenie kindly agreed to act as its Patron.
FUNDRAISING
Bris to l Poppy Day
In May, Jamie Cunningham, then aged 16, took over f rom his brother Tom as the youngest Poppy Appeal Organiser in the country. Pictured here with their mum, VivMayor of London Boris Johnson
HRH The Duchess of Cambridge at London Poppy Day
Poppy Appeal collectors f rom the Ahmadiyya Muslim Youth Associat ion
HRH The Duke o f Cambr idge a t London Poppy Day
Some of our new poppy merchandise
Londoners were proud to see their Armed Forces personnel in uniform turning out to support London Poppy Day, raising more than £1m in a day. One office worker went to a nearby cashpoint, withdrew his daily allowance of £300 and handed it over in exchange for a poppy. We are grateful for the huge show of support on the day: From Their Royal Highnesses The Duke and Duchess of Cambridge, who met with collectors, to the Prime Minister, who invited the Poppy Routemaster Bus to Downing Street. From London Mayor Boris Johnson, who fired off an Honourable Artillery Company cannon to announce the event, to the Strictly Come Dancing cast, who joined Service personnel collecting in Covent Garden. From Transport for London to Network Rail, who provided free transport for Service personnel in their poppy-liveried carriages.This year the Poppy Day model has also extended to cities and towns around the country, including Manchester, Birmingham, Swansea and Bristol.
37F UNDR A IS ING
We will:
THE FUTURE
Play a leading role in First World War Centenary commemorative
events during 2014-2018
Broaden the base of groups supporting
our Remembrance and fundraising work
Open more high street and outreach locations to reach
more beneficiaries
Continue our work on Branch Property Trusts to ensure Legion assets are used to best serve our
current beneficiaries
Expand our work in theatrical performance as an aid to recovery
Conduct the largest household survey of veterans since 2005
Build on the number of ways that people can support us year-round
Broaden the reach of our military
membership scheme
Open a new dementia wing at Dunkirk Memorial House
FINANCIAL REVIEW
39
Whilst the Legion’s financial position appears very strong, with closing reserves in excess of £300 million, the majority of these reserves are tied up in fixed assets; either functional assets such as Residential Care Homes and Welfare Break Centres or properties held under Branch Property Trusts (see section overleaf).
the economic downturn, suffered a £3.3 million decline. To mitigate the impact of reduced income, the Legion identified and delivered significant savings and through careful financial management generated net incoming resources before transfers of £2.1m for the year, of which £1.6m relates to unrestricted funds.The Legion continued to direct 77p in every £1 raised towards its charitable activities. However, expenditure on welfare reduced by £11.2 million. This is partly due to the accounting treatment for multi-year grant funding, as welfare expenditure last year included an additional £3.5m funding provision for the Personnel Recovery Centres. The implementation of the Legion’s new operating model led to a managed reduction in the value of individual welfare grants awarded to beneficiaries as the Legion moved towards a new model of personalised advice and support delivered through the new Area Office structure, the new Contact Centre in Cardiff and a revamped, user-friendly and informative website.
Over the last two years, in recognition of a greater understanding of the restrictions created by these trusts, some £150 million has been transferred from unrestricted to restricted reserves. Work is in hand with the Charity Commission to implement schemes to free up the assets and the associated reserves and we are pleased to report the first release was achieved in February 2014. However, in the meantime, Free Reserves, being those reserves immediately available to spend at the discretion of the Trustees, have been limited. On 30 September 2012, the Legion held free reserves of £6.2 million, representing less than one month’s forward unrestricted expenditure. To maximise the use of these Free Reserves pending the expected release from restricted funds, the Legion is carefully managing its budgets to match expenditure to voluntary income raised.The difficult fundraising environment represented a further financial challenge in 2013. Against a backdrop of falling sector incomes, the Legion’s voluntary income fell by 9%. Even the Poppy Appeal, previously immune to
The Legion’s total funds increased by £11.6 million supported by an unrealised gain on the value of the Legion’s investments of £5.6 million, an actuarial gain on the defined benefit pension scheme of £3.7 million and a £0.2 million increase in the value of the Legion’s investment property portfolio. The Legion ended the year with a strong balance sheet and high levels of liquidity. Group cash and investments totalled £155 million at 30 September 2013; however, the majority of these assets continue to be restricted or designated in nature and not immediately available to spend on the Legion’s general charitable purposes. Whilst the Trustees are confident that the restrictions on some of these funds can be liberated, this will take time. In the interim, elements of our welfare expansion programme, particularly the capital expansion programme will remain on hold and we will continue to carefully monitor our expenditure, whilst ensuring that our limited unrestricted funds are directed towards those beneficiaries in greatest need.
FINANCIALSFinancial review
Branch Property TrustsThe Legion is the corporate Trustee of some 775 branch property trusts, of which some 470 trusts still hold properties occupied by Legion branches and/or leased to social clubs licensed by the Legion. The remaining properties have been sold and the proceeds are held in trust funds.The trust deeds under which these properties are held specify the governance of the properties and in the event of disposal, how any proceeds of sale are to be used. Following a review of these trusts in 2011, we identified that the purposes of these trusts, whilst broadly in line with those of the Legion, in most cases contained certain restrictions, usually defining the geographical area in which the funds could be used. At 30 September 2012, the balance on these Branch Property Trusts was £93 million of property value and £58 million of disposal proceeds. During the year, the total value of the funds reduced by £1.6m as realised gains on the disposal of properties, rental income and investment income were offset by trust expenditure, including direct welfare expenditure on beneficiaries living within the trust area of benefit and eligible expenditure incurred by the Branch connected to the Branch Property Trust. The closing balance at 30 September 2013 comprised £89 million of property value and £60 million of disposal proceeds.Work has been continuing with the Charity Commission to resolve how we can widen the trust restrictions
to best serve the Legion’s current beneficiaries. A pilot public consultation exercise was launched in November 2013 covering ten Branch Property Trusts. The consultation exercise sought to identify beneficiary need in the trust area of benefit whilst canvassing the opinion of beneficiaries, local members and other stakeholders on potential future uses for surplus trust funds. As a result of this exercise, in February 2014, the BPT Trustee Committee agreed the first decisions about future use of funds. This resulted in the first release of funds from restricted into unrestricted funds, totalling £300,000 with further release of funds anticipated once agreement has been reached with the Charity Commission about our proposals. The results of this and future pilot consultation exercises will inform the Legion’s future strategy on the management and application of Branch Property Trusts.
ReservesAs set out in Note 23, the Legion’s unrestricted reserves at 30 September 2013 comprise Free Reserves of £6 million and designated reserves of £116m. Free reserves comprise the Central Benevolent Fund, which is the excess of income received over expenditure and is immediately available for use at the discretion of the Trustees. During the year, the Trustees have considered the risks incurred in undertaking the Legion’s charitable work and have determined that a target Free Reserves level of between three and six months’
unrestricted expenditure is desirable and commensurate with the type of work we undertake. At 30 September 2013, the Free Reserves of £6 million equated to a little over three weeks of unrestricted expenditure. However, free reserves are calculated after providing for some £16.7 million for the Legion’s long-term grant commitments which will crystallise over nine years, and other liabilities which are of a recurring nature. Taking these factors into account, together with the anticipated release of funds from the Branch Property Trusts, the Trustees are of the view that, despite the shortfall against target-free reserves, the Legion has adequate working capital for its foreseeable requirements. During the year, a new designated fund was created by the Trustees to hold the Women’s Section funds of £5 million, reflecting their separate administration from the rest of the unrestricted funds of the charity.The deficit on the Legion’s defined benefit pension scheme reduced from £6 million to £1.2 million as a result of higher corporate bond yields and strong investment returns. The scheme was closed to new members in 2002 and closed to future accrual from its remaining members on 1 April 2010. The Legion is seeking to manage the pension liabilities through a Pensions Increase Exchange exercise, offering members with non-statutory increases earned before 1997 the opportunity to take a higher pension now, in exchange for giving up future increases on part of their pension.
41F IN A NC I A L S
Branch, County and District fundsDuring the year, the Legion implemented a change in the field year end from 30 September to 30 June. These accounts therefore include the results of the Legion’s Branches, Counties and Districts for the nine months from 1 October 2012 to 30 June 2013. There has been no material impact on the results for the year or on the Legion Group assets and liabilities at 30 September 2013 as a result of this change.
Investment policy and performanceThe Trustees hold investments to meet the needs of the reserves policy stated above. The investment portfolio is invested through investment managers. The charity’s main investment portfolio (representing 75% of the value of funds under management at 30 September 2013) is managed by Cazenove Capital Management Limited. The Poppyscotland portfolio is managed by Sarasin & Partners. Branch and County investments are predominantly held in the COIF Charity Investment Fund with CCLA.The mandates agreed with the Legion’s investment managers specify the level of risk that can be undertaken by defining asset classes and ranges, benchmarks and acceptable volatility. The investment managers have total discretion within these parameters. No specific ethical investment restriction is placed on the investment managers’ remit as the Trustees are content that the corporate socially responsible investment policies of the current investment managers meet their needs.
The value of the Legion’s investment portfolio increased by 7% to £104 million.The mandate agreed with Cazenove has the following dual objectives:• To minimise the risk of the assets
falling by more than 10%; and• To maintain the real value of assets
and target an investment return in excess of annual increases in the Retail Price Index.
The Cazenove fund achieved its target of delivering an investment return in excess of RPI. The balance of assets within the Cazenove portfolio continued to shift as the investment managers moved towards the new benchmarks of 24% for equities, 66% for bonds and 10% for hedge funds, divesting equity and hedge fund holdings to invest in bonds as the opportunity arose. While the repositioning of the portfolio continues, subject to market conditions, the level of cash held remains relatively high, at 24% of the total portfolio, awaiting for prospects for bonds to improve.The Sarasin mandate with Poppyscotland has traditionally been higher risk than that for Cazenove given the requirement for sustainable income from the Poppyscotland portfolio. During the year, a transition plan was agreed which will see the risk profile of the portfolio move closer to that of Cazenove. This transition will be implemented subject to market conditions over the next two years.
Grant makingGrants are made to individuals in immediate need following an assessment of the beneficiary’s financial situation. These grants, in the form of cash, goods or services, are small in value but large in volume. In 2013, we provided 25,926 individual grants (2012: 24,908) at a cost of £14.3 million (2012: £18.2 million). The average cost of these grants has reduced reflecting the move towards a new model of personalised advice and support for beneficiaries.External grant giving is applied where a third party has skills or facilities unavailable within the Legion’s resources. In 2013, grants were awarded to 31 organisations totalling £3.8 million (2012: 57 organisations totalling £8 million).
Organisational structure, governance and managementThe Legion has a head office in London where the Director General and the supporting Board of five Executive Directors are based. There is a network of offices in England, Ireland, Scotland and Wales which provides facilities for beneficiaries, local members, volunteers and staff. Care Home services and Poppy Breaks are delivered through the Legion’s premises around the country. The Poppy Calls service is organised from a call centre in Huntingdon, and a Contact Centre has recently opened in Wales. The National Memorial Arboretum, the home of the Armed Forces Memorial, is situated in Alrewas, Staffordshire. The charity’s 2,445 branches are located throughout England, Wales and Northern Ireland and overseas.
FINANCIALS
The Legion’s governing document is the Royal Charter which was first granted in 1925. The Board of Trustees has the responsibility for its implementation and review but amendments to the Charter require the passing of a Special Resolution at an Annual Conference before they can be subsequently ratified by a Special Resolution of the Board of Trustees and allowed by Her Majesty the Queen in Council.
Board of TrusteesThe Board of Trustees is responsible for the overall governance, policy and work of the Legion. All substantive decisions are made by the Board of Trustees within the bounds of the Royal Charter and the Legion’s Vision, Mission and charitable objects. The Board provides overall policy direction; management of the charity is delegated to the Director General and through him to the Board of Executive Directors. Current membership of the Executive Board is shown on page 71 of this report.The Board of Trustees meets six times per year and comprises 16 Trustees as follows:• The Chairman and Vice-Chairman
are elected by all branches;• Seven Trustees are elected by
all branches;• Six Trustees are appointed by the
Board of Trustees. Invitation is by open advertisement and selection takes place through the Governance Committee; and
• The Chairman of the Women’s Section is elected by the members of the Women’s Section at the Women’s Section National Conference.
Trustees are elected or appointed for an initial three-year period and are eligible for a further two terms of three years. The Chairman and Vice- Chairman may only serve one term of three years. Newly elected Trustees are given induction training on their duties and responsibilities as members of the Board of Trustees. Training needs are reviewed on an annual basis and specific training is given to Trustees as required.Trustees receive no remuneration but are reimbursed for the cost of attending meetings and other official functions. Some Trustees are invited to lead and officiate on pilgrimages and the costs involved in that duty are included in the declared figure for Trustee expenses (Note 13).The names of Trustees who served in the year are shown on page 70.
Statement of Trustees’ Responsibilities relating to the Annual Report and Accounts The Trustees are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period.
In preparing these financial statements, the Trustees are required to: • select suitable accounting policies
and then apply them consistently;• observe the methods and principles
in the Charities SORP;• make judgements and estimates that
are reasonable and prudent;• state whether applicable 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 in business.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011 and the Charity (Accounts and Reports) Regulations 2008. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.The Trustees are responsible for the maintenance and integrity of the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
43F IN A NC I A L S
Committees of the BoardThe Board of Trustees has seven committees that report to it, all of which have written terms of reference.Two of the Committees facilitate the communication with members:The Membership Council – has responsibility for the direction and implementation of all membership issues;The Conference Committee – oversees the organisation of the Annual Conference. Two Committees form an integral part of the governance of the charity:The Governance Committee – makes recommendations on Trustee appointments and monitors governance best practice; The Audit Committee – reviews the significant judgements made in the accounts prior to Board approval. It provides for regular communication between the Trustees and the external and internal auditors, monitors risk management procedures and approves the internal audit programme.Three Committees oversee the resources of the charity: The Finance Committee – reviews, recommends and monitors compliance with the reserves and investment policies. It reviews the annual budget, oversees and monitors the Investment Portfolio and addresses any other financial matters referred to it by the Board of Trustees;The Property Committee – recommends strategy and monitors performance in relation to functional property developments, oversees significant acquisitions or disposals and ensures these properties are appropriately maintained;The Branch Property Trusts (BPT) Trustee Committee – recommends strategy and monitors compliance in relation to the management of properties, income and assets held by the Branch Property Trusts.
Corporate structureThe Legion has an extensive corporate structure comprising:• the Charity; • eight wholly owned subsidiaries,
six of which are included in the consolidated accounts and two of which are dormant; and
• acting as the custodian trustee for one charity and the distributory agent for another.
Three of the Legion’s six active wholly owned subsidiaries are trading entities. The three charitable subsidiaries are Royal British Legion Poppy Lottery Limited, the National Memorial Arboretum Company Limited and the Earl Haig Fund (Scotland) (trading as Poppyscotland). Further details on the activities and performance of subsidiaries are given in Note 11 to the accounts.The Legion is the custodian Trustee for the Samsung Royal British Legion Korean Veterans Association Scholarship Fund (charity number 1051545) with net assets of £385,000 at 30 September 2013. The assets of the charity are predominantly held as investments. The object of the charity is to advance the education of the public by way of scholarships to members of HM forces, their spouses and descendants, with preference given to dependants of HM Forces Korean Veterans. This falls within the Legion’s object to further the education of beneficiaries and their spouses, children and dependants. The assets are held separately from those of the Legion in COIF Charities Fixed Interest Funds and M&G Investment Funds.In addition there are three active companies which for historic reasons share our logo.
• Royal British Legion Industries Limited (RBLI) which provides employment, training and support for people, including those with disabilities, plus care and support for ex-Service men, women and families;
• Royal British Legion Poppy Factory Limited in Richmond (the Poppy Factory) , which creates paid meaningful employment opportunities for wounded, injured and sick ex-Service men and women; and
• The Royal British Legion Attendants Company Trust which promotes the rehabilitation and resettlement of men and women of Her Majesty’s Armed Forces who are in need of assistance in civilian life.
These three companies are separate charitable trusts with no common shareholding and no other form of control by the Legion. The results of these companies are therefore not included in the consolidated accounts of the Legion.
Role of the membership and volunteersThe Legion is a membership organisation overseen by a Board of Trustees through the Membership Council. Around 300,000 members are organised through a branch structure of which there are approximately 2,445 branches operating across England, Wales, Northern Ireland, and the Isle of Man, with a further 88 branches overseas. Branches:• administer welfare in their area; • undertake their own fundraising
with central support for the Poppy Appeal;
• recruit and maintain members; and• act as representatives in their
local community.
FINANCIALS
Branches report into 52 County and District Committees; the Committees of Branches, Counties and Districts consist entirely of volunteers. The Legion provides operational support to the Membership structure and oversees the delivery of welfare services by the provision of paid staff located in each County and District. There is a separate Women’s Section within the Legion which is constituted under the Royal Charter and had over 830 branches and 36,000 members at 30 September 2013. It provides care and support for the ex-Service community by means of various welfare work schemes such as financial help to ex-Service women, wives, widows and widowers of ex-Service personnel and their children.Many members belong to one of the 516 clubs which use the Legion’s name under licence but which are independent entities and therefore their financial results are not included in these accounts. 279 clubs occupy premises which are owned (or leased from third parties) by the Legion and leased to the club under a commercial lease.The Legion is also grateful for the valuable support of approximately 2,800 Operations volunteers including caseworkers and visitor volunteers, around 4,700 Poppy Appeal Organisers and the countless volunteers who, with members, support us and assist in the annual Poppy Appeal collection and the day-to-day operations of the Legion at District, County and Branch level.
Risk management and internal controlThe Board of Trustees has responsibility for the oversight of risk management within the Legion. It has approved a Framework for the management of risk through which major risks are identified, assessed, effectively addressed and monitored. The implementation and operation of the Framework is delegated to the Director General. The Framework comprises:• Risk policies, that set out the limits to
the amount of governance, financial, operational and reputational risk that the Legion is prepared to accept, tolerate or be exposed to at any point in time (the Risk Appetite) and summarise the measures that have been established to address each particular type of risk;
• Risk processes, that result in the informed consideration and evaluation of the impact and likelihood of risks that affect the achievement of the Legion’s key objectives, the selection of appropriate responses to mitigate those risks and the taking of actions to enhance those responses which do not reduce risk to within, or as a consequence of events occurring that are outside of, the Legion’s Risk Appetite; and
• Risk assurance, provided to the Trustees and the members of the Executive Board through line management or independently by Internal Audit, that risks are being managed within the Risk Appetite that has been set.
The key risks to the achievement of the Legion’s objectives, together with the mitigating controls and further actions required, are recorded in a Risk Register. The Register is kept under review by the Executive Board and is reported to the Board of Trustees through the Audit Committee every six months.The annual Internal Audit plan is drawn up by reference to the Risk Register and audits undertaken focus on the mitigating controls that address the key risks. The Audit Committee receives copies of all Internal Audit reports in which opinions are expressed on the effectiveness of the mitigating controls that have been reviewed.For and on behalf of the Trustees
John Crisford, Chairman27 March 2014Board of Trustees
45F IN A NC I A L S
We have audited the financial statements of The Royal British Legion for the year ended 30 September 2013 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Respective responsibilities of Trustees and auditorsAs explained more fully in the Statement of Trustees’ Responsibilities set out on page 43, the trustees are responsible for the preparation of financial statements which give a true and fair view.Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.This report, including the opinions, has been prepared for and only for the charity’s trustees as a body in accordance with section 144 of the
Charities Act 2011 and regulations made under section 154 of that Act (Regulation 30 of The Charities (Accounts and Reports) Regulations 2008) 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.
Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and parent charity’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Independent Auditors’ Report to the Trustees of the Royal British Legion
FINANCIALS
Pedal to Par is
Opinion on financial statementsIn our opinion the financial statements:• give a true and fair view of the
state of the group’s and the parent charity’s affairs as at 30 September 2013, and of the group’s incoming resources and application of resources and cash flows, 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 requirements of the Charities Act 2011 and Regulation 15 of The Charities (Accounts and Reports) Regulations 2008.
Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:• the information given in the Annual
Report is inconsistent in any material respect with the financial statements; or
• sufficient accounting records have not been kept by the parent charity; or
• the parent charity financial statements are not in agreement with the accounting records and returns; or
• we have not received all the information and explanations we require for our audit.
47F IN A NC I A L S
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London, 27 March 2014
PricewaterhouseCoopers LLP is eligible to act, and has been
appointed, as auditor under section 144(2) of the Charities Act 2011
FINANCIALS
NOTE Unrestricted funds £’000
Restricted funds £’000
Total 2013 £’000
Total 2012 £’000
Incoming Resources:
Incoming resources from generated funds:
Voluntary income 2 68,958 6,648 75,606 82,893
Activities for generating funds 2a 15,467 1,830 17,297 18,540
Investment income 2b 1,538 3,069 4,607 5,310
Total incoming resources from generated funds 85,963 11,547 97,510 106,743
Incoming resources from charitable activities 3 18,670 7,030 25,700 25,319
Other incoming resources 4 1,232 116 1,348 754
Total incoming resources 105,865 18,693 124,558 132,816
Resources expended:
Cost of generating voluntary income 5 12,129 1,777 13,906 13,400
Activities to generate funds 5 9,138 1,833 10,971 15,187
Investment management costs 5 237 - 237 352
Total cost of generating funds 21,504 3,610 25,114 28,939
Total charitable activities 6 81,587 14,382 95,969 110,085
Governance costs 8 1,199 201 1,400 1,515
Total resources expended 104,290 18,193 122,483 140,539
Net incoming/(outgoing) resources before transfers 1,575 500 2,075 (7,723)
Transfer between funds 25 3,924 (3,924) - -
Net incoming/(outgoing) resources before other recognisedgains and losses 5,499 (3,424) 2,075 (7,723)
Other recognised gains and losses:
Gain on investments 16a 3,670 1,951 5,621 5,393
Gains on investment properties - 244 244 920
Actuarial gain/(loss) on defined benefit pension scheme 14a 3,686 4 3,690 (7,162)
Net movement in funds 12,855 (1,225) 11,630 (8,572)
Fund balances brought forward at 1 October 111,270 177,964 289,234 297,806
Fund balances carried forward at 30 September 124,125 176,739 300,864 289,234
The notes on pages 51 to 69 form part of the financial statements. All amounts relate to continuing operations.
There is no material difference between the net incoming/(outgoing) resources before transfers and the net incoming/(outgoing) resources for the financial year stated above and their historical costs equivalents.
All gains and losses recognised in the year are included in the Statement of Financial Activities.
Consolidated Statement of Financial Activities for the year ended 30 September 2013
49F IN A NC I A L S
NOTE 2013Group £’000
2012 Group £’000
2013 Charity £’000
2012
Charity £’000
Fixed assets:
Tangible assets 15 76,575 75,007 73,286 72,067
Investments 16 192,593 189,849 182,593 180,969
Programme related investments 17 10,375 9,867 10,398 10,890
Total fixed assets 279,543 274,723 266,277 263,926
Current assets:
Stock 1,170 902 - -
Debtors 18 4,698 9,607 10,393 12,465
Cash at hand and in bank and short-term deposits 19 51,308 50,843 41,353 43,359
Total current assets 57,176 61,352 51,746 55,824
Liabilities:
Creditors: Amounts falling due within one year 20 (15,605) (20,334) (12,540) (17,517)
Net current assets 41,571 41,018 39,206 38,307
Total assets less current liabilities 321,114 315,741 305,483 302,233
Creditors: Amounts falling due after one year 20 (16,740) (18,234) (16,740) (18,234)
Provisions for liabilities and charges 21 (862) (891) (862) (891)
Net assets excluding pension liability 303,512 296,616 287,881 283,108
Defined benefit pension liability 14b (2,648) (7,382) (1,186) (5,992)
Net assets 300,864 289,234 286,695 277,116
Funds:
Unrestricted funds:
Free and designated reserves 23 122,243 114,800 122,280 114,838
General fund 23 3,068 2,462 3,068 2,462
125,311 117,262 125,348 117,300
Pension reserve 14b (1,186) (5,992) (1,186) (5,992)
Total unrestricted funds 23 124,125 111,270 124,162 111,308
Restricted funds:
Benevolent fund 178,201 179,354 162,533 165,808
Pension reserve 14b (1,462) (1,390) - -
Total restricted funds 24 176,739 177,964 162,533 165,808
Total funds 300,864 289,234 286,695 277,116
The notes on pages 51 to 69 form part of the financial statements.
Approved by the Board of Trustees on 27 March 2014
J Crisford, National Chairman
Consolidated and Charity Balance Sheets as at 30 September 2013
FINANCIALS
Consolidated Cash Flow Statement for the year ended 30 September 2013
2013 2012
£’000 £’000 £’000 £’000
Net cash inflow/(outflow) from operating activities:
Net incoming/(outgoing) resources 2,075 (7,723)
Investment income (4,607) (5,310)
Depreciation – tangible fixed assets 3,528 2,164
Impairment of tangible fixed assets - 2,241
Notional defined benefit pension income (1,044) 577
Gain on sale of tangible fixed assets (79) -
Gain on sale of investment property 385 475
Increase in stock (268) (334)
Increase in programme related investments (508) (1,380)
Decrease in debtors 4,909 1,463
(Decrease)/increase in creditors (6,223) 2,976
(Decrease)/increase in provisions (29) 525
(1,861) (4,326)
Returns on investment and servicing of finance:
Investment income received 3,497 4,128
Interest received 723 945
Income from branch investments and deposits 387 237
4,607 5,310
Capital expenditure and investing activities:
Purchase of tangible fixed assets (5,101) (1,692)
Sale of tangible fixed assets 84 -
Purchase of fixed asset investments (1,783) (1,267)
Sale of fixed asset investments 4,519 3,361
(2,281) 402
Net cash inflow (a) 465 1,386
(a) Increase in cash and short-term deposits
Cash and short-term deposits at 1 October 50,843 49,457
Increase in cash and short-term deposits 465 1,386
Cash and short-term deposits at 30 September 51,308 50,843
51F IN A NC I A L S
Notes to the Accounts for the year ended 30 September 2013
Accounting conventionThe financial statements are prepared on a going concern basis under the historical cost convention as modified by the revaluation of listed investments and certain properties. They have been prepared in accordance with the Statement of Recommended Practice – Accounting and Reporting by Charities as revised in 2005 (‘SORP 2005’), applicable accounting standards in the United Kingdom and the Charities Act 2011. The financial statements are prepared on an accruals basis except that the results from branches have been extracted from returns submitted on a receipts and payments basis. The Branch results included in these accounts are for the nine month period from 1 October 2012 to 30 June 2013 due to a change in the Branch year end from 30 September to 30 June. The principal accounting policies are set out below and have been applied consistently with the prior year.
Group financial statementsThese financial statements comprise the central General and Benevolent funds vested in the Board of Trustees in accordance with The Royal British Legion’s (‘The Legion’) Royal Charter. As agreed with the Charity Commission and in accordance with SORP 2005, they include the results, assets and liabilities of the Legion’s counties, districts, branches and Women’s Section. The Legion’s policy is to consolidate results of all branches, counties and districts based upon receipt of individual returns. Where returns are not received, assets are included at the previously reported value adjusted for known transactions. The subsidiaries and organisations listed in note 11 have been consolidated on a line by line basis.
Uniform accounting policies have been applied across the group except where stated. Intra-group transactions have been eliminated on consolidation.
Three organisations which carry the Legion’s name but are not controlled by the Legion have not been included in these financial statements, namely, Royal British Legion Industries, The Royal British Legion Poppy Factory Limited and The Royal British Legion Attendants Company Trust. The accounts do not include results of affiliated social clubs which are not part of the charity, but are separately registered organisations licensed to use the Legion’s name.
The Legion has taken advantage of the provisions of paragraph 397 of SORP 2005 not to provide a separate Statement of Financial Activities for the charity. The results of the charity for the year were: total incoming resources £103,731k (2012: £119,665k), total expenditure £101,103k (2012: £126,260k) with an overall surplus after gains and losses of £9,580k (2012: loss of £7,547k).
Fund accountingUnrestricted funds include designated funds and are expendable at the discretion of the Trustees in furtherance of the objects of the charity.
Restricted funds represent grants, donations, legacies and property which are given by the donor for specific purposes and which must be used for that purpose. All restricted funds are held within the Benevolent fund unless otherwise stated. Restricted funds include permanent endowment funds which are not material and are not therefore shown separately on the face of the balance sheet. The NMA Group and Poppyscotland Group funds are held within restricted funds since their objects are narrower than those of the group.
Incoming resourcesIncome is recognised in the period in which the Legion is entitled to receipt of that income and when the amount can be measured with reasonable accuracy. In accordance with this policy:
Legacies are included as follows: Pecuniary legacies are recognised when the legacy has been received or if, before receipt, there is sufficient evidence to provide the necessary certainty that the legacy will be received. Residual legacies are recognised on receipt of Estate Accounts. Legacies subject to a life interest held by another party are not recognised until they can be measured and the Legion is certain that they will be received.
Grants are included when the conditions for recognition have been complied with.
Gifts in kind are included in the Statement of Financial Activities at their estimated value (usually the price that the Legion estimates it would have to pay in the open market for an equivalent item).
Donations are accounted for in the period of receipt. Poppy Appeal donations are accounted for when banked.
Fundraising lottery income is recognised when the lottery draw has taken place. Income received in advance for future lottery draws is deferred until the lottery draw takes place.
Fees from residential Care Homes are recognised on an accruals basis.
Affiliation fees are recognised on an accruals basis.
Investment income from the centrally held investment portfolio is accounted for on an accruals basis and includes dividends declared but not yet received. Investment income includes rental income earned by branches.
The economic value of time given by volunteers is not included in these financial statements.
1. Principal accounting policies
FINANCIALS
Resources expendedExpenditure is accounted for on an accruals basis. Irrecoverable VAT is included with the expense items to which it relates. Resources expended comprise:
Cost of generating funds includes expenditure on poppies and other fundraising items, staff and related expenditure of the Poppy Appeal, costs of the central fundraising department, commercial (trading) activities and investment management fees.
Charitable activities include expenditure directly related to the delivery of the services (including staff costs) provided by the charity to eligible beneficiaries and comprises the cost of residential care, welfare Break Centres, community welfare services and Remembrance and comradeship. It also includes the cost of supporting and maintaining the Legion’s extensive membership and the costs of campaigning on behalf of beneficiaries. The cost of evaluating, supporting and managing charitable programmes is also included and further analysed in the notes to the accounts.
Certain costs of campaigns are allocated between Cost of generating funds and Charitable activities on the basis of the percentages of space within the literature relating to either fundraising or raising awareness.
Governance costs represent the costs of governance arrangements which relate to the general running of the charity as opposed to the direct management functions inherent in generating funds, service delivery and programme or project work.
Support costs include the central functions such as general management, financial administration, information technology, human resources and the provision of office facilities at the head office.
Grants payable are recognised in the Statement of Financial Activities when awarded and the recipient has a valid expectation of receipt, thus creating a constructive or legal obligation.
Future commitments to fund Personnel Recovery Centres are included in the balance sheet at their net present value, using a discount rate equivalent to the yield on Treasury Gilts over the same period.
Allocation of costsWhere possible, the Legion’s operating costs, which include staff costs, are allocated directly to the various categories of charitable expenditure, cost of generating funds, or governance costs. Where costs are not directly attributable to any category, they have been apportioned on an appropriate basis to reflect, in each case, an estimate of the efforts and resources devoted to each category of activity – see note 10. Activities which are predominantly outsourced bear no allocation of support costs.
Poppy AppealPoppy Appeal expenditure is accounted for in the financial year in which it occurred. The cost of poppies is charged to the cost of generating funds and the cost of Remembrance wreaths is charged to Remembrance and ceremonial activities.
Stock, poppies and wreathsIn support of one of the Legion’s prime charitable objectives, poppies and wreaths are produced by The Royal British Legion, The Royal British Legion Poppy Factory Limited (‘Poppy Factory’) and the Lady Haig Poppy Factory (the subsidiary of the Earl Haig Fund). The Poppy Factory and the Lady Haig Poppy Factory also provide sheltered employment for disabled ex-Service people.
Stock relates to Poppy Shop products as well as poppies and wreaths produced at the Lady Haig Poppy Factory which are manufactured for resale. Poppy Shop and the Lady Haig Poppy Factory stock is valued at the lower of cost and net realisable value and includes direct costs of labour and materials plus allocation of general overheads. Poppies and wreaths produced by the Legion, and those manufactured by the Poppy Factory but transferred to the Legion, are expensed immediately.
Staff pension schemesPensions are accounted for in accordance with FRS17 Retirement Benefits, with a valuation undertaken by an independent actuary. The Royal British Legion Staff Pension Fund, a defined benefit scheme, is closed to future accrual. The current service costs of the Earl Haig Defined Benefit Scheme are charged to employee costs over the anticipated period of employment. Net pension finance income or costs are included immediately in other incoming resources or employee costs as appropriate. Actuarial gains and losses are recognised immediately on the face of the Statement of Financial Activities. The Legion’s share of the scheme deficits is included as a liability in the balance sheet. Details of the pension schemes are included in note 14 to the accounts. The amounts charged to the Statement of Financial Activities for defined contribution schemes represent the contributions payable in the period.
Investments and bank depositsFixed asset investments are stated at market value. Gains and losses arising from either the change in market value or on sale are included in the Statement of Financial Activities. Income from listed investments is accrued when due for payment. Interest on deposits is accrued on a daily basis. Properties not used for charitable purposes are classified as investment properties and are included in investments at market value. Investment properties are revalued every five years by an independent surveyor and in the intervening period values are adjusted using
composite indices to reflect the broad nature of the Legion’s investment property portfolio. Investments in subsidiaries are included at cost.
Programme related investments are held at the amount invested less any impairment. These are reviewed on an annual basis and any impairment is immediately recognised in the Statement of Financial Activities.
Tangible fixed assetsPurchases of individual items of tangible fixed assets costing over £50,000 are capitalised.
Functional properties (freehold and leasehold) used by the charity are included at cost, where known, or valuation at dates of acquisition. Branch properties acquired or gifted before 1 October 1995 where the original cost cannot be established are included at a nominal value of £1 each. Depreciation on functional properties is provided on the cost of buildings on a straight line basis over 50 years or the term of the lease if less. Leasehold improvements are depreciated over the term of the lease. The head office building, Haig House, is depreciated over its expected useful life of 33 years.
Plant, machinery and equipment where capitalised are included at cost. Depreciation is provided over 5 years from the month of first use.
Tangible fixed assets which are under construction are classified as Assets under construction and are transferred into the appropriate category on completion.
Useful economic lives and residual lives of fixed assets are reviewed at the end of the accounting period to consider whether there has been an impairment. Impairments are charged to the Statement of Financial Activities.
LeasesRentals payable under operating leases are charged to the Statement of Financial Activities on a straight line basis over the period of the lease.
TaxationThe activities of the Legion and its charitable subsidiaries are exempt from corporation tax under Schedule 6 Finance Act 2010 and Corporation Tax Act 2010 to the extent that they are applied to the organisation’s charitable objects. The trading subsidiaries do not generally pay UK corporation tax because their policy is to pay taxable profits as Gift Aid to the Legion.
Foreign exchangeThe Legion has no significant exposure to foreign exchange. Foreign branches and districts make returns once a year and the results are included in these accounts converted to sterling at the exchange rate at June 2013.
1. Principal accounting policies (continued)
53F IN A NC I A L S
Unrestricted 2013 £’000
Restricted 2013 £’000
Total 2013 £’000
Total 2012 £’000
2 Analysis of incoming resources from generated funds
Voluntary income
Donations 20,813 2,668 23,481 27,768
Legacies 11,179 1,417 12,596 12,322
The Poppy Appeal 36,966 2,563 39,529 42,803
Total 68,958 6,648 75,606 82,893
The declared total of the Poppy Appeal launched in October 2012 in England, Wales and Northern Ireland was £36,966k (prior year: £40,089k). This includes cash collected of £35,330k (prior year: £37,690k), legacies of £236k (prior year £447k) and other donations of £1,400k (prior year: £1,952k). The Poppy Appeal in Scotland raised £2,563k (prior year: £2,714k).In 1922 the Officers’ Association transferred the Poppy Appeal to the Legion in return for a payment of 7.5% of the net amount received from street collections. The amount due to the Officers’ Association for the Poppy Appeal was £1,670k paid as a grant (prior year: £1,865k). At 30 September 2013 the Legion had been advised of its interest in residuary and pecuniary legacies with estimated values of £537k (2012: £1,028k) and they were included in the accounts. Not included in the accounts are interests in 16 life interest legacies (2012: 33) with a value of £378k (2012: £965k) where the conditions for acceptance have not been met. The Legion has also been notified of residuary legacies estimated at a potential value of £6,852k. These residuary legacies are not recognised in these accounts, as confirmation of entitlement has not been received and the value cannot be confirmed at the balance sheet date.
Unrestricted 2013 £’000
Restricted 2013 £’000
Total 2013 £’000
Total 2012 £’000
2a Activities for generating funds
Fundraising events income 1,844 119 1,963 2,880
Fundraising lotteries 10,274 169 10,443 11,009
Income from commercial activities 3,349 1,542 4,891 4,651
Total 15,467 1,830 17,297 18,540
Unrestricted 2013 £’000
Restricted 2013 £’000
Total 2013 £’000
Total 2012 £’000
2b Investment income
Dividends and interest on listed investments 929 621 1,550 1,490
Investment income on funds held by branches 248 139 387 237
Rentals from investment properties 332 1,615 1,947 2,638
Bank deposit interest 29 694 723 945
Total 1,538 3,069 4,607 5,310
Rentals from investment properties with a market value of £88,837k at 30 September 2013 are in most cases received by branches in relation to the rental of properties by Legion clubs. The clubs are independent financial entities which use the Legion’s name under licence and promote the work of the Legion in return for discounted rentals, which in many cases are lower than could be obtained in a commercial environment. The reduction in rental income is due to the change in branch year end as outlined in note 1.
Unrestricted 2013 £’000
Restricted 2013 £’000
Total 2013 £’000
Total 2012 £’000
3 Incoming resources from charitable activities
Fees from residential Care Homes 13,091 183 13,274 12,874
Grants for welfare services and Remembrance:
Ex-Service charities and other organisations (almonisation) - 4,809 4,809 5,654
Contributions towards other services 26 798 824 1,423
Ministry of Defence - 922 922 55
Total grants for welfare services and Remembrance 26 6,529 6,555 7,132
Affiliation fees 5,451 12 5,463 4,888
Income from charitable services 102 306 408 425
Total 18,670 7,030 25,700 25,319
Almonisation income is the contribution from other charities towards Immediate Needs Grants paid by the Legion when the recipient of assistance is also the beneficiary of these other charities.
FINANCIALS
Total 2013 £’000
Total 2012 £’000
4 Other incoming resources
Licence fees and royalties 208 220
Advertising in the Legion magazine 744 432
Gains on sale of functional property 79 -
Finance income on pension 180 -
Other income 137 102
Total other incoming resources 1,348 754
Direct costs £’000
Support costs £’000
Total 2013 £’000
Total 2012 £’000
5 Cost of generating funds
Cost of generating voluntary income 12,497 1,409 13,906 13,400
Fundraising events costs 1,550 82 1,632 3,183
Fundraising lotteries costs 5,540 83 5,623 7,847
Commercial activities (trading) 3,716 - 3,716 4,157
Total cost of generating voluntary income 10,806 165 10,971 15,187
Investment management 237 - 237 352
Total cost of generating funds 23,540 1,574 25,114 28,939
Certain costs of campaigns have a parallel purpose of increasing public awareness and fundraising and as a result these costs have been allocated between the Cost of generating funds in note 5 and Charitable activities in note 6 on the basis of the percentages of space within the literature relating to either fundraising or raising awareness. The total expenditure of this nature is £8,947k (2012: £15,040k) of which £5,331k (2012: £8,670k) remains within Cost of generating funds representing the fundraising element of the literature and £3,616k (2012: £6,370k) has been reallocated into Charitable activities representing the raising awareness element.
55F IN A NC I A L S
NOTE Direct costs £’000
Support costs £’000
Total 2013 £’000
Total 2012 £’000
6 Analysis of charitable activities
Personnel Recovery Centres 2,058 - 2,058 5,507
Residential Care Homes 14,487 2,268 16,755 17,776
Welfare Break Centres 4,205 519 4,724 4,214
Total care services 18,692 2,787 21,479 21,990
Welfare grants to 25,926 individuals (2012: 24,908) 14,190 - 14,190 18,220
Grants to other organisations 7 3,765 - 3,765 7,742
Information, advice and support 21,077 3,902 24,979 24,716
Welfare cost in branches, counties and districts 6,184 - 6,184 5,625
Total community welfare services 45,216 3,902 49,118 56,303
Central membership support 2,401 627 3,028 3,218
Recruitment, development and training 140 289 429 418
Support to branches with clubs 417 141 558 481
The Legion magazine 1,106 12 1,118 1,119
Membership costs in branches, counties and districts 2,640 426 3,066 3,067
Total membership services 6,704 1,495 8,199 8,303
Comradeship 744 167 911 641
Direct cost of communication and campaigning 4,712 346 5,058 4,505
Allocated cost of communication and campaigning 3,616 - 3,616 6,370
Total communication and campaigning 8,328 346 8,674 10,875
Festival of Remembrance 555 13 568 479
Ceremonial and commemorative events 1,754 170 1,924 1,965
Remembrance tours 108 14 122 301
National Memorial Arboretum operating costs 1,368 503 1,871 1,480
National Memorial Arboretum Visitors Centre Impairment - - - 2,241
Assets under construction expensed 1,045 - 1,045 -
Total Remembrance and ceremonial 4,830 700 5,530 6,466
Total charitable activities 86,572 9,397 95,969 110,085
As stated in note 5, Charitable activities contain an allocation of £3,616k (2012: £6,370k) relating to costs associated with the percentages of space within the literature relating to raising awareness.
Some of the costs related to the previous development plans for the new visitor centre at the National Memorial Arboretum, which had been capitalised as assets under construction, have been expensed during the year, resulting in a one-off charge of £1,044,605.
FINANCIALS
Total 2013 £’000
Total 2012 £’000
7 Grants awarded to other organisations
Grants issued by the Charity:
The Officers' Association (see note 2) 1,670 1,927
Imperial College of Science, Technology and Medicine 1,552 1,705
Stoll (formerly Sir Oswald Stoll Foundation) 148 149
The Royal British Legion Poppy Factory 100 -
Royal Commonwealth Ex-Service League - 654
Goodwin Development Trust - 500
SkillForce - 450
MediCinema - 410
Thrive - 205
Age Concern Liverpool & Sefton - 180
Alabaré Christian Care and Support - 180
Community Housing & Therapy - 105
Grants to other charities withdrawn in the year (520) -
Grants to 13 other charities and voluntary organisations (2012: 28) under £100k 271 603
Grants made by Poppyscotland:
Citizens Advice Scotland 247 183
Scottish Veterans Garden City - 150
Grants to 13 other charities and voluntary organisations (2012: 16) under £100k 297 341
Total grants to other organisations 3,765 7,742
Grants awarded may relate to commitments for multiple future years. For more information on grant commitments see note 20.
Total 2013 £’000
Total 2012 £’000
8 Governance costsSupport to Trustees and volunteers 360 448
Statutory reporting and strategy 269 290
Internal and external audit and tax services 771 777
Total 1,400 1,515
57F IN A NC I A L S
Total 2013 £’000
Total 2012 £’000
9 Net incoming/(outgoing) resources for the year is stated after charging:Auditors remuneration 194 182
Other fees paid to auditors 6 6
Branch, county and district audit fees 115 142
Depreciation 3,528 2,164
NMA Visitor Centre Impairment - 2,241
Operating lease rentals:
Vehicles and equipment 329 368
Land and buildings 1,861 999
Head Office Central
£’000
Facilities Management
£’000
Human Resources
£’000
Finance and IT £’000
Women’s Section and other entities
£’000
Total 2013 £’000
Total 2012£’000
10 Support costsCost of generating funds 123 104 173 1,105 69 1,574 1,569
Care services - 439 728 1,620 - 2,787 3,254
Community welfare services 738 227 376 2,405 156 3,902 3,974
Membership services 344 83 138 880 50 1,495 1,431
Communication and campaigning 82 20 33 211 - 346 358
Comradeship 40 10 16 101 - 167 56
Remembrance and ceremonial 20 5 8 50 617 700 618
Charitable activities 1,224 784 1,299 5,267 823 9,397 9,691
Governance costs 24 6 9 60 29 128 137
Total 1,371 894 1,481 6,432 921 11,099 11,397
Support costs are allocated on the basis of headcount.
FINANCIALS
11 Activities of consolidated subsidiaries and organisations
The Legion has eight wholly owned subsidiaries, six of which are consolidated into these accounts as described below, and two which are dormant.
The results of the subsidiary entities are shown in the table below. All subsidiaries are registered in the UK and have 30 September year ends.
RemembranceTravel
£’000
National MemorialArboretum
Group £’000
Royal British Legion Trading
£’000
Royal British Legion
Developments
£’000
Royal British Legion Poppy
Lottery
£’000
PoppyscotlandGroup
£’000
Turnover/incoming resources 146 5,236 3,205 2,180 6,936 4,787
Expenditure (146) (4,632) (3,205) (2,178) (6,936) (4,278)
Other gains/(losses) - - - - - 936
Net incoming resources - 604 - 2 - 1,445
Assets 122 5,646 2,034 956 4,847 11,959
Liabilities (72) (1,272) (2,034) (956) (4,847) (2,128)
Net assets 50 4,374 - - - 9,831 The principal activities of the subsidiaries are as follows:Remembrance Travel Limited – a travel company delivering pilgrimages and associated travel activity. Its expenditure includes profits paid to the Legion of £26k (2012: £22k).The National Memorial Arboretum Company Limited – a charitable company operating an arboretum with memorial plots dedicated to those who suffered or lost their lives in the service of their country. The charitable company has one subsidiary NMA (Enterprises) Ltd, a trading company providing services to visitors to the National Memorial Arboretum. The results above are those of the consolidated NMA Group. Royal British Legion Trading Limited – a trading company which markets a range of goods and services to members and supporters of the Legion. Its expenditure includes profits paid to the Legion of £1,372k (2012: £1,053k). Royal British Legion Developments Limited – a trading company which develops or improves properties, principally those owned by the Legion. Its expenditure includes profits paid to the Legion of £49k (2012: £nil). Royal British Legion Poppy Lottery Limited – a charitable company which undertakes the marketing and provision of a weekly lottery to members and supporters of the Legion. Its expenditure includes grants paid to the Legion of £3,804k (2012: £750k). Other lottery activities are carried out by the parent charity.The Earl Haig Fund Scotland (Poppyscotland) – a charitable company that supports those in need who have served in the Armed Forces and their dependants, in Scotland. The charitable company has one subsidiary, The Lady Haig Poppy Factory Limited, whose principal activity is the employment of disabled ex-Service personnel to manufacture poppies and wreaths and to provide framing and printing services. The results above are those of the consolidated Poppyscotland Group.Travel and Learn Limited – a dormant subsidiary.Poppy Travel Limited – a dormant subsidiary.
12 The Royal British Legion Women’s Section
The Legion’s accounts (charity) include the financial results for The Royal British Legion Women’s Section. The Women’s Section, which is constituted under The Royal Charter, is a membership organisation for women with around 830 branches and 36,000 members.The Women’s Section contributed £1,018k (2012: £1,172k) towards the Legion’s incoming resources. It provides care and support for the ex-Service community by means of various welfare work schemes such as financial help to ex-Service women, wives, widows and widowers of ex-Service personnel and their children. Their total charitable expenditure amounted to £1,120k (2012: £1,187k). The section currently holds net assets of £5,364k (2012: £5,330k).Whilst the funds of the Women’s Section are unrestricted in nature, they are administered separately from other Legion funds. During the year, Women’s Section funds were transferred to a new designated reserve to reflect this separation. £5,330k was transferred from the Central Benevolent Fund into the Women’s Section designated reserve, representing the funds held by the Women’s Section at the beginning of the financial year.
59F IN A NC I A L S
Total 2013 No.
Total 2012 No.
13 Information regarding employees and Trustees
Average number of employees (full time equivalent) during the year
Generating funds 122 118
Charitable activities:
Care services 514 493
Community welfare services 271 253
Membership services 109 89
Communication and campaigning 23 23
Remembrance and ceremonial 6 3
Comradeship 4 4
Total charitable activities 927 865
Support and governance 81 85
Charity’s total full-time equivalent staff 1,130 1,068
Subsidiaries average number of employees during the year:
Poppyscotland 77 67
National Memorial Arboretum 38 38
Royal British Legion Trading 4 4
Total group full-time equivalent staff 1,249 1,177
At 30 September 2013 the Legion had 1,518 (2012: 1,490) full- and part-time staff on the payroll.The Royal British Legion incurred costs of £2.8m (2012: £2.3m) on agency staff including their recruitment fees which are not included in the staff costs below.
Staff costs comprise:Total 2013 £’000
Total 2012 £’000
Wages and salaries 29,841 28,411
National Insurance contributions 2,596 2,638
Pension costs 2,163 2,154
Total 34,600 33,203
The number of staff paid over £60,000 during the year (salary plus taxable benefits excluding pension contributions) was:Total2013 No.
Total 2012 No.
£60,001 - £70,000 10 10
£70,001 - £80,000 5 1
£80,001 - £90,000 1 2
£90,001 - £100,000 3 2
£100,001 - £110,000 1 1
£110,001 - £120,000 2 2
£120,001 - £130,000 - -
£130,001 - £140,000 - 1
£140,001 - £150,000 1 - The Legion operates a transparent Pay Policy which is communicated to all staff. Salary levels are regularly benchmarked against other comparable organisations across the private, public and third sectors. The compensation of Legion Directors is subject to annual review by a Governance Committee comprising four Trustees including the Chairman and Vice-Chairman. No Trustee or person related or connected by business to them has received any remuneration from the Legion nor have they entered into any transaction, contract or other arrangement with the Legion during the year. During the year the total expenses reimbursed to 15 (2012: 19) Board of Trustee members amounted to £96k (2012: £136k). This principally represents reimbursed travelling expenses in attending meetings and official engagements, and includes the costs of Trustees officiating at Remembrance tours. The Legion purchased insurance at a cost of £5k (2012: £7k) to protect the charity from loss arising from neglect or default of its Trustees, and to indemnify the Trustees against the consequences of neglect or default on their part.
FINANCIALS
14 Staff pension funds
The Royal British Legion group pension arrangements comprise those of the Legion and subsidiaries. Pension schemes are as follows:1. Group Flexible Retirement Plan (GFRP) 2. The Royal British Legion Staff Pension Fund (DB Fund) 3. Stanplan F (Earl Haig Fund, ‘EH Fund’) GFRP : This is the scheme available to all Legion employees (including the National Memorial Arboretum but excluding Poppyscotland) and is provided by Standard Life. The GFRP scheme was introduced on 1 April 2010 and is a defined contribution scheme. The liability of the employer is limited to the contributions it makes which amounted to £2,143k, of which £177k remained payable at the year end.DB Fund : This is a multi-employer defined benefit scheme. The other employers participating in the scheme are Royal British Legion Industries and the Royal British Legion Poppy Factory. The DB Fund was closed to new members on 31 October 2002 and on 1 April 2010 was closed to accrual from the remaining members. The last full actuarial valuation of the DB Fund was completed at 1 April 2011. This showed a deficit on the fund of £2.4m of which the Legion’s share was £1.9m. The employers agreed to make payments of £921k p.a. for three years up to 31 March 2012 with additional payments of £300k p.a. in respect of the administration expenses of the fund. The Legion agreed to pay 77% of the overall deficit contributions of £709k p.a. plus an additional £231k p.a. in respect of the administration expenses of the fund. During the accounting year beginning 1 October 2013, the Legion expects to pay £940k to the DB Fund.EH Fund : This is a defined benefit pension scheme available only to employees of Poppyscotland. The last actuarial valuation of the EH Fund was carried out as at 30 September 2013. A new Schedule of Contributions has been signed as a result of the 2013 triennial valuation and as a result the employer has agreed to pay annual contributions of £27k per year increasing by 3% annually with the expectation that the funding shortfall will be eliminated within five years. The Legion accounts for defined benefit schemes in accordance with FRS17 Retirement Benefits and identifies each entity’s share of the pension scheme assets and liabilities. A summary of the movement in pension assets and liabilities for the group’s defined benefit pension funds is shown below:
EH Fund2013£’000
DB Fund2013£’000
Total2013£’000
EH Fund2012£’000
DB Fund2012£’000
Total2012£’000
14a Amounts recognised in the Statement of Financial Activities
Analysis of amounts charged to net incoming/(outgoing) resources
Current service cost (107) - (107) (97) - (97)
Past service cost - - - - (762) (762)
Previously unrecognised surplus deducted from service costs - - - - 762 762
Interest on liabilities (213) (2,512) (2,725) (226) (2,851) (3,077)
Expected return on fund assets 165 2,692 2,857 151 2,430 2,581
Total decrease in net incoming/(outgoing) resources (155) 180 25 (172) (421) (593)
Actuarial gains/(losses) 4 3,686 3,690 (668) (7,631) (8,299)
Limit on recognition of assets - - - - 1,137 1,137
Total gains/(losses) recognised 4 3,686 3,690 (668) (6,494) (7,162)
Total increase/(decrease) in net funds (151) 3,866 3,715 (840) (6,915) (7,755)
EH Fund2013£’000
DB Fund2013£’000
Total2013£’000
EH fund 2012 £’000
DB fund 2012 £’000
Total2012£’000
14b Reconciliation to the Balance Sheet
Description
Market value of assets 4,119 60,463 64,582 3,944 58,096 62,040
Present value of liabilities (5,581) (61,649) (67,230) (5,334) (64,088) (69,422)
Pension liability recognised in the Balance Sheet (1,462) (1,186) (2,648) (1,390) (5,992) (7,382)
EH Fund2013£’000
DB Fund2013£’000
Total2013£’000
EH Fund2012£’000
DB Fund2012£’000
Total2012£’000
14c Analysis of changes in the value of the fund liabilities over the year
Value of liabilities at start of year/period 5,334 64,088 69,422 4,178 54,375 58,553
Service cost 107 - 107 97 - 97
Interest cost 213 2,512 2,725 226 2,851 3,077
Member contributions 19 - 19 21 - 21
Past service cost - - - - (762) (762)
Benefits paid (148) (2,610) (2,758) (108) (2,438) (2,546)
Actuarial (gains)/losses 56 (2,341) (2,285) 920 10,062 10,982
Value of liabilities at end of year 5,581 61,649 67,230 5,334 64,088 69,422
61F IN A NC I A L S
EH Fund2013£’000
DB Fund2013£’000
Total2013£’000
EH Fund2012£’000
DB Fund2012£’000
Total2012£’000
14d Analysis of changes in the value of the fund assets over the year
Market value of assets at start of year/period 3,944 58,096 62,040 3,551 54,750 58,301
Expected return on fund assets 165 2,692 2,857 151 2,430 2,581
Actuarial gains 60 1,345 1,405 252 2,431 2,683
Employer contributions 79 940 1,019 77 923 1,000
Member contributions 19 - 19 21 - 21
Benefits paid (148) (2,610) (2,758) (108) (2,438) (2,546)
Market value of assets at end of year 4,119 60,463 64,582 3,944 58,096 62,040
14e History of assets, liabilities, experience gains and lossesDB Fund
2013£’000
DB Fund2012£’000
DB Fund2011£’000
DB Fund2010 £’000
DB Fund2009£’000
DB Fund
Market value of fund assets 60,463 58,096 54,750 53,104 48,937
Value of fund liabilities (61,649) (64,088) (54,375) (56,981) (51,912)
(Deficit)/surplus in the fund (1,186) (5,992) 375 (3,877) (2,975)
(Losses)/gains arising on fund liabilities:
Due to experience - (2) 253 (184) (185)
% of liabilities 0% 0% 0% 0% 0%
Due to changes of basis* 2,341 (10,060) 3,500 (4,420) (6,324)
% of liabilities 4% (16)% 6% (8)% (12)%
Experience gains:
Arising on fund assets 1,345 2,431 381 1,593 1,615
% of assets 2% 4% 1% 3% 3%
EH Fund2013£’000
EH Fund2012£’000
EH Fund2011£’000
EH Fund
Market value of fund assets 4,119 3,944 3,551
Value of fund liabilities (5,581) (5,334) (4,178)
Deficit in the fund (1,462) (1,390) (627)
(Losses)/gains arising on fund liabilities:
Due to experience (427) 43 (49)
% of liabilities (8)% 1% (1)%
Due to changes of basis* 371 (963) 180
% of liabilities 7% (18)% 4%
Experience gains/(losses):
Arising on fund assets 60 252 (401)
% of assets 1% 6% (11)% * Changes of basis relate to changes in the actuarial assumptions used as detailed below (note 14g).The cumulative amount of actuarial gains and losses recognised (since 2002) on the DB Fund is a cumulative loss of £9,146k and (since 2011) on the EH Fund is a cumulative loss of £934k.The Legion’s assets have been taken as the proportion of the total fund assets that the Legion’s liability valuation bears to the total fund’s liability valuation. The assets are invested in a diversified portfolio.
FINANCIALS
DB Fund2013
DB Fund2012
DB Fund2011
DB Fund 2010
Market value£’000
% of Totalfund assets
Market value£’000
% of Totalfund assets
Market value£’000
% of Totalfund assets
Market value£’000
% of Totalfund assets
14f Asset class
Equities 16,487 27% 13,860 24% 11,675 21% 30,193 57%
Bonds 20,020 33% 20,870 36% 19,124 35% 16,140 30%
Gilts 9,087 15% 9,277 16% 9,952 18% 2,985 6%
Cash 412 1% 356 1% 1,130 2% 3,786 7%
Other assets 14,457 24% 13,733 23% 12,869 24% - -
Total 60,463 58,096 54,750 53,104
The actual return on assets over the year was 4,037 4,861 3,455 4,429
EH Fund2013
EH Fund2012
EH Fund2011
Market Value£’000
% of Totalfund assets
Market Value£’000
% of Totalfund assets
Market Value£’000
% of Totalfund assets
Asset class
Equities 3,393 82% 1,878 48% 1,736 49%
Bonds - 0% 321 8% 539 15%
Gilts - 0% 725 18% 502 14%
Property - 0% 551 14% 527 15%
Cash 196 5% 198 5% 247 7%
LDI funds 530 13% - 0% - 0%
Other assets - 0% 271 7% - 0%
Total 4,119 3,944 3,551
The actual return on assets over the period was 225 403 (340)
2013% p.a.
2012% p.a.
14g Actuarial assumptions
Financial assumptions (both funds)
Discount rate 4.50 4.00
Retail price inflation 3.10 2.50
Consumer price inflation 2.10 1.50
Salary increases 3.10 2.50
Rate of increases of pensions in payment:
Capped at 5% or RPI if less 3.00 2.40
Capped at 5% or CPI if less 3.10 3.10
Capped at 3% or CPI if less 1.90 1.40
Capped at 2.5% or CPI if less 1.80 1.35
Rate of increase for deferred pensioners 2.10 1.50
Expected return on assets: % p.a. % p.a.
DB Fund 5.10 4.70
EH Fund 5.70 3.70 For the DB Fund, the overall assumption for the expected return on assets of 5.10% as at 30 September 2013 has been derived by calculating the weighted average of the expected rate of return for each asset class. A further deduction of 0.57% to the expected return was made to allow for administrative expenses. For the EH Fund, the overall assumption for the expected return on assets of 5.7% as at 30 September 2013 has been derived by calculating the weighted average of the expected rate of return for each asset class. A further deduction of 1.34% to the expected return was made to allow for administrative expenses.
The following mortality assumptions have been used for both funds: 2013 2012
Males Females Males Females
Life expectancies at age 60
Current pensioner now aged 60 in 2013 28.9 years 31.9 years 28.9 years 32.0 years
Future pensioner now aged 40 in 2013 30.9 years 34.0 years 31.0 years 34.0 years
63F IN A NC I A L S
Freeholdhomes
£’000
Otherfreehold
£’000
Leaseholdproperty and
leasehold improvements
£’000
Plantmachinery and
equipment
£’000
Assetsunder
construction
£’000
TotalGroup
£’000
15 Tangible fixed assets
15a Group Tangible fixed assets including functional property
At cost or valuation:
At 1 October 2012 54,083 27,732 5,763 3,075 1,103 91,756
Additions 66 755 541 283 3,456 5,101
Disposals - (169) (10) - - (179)
At 30 September 2013 54,149 28,318 6,294 3,358 4,559 96,678
Accumulated depreciation:
At 1 October 2012 (9,340) (2,272) (3,463) (1,674) - (16,749)
Charge for the year (962) (576) (472) (473) (1,045) (3,528)
Disposals - 167 7 - - 174
At 30 September 2013 (10,302) (2,681) (3,928) (2,147) (1,045) (20,103)
Net book value at 30 September 2013 43,847 25,637 2,366 1,211 3,514 76,575
Net book value at 30 September 2012 44,743 25,460 2,300 1,401 1,103 75,007
Freehold homes include the freehold assets of both the residential Care Homes and the welfare Break Centres. Freehold and leasehold properties are stated at cost or valuation at the date of acquisition so far as historical records permit. Where an accurate cost is not available the Trustees have valued each functional property at a nominal cost of £1. Heritage assets of £539k are included within the plant, machinery and equipment category. These include trees included at a cost of £289k which are an inherent part of the National Memorial Arboretum. Heritage assets are not depreciated but are annually assessed for any impairment.
Freeholdhomes
£’000
Otherfreehold
£’000
Leaseholdproperty and
leasehold improvements
£’000
Plantmachineryequipment
£’000
Assetsunder
construction
£’000
TotalCharity
£’000
15b Charity Tangible fixed assets including functional property
At cost or valuation:
At 1 October 2012 54,083 27,619 880 2,337 345 85,264
Additions 65 133 431 283 2,621 3,533
Disposals - (2) - - - (2)
At 30 September 2013 54,148 27,750 1,311 2,620 2,966 88,795
Accumulated depreciation:
At 1 October 2012 (9,340) (2,266) (325) (1,266) - (13,197)
Charge for the year (962) (565) (335) (450) - (2,312)
Disposals - - - - - -
At 30 September 2013 (10,302) (2,831) (660) (1,716) - (15,509)
Net book value at 30 September 2013 43,846 24,919 651 904 2,966 73,286
Net book value at 30 September 2012 44,743 25,353 555 1,071 345 72,067
FINANCIALS
Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
16 Investments
Investment portfolio (note 16a) 103,756 96,937 93,756 88,057
Investment properties (note 16b) 88,837 92,912 88,837 92,912
Total investments 192,593 189,849 182,593 180,969
Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
16a Investment portfolio
Market value at 1 October 2012 96,937 91,452 88,057 83,355
Additions at cost 1,785 1,267 1,597 1,054
Disposals at value realised (587) (1,175) (587) (975)
Investment gain on revaluation 5,621 5,393 4,689 4,623
Market value at 30 September 2013 103,756 96,937 93,756 88,057
The asset distribution of the investment portfolio at 30 September 2013 is presented below. Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
Equities
UK 22,034 19,665 15,120 13,577
Overseas 6,879 6,957 6,879 6,957
Total equities 28,913 26,622 21,999 20,534
Bonds 28,714 27,480 27,231 25,936
Cash 25,320 18,916 25,320 18,916
Hedge funds 717 6,620 717 6,620
Portfolio funds
Absolute Return Trust for Charities (Portfolio Funds) 5,518 5,539 5,518 5,539
COIF Charity Investment Fund 5,373 4,894 5,373 4,894
Charinco Common Fund 62 48 62 48
Total portfolio funds 10,953 10,481 10,953 10,481
Overseas – common investment funds and gilt edged stock 5,805 4,958 5,805 4,958
Others 3,334 1,860 1,731 612
Total 103,756 96,937 93,756 88,057
65F IN A NC I A L S
Charity and Group2013£’000
Charity and Group2012£’000
16b Investment properties
Market value at 1 October 2012 92,912 95,638
Additions 182 -
Disposals at market value (4,946) (3,171)
Investment property gain on revaluation 689 445
Market value at 30 September 2013 88,837 92,912 Within investment properties are some 480 properties which are owned by the Legion but are let to independent commercial operations, primarily affiliated social clubs. As at 1 October 2010 a full valuation by an external surveyor was completed on the basis of open market value for existing use and these properties are included in the accounts at market value. The estimated values of the property portfolio at September 2011, September 2012 and September 2013 were derived using a composite index reflecting house price, residential development land and commercial property indices to reflect the broad nature of the Legion’s investment property portfolio. A revaluation gain of £1,934k has been included in these accounts to reflect an estimated increase in the property portfolio of 2.2% since the last full valuation in 2010.
Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
17 Programme related investments
17a Loans to external organisations
Royal British Legion Industries (RBLI) 3,000 3,000 3,000 3,000
Other schemes:
Loans for property repairs (PRL) 6,371 6,331 6,371 6,331
Be the Boss scheme (BTB) 1,002 533 1,002 533
Small Business loans (SBL) 2 3 2 3
Group loans - - 23 1,023
Total programme related investments 10,375 9,867 10,398 10,890
During the year, the Legion forgave a loan of £1,000k made to the National Memorial Arboretum in 2009 to enhance the existing Visitor Centre.
Group 2013
%
Group2012
%
Equities:
UK 21.2 20.3
Overseas 6.6 7.2
Total equities 27.8 27.5
Bonds 27.7 28.4
Cash 24.4 19.6
Hedge funds 0.7 6.8
Portfolio funds
Absolute Return Trust for Charities (Portfolio Funds) 5.3 5.7
COIF Charity Investment Fund 5.2 5.0
Charinco Common Fund 0.1 0.0
Total portfolio funds 10.6 10.7
Overseas – common investment funds and gilt edged stock 5.6 5.1
Others 3.2 1.9
Total 100.0 100.0
£77,659k of the investments are managed by Cazenove Capital Management Limited. The strategy is to maintain the real value of assets and target an investment return in excess of RPI. No one investment was held which represented more than 5% of the total portfolio. Listed investments were valued at middle market value at the year end.
FINANCIALS
PRLloans£’000
RBLIloan£’000
BTBloans£’000
Small business loans£’000
TotalGroup£’000
Grouploans£’000
TotalCharity£’000
17b Programme related investments movement during the year
Opening balance at 1 October 2012 6,331 3,000 533 3 9,867 1,023 10,890
New loans issued 40 - 685 - 725 - 725
Loan forgiven - - - - - (1,000) (1,000)
Repayments and security deposits - - (216) (1) (217) - (217)
Closing balance at 30 September 2013 6,371 3,000 1,002 2 10,375 23 10,398
The Legion has provided a number of loans in furtherance of its charitable objectives as follows:Royal British Legion Industries loan - a secured loan repayable by 31 December 2015 issued for the sheltered accommodation project for ex-Service personnel. An interest rate of 0.5% below the base rate is applied to the principle. Property Repairs Loans - interest free secured loans to beneficiaries living in their own home to provide housing improvements. The majority are lifetime loans as they are repayable on the sale of property. The minimum amount for a loan is £2k and the maximum allowed is £25k. Be the Boss loans - a scheme funded by the Ministry of Defence which provides financial support through loans and grants to recent UK service leavers who are interested in setting up or expanding their own business. The loans are repayable within four years and an annual rate of interest of 9.4% is charged. Small Business Loans - this scheme was run by the Legion to encourage employment of ex-Service personnel. These are unsecured interest-free loans. The scheme has now ceased and has been replaced by the Be the Boss scheme.
Group2013
£’000
Group2012
£’000
Charity2013
£’000
Charity2012£’000
18 Debtors
Trade debtors 1,150 830 1,054 721
Amounts due from consolidated entities - - 5,630 3,422
Other debtors 1,758 3,860 1,683 3,853
Prepayments and accrued income 1,790 4,917 2,026 4,469
Total 4,698 9,607 10,393 12,465
Total Group2013
£’000
Total Group2012
£’000
TotalCharity
2013
£’000
TotalCharity2012
£’000
19 Cash at hand and in bank and short-term deposits
Short-term deposits 25,911 34,225 24,839 32,906
Cash at hand and in bank 25,397 16,618 16,514 10,453
Total 51,308 50,843 41,353 43,359
Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
20 Creditors
Creditors falling due within one year:
Trade creditors 2,487 2,597 1,536 1,138
Amount due to consolidated entities - - 375 158
Grant commitments 4,184 8,722 3,979 8,557
Accruals and deferred income 7,945 8,064 5,734 6,771
Other creditors 989 951 916 893
Total creditors falling due within one year 15,605 20,334 12,540 17,517
Creditors falling due after one year:
External grant commitments: 9,976 9,595 9,976 9,595
Due within two to five years 6,764 8,639 6,764 8,639
Due over five years 16,740 18,234 16,740 18,234
67F IN A NC I A L S
Balance1 Oct 2012
£’000
Transfers within unrestricted funds
£’000
Incomingresources
£’000
Resourcesexpended
£’000
Gains/(losses)
£’000Transfers
£’000
Balance30 Sept 2013
£’000
23 Unrestricted funds
Free reserves
Central benevolent fund 6,217 (5,330) 79,072 (80,731) 2,815 3,924 5,967
Total Free reserves 6,217 (5,330) 79,072 (80,731) 2,815 3,924 5,967
Designated funds
Branch, county and district funds 27,281 - 3,579 (3,559) 622 - 27,923
Women’s section - 5,330 1,018 (1,217) 233 - 5,364
Programme related investments reserve 9,867 - 726 (218) - - 10,375
Designated functional fixed asset reserve 71,473 - 3,250 (2,072) - - 72,651
Total designated funds 108,621 5,330 8,573 (7,066) 855 - 116,313
General fund 2,462 - 5,573 (4,967) - - 3,068
Charity unrestricted funds excluding pension reserves 117,300 - 93,218 (92,764) 3,670 3,924 125,348
Pension reserve (5,992) - 180 940 3,686 - (1,186)
Total charity unrestricted funds 111,308 - 93,398 (91,824) 7,356 3,924 124,162
Intergroup funds (38) - 12,467 (12,466) - - (37)
Total group unrestricted funds 111,270 - 105,865 (104,290) 7,356 3,924 124,125
The Legion’s free reserves comprise the Central benevolent fund, incorporating the core activities of the Legion such as operating residential Care Homes and welfare Break Centres, giving grants, providing resettlement training, advising on pension claims service and acting as the custodian of Remembrance. The proceeds from the annual Poppy Appeal collection are allocated to this fund. In addition, work continues on the release of funds from Branch Property Trusts as covered in note 25.
The Legion’s designated funds include: Branch, County and District funds, which have been built up by the Legion’s branch network over many years. The income thereon is used to support the activities of the Legion’s branches and counties. Women’s Section. Whilst the funds of the Women’s Section are unrestricted in nature, they are administered separately from other Legion funds. During the year, Women’s Section funds were transferred to a new designated reserve to better reflect this separation. £5,330k was transferred from Central benevolent fund into the Women’s Section designated reserve, representing the funds held by the Women’s Section at the beginning of the financial year.The Programme related investments reserve, which represents the value of the programme related investments used by the charity in the delivery of its charitable objectives. The Functional fixed asset reserve, which represents mainly the value of the Legion’s functional portfolio (such as residential Care Homes and welfare break homes), used by the charity in the delivery of its charitable objectives. The General fund, which is used to support the administration of the membership at the Legion.The Pension reserve is a specific allocation of unrestricted funds in relation to the Royal British Legion Staff Pension Fund.
Group2013£’000
Group2012£’000
Charity2013£’000
Charity2012£’000
21 Provisions for liabilities and charges
Dilapidations provision
Opening balance at 1 October: 891 366 891 366
Amounts utilised in year (52) - (52) -
Provisions raised in year 23 525 23 525
Closing balance at 30 September 862 891 862 891
2013Land and buildings
£’000
2013Vehicles and
equipment£’000
2013Charity andGroup Total
£’000
2012Charity andGroup Total
£’000
22 Operating lease commitments
At the year end, the Legion was committed to payments during the next year in respect of operating leases which expire:
within one year 273 17 290 476
within two to five years 283 479 762 412
over five years 311 - 311 164
Total 867 496 1,363 1,052
FINANCIALS
Balance1 Oct 2012
£’000
Incomingresources
£’000
Resourcesexpended
£’000
Gains/(losses)
£’000
Transfers
£’000
Balance30 Sept 2013
£’000
24 Restricted funds
Benevolent fund
Investment property reserve 92,912 - - (4,075) - 88,837
Income and sales proceeds from property held in corporate Trusteeship 57,781 2,532 (1,923) 5,055 (3,233) 60,212
Grants for specific purposes 2,524 823 (2,078) - (4) 1,265
Donor restricted legacies and donations 8,990 6,132 (4,566) 88 (2,350) 8,294
Charity Commission schemes 1,132 50 - 82 - 1,264
Homes’ residents’ amenity funds 1,122 640 (685) - - 1,077
The Arthur Atock Memorial Trust 471 127 - 53 - 651
British Korean Veterans (1981) Relief Fund 107 14 (7) 11 - 125
Permanent endowment 769 15 (20) 44 - 808
Total charity restricted funds 165,808 10,333 (9,279) 1,258 (5,587) 162,533
Poppyscotland Group 9,776 4,739 (4,206) 937 48 11,294
Poppyscotland pension provision (1,390) - (76) 4 - (1,462)
National Memorial Arboretum Group 3,770 3,621 (4,632) - 1,615 4,374
Total group restricted funds 177,964 18,693 (18,193) 2,199 (3,924) 176,739
Restricted funds represent grants, donations, legacies and property which are given by the donor for specific purposes and which must be used for that purpose. All restricted funds are held within the Benevolent Fund. Restricted funds include permanent endowment funds which are not material and are not therefore shown separately on the face of the balance sheet.The investment property reserve represents the estimated market value of £88,837k representing a portfolio of some 536 properties owned by the Legion and, in most cases, occupied by social clubs licensed by the Legion to use its name. Many of these properties are held under trust deeds which provide that, if they are sold, the proceeds must be applied in accordance with the terms of the original trust deeds. In most cases, the beneficiaries of such deeds will also be the beneficiaries of The Royal British Legion, but in some cases the relevant deed may limit support in the first instance to ex-Service persons in a defined geographical area.As a result, these properties are held as restricted funds pending agreement with the Charity Commission on how the restrictions contained within the trust deeds can be widened to best serve the Legion’s beneficiaries. Similar conditions apply to any income as well as sale proceeds relating to these properties, the value of which is currently estimated at £60,212k.
69F IN A NC I A L S
25 Transfers between restricted and unrestricted funds
During the year the Legion carried out further work in respect of the income relating to properties held under trust deeds and any sales proceeds. As a result of this work £3,234k was released from restricted to unrestricted funds predominantly relating to eligible expenditure on the trusts.
£1,663k was transferred from unrestricted to restricted funds which represents funding provided from the charity to Poppyscotland and the National Memorial Arboretum.
Other transfers of £2,354k from restricted and unrestricted funds represent the application of restricted income to fund unrestricted expenditure where the nature of the expenditure meets the conditions imposed by the donor. This transfer related to a number of transactions.
Unrestricted2013£’000
Restricted2013£’000
Total2013£’000
Total2012£’000
26 Analysis of group net assets between funds
Fund balances are represented by:
Tangible assets 73,284 3,291 76,575 75,007
Investments 39,308 163,660 202,968 199,716
Current assets 44,328 12,848 57,176 61,352
Current and non-current liabilities (31,609) (1,598) (33,207) (39,459)
Defined benefit pension liability (1,186) (1,462) (2,648) (7,382)
Total funds 124,125 176,739 300,864 289,234
27 Contingent assets
There are 68 branches where the ownership of properties is unclear. These properties, in the main donated to the Legion and occupied by Legion branches, operate under local trust deeds. Depending on the drafting of these deeds, the Legion may or may not have an interest in the freehold of the property.
28 Commitments
Capital expenditure on properties used as residential Care Homes of £1,185k (2012: £2,642k) had been authorised and contracted for at 30 September 2013 and related to a new dementia unit at Dunkirk Memorial House.
29 Related party transactions
Advantage has been taken of exemptions under FRS8 Related Party Disclosures not to disclose balances with or transactions between the Legion and its wholly-owned subsidiaries.
The Royal British Legion Poppy Factory Limited (Poppy Factory) is a charitable organisation which shares the Legion’s name but is not controlled by the group which produces poppies and wreaths for the Legion at cost. During the year the Legion paid £2,185k (2012: 2,236k) to the Poppy Factory. The related party relationships are detailed below. All members of the Legion’s Board of Trustees resigned as Trustees of the Poppy Factory in April 2013.
The Royal British Legion is a member organisation of the Royal Commonwealth Ex-Services League (RCEL). Three of the Legion’s staff and Trustees are on the RCEL Standing Committee on Welfare Programmes as detailed below. RCEL shares office space and certain services with the Legion which had an estimated value of £38k (2012: £39k). In addition, in September 2012, the Legion approved a grant of £600k to RCEL to be paid over a period of five years. The first instalment of £120k was paid in September 2013.As explained in note 2, in 1922 the Officers’ Association transferred the Poppy Appeal to the Legion in return for a payment of 7.5% of the net amount received from street collections. Two Legion Trustees were also Trustees of the Officers’ Association during the year as indicated below. The amount paid to the Officers’ Association for the Poppy Appeal was £1,670k (2012: £1,865k). All members of the Legion’s Board of Trustees resigned as Trustees of the Officers’ Association in October 2012.
Related Party Position at the Legion Position at Related Party Organisation
Organisation
The Royal British Legion Poppy Factory Eddie HeffermanJohn Crisford
Trustee (to May 2013)Chairman (from May 2013)
Trustee to April 2013 Trustee to April 2013
Royal Commonwealth Ex-Services LeagueMajor General David JolliffeJohn FarmerSue Freeth
TrusteeChairman (to May 2013)Director of Operations
Hon Medical AdviserMember of Standing Committee on Welfare ProgrammesMember of Standing Committee on Welfare Programmes
The Officers’ Association John FarmerDr Chris Simpkins
Chairman (to May 2013)Director General
Trustee to October 2012Trustee to October 2012
None of the Trustees or other related parties has undertaken any material transactions with the Legion during the year other than as disclosed above.
FINANCIALS
Board of Trustees Chairman John Crisford (from May 2013)John Farmer (to May 2013)
Vice-Chairman Terry WhittlesTrustees Wendy Bromwich JPAdrian Burn FCA Denis Compton (to May 2013)Denise EdgarEddie Hefferman MBE (to May 2013)Dr Diana HendersonMaj Gen David Jolliffe CB FRCPAnthony Macaulay Bill Parkin (from May 2013)Keith Prichard MBFIMCatherine Quinn (from May 2013)Alan Ronaldson (to May 2013) Jenny Rowe (to May 2013)Colonel Neil Salisbury (from May 2013)David Spruce (from May to December 2013)Martyn TigheLieutenant Colonel David Whimpenny (from May 2013)
Co-opted MembersThe Trustees would like to recognise the support given by the following co-opted members, who bring their special expertise to the boards and committees on which they sit:Flt Lt Ian C Melia MA FCA RAuxAF Paul Orchard-Lisle FRICSDavid Bennett Rees FIAJohn TedderPaul SmiddyNational President Vice Admiral Peter Wilkinson CB CVO National Vice-Presidents Peter Howells CBE OstJ, TD DLHis Grace the Duke of Wellington KG, LVO, OBE, MC, DL FKCHis Grace the Duke of Westminster KG, CB, OBE, TD, DLGeoffrey Medcalf MBEGeoff Barwell OBE JPNational Chaplain The Right Reverend Nigel McCulloch KCVO
Key Committees of the Board of Trustees and Current MembershipAudit CommitteeAdrian Burn (Chairman)Keith PrichardDavid Jolliffe (from May 2013) Finance Committee
John Crisford (Chairman) (from May 2012 to May 2013)David Spruce (Chairman) (from May to December 2013)Terry Whittles (Chairman) (from December 2013)Anthony MacaulayJenny Rowe (to May 2013) Bill Parkin (from May 2013)Governance Committee
John Farmer (Chairman) (to May 2013)John Crisford (Chairman) (from May 2013)Catherine Quinn (from May 2013)Terry Whittles Jenny Rowe (to May 2013)Martyn Tighe (from May 2013)Property Committee
Anthony Macaulay (Chairman)John Crisford (to May 2013)Keith PrichardDenise Edgar (from May 2013)Conference Committee
Eddie Hefferman (Chairman) (to May 2013)David Whimpenny (Chairman) (from May 2013)Tony GoodwinSue KellyRay MannTerry Whittles (to May 2013)Alan Ronaldson (to May 2013)Neil Salisbury (from May 2013)Bill Parkin (from May 2013)
BPT Trustee Committee
Keith Prichard (Chairman)Terry WhittlesChris SimpkinsJohn GrahamStephen CooperMembership Council Martyn Tighe (Chairman)Denise EdgarAlan CatheryTimothy McManusJohn ClarkRod BedfordRoger GarrattMartin FordeColin KempStuart Allen Philip WilsonJohn MorrisonBill BurnJohn Sayles (to May 2013)Alan Higbee (from May 2013)
71F IN A NC I A L S
Executive BoardDirector General
Dr Chris Simpkins DMA, HonDUniv, DLDeputy Director General and Director of Finance
John Graham FCA DChA
Commercial Director
Stephen Cooper DIP ARCH RIBA MRICS ACIRib FRSADirector Fundraising
Charles Byrne
Director Operations
Sue FreethDirector Human Resources and Organisational Development
Sharron Lewis-James Chief Financial Officer
Helen Downie ACA
Consultants and AdvisorsBankers Lloyds TSB Commercial Public & Community Sector 3rd Floor 25 Gresham Street London EC2V 7HNIndependent Auditors PricewaterhouseCoopers LLP 7 More London Riverside, London, SE1 2RTInvestment Managers Cazenove Capital Management Limited 12 Moorgate London EC2R 6DA
Women’s SectionPresident HRH The Princess RoyalCentral Committee
Chairman
Wendy Bromwich JPVice-Chairman
Marilyn HumphryHonorary Treasurer
Lynne JoyceCentral Committee Members
Joanne Andrew-Steer MBEPatricia BerryPatricia ChrimesMargaret CookHazel Crosby Margaret EarleySheila Fear (to 25 April 2013)Jacqueline Graham Margaret HarrisFiona HavergalRachel Lucas Ann Morris RGNJoan MurrayAveril Rosser Janet SalterKay ScasePatricia ScottMarie Skells (from 25 April 2013)Barbara Todd (to 25 April 2013)Julia Walker (from 1 July 2013)
National Life Vice-Presidents
May Arnold OBEDame Mary Bridges DBEMaureen Cole OBE Doris Ingham OBEElsie Nash OBEPatricia Valler OBENational Vice-Presidents
Lady Bromley-Davenport (to 1 June 2013)Viscountess BrookeboroughThe Rt Hon the Countess BathurstBaroness Grey-Thompson DBEHer Grace The Duchess of Grafton GCVOAuriol, Marchioness of LinlithgowThe Rt Hon The Countess of Scarbrough LVOThe Lady Luke (to 1 November 2012)Betty Underhill OBE The Lady Grey of Codnor (from 1 August 2013)Sara Jones CBE DL JP OStJ Barbara FranklandValerie Kerr-WilsonMrs J Martin DL (from 1 February 2013)National Secretary
Anthony Beattie
SHOULDER TO SHOULDER WITH ALL WHO SERVE
REGISTERED CHARITY NUMBER: 219279
THE ROYAL BRITISH LEGION HAIG HOUSE
199 BOROUGH HIGH STREET LONDON SE1 1AA
T: 020 3207 2100 WWW.BRITISHLEGION.ORG.UK
THE ROYAL BRITISH LEGION
AN
NUA
L REPORT & ACCOUN
TS | 2013
