ANNUAL ACCOUNTS
2017/2018
WWW.RBLI.CO.UK
FRONT COVER: Veterans who live on the RBLI village during the Garden of Honour Remembrance Service.
CONTENTS 05
HOW WE HELP
06
WHERE THE MONEY GOES
09
CHAIRMAN AND CHIEF EXECUTIVE’S REVIEW
20
OUR BOARD OF TRUSTEES
22
OUR SENIOR MANAGEMENT TEAM
24
TRUSTEES REPORT
40
STRATEGIC REPORT
44
INDEPENDENT AUDITORS REPORT
48
FINANCIALS
67
LEGAL AND ADMINISTRATIVE INFORMATION
Royal British Legion Industries
@RBLI
Royal British Legion Industries
Lord King being interviewed by Evan Davis at our ‘In Conversation With Lord King’ event at the Tower of London in March 2018.
4
2017/2018 ANNUAL ACCOUNTS
HOW WE HELP With an aim of improving lives every day, RBLI works across the UK to help members of the Armed Forces community, people with disabilities and people who are unemployed. Whether it is providing a homeless veteran with emergency accommodation, helping someone into work after 20 years of unemployment or ensuring someone has the support they need to stay in a role when their health condition deteriorates, our teams are making a difference. All this support is provided by our core divisions detailed below, assisted by our corporate services and strategic development teams.
RBLI Employment Solutions supports people with disabilities across Great Britain, ensuring they are not disadvantaged when doing their job. It also provides employment support for veterans who are struggling on civvy street. In Kent and Sussex, the teams work to support local people gain the skills they need for work, as well as helping them find sustainable, relevant employment or volunteering opportunities.
Britain’s Bravest Manufacturing Company (BBMC) is RBLI’s social enterprise providing vital employment to Armed Forces veterans and people with disabilities. The employment we provide gives them the necessary skills and support they need to regain their independence. Their skills and work ethic mean we can manufacture high quality products and deliver exceptional services, including signs, wooden products and print, mail and fulfilment.
RBLI Living focuses on providing homes to Armed Forces veterans and their families. In addition to emergency accommodation, we also provide family housing, specially adapted homes for wounded veterans, an assisted living scheme and a high-dependency nursing home. Residents are supported by our welfare team. Via our holistic health and social care model, they can access help to improve their independence, with benefits support, advice on managing health conditions and more.
Scotland’s Bravest Manufacturing Company (SBMC) is our new social enterprise currently being developed near Glasgow in Scotland. A project supported by fellow military charity, Erskine, it will work in a similar way to BBMC but all manufacturing staff will be Armed Forces veterans. The teams will provide a variety of services and manufacture a number of different products, enabling them to gain new skills in a civilian working environment.
2017/2018 ANNUAL ACCOUNTS
5
WHERE THE MONEY GOES
RBLI Chief Executive, Steve Sherry, presents plans for our Centenary Village, which will create purpose-built homes for future generations of Veterans and their families.
6
2017/2018 ANNUAL ACCOUNTS
35%
26%
Britain’s Bravest Manufacturing Co.
Employment Solutions
OPERATIONAL COSTS
£18.3M 5%
34% RBLI Living
Raising funds
2%
52%
Office equipment
4%
Base Camp playground (The Summit)
CAPITAL COSTS
Veterans’ apartments
£1.5M
21%
4%
New care facility
7%
Fixtures & fittings
10%
Other building work
Plant & machinery
2017/2018 ANNUAL ACCOUNTS
7
WE WERE HONOURED TO BE AWARDED THE DELIVERY OF THE DEPARTMENT FOR WORK AND PENSIONS PRESTIGIOUS NATIONAL DISABILITY PROGRAMME, ACCESS TO WORK.
8
2017/2018 ANNUAL ACCOUNTS
CHAIRMAN AND CHIEF EXECUTIVE’S REVIEW “Improving Lives Every Day”, our ten-year strategic plan, continues in year three to reach more beneficiaries through a mix of new programmes, greater national reach and an increased provision of services within our dynamic community in Kent. We are delighted to report that this year our charity reached over 13,000 people who needed extra help finding work, coping with health conditions, or overcoming barriers to social inclusion.
THE RBLI VILLAGE Our dynamic community on our Village in Aylesford had a real boost when 24 high quality and specially adapted homes for veterans were opened in September 2017 by the then Secretary of State for Defence, the Right Honourable Sir Michael Fallon MP.
With almost 100 years’ experience under our belt, we are a leading charity that is able to provide the right services, and environment, to help even the most vulnerable people help themselves.
Coupled with STEP-IN, RBLI’s unique programme to ensure residents have access to personal development, social support networks, and individual health, care and wellbeing strategies, this new provision is already achieving positive outcomes for disadvantaged and disabled veterans.
Maintaining our clear focus on supporting veterans and those from the wider community with disabilities, RBLI is achieving such strong outcomes through increased collaboration and is winning greater recognition for the way we successfully integrate health and social care, supported and adapted homes, with first class employment support.
We are well into the build of our much needed new 14-bed extra care home and day care centre with a completion date of spring 2019. We have also provided funding for a complete refurbishment of our high-dependency care home, Gavin Astor House, which will convert into a new dual offering of 24 dementia care and 26 high-dependency care places.
Replication of this successful model was the challenge posed in late 2016 by the Minister for Disabled People, Health and Work.
Once complete, the Village will be able to offer veterans the complete care pathway from low to high dependency care. This means we will have the right facilities to support any veteran of any age, with any disability, and help them all maximise their independence.
SCOTLAND’S BRAVEST MANUFACTURING COMPANY (SMBC) We are pleased to report that just 18 months after being set the challenge, saw the opening of our brand new social enterprise, Scotland’s Bravest Manufacturing Company, on the outskirts of Glasgow; working alongside fellow military charity, Erskine. This exciting development will see employment opportunities for veterans fully integrated with the provision of welfare support, 24 new apartments and an activities centre. This expansion of welfare services, facilities, work opportunities and homes for veterans has been well received in Scotland and is an exemplar of successful collaboration within the charitable sector.
CENTENARY VILLAGE PHASE TWO Another important achievement during the year has been the granting of planning consent for phase two of our exciting new Centenary Village vision which will provide homes for nearly 100 veterans and their dependents for the next 100 years. Our campaign to raise £14m to fund this vital new development is underway and we are grateful to each and every member of our Development Board, plus our Campaign Patron, General Sir Gordon Messenger KCB DSO* OBE ADC, Vice Chief of the Defence Staff, for voluntarily giving their time and energy.
2017/2018 ANNUAL ACCOUNTS
9
ACCESS TO WORK We were honoured to be awarded the Department of Work and Pensions prestigious national disability programme, Access to Work, last June. Our purposeful team delivers over 1,000 workplace assessments every month and is helping people with health conditions and disabilities not only sustain employment but also improve productivity and personal opportunity.
LIFEWORKS Our veterans employment programme, LifeWorks, continues to deliver nationally, and internationally, focusing on unemployed veterans in areas of social deprivation and also families of serving personnel, achieving phenomenal results.These employability courses, which help veterans identify and achieve realistic work goals in just one week, are another example of RBLI’s successful collaboration with charities and other specialists to deliver outstanding personalised support that helps people turn their lives around.
Fundraisers ready to take on the UK three peaks to support Britain’s Bravest.
10
2017/2018 ANNUAL ACCOUNTS
STRATEGIC GOALS 1
Further develop thriving communities for those veterans who are most in need from across the UK with integrated services of social care, health care, employment support and accommodation. Be the catalyst for replication of effective integration across the UK.
2
Build a resilient work, health and training services business, “best in class� at working with people with disabilities, health conditions and those furthest from the workplace.
3
Continue developing and delivering first class pre-employment support for the Armed Forces community, centred on sustainable and relevant variants of LifeWorks programmes across the whole of the UK.
4
Build a 21st century social enterprise and employment academy.
5
Secure funding, sponsorship, awareness, and profile, to maximise the opportunities for our beneficiarie
2017/2018 ANNUAL ACCOUNTS
11
PLANNING CONSENT HAS NOW BEEN GRANTED FOR PHASE 2 OF OUR EXCITING NEW CENTENARY VILLAGE VISION WHICH WILL PROVIDE HOMES FOR 100 VETERANS AND THEIR FAMILIES FOR THE NEXT 100 YEARS. 12
2017/2018 ANNUAL ACCOUNTS
LOOKING BACK ON THE FINANCIAL YEAR 2017/2018 RBLI has not been fundraising for long, so we are delighted to have secured so many exciting grants and donations this year, totalling £2.5m towards our vital work with vulnerable and disadvantaged people. We are especially grateful to all the charitable foundations and companies that supported the completion of the new adapted apartments for veterans including the Garfield Weston Foundation, The Royal British Legion, the Chancellor using LIBOR funds and the Lloyds Patriotic Fund who supported the development of STEP-IN. The apartment buildings surround a former gold-medal winning Chelsea Flower Show Garden, created by renowned designer Jo Thompson, which was kindly donated by the Chelsea Barracks Foundation. We would also like to draw attention to the generosity of the Morrisons Foundation who, as well as supporting the new veterans’ apartments, began funding LifeWorks courses to reach unemployed exservice men and women in the most deprived areas of Wales. We are also hugely grateful to ABF The Soldiers’ Charity who have not only supported our LifeWorks programme since its inception, but recently launched a new skills project for our residents, and made a major contribution to our Centenary Village vision.
THANK YOU to all the charitable foundations and companies who have supported our Centenary Village campaign so far, including the Chancellor using LIBOR funds.
2017/2018 ANNUAL ACCOUNTS
13
SCOTLAND’S BRAVEST MANUFACTURING COMPANY
THE WIDER EMPLOYMENT SERVICES MARKET
Scotland’s Bravest Manufacturing Co. joins Britain’s Bravest Manufacturing Co. in leading the change towards a 21st century social enterprise.
The record high levels of employment across the UK have happily depressed the demand and therefore the potential for growth in the welfare-to-work sector.
Our charitable purpose has remained focussed and beneficiary numbers in our social enterprise have remained strong at 63% compared to 60% the year before. However, commercially 2017/2018 has been tough for BBMC, in the main caused by a degree of slowdown in the external market particularly in road and rail infrastructure projects. This seems to be a short-term challenge; as we finished the final month of the financial year it was clear that signs, print and fulfilment were already showing a marked uplift. Our feasibility study, in partnership with PA Consulting, recommended we set up a new RBLI division and social enterprise at Erskine in greater Glasgow.
However our track record on delivery remains strong as we have seen impactful results on the National Access to Work programme with well over 7,000 individual assessments across the UK this year with a total revenue of £3.9m. We are pleased also to have been selected to deliver on the Government’s adult education contract although it’s too early to be able to assess our impact. The work programme has now moved into its final year of eight and we continue to support individuals who for health reasons are still some considerable distance from the labour market.
This decision was taken in September 2017 and the newly appointed Director of Scotland’s Bravest Manufacturing Co. received the keys to the leased factory in February 2018 and has begun implementation of the new social enterprise and work opportunities for Scotland’s veterans. We are in the process of registering the division with the Scottish Charity Commission (OSCR).
14
2017/2018 ANNUAL ACCOUNTS
Graeme Dey, Minster for Parliamentary Business and Veterans, Scottish Parliament on his visit to Scotland’s Bravest Manufacturing Company. 2017/2018 ANNUAL ACCOUNTS
15
THE VILLAGE Our Village continues to change dramatically with the creation of new facilities and services for veterans of all ages. More than 250 veterans and dependents are residents on our village with householders ranging in age from 28 to 104. Additionally, our hugely impactful outreach programme with older and isolated veterans has now reached over 1,000 individuals, bringing many veterans onto the Village for concerts, health and wellbeing, activities, and regular peer support groups. With the consolidation of our health and welfare services, into our structured person-centred programme called STEP IN, RBLI’s effective approach has won increasing recognition. General Sir Gordon Messenger, VCDS, on visiting and touring the Village, commented on the powerful ethos of self-reliance. Lord King, former Governor of the Bank of England was also impressed saying “This is one of the most valuable projects I have come across. This is a real
16
community. Veterans will need this support not just now, or when they come back, they are going to need this support for the rest of their lives.” Now is a critical time for this unique village as we seek to raise £14m to develop it further creating homes and holistic welfare services to ensure we can support more veterans for the next 100 years. With an effective and person-centred model that is able to help veterans with any disadvantage grow in independence, and homes to meet the critical need for affordable and supported, RBLI’s Centenary Village expansion is truly a project of national significance. As our Campaign Patron, General Sir Gordon Messenger says; “This new development will bring much more than quality homes, and with employability at its heart, the Centenary Village is a true legacy to brighter futures. This is precisely the kind of forward-looking culture and community that our veterans need, and only through collaboration and commitment can we make this happen.”
2017/2018 ANNUAL ACCOUNTS
THE ROYAL BRITISH LEGION
LIFEWORKS
Delivering more through collaboration:
Our LifeWorks employability programme continues to go from strength to strength, and has expanded its national reach even further over the past year. This could not happen without the support of partners.
We are proud to have an ongoing, positive, working relationship with our sister charity The Royal British Legion, who have continued to support us over the last year. During 2017/18 we worked on four strategic projects in partnership with The Royal British Legion, including the exciting roll out of dementia care training to our entire village care team and evolution of our acclaimed integrated support model STEP IN, which is helping the most vulnerable veterans overcome mental health issues, substance abuse, long-term health problems, severe disability, homelessness and social isolation.
We continue to work closely and have fantastic support from Poppy Scotland and ABF The Soldiers’ Charity and have supported hundreds of unemployed veterans, including those based in Scotland, with their help. The Morrisons Foundation’s powerful strategic donation has enabled us to commit to more courses for veterans in the most deprived areas of Wales and we began delivery in the final weeks of the financial year. As we established last year, LifeWorks’ success rates are exceptional – 83% of those veterans who undertake the programme move into employment, training or volunteering within 12 months. This is incredible when compared to other back-towork programmes, especially as 4 out of 5 veterans who attend have a disability or health condition. This year has also seen further development of our LifeWorks Families programme for the spouses and partners of serving personnel with courses abroad in Belgium, Cyprus, Germany and the Netherlands. Generous funding from the Annington Trust has allowed us to continue this vital work helping partners to cope with relocation and life changes. Further developments include the introduction of an online Lifeworks Families course which has enabled the programme to be further accessible to those who struggle to attend a course. 2017/18 also saw the continuation of our pioneering Covenant Funded programme helping veterans in custody consolidate their skills and traits towards their future employment. We are proud that we were able to deliver this service as an outreach programme, supporting veterans after they were released from the criminal justice system to plan a constructive future and achieve their new goals.
In September 2017, we officially opened Victory House and Invictus Games House, providing 24 high quality and specially adapted homes for veterans 2017/2018 ANNUAL ACCOUNTS
17
LOOKING AHEAD Our strategic goals established, as part of an ambitious ten-year plan in May 2015, remain (bar a few minor tweaks) very much intact. Our desire for a 21st century social enterprise is becoming a reality and we expect Britain’s Bravest Manufacturing Company to have a record year in 2018/2019 alongside the creation of Scotland’s Bravest Manufacturing Company. As we move into our milestone Centenary Year in 2019, RBLI will complete its full suite of care and accommodation services and our STEP-IN personal development programme will be further refined to deliver greater independence and social participation for any veteran, of any age, and any disadvantage. We will be further integrating our LifeWorks programme with work for the wider community; fully utilising our core delivery experience and our incredible expertise in assessment, development and support for people with disabilities or health conditions seeking employment. Our immediate priority is to secure £14 million in donations in order to complete Phase Two of our Centenary Village, building on a successful Phase
Stephen Kingsman DL CHAIRMAN
One which is an exemplar of successful collaborative work between the Government, commercial and charitable sectors. We want the Village, which has already supported our nation’s veterans for 99 years, to offer this wonderful community long into the future. The planned purpose-built homes are urgently needed. As our Patron General Sir Gordon Messenger, VCDS, explains “I am very conscious that our veterans from Afghanistan and Iraq, many of whom were young when they experienced life-changing injuries, will need our support for decades to come. We need to be there for them”. The Centenary Village will enable the most deserving and disadvantaged veterans from anywhere in the UK to access integrated health and social care, outstanding employment support and purpose-built accommodation, so they can begin building a new life in this unique community. We must pull together now to ensure the services and facilities are in place for those who will certainly need more help, not less, as they get older. We hope we can count on your continued support.
Steve Sherry CMG OBE CHIEF EXECUTIVE
28th June 2018
18
2017/2018 ANNUAL ACCOUNTS
Tracey Crouch, MP for Chatham and Aylesford and Minister for Sport and Civil Society, opening the new Invictus Games House with (from left to right) Frank Martin DL, Vice-Chairman of RBLI Trustee Board, Sir Keith Mills GBE DL, Chairman of the Invictus Games Foundation, Anil Gurung, BBMC veteran and Dave Henson MBE, Trustee of the Invictus Games Foundation.
“THIS NEW DEVELOPMENT WILL BRING MUCH MORE THAN QUALITY HOMES, AND WITH EMPLOYABILITY AT ITS HEART, THE CENTENARY VILLAGE IS A TRUE LEGACY TO BRIGHTER FUTURES.” General Sir Gordon Messenger, Vice Chief of Defence Staff,
KCB DSO* OBE ADC, Centenary Village Campaign Patron
2017/2018 ANNUAL ACCOUNTS
19
OUR BOARD OF TRUSTEES STEPHEN KINGSMAN DL CHAIRMAN Stephen is a former Chairman of the Denne Construction Group, which specialises in delivering affordable housing, regeneration schemes and care facilities, much like those offered by RBLI. His extensive history in charitable service has seen him in the role of Chairman of Canterbury Further Education College, Chairman of Kent Training and Enterprise Council and as an RBLI trustee for four years preceding his election to Chair.
FRANK MARTIN DL VICE CHAIRMAN Frank is a Deputy Lieutenant for Kent and was formerly Chief Executive of Hornby Plc. He is currently Deputy Chairman of the Dover Harbour Board and Chairman of Governors/Pro Chancellor of Canterbury Christ Church University.
BRIGADIER TONY KERR OBE Tony rose to the ranks of Brigadier in the British Army. Now retired, he has spent many years as a trustee of RBLI. He is also currently President of The Royal British Legion Village Branch at Aylesford.
KATE BOSLEY Kate’s extensive experience in the care industry has been gained through her time working for the Heart of Kent Hospice. In 1991 Kate was a clinical manager and then progressed to Chief Executive in 2007. Kate joined the Board of Trustees at RBLI in 2010 and also volunteers for the charity.
20
2017/2018 ANNUAL ACCOUNTS
NADRA AHMED OBE DL Nadra is a Deputy Lieutenant for Kent and is Chairman of the National Care Association. In 2006, she gained an OBE for her work in social care over 30 years. She is also Vice President of Hi Kent and Vice President of the Kent Care Homes Association.
BLAIR GULLAND Blair is Chairman and Partner at Gulland Solicitors and has been a practicing solicitor for over 40 years. He is also a Trustee of many other charities including Benenden Almhouse Charities, the Michael Yoakley Charity and the Kent Community Foundation.
KATHRYN CEARNS OBE FCA FCCA Kathryn is a chartered accountant and non-executive director, mainly in the public sector or for public interest entities. Among other appointments, she is on the board of Companies House, the UK Supreme Court and Highways England. She is also on the External Audit Committee of the IMF.
DAVID MONTGOMERY David rose to the ranks of Brigadier in the British Army before becoming COO of international Executive Search firm, Hanover Matrix. He then founded the Benchmark Search Group in 2002, which helps senior Service personnel transition into successful civilian careers.
DESMOND CRAMPTON DL Desmond is a Deputy Lieutenant for Kent and a Vice President of Demelza Hospice Care for Children, where he served as a trustee for more than a decade. He also founded Lorenden Preparatory School and helped establish the Isle of Sheppey Academy.
2017/2018 ANNUAL ACCOUNTS
21
SENIOR MANAGEMENT TEAM
STEVE SHERRY CMG OBE CHIEF EXECUTIVE
Brigadier Steve Sherry has been Chief Executive of RBLI since April 2010. With a MBA and MSc in Strategic Studies as well as a wealth of experience in implementing change in many differing environments, including Pakistan and the Czech Republic, Steve is enjoying leading RBLI at a time of significant growth, innovation and modernisation.
STEVE WOODWARD
DIRECTOR OF EMPLOYMENT SOLUTIONS Steve joined RBLI in February 2017 having previously worked for Twin Group International where he held the role of Group Chief Operating Officer. Steve has an MBA and has also held director roles with Working Links and Lifeline projects. Prior to this Steve had a retail career spanning in excess of 25 years with ASDA, Sainsburys, B&Q and latterly Dixons Stores Group where he held various senior operational and commercial roles.
JAMES RUDONI
DIRECTOR OF RBLI LIVING James Rudoni has 25 years of operational and commercial management experience in the charity and heritage sector. Prior to joining RBLI in 2014 as Director of RBLI Living, James was the Director of Gardens for the Royal Horticultural Society. His other senior management roles include The Science Museum, the British Film Institute and being a founder member of international start-up business Science and Media LLP. 22
2017/2018 ANNUAL ACCOUNTS
PHIL DEFRAINE
DIRECTOR OF CORPORATE SERVICES Phil Defraine is a CIMA qualified accountant. Having originally worked as a trainee accountant at the Burton Group, Phil spent 20 years in a number of senior management roles including UBS, Warburgs, Deutsche Bank and LloydsTSB. Phil joined RBLI as Head of Business Services within the Employment Solutions Division in 2005. Phil was appointed Director of Finance and Company Secretary in July 2010.
LISA FARMER
DIRECTOR OF STRATEGIC DEVELOPMENT Lisa Farmer joined RBLI in October 2015 as Director of Strategic Development with over 20 years of experience in fundraising, marketing and business development. Lisa spent 8 years at Young Epilepsy as Fundraising Director before becoming Director of Development and has been involved in major commercial developments including Loughborough University’s £40m fundraising campaign and two capital fundraising campaigns at Young Epilepsy.
GEOFF STREETLEY
DIRECTOR OF BRITAIN’S BRAVEST MANUFACTURING COMPANY Geoff Streetley joined RBLI in November 2012 as Head of Commercial and is now responsible for RBLI’s social enterprise, Britain’s Bravest Manufacturing Company. Geoff was previously the Chief Commercial Officer for a UK listed plc in the business services industry. Prior to this role, Geoff held senior commercial roles based both the UK and internationally and has significant experience of dealing with both public and private sector organisations globally.
MICHELLE FERGUSON
DIRECTOR OF SCOTLAND’S BRAVEST MANUFACTURING COMPANY Michelle has held senior management positions within the media industry, television press and magazines and was a director for Scottish Sports Futures Charity. Before joining RBLI in 2018, she was Managing Director of successful social enterprise St Andrew’s First Aid Training and Supplies Ltd., leading the team as they gained Highly Commended at the UK National Business Awards. Michelle was also a Guest Lecturer at the University of Glasgow Business School in 2017. 2017/2018 ANNUAL ACCOUNTS
23
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2018
The trustees are pleased to present their annual directors' report together with the consolidated financial statements of the charity for the year ending 31 March 2018 which are also prepared to meet the requirements for a directors' report and accounts for Companies Act purposes. The charity registration number is 0210063. The charity is also a limited company registration number 0158479. The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015). 24
2017/2018 ANNUAL ACCOUNTS
Gavin Astor House residents enjoying a Christmas trip, organised by the RBLI Living team. 2017/2018 ANNUAL ACCOUNTS
25
Members of the Britain’s Bravest Manufacturing Company team, including veterans Steve and Anil, at the opening of the new apartments in September 2017.
26
2017/2018 ANNUAL ACCOUNTS
OBJECTIVES AND ACTIVITIES The primary objectives of the charity are to support people with disabilities, health conditions or other social disadvantages to develop independence through the following main activities:
1
THE PROVISION OF WELFARE, HEALTHCARE AND HOUSING MAINLY TO MEMBERS OF THE EX-SERVICE COMMUNITY
2
THE PROVISION OF EMPLOYMENT AND DEVELOPMENT OPPORTUNITIES THROUGH SOCIAL ENTERPRISE AND LIFEWORKS EMPLOYMENT SUPPORT OUTREACH PROGRAMMES
3
SUPPORTING UNEMPLOYED, DISABLED, DISADVANTAGED AND OTHER UNEMPLOYED PEOPLE TO INCREASE THEIR INDEPENDENCE, AND PARTICIPATION, THROUGH MEANINGFUL EMPLOYMENT
2017/2018 ANNUAL ACCOUNTS
27
One of many social and activity days held at Basecamp; our vibrant cafe and a central hub for residents, families and visitors to enjoy.
THE CHARITY ACHIEVES ITS PURPOSE AND OBJECTIVES VIA THE FOLLOWING ACTIVITIES AND SERVICES: PROVIDING CARE Delivering an integrated and comprehensive suite of care, accommodation and employment services and facilities on our Village in Aylesford, with a clear focus on supporting veterans and their families.
CHAMPIONING DISABILITY
EMPLOYMENT SERVICES
Delivery of the Government Delivering supported employment funded Work Programme and a for individuals with disabilities and number of other back-to-work health conditions from the Armed programmes across a large part of Kent and Sussex (currently Forces and wider community through our manufacturing social delivered by RBLI as a subcontractor to G4S on behalf of enterprise, Britain’s Bravest the Department of Work and Manufacturing Company. Pensions).
The Board of Trustees review the charity’s strategic goals, activities and performance throughout the year and have considered the Charity Commission’s guidance on public benefit and are confident that the broad range of services and support that the charity provides demonstrable public benefit to a very large number of beneficiaries. This report highlights some of the core work and achievements of the charity during the year.
28
2017/2018 ANNUAL ACCOUNTS
ACCESS TO WORK
CAREER DEVELOPMENT
The provision of disability assessment services via our Access to Work Programme is delivered for the Department of Work and Pensions.
The design, development and ongoing delivery of RBLI’s innovative vocational assessment and development activities for the serving and veteran service community (via our LifeWorks courses for veterans, spouses of serving personnel, and now veterans in custody as well as vocational assessments for wounded, injured and sick serving personnel as part of the Right Management Career Transition Partnership with the MOD).
CONTINUOUS IMPROVEMENT Creating innovative new projects, products and outreach services to meet our objectives, and meet the needs of our beneficiaries more effectively and efficiently.
2017/2018 ANNUAL ACCOUNTS
29
ACHIEVEMENTS AND PERFOMANCE
“I’D RECOMMEND LIFEWORKS TO ANY PERSON THAT’S BEEN IN THE FORCES AND PEOPLE THAT HAVE COME OUT THE FORCES, TO HELP WITH EMPLOYMENT , IT’S FANTASTIC.” Neil, British Army Veteran
ACCOMMODATION During the year the charity provided accommodation and care to more than 300 veterans and their families on our village at Aylesford. In addition to accommodation provided, the charity provides a full range of welfare, health and wellbeing services on the village. We are experiencing more and more demand for accommodation and care from the veteran community so with a generous Libor grant and RBLI match funding plus donations we have developed 24 new apartments for veterans in need. The first residents were given their keys in June 2017. We have also received Libor funding from the Treasury to begin a much-needed new 15 bed extra-care and day-care facility that will be complete in 2019.
30
TRAINING AND VOCATIONAL ASSESSMENT SERVICES Our training and vocational assessment services to the veteran and serving Armed Forces continue to excel. LifeWorks, our flagship programme, was recognised in an independent study by the Learning and Work Institute to be highly effective at helping more than 80% of all participants move onto work or further education. During the year the programme was delivered nationally across the country and internationally at armed forces garrisons. In addition to LifeWorks we continue to deliver our Vocation Assessment Course for the MOD at garrison facilities across the UK.
2017/2018 ANNUAL ACCOUNTS
BRITAIN’S BRAVEST MANUFACTURING COMPANY
SCOTLAN’D BRAVEST MANUFACTURING COMPANY
Our Kent and Surrey based manufacturing division Britain’s Bravest Manufacturing Company continues to provide employment opportunities for a range of veterans, disabled and able bodied staff.
Finally at the end of 2017, RBLI are proud to have launched a new manufacturing operation. Scotland’s Bravest Manufacturing Co.
During the year the division won the contract to supply and deliver British Tommy models as part of the 2018 commemoration project “There But Not There”. We are proud to be part of this project that commemorates the end of the 1914 -1918 war and all the brave men and women who lost their lives.
This initiative is a collaboration with the Erskine Charity in Scotland and will provide employment for up to 100 veterans at the Erskine facility, 14 miles west of Glasgow. The project is well advanced and we expect to start manufacturing a range of products mid way through the next financial year.
EMPLOYMENT SOLUTIONS The Charity continues to operate a range of Welfare to Work Programmes via our Employment Solutions Division. We deliver Work Programme across a large part of Kent and Sussex along with a number of Big Lottery and European Social Fund funded projects designed to help the long term unemployed.
SCOTLAND’S
In the summer of 2017 we secured the Department of Work and Pensions Access to Work Assessment Contract, delivering nearly 7,500 workplace assessments to disabled employees throughout the UK. During the year the division also won contracts to deliver skills and training on behalf of the Skills and Training Agency as part of the government funded Adult Education Budget Programme.
BRITAIN’S BRAVEST MANUFACTURING COMPANY WON THE CONTRACT TO SUPPLY AND DELIVER BRITISH TOMMY MODELS AS PART OF THE 2018 “THERE BUT NOT THERE” PROJECT, COMMEMORATING THE END OF THE 1914-1918 WAR.
2017/2018 ANNUAL ACCOUNTS
31
FINANCIAL REVIEW AT THE END OF THE YEAR OUR CASH BALANCE IS STRONG AND REFLECTS THE FUNDS SET ASIDE FOR THE NEW CARE FACILITY BEING DEVELOPED THROUGH 2018 CALENDAR YEAR. INCOME
EXPENDITURE
During the year the Charity generated income of £17.7m (2017 £17.2m). Donations at £2.5m reflect a highly successful year for our fundraising activity.
Total expenditure for the year was £18.3m (2017 £16.7m). Fundraising costs increased by £94k reflecting the improved funds raised position.
Employment Solutions improved by £587k, year on year reflecting growth into new contract areas in the welfare to work sector.
Employment Solutions costs increased by £1.4m as the division expanded into skills and training.
RBLI Living, our care and accommodation division, generated £5.5m income, marginally down on the prior year. Manufacturing at £5.5m was £334k lower than 2017, with the wooden products and signs business experiencing a downturn in demand.
Manufacturing costs were down in year reflecting the lower demand in the area. Living costs increase by £380k as we invest in more welfare on the village at Aylesford and as we improve our estates management infrastructure in preparation for a major re-development and expansion of our housing for veterans. Overall our operating divisions produced a net expenditure of £642k, a result that is consistent with our planned deficit as we continue to invest into our exciting new 10 year strategy. Our investment fund reduced in value by £184k in year and therefore the net expenditure for the year was £826k ( 2017 : Net income for the year £1.7m) . In addition to the above, the 2018 financial statements include a £2.5m actuarial gain on the defined pension benefit scheme and therefore the net movement in funds for the year equates to £1.7m and the charity ends the year with funds of £22.8m; an increase of just under 8% year on year. The charity’s balance sheet has strengthened over the year reflecting the reduction in the FRS102 pension deficit provision. At the end of the year our cash balance is strong and reflects the funds set aside for the new care facility being developed through 2018 calendar year.
32
2017/2018 ANNUAL ACCOUNTS
INVESTMENT POWERS AND POLICY
RESERVE POLICY
Investment powers are governed by the Memorandum and Articles of Association and permit the charity’s fund to be invested in a wide range of assets. No ethical investment restrictions are placed on the investment fund managers’ remit.
The reserve policy, reviewed annually by trustees, is to hold a sum of money as a designated fund in two parts as follows:
The charity’s investments are held to achieve balanced long term growth and a level of investment income each year. Performance is measured against a long term target of CPI+3% per annum. Performance is also measured against a bespoke benchmark that reflects the fund asset allocation. During the year the fund performed better than target and benchmark.
An operating reserve equating to approximately four months working cash flow, which equates to £5m A reserve equating to the forecast cost to RBLI for planned future projects and developments, primarily accommodation and care facilities at Aylesford. This also equates to £5m.
The Board reviews fund performance at every board meeting. Management meet with our investment managers quarterly and the investment managers present and report to the board on an annual basis.
DONATIONS AT £2.5M REFLECT A HIGHLY SUCCESSFUL YEAR FOR OUR FUNDRAISING ACTIVITY.
2017/2018 ANNUAL ACCOUNTS
33
RESERVES
GOING CONCERN
Unrestricted funds totalled £17.1m (2017: £16.6m).
The Trustees have reviewed the future plans for the Charity and this combined with the strength of the balance sheet and future funds already secured are confident that the Charity will remain a going concern for many years to come.
The operating reserve in a designated fund equates to £5m. The development reserve in a designated fund stands at £5m, of which £3m is for the New Care Facility and the refurbishment of our care home Gavin Astor House. The fund also includes £2m designated for the 2019 Centenary Village Development. The pension deficit reserve calculated as per FRS102 is £1.5m. The general fund of £8.2m reflects the infrastructure and tangible fixed assets used by the charity to support our beneficiaries in Aylesford and Leatherhead. Restricted Funds totalled £5.7m (2017: £4.6m). In addition to the above, the unrestricted fund also includes a sum covering the investment fair value reserve which equates to the difference between the original cost of the investments and their market value. Land and buildings shown on the balance sheet are shown at historical costs less depreciation and have not been restated at market value. Although a professional valuation of land has not been done, the trustees believe that the market value is significantly higher than the book value which is negligible as it was transferred to the charity in 1919.
PENSION LIABILITY The charity is a member of a multi-employer pension scheme with the Royal British Legion and the Poppy Factory. The scheme is a defined benefit scheme. This scheme was closed to new entrants in 2002, but members are still accruing benefits. The scheme has a pension deficit, largely due to historic funding not achieving predicted returns required to ensure the scheme assets fully cover the liability. RBLI’s share of the deficit is £1.5m or approximately 16% of the total deficit as determined by our actuaries as part of the FRS102 Pension Liability Report We have an agreed recovery plan with the Pension Scheme Trustees to fund the deficit over a five-year period. The plan allows for a scrutinised charge over the charity’s assets rather than a cash recovery plan. However, the recovery plan allows for a revision to the methodology subject to the future size of the scheme assets versus liabilities.
“I CANNOT RECOMMEND LIFEWORKS HIGHLY ENOUGH TO ANY SPOUSE LOOKING FOR A POSITIVE CHANGE IN JOB, PROMOTION, CAREER CHANGE ETC.”
Coretta, military spouse, supported by the Lifeworks Families team
34
2017/2018 ANNUAL ACCOUNTS
FUNDRAISING
BOARD OF TRUSTEES
The Charity has invested in a fundraising division (Supporting Britain’s Bravest ). The division has specific teams that focus on corporate, community and grant based fundraising.
The Board of Trustees are responsible for the overall governance, policy and work of the Charity. The Members of Royal British Legion Industries (RBLI) can appoint up to a maximum of 12 trustees for the year from one Annual General Meeting to the next. If a vacancy arises, the trustees can co-opt a Member to fill a vacancy at any time.
Each team has a target that generates a level of both restricted and unrestricted funds. A major focus of the division is the centenary village campaign raising funds for the future development of the village at Aylesford. Our fundraising activity has performed well against target and we are very grateful for the support of donors and supporters in helping raise much needed funds for many good causes. During the year we have not received any complaints regarding our fundraising activities.
PLANS FOR THE FUTURE Plans for the future are covered in the Strategic Report
STRUCTURE, GOVERNANCE AND MANAGEMENT Governing Document Royal British Legion Industries is a charitable company limited by guarantee and was set up on 3 September 1919 and known as Industrial Settlements (Incorporated). It is governed by Articles of Association which were last amended in September 2016.
REFERENCE AND ADMINISTRATIVE INFORMATION The trustees in office during the year and at the date of this report, senior executives of the charity, its principal places of business and its professional advisers are set out on page 69.
Newly elected trustees are given induction training on their duties as Members of the Board and on their responsibilities as trustees. In addition, they receive a copy of the Charity’s Articles of Association, a copy of its latest reports and financial statements, details of the Senior Executives and their respective roles and details of future board meetings. The Board governs the Charity within its Articles of Association and in line with its mission, charitable objectives and values. The Board provides overall policy direction and the management of the Charity is delegated to the Chief Executive and through him to the senior management team. The Board meets quarterly and papers are made available prior to board meetings including business plans and budgets. Summary management accounts are reviewed by the trustees at each Board meeting. The trustees confirm that reference has been made to the guidance contained in the Charity Commission’s guidance on public benefit of the Charities Act 2011, when reviewing the Charity’s aims and objectives and in planning future activities. The trustees and senior executives are involved in the strategic planning and their recommendations are then considered by the Board. In addition to the quarterly board meetings the trustees also meet annually for a strategic review and planning day. The Board review existing operations of the charity and consider strategic options for the future. In addition to this the Board also consider their own effectiveness and practices. At this time the Board have not conducted a full charity governance code review. Estates Development matters are considered and reviewed by the Estates Development Committee which is chaired by a trustee and its recommendations are submitted to the Board of Trustees for its approval. Care and Welfare matters are considered and reviewed by the Care and Welfare Committee which is chaired by a trustee and its recommendations are submitted to the Board of Trustees for its approval.
2017/2018 ANNUAL ACCOUNTS
35
IMAGE NEEDED
Steve Hammond, former Welsh Guard, working in the signs department for Britain’s Bravest Manufacturing Company.
At the House of Lords for RBLI’s Ladies’ Lunch in March discussing the disability employment gap.
STATEMENT OF TRUSTEES RESPONSIBILITIES The trustees (who are also directors of Royal British Legion Industries for the purposes of company law) are responsible for preparing the trustees’ report and the financial statements in accordance with applicable law and regulation. Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have prepared the financial statements in accordance with United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company 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 Statement of Recommended Practice: Accounting and Reporting by Charities (2015); 36
• make judgements and estimates that are reasonable and prudent; • state whether applicable UK accounting standards, comprising FRS 102 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 charitable company will continue in business. The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 2017/2018 ANNUAL ACCOUNTS
Alex Stringer, who sustained life-changing injuries after stepping on an IED during a tour of Afghanistan whilst serving in the Royal Logistic Corps, now a resident in Victory House. Photo by Andy Bate, Blesma
PAY POLICY
RISK MANAGEMENT
The Board of Trustees approve any relevant annual pay rise to all employees with the Senior Management Team receiving the same annual increase as all other employees.
The charity operates a risk reporting matrix that is reviewed by the Board of Trustees at every Board meeting.
When new members join the Senior Management Team, the Chairman or Vice-Chairman of the Board of Trustees are asked to approve relevant salaries and other compensation/rewards.
The matrix is updated in real time as events or issues emerge, and wherever possible alternative scenarios are evaluated and relevant action plans or strategies are developed to help plan through and mitigate any possible material risk that may emerge.
Out-of-cycle pay rises not covered by the annual process, require the approval of the Chief Executive and the Director of Finance and typically reflect a change of roles and responsibilities, or a market change in a specific division or area of the charity. Where appropriate, staff with revenue targets benefit from a bonus system that rewards good performance. All staff are encouraged to join the current pension scheme which is a defined contribution scheme. The charity contributes to the scheme and the contribution is determined by the individual employee contribution level.
2017/2018 ANNUAL ACCOUNTS
37
PRINCIPLE RISKS AND UNCERTAINTIES The major risks that could negatively and materially impact the charity in the medium and long term are as follows: • The Government removes the Supported Factory Grant used to support disabled employees in Britain’s Bravest Manufacturing Company. The grant provides help and support for those employees with the most profound disabilities at both Aylesford and Leatherhead. • The majority vote for the leave campaign for the UK to leave the European Union may have an adverse effect on the charity at some time in the future. At this stage it is impossible to quantify any likely effect in either the charity’s investments or those programmes that we deliver that are ESF funded.
STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS Insofar as the trustees are aware: • there is no relevant audit information of which the charitable company’s auditors are unaware; and • the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
DIRECTORS’ INDEMNITIES
INDEPENDENT AUDITORS
As permitted by the Articles of Association, the directors/trustees have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force.
A resolution proposing that PricewaterhouseCoopers LLP be reappointed as auditors of the Charity will be put to the Board at the Annual General Meeting.
The charity also purchased and maintained throughout the financial year directors’ and officers’ liabilities insurance in respect of itself and its directors/trustees.
Approved by the Board and signed by its order by
Stephen Kingsman CHAIRMAN 28th June 2018
38
2017/2018 ANNUAL ACCOUNTS
Base Camp team member, Julia, on her way to take on a skydive for the charity. Julia has been an incredible supporter over the last year, taking on numerous challenges to help rasie funds so we can continue to support Britain’s Bravest.
2017/2018 ANNUAL ACCOUNTS
39
STRATEGIC REPORT FOR THE YEAR ENDED 31 MARCH 2018
40
2017/2018 ANNUAL ACCOUNTS
Volunteers from Tudor Marriot Hotel in Maidstone get involved at Britain’s Bravest Manufacturing Company.
2017/2018 ANNUAL ACCOUNTS
41
STRATEGIC REPORT BUSINESS REVIEW During the year, many programmes within the charity performed relatively well with significant planned growth in both the Employment Solutions and RBLI Living divisions being achieved. Overall the charity performed below it’s in-year financial operating target, with net expenditure in the year of £826k overall and just under £2m net expenditure in unrestricted funds. However the charity increased net funds over the year by nearly 8%, benefiting from a material reduction in the charity’s FRS102 pension deficit provision.
FUTURE PLANS The Charity has successfully delivered on its first two years of our ten-year strategy ‘Improving Lives Every Day’. The new structure is effectively embedded and is over achieving on our four themes:
42
INVESTMENT
INNOVATION
INFLUENCE
INSPIRE
2017/2018 ANNUAL ACCOUNTS
THE VILLAGE
SUPPORTING SCOTLAND’S BRAVEST
Our Village development plans progress very well. During the year we opened 24 new apartments on the Village at Aylesford. This exciting new development part funded by the MOD LIBOR Fund was opened by the Secretary of State for Defence in September 2017 and is now fully occupied housing a number of disadvantaged veterans and their families.
We are well progressed in our new manufacturing project “Scotland’s Bravest Manufacturing Company” ( SBMC). This project is a joint venture with the Erskine Charity in Scotland.
During 2018 we are developing a New Care Facility at Aylesford. This much needed facility will provide high quality care for 14 beneficiaries and a Day Care Facility for up to 40 participants daily. The Centenary Village Development Programme progresses well and in April 2018 we received our first major donation, from the ABF The Soldiers’ Charity for this exciting long term project that will see the charity develop a significant range of additional accommodation and care services including new homes an assisted living unit and welfare facilities for more veterans at the Royal British Legion Village at Aylesford. The Village expansion planned aims to support 100 veterans a year for the next 100 years and will prioritise those in greatest need, offering our unique community and life-changing health, welfare and employability opportunities to veterans from right across the UK.
Our new social enterprise will develop in parallel with new purpose homes and a new activities centre which is ensure the Erskine Village will be able to support veterans of all ages. SBMC went live in April 2018 and will result in the development of a manufacturing operation at Erskine that will provide employment for veterans in the Glasgow area. Our strategic intent remains one of reaching more beneficiaries through growth, national reach, innovation, investment, inspirational leadership and influence. This is being achieved by our wonderful staff and through open and collaborative working with other charities, Government and commercial organisations. As we approach our exciting Centenary year, 2019, we hope that many more partners will choose to get involved with RBLI, to help us develop our inspirational services and facilities and deliver even more for those who have served and sacrificed.
OUR SOCIAL ENTERPRISE Britain’s Bravest Manufacturing Co, plans to build on its successful growth by continuing to offer more employment opportunities to veterans and people from the wider community with disabilities. We are proud to have won the contract to source, pack and fulfil ‘Tommy’ figures for There But Not There, an exciting new national charitable project is already helping us to employ more beneficiaries in our manufacturing operation.
Stephen Kingsman CHAIRMAN 28th June 2018
We are also very grateful for the help we’ve had from a large number of volunteers who are keen to help support this fantastic initiative
2017/2018 ANNUAL ACCOUNTS
43
INDEPENDENT AUDITORS REPORT FOR THE YEAR ENDED 31 MARCH 2018
44
2017/2018 ANNUAL ACCOUNTS
Aerial view of the Erskine village near Glasgow, now the site of Scotland’s Bravest Manufacturing Company. 2017/2018 ANNUAL ACCOUNTS
45
INDEPENDENT AUDITORS REPORT REPORT ON AUDIT OF THE THE FINANCIAL STATEMENTS OPINION In our opinion, Royal British Legion Industries Limited’s financial statements (“the financial statements”): • give a true and fair view of the state of the charitable company’s affairs as at 31 March 2018 and of its incoming resources and application of resources, including its income and expenditure and cash flows for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Generally Accepted Accounting Standards, comprising FRS102, the Financial Reporting Standards applicable in the UK and Republic of Ireland, and applicable law, and • have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Trustees’ Report and Financial Statements (the “Annual Report”), which comprise: the balance sheet as at 31 March 2018; the statements of financial activities (incorporating the summary income and expenditure account), and the statement of cash flows for the year then ended; the accounting policies; and the notes to the financial statements.
BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled our 46
other ethical responsibilities in accordance with these requirements.
CONCLUSIONS RELATING TO GOING CONCERN We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when: • the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or • the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the charitable company’s ability to continue as a going concern.
REPORTING ON OTHER INFORMATION The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude 2017/2018 ANNUAL ACCOUNTS
whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to report certain opinions and matters as described below. Report of the Trustees and the Strategic Report In our opinion, based on the work undertaken in the course of the audit the information given in the Report of the Trustees and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the Report of the Trustees and the Strategic Report have been prepared in accordance with applicable legal requirements. In addition, in light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we are required to report if we have identified any material misstatements in the Report of the Trustees and the Strategic Report. We have nothing to report in this respect.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
Responsibilities of the trustees for the financial statements As explained more fully in the Statement of Trustees Responsibilities, the trustees are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The trustees are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc. org.uk/auditorsresponsibilities. This description forms part of our auditors’ report. Use of this report This report, including the opinions, has been prepared for and only for the charity’s members and trustees as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions accept or assume responsibility for any other purpose to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
OTHER REQUIRED REPORTING Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: • we have not received all the information and explanations we require for our audit; or • adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or • certain disclosures of trustees’ remuneration specified by law are not made; or • the financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility
Jill Halford SENIOR STATUTORY AUDITOR for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London
Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due 2017/2018 ANNUAL ACCOUNTS
47
STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2018
Mike Angell, Vice-Chairman Kent County Council, and children at the opening of the new Base Camp playground – the Summit, in August 2017.
48
2017/2018 ANNUAL ACCOUNTS
2017/2018 ANNUAL ACCOUNTS
49
FINANCIALS STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING THE SUMMARY INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 MARCH 2018 INCOME & EXPENDITURE
2018 Unrestricted Funds
2018 Restricted Funds
2018 Total Funds
2017 Restricted Funds
2017 Total Funds (reclassified)
£000’s
2017 Unrestricted Funds (reclassified) £000’s
£000’s
£000’s
£000’s
268
2,256
2,524
68
2,291
2,359
Employment Solutions
3,339
581
3,920
3,150
183
3,333
Britain’s Bravest Manufacturing
5,117
366
5,483
5,512
305
5,817
RBLI Living
4,669
868
5,537
4,577
895
5,472
Total Charitable Activities
13,125
1,815
14,940
13,239
1,383
14,622
209
-
209
264
-
264
13,602
4,071
17,673
13,571
3,674
17,245
764
149
913
684
135
819
Note
£000 ‘s
INCOME FROM Donations Charitable Activities:
Investments Income
2
Total
EXPENDITURE ON: Raising Funds
3
Charitable Activities:
-
Employment Solutions
3
4,064
637
4,701
3,216
128
3,344
Britain’s Bravest Manufacturing
3
6,148
376
6,524
6,426
316
6,742
RBLI Living
3
4,404
1,773
6,177
4,403
1,394
5,797
Total Expenditure
3
15,380
2,935
18,315
14,729
1,973
16,702
Net (Expenditure)/Income before Investment (Losses)/Gains
3
( 1,778 )
1,136
( 642 )
( 1,158 )
1,701
543
(Losses)/Gains on investments assets
6
( 184 )
-
( 184 )
1,123
-
1,123
( 1,962 )
1,136
(826)
( 35 )
1,701
1,666
2,510
-
2,510
( 1,070)
-
( 1,070)
548
1,136
1,684
( 1,105 )
1,701
596
16,581
4,579
21,160
17,686
2,878
20,564
17,129
5,715
22,844
16,581
4,579
21,160
Net (Expenditure)/Income
OTHER RECOGNISED GAINS AND LOSSES Actuarial Gain/(Loss) on defined benefit pension scheme
14
Net movement in funds
Fund balances brought forward at 1st April Fund balances carried forward at 31st March
12
The reclassification of prior year reflects the change in analysis of support costs - see note 3. All of the current year above results are derived from continuing activities. The notes on pages 53 to 65 form part of these financial statements.
50
2017/2018 ANNUAL ACCOUNTS
BALANCE SHEET AT 31 MARCH 2018 BALANCE SHEET
2018
2017
Note
£000s
£000s
Tangible assets
5
13,827
12,904
Investments
6
6,834
7,085
Investment in subsidiary
7
-
-
20,661
19,989
FIXED ASSETS
Total Fixed Assets
CURRENT ASSETS Stocks and work in progress
8
382
315
Debtors
9
2,371
2,059
Cash at bank and in hand
4,165
5,796
Total Current Assets
6,918
8,170
( 3,229 )
( 3,143 )
( 3,229 )
( 3,143 )
Net current assets
3,689
5,027
Total assets less current liabilities
24,350
25,016
Net assets (excluding pension scheme liability)
24,350
25,016
14
( 1,506 )
( 3,856 )
12,13
22,844
21,160
Unrestricted - Designated
13
10,000
10,000
Unrestricted - General
13
8,155
9,676
Fair Value Reserve
13
480
761
18,635
20,437
( 1,506 )
( 3,856 )
17,129
16,581
5,715
4,579
22,844
21,160
CURRENT LIABILITIES Creditors – amounts falling due within one year
Defined benefit pension scheme liability Net assets (including pension scheme liability)
10
THE FUNDS OF THE CHARITY
Pension Reserve
13
Total Unrestricted Income Funds Restricted Income Funds TOTAL CHARITY FUNDS
12,13
The notes on pages 53 to 65 form an integral part of these financial statements. The Financial Statements which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and the related notes were approved by the Board of Trustees on 28th June 2018 and were signed on its behalf by:-
Mr Stephen Kingsman Mr A B Gulland 2017/2018 ANNUAL ACCOUNTS
51
FINANCIALS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2018 CASH FLOWS
2018 Note
Net cash (outflow)/inflow from operating activities
£000s
2017 £000s
£000s
( 442 )
20
£000s 1,093
INVESTMENTS Investment income
209
Net cash inflow from investments
264 209
264
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets Receipts from the sale of Investments
( 1, 398)
( 3,310 )
-
2,000
Net cash outflow from capital expenditure & financial investment
( 1,398 )
( 1,310 )
(Reduction)/increase in net cash
( 1,631 )
47
Balance brought Forward
5,796
5,749
Balance Carried Forward at 31 March
4,165
5,796
52
2017/2018 ANNUAL ACCOUNTS
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 1. ACCOUNTING POLICIES Going Concern
The Trustees have reviewed the future plans for the charity and this combined with the strength of the balance sheet and future funds already secured are confident that the Charity will remain a going concern for many years to come.
Basis of Accounting
The Financial Statements have been prepared in accordance with the charities SORP, FRS102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and applicable UK charity and company law. The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated. These financial statements are prepared on a going concern basis under the historical cost convention, as modified by the recognition of certain financial assets and liabilities measured at fair value. Consolidation The company has a wholly-owned subsidiary company, RBLI Contracts Limited. Consolidated financial statements have not been prepared as it has been dormant for several years and the activities of the subsidiary are not material to the group. Information concerning the subsidiary is set out in note 7.
Funds
The charity maintains the following funds:• Restricted - where the purpose to which the funds may be used has been restricted by the donors • Unrestricted - where the fund is not restricted as to its use • Designated - where the funds are unrestricted but the Trustees have designated them for a specific purpose Funds have been set up and designated by the Board of Trustees and transfers between funds are agreed by the trustees.
Income Recognition
Charitable activity income is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed and value added taxes. Donations are
recognised as income when received or when entitlement to receive has been established, receipt is probable, and the amount can be quantified with reasonable accuracy. Gift Aid receivable is included when claimable.
Grants Received Grants are recognised in the Statement of Financial Activities when the conditions for entitlement have been met. Grants received before the conditions for entitlement have been met are deferred and included in creditors at year-end. Subsidies Receivable
A subsidy is made to host companies who employ a disabled person under the terms of the Work Choice Programme. The subsidy arises on the employment of the disabled person and remains for the term of the employment contract. It is accounted for on an accruals basis.
Pensions
The Charity operates two pension schemes, the Defined Benefit Scheme which was closed to new entrants in 2002 and the Group Personal Pension Scheme. The Defined Benefits scheme, the assets of which are held and managed separately, is a multi-employer scheme. The actuaries have attributed scheme assets and liabilities to RBLI for the requirements of FRS102. The impact on the current year SOFA was an actuarial gain of £2.5m and a deficit on the balance sheet of £1.5m. For the defined benefit section the amounts charged in expenditure are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of Financial Activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in ‘Other recognised gains and losses’. The Defined Benefit scheme is funded, with the assets of the scheme held separately from those of the underlying employers, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on
a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The resulting defined benefit asset or liability, net of the related deferred tax is presented separately after other net assets on the face of the balance sheet. In addition the amount charged to the Statement of Financial activities includes contributions payable to the Group Personal Pension Scheme in the year.
Short-term benefits
Short term benefits, including holiday pay, termination payments and other similar non-monetary benefits, are recognised as an expense in the period in which the service is incurred.
Taxation
The company is a registered charity, and as such is entitled to certain tax exemptions on income and profits from investments, and surpluses on any trading activities carried on in furtherance of the charity’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts, when applicable, are shown within borrowings in current liabilities.
Investments
Investments are stated at fair value and the value of both realised and unrealised gains are included in the Statement of Financial Activities within the relevant Funds. Investments are subject to review for impairment when there is an indication of a reduction in their carrying value. Any impairment is recognised in the year in which it occurs.
2017/2018 ANNUAL ACCOUNTS
53
FINANCIALS 1. ACCOUNTING POLICIES (continued) Charitable Expenditure Assets Under Construction Costs are recognised on an accruals basis Assets under construction represents in the period in which they are incurred. expenditure incurred in creating assets. Expenditure on raising funds includes the Depreciation takes place only after completion costs incurred in raising donation income and and capitalisation. grant income, including apportioned support costs. Expenditure on charitable activities Limitation of Capitalisation comprises the costs incurred on charitable Expenditure below £1,000 per item does not activities including apportioned support costs. qualify for capitalisation as a fixed asset as it is Where support costs cover more than one not considered to be material. area of activity the costs are allocated to each activity based on revenue. Costs of expenditure on raising funds includes Financial Risk Management the fees incurred in managing the charity’s investments. The charity’s operations expose it to some financial risks that include the effects of changes in market interest rates and its Operating Leases liquidity position. The charity has in place a risk management programme that seeks to limit Annual rentals under operating leases are adverse effects on the financial performance of charged against income on a straight line basis the charity. over the lease term. Stock and Work-in-Progress
Raw materials, work-in-progress and finished goods are valued at the lower of cost or estimated selling price less cost to complete and sell. Cost comprises the direct cost of production and the net attributable proportion of works overheads appropriate to each department. Cost is determined on an average cost method. Cost includes the purchase price including transport and handling directly attributable to bringing the stock to its present location and condition.
Fixed Assets
Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs. Land is not depreciated. Depreciation on other assets is calculated, using the straight-line method, to allocate the depreciable amount to their residual values over their estimated useful lives, as follows: • Freehold buildings - 2% straight-line • Buildings plant - 7% straight-line • Plant, Machinery, Fixtures and Fittings 15% straight-line • Motor vehicles - 25% straight-line • Office equipment - 33% straight-line An annual impairment review is undertaken and adjustments are made where the adjustment is material.
54
Critical accounting estimates and assumptions
The charity makes estimates and assumptions concerning the future. The resulting accounting estimates will by definition seldom equal actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. Stock provisioning At each balance sheet date the charity considers the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. Impairment of debtors The charity makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. Defined benefit pension scheme The charity has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends.
Financial Instruments
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. (i) Financial assets Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price. At the end of each reporting period financial assets are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the estimated cash flows. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. Investments which are not subsidiaries are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in fair value reserve. Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party. (ii) Financial liabilities Basic financial liabilities include trade and other payables, and loans. They are initially recognised at transaction price. Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially and subsequently measured at transaction price as all of them are current. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. (iii) Offsetting Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
2017/2018 ANNUAL ACCOUNTS
2. INVESTMENTS 2018 £000s
2017 £000s
Investment dividends
199
238
Interest receivable
10
26
209
264
2017 Support costs (reclassified)
2017 Total (reclassified)
£000s
£000s
3. TOTAL EXPENDITURE 2018 Activities undertaken directly £000s
2018 Support costs
561
352
913
543
276
819
Employment Solutions
4,173
528
4,701
2,953
391
3,344
Britain’s Bravest Manufacturing
5,788
736
6,524
6,058
684
6,742
RBLI Living
5,446
731
6,177
5,155
642
5,797
15,968
2,347
18,315
14,709
1,993
16,702
Raising Funds
2018 Total
2017 Activities undertaken directly
£000s
Support Costs are detailed in the schedule below. The comparative analysis for the prior year has been reclassified so that the allocation of support costs is on the same basis as the current year. Auditors’ remuneration was £46,000 for the 2018 audit (2017 : £44,670). In addition other advice was provided by PricewaterhouseCoopers LLP relating to taxation services - £3,900 (2017:£6,320) Operating lease payments included in Resources Expended totalled £333,723 (2017 : £290,445). The loss on disposal of fixed assets was £21,322 (2017 : £Nil) SUPPORT COSTS 2018
Employment Solutions
RBLI Living
Fundraising
2018 Total
£000s
Britain’s Bravest Manufacturing £000s
£000s
£000s
£000s
Executive
52
73
73
36
234
Finance
131
183
182
89
585
Business Systems
84
117
117
57
375
Human Resources
99
138
138
67
442
Marketing
54
76
76
37
243
Other Costs
69
96
96
47
308
Pension Deficit
39
53
49
19
160
528
736
731
352
2,347
Support costs are allocated, where practicable, to the charitable activities on a directly attributable basis. The remainder is apportioned to each activity based on revenue. SUPPORT COSTS 2017 Comparatives (Reclassified)
Employment Solutions
RBLI Living
Fundraising
2017 Total
£000s
Britain’s Bravest Manufacturing £000s
£000s
£000s
£000s
Executive
47
82
78
33
240
Finance
103
181
170
73
527
Business Systems
71
124
116
50
361
Human Resources
68
119
111
48
346
Marketing
62
108
102
44
316
Other Costs
19
32
30
13
94
Pension Deficit
21
38
35
15
109
391
684
642
276
1,993
2017/2018 ANNUAL ACCOUNTS
55
FINANCIALS 4. DIRECTORS, EMPLOYEES AND VOLUNTEERS THE AVERAGE MONTHLY NUMBER OF PERSONS EMPLOYED BY THE
2018
2018
2017
2017
Number
FTE
Number
FTE
Employment Solutions
89
83
75
69
RBLI Living
156
107
153
120
Britain’s Bravest Manufacturing
119
86
111
92
Fundraising and Marketing
10
9
10
10
Executive & Corporate Services
26
24
22
21
400
309
371
312
STAFF COSTS
2018 £000s
2017 £000s
Wages and salaries
8,081
7,086
Social Security costs
700
601
Other Pension costs
596
591
Other costs
17
17
FRS 102 adjustment in SOFA
205
163
9,599
8,458
COMPANY DURING THE YEAR WAS:
During the year a total of 265 volunteers (2017: 208) worked for a total of 14,563 hours (2017: 9,946 hours)
During the year £51,590 expenditure was incurred on recruitment fees (2017: £46,929). The total number of employees whose emoluments, excluding pension contributions, were in excess of £60,000 per annum fell within the following bands: EMPLOYEE EMOLUMENTS IN EXCESS OF £60,000 Emolument band £
2018 Employees
2017 Employees
60,001 - 70,000
4
4
70,001 - 80,000
2
2
80,001 - 90,000
1
-
90,001 - 100,000
-
2
100,001 - 110,000
3
2
110,001 -120,000
1
1
130,001 -140,000
2
1
13
12
All the thirteen employees earning over £60,000 p.a. participated in the company pension scheme, and pension contributions of £89,560 were made by RBLI in the year to 31 March 2018. (2017 : £89,119) The total remuneration of the above thirteen key ( 2017 : 12 ) management personnel was £1,185,098 (2017: £1,069,873). This includes redundancy pay of £48,940 (2017 : £53,000) No remuneration is paid to the Trustees as they act on an honorary basis. Travel expenses were reimbursed to one Trustee (2017 : 1) and amounted to £57 in the year (2017 : £253). The charity is grateful for the large number of volunteers who have helped support the charity over the last 12 months. All areas of the charity have benefited from this support ranging from admin support, job coaching, care etc. Governance costs for the year were £100,797 (2017: £101,422)
56
2017/2018 ANNUAL ACCOUNTS
5. TANGIBLE ASSETS Freehold Land and Buildings £000s
Buildings Plant
Fixtures and Fittings £000s
Motor Vehicles
Office Equipment
£000s
Plant and Machinery £000s
£000s
Assets Under Construction £000s
£000s
12,366
1,486
1,130
1,286
Additions
22
3
12
Disposals
-
-
Transfers
4,094
Total
£000s
90
471
3,573
20,402
13
-
21
1,509
1,580
( 104 )
( 13 )
(5)
( 15 )
-
( 137 )
47
138
374
-
7
( 4,660 )
-
16,482
1,536
1,176
1,660
85
484
422
21,845
At 1st April 2017
4,247
1,003
881
938
90
339
-
7,498
Charge for year
292
101
72
105
-
66
-
636
-
-
( 83 )
( 13 )
(5)
( 15 )
-
( 116 )
At 31st March 2018
4,539
1,104
870
1,030
85
390
-
8,018
Net book value at 31st March 2018
11,943
432
306
630
-
94
422
13,827
Net book value at 31st March 2017
8,119
483
249
348
-
132
3,573
12,904
COST At 1st April 2017
At 31st March 2018 ACCUMULATED DEPRECIATION
Disposals
The Trustees believe that the market value of land is significantly higher than the book value, which is negligible as it was transferred to the Charity in 1919, although a professional valuation was not performed.
6. INVESTMENTS AT FAIR VALUE MANAGED INVESTMENT PORTFOLIO
2018
2017
£000s
£000s
Listed on UK Stock Exchange
1,734
1,847
UK Fixed Interest
1,873
1,784
Overseas Equities
2,096
2,301
Overseas Fixed Interest
130
413
Alternative Investments
243
280
Cash Reserve
758
460
Fair Value at 31 March 2018
6,834
7,085
Cost of Managed Investments at 31 March 2018
6,354
6,324
The difference between the fair value and the cost of investments is £480,000 (2017: £761,000) and represents the fair value reserve as required by the Companies Act 2006.
2017/2018 ANNUAL ACCOUNTS
57
FINANCIALS 6. INVESTMENTS (continued) ANALYSIS OF MOVEMENTS OF INVESTMENTS
2018 £000s
2017 £000s
Valuation at 1 April 2017/2016
7,085
8,031
96
476
( 280 )
647
-
( 2,000 )
less: Management Costs
( 67 )
( 69 )
Valuation at 31 March 2018/2017
6,834
7,085
Realised Gains Unrealised (Losses)/Gains Withdrawals
The directors believe the carrying value of the investments is supported by their underlying net assets.
7.
INVESTMENT IN SUBSIDIARY
The Company owns 100% of the issued share capital (being 2 shares of £1 each) of RBLI Contracts Ltd, a dormant company. There has been no income or expenditure in the subsidiary in the year (2017: none) and there are no capital and reserves at the year end (2017: none).
8.
STOCKS AND WORK IN PROGRESS 2018 £000s
2017 £000s
374
264
8
51
382
315
2018 £000s
2017 £000s
Trade debtors
1,516
1,314
Other debtors
50
206
Prepayments and accrued income
805
539
2,371
2,059
Raw materials Finished goods
The replacement cost of raw materials does not differ materially from the value stated in the balance sheet. The cost of raw materials recognised as an expense in the year was £ 2,594,990 (2017: £2,660,363).
9.
58
DEBTORS
2017/2018 ANNUAL ACCOUNTS
10.
CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR
AMOUNTS FALLING DUE WITHIN ONE YEAR:
2018
2017
£000s
£000s
Trade creditors
862
900
Other taxation and social security
500
334
Other creditors
47
69
1,820
1,762
-
78
3,229
3,143
Accruals Deferred Income
11.
LOAN FINANCE
A charge over the Churchill Centre and the factory buildings at Aylesford has been granted to The Royal British Legion Pension Fund Trustees as security for the pension deficit liability and to support the Employers Covenant.
12.
FUND BALANCES CARRIED FORWARD AT 31ST MARCH 2018
2018
2018
2017
2017
2017
Unrestricted Funds £000s
Restricted Funds £000s
Total Funds £000s
Unrestricted Funds £000s
Restricted Funds £000s
Total Funds £000s
Tangible assets
8,871
4,956
13,827
8,325
4,579
12,904
Investments
6,834
-
6,834
7,085
-
7,085
15,705
4,956
20,661
15,410
4,579
19,989
2,930
759
3,689
5,027
-
5,027
NET ASSETS (excl. pension scheme liability)
18,635
5,715
24,350
20,437
4,579
25,016
Defined benefit pension scheme (liability)
( 1,506 )
-
( 1,506 )
( 3,856 )
-
( 3,856 )
NET ASSETS (inc. pension scheme liability/asset)
17,129
5,715
22,844
16,581
4,579
21,160
Net current assets
13.
ANALYSIS OF FUNDS
UNRESTRICTED FUNDS There are five unrestricted funds, two of which are designated: The designated Future Projects and Developments Fund holds reserves of £5m (2017: £5m) for the development of the RBLI Village. The designated Operating Cost Reserve provides a reserve covering four months of operating cost. The General Funds reflects the tangible fixed assets used by the charity to provide services and support to beneficiaries. The Pension Reserve reflects the balance of surplus or deficit on the defined benefit pension scheme and moves in line with annual valuations as per note 14. The Fair Value Reserve reflects the balance of surplus or deficit on the revaluation of the investments as per note 6.
2017/2018 ANNUAL ACCOUNTS
59
FINANCIALS 13.
ANALYSIS OF FUNDS (CONTINUED) Balance 1st April 2017 £000s
Income
Expenditure
Gains and losses
£000s
£000s
£000s
Balance 31st Mar 2018 £000s
Future Projects and Developments
5,000
-
-
-
5,000
Operating Cost Reserve
5,000
-
-
-
5,000
10,000
-
-
-
10,000
9,676
13,557
( 15,175 )
97
8,155
( 3,856 )
45
( 205 )
( 2,510 )
( 1,506 )
761
-
-
( 281 )
480
16,581
13,602
( 15,380 )
2,326
17,129
DESIGNATED FUNDS SET ASIDE BY THE TRUSTEES
General Fund Pension Reserve Fair Value Reserve Total Unrestricted Funds
RESTRICTED FUNDS There are two restricted funds: Capital and Revenue Grants hold restricted grants received for the development of property, plant and equipment and the provision of services to disabled people and Armed Forces veterans. There have been no transfers between any of the unrestricted or restricted funds.
RESTRICTED FUNDS
Balance 1st April 2017 £000s
Income
Expenditure
£000s
£000s
Balance 31st March 2018 £000s
Capital and Revenue Grants
1,514
2,592
( 2,288 )
1,818
Libor MOD Grants
3,065
1,479
( 647 )
3,897
Total Restricted Funds
4,579
4,701
( 2,935 )
5,715
EXPLANATION The £1,479k Libor Grant is contributing £1m to help fund the development of a new 15 bedroom care facility and day care centre, and the balance of £479k is to support the delivery of the Lifeworks Programme.
60
2017/2018 ANNUAL ACCOUNTS
14.
PENSION SCHEME
Royal British Legion Industries participates in two staff pension funds. The Defined Benefit Scheme (the Fund), and the Group Personal Pension Plan ( the GPPP), both operated in conjunction with The Royal British Legion. Contributions to the Group Personal Pension Plan in the year were £401,000 (2017 : £379,000). Contributions are limited to twice the level of the employees’ contribution. There were 351 employees participating in the scheme at 31 March 2018 ( 2017 : 310) The Defined Benefit Scheme was closed to new entrants in 2002. During the year no contributions were made by RBLI (2017 : £NIL). The most recent formal scheme published actuarial valuation was carried out by First Actuarial LLP as at 1 April 2017. The major financial assumptions used by the actuary for FRS102 purposes were: ACTUARIAL ASSUMPTIONS
2018
2017
Discount rate (%p.a.)
2.60%
2.70%
Retail Price Inflation (%p.a.)
3.10%
3.30%
Consumer Price Inflation (%p.a.)
2.10%
2.30%
Salary increase rate (%p.a.)
3.10%
3.30%
5%p.a. or retail price inflation if less
3.00%
3.20%
3%p.a. or retail price inflation if less
1.90%
2.00%
Rate of increase for deferred pensioners
2.10%
2.30%
Current pensioners Men
87.7
88.8
Current pensioners Women
89.6
91.1
Future pensioners now aged 45 Men
89.1
90.2
Future pensioners now aged 45 Women
91.2
92.6
RATE OF INCREASES OF PENSIONS IN PAYMENT
LIFE EXPECTANCY AT AGE 65:
FAIR VALUE OF FUND ASSETS
2018
2017
£000s
£000s
Equities
3,656
3,291
Bonds
4,702
4,168
Gilts
2,308
2,898
Other Growth Seeking assets
2,797
3,393
Cash
614
190
Total
14,077
13,940
In addition, the Trustees hold insured annuity policies. The value of these annuities has been excluded from both the assets and the liabilities since the liability is matched directly by an asset value of equal value. This is consistent with previous disclosures. The Fund does not invest in the sponsor’s own financial instruments, including property or other assets owned by the sponsor.
2017/2018 ANNUAL ACCOUNTS
61
FINANCIALS 14.
PENSION SCHEME (CONTINUED)
TOTAL COST RECOGNISED AS AN EXPENSE:
2018 £000s
2017 £000s
Administration expenses
100
72
Net interest
105
91
Total cost recognised as an expense:
205
163
RECONCILIATION OF SCHEME ASSETS AND LIABILITIES
£000s Assets
£000s Liabilities
£000s Total
At 1 April 2017
13,940
( 17,796 )
( 3,856 )
( 475 )
475
-
Employer contributions
45
-
45
Administration expenses
( 100 )
-
( 100 )
369
( 474 )
( 105 )
-
2,212
2,212
298
-
298
14,077
( 15,583 )
( 1,506 )
Benefits paid
Past service cost Interest income/(expense) remeasurement gains - Actuarial gains - Return on plan assets excluding interest income At 31 March 2018
62
2017/2018 ANNUAL ACCOUNTS
15.
TAXATION
The Company is exempt from liability to corporation tax on its charitable activities due to its status as a registered charity.
16.
CAPITAL COMMITMENTS
Capital Commitments contracted for at year end but not provided for.
17.
2018 £000s
2017 £000s
2,259
3,162
OPERATING LEASE COMMITMENTS
The Company had the following future minimum lease payments under non-cancellable operating leases for each of the following periods: OPERATING LEASES
2018 £000s
2017 £000s
Payments due not later than one year
201
241
Payments due later than one year and not later than five years
185
306
Total operating leases
386
547
18.
RELATED PARTY TRANSACTIONS
A donation of £12,252 was received in 2018 from Kent Community Foundation (2017: Nil). Blair Gulland, a trustee of RBLI, is also a trustee of Kent Community Foundation. In 2017 payments of £1,500 were made to ERSA UK Ltd and £3,052 to the Institute of Employability Professionals. Richard Brooks a former member of RBLI senior management team was on the board of these organisations but he is no longer an employee of RBLI in 2018.
2017/2018 ANNUAL ACCOUNTS
63
FINANCIALS 19.
GRANTS AND DONATIONS
Donations and Grants of £5,000 or more, received in either curent or prior year, are shown below. These are reported in the Statement of Financial Activites either under Charitable activities or under income from donations. 2018 £
2017 £
1,479,000
1,479,000
BBO Grant
580,883
177,780
ABF The Soldiers' Charity
420,200
229,400
MOD Armed Forces Covenant
339,750
281,000
MOD Aged Veterans Fund
305,880
39,200
Workchoice employee support grant
273,667
323,673
Lloyds Patriotic Fund
100,000
-
The Morrisons Foundation
96,600
293,360
Erskine Hospital
75,000
-
The Royal British Legion
67,400
134,750
Greenwich Hospital
34,271
67,422
Annington Trust
31,416
-
Queen Mary's Roehampton Trust
20,000
20,000
The Army Central Fund
15,000
15,000
Poppy Scotland
14,472
10,899
Kent Community Foundation
12,252
-
MOD acting on behalf of Her Majesty's Treasury
Next PLC
12,000
-
UFI Charitable Trust
11,305
20,997
Aylesford Parish Council
10,000
-
BAE Systems
10,000
5,000
Sainsbury's Tonbridge Charity
5,234
-
We Work
5,060
-
The Edith Murphy Foundation
5,000
-
Golding Homes
5,000
-
The Eveson Charitable Trust
5,000
-
The Officers Association
3,175
1,525
Tesco(Groundwork UK)
3,000
9,000
Garfield Weston Foundation
-
75,000
The Chelsea Barracks Foundation
-
50,000
Walking With The Wounded
-
50,000
The Swire Charitable Trust
-
20,000
Forces In Mind Trust
-
18,350
Centor
-
14,050
Blind Veterans
-
10,100
The Barbour Foundation
-
10,000
CHK Charities
-
5,000
The Forces Trust
-
5,000
Santander Community Scheme
-
5,000
The Liz & Terry Bramall Foundation
-
5,000
Parachute Regiment
-
1,525
3,940,565
3,377,031
20.
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 2018 £000s
2017 £000s
( 826 )
1,666
Losses/ (Gains) on investment assets
183
( 1,123 )
Investment management fees deducted from fund
68
69
Difference between pension charge and cash contributions
160
118
( 209 )
( 264 )
Depreciation on tangible fixed assets
636
569
Loss on disposal of fixed assets
21
-
(Increase) in stocks
( 67 )
-
(Increase) in debtors
( 312 )
( 353 )
(Decrease)/Increase in creditors
( 96 )
411
( 442 )
1,093
2018
2017
Note
£000s
£000s
Trade debtors
9
1,516
1,314
Others debtors
9
50
206
1,566
1,520
4,165
5,796
Net (expense)/income
Investment income
Net cash (outflow)/inflow from operating activities
21
FINANCIAL INSTRUMENTS
Financial assets: Financial assets measured at amortised costs
Cash at bank and in hand Financial liabilities measured at amortised costs: Trade creditors
10
862
900
Other creditors
10
47
69
909
969
2017/2018 ANNUAL ACCOUNTS
65
RBLI staff promoting Armed Forces Day in June 2017.
LEGAL & ADMINISTRATIVE INFORMATION TRUSTEES Chairman Mr S W Kingsman DL Vice Chairman Mr F Martin DL Brigadier H H Kerr OBE Ms Kate Bosley MSc RGN RSCN Dip of Nursing Mrs N Ahmed OBE DL Mr A B Gulland Kathryn Cearns OBE FCA FCCA Mr D Montgomery Mr D Crampton DL
SENIOR OFFICERS Chief Executive Mr S F Sherry CMG, OBE Director of Corporate Services & Co.Secretary Mr P Defraine ACMA Director of Britain’s Bravest Manufacturing Co. Mr G Streetley Director of Operational Delivery Mr J Rudoni (Resigned April 2018) Director of Strategic Development Mrs L Farmer Director of Scotland’s Bravest Manufacturing Co. Miss M Ferguson Director of Employment Solutions Mr S Woodward (Resigned April 2018)
HEAD OFFICE AND REGISTERED OFFICE
Royal British Legion Industries Limited Hall Road Aylesford ME20 7NL Tel: 01622 795900 Fax: 01622 882195 Company Number 0158479 Incorporated in England and Wales Regsitered Charity Number 0210063 The charity is a public benefit entity
INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6R H
BANKERS
Barclays Bank Plc Corporate Banking Kent Team, 2nd Floor, 30 Tower View Kings Hill West Malling ME19 4UY
INVESTMENT ADVISORS Julius Baer Portfolio Managers Ltd 1 St Martin’s Le Grand London EC1A 1HQ
SOLICITORS
Thomson Snell & Passmore LLP 3 Lonsdale Gardens Tunbridge Wells TN1 1NX Brachers LLP 59 London Road Maidstone ME16 8JH
2017/2018 ANNUAL ACCOUNTS
67
This product was printed by:
www.britainsbravestmanufacturing.org.uk
Royal British Legion Industries (RBLI), Hall Road, Aylesford, Kent, ME20 7NL. Charity No. 210063. W www.rbli.co.uk E enquiries@rbli.co.uk