HALO LEISURE SERVICES LIMrrED REPORT OF THE TRUSTEES STRATEGIC REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 CHARITY NO . 1091543 COMPANY NO: 04335715 HALO LEISURE SERVICES LIMITED CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS for the Year Ended 31 December 2023 Page Report of the Trustees incorporating strategic report R8f8r8nce and administrative details of the Charity, its Trustees and advisors Structure, governance and management Objèctives and actlvltles Strategic report Fundraising - Achievements and performance Flnanclal revlew >6 Prlncipal risks and uncertalntles Future plans - Disabled persons Statement of Trustees, Responsibilities Report of the Independent Audltors 9-10 Consolidated Statement of Financial Activities (incorporating an Income and Expenditurè Account & Statement of Other Comprehensive Income) Consolidated Balance Sheet 12 Company Balancé Sheèt 13 Consolidated Cash Flow Statement 14 Notes to the Consolldated Cash Flow Statement 15 Notes to the Consolldated Financial Statements 1645 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 The Trustees, who are also Directors of the Charitable Companyfor the purposes of the Companies Act 2006, present their report with the consolidated financial statements of the Charitable Company and the Group for the year ended 31 December 2023. The Trustees have adopted the provisions of the Statement of Recommended Practice ISORP) (FRS102)'Accounting and Reporting by Charities, (effective 1 January 2019). REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARrrY, ITS TRUSTEES AND ADVISORS The name of the parent Charitable Company is Halo Leisure Services Llmited. Principal and registered office: Halo Support Centre Lion Yard Broad Street LEOMINSTER Herefordshire HR6 8BT Telephone: 01568 618980 Website: www.haloleisure.org.uk Company Reglstratlon Number: 04335715 (England and Wales) Charlty Raglstratlon Number: 1091543 Trustees during the year under review and up to the present date: Date of appointment as Directorrrrustaa Date of reslgnatlon as DlrectorlTrustee R J S Curtis [Chairmanl S Brewster N A Sellar ￿reasUrer] A Cavaghan C E Edginton M J Rendall K Bush R Whelan G Hotchen JLee 31 August 2023 1 January 2023 1 January 2023 1 January 2023 Chaimian: RJSCurtis Chief Executive: S M Rolfe Company Secretary: J G Huxley Auditors: Mccabe Ford Williams Chartered Accountants statutory Auditors Building 1063, Cornforth Drive, Kent Science Park. Sittingbourne, Kent ME9 8PX Bankers: National Westminster Bank plc 12 Broad Street Hereford HR4 9AH Page 1 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY. ITS TRUSTEES AND ADVISORS - contlnued Solicitors: T.A. Matthews 32-35 Broad Street Hereford HR4 9AR STRUCTURE, GOVERNANCE AND MANAGEMENT The Trustees The Trustees are also the Directors in accordance wlth the Companies Act 2006. The Board is made up of not less than 5 and no more than 15 Trustees. Trustees are required to retire after a term of three years but may be reappointed for a further three years to a maximum of four consecutive terms of three years. They may be appointed annually for further terms of one year under exceptional circumstances and with unanimous resolution by the Trustees. The Trustees are also members of the Charltable Company which is limited by guarantee. Structure of the Charity The Charity is incorporated as a company limited by Guarantee. There is one subsidiary which, through ownership of land, acts as a s8curity to the parent for loans it may have from time to time. The Board of Trustees also act as Directors of the Limited Companyand meet regularly during the year. Two sub committees have been established to advise, scrutinise and report to the main Board. These are the Workforce Sub- committee and the Finance, Audit and Compliance Sub-committee. The subsidiary company's Board is made up of a smaller number to the Trustees of the parent wlth an additional independent member, and report to the main Board on a regular basis. A Chief Executive is appointed by the Trustees to manage the day to day operations of the Charitable Company, supported by a Senior Management Team. Induction and tralnlng All Trustees receive induction training with regard to the organlsation including its powers and objects and the Charitable Company itself. Regular update and refresher training is also provided regardlng their role as Charity Trustees and Charitable Company Trustees. Organisational structure and decision making process The Full Board of Trustees retains overall accountsbility for the management of the Charitable Company and its subsidiaries. It delegates responsibility for day-to-day decision making to th8 Chief Executive and the Senior Management Team. Finance and Workforce Sub-committees meet on a regular basis across the year taking responsibility for strategic decision making along with monitoring and review of outcomes. There is a scheme of delegation in place which is reviewed on a cyclical basis. Remuneratlon of Key Management Personnel Remuneration of Key Management Personnel is reviewed annually alongside the other employees of the company by both the Workforce Sub-committee and the Finance, Audit and Compliance Sub-committee, with a recommendation presented to the main Board. No Trustees or Directors receive remuneration other than reimbursement of direct expenses. Related partles The Charitable Company works closely with the Local Authorities and bodies who have sub-contracted facility management to the Charity. The Charitable Company is the sole guarantor of Severn Centre Trust Ltd, which is a registered Charity with similar aims and objects to the Charitable Company. Page 2 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 STRUCTURE, GOVERNANCE AND MANAGEMENT- continued Co•operation with other organisations As a community-based organisation operating in Herefordshire, Brldgend, Shropshlre, Gloucestershire and Wiltshire. Halo Leisure Services Limited (Halo) designs its strategic planning and operational service delivery with due regard to partner aims and objectives, as specified in the relevant contractual tems. The annual Business plan specifically identrfies how Halo will contribute to delivering on broader social agendas. working with the health, education and voluntary sectors across local authorities and both local and national organisations. As a non-profit making charity Halo actively seeks to expand its operations beyond contractual terms through sourcing grants to support innovative wellbeing activities. Risk Assessment The Charitable Company has developed a comprehensive risk register to identify both the risks it faces and risk mitigation measures. This document is reviewed on a regular basis by the Trustees. OBJECTIVES AND ACTIVITIES Objectives and aims To provide or assist in the provision of facilities for recreation or other leisure time occupation in the interests of social welfare with the intention of improving the conditions of life of those using the facilities; To organize events for recreation or leisure time occupation in the interests of social welfare with the objects of improving the conditions of life of those engaging in them. To relieve the needs of people who are elderly. sick or who have physical or mental disabilities through the provision of recreational and leisure time activities; To promote and preserve good health amongst the population through exerclse and sport. and To promote physical education and development amongst pupils and students of schools, colleges or establishments for the provislon of further or higher education. Strategic themes As a Social Enterprise, the Charitable Company takes its role within the communities it serves seriously and sees social responsibility at the heart of all it does. The Charitable Company's four corporate themes are.. 1. To provide a customer experience which exceeds expectations which attracts and retains customers in an increasingly competitive marketplace. 2. To deliver innovative products for our customers and partners to encourage healthier lifestyles, drive revenue and combat competition. 3. Employ and reward people who add value through their skills, knowledge and performance while delivering a lean workforce fit for future challenges. 4. To operate a flnancially sustainable organisation which uses commercial principles to drive perfonnance and achieve our vision and goals. Page 3 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 STRATEGIC REPORT In common with other providers Halo's market has been characterized by increasing competition, changing customer requirements, cost of living crisis, Local Authority funding restrictions, the fast moving pace of technology and its impact on how people consume leisure. In 2023. Halo faced significant cost pressures from staff costs, primarily increases driven by the National Living Wage, general inflation and the continuing energy cost increases. In the past Halo has used fixed price purchasing arrangements to secure Its energy costs. These arrangements terminated in 2022 leaving the company exposed to market volatility, plans were prepared for several scenarios in 2023 but fortunately market pricing allowed for operations to continue with minimal disruption. Many organisations in the leisure sector did not fare so well. A new flexible purchasing agreement has been put in place until March 2026 and for the winter of 2023 a fixed price deal was activated when it became available at a reasonable cost. Some Halo contracts with local authorities also provide protection from energy cost increases. FUNDRAISING The Trustees are responsible for ensuring that the charity operates within a responsible. sustainable financial framework and that it has adequate resources to carry out its objectives. While the Trustees may delegate many of the operations of fundraising to other parts of the organisation. they retain the responsibility for inspiring other fundraisers, demonstrating the per￿1Ved importance of fundraising to the organisation. In carrying out fundraising, the charity adheres to the following standards.. The Trustees will have regard to the Charity Commission's publication 'Charity Fundraising, {CC20). Fundraising activities carried out by the charity will comply wlth all relevant laws. - Anycommunications to the public made in the course of carrying out a fundraising activity shall be truthful and non-deceptive. All monies raised via fundraising activities will be for the stated purpose of the appeal and will comply with the charitls stated mission and purpose. The charlty wlll comply with GDPR Legislation in relation to all personal data collected. Nobody directly or indirectly employed by or volunteering for the charity shall accept commissions, bonuses or payments for fundraising activities. No general solicitations shall be undertaken by telephone or door-to-door. Fundraising activities should not be undertaken if they may be detrimental to the good name or community standing of the charity. - All Trustees, casual, permanent and contract staff and volunteers are responslbSe for adhering to these procedures. Fundraising activities should not b8 undertaken if they will expose the charity to significant financial risk. Complaints will be dealt with in accordance with the Charity Commissions guide CC20. ACHIEVEMENTS AND PERFORMANCE 2023 Perforniance These accounts represent the nineteenth year of trading for Halo Leisure Services Limtted. (previously trading as The Herefordshire Community Leisure Trust for 2 years) There were no changes to the estate during 2023 with Halo operating 22 leisure ￿ntreS across Herefordshire, Bridgend, Shropshire. GIoU￿sterShIre and Wiltshire. Page 4 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 Deeember 2023 STRATEGIC REPORT - continued FINANCIAL REVIEW The group has returned a surplus of £3,330,867 (2022: £296,917 deficit) before defined benefit pension remeasurement adjustment5 for the year ended 31 December 2023. The Charitable Company continues to target a trading surplus. The challenge has been addressed by a combination of additional cost savings, business expansion and service development, including modernization of systems and processes driven through investment, leading to improved sustainability and reduction in cost of employment. For example.. secure access systems. Key factors behind the reported performance of the Charitable Company have been: 1. Operational revenue recovering following the end of COVID restrictions. 2. Non-operational revenue boosted by a payment from the Welsh Hardship Scheme of £191,446 and an interest payment related to COVID business interruption insurance of £104,872. 3. Funding of £1,698,000 for the construction of an all weather cycle track in Hereford. Reserves policy The Charitable Company's principal financial management policy centers around the need to retain sufficient cash reserves to operate within the Charity Commissions guldelines. Halo Leisure Services Limited has a relatively favourable cash flow as it receives much of its income in advance of its expenditure, but the impact of inflation and energy costs had a detrimental effect on cash generation from core business trading,. leading to capital investment being sourced through financing options. Th8 Trustees recognlse the need for a level of financial reserves that wlll shield the Charitable Company from the possibility of adverse unforeseen circumstsnces. These include a number of specific risks that have been identified in the Charitable Company's Risk Register. The company's reserves policy is to achieve "a level of reserves sufficient to cover an average of three months expenditure plus a level of reserves sufficient to COV8r any actuarially determined crystalised pension deficit contributlon that may be required, in excess of existing bonds. The reserves policy suggests a desired level of unrestricted reserves of at least £3.gm, excluding any pension asset orli8bility. This compares with current unrestricted reserves, excluding the current pension asset, which are £1,630k. Reserves have fallen over recent years due to long lasting effects of the COVID pandemic. The trustees will aim to build reserves. However. this will take a number of years given the continuing uncertainty. The Charitable Company also continues to seek opportunities where it can deliver both social benefrt and financial improvement. and to maintain and improve cost control and effficiency across the business. The company is also following advice from the pension fund managers and the pension scheme actuaries to ensure that the pension scheme is funded at a rate which is sufficient, over the next 20 to 25 years. Page 5 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 STRATEGIC REPORT - continued FINANCIAL REVIEW - continued Reserves in deficit in the previous year Before accounting for any assetlliability arising from the Charitsble Company's defined benefit pension scheme accumulated reserves for the group amounted to £5,133,447 (2022.. £1,802,580), including restricted funds of £3,503,62912022: £2,404,513) and unrestricted funds of £1,629,818 (2022.. £601,933 deficit). However, after accounting for the Charitable Company's defined benefit pension scheme asset at the year end of £1,983.000 (2022.. £4,747,000, liability) the group has an unrestricted reserve surplus of £3,612.818 (2022: £4,145.067). The pension assevliability does not affect the Charitable Company's resources for general application as the Charitable Company pays pension contributions in line with the rates prescribed by professionally qualified actuaries which are calculated to prevent any potentlal pension deficit in the long term. The Trustees are satisfied that the Charitable Company can meet its obligations as and when they fall due. PRINCIPAL RISKS AND UNCERTAINTIES The Trustees maintain a register of the key business risks faced by the Charitable Company and seeks to ensure that appropriate policies are in place to manage, monitor or mitigate those risks. Much of the Charitable Company's income is received from short tem membership commitments and daily till income with no guarantees of renewal. Whereas Halo has longer t8rm commitments to staff and maintenance of the property portfolio. The variance between the timing of Halo's commitments and its customers, commitments is judged to be a risk that Halo faces, along with the stability of some of its key partners in the form of Local Authority funding in the short and medium term. FUTURE PLANS Halo will continue to promote an environment of high perfomiance from a happy and well-motivated workforce alongside driving down energy consumption through a combination of good practice and targeted investment. The company will continue to work with its partners to provide the best possible service and promote the overall objectives of preserving and improving good health and wellbeing amongst the population. Halo has a strategic objective to grow through acquisition of new contracts, in circumstances where the geographical proximity complements the existing business. During 2024, work will commence on the replacement of the athletics track at Hereford, which is a major project and h8s been funded by community and national organisations. DISABLED PERSONS AND DIVERSITY The parent Charitable Company and its subsidiary undertakings, policy is to give full and fair consideration to applications for employment by disabled persons, having regard for their particular aptitudes and abilities. Disabled employees receive appropriate training to promote their career wlthin the organisation. Employees who become disabled are retained in their existing posts where possible or retrained for suitable altemative posts. Halo has a strong commitment to diversity inclusion and engagement and works with partners to target groups and break down barriers to activity and participation, taking positive steps to increase representation and participation from under-represented groups, believing in a culture of safety, va5ue and inclusion. Halo has partnered with the National Centre for Diversity and has achieved the Investors in Diversity Award during 2023. Page 6 HALO LEISURE SERVICES LIMITED REPORT OF THE TRUSTEES INCORPORATING STRATEGIC REPORT for the Year Ended 31 December 2023 STATEMENT OF TRUSTEES, RESPONSIBILITIES The Trustees are responsible for preparing the Report of the Trustees incorporating a Strategic Report and financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice, including FRS102 (the financial reporting standard applicable in the UK and R.O.l). Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charitable Company and the group and application of resources induding the income and expenditure of the group for that period. In preparing those financial statements. the Trustees are required to: select suitable accounting policles and then apply them conslstently; observe the methods and the prlnciples in the Charltles SORP 2019 (FRS 102) make judgements and estimates that are reasonable and prudent., stste whether applicable accounting standards have been followed, subject to any material departures explained in the financial statements., 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 anytime the financial position of the Charitable Company and to enable them to ensure that the financial statements compSy wlth 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. STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS So far as the Trustees are awar8, ther8 is no relevant audit infonnation (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each Trustee has taken all the steps that he or she ought to have taken as a trustee in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that infomiation. APPROVAL OF REPORTS In approving the Report of the Trustees, the Trustees of th8 Charitable Company also approve the Strategic Report in their capacity as Directors. ON HALF OF THE BOARD: Curtis rman J G Huxle Secretary A Cavaghan - tee Date: Page 7 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HALO LEISURE SERVICES LIMITED Opinion We have audited the consolidated financial statements of Halo Leisure Services Limited Group for the year ended 31 December 2023 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Cash Flow Statement and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: give a true and fair view of the stste of the group's and of the parent charitable companls affairs as at 31 December 2023 and of the group's incoming resources and application of resources, including its income and expenditure, for the period then ended. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities: and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) {ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors responsibilities for the audit of the financial statements section of our report. We are independent of the group and charitsble company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Concluslons relatlng to going concern In auditing the financial statements, we have conduded that the Board of Trustees, use of the going concem basis of accounting in the preparation of th8 financial statements Is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charltable company's ability to continue as a going concern for a period of at least twelve months from when the financial statem8nts are authorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report. Other information The trustees are responsible for the other information. Th8 Other infomiation comprises the information included in the annual report, other than the financial statements and our Report of the Independent Auditors thereon. Our opinion on the financial statements does not cover the other infomation and we do not express anyform of assurance conclusion thereon. In Gonnection 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, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinion on other matters prescribed by the Companies Act 2006 In our opinion. based on the work undertaken in the course of the audit: the information given in the Report of the Trustees for the financial year for whlch the financial Statements are prepared is consistent with the financial statements., and the Report of the Trustees has been prepared in accordance with applicable legal requirements. Page 8 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HALO LEISURE SERVICES LIMITED Matters on which we are required to report by exception In the light of the knowledge and understanding of the group and charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us. or the financial statements are not in agreement with the 8ccounting records and returns., or certain disclosures of trustees, remuneration specified by law are not made; or we have not received all the infomiation and explanations we require for our audit. Responsibilities of trustees As explained more fully in the Statement of Trustees Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of fin8ncial statements that are free from materlal misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responslble for assessing the group's and charitable companvs ability to continue as a going concem, disclosing. as applicable, matters related to going concern and uslng the golng concern basls 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. Our responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion, Reasonabl8 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 re8son8bly be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilitles. outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities. including fraud is detalled below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities. including fraud and non-compliance with laws and regulations, was as follows: the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulatlons., we identified the laws and regulations applicable to the group and charitable company through discussions with directors and our experience of the sector., we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group and Charitable Company, including, but not limited to. the Companies Act 2006, UK tax legislation and National Minimum Wage legislation,. we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management., and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the Group's and Charitable Company's financial statements to materlal misstatement, including obtaining an understanding of how fraud might occur, by: making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. Page 9 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HALO LEISURE SERVICES LIMITED To address the risk of fraud through management bias and override of controls. we: perfomed analyiical procedures to identify any unusual or unexpected relationships., tested joumal entries to identify unusual transactions. reviewed management contracts where contract variations had arisen; assessed whetherjudgements and assumptions made in determining the accounting estimates set out in note 1 were indicative of potential bias: and investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included. but were not limited to= agreeing financial statement disclosures to underlying 5UPPOrting documentation. reading the minutes of meetings of those charged with governance. enquiring of management as to actual and potential Ittigation and claims. and reviewing correspondence with HMRC and the relevant regulator. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non- compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the Board of Trustees and other management and the inspection of regulatory and legal corresponden￿, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. Afurther description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's webstte at www.frc.org.uklauditorsresponsibilities. This description forms part of our Report of the Independent Auditors. Us• of our report This report is made solely to the charitable companvs members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable comp8ny's members those matters we are required to st8te to them in an auditors, report and for no other purpose. To the fullest extent pemiitted by law, we do not accept or assume responsibility to anyone other than the charitabl8 company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have fomied. Ashley Phillips FCCA (Senior Statutory Auditor) for and on behalf of Mccabe Ford Williams Statutory Auditors and Chartered Accountants Building 1063, Cornforth Drive Kent Science Parf( Sittingbourne Kent ME9 8PX Date: Page 10 HALO LEISURE SERVICES LIMrrED CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES Incor oratin a consolidated Income and Ex endSture Account and statement of Other Com rehensive Income for the Year Ended 31 December 2023 Unreslricted Funds Restricled Funds FRS 102 s.28 Unrestricted Funds Totsl Funds Year to 31.12.2023 Total Funds Year to 31.12.2022 NOTE INCOME Donations and legacies 150 499,101 499,251 313,164 Inwme from charitabl& aclivilies.. Operation of Leisure sites 15,547,323 1,680,301 17,227,624 14,123,428 Income from other trading aclivilies,. Commercial Irading operations 134,527 Investment income 42,920 42,920 368,448 Other income 104,870 104,870 17,874,665 109,293 15.048,860 TOTAL INCOME 15,695,263 2,179,402 EXPENDITURE Costs of raising funds.. Commercial trading operations 41,982 Expenditure on charltable acliviliss.. Lelsure acliwties 12 13,463,512 1,080,286 (76,0001 14,487,798 16,184,795 TOTAL EXPENDITURE 13.463,512 1,080,286 {76,000) 14,467,798 16,226,777 NET {EXPENDITUREI I INCOME BEFORE TAXATION AND TRANSFERS 2,231,751 1,099,116 76,000 3,406,867 11,177,917) GROSS TRANSFERS BETWEEN FUNDS NET {EXPENDITUREI I INCOME BEFORE ACTUARIAL {LOSSESyGAINS UNDER FRS102 2,231,751 1.099,116 76,000 3,406,867 11,177,917) OTHER RECOGNISED GAINS AND LOSSES R8measurem8nts on defined benefit pension schemes 27 {2,840,0001 12,840,000) 18,334,000 NET INCOME I (EXPENDITURE) 2.231,751 1,099,116 {2,764,0001 566,867 17,156.083 FUNDS BROUGHT FORWARD {601,9331 2,404,513 4,747,000 6,549,580 110.606,503) FUNDS CARRIED FORWARD 1,629,818 3,503,629 1,983,000 7,116,447 6,549,580 All of the above results are derived from continuing activities. The group has no other recognised gains gnd losses other than those stated above. The notes forn part of these financial stat8ments Page11 Company Registered number: 04335715 Registered Charity number: 1091543 HALO LEISURE SERVICES LIMITED CONSOLIDATED BALANCE SHEET 31 December 2023 31.12.23 31.12.22 Notes FIXED ASSETS Intangible assets Tangible assets 14 15 13,737.649 13.878,233 13,737,649 13,878,233 CURRENT ASSETS Stocks Debtors Cash at bank and in hand 17 18 25,058 376,074 2,909,656 40,058 562.663 2,912,962 3,310,788 3,515,683 CREDITORS Amounts falling due within one year 19 3,515,949 4,595,655 NET CURRENT {LIABILITIES)IASSETS 205,161 (1,079,972 TOTAL ASSETS LESS CURRENT LIABILITIES 13.532,488 12,798,261 CREDITORS Amounts falling due after more than one year 20 (8,320,798) (10,891.772) DEFERRED INCOME 24 (78,243) (103,909) NET ASSETS BEFORE PENSION (ASSET)ILIABILITY 5,133,447 1.802,580 PENSION (ASSET)ILIABILITY 27 (1,983,000) (4,747,000) FUNDS Unrestrlcted income funds Unrestricted designated funds Restricted funds 25 25 25 3,612,818 4,145,067 3,503,629 2.404.513 TOTAL FUNDS 25 7,116,447 6,549,580 5,133,447 1,802,580 ONB ALF OF THE BOARD: Curtis - Ch A Cavaghan - Trustee J G Huxley- any Secretary Date: The notes fomi part of these financial statements Page 12 Company Registered number: 04335715 Registered Charity number: 1091543 HALO LEISURE SERVICES LIMITED COMPANY BALANCE SHEET 31 December 2023 31.12.23 31.12.22 Notes FIXED ASSETS Intangible assets Tangible asset5 Investments 14 15 16 11,801,350 11,882,790 11.801.350 11.882.790 CURRENT AssErs Stocks Debtors Cash at bank and in hand 17 18 25.058 369.165 2,807,286 40.058 508,846 2,827,845 3,201.509 3,376,749 CREDfTORS Amounts falling due within one year 19 3,465,964 4,497,564 NET CURRENT (LIABILITIES)IASSETS 264,455 (1,120,815 TOTAL ASSEfs LESS CURRENT LIABILITIES 11,536,895 10,761,975 CREDrroRS Amounts falling due after more than one year 20 {8,320.798) (10,891,772) DEFERRED INCOME 24 (78.243) (103,909) NET LIABILITIES BEFORE PENSION (ASSET)ILIABILITY 3,137,854 233.706 PENSION (ASSET)ILIABILITY 27 (1,983,000) (4,747,000) FUNDS Unrestricted income funds Unrestricted designated funds Restricted funds 25 25 25 3,546,206 4,097,456 1,574,648 415,838 TOTAL FUNDS 25 5,120,854 4,513,294 3.137.854 233,7061 ON HALF OF THE BOARD: S Curtis- A Cavaghan - Tru ee JGHuxl ompany Secretary Date: The notes fomi part of these financial statements Pag8 13 HALO LEISURE SERVICES LIMITED CONSOLIDATED CASH FLOW STATEMENT for the Year Ended 31 December 2023 Year to 31.12.23 Year to 31.12.22 Notes Cash flows from operating activities Cash generated from operations Proceeds from sale of investment Interest received 2,802,754 628,616 (350,000) 18,448 42.920 Net cash from operating activities 2,760,464 260.168 Cash flows from investing activities Purchase of tangible fixed assets Proceeds from sale of investment Proceeds from fixed asset disposal Interest re￿iVed (2.486.050) (541,037) 350,000 2,263 18,448 42.920 Net cash from investing activities 2,443,130 170,326) Cash flows from financing activities New finance lease agreements in year Repayment of bank loans Hire purchase repayments in year Interest element of hire purchase and lease payments 148,680 (150,000) {208,056) 111,264 (150,000) (468,806) Net cash from financing activities 320,640 618,806 Change in cash and cash equlvalents in the reporting period (3,306) 528,964 Cash and cash equivalents at the beginning of the reportlng perlod 2,912,962 3,441,926 Cash and cash equivalents at the end of the reporting period 2,909.656 2,912,962 The notes fomi part of these financial statements Page 14 HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT for the Year Ended 31 December 2023 RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH INFLOW FROM OPERATING ACTIVITIES Year to 31.12.23 Year to 31.12.22 Net movement in funds Actuarial (gainslllosses on defined benefit pension schemes Interest element of hire purchaselfinance lease pa￿entS Depreciationlamortisation charges Losses on asset revaluation Gain on finance lease revaluation Decreasel(increase) in stocks (Profit>lloss on disposal Decreasel(increase) in debtors Increasel(decrease) in creditors Movement in deferred capital grants Difference between pension charge, including finance costs, and cash contributions 566,867 2,840,000 111.264 838,154 1,783,370 14,189,337) 15.000 17,156.083 118.334,000) 468,806 702,999 (5,690) <2,263) (59.184) (153.469) (25.666) 186,589 752,513 125.666) 76,000) 881,000 Net cash Inflow from operatlng actlvltles 2,802,754 628,616 ANALYSIS OF CASH AND CASH EQUIVALENTS Year to 31.12.23 Year to 31.12.22 Cash in hand and at bank 2,909,656 2,912,962 Total cash and cash equivalents 2,909,656 2,912,962 ANALYSIS OF CHANGES IN NET DEBT 31.12.2022 Cash Flows Non-cash Changes 31.12.2023 New Finance Leases I Bank Loans Other non- cash changes Cash in hand & bank Debt due within one year Debt due greater than one year 2.912,962 12,362,088) (3.306) 196,974 2,909,656 1529,850) (50,851) 1,686.115 (10,891.772) (97,829) 2,668,803 (8.320,798) {10,340,8981 193.668 (148,680) 4,354,918 15,940,992) The notes form part of these financial statements Page 15 HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the Year Ended 31 December 2023 ACCOUNTING POLICIES Basls of preparing the financial statements The financial statements of the charitable company, which is a public benefrt entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the provisions of FRS 102 (effective 1 January 2019).. Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and the Companies Act 2006. There were no material departures from that Standard. The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless Otherwise stated. Going concern Revenue has continued to recover through 2023 following the COVID-19 disruption of the previous years and this has been enhanced by pri￿ increases to cover both general infiationary increases and the wage cost increases driven by changes to the National Living Wage. Cost of utilities. primarily gas and electricity, remain a risk, although prices have softened through 2023. Halo has an agreement in place for fomard purchases when pricing is favourable butthis is not a fixed price contract. This means Halo continues to be exposed to shortlmedium tenn price shocks. Group and charitable company cash flow forecasts have been produced based on revenue and cost forecasts for the foreseeable future. These forecasts indicate that the group and charitable company will remain within the group's financing facllitles for the foreseeable future and will be able to meet their financial obligations as they fall due. The Board of Trustees has determined that the actions that it has taken mitigate the uncertainties and has therefore prepared the financial reporting on a going concem basis. Page 16 continu8d. HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 ACCOUNTING POLICIES - continued Functional currancy and presentation currency The group's functional currency is British Pound Sterling (GBP), which is also the presentation currency for the group. The financial statements are therefore presented in British Pound Sterling. Funds Unrestricted funds are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The cost of raising and administering such funds are charged against the specrfic fund. The aim and use of each restricted fund is set out in the notes to the financial statements. Investment income, gains and losses are allocated to the appropriate fund. Income recognition Items of income are recognlsed and included in the accounts when all of the following criteria are met: the Charitable Company has entitlement to the funds; any performance conditions attached to the items of income have been met or are fully within the control of the Charitable Company., there is sufficient certainty that receipt of the income is considered probable; and the amount can be measured reliably. iv. Income represents net sales of goods and services, excluding Value Added Tax and discounts to customers and management fees. Income received in respect of future events has been deferred and will be released when the event is complete or over the period to which the income relates. Membership income is deferred over the period of membership. Management fee The management fee is unrestricted funding which is available for use at the discretion of the Trustees in furtherance of the general objectives of the Charitable Company. Income received for capital expenditure is treated as deferred income and is credited to the Statement of Financial Activities by instalments over the expected useful economic life of the related asset on a basis consistent wf(h the depreciation policy. Expenditure recognition Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation commlttlng the charity to that expenditure, it is probable th8t a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources. Support costs Support costs are those that assist the work of the Charitable Company but do not directly represent charitable activities and include office costs, govemance Costs, and administrative payroll costs. They are incurred directly in support of expendlture on the objects of the Charitable Company and include project management carried out at Headquarters. Where support costs cannot be directly attributed to particular headings they have been allocated to cost of raising funds and expenditure on charltable activities on a basis consistent with use of the resources. Irrecoverable VAT Given the nature of the Charitable Company's activities it attracts exempt supplies, whlch results in the Charitable Company falling under the partial exemption scheme. Input VAT is fully recovered on taxable supplies, together with a proportion of non-attributable input VAT. Irrecoverable VAT is written off to the Statement of Financial Activities. Page 17 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - contlnued for the Year Ended 31 December 2023 ACCOUNTING POLICIES - continued Tanglbl• flxèd assets Indlvidual fixed assets costing £2,000 or more are capttallsed at cost and are depreciated over their estimated useful economic lives. In respect of leases held over the leisure facilities, capitalised when deemed to be finance leases due to thelr duration, cost is detemined on the basis of the net present value of minimum lease payments calculated in accordance with the Charitable Company's incremental borrowing rate. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter. Freehold Property 2% oncost Leasehold Property over remaining term of lease Improvements to Property over remaining term of lease Plant and Machinery straight line over 10 years, 15 % on cost Fixtures and Fittings straight line over 5 years, 150/0 on cost Fitness Equipment straight line over 5 years and straight line over 3 years Computer Equipment straight line over 3 years Intangible fixed assets Amortisation is provided at the following annual rate in order to write off the asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter. Computer Software straight line over 3 or 5 years Stocks Stocks have been valued at the lower of cost and estimated selling price less costs to sell, after making due allowance for obsolete and slow moving items. Group financial statements The financial statements consolidate the results of the Charitsble Company and its wholly owned subsidiaries Halo Leisure Enterprises Limited (up to the date of sale of the company) and Severn Centre Trust Ltd on a line by line basis. A separate Statement of Financial Activities and Income and Expenditure Account is not presented for the Charitable Company itself in accordance with the exemptlons afforded by paragraph 397 of the SORP. Charitable Company status The Charitable Company is a company limited by guarantee. At 31 December 2023 there were nine members. each of whom, on winding up, has undertaken to contribute an amount not exceeding £1. Debtors Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. Cash at bank and in hand Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Creditors and provisions Creditors and provisions are recognised where the Charitable Company has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to setue the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. Financial instruments The twst only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method. Page 18 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 ACCOUNTING POLICIES - contlnued Servlce Coneesslon Arrangements The Charitable Company has a Service Contract with a Local Authority for the maintenance and operation of leisure centres owned by the Local Authority to which it has a lease and management service contract. The Authority has rights under the contract to specify the activities offered by the centres and have influence over the prices charged for them and also may have certain exclusive rights for the use of the centres at certain times. The contract specifies minimum standards for the ServI￿S to be provided, with deductions from the service management fee payable being made if facilities are unavailable or performance is below the minimum standards. Property, plant and equipment The buildings and plant at the centres are leased to the Charitable Company as part of the overall contractual relationship with the Authority but the Authority maintains ultimate control of these assets. Accordingly the access which the Charitable Company has in the use of these assets is to enable it to operate the leisure centres, so that the Charitable Company can provide the public service it is contracted to provide, not to effectively own these public service assets. The leased buildings are for Such a length of time that they are recognized as finance leases on the Charitable Company's Balance Sheet however other assets leased from the Local Authority are not recognised on the Charitable Companys Balance Sheet. Receipts The Charitable Company receives an agreed payment from the Authority each year which is adjusted each year by inflation and can be reduced rf the Charitable Company fails to meet availability and perfomiance standards in any year but which is otherwise fixed. In cases where the receipt from the Authority includes funding for specific works to be carried out in accordance with specifications laid down in the contract but which has not been spent at the year end a provision is included in the financial statements to reflect this. Taxation The Charitable Company is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Leaslng and hlre purchase Property, plant and equipment acquired under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Charitable Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Statement of Financial Activities so as to produ￿ a constant periodic rate of charge on the net obligation outstanding in each period. Rentals payable under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease. Government grants Govemment grants are recognised when the performance related conditions imposed upon the receipt of the grant have been met. Where these have not been satisfied, these grants are recognised as liabilities. If grants are not conditional on future perfomiance related conditions, then income is recognised when the grant proceeds are receivable. During the year. the following grants were received: Government Business Grants relating to the retail, hospitality and leisure industries awarded during the lockdown periods. Page 19 continued.. HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - contlnued for the Year Ended 31 December 2023 ACCOUNTING POLICIES- contlnued Pension costs and other pOst￿etirement benefits The Charitable Company accounts for the pension scheme in accordance with the Financial Reporting Standard 102. The Charitable Company operates three defined benefits pension schemes for which pension charges are based on full actuarial valuations dated 31 March 2022, rolled forward to the balance sheet date. for the Worcestershire County Council Pension Fund, Shropshire County Pension Fund and the Rhondda Cynon Taf County Borough Council Pension Fund. A furiher defined benefit pension scheme is operated in respect of the Gloucestershire Local Govemment Pension scheme however this is not recognized on the balance sheet of the charitable company due to a pass-through arrangement. The Charitable Company provides pension benefits for eligible staff through these administered pension schemes. The administered schemes are multi*mployer schemes which provide benefits based upon final pensionable pay. For defined benefit schemes the amounts charged to resources expended on charitable activities are the current seNice costs and any gains and losses on settlements and curtailments. They are included as part of staff costs. Past Service costs are recognised immediately if the benefits are vested. If the benefits have not vested. 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 adjacentto interest. Actuarial gains and losses are recognised immediately in the Statementof Financial Activities. The defined benefit scheme is funded, and the assets of the scheme are held separately from those of the charity in a trust68 administ8r8d fund. 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 curr8nt rate of return on long dated high quality corporate bonds of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtalned at least triennially and are updated at each balance sheet date. See note 27 for further information in connection with the Charitable Companvs defined benefit schemes. Crltlcal accountlng Judgements and key sources of estimation uncèrtainty In the application of the Group's accounting policies management is required to make judgements, estimates and assumptions aboutthe carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from the estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised rf the revision affects only that period. or in the period of the revision and future periods if the revision affects both current and future periods. The present value of the Local Govemment Pension Scheme defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net COSt (income) for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 27. will impact the carrying amount of the pension liability. Furthermore a roll forward approach which projects results from the latest full actuarial valuations performed have been used by the actuaries in valuing the pensions liability at 31 December 2023. Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carr￿Ing amount of the pension assetlliability. In detemiining the value of the pension assevliability the impact of an asset ceiling has been included to assess for recoverability, in accordance with the requirements of FRS102. The recoverability of certain assets and valuation of investments within the Local Government Pension Fund may have been impacted by COVID-19, however it is not possible to determine atthe current time to what extent that is. Page 20 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 FINANCIAL ACTIVITIES OF THE CHARITABLE COMPANY The financial activities shown in the Consolidated Statement of Financial Acllvitles include those of the Charitable Company's wholly owned subsidiaries, Halo Leisure Enterprises Limited to the date of sale and Severn Centre Trust Ltd. A summary of the financial activities undertaken by the Charitable Company is set out below: Year to Year to 31.12.23 31.12.22 Incomlng resources excluding gift aid from subsidiary Expenditure on charitable activities Net (expenditure)lincome Actuarial (lossesygains on defined benefit pension schemes 17,637,510 14,683,487 (14,189,950) (15,871.413) 3,447,560 {1,187,926) 2,840,000 18,334,000 607,560 17.146,074 86,712 Distribution from subsidiary 607,560 17,232,786 DONATIONS AND LEGACIES Unrestricted fund5 31 December 2023 Restrlcted Total funds funds Year to 31 31 December December 2023 2023 Total funds Year to 31 December 2022 National Exercise Referral Scheme (see note 25) Donations Other project grants 197,635 197.635 182,441 150 150 301.466 301,466 130,723 Total 150 499,101 499,251 313.164 INCOME FROM CHARITABLE ACTIVITIES Unrestricted funds 31 December 2023 Restricted Total funds funds Year to 31 31 December December 2023 2023 Total funds Year to 31 December 2022 Operation of leisure centres Management fee Government grants 14,056,787 1,464,870 25,666 1.372,647 15,429,434 1,464,870 333,320 12,267,853 1,576,674 278,901 307,654 Total 15.547,323 1,680,301 17,227.624 14,123,428 Page 21 continued... HALO LEISURE SERVICES LIMrrED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Yéar Endéd 31 Decembér 2023 INCOME FROM OTHER TRADING ACTIVITIES A summary of the trading results of the subsidiary, Halo Leisure Enterprises Limited, that was wholly owned until its sale in July 2022 is shown below: Year to 31.12.22 Tumover Cost of sales and administration costs (including intra-group) 134,527 141,982) Net profrt 92,545 The subsidiary company gift aided its profits to the parent Charitable Company at the point of sale. Included within Turnover 15 £nil (2022= £nil) of sales to other group companies and £nil (2022: £350,000) in sales proceeds of the trading subsidiary. Included within Costs of sales and administration costs is £nil (2022: £5,833) of management fees payable to the parent charitable company, Halo Leisure Services Limited. INVESTMENT INCOME Unrestricted funds 31 December 2023 Restricted Total funds funds Year to 31 31 December December 2023 2023 Total funds Year to 31 December 2022 Interest received Proceeds from sale of investment 42,920 42,920 18,448 350,000 Total 42,920 42,920 368,448 OTHER INCOME Unrestricted funds 31 December 2023 Restricted funds 31 December 2023 Total funds Year to 31 De￿rnber 2023 Total funds Year to 31 December 2022 Insurance claim 104.870 104,870 109,293 Totsl 104.870 104,870 109.293 In 2023. the Group received £104,870 (2022: £109,293) of income related to a Covid Business Interruption Clairn on its insurance policy. NET EXPENDITUREIINCOME OF THE PARENT CHARITABLE COMPANY As permitted by section 408 of the Companies Act 2006. the income and expenditure account of the parent Charitable Company is not presented as part of these financial statements. The parent Charitable Companls net surplus after the gift aid of profits from the subsidiary, proceed of its sale and actuarial gainsllosses under defined benefit schemes for the financial year was £607,560 (2022: £17.232.786). Page 22 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 ANALYSIS OF STAFF COSTS, TRUSTEE REMUNERATION AND EXPENSES, AND THE COST OF KEY MANAGEMENT PERSONNEL Year to 31.12.23 Year to 31.12.22 Wages and salaries Social security costs Other pension costs 8,249,440 553,710 636.090 7,214,199 502,948 1,216,734 9,439,240 8,933,881 The average monthly number of employees during the period was as follows: Year to 31.12.23 607 57 Year to 31.12.22 522 55 Leisure Centres Support Management and administration 668 581 The average monthly full-time equivalent number of employees during the period was as follows: Year to Year to 31.12.23 31.12.22 215 205 47 45 Leisure Centres Support Management and administration 266 254 The number of employees whose emoluments as defined for taxation purposes amounted to over £60,000 in the year was as follows: Year to 31.12.23 Year to 31.12.22 £60,001- £70,000 £70,001- £80,000 £80,001- £90,000 £90,001- £100,000 £100,001- £110,000 During the year, Trustees received £nll remuneration (2022: £Nil) and Trustees received £nil benefits in kind (2022: £nil). The Trustees neither received nor waived any 8moluments durlng the year. During the year, expenses of £304 (2022: £219) were reimbursed to Trustees of the Charitable Company for travel expenses to board meetings. The total amount of employee benefits received by key management personnel is £395.93212022: £384,940). The trust conslders its key management personnel comprise of the Chief Executive, Finance Director, HR Dlrector and Operations Director. Page 23 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 10. NET INCOME FOR THE YEAR The net income is stated after charging., Year to 31.12.23 Year to 31.12.22 Equipment repairs, maintenance and lease Depreciation - owned assets Depreciation - assets on hire purchase contracts or finance leases Computer software amortisation Impairment losses on tangible fixed assets Auditors remuneration Non audit work - statutory accounts preparation 138,130 503,924 334,230 221,169 338,438 356,512 8,051 1,783,370 26,870 8,200 25,000 6,223 11. INTEREST PAYABLE AND SIMILAR CHARGES Year to 31.12.23 Year to 31.12.22 Finance lease and hire purchase interest (4,068,780) (4,068,780) 468,806 468,806 12. RESOURCES EXPENDED ON CHARITABLE ACTIVITIES Support costs Total for Year to 31.12.23 Total for Year to 31.12.22 Direct costs Stsff costs Leisure centres 4 794 720 9 439 240 233 838 14 467 798 16 184 795 Major components of Support Costs Year to 31.12.23 Year to 31.12.22 Premises Costs Advertising & Promotions OffiTr Admlnlstratlon Finance and Compliance Other Finance Costs re FRS 102 Irrecoverable VAT Equipment Repairs, Maintenance and Lease Other Costs Govemance Costs 1,569,090 66,940 348,784 (3,702,790) (225,000) 871.860 138,130 1,131,754 35,070 233,838 1,404,829 60,760 256,262 873,261 224,000 777,958 221,169 843,826 31.223 4,693,288 All staff and support costs relate to the sole activity of the Charitable Company and its wholly owned charitable subsidiary, being the provision of leisure facilities. Governance costs are made up of auditor's remuneration of £26,870 (2022: £25,000). Page 24 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - contlnued for th• Year Endèd 31 D•c•mber 2023 13. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES Unrestricted Funds Restricted Funds FRS 102 s.28 Unrestricted Funds Totsl Funds Year to 31.12.2022 NOTE INCOME Donations and legacies 313,164 313,164 Income from charitable activities.. Operation of Leisure siles 13,707,590 415,838 14,123,428 Income fmm olher trading activitses.. Commercial trading operations 134.527 134,527 Investment income 368,448 368.448 Other income 109,292 14,319,858 109,292 TOTAL INCOME 729,002 15,048,859 EXPENDITURE Gosts of raising funds.. Commercial trading operalions 41,982 41,982 Expenditure on charitable activthes.. Leisure activities 12 13,900,077 1,403,718 881,000 16,184,795 TOTAL EXPENDITURE 13,942,059 1,403,718 881,000 16,226,777 NET (EXPENDITURE) I INCOME BEFORE TAXATION AND TRANSFERS 377,799 {674,7161 1881,0001 11,177,917) TAXATION Taxai)on on trading pmfit GROSS TRANSFERS BETWEEN FUNDS NET INCOME BEFORE ACTUARIAL (LOSSESIIGAINS UNDER FRS102 377,799 1674.716) (881,000) {1,183,7511 OTHER RECOGNISED GAINS AND LOSSES Remeasurements on defined benefit pension schemes 27 18,334,000 18.334,000 NET INCOPIE I (EXPENDITURE) 377,799 1674,716) 17,453,000 17,156,083 FUNDS BROUGHT FORWARD {979.7321 3,079,229 112,706,000) {10,606,503) FUNDS CARRIED FORWARD 1601,9331 2,404.513 4,747,000 6,549,580 Page 25 continued... HALO LEISURE SERVICES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - contlnued for the Year Ended 31 December 2023 14. INTANGIBLE FIXED ASSETS Group Computer software COST At 1 January 2023 Disposals 27,363 27,3631 At 31 December 2023 AMORTISATION At 1 January 2023 Amortisation eliminated on disposal 27,363 27,363) At 31 December 2023 NET BOOK VALUE At 31 December 2023 At 31 December 2022 Company Computer software COST At 1 January 2023 Disposals 27,363 27,363) At 31 December 2023 AMORTISATION At 1 January 2023 Amortisation eliminated on disposal 27,363 27,363) At 31 December 2023 NET BOOK VALUE At 31 December 2023 At 31 December 2022 Page 26 continued... (r o vj HALO LEISURE SERVICES LIMrrED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the Year Ended 31 December 2023 15. TANGIBLE FIXED AssEfs - continued Group - contlnued Cost or valuation at 31 December 2023 is represented by: Improvements to property Freehold propety Long leasehold Plant and machinery Initial valuation Valuation in 2023 Cost 10,395,137 (1,783,370) 2,297,613 5,563,212 576,872 2,297.613 8,611,767 5,563,212 576,872 Fixtures and fittings Fitness equipment Computer equipment Totsls Initial valuation Valuation in 2023 Cost 10,395,137 (1,783,370) 10,224,518 651,488 847,919 287,414 651,488 847,919 287,414 18,836,285 If long leasehold property had not been revalued it would have been included at the following historical cost.. 31.12.23 31.12.22 Cost Aggregate depreciation continued... Page 28 co N¢0 L)<<0￿c u<