ROYAL AIR FORCE CLUB FOUNDED 1918 The Royal Air Force Club (A charity and company limited by guar3ntee} Trustees Annual Report and Consolidated Financial Statements for the Year Ended 31 December 2023 Reglstered Address The Royal Air Force Club, 128 Piccadilly, London. W1J 7PY Charity Details Charity registration number - 1108295 Company Details Company registration number- 05321353 A Company registered by Guarantee. The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Ststements For the year ended 31st December 2023 Contenls Foreword from the Chair of the Board of Trustees Pages3&4 Trustees Officers and Advisors, Reference and Administrative Information Page 5 Financial Statements Declaration, Governance, Management and Risk Page56&7 Group Structure, Govemance Code and Charitable Objects Page8&9 The Wider RAF Famity and the Club's Vision Mission and Values Page 9 The Club Strategy and Plans for the Future Page 10 Environmentsl Strategy and Fundraising Strategy Poge11 Club Committees Pages 12 to 14 Contribution by Club Volunteers Page 14 Stsff Engagement, stsff Awards and Staff Wisits to RAF Stations Page 15 Financial Review Pages 16 to 18 Capital Improvements to the Club House and The Club as a Going Concem Page 18 Key Management Personnel & Remuneratiory The Reserves Policy & the Investment Policy Page 19 Accounting and Reportillg Responsibilities Pages 20 & 21 Independent Auditors. Report Pages 22 to 24 The Ststutory Financial Statements Pages 25 to 28 Notes to the Financial Statements Pages 29 to 39 Page 2 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31, December 2023 Foreword - Chair of the Board of Trustees I have much pleasure in submitting this ￿POrt on the artivities and financial statements of the K4F Club for the year which ended on 31. December 2023. The calendar year of 2023 saw three long-standing Trustees leave the Board. In January, Mr John Fisher, Trustee and Vice-chair stood down after 14 years of service. In June Wg Cdr James Hill, Trustee and Chair of the Membership Cornmittee stwd down after 8 years of service and in December, Wg Cdr James Poynton, Tnjstee and Chair of the Arts & Heritage Committee also stood down after 8 years of service. The Board of Trustees th3nks Mr Fisher, Wg Cdr Hill and Wg Cdr Poyntcn for their tireless work supporting the Club over many years. In September, the Board was pleased to welcome both Air Cdre Paul Higgins and Flt Lt Neeraj Kapur to the Board of Trustees. Air Cdre Higgins has also been appointed as Chair of the Membership Committee and Flt Lt Kapur has been appointed as Vice-chair of the Finance, Audit and Risk (FAR} Committee and will take over as Chair of the FAR Committee in late 2024. The Board has continued its work in growing the membership of those who are currently seNin9 through focussing on the Station Club Representative network to ensure that the Club's links with the currently serving RAF Officer cadre, both Regular and Rese￿e, are strongly and closety maintained, which are wtal to the Club as part of our Charitable objects. In August, the Club was honoured to welcome Her Majesty The Queen to the Club to both unveil a commissioned portrait and name a room after Noor Inayat-Khan GC, an SOE agent based in France during WWII. Her incredible story continues to inspire u5. A portrait of Daphne Pearson GC has been commissioned to be displayed next to Noor Khan GC. The Club also continues its discussions with Royal Advisors to seek on the next Patron of the Royal Air Force Club. In September, the Board approved the commissioning of an Environmental and Sustainability Carbon Net Zero plan in support of the Club's NZ40 commitments. The results of this will feed directly into the capital expenditure projects planned over the next 10 years and beyond. The Club staff-led 'Green Team, has also implemented changes such as removing single-use plastics from Club bedrooms and workn'ng with suppliers to reduce our carbon footprint. Financially the Club has now returned to 'normal business" following the efferts of the pandemic, and has developed a Board-led strategy to regrow our Reserves as part of our future proofing and risk mttigation processes. For the first time in many years, a comprehensive rnembership survey was undertaken in 2023 to help us priorf(ise what our current and future members will need and want from the Club over the next 10 years and beyond. The results are exceptionally detailed and are providing invaluable infomation to the Board of Trustees and the Club Executive Team. In 2023, 945 discounted room nights lan increase of 52% versus 2022) were provided to serving RAF officers when in London on duty. The Club also worked to support growth in member- sponsored bookings including Squadron lunches and dinnèrs as well as weddings and family functions and also saw an increase in KAF-related bookings. All of this underlines our commitment P>Je 3 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31. December 2023 to the Mission of the Club to foster and promote the traditions of the Royal Air Force and our Vision to be the London Club of choice for seNing and retired RAF Officers, their families and other Members. Durin9 2023, the Club continued to win awards as an employer of choice, including achieving 15 place in The Catererf5 8e5t Places to Work in UK Hospitality 2023. We are also proud to continue to pay our team above the London Living Wage. Finally, the Board would like to thank those Members who have signed up for the 'Friends of the RoyalAirForce Club. scheme which has paid forthe new Lobby and doors as well as other projerts. Air Wice-marshal The Hon. David Murray CVO, OBE, DL Chair of the Board of Tnjstees Page 4 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Ststemenls For the year ended 31st December 2023 Trustees. Officers and Advisors Trustees Air Vice-marshal The Hon. David Murray Air Commodore Barfoara Cooper Air Commodore Paul Higgins Air Commodore Adam Wardrope Air Commodore Dai Whittingham Group Captain Jim Beldon Group Captain Al Lockwood Hon. Group Captain Jo Salter. Wing Commander James Hill Wing Commander James Poynton Wing Commander Paula Willmot Squadron Leader Sean O'Brien Squadron Leader John Peters Flight Lieutenant Neeraj Kapur Flight Lieutenant lan Melia Flight Lieutenant Haig Tyler Mr John Fisher Chair of the Board of Trustees (appointed in September 2023) Vice-chair {Serying-Officer) (retired in May 2023) (retired in December 2023) (appointed in September 2023) Vice-chair (Business) Vice-chair (retired in January 2023) * Hon. Gp Capt Jo Salter took agreed sabbatical leave from the Board be￿een July 2023 and December 2023 for WO￿ reasons. Offlcer Mr Mile5 Pooley Chief Executive Officer and Club Secretary Principle athiisors Audltors Haysmacintyre LLP 10 Queen Place London, EC4R 1AG Soll¢ltors- Charity legal advice Farrer & Co 66 Lincoln's Inn Fields London. WC2A 3LH Banker5 Coutts & Company 440 The Strand London, WC2R OQS Sollcltors- Employment legal advice Burges Salmon One Glass Wharf Bristol, BS2 OZX Reglstered Address The Royal Air Force Club, 128 Piccadilty, London. W1J 7PY Reference arKI Administratbve Inforn￿tion The Royal Air Force Club was founded in 1918 and became registered wtth the Charity Ct)mmission in 1965 under charity number 252720. The Trustees and Chief Executive Officer of the Charity are listed on this page, along with the Club's registered address and principal advisors. The Club became incorporated on 24 December 2004 and received a new Registered Charity Number 1108295 in place of 252720. Pa9e S The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31 December 2023 The Board of Trustees presents its report for the year ended 31 December .23. Governance. Management and Risk Financial Ststements de¢laration The financial statements have been prepared in accordance with applicable law and United Kingdom Accounting Standards including the Statement of Recommended Practice for charitie5 preparing their account5 in accordance with the FinarKial Reporting Stsndard applicable in the UK and Republic of Ireland {FRS 102 - second edition effertNe l January 2019 - Charities SORP), and the Companies Act 2006. Governln9 Do¢ument The Charity is governed by its Memorandum and Articles of Association vthich were last revised at the Charity's Annual General Meeting in June 2015. Being mindful of this, the Board of Trustees, with the help of lawyers, reviewed the Articles of Agsociation during 2023, bringing them up to date. These have been adopted by the Board and will go to the Annual General Meeting in 2024. Trustee Recruiknent and Training The Charitys elected Trustees are appointed at the Annual General Meeting based on applications received from the membership through the Nominations Committee. Candidates for election must satisfy the Board's specifications conceming personal competence. specialist skills and availability. New Trustees are inducted into the workings of the Charty, including Policy and Procedures, through a programme which is overseen by the appointed Vice-Chair(s). Organisational Management The TnJstees of the Charity are legally responsible for the overall management, finances and control of the Club and meet at least six times a year. The work of implementing most of their F)olicie5 IS carried out by the following standing sub-committees which meet as required and whose chair5 report at each meeting of the Trustees.. Ad-hoc Working-Groups The ad-hoc working groups include the Nominations Working Group, the Remuneration Working and the Systems Working Group which meet as required. Risk Management The Board is responsible for setting the Club's risk appetite and for overseeing the risks faced by the Charity, with The Finance, Audit & Risk Committee playing a key role in the oversight of risks. Continuous horizon scanning and monitoring are used to identify new risks and to evaluate and assess both new and existing risks and controls. Appropriate controls are established and monitored to deal with risks. Risk Mana ement Res nslbilitie5 The Finan￿. Audit 8t Risk Committee & Board of Trustees - oversi ht of risk mana ement The Chief Executive - re aration and mana ement of the risk re ister The Trustees and a member of the Finance, Audit and Risk Committee, with reswnsibility for risL regularly review and set risk appetite statements against which the risks are measured. The Board of Trustees discussed risk at their strategy day in July, when it was also reviewed against the ChaTity Commission Guidance on Risk Management and changes were made accordingly. The risk register contains an assessment of specific risks, and the highest inherent risks are listed (see the next pagel with a description of the mitigation controls in place. Page 6 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Ststements For the year ended 31, December 2023 Inherent Risk Cyber security breach Mitigation Multi-layered specialist cyber-seculity application softwaie and firewalls are installed throughout the Club's IT systems. Regular monitoring from the Club's IT Management contractor and the Club'5 Systems & IT Working Group. Contact with the Cyber Security Infom)ation Sharing Partnership to keep up to date with cyber security issues. Regular penetration tests by independent third parties and robust ransomware procedures in place. Specialisl insurance cover in place. Benchmarking of remuneration packages and formal annual compensation reviews to ensure the Club is competitive in the maiket. Formal appraisal system and continuous remew of staff and employee welfare standards. Offering flexible working opportunities, where appropriate, and training and educatiorbal support to boost professional standards. Succession planning. Constant review of business KPI'S. supplemented by flexible business planning mode15 and adjustments to Cost base to refflert demand changes. Appropriate security measures based on professional advice (House Committee experts, civil police and HQP&SS1. Disrupting hostile reton. Insuran￿ Cover pay.outs significantly reduce monetsry impact ol attsck., Business Continuily Plan IBCPI in place to enable recovery, 3 security Staff for vetting visitors, applying opaque film to front entry doors and installing additional C￿V. Constant monitoring of S¢xial media and events held in Club Loss of Senior Management Stsff resulting in an advetse impact on service and functic￿al￿ Negative impact of possible Intemational Conflict Te￿orist Activity Reputational damage by 3rd paty and social media outlets Significant loss of Club facilities through fire or similar disaster. Late/lncorrert filings to the Charity Commission andlor Companies House FiTe/security prevention measures. H&S Regulation adherence. Crisis Management plan. Business Interruption Insuranc& Fire risk assessment. Ansul fire suppression system. Calendar reminders for relevant dates set up for key Club personnellRolling agenda item for the Finance, Audr( & Risk Committee IFARCI. Segregated responsibilitie5 With Company Secrelary monitoring performarbce. Use of cloud-ba5ed applications to prowde extra resilience. Dally extemal back-ups, back-up power supply. and a regularly updated Crisis Management Plan. Business interruption and other specialist IT insurance. Policy on Intemal Financial Controls and delegated Authorities annually reviewed by the Finance. Audit & Risk Committee and Board of Trustee5. Budgetary control system with monthly monitoring of management account5 and variance analysis. Dashboard reports for key activity indicato￿. Development of Intemal Audit Team, stsffed by member volunteers. Energy contracts to be thoroughly reviewed in the first half of 2024 befo￿ expiry of si nificant fixed price contrartS. House Committee prodLJces a S to 10 year"Rolling Programme- of planned preventative maintenance and new investment Projects. A formal system of capital investment appraisal and tendering policy exists and a project management review system is in place. Computer system failures or 1055/corwption of data. Weak control of income and expenditur Weak control of capital expenditure and impact on cash flow Page 7 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31" December 2023 Group Structurè The Charity has a subsidiary trading company, RAFCTC Limited, registered number 6590556. The company is responsible for using the Charitls facilities and resources so as to increase the total income and hence improve it5 continuing ability to achieve its Objects. The trading company provides meeting room hire, function and banqueting services to persons supportive of. but not directly associated with, the Royal Air Force, and who therefore are not eligible to join the Club. All trading profit is distributed by Gift Aid each year to the Charity. As the company does not have any premises and uses agency staff when required, it is not considered that its actNlties constitute any risk to the finances of the Charity itself. Èven during periods of economic uncertainty. In 2023. the trading company revenue represented 2% of the Club's charitsble revenue. The Charity Governance Code The Trustees confirm that the Club's structure, governance and management have been reviewed against the guidance set out in the Charity Governance Code for larger charities issued by the Charity Governance Code Steering Group. In particular. the Trustees have assessed the Board's performance against the following seven principles: 1. Leadership 2. Diversity 3. Board effectiveness 4. Integrty 5. Organisational purpose 6. Decision - making, risk & control. 7. Openness & Accountabilty Charitable Objects and Club Operational Objertives The Trustees confirm that they have complied with the dutie5 specified in the Charities Act 2011 to have due regard to the general guidelines issued by the Charity Commission on public benefit In particular, the Trustees confirm that they have complied with the Commission's published specific guidance relating to fee-charging charities. The charitable purpose of the Royal Air Force Club within the meaning of the Act is enshrined within its objects.. To promote the efficiency of the Royal Air Force by improving the condition of officers holding commissions therein and in other associated Services and by preserving and fostering among them the esprit de corps and traditions of those Services by every suitable means. By establishing, maintaining and conducting in London a central residential and non- residential club for the use and accommodation of Members, and by making available to them such other seNices, recreational facilities and leisijre time activities as may be desirable at prices which, so far as is possible. can be afforded by all Members of whatever rank. y encouraging, by means of discussion5, lectures. film shows, visits to places of interest nd by any other mean5, an interest in all mattels connected with flying in general and with the Roy31 Air Force in particular. Page 8 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31st December 2023 By encouraging and organising the holding at the Club of Service reunions, meetings and similar functions and by placing at the seNice of Her Majesty's Government facilities at the Club for the entertainment of representatives of foreign air forces. By encouraging and by providing facilities to enable officers serving in the Royal Air Force and in other associated Seryices to meet and associate regularly with each other, and with persons who have previously seNed as officers in such Setvices and with Members of other air forces and to benefit from the knowledge and experience of such persons. Public Benefit is not just provided to members of the Charity. During the year, the Club hosted visits from like-minded organisations and encouraged visits for RAF Cadets. The Club welcomes, with prior arrangement non-member visitors to view the Club House, a Grade 11 listed building, memorabilia, and art collection. The Widèr Royal Air Force Family The Club 5UPPOrts and works closely with the wider RAF family and other Charities working to support Royal Air Force personnel and their families. Recent examples have included: Partnerships and complimentary event rooms for the PAF Central Church of St Clement Danes Mutual 5UPPOrt received from and supplied to the RAF Benevolent Fund and Royal Air Forces Association Discounted prices for organisations like ICAFOW {International Club for Air Force Officers Wives) Complimentary food and beverage for RAF Air Cadets providing the Guard of Honour at events including the Pride of Britain Awards The Club's Misslon. Vision and Core Values The Trustees and Executive Team work together to maintsin the Vision, Mission and Corè Value& These are.. Vision To be the London Club of choice for serving and retired Royal Air Force Officers. their families, and other Member5 in order to preserve, promote and foster the spirit of the Royal Air Force Mission To provide high-quality and value-for-money facilities and services in Central London that are in keeping with the heiitage and ethos of the Royal Air Force. Core Values Give personalised, wami and consistently exceptional service Care about and give back to our local community Value, fespect and support each other Create positive, memorable experiences for every Member Page 9 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31# December 2023 The Club Strategy and Plans for the Future The Trustees will develop its strategy & deliver the Club's Vision in the following way5= Data 15 required to inform decisions taken by the Trustees and Club management. The data from the Members SuNey undertaken in 2023, alongside ongoing Member feedback will be used to.. develop a deeper understsnding of the current and likely future requirements of each member group (serving, former serving, families and other members), because of the mix of Membership type5, the membership age profile and the aspirations and expectations of the current Service officer cadre have a direct influence on usage and the Club's ethos. monitor the balance betweèn membership categorie5 and set limits when necessary to alwn with the Charitable Ob ects. help set the balance btheen revenue, quality and affordability, and to ensure that resources are priolitised with thè Vision and Mission clearly in mind. Infommllon T•chnolog We will develop and maintain an IT system that supports appropriate data capture to guide strategic management and the most efficient use of the Club's resources. Risk Management We will ensure that business, security and operational risks are managed appropriately and within the risk appetite parameters set by the Board. Club Membershi We will work to improve the offer to rnembers to.. Increase the use of the Club by all member% Better attract existing members who seNe or live away from London. Promote the Club as the social venue of choice lor serving members based in London. Promote the benefits of Club membership to newty commissioned and other non-member seNing officers. Increase the membership uptake from former serving officers. Ethos and h•rftage In 2023, the Club Arts Committee was renamed the'Arts and Heritage Committee,, to help the Club remain respectful of its heritage and supportive of the Board and other Committees who ensure it remains relevant for the future. Quality We will improve the condition of 128 Piccadilly and its facilities, including measures in support of the Net Zero 2040 tar et, whenever possible. We will provide benefits and training for staff such that the Club becomes recognised as an employer of choice. We will provide training for Trustees and managers to improve the govemance and efficierrt management of the Club. We will develop meaningful K Perfomance Indicators for Trustees and Executives. Page10 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Ststements For the year ended 315t December 2023 Environmental Stratsgy The Board of Trustees have agreed a strategywhich includes the intent for the IiAF Club to become carbon neutral by 2040. We are currently working out exactly how we will achieve this aspiration and whi15t part of that is ensuring that sustainability is at the heart of all future facilities improvement projects, there are some smallerchanges that we have made in the Club immediately. In addition. we are working with a group of students from the Edge Sch¢)ol in Colchester who, as part of their course on Sustainabilty will be undertaking an audit of what we do now on a day to day basis to determine any other immediate improvements that we can implement. The internal Green Team are working with a specialist on the House Comrnittee who is providing advice and guidance. Fundraising Strategy The Club benefits significantly from generous Member support through donations and legacies including The Friends of the RAF Club programme, which was set up in 2021 to acknowledge Members who make regular donations at Bronze, Silver and Gold levels. The Club employ5 a part-time Fundraising Director to manage its fundraising and legacy activities. The Club is also registered with the Fundraising Regulator and adheres to its policies and guidance. Page11 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31 December 2023 Club Committe Committ•e Members Ari& Hou H*rftsg• Comrnltteg Gp Capt Jim Beldc*) Fundrni5iny It Legacies Commlttee rcdre Barbaro Cooper Membersh5p C41mmltte• Audlt & Risk Commit1¢¢ Flt Lt I￿ Mdia Commlttee Worklng Group Flt Li Hè T￿eT Gp Captjo Saker Air Cdre Whittingham W9 Cdrjawes Hill Ilan to Junè) Cdre P¥Jl Higjins Iluty to Dec) Wg Cdr14ula Willmot Wg Cdr James Poynt A*Cdre Da Whittingham Flt Lt Neerai Kawr Sqn Ldf John Gp CaptNJ Lo¢kwoDd Drmichael Fopp Wg Cdr Michapl Gilbert Mrs Sue Hutthlnson Wg Cdr Neil Cook Flt LtGary Homby Mrjames Calladine Gp Capt LotkY4wd Ms N￿mI Miles Flt Lt Mike Stubbs Fg OFfJothim Wrany-widén Ws Cdr Lolrise Clarke Sqn Lth Ste¥e mrD￿ exa￿er Mr Bernard Brow Sqn Ldr Mike MrAndrew Mannir¥J Sqn Lth Stuart Quinn Sw Lthjo R￿ve Miss Jo¢e￿fi DArcy Alr Cd Ridt Mr Bernie Watson Sw LthJame5 Trw Mrjoe Hardstsff Edwards Mrs Mandy Shepherd Club Committees exist to support the work of the Board of Trustees. Each Committee meets on average 5 times per year and is tasked by the Board to examine subjects in detail which are then fed into the Board for disCU55ion and decision. All Committees are chaired by a Club Trustee with a second Trustee being the Vice-chair. where possible. Volunteers on Committees are made up of Club members trom all membership categories, thus ensuring that all categories of membership are represented. Art 81 Heritage Committee Management ot the Art collertion The Arts and Heritage Committee h)5 continued to gn)w the Club's collertion of herdldic badges with approximately 15 presented in 2023, which included 10 from the Free French Air Force. The total number of Squadron Badges now is over 540 and continues to grow. The artwo￿ presented this year included several new paintings including a portrarf( of Noor Inayat Khan GC and prints generously donated by Club Membws that fill gap5 If3 the Club's collertiorL A majoi inventory exercise took place in 2023, with the Committee in 2024 reviewing where and hjw art is displayed, including identifying specific Works of art %thich should be prioritised for rescue in the event of file or flood. Events Committee Plonnln9 and management of the e¥•nts programme The Events Committeè continued to rur) a varied events programme including a honéy gourmet evening using honey Produced from the beehive5 on the roof of the Club. talks on the building of Green Pat*, Club Dinners with speakers such as Radio 4's Matthew Pottage, Candida Adkins and the Red Arrows. Plans for 2024 include Club events with renowned spÈakèr& events for Junior officers, wine tsstings. new member re¢eptions and event5 celebrating PAF annivetsaries such as thè annual Battle of Bfltain Dinner. Page 12 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31" December 2023 Finance. Audit & Risk Committee (FAR) Assisling the Board In futrnlllng its governance obllgatloTrs and Over￿ght re5POn5ibilities by providing detslled Krutlny and a55urance of the Club's flnanclal. audit and rlsk management pr￿ed￿e5 and maklng recommendatlons for Improvements in relaled performance During 2023, apart from its routine activities of financial governance and oversight, the Committee has undertaken a number of piojects for presentation to the Board of Trustees. The Committee (aThied out a detailed review of the Club's Financial Strategy and Reserves Policy. This work included the development of a Medi(tm Temi Financial Plèn looking foNard over the next five years and a Treasury evaluation for the refinancing options forthe Centenary Loan. The new Intemal Audit Team, staffed by seven part-time member volunteers with expertise in the function. carried out is first major review. Thi5 covered the HR /Payroll functions and recommended various enhancements to the control environment Risk managernent processes were reviewed in depth across the risk spectrum from assessing risk appetite to updating the risk register and evaluating mitigating fadors. ￿sk management involvement hès been formally extended to encompass all employees through the inlroduciion of Departmental Risk registers and evaluation of new or emerging risks has begun. The Charity Commission has introduced new reporting requirements and the Committee worked with management to ensure the Club will be fully compliant. Following the remew of extemal reporting in the previous year the first Impact ￿pOrt was published in 2023 and will become an annual publication. House Commlttee Ensuring the malntenanc• and development of the Club's infrastructure and en¥lronment Is consistent with the Club's ethos and herhJge whlle laklng Into account members. vlew5 The House Committee oversaw the projert to improve the lobby and install new front doors with a wew to enhancing security and in a bid to assist the sustainability strategy to reduce loss of energy. Other projects in 2023 irKluded the refurbishmetst of 10 bedrooms on the 2nd fioor, the cleaning and restoration of the Club fa￿de which involved ihe building being scaflolded and the replacement of carpets in the Dining Room, Hodges R¢)om and 601 Squadron Room. In 2024, the projerts include 10 betlrooms being refurbished and the instsllation of soundproof pods in the business cent￿. generously funded by Members legacie5, refuTbi5hment of the Presidents. Room. funded by the Frtends of the RAF Club scheme and continued work to developthe 10-yearcapitsl expenditure plan. In January 2020, the Club signed fixed-price energy contracts for both gas and eleclri¢ity which expires 3￿h September 2024 (Gas) and 31" March 2025 (Electriotyl. The House Committee has started WOTking new {c￿traCts for these utilities. Fundraising and Legacles Commlttae Supportlng the activltl¢s of th• Royal Air Force Club by enabllng and encouraglng Members organlsatlons and supporters to contr1￿le funds The Club received £151,223 in income from donations from the Friends of the Club in 2023 and was able to make significant contributions to the faEade renovation and the lobby improvements to our Grade 11 listed 'home from home,. A second Friends of the RAF Club event was held in March 2023 and a social event for Bronze, Silver and Gold Friends was held in November 2023 with Lord Peach as Guest Speaker. Additionally, funds from the Legacy fvnd were allocated to construct new sound-proof pod5 in the business centre for Members who are using the designated areas for remote working. Donations from the Chaimian's Christmas Appeal and ad hoc gifts for staff totalled £34.016. Membership Committee Oeveloplng and Implementlng the Club membershlp strate9y to recruit and retaln members The Membership Committee continued to raise awareness of the Club to Serving Officers with a view to growing that membership category in line with our tharitable ststus. Working with Club repiesentatives on RAF stations has improved communrcation and the meeting in the Club of Representatives allowed a free flow of ideas. Membership levels stsyed consistent with p￿VIouS years which includes robust vetting of Membership applications to ensu￿ compliance with thp strict criteria for membership. The Membership Page13 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Ststements For the year ended 31 December 2023 Committee works closely with the team at the Club responsible for social media coverage, and the use of reels (short videos that are shared on social medial within the various latforms ha5 enhanced that resence. RAF Club Membership by type ~ 2022 to 2023 4.000 6,0&) 7,￿0 8,￿0 ng & Re5etW5ts Fam￿ SeTvin9 Spouses / Parther5 All ¢therAffiliate Wiéowlers Honorary 2023 • 2022 Total membership - 2018 to 2023 31st Dec 2018 31st D•c 2019 31st Dec 2020 31st Dec 2021 31st Det 2022 31st De< 2023 5,00 10,Tr)0 15,tK)o 20,000 25,(KJO 30,(KX) The Systems and IT Workiw Group O¥erseelng IT strategy and prlnclples and the u￿ge of data The Systems Working Group advised on projerts including the implementation of a management infomatlon system IMASTELI and evaluating longer-temi plans including a smart Club membership card and mobile App& In addition, the Working Group has Sed a project to improve the Club's WI-FI (apabilities which has Included the replacement of over 150 network points and the upgiade of broadband infrnstructure supplied to the building. Finally, over 30 of the Clubs, CCTV Cameras and associated systems were replaced in 2023. Club Library and Archive The Club library is supported by a volunteer team of librarians and the Club's archive is maintained by volunteer archiwsts.. Club Librarians Mr Peter Elliott Ichairl Club Archivists Mrs Jacky Atkinson Wg Cdr Rob Stephens Mr Peter Elliott Mr5 Gaynor Cooper Mr Peter Thorne Wg Cdr Michael Gilbert Fg Off Sandy Copland Sqn Ldr Gavin Tumbull Gp Capt Paul Stewart Contribution by Volunteers All Trustees, Committee members Working Group members, Internal Auditors, Librarians and Club Arthivists are unpaid volunteers, and it is e￿imated that over 515 volunteer days were given to the Club in the year for the benefit of all Club Members. The Club benefits enonnously from their considerable professional expertise and invaluable advice. Pag• 14 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements Forthe year ended 31" December 2023 Staff Engagement Our team are the CIL*b's most important resource so our engagement WTth thern is paramount. Keeping our team competitively compensated, well cared for and listened to makes the difference bemeen positive and negative Member experience. During 2022 the team has grown and developed whilst recruitment has been challenging, but our efforts have resulted in a well- motivated and hard-working team. The staff welfare fund, launched in 2022 which is available to support staff in need remains available and the Club were pleased to be able to use this fvnd in 2023 to assist a member of staff. A highlight of our staff engagement are the annual awards presented each year * the Staff Christmas lunch. The internal staff nominated charity in 2023 is the London Air Ambulance, with Club staff recently raising over £3,000 by completing charity cycle rides and a bike-a-thon in the Lobby of the Club. Other staff charitable &tivities took place including a Macmillan Cancer Support Cake sale. Staff Awards In 2023 we presented the following awards: Newcomer of the Year - 2023 Ewa Keegan, Senior Payroll & Finance Officer Front of House Star - 2023 Dave Hollaryl Senior Security Officer Heart of House Star- 2023 - Two winners Renato Barco, Senior Launderer Matthew KenL Head of Admini51ration Casual of the Year - 2023 Jeannice Bi5sembay, Food & Beverage Assi5tsnt Department of the Year - 2023 Kitchen Employee ol the Year - 2023 Jemima Lywood, Marketing & Communications Executive Mohammed Or-Rashid, Banqueting Operations Mana er Leader of the Year - 2023 Chief Executive Special Recognition - 2023 The Chief Executive Special Recognition Award was presented to the Canteen Chef, Liliana Andrei. Lilly has transformed the offering of the staff canteen through her incredible skills and unwavering dedicatiorTr. Lity sources ingredients responsibly. championing sustsinability and is Iways conscious about serving the food at the appropriate temperature. In 2023, we launched a new online benefits plarform and 2024 will see the continuation of the monthly service anniversary lunch, hosted by the Chief Executive. Miles Pooley and the bimonthly Chiropodist visit; and much more. Liliana Andrei, Canteen Chef Stsff Vlsits to RAF Ststions The Membership Department supported by other members of staff resumed its quarterly visits to RAF Cranwell, attending the graduating IOT Cadets Fre5hers Fare, with over 70 cadets expressing an interest in joining. Further visits to other stations are also being planned for Club Staff. Page 15 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Ststements For the year ended 31 December 2023 2023 Financial Review Quarter 1 Taial revenu £2.481.492 Surplus £109,6(KI The year started stroThJly with revenue in all areas exceeding both the bjdget and the previous yearfs performance. Occupancy for Q1 was 73% compared to Budget of 58% and a previous year's occupancy of 56%. Food and Beverage revenue again performed well compared to the budget versus l&%t year. Revenue was +33% v Budget and +18% v the previous year. One of the main contributing factors was evidence of several events that were cancelled in 2022 rebooking in 2023. This strong overall performance combined with the general donations received through the generosity of our members, contributed towards total revenues of £2,481,492 and an operating surplus of £109.600. Qu3rrer I Quarter 2 The positive start to the year continued into Q2. All QDartÈr 2 £1959,924 £229.675 operating revenues exceeded both the budget and the previous year's performance. Revenues were particularty strong in the lead-up to the Coronation on the 6th of May. Membership ￿VenUeS exceeded Budget occupancy for Q2 was 84% compared to a Budget of 82% and a previous year's occupancy of 80%. Quarter 3 Total revenue Surplu5 £174,426 Occupancy levels, together with food and beverage revenues, declined slightly compared to the budget, and this was attributed to the numerous train and tube strikes Quarter 3 £2.647.280 that occurred throughout the period. Quarter 4 Total revenue Surplus £661,993 Quarter 4 was an extremely strong period with overall revenues exceeding Budget throughout October, November, and December by £64k Quflrtor 4 £3A43,920 Yearty Overview The strong recovery that wa5 experienced in 2022 continued into 2023 with the Club recording total income more than £11.5m for the first time in its history. Occupancy for the year was 80% compared to a Budget of 78%, additionally Food and Beverage revenues exceeded Budget by 2%. The Club like many in the hospitalty sector experienced the negative effect of rising general inflation, despite this and through tight cost control, the resultant net operating surplus of £1.2m exceeded Budget by £0.3m. Cash provided by operating actiwties was £2.3m, up from £1.9m in 2022. Loan repayments of £0.4m were made against the Centenary Extension Loan. Capital expenditure accounted for £0.8m, the net effect was a year-end cash balance of £4.2m which was an increase of £1.2m compared to the previous year. Page 16 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31st December 2023 The following charts summarise the yearfs activities by month for the key indicator of Bedroom Occupancy and Total Revenues and Operating Surplus/Deficit with comparisons against the revious ar. Bedroom Occupancy ~ 2023 vs 2022 60% 40% 20% Iiiillliifii Jan Feb Mar Apr MBY lun Aug Sep Nov Dec 2023 ￿2022 Total Revenue 2023 vs 2022 (including donations) £1,4(K),000 £1,200,OCM) £1,000,Ch)O £800,000 £6CQ,(K)O £400,000 £2(M),000 Iriiliiiiil-l lan Feb Mar Apr May Jun Aug Sep Nov Dec 2023 2022 Operating Surplus/Deficii 2023 v5 2022 Ilncluding Donations) £300,000 £250,000 £200,000 £150,000 £100,000 £50,(K)O Api May Jul Sep Oct Nov Dec £150,000) Feb Mar ,,1 I I I £1100,000) 2023 ￿kn￿2022 Note: Losses in January, February and August are seasonal. The10ss for June was due to an exceptional charge for emergency repairs to the building front fapde. Page 17 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31" December 2023 Coutts Cèntenary Extension Loan and Covenants The £8.Om construction cost of the Centenary Extension was financed by £2.5m of unrestricted General Reserves and a seven-year term loan from Coutts Bank of £5.5m. The seven-year term of the loan was determined by the bank's capitsl risk requirements applicable in 2017 and optimised the loan pricing to the Club's benefit. The Club is contractually required to repay the loan in April 2024 when the outstanding balance will be £3.7m. It was originally anticipated that a new medium term loan would be arranged. on market terms ruling in April 2024, to cover the outstandir balance of the first loan. However, the Club's projected cash balance in April 2024 is £6.Om and, thus, there is headroom to repay the loan in full. Financial projections indicate that the remaining cash balance of £2.3m provides adequate liquidity to cover operational and capital spending for the foreseeable future. Based on current interest rates and market loan margins the borrowing cost for a r￿W loan will be considerably higher than the rates payable on the current loan and the economic appraisal favours the full repayment option. The Board of Trustees is minded to repay the loan upon maturity and will make a final decision on repayment against refinancing based on latest rnarket information and updated financial f0￿caSts just before the loan maturity date. During 2023 the Club has been fully compliant with all of the Centenary Extension bank loan covenants and experts to remain compliant until repayment in April 2024. 2024 Outlook Against a background of continuing high inflation and labour capacity restraints the Club's financial forecast for 2024 anticipates a marginal improvement in attivty levels and a similar overall financial perfomiance. Capltal Improvements to the Club House 2023 saw a bedroom refurbishment project take place. along with repairs to the building faEade and new carpets installed in several rooms {see the House Committee update for more details). In Quarter 3 and 4, the lobby was completely refurbished including the replacement of the main Club doors. A short-term 5-year plan alongside our existing 10-year plan has been developed to ensure that refijrbishment projects can tske into account the fvture needs of both the building and the membership. The Club a5 a Golng Concern The Board of Trustees consider there are no material uncertainties about the Charitys abilty to continue as a going concern. The Trustees have reviewed the Club's financial forecast and business plans for the period ending 31 March 2025 and anticipate similar levels of trading and financial performance as achieved in the last financial year. Having considered all available infomiation about current circumstances and future trends, the Trustees have a reasonable expectation that the Club has adequate resources to continue to operate as a viable organisation for the foreseeable future. Thus, the Trustees continue to adopt the going concem basis of accounting in preparing the annual financial statements. Page 18 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31st December 2023 Key Management Personnel and Remuneratlon The Board, supported by the Chief Executive and the Executive Team, together comprise the key management personnel of the Charity in charge of directing, controlling, and managing the Club and r(s operations on a day-to-day basis. All trustees give their time freely and no trustee received remuneration in the year. Note 5 to the Financial Statements gives details of the total remuneration and benefits of the key management personnel of the Club and Trustees, expenses and related party transactions during the year. The pay of the Chief Executive and Executive Team is reviewed annually by the Remuneration Working Group which reports to the Board and the review takes into account comparative dats from several external sources. Re5orve5 Poll¢y The Trustees reviewed the Club's Reserves policy in July 2023 as part of its annual review of strategy. Taking into account Charty Cornmittee guidance and recognising the serious adverse financial impart of the global pandemic the Board decided it was essential to better protect the long-term interests of the charity and its beneficiaries by setting an increased General "free. Reserve target of £6m representing about 6 months of current operating costs. This unrestricted ReseNe objective will provide financial cover for the key business risks such as business downturns and uninsurable and unexpected operational interruptions. At the time of the review, it was expected that it would tske a number of years to reach the objective, as following completion of the Centenary Extension investment project, there is a priority requirement to build-up the Fixed Asset Fund to match the increased net book value of the fixed assets and to take account of funds required for repayment of the related loan. Investsnent Policy and Objectives It has been the Club's policy to hold any cash surplus to operating and capital expenditure requirements on short-tem deposits with financial institutions with high credit ratings. Page 19 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Statements For the year ended 31 December 2023 Accounting and Reporting ResponsibilitÉes The Companies Act 2006 requires the Trustees of the Charity to prepare accounts for each financial year. which give a true and fair view of its financial activities during the year, and of its financial position at the end of the year. In preparing thi5 reporL the Trustees are mindful that whilst the Report and Accounts must meet the requirements of the applicable law and United Kingdom Accountir¥J Standards (United Kingdom GenerallyAccepted Accounting Practice), there will be Members of the Club who will look to this Report for assurances that the Club is being managed in a prudent and appropriate way, especially with regard to safeguarding the future of the Club and maintaining the stsndards of the facilities offered by the Club. In attempting to meet the requirements of the Charty Commission and the Club's membership, the Trustees wish again to reinforce the following: That the Club is run as a Charity and that expenditure is in accordance with the Club's Charitable Purposes. These Charitable Purposes include the provision of a seNice to promote the efficiency of the RAF by establishing, maintaining and conducting in London, a central residential and non-residential Club for the use and accommodation of Members and by making available to them such other setvices, recreatiorwl facilities and leisure time activities as may be desirable, at prices which, so far as is possible, can be afforded by all Members of whatever ran That our policy is not to build up substantial cash reserves in excess of the Board approved Reserves policy but rather to use income in pursuing the Club's Charitable Purposes, giving due regard to prudence, propriety and reasonableness in all expenditure and, in particular, ensuring that the Club's facilities are adequately mairbtained and protected. That in managing the finances of the Club. we have: Selerted suitable accounting practices, which we apply consistently. Made judgements and estimates that are reasonable and prudent; Followed applicable accounting standards and the Charities SORP,. Disclosed and explained any departures in these accounts,. Prepared the accounts on the 'going-concem' basis unless it is inappropriate to assume that the Charity will continue in operation: and Sought advice from properly qualrfied experts on projects and the use of a related bank facility. In managing the finances in this way, we have ensured that the Club is safely managed from a financial point of view. The Board of Trustees is responsible for keeping accounting records, which are such as to disclose, with reasonable accuracy, the financial position of the Charity at any time, arKI to enable them to ensure that the accounts comply with charity law. The Board of Trustees is a150 responsible for safeguarding the Charity's assets and ensuring their proper application in accordance with P&Je 20 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31, December 2023 Company law, and hence for taking reasonable steps for the prevention and detection of error, fraud and other irregularities. So far as each of the Trustees is aware at the time the report is approved.. There is no relevant audit infomiation of which the 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 infomiation and to establish that the audr(ors are aware of that information. The Trustees, report incorporating the Strategic Report, was approved by the Board of Trustees, and signed on their behalf by. Air Vice-ma l David Murray Chair of the ard of Trustees Wednesday 2W March 2024 Page 21 The Royal Air Force Club The Trustees, Annual ReF)Ort and Consolidated Financial Statements For the year ended 31" December 2023 Independent Audltors Report to the Truslees & Members of the Royal Alr Forc• Club Opinion We have audited the financial statement5 of The Royal Air Force Club for the year ended 31 December 2023 whlch comprise the Consolidated Ststement of Financial Activities, the Consolidated and Parent Charitable Company Statements of Financial Position, the Consolidated Cash Flow Ststement and the related note5. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Finonciol Reporting Standardappticoble w the UKond Republic ofireland Iunited Kingdom GenerallyAccepted Accounting Practice). In our opinion. the financial ststements.. give a true and fair view of the state of the charitable company and group'5 affairs as at 31 December 2023 and of the charitable company and group's net movement in funds, including the income and expenditure. forthe year then ended; have been properly prepared in accordance wth United Kingdom Generally Accepted Accounting Prartice,. and have been prepared ill accordance with the requirement5 of the Companie5 Att 2006. Basis for oplnion We conducted our audit in accordance with International &andards on Auditing IUKI IISAS IUKII and applicable law. Our re5ponsibilitie5 under those Standards are further described in the Auditorfs re5POn5ibilities ￿ the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical ￿quirements that are relevant to our audit of the financial ststements in the UK, including the FRC'S Ethical Stsndard, 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 ￿latIng to golng concem In auditing the financial statements, we have concluded that the trustee5' Use of the going concem basis of accounting in the preparation of the financial statements 15 appropriate. Based on the work we have performed, we have not identified any material uncertaintie5 relating to events or conditions that, indiwdually or collectivety, may cast signifficant doubt on the charitsble company and group's al￿1•ty to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the ￿ponsibl11the5 ol the trustees with reSp￿t to going concern are described in the relevant sections of this report. Other Informatlon The trustees are responsible for the other infomiation. The other information comprises the information included in the Trustees, Report. Our opinion on the financial statement5 does not cover the other infomiation and. except to the extent otheN4ise explicitly stated in OUT reporL we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other infomiation and, in doing so. consider whether the other inlomiation is materially inconsistent with the financial ststements or our thowledge obtsined in the 8u(lit or otherwise appears to be materially misststed. If we identify such material inconsistencies or apparent material mi55tatements, we are required to determine whether there is a material mis5t3tement in 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 misststement of this other infomation, we are required to report that fact. We have nothing to report in thi5 regard. OplThlons on other matters prescrIl￿d by the Companles Ad 2006 In our opinion, based on the work undertaken in the (￿r5e of the audit.. the information given in the Trustees, Report (which incorporates the Strategic report and the Directors, report) for the financial year for which the financial statements are prepared is consistent with the financial statements,. and Pa9e 22 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Ststements For the year ended 3 1st December 2023 the Strategic report and the Dirertors, report, which are included in the TnJstee5' Report have been prepared in accordance with applicable legal requirements. Independent AudltOTs Report to the Trustees & Members of the Royal Alr Force Club lcontlnued) Matters on whlch we are requlred to report by exc•ption In the light of the knowledge and understanding of the charitsble company and group and its environment obtained in the course of the audit, we have not identified material misststements in the Trustee5' Report (which incorporates Ihe strategic report and the directors, report). We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the charitable company and group,. or the charitable company and group'5 financial statements are not in agreement with the accounting records and retufns., or certain disclosures of trustees, remuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit Responslbllltle5 of tru51ees for the flnan l year 3,049.669 1404.9081 13,779,14TI 1,078,226 13,374.2321 3,T19,141 4.127,895 13.719.140) Net debt (£1,134J801 É1,483,135 £34&7S5 RECONCIUATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING AcfiviTIES 2023 2022 Net rnovement in funds Add back depreciation chargè De(￿aSe/{lnc￿se1 in stock I￿rease in debtors 1￿C￿8$ell￿eCre3sel in crwjltors 1,074,485 890,631 16,0721 173,0011 417,729 1,214,502 881,078 13.499 1365,9081 127,837 N•t provided by <>peAting •Cti4ryts £1303,772 £1,871,(K)8 The notes on pages 29 to 39 fomi an integral part of these financial statements. Page 28 The Royal Air Force Club The Trustees, Annual Report and Consolidated Finanaal Statements For the year ended 31" December 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31" DECEMBER 2023 ACCOUNTING POLICIES General information The Royal Air Force Club is a charitable company. limited by guarantee, registered in England and Wales. It5 registered office is 128 Piccadilly, London Wlj 7PY. The principal accounting policies adopted, judgements and key sour￿$ of estimation uncertainty in the preparatron of the financial 5tstements are as follows: Basls of preparallon The financial statement5 have been prepared in accordance with Accounting and Reporting by Charities.. Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Réporting Standard applicable in the UK and Republic of Ireland IFRS 102}15econd edition effertive 1 January 20191 (Charities SORP IFRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 102) and the Companies Act 2006. The Royal Air Force Club meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otheThvise stated in the relevant accounting policy. Basls of consolid*ion Thèse financial ststements consolidate the resuks of The Pwal Air Force Club ar)d its subsicfwry, The PAFCTC Limited (registered in England and Wales, registered number 065￿556) on a line by line basis. A5 permitted by Section 408 of the Companies A(t 2006. the Statement of Financial Activities of the parent undertaking is not P￿sented as part of these financial statements. Golng concern The Board of Trustees consider there are no material uncertainties about the Charitys abilty to continue as a going concem. The Trustees have reviewed the Club's financial foretast and business plans for the period ending 31 March 2025 and anticipate similar levels of trading and financial performance as achieved in the last financial year. Hamng considered all available information about current circumstances and fvture trends thè Tnjstees have a reasonable expectation that the Club has adequate resources to continue to operate as a viable organisation for the foreseeable future. Thus, the Trustees continue to adopt the going concem basis of accounting in preparing the annual financial statement% Fund accounting Unrestricted funds comprise accumulated surpluses and deficits on general funds. They are available for use at the discretion of the Trustees in furtherance of the general charitable objectives. Designated frjnds are amounts that have been set aside at the discretion of the Trustees. Restricted funds a￿ funds that are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. Page 29 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31st December 2023 NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 31StDECEMBER 2023 ACCOUNTING POUCIES Icontlnuedl Incom• Income represents the total income receivable (iuring the year comprising government grants, donations. subscriptions. entrance fees, bedroom receipts, food, beverages and inveslment income. DepreCI￿lOn The original freehold buildings are maintained to a standard that presetves likely residual value at a level at least equal to the book value. Accordingly no provision has been made for depreciation as the amount involved would not be material. Building improvernents related to the Centenary Extension project are depreciated over 50 year5. Major improvements to Club premises are written off on a straight line basis over 51Xto fifteen yea from the date of completion of the refurbishmenL CompLrter equipment is written off on a straight line basis over three year& Minor addr(ic￿S to the furnf(ure, fittings. equipment and other improvements to the Club premises have been written off directly against revenue. The amount expensed in the year was £nil12022'. £nill Club does not capilalise donated assels principally comprising work5 of arL Allocatlon ol support costs Support costs incluLle back office costs, finan￿. personnel. payToII and g¢)vemance costs which support the Club's activities. These costs have been allocated btheen cost of raising funds and expenditure on charitsble artivtlie& The allocations of support costs are set out in note 2. The Club operates a Group Pewjnal Pension Plan with Legal and GeneTrl. Contributions to the Plan are charged to the income and expenditure account Redundancy and tennination payments are included in the income and expenditure account within the relevant actmty line on an accruals basis. Stocks Stock is included at the lower of cost or net realisable value. Donated items ot stock are recognised at fair value which is the amount the charity would have been willing to pay forthe items on the open rna￿et. 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 ary trade discounts due. Cash at bank and In hand Gish at bank and in hand includes cash and short tem highly liquid investsnerrts wth a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Judg•m•nts in applying accoimting poli93 1,527,888 18,391 10,850 10,239 111951 1011192 1614,326 79,143 £4947N3 £10,850 £10,￿9 £111951 £41728 £9,125.011 £6,244,479 NET EXPENDITURE 2023 2022 net expenditure 15 stated aftèr¢hargiro.' Auditows. remuneration-audit Auditors, ￿MuneratiOn-OtherServ￿es Depreck?tion- on owned assets 26,525 11630 8￿,631 24,675 1.100 881P78 EMPLOYEES AMD sfAFF COSTS 2023 2022 The aveTrJe numberofcontrdtts fof Full rim? Partrime staff 125 118 Stsff costs were as fc41 Wages and salaries Agenry Social security costs Other pensign costs Temiination payments 4,699,440 169287 418,338 228,(K12 17,546 4017,303 161.288 371.718 194.952 19,164 £5,532,613 £4,764A25 The number of stsff who fell within the folkmng bands we¥e'. £60,C¥)1- £70.0 £80.001- £9),OLk) £%,1]01- £100,0 £1(KTr,001 - £110,￿0 £130,001 - £140,000 £160.001 - £170,000 Thè trading subsidigry. RAF￿ incurred £7&138 in stsff costs 12022.. £75.2721 whith a￿ included within Trnding Acti¥At*s expenditure. Page 32 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 315t December 2023 NOTES TO THE FINANCIAL STATEMENTS l¢•nllnued) YEAR ENDED 31# DECEMBER 2023 TRUStEES' REMUNERATION. REIMBURSED EXPENSES AND RELATED PARTIES The key management personnel of the parent charty. the Club, comprise the Tnjstees and the Executive Team. The total employee remuneration and benefits of the key management personnel of the Club were £613.64712022'. £570,115). No Trustees received remuneration for their setvices during the year. The charity trustees were not paid from employment with the Club or its subsidiary in the year12022.' Nill. No Club trustee received payment for professional orother services supplied to the Club12022.. Nil). During the year 12 tNstees12022.- 9 trustees) were reimbursed expenses totalling £5,11712022- £5,827). There were no related party transactions during the year12022.. Nill. TANGIBLE FIXED ASSErs Freehold land and buildin95 and g•nèral Functlon Roorns and Equlpn•nt Totsl GROUPAND CWB At istjanuary 2023 ddittons 17,997,262 820,637 7.693,438 2.370,862 2&061,562 820,637 At 31st December 2023 18,817A99 7.693,438 1370,862 2Q881199 DePr•cla￿On At 1stJanuary2023 Charge lor the year 8A57,9D4 624,4M 7324,791 108.887 1,7a517 157,300 17,505.212 89).631 At 31st December 2023 9.081348 7,431618 1,879.817 1&395N3 N•t bookvalue At 31st Deeembèr 2023 £9.735,551 £259,7 £491.045 £10,486,3% At 31st December 2022 £9.539,358 £368.647 £648,345 £10,55&350 All the fixed a55ets a￿ used for charitable activities. In addition to the capitalised fixed assets, the Club has an extensive collection of paintings sculptures and bronzes, other objects d'art and books and documents, either purchased by or donated or loaned to the Club. These represent a history of both aircraft and those who seNed in or were associated with the RAF. The cost of those items. and especially paintings, purchased by the Club is insignificant in terms of the value of the whole collection, which is irreplaceable. The Trustees do not believe that the Significant cost involved in valuin9 the whole collection for accounting purposes would derive significant additional benefit to the user of the accounts in terms of assessing the Trusteès, stewardship of the assets. Consequently. these assets have not been capitalised in the financial statements. A full inventory is kept for insurance purposes. Page 33 The Royal Air Force Club The Trustees. Annual Report and Consolidated Financial Ststements For the year ended 31 St December 2023 NOTES TO THE FINANCIAL STATEMENTS (contiwed) YEAR ENDED 31"DECEMBER 2023 INVESTMENTS The Club has a wholly owned subsidiary, RAFCTC Limited, which operates the trading activity of the Club and gift aids its surplus to the Club. The subsidiary is registered in England and Wales (registration number 06590556). 2023 2022 The ClJb'5 investment in the tr•Jing company was as lollm.. RAFCTC Limited 7& TrADING AcfNITIES 2023 2022 TumoveT Cost of saks 231,906 157,9161 145,186 136,6951 Gross profft Administration eX[￿Se$ Inet ol intwest r￿e￿able) 173,991 (71,2111 10&491 176,2561 Profitforthefinancial year £96,780 £32,235 Arntyjnt pty0b￿ undÈr9iltaid to the Club £96.780 £32,235 Balwncé sheet Net current assèts £1¢)J Share uptsl £1(M) £100 STOCKS Gyoup and (￿b 2023 2022 Gaods for resale £92,196 £86.124 Group aub 2023 2022 2023 2022 Trade debtors Otherdebtors Amounts iry subsidrdry uThJertaknng5 p￿payMents and acuued I[￿oMe Interest rate swap 239,907 364,035 186,630 211.274 199,429 341,279 29D,767 105,358 46.528 159,881 211.274 84,339 137,185 147.738 105.358 46.528 137,185 147.738 £755,828 £681827 £983361 £740.417 Page 34 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Staternents For the year ended 31" December 2023 NOTE5 TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 31" DECEMBER 2023 CREDITORS: Amounts falln9 dy¢ wtthln on• y•ar Grvup Club 2023 2022 2023 2022 Bank bans Tfade creditors Othercreditor5 Amounts owed to subsidiary uTrJtrtsknngS Othertaxes aThJ social secuiity Accruals and deferred incor 3.779,140 295,433 301,535 404,SX)8 288,330 48A47 3,779,140 293,586 301,534 404,908 288.330 41,791 582,962 419,125 552,700 291,849 578,517 416,675 539.971 290.749 £5.378,195 £1.586,234 £5,369A52 £1,565.749 CREDITORS: Amounts falllng th• fterone y¢ar Grnup 2023 2022 2023 2022 Bank k)3n £3.779,141 £3,779,141 Anply* of bank loank. Arnounts falling due.. Within one year 3,779,140 4IY,908 3,779.140 Amounts falling duv. Between one and two years 8elween iwo ar¥J fNe years Aftei five years 404,￿8 1,214,724 1159,509 404,9]8 1,214,724 2,159,509 £3,779,141 £3,779,141 The bank facilty comprises a business term loan of £3,779,14012022- £4,IB4.049) which is secured by first legal charge over the freehold land and buildings at The Royal Air Force Club. The loan wa5 arranged to partly finance the Centenary Extension wing of the Club. The business loan is for a seven-year term and the loan period was determined by the bank's capital risk ￿qUirementS applicable in 2017 and optimised the loan pricing to the Club's benefiL The Club is contractually required to repay the loan in April 2024 when the outstanding balance will be £ 3,677,929. It was originally anticipated that a new loan for a seven- or eight-year tem) would be arranged, on market terms ruling in April 2024, to cover the outstanding balance of the first loan. However, the Club's projected cash balance in April 2024 is £6.Om and, thus, there is headroom to repay the loan in full. Financial projections indicate that the remaining cash balance of £2.3m provides adequate liquidity to cover operational and capital spending for the foreseeable future. Based on current interest rates and market loan margins the borrowing cost for a new loan will be considerably higher than the rates payable on the current loan and the economic appraisal favour5 the full repayment option. The Board of Trustees is minded to repay the loan upon maturity and will make a final decision on repayment against refinancing based on latest market information and updated financial forecasts just before the loan Maturity date. Page 35 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Statements For the year ended 31st December 2023 11. CREDITORS- Amounts falllng due after one yw lre iThv851mont 9alMIOosses) 1.049.168 &250 1,057,418 Netgain/llos¥ on investment of interest rate swap 157,084 157,084 Nrt inCome/{•xp￿ditsff• 1,20Q252 250 1,214,502 12 61601 1616011 Balance brought fomard 7,731264 61,829 7.795,093 Balar￿£amed forward £9,￿)1117 £7A78 £9.009,595 Page 40 The Royal Air Force Club The Trustees, Annual Report and Consolidated Financial Ststements For the year ended 31$1 December 2023 Page intentionally left blank Ends Pa9e 41