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LTA Tennis Foundation
Trustee Report and Financial Statements for the year ended 31 December 2022
Registered in England – Company Number 08087723 Charity Number 1148421
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Contents
| Administrative information | Page 3 |
|---|---|
| Chairman’s Report | Page 4 |
| Report of the Trustees | Page 8 |
| Statement of the Trustees' Responsibilities | Page 12 |
| Independent Auditors' Report to the Members of LTA Tennis Foundation | Page 13 |
| Statement of Financial Activities | |
| Incorporating an income and expenditure account | Page 17 |
| Balance Sheet | Page 18 |
| Cash Flow Statement | Page 19 |
| Notes to the Financial Statements | Page 20 |
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LTA Tennis Foundation Administrative Information
| Board of Trustees | Timothy Lawler MBE |
|---|---|
| Born Barikor | |
| Serena Hedley-Dent (resigned 17 March 2022) | |
| Christopher Mills | |
| Cynthia Muller | |
| Gavin Murgatroyd (resigned 17 March 2022) | |
| Hitesh Patel | |
| Alexander Pitt | |
| Sandra Procter | |
| Oliver Scadgell | |
| Simon Steele | |
| Company Secretary | Alice Lacroux |
| Registered (and Principal) Office | The National Tennis Centre |
| 100 Priory Lane | |
| Roehampton | |
| London, SW15 5JQ | |
| England | |
| Independent Auditors | PricewaterhouseCoopers LLP, |
| Chartered Accountants and Statutory Auditors | |
| 1 Embankment Place, London, WC2N 6RH, | |
| United Kingdom | |
| Bankers | Coutts Bank, |
| 44 Strand, London, WC2R 0QS | |
| Solicitors | Farrer and Co, |
| 66 Lincoln’s Inn Fields | |
| London, WC2A 3LH | |
| Investment Managers | Cannacord Genuity Wealth Management |
| 41 Lothbury, London EC2R 7AE | |
| Brooks Macdonald Asset Management Limited | |
| 72 Welbeck Street, London W1G 0AY | |
| JPMorgan Asset Management (Europe) S.à r.l. | |
| European Bank & Business Centre, 6 route de Trèves, | |
| L-2633 Senningerberg, Luxembourg | |
| Rothschild Wealth Management (UK) Ltd | |
| New Court, St Swithin’s Lane | |
| London EC4N 8AL |
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LTA Tennis Foundation
Chairman’s Report
Introduction by Tim Lawler MBE, Chair of the Trustees.
This has been a hugely significant year for our charity as we completed the process started in 2021 of bringing together two separate and distinguished historical charities The Tennis Foundation and The LTA Trust – into one new entity, the LTA Tennis Foundation .
I’d like to thank all those who have previously served as Trustees of The Tennis Foundation and The LTA Trust for their contributions over many years. Their service has allowed the LTA Tennis Foundation to begin its life in a strong position to deliver its charitable purposes.
As a Board we agreed the principles and objectives of the charity. In short this is to ‘improve lives through tennis’. A simple objective, but one that runs through all our activities.
Beneath this overarching vision we developed key strategies to cover every part of our work: Inspire, Partner, Fundraise, Invest and Challenge.
By working in all of these areas we want to use the sport of tennis to make a real difference to individuals in Great Britain, with a particular focus on diverse and underserved communities where the game is less well established.
We’re entirely focussed on the grassroots of the game, and as a grant giving charity want to work with other charities and organisations to extend their reach and invest in innovative projects.
We’re also fully aligned to the LTA’s vision of ‘Tennis Opened Up’ – and will support LTA initiatives that we feel meet our charitable purposes. We see our relationship with the LTA as being complementary, both organisations helping the other to do things that neither could do on their own.
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However, it is important that the Foundation has its own identity, which is why we quickly adopted a new logo and established our own brand guidelines, incorporating bold and warm colours, to set a vibrant look and feel for the charity.
We also ensured the necessary governance work was completed in order to put in place strong foundations for the charity as it ramps up its activity in the coming years.
Alongside this we set about building relationships with many existing tennis charities currently operating. Understanding how and where they worked, their objectives, and establishing how we could help them.
This all culminated in a soft launch of the Foundation just ahead of the LTA’s summer major events. A strong presence at the tournaments in Nottingham, Birmingham, Queens and Eastbourne across on-court signage, programmes, and the big screens allowed us to publicise the charity and start the process of raising public awareness about our objectives and vision.
Alongside our launch the charity continued to invest in key projects including supporting LTA Youth, the LTA’s dedicated programme to introduce children to the game. Since the launch, we have issued more than 5,000 schools with a £250 voucher to spend on equipment or 10 hours with a local LTA Accredited coach – meaning they can introduce children to tennis in a positive, progressive, and inclusive environment.
We continued to support investment in tennis facilities throughout Britain with a total of £2.4m in either grants or loans invested in venues across the country. Work also began in earnest on the parks project, refurbishing thousands of tennis courts across Britain in conjunction with the UK Government and LTA who together with the LTA Tennis Foundation are investing millions into transforming local authority park tennis facilities across Great Britain. These venues are vital in providing accessible and affordable opportunities for local communities and they are also a significant enabler of participation and access to tennis for those from underserved groups. Over the course of 2022 the LTA worked with local authorities to develop a pipeline of projects where activity was ready to start on site.
This project will be the largest ever single investment into tennis facilities in this country and has the power to be transformational for the sport in communities up and down Britain. We are proud to be playing our part in the project and look forward to it coming fully on-stream in 2023.
Financial health
Financially our position remains healthy. Whilst the volatility of international markets means there were losses on paper of £2.6m, through robust financial planning, and access the charity has to more liquid reserves, there was no need to crystalise these losses.
We have net assets of £37.0m, of which £10.2m is designated for projects, including the parks project, and £0.3m restricted for legacy projects inherited from The Tennis Foundation (Legacy) following the charity merger. We will continue to look for opportunities to support projects that align with our vision and objectives, and always look to strike an appropriate balance between retaining enough reserves to continue our work over the long term, and not wanting to retain funds unnecessarily if there are appropriate projects that they could be supporting.
Plans for 2023
Plans for 2023 are ambitious, and good progress has already been made. The first of two grant making rounds took place in the first quarter with funds being distributed to charities and partners that will make a tangible difference to improve people’s lives through tennis.
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As we described, work has ramped up significantly on the parks project with dozens of courts being repaired and resurfaced each month.
Meanwhile we will once again use the LTA’s major events as our ‘shop window’ to raise awareness of the charity and the work we do. For the first time we will also actively seek donations from members of the public. To ensure we deliver this and our wider work in this area with excellence, we commissioned external expertise to help develop our own fundraising strategy in 2022 – researching the approach to fundraising that would best fit our charitable model and audiences.
Given all this activity 2023 promises to be an exciting year for the charity, and one where we can have real impact.
Before I conclude however I would like to thank all those, be they fellow Trustees, LTA staff, or contributors from other organisations, who have helped the charity in 2022. This has been an important period, during which we set out to build strong foundations for the future.
I am sure everyone’s work and commitment, including that done with no financial recompense, will help our charity make a real difference over the coming years.
Tim Lawler MBE Chair of the Trustees
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Docusign En¥ÈlopÈ ID". FB01B938-F63D418&9935-96639DE79COC IMPROVING 5,000 THROUGHTENNIS SCHOOLS WITH A£250 VOUCHER MORE THAN 20,000 £10.2M IN sIGNATED FUNDS EARMARKED FOR USE TEACHERS REGISTERED LTA £1.4M £2.4M SPENT ON THE FIRST YEAR COMMITTED IN GRANTS AND LOANS TARGET OF £1,000,000 £3.9M IN PARTIERSHIP FUNDING FROMAPPLICANTS IN GRANTS
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Report of the Trustees for the year ended 31 December 2022
The Board of Trustees of LTA Tennis Foundation (“the Foundation”) presents the annual report and the audited financial statements, for the year ended 31 December 2022. The Trustees have prepared this report and financial statements in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006, the Charities Act 2011 and Statement of Recommended Practice: Accounting and Reporting by Charities (SORP 2019).
The Foundation is a registered charity and a company limited by guarantee, having no share capital. It was incorporated on 29 May 2012 and is bound by its Memorandum and Articles of Association. The Foundation was registered by the Charity Commission (Charity Number 1148421) on 2 August 2012. LTA Tennis Foundation, formerly The LTA Trust, was renamed on 1 April 2022.
The Foundation’s only member is LTA Operations Limited (“the LTA”). The Foundation is an independent charity with nine (2021: nine) Trustees, six (2021: six independent and three (2021: three) appointed by the LTA. Though all Trustees are appointed by the LTA, those that are independent do not sit on the LTA Board of Directors, nor are they paid by the LTA for their services. The LTA does not have control over the day-to-day operations.
Charitable Objectives of the Foundation
The object of the Foundation is to advance for the public benefit such charitable purposes associated with the game of tennis in any part of Great Britain that are consistent with the purposes of the Lawn Tennis Association Limited from time to time as the Trustees may in their absolute discretion determine and (save for purposes incidental and ancillary to those objects) no other purposes.
The Foundation only invests in projects that are for the public's benefit and meet its charitable objectives.
Achievements and Performance
The Foundation officially relaunched in June 2022; it shares the Lawn Tennis Association’s vision of ‘Tennis Opened Up’, its mission is ‘Improving Lives Through Tennis’, with the following strategies: Inspire, Partner, Fundraise, Invest and Challenge.
The Foundation’s focus is solely on the grassroots of the game, and as the LTA’s charity it is committed to working in all parts of Great Britain with a particular focus on diverse and underserved communities where the game is less well established.
During 2022, the Foundation continued to make significant progress towards achieving its charitable objectives. £0.6m was spent on LTA Youth Programme (2021: £1.2m) to help provide skills for life, not just for tennis, and will help develop children as both players and people. More than 20,000 teachers have registered on LTA Youth Schools and the Foundation has provided more than 5,000 schools with a £250 voucher to support them in their delivery of tennis.
In addition, £0.3m grant funding (2021: £1.0m) and £2.1m (2021: £1.9m) loan funding was committed towards tennis venues’ projects, as part of the LTA's facility investment strategy which the Foundation provides funding towards. The projects that were awarded grant and loan funding included development of tennis facilities in parks, clubs, schools, and universities to provide affordable access of these facilities to the community.
Partnership funding from applicants in support of the approved projects amounted to £3.9m (2021: £3.8m).
The temporary decrease in capital grant funding is driven by the preparation required for the significant change in how the Foundation, in conjunction with the Department of Culture, Media and
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Sports (‘DCMS'), will fund park court and gate access projects over the next few years. In 2021 the UK Government announced £22m of investment into public park tennis courts in Britain, alongside a further £8.5m from the LTA Tennis Foundation. As a result, 2023 is expected to see materially higher levels of capital grant funding due to the start of the transformational Parks Delivery Investment scheme. The Foundation spent £1.4m towards the parks project in 2022 and will continue to invest in the project in 2023.
Future Developments
This will be a crucial year for delivery of the parks project. The Foundation will invest in digital infrastructure including funding and installation of gate access systems as well as investing in resurfacing, repainting, and fence repairs at existing facilities, for those facilities that are in the worst condition. The LTA will work with local authorities to make it easier for players to find and book a court and tennis activity, and a Free Parks Tennis product is in development to provide cost free, accessible tennis in parks across the country, which alongside the LTA’s Local Tennis Leagues will drive participation in new and established players.
Through a new grant making framework, with two expected windows for grant applications across 2023, the Foundation is targeting an initial investment of £1m. It is committed to working in all parts of Great Britain with a particular focus on diverse and underserved communities where the game is less well established.
All funding applications to the Foundation are assessed against the objectives of the Foundation and the outcomes of funding provided will be monitored and reviewed so that insight can be applied to future applications.
Public Benefit
The trustees confirm that they have complied with the duty under section 17 of the Charities Act 2011 to have due regard to the Charity Commission’s general guidance on public benefit and seek to meet the Foundation's charitable purposes in following its objectives.
Structure, Governance and Management
The Trustees
The appointment of the trustees is governed by the Foundation’s Articles of Association. Trustees are appointed by LTA Operations Limited in its capacity as the sole member of LTA Tennis Foundation, for their specific expertise in areas relevant to the charity.
Upon appointment, all new trustees are made familiar with the terms of the charitable company’s governing documents, its objectives and aims as part of the formal induction process. Trustees are assisted in the fulfilment of their duties, with on-going training provided as appropriate.
As at 31 December 2022, the Board comprised of nine (2021: eleven) trustees who met seven (2021: seven) times during the year . Further details of the trustees can be found on page 3.
During the year, no new trustees were appointed to the board. Both Serena Hedley-Dent and Gavin Murgatroyd resigned from the board in 2022.
Management
A major aspect of the Foundation’s work is the provision of capital and revenue grants and loan funding. Applications that are eligible for funding are assessed, in principle, on behalf of the Foundation by the Facilities Investment Panel of the LTA in line with its Facilities Strategy. Final approval on whether the Foundation's funds are utilised for those projects is at the Board’s discretion
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as the ultimate decision maker. A service level agreement is in place under which the LTA provides administrative services to the Foundation and administers grant and loan funding awards on behalf of the Foundation.
Financial Review
The statement of financial activities for the year is set out on page 17 of the financial statements.
The total net movement in funds for the year ended 31 December 2022 was a deficit of £4.6m (2021: £4.0m surplus).
The principal reasons for the difference in results between 2022 and 2021 was due to the £4.8m donation received in 2021 by The Tennis Foundation (Legacy) as part of the charity merger, and market volatility where the Foundation experienced a £2.7m loss in investments in 2022 compared to a £1.2m gain in 2021. £2.6m of the £2.7m losses were unrealised losses, and the Foundation's strong financial position means it is able to let the investments recover, instead of crystalising the losses.
Incoming resources of £0.6m (2021: £5.2m) were largely received from the investment portfolio of £0.4m (2021: £0.3m). In the year there was £0.1m (2021: £0.1m) of expenditure on management fees associated with the investment portfolio.
In the year the Foundation spent £1.5m in relation to the Parks renovation project (2021: £nil); this consists of £0.7m staff seconded from the LTA and £0.8m support costs for project management, technical services, and legal fees. The Foundation continued to support the LTA Youth programme and spent £0.6m on school vouchers (2021: £0.8m).
The total net assets held by the Foundation at 31 December 2022 were £37.0m (2021: £41.6m) with £0.3m restricted funds held (2021: £0.3m), and £10.2m designated funds held for various projects as detailed in note 10.
Responsibilities and Policies
Conflicts of Interest Policy
The Foundation's Conflict of Interest policy sets out guidelines and procedures for identifying, monitoring, and managing actual and potential conflicts of interest. Trustees are required to complete an annual declaration of conflicts and to state any new conflicts at the beginning of each meeting.
Reserves Policy
Charity reserves are funds that can be freely and readily spent on charitable purposes. They typically comprise unrestricted funds that can be readily accessed (i.e. they are liquid) but excludes funds designated for specific purposes.
The Foundation holds reserves to ensure that it can meet on-going operational and programme expenditures as they fall due. Our aim is to hold reserves equivalent 3 months of budgeted operational expenditure. Based on budgeted levels of operational expenditure for 2023 (excluding Parks programme budgeted expenditure which will be funded by DCMS and the Parks designated fund), this equates to £1m.
As at 31 December 2022, the level of reserves held by the Foundation was £23.0m (2022: £29.5m). Although this sum is substantially higher than the current target level of reserves, the Foundation plans to utilise reserves over the next 5 years to invest in community-accessible tennis facilities and to fund operational deficits whilst we build our fundraising capacity. The majority of the Foundation’s reserves will be used to provide loan funding to third parties under the facilities investment strategy,
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although reserves will also be used to award grants to organisations in pursuit of our charitable objectives. Over the long-term, future loan repayments are likely to be the primary source for replenishing the Foundation's reserves.
Risk Management
The Board has assessed the major risks to which the charity is exposed as being: too few sources of income, negative publicity, failure to meet legal requirements, exposure to fraud and not having adequate insurance cover.
Trustees have reviewed these areas of potential risk and concluded that, operationally, these risks are significantly mitigated; record keeping is performed by the LTA which has robust internal controls, insurance cover is reviewed every year. Processes, governance, policies, and Charity Commission check lists are regularly featured and reviewed in board meetings to ensure all legal requirements are met. Long term commitments are not made without having the adequate financial resources available, and investments and reserve policies are reviewed periodically.
Investment Policy
The investment policy of the Foundation is to generate a positive financial return on funds over the medium term through a balanced portfolio with a low risk profile and low capital volatility. The portfolio is to be fully liquid so that funds can be invested in projects as the need arises.
The Board has delegated responsibility to Lawn Tennis Association Limited's Investment Advisory Group (IAG) to implement the investment policy and monitor the performance of the Foundation's investments. The Board is updated on the performance of the investments during each board meeting and seeks professional advice when appropriate, while in addition one of the Foundation's Trustees is also currently a member of IAG.
Indemnity Insurance
Directors’ and Officers’ Liability Insurance to indemnify the trustees against the consequence of neglect or default on their part is purchased by the LTA but not recharged to the Foundation.
Related Parties
The Foundation works closely with Lawn Tennis Association Limited, the national governing body of tennis in Great Britain in pursuit of its charitable objectives.
For further information on related parties see Note 17 of the Financial Statements.
The Report of the Trustees was approved and authorised for issue by the Board of Trustees on 8 June 2023 and signed on its behalf by:
T Lawler MBE Chair of Board of Trustees
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LTA Tennis Foundation
Statement of the Trustees’ Responsibilities
The trustees (who are also directors of LTA Tennis Foundation for the purposes of company law) are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulation.
Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have prepared the financial statements in accordance with United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Statement of Recommended Practice: Accounting and Reporting by Charities (2019);
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make judgments and estimates that are reasonable and prudent;
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state whether applicable UK Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements; and
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
In accordance with Section 418, trustees’ reports shall include a statement, in the case of each trustee in office at the date the trustees’ report is approved, that:
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so far as the trustee is aware, there is no relevant audit information of which the company’s auditors are unaware; and
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they have taken all the steps that they ought to have taken as a trustee in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
The Statement of Trustees' Responsibilities was approved and authorised for issue by the Board of Trustees on 8 June 2023 and signed by its order by:
T Lawler MBE Chair of Board of Trustees
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LTA Tennis Foundation
Independent Auditors’ Report to the Members of LTA Tennis Foundation
Report on the audit of the financial statements
Opinion
In our opinion, LTA Tennis Foundation’s financial statements (the “financial statements”):
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give a true and fair view of the state of the charitable company’s affairs as at 31 December 2022 and of its incoming resources and application of resources, including its income and expenditure, and cash flows for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
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have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Report and Financial Statements (the “Annual Report”), which comprise: the Balance Sheet as at 31 December 2022; the Statement of Financial Activities (Incorporating an income and expenditure statement), and Cash Flow Statement for the year then ended; the accounting policies; and the notes to the financial statements, which include a description of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
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 charitable company’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the charitable company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
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Reporting on other information
The other information comprises all of the information in the Annual Report and Financial Statements other than the financial statements and our auditors’ report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
Report of the Trustees
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 which 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.
In addition, in light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we are required to report if we have identified any material misstatements in the Report of the Trustees. We have nothing to report in this respect.
Responsibilities for the financial statements and the audit
Responsibilities of the trustees for the financial statements
As explained more fully in the Statement of the 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 in accordance with the applicable framework and for being satisfied that they give a true and fair view. The trustees are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the charitable company, we identified that the principal risks of noncompliance with laws and regulations related to indirect legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as Companies Act 2006 and the Charities Act 2011. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates. Audit procedures performed included:
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Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
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Identifying and testing the validity of journal entries, in particular any journal entries posted with unusual account combinations, journals posted by senior management.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the charity’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
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Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
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we have not obtained all the information and explanations we require for our audit; or
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adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
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certain disclosures of trustees’ remuneration specified by law are not made; or
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the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Jonathan Lambert (Senior Statutory Auditor) For and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 8 June 2023
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LTA Tennis Foundation Statement of Financial Activities Incorporating an income and expenditure account for the year ended 31 December 2022
The net movement in funds for the years derives from the continuing activities of the Foundation.
The Foundation has no recognised gains or losses other than the net gain or loss in funds for the years stated above.
There is no material difference between the net movement in funds stated and their historical cost equivalents.
The notes on pages 20 to 29 form part of these financial statements.
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LTA Tennis Foundation
Company Registration No: 08087723 Charity Registration No: 1148421
Balance Sheet
as at 31 December 2022
*£1,550,000 and £338,000 have been reclassed from Trade and other receivables - amounts falling due after more than one year, and amounts falling due within one year respectively, because they are concessionary loans and better reflect the nature of the assets when shown separately as Programme Related Investments – amounts falling due after more than one year, and amounts falling due within one year of £1,550,000 and £338,000 respectively. 2021’s net assets and total charity funds remain the same after this change at £41,645,000.
The financial statements on pages 17 to 29 were approved and authorised for issue by the Board of Trustees on 8 June 2023 and signed on its behalf by:
S Steele Trustee
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LTA Tennis Foundation
Cash Flow Statement for the year ended 31 December 2022
The movement in cash relates solely to movements in cash and deposits.
The notes on pages 20 to 29 form part of these financial statements
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LTA Tennis Foundation Notes to the Financial Statements
1. Statement of accounting policies
a) Basis of preparation
The financial statements have been prepared under the historical cost convention as modified by the inclusion of fixed asset investments at market value, and in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006, Charities Act 2011 and applicable United Kingdom Accounting Standards. The financial statements also comply with the requirements of the Statement of Recommended Practice: Accounting and Reporting by Charities (SORP 2019). The Foundation has adapted the Companies Act formats to reflect the Charities SORP and the special nature of the Foundation’s activities. The Trustees believe the Foundation will be able to meet its debts as they fall due given the high level of liquid investments held and as such have prepared the financial statements on a going concern basis. The accounting policies have been applied consistently.
The report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006 and as such no strategic report has been prepared.
LTA Tennis Foundation has one wholly owed subsidiary, TF Enterprises Limited. As the results of the subsidiary are not considered material, consolidated financial statements have not been prepared in accordance with the exemption under Companies Act 2006 s400.
b) The Foundation's funds comprise:
Unrestricted funds which are available for use at the discretion of the Board of Trustees in furtherance of the general objectives of the Foundation and which have not been designated for other purposes; designated funds are those unrestricted funds which have been set aside by Trustees for essential spend or planned project. Designating funds is at the discretion of the Board of Trustees, and they are able to change their view on this in the future. This form of unrestricted funds is not bound under charity law in the same way that restricted funds are. Unrestricted funds have been disclosed showing those which have been designated and those which are the general funds of the charity, alongside a separate disclosure for restricted funds per the charities Statement of Recommended Practice framework issued as part of FRS 102.
Restricted funds which may only be used in accordance with specific restrictions imposed by the donor. The aim and use of each restricted fund is set out in the notes to the financial statements.
c) Incoming resources
All incoming resources are included in the Statement of Financial Activities when the Foundation is entitled to the income and the amount can be quantified with reasonable accuracy.
Gift aid - donations under gift aid together with income tax recoverable are recognised when the donation is receivable.
Investment income - investment income from investments is recognised on an accruals basis and reinvested. Interest income from cash at bank is recognised on an accruals basis. Credit is taken for interest in the period in which the Foundation is entitled to receipt.
All incoming resources are generated in the United Kingdom.
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LTA Tennis Foundation Notes to the Financial Statements
Statement of accounting policies (continued)
d) Incoming resources
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs relating to that activity.
Investment management costs - investment management costs comprise the costs directly associated with management of the Foundation's investments. These are deducted from investments by fund managers and hence included in the net value of investments.
e) Taxation
No charge to corporation tax arises as the Company is a registered charity, without taxable income. The Foundation is not registered for value added tax (VAT) and, accordingly its expenditure is recorded inclusive of any VAT incurred.
f) Programme Related Investment
The Foundation has applied the accounting policy choice allowed by PBE34.89 and is following the treatment prescribed by PBE 34.90 to 34.97. Programme-related investments are held to further the charitable purposes of the Foundation. They are held at cost less any provision for impairment. They are public benefit concessionary loans, which are interest free, are not repayable on demand and are for the purposes of furthering the objectives of the Foundation. Where a concessionary loan arrangement is entered into, the loan paid is retained on the balance sheet at the loan amount less an appropriate provision made for impairment. Loans are made to tennis venues and are repayable over periods up to 10 years.
Applicants must present a business plan regarding the suitability of the venue and the likelihood of repayment. A senior staff member with delegated authority makes the final decision on the loan application, based on affordability and viability of the business.
In prior years, loans awarded in the year include loans issued and outstanding loan commitments. Outstanding loan commitments were those successful loan applications where a loan was not yet issued however a constructive obligation exists between LTA Tennis Foundation and the tennis venue. The review of loan balances at that stage confirmed consistency to the values reported at Note 10 to the financial statements.
Repayments are normally collected by direct debits or standing orders from the bank accounts of the businesses on a 6 monthly basis. A specific provision is made against the aggregate value of loans issued, based on past experience and on management’s current expectations. Loans are only written off when there is no realistic prospect of recovering any further repayments.
Fixed assets and investments are subject to review for impairment when there is an indication of a reduction in their carrying value, and at the end of each reporting period, and if there is any objective evidence of impairment, that an immediate impairment loss is recognised in the Statement of financial activities, as required in the Charities SORP 2019 para 21.32 and 21.33.
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LTA Tennis Foundation Notes to the Financial Statements (continued)
2. Funds received
Funds received Park Renovation Project funded by DCMS 3. Income from investments Income from listed investments and investment funds Interest from cash deposits 4. Expenditure on raising funds, audit, and other expenses Investment management costs Audit fee Administrative expenses 5. Expenditure on charitable activities Facility grants awarded Park Renovation Project Park Renovation Project funded by DCMS |
2022 £’000s 115 12 127 2022 £’000s 429 2 431 2022 £’000s 109 7 62 178 2022 £’000s 872 1,484 12 2,368 |
2021 £’000s 4,872 - |
|---|---|---|
| 4,872 | ||
| 2021 £’000s 280 - |
||
| 280 | ||
| 2021 £’000s 100 4 131 |
||
| 235 | ||
| 2021 £’000s 2,113 - - |
||
| 2,113 |
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LTA Tennis Foundation Notes to the Financial Statements (continued)
6. Employees
The average monthly number of full-time employees (excluding Trustees) employed directly by the Foundation during the year was nil (2021: nil).
Trustees’ remuneration
During the year no trustees received remuneration nor reimbursement for expenses from the Foundation.
7. Investments in subsidiary undertaking
The principal activity of the subsidiary undertaking (TF Enterprises Limited) is to receive sponsorship and undertake other commercial activities on behalf of LTA Tennis Foundation, though there was no sponsorship or other commercial activity during the year. A summary of the audited results of TF Enterprises Limited at 31st December is shown below:
| Turnover Loss for year after taxation Net assets: At beginning of year At end of year TF Enterprises Limited 100 (2021: 100) ordinary shares of £1 each (100% of the company) |
2022 2021 £000 £000 - - |
|---|---|
| - (1) |
|
| 6 7 |
|
| 6 6 |
|
| - - |
|
| - - |
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LTA Tennis Foundation Notes to the Financial Statements (continued)
8. Tangible Assets
| Cost: at 1 January 2022 Additions Disposals Transfer from The Tennis Foundation (Legacy) at 31 December 2022 Accumulated depreciation: at 1 January 2022 Charge for the year Disposals at 31 December 2022 NBV at 31 December 2022 NBV at 31 December 2021 |
Technology Development Field Equipment Total £000 £000 £000 29 19 48 - - - - - - - - - |
|---|---|
| 29 19 48 (29) (19) (48) - - - - - - |
|
| (29) (19) (48) |
|
| - - - |
|
| - - - |
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LTA Tennis Foundation Notes to the Financial Statements (continued)
9. Investments
| Listed securities at market value: Balance at beginning of year Additions during the year Disposals during the year Fund cash movement Fair value (decrease)/increase Balance at end of year Listed securities at historical cost |
2022 2022 2022 2022 2022 £000 £000 £000 £000 £000 Canaccord Fidelity JP Morgan Brooks Macdonald Rothschild 8,680 10,258 10,268 8,611 4,378 1,922 - - 911 518 (1,915) (1,000) (2,000) (646) (867) 127 16 95 (62) 172 (1,362) 111 - (1,208) (144) |
2022 2021 £000 £000 Total Total 42,195 39,407 3,351 6,765 (6,428) (5,509) 348 320 (2,603) 1,212 |
|---|---|---|
| 7,452 9,385 8,363 7,606 4,057 |
36,863 42,195 32,289 38,422 |
The Foundation holds investments in shares, fixed interest products and corporate bonds as part of its low-risk investment strategy providing an investment return for the Foundation. The trustees believe that the carrying value of the investments is supported by the underlying net assets.
10. Programme Related Investments
| Programme related Investments - amounts falling due after more than one year Programme related Investments - amounts falling due within one year |
2022 2021 restated £000 £000 2,798 1,550 621 338 |
|---|---|
| 3,419 1,888 |
The loans represent interest free concessionary loans issued by the Foundation to clubs, indoor facilities, parks, and schools to improve tennis facilities. The loans are repayable between 3-10 years or longer and are recorded net of any bad debt provision.
In addition to the issued loans, there are loans of £3.3m (2021: £3.7m) that have been approved for payment to places to play but have not yet been paid.
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LTA Tennis Foundation Notes to the Financial Statements (continued)
11. Unrestricted funds
| General unrestricted funds Other unrestricted recognised gains Designated funds Parks Designated funds LTA Youth Designated funds Grant Making Framework Designated funds Charity partner projects Total unrestricted funds |
Fund at start Income Expenditure Net Expenditure Transfer in/out Fund at end of 2022 of 2022 £000 £000 £000 £000 £000 £000 26,605 558 (1,062) (504) (1,795) 24,306 4,805 - (2,650) (2,650) - 2,155 9,890 - (1,484) (1,484) - 8,406 - - - - 450 450 - - - - 1,000 1,000 - - - - 345 345 |
|---|---|
| 41,300 558 (5,196) (4,638) - 36,662 |
Designated funds Parks
The designated funds relate to will invest in digital infrastructure including funding and installation of gate access systems as well as investing in resurfacing, repainting, and fence repairs at existing facilities, for those facilities that are in the worst condition.
Designated funds LTA Youth
The designated funds relate to supporting the delivery of tennis in schools by providing £250 worth of vouchers for tennis equipment to schools.
Designated funds Grant Making Framework
The designated funds relate to investment in external partner initiatives that support people and programmes in opening up tennis.
Designated funds Charity partner projects
The designated funds relate to investment in charity partner projects.
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LTA Tennis Foundation Notes to the Financial Statements (continued)
12. Restricted funds
| Restricted funds Total restricted funds |
Fund at start Income Expenditure Net income Fund at end of 2022 of 2022 £000 £000 £000 £000 £000 345 - - - 345 |
|---|---|
| 345 - - - 345 |
| Restricted Funds ITI Fund Cliff Richard Tennis Trail – General Cliff Richard Tennis Trail – Suffolk Seed Legacy Fund PESSYP Murton Pitts Intercity Challenger Fund BSTA The Harris Fund Keith Baker Fund Comic Relief |
Fund at start Income Expenditure Net Fund at end of year income of year £000 £000 £000 £000 £000 27 - - - 27 143 - - - 143 5 - - - 5 61 - - - 61 6 - - - 6 24 - - - 24 41 - - - 41 3 - - - 3 10 - - - 10 23 - - - 23 2 - - - 2 |
|---|---|
| 345 - - - 345 |
Purposes of each fund:
ITI Fund - To provide capital and revenue grant aiding for indoor and outdoor tennis facilities on local authority land
Cliff Richard Tennis Trail - General - For the development of tennis in primary schools Cliff Richard Tennis Trail - Suffolk - For the development of tennis in Suffolk Seed Legacy Fund - To support Junior Development Programmes
PESSYP - To support the Club Links Programme to increase the number of accredited clubs, school sports partnerships and the number of young people participating in accredited clubs Murton Pitts - For the development of young players in Kent
Intercity Challenger Fund - To promote competition for inner-city tennis clubs BSTA - British Schools Tennis Association to promote tennis in schools The Harris Fund - For the support of Kent LTA
Keith Baker Fund - For the support of deaf tennis
Comic Relief - For the support of the Serves programme in named sites in Manchester, Birmingham and two sites in London Sufficient resources are held in an appropriate form to enable each fund to be applied in accordance with any restrictions.
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LTA Tennis Foundation Notes to the Financial Statements (continued)
13. Total funds
| otal funds | |
|---|---|
| Cash Investments Trade and other receivables Creditors Total |
Unrestricted Restricted Total Total Funds Funds Funds Funds 2022 2022 2022 2021 £000 £000 £000 £000 1,124 345 1,469 1,331 36,863 - 36,863 42,195 3,450 - 3,450 1,889 (4,775) - (4,775) (3,770) |
| 36,662 345 37,007 41,645 |
14. Reconciliation of profit for the financial year and cash flow from operating activities
| Note (Loss)/profit for the financial year Investment income receivable net of management fees 3 Net loss/(gain) on investments Operating (loss)/profit Increase in receivables 15 Increase in creditors Increase in programme investments 17 10 Cash (outflow)/inflow from operating activities |
2022 2021 restated £000 £000 (4,638) 4,036 (431) (280) 2,650 (1,232) (2,419) 2,524 (30) (2) 1,005 (1,531) 808 (1,334) |
|---|---|
| (2,975) 1,996 |
*2021’s Increase in receivables has been reclassed by £1,334,000 from £1,336,000 to £2,000 in order to add a new line for programme related investments, which better reflects the nature of the assets (being interest free concessionary loans to support tennis venues).
15. Trade and other receivables
| Trade and other receivables – amounts falling due after more than one year Trade and other receivables – amounts falling due within one year |
2022 2021 restated £000 £000 - - 31 1 |
|---|---|
| 31 1 |
*2021’s Trade and other receivables – amounts falling due after more than one year, and amounts falling due within one year have been restated from £1,550,000 and £339,000 to £nil & £1,000 respectively. The moved balances of £1,550,000 and £338,000 are now disclosed in Note 10, Programme Related Investment, which better reflects the nature of the assets (being interest free concessionary loans to support tennis venues).
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LTA Tennis Foundation Notes to the Financial Statements (continued)
16. Cash at bank and in hand
| Cash at bank and in hand | |
|---|---|
| Cash at 1 January Net increase in cash and cash equivalents Cash at 31 December |
2022 2021 £000 £000 1,331 611 138 720 |
| 1,469 1,331 |
17. Creditors: amounts falling due within one year
| Creditors due within one year | 2022 2021 £000 £000 (4,775) (3,770) |
|---|---|
| (4,775) (3,770) |
18. Related parties
The Foundation is a company limited by guarantee and the members undertake to contribute £1 in the event of the company being wound up. As at 31 December 2022 there was one member, being LTA Operations Limited.
The Lawn Tennis Association Limited is the national governing body of tennis in Great Britain, the Channel Islands, and the Isle of Man. Its objectives are to promote and develop tennis and to advance and safeguard the interests of the sport.
The Foundation is an independent charity with nine (2021: nine) trustees, six (2021: six) independent and three (2021: three) appointed by the LTA. Though all trustees are appointed by the LTA, those that are independent do not sit on the LTA Board of Directors, nor are they paid by the LTA for their services. The LTA does not have control over the day-to-day operations.
During the year, the Foundation reimbursed another group entity, LTA Operations Limited, £0.6m (2021: £0.5m) to cover the delivery costs of the LTA Youth programme. The Foundation was charged £0.7m (2021: £nil) by LTA Operations Limited to cover staff seconded for to the Parks project.
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Registered in England – Company Number 08087723
Charity Number 1148421
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