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2022-03-31-accounts

Charity registration number 1160964

Company registration number 09172730 (England and Wales)

MERTHYR TYDFIL LEISURE TRUST LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

MERTHYR TYDFIL LEISURE TRUST LIMITED

CONTENTS

Page
Chairman's statement 1
Trustees' report 2 - 12
Statement of trustees' responsibilities 13
Independent auditor's report 14 - 16
Statement of financial activities 17
Balance sheet 18 - 19
Statement of cash flows 20
Notes to the financial statements 21 - 41

MERTHYR TYDFIL LEISURE TRUST LIMITED

CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2022

Chairs Introduction

I am pleased to be able to introduce our Trustees Annual Report for the year to March 2022. The year as with the previous one was not without its challenges as we navigated our way out of the Government restrictions and back to some semblance of normality. It was pleasing to see all our venue re opening albeit some with restricted usage at the beginning of the year. Our on line presence continues to grow however it is equally pleasing to see customers returning and using our venues, the mix of both will continue to support our recovery moving forward.

My thanks as always to all our staff who have continued to work hard in an ever changing work place, meeting every challenge thrown at them with resilience, commitments and a willingness to ensure all our customers receive the very best service that we can offer.

Looking forward to the next 12 months, despite the current challenges presented by the cost of living increases and energy crisis we will aim to continue to provide an efficient, effective service, with accessible and well-maintained facilities that cater for all our customers.

Our plans include an upgrade to the fitness facilities at Merthyr Tydfil Leisure Centre, new spin bike for Aberfan Community Centre, the re-introduction of events and activities within the main hall at Merthyr Tydfil Leisure Centre. The museum service will again start its programme of temporary exhibitions. Redhouse will provide a varied programme of events and activities, the libraries will once again be able to offer a wider range of activities such as its Lego club, summer reading challenge and charity event such as the strawberry tea and the splash pad and catering facilities within Cyfarthfa Park will be open for business throughout the summer season.

To conclude whilst we acknowledge that there will continue to be challenges ahead of us we will continue to strive to ensure we provide the best possible opportunities for all our customers.

J Smith- Chair of Trustees

Dated: 31 March 2023

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 MARCH 2022

The trustees present their annual report and financial statements for the year ended 31 March 2022.

The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements and comply with the charity's governing document, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2019).

Objectives and activities

Objects and aim

Merthyr Tydfil Leisure Trust has the following Company Objectives, which are outlined in the company’s Articles of Association:

The Vision Statement that shapes our annual activity is: Creating healthier and happier communities.

Our Mission Statement is: to inspire healthier communities by connecting people to cultural and active recreation.

Our values: We are an organisation that aspires to the highest standards in everything we do, and we adopt the following seven core values to assist us to achieve our mission:

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Significant activities

Cultural Services

Libraries

Merthyr Tydfil Public Libraries are the only statutory service provided by Merthyr Tydfil Leisure Trust on behalf of Merthyr Tydfil County Borough Council. Merthyr Tydfil public Library Service consists of the main Central Library and three community libraries at Dowlais, Treharris and Aberfan and there is a library hub based at the Merthyr Tydfil Leisure Centre. In addition, the service offers a home links delivery service for those unable to access services in the usual way. The public library service is governed by the 1964 Libraries and Museums Act which places a duty on authorities to provide: ‘a comprehensive and efficient library service for all persons wishing to make use thereof’.

Part of being a statutory Public Library Service is that services are provided free of charge for those who live, work or visit the area, and public library services across Wales work together to provide resources in conjunction with Welsh Government and the National Library of Wales to ensure parity of access to a range of resources, including but not limited to:

Museum

Merthyr Tydfil Museums Service is responsible for the management of Cyfarthfa Castle Museum and Art Gallery and Joseph Parry’s Ironworker’s Cottage.

Cyfarthfa Castle Museum & Art Gallery is one of the main tourist attractions in Merthyr Tydfil. The Museums Service provides a means by which the important, rich heritage of Merthyr Tydfil can be interpreted, promoted and appreciated by the local community and visitors alike. Joseph Parry’s Cottage was the birthplace in 1841 of Joseph Parry, Wales’ best-known composer, and the interior of the cottage provides an insight into the living conditions of the ironworker at the time when Parry was a young boy.

The Museums Service runs a variety of events and exhibitions and our education and community programmes offer an exciting and interactive programme of activities that aims to bring history to life. The service aims to provide a sense of ‘place’ to the community and visitors by providing a gateway to Merthyr’s past, its achievements and how they contributed to outstanding customer service and all round visitor experience. The service has an important role in collecting and preserving historic and artistic objects for the future generations of Merthyr Tydfil.

With the departure of the school from the Cyfarthfa Castle and the potential redevelopment of the building, there will also be future opportunities for both the museum and the trust as a whole to support and hopefully enhance any future developments of the site.

Cyfarthfa Park

Once the family home of the Crawshay Ironmasters dynasty, Cyfarthfa Park and Castle occupy some 165 acres of land to the north west of Merthyr Tydfil town centre. The Castle itself houses the Museum & Art Gallery whilst the rest of the Castle was utilized as a school from 1909 up until 2014. Since April 2015, the Trust has been responsible for the Castle, Park, Museum, and the activity zone, which incorporates the Splash Pad, Canolfan Cyfarthfa, bowling green, Pitch and Putt Golf Course and Tennis Courts. However, it must be recognized that there are a number of important partners and stakeholders who have invested in and contribute to the short and long term success of Cyfarthfa Park and Castle as a premier local, regional and national attraction such as Heritage Lottery Fund, the Friends of Cyfarthfa Park, Museum and Heritage group which act as Friends of the Museum Merthyr, Engineering Society, Merthyr Tydfil Angling Association, Social Regeneration Department and Cyfarthfa Bowling Club.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

The Park is also used for a number of community events which include The Merthyr Rocks Festival, Fireworks Sky show, American Circus, Monster Trucks, and Pony Shows etc.

Redhouse

Built in 1896, the Old Town Hall was originally the seat of local government, which included the Council Chamber, Magistrates Court and holding cells for remand prisoners. After years of use as a civic building, these services moved elsewhere in 1989, leaving the Old Town Hall vacant. In the intervening years, the Old Town Hall was divested to private ownership and used as a nightclub where it was unceremoniously vandalised and fell into disuse and disrepair.

Merthyr Tydfil Housing Association resolved to save the building and preserve its unique heritage and character when they purchased the Old Town Hall in 2007. Working with a range of funding partners, the venerable building started the journey towards its new life as a centre for the arts, heritage and creative industries. The Old Town Hall has been extensively renovated and restored, blending its beautiful period features with brand new arts facilities and technologies to make it a truly inspirational building. The magnificent Grade II* listed building reopened to the public on St. David’s Day 2014, following an extensive £8m capital redevelopment programme supported by the Welsh Government, European Regional Development Fund, Heritage Lottery Fund & Merthyr Tydfil County Borough Council in association with Miller Argent. On April 1st 2015 the business was transferred under lease to the Merthyr Tydfil Leisure Trust.

Leisure Services

The Leisure section of the Trust is responsible for the operation and management of the flag ship Merthyr Tydfil Leisure Centre & Skate Park, Aberfan Community Centre, Treharris Community Centre, and Grove Field Artificial Turf pitch. We also work in partnership with Gôl to offer activities at the newly built external five a side pitches adjacent to Merthyr Tydfil Leisure Centre and provide support to the Merthyr Tydfil International Bowls Centre. Our venues provide a wide range of opportunities for adults and children that encourage physical activity and sport, such as Swimming, Fitness suites, classes, courses and holiday activity programmes. Our venues are home for many local clubs and sporting organisations that train on a weekly basis and develop their sport. We are also proud to host many large sporting and non-sporting events each year.

Leisure is working in partnership with the Local Authority and contributes to the Single Integrated plan and corporate plan, specifically in the priority area of Healthy and Active lifestyles via its range of facilities and activities. We also deliver the Free Swim and National Exercise Referral Scheme on their behalf. Our Community Sport programmes focus on providing sport and physical activity opportunities within our Leisure facilities for children aged three and upwards via a variety of activities.

Events

Merthyr Tydfil Leisure Trust plays host to a variety of sporting and non-sporting events within its facilities throughout the year such as concerts in the park to darts and boxing events at Merthyr Tydfil Leisure Centre.

Public Benefit

In setting our objectives and planning our activities, the trustees confirm that they have considered the Charity Commission general guidance on public benefit and its supplementary public benefit guidance. Merthyr Tydfil Leisure Trust understands and embraces the need to use commercial practices to deliver social outcome and as such ensures a careful balance between the two. Our Trust continually strives to improve and develop its services and activities.

The Trust has entered into an agreement with Merthyr Tydfil County Borough Council whereby we undertake to deliver a range of services at a variety of facilities, which are owned by the Council and leased to the Trust.

The trustees confirm that they have complied with the requirements of section 4 if the Charities Act 2011 to have due regard to the public benefit guidance published by the Charities Commission for England and Wales.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Achievements and Performance

Libraries

The year 21/22 was still a difficult one for Library frontline services, with significant restrictions still in place in relation to the services it was able to provide. New ways of working developed during the first year of the pandemic, including online and digital content provision was built on, and thus provided ways of delivering content, knowledge and information to new and existing audiences.

As restrictions eased, in line with the public health protection measures in place saw small returns to in person delivery, opening hours were extended and services gradually began to return to similar models to pre-pandemic.

Although services began to return to normal, actual visits to premises and engagement with activities was slow to

build, in line with national trends in the return to physical spaces.

Services continue to be operated in a blended model and are developing to increase consumer confidence in returning to physical spaces, alongside understanding the changing needs of customers post pandemic restrictions.

The local authority were able to secure funding for repair of one of the grade 2 listed service points which has suffered severe water ingress and this work will be ongoing for two financial years to ensure the ongoing viability of the building. The service point has been moved across the road into a community space and continues to provide services.

Museum and Art Gallery

Again, as in the case of Library services, the Museum service continued to be subject to significant public health measures in relation to the delivery of their services, and like Libraries, have seen slow increases to numbers of people attending.

Again, services have been delivered differently through different mediums, including online and digital platforms and these have been well received by both traditional and non-traditional models.

Much of the year has been spent re-building links lost during the pandemic, especially with schools and educational establishments, community groups and individuals. As the year has developed there have been increasing activities, participation and interest in the service which will be built on for subsequent years.

Cyfarthfa Park

Scheduled refurbishment works at the park for the café and splashpad area were hampered by supply chain issues caused by the pandemic and as such had a severe and negative impact on the service levels at the park.

However, a range of activities did take place and were well received by those in attendance, including outdoor panto and shows, music events, walks, talks and other activities which, as they were outside, meant that they were less restricted and appeared more attractive to participants.

The park was able to remain open throughout the period of restrictions and thus played an important part of the offer to enhance lives, through active participation.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Redhouse

Significant levels of funding were sought and granted during the year to begin to improve and develop the offer at Redhouse. Significantly the Redhouse attracted Arts Council of Wales, Welsh Government and UK government funding to develop activities.

There were set backs as COVID cases increased in the local area and in Wales and some activities had to be cancelled at short notice due to Welsh Government restrictions being imposed during the fourth quarter.

However, the grants given were able to be used to do some audience development and partnership working to build on for the coming years. The College (anchor tenants) were welcomed back and their presence also helped the building become more active. As the requirements of the College changed (significant additional requirements on the building were needed), we were able to also welcome back other tenants, such as Community Music Wales.

Leisure

As public health measures eased, leisure services began welcoming people back into the buildings, but also undertook outdoor classes and exercise activities, alongside the digital offers being made available, alongside the home exercise equipment.

Grants were obtained to develop the changing areas in one of the centres and significant work was undertaken to assess, redesign and develop a grant application for Welsh Government in relation to the pool works required in Merthyr Tydfil Leisure Centre.

As restrictions eased Leisure was able to welcome back new members and a significant investment was sought and planned for a new gym area to revitalise the offer moving into a post-pandemic period.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

NERS (National Exercise Referral Scheme)

The key achievement of 2021-22 was the restart of the NERS programme in June 2021. After 15 months of NERS being suspended due to the pandemic, we were able to return to the leisure centre to do classes and accept new referrals again. We had some challenges with finding some space to do our classes because the vaccination centre was located in the main double hall and main dance studio of Merthyr Leisure Centre. A lot of work was involved in the restart and it was such a lovely achievement when we were able to recommence our consultations and face-to-face classes again.

In addition to the restart, we employed an instructor in August 2021. This instructor had been employed with us previously (had left in March 2020) so came ready with all the qualifications and experience needed to be part of the team and get working immediately.

To promote the NERS programme during 2021 - 22 the NERS coordinator gave presentations to GP’s at their GP cluster meeting, presented to the Voluntary Action Merthyr Tydfil forum, presented at the practice nurses CPD training, presented to the physiotherapists who are based in our local GP surgeries, presented to the stroke rehabilitation team at Prince Charles Hospital and attended a community information day at Twyn Community Centre in Merthyr.

The Merthyr NERS team started a project with the Department of Work and Pensions (DWP) in September 2021. This project is to enable people who are of working age and on certain benefits to access NERS for free. The project was given a small grant to allow local authority NERS teams to take on up to 78 participants for the pilot project. This project will continue into 2022 - 23 to ensure 78 participants benefit from the funding.

Events

Events were limited and subject to the restrictions in place at various times during the year, although the latter part fo the year did see significantly more events and activities start to take place. These events ranged from story and rhyme sessions to music events and covered everything in between. A new programme of events and developments was programmed for the coming year using the grant spends allocated to them.

Community Activity

The start of the year saw very little community activity other than what was delivered online due to the restrictions in place at the time. As we moved through the year, and public health measures were reduced and changed etc, more partnership approaches were developed and community engagement began again right at the end of the year.

Staff Support throughout the pandemic

Staff have more than proven their resilience through the pandemic, being involved in whole new ways of working and developing activity, alongside their efforts around mass testing. However, in order to further support the staff through the pandemic, the People and Learning manager has arranged a series of support mechanisms that staff can call on, including but not limited to:

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Financial review

The financial statements are set out later in this report. The statement of Financial Activities shows a net unrestricted deficit, before actuarial losses on defined benefit pension schemes, for the year of £314,384 (2021: net unrestricted surplus of £368,799). Income in 2022 was £4,202,864 (2021: £4,333,839) whilst expenditure in 2022 was £4,510,689 (2021: £3,871,546). The actuarial gain on defined benefit pension scheme for the year was £1,627,000 (2021: loss of £1,183,000).

Full details of the movement in restricted funds is included within note 19 on page 37.

Going cocern

The Trust, is facing significant levels of uncertainty relating to the recovery from the impacts of the Covid 19 pandemic as well as the cost of electricity and gas. The Trust is seeing the return level of customers stabilised at a lower level than pre-Covid, and therefore income has stagnated. In addition to the issues facing the Trust in relation to post-COVID recovery, the massive increases in utilities and the exclusion of sports facilities from the latest round of government support has seen that the Trust is faced with an increase in power costs in the year to 31/03/2024 in the region of £570,000.

The Trust currently has a positive level of general reserves, although these have reduced in the current year following the slow recovery from the effects of the Covid 19 pandemic and the reduction of Covid 19 funding. However these increased costs are not sustainable and without changes to the current operational model the Trust will face cashflow issues by the end of the 2024 financial year.

These material uncertainties related to going concern are set out in note 1.2 to the financial statements.

Pension

On 1 April 2015 the Trust was admitted to the Local Government Superannuation Scheme (LGPS), a defined benefit scheme. The funding deficit accruing to 31 March 2015 in respect of employees relocating to Merthyr Tydfil Leisure Trust was retained by Merthyr Tydfil County Borough Council (MTCBC). The Trust is, therefore, only responsible for any increase in liabilities occurring after the transfer date, with the Authority acting as guarantor for the previously accrued net deficit.

Full details of the movement in pension obligation is included within note 18 on page 34.

Policy on reserves

Reserves are needed to bridge the gap between the spending and receiving of income and to cover unplanned emergency repairs and other expenditure.

It is the Trust’s policy that unrestricted funds not committed or invested should be built up over time, so there are sufficient reserves to meet 2 months of expenditure, in order to allow the ongoing operation of the charity to continue in the event of a fall in expected funding. The trustees consider that the idea level of reserves would be £766,000.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

At 31 March 2022 the free reserves excluding the defined benefit pension reserve amount to £245,309. The pension reserve amounted to a deficit of £3,344,000. At 31 March 2022 restricted reserves were £368,923. The Trust currently holds minimal reserves.

Discussions with Merthyr Tydfil County Borough Council are ongoing to clarify responsibilities for the funding of repairs and maintenance of the properties we currently lease from them. The Trust also aims to build up reserves to fund working capital. All annual surpluses not allocated to fund working capital are available to fund investment into property and equipment to improve service quality. The Trust aims to maintain a minimum unrestricted reserve.

1. Unrestricted Funds

2. Restricted Funds

The reserves level will be reviewed on an annual basis by the Trustees of Merthyr Tydfil Leisure Trust.

Remuneration of Key Management Personnel

The arrangements for setting pay and remuneration of key management personnel is linked to the general staff pay award as agreed with Union representatives. Consideration is given to the National Joint Council Pay Award for Local Government during these discussions and subject to affordability and are ratified by the Board of Trustees

Risk Management

The Trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error. The Trust has a risk register for identifying, evaluating and managing risk which is regularly reviewed in order to ensure all principal risks and uncertainties are identified and that robust plans and strategies are in place to manage those risks.

Health and Safety

The Trustees have identified health and safety as a significant risk area. Merthyr Tydfil Leisure Trust’s duty of care to all those who visit and work within the facilities is of paramount importance to us. We have a service level agreement in place with Merthyr Tydfil County Borough Council who provides us with support, guidance and advice and appointed a Health and Safety Manager in the summer of 2020.

Future

The future plans are as is the case with all charities, businesses and organisations of all types at risk, and will be for the foreseeable future as a result of the impact of the Coronavirus Pandemic.

A lot of work is ongoing to develop new and innovative ways of working while being mindful of the restrictions in place around the services that are provided through us. There is currently a much reduced level of operation and this will provide challenges moving forward. There will be ongoing work to understand grant funding and support funding available to us and partnership development which has already been started will be built on and we will work with those partners to support our communities further as we look to recover from the devastating effects of the pandemic, that have had personal and organisational wide impacts.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Plans for the Future

Plans are ongoing now for blended service models to ensure services remain relevant and interesting for customers. Digital technologies, developed out of necessity during the pandemic will be part and parcel of a normal service model moving forward. There will be ongoing work to understand grant funding and support funding available to us and partnership development which has already been started will be built on and we will work with those partners to support our communities further as we look to recover from the devastating effects of the pandemic, that have had personal and organisational wide impacts.

Ongoing reference to both the cost of living crisis and energy crisis will have massive impacts on planning and development.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Structure, governance and management

Nature of governing document

Merthyr Tydfil Leisure Trust is a Charitable Company Limited by Guarantee and governed by its Memorandum and Articles of Association, which establishes the objectives and powers of the charitable company.

Recruitment and appointment of trustees

New Trustees will be appointed by existing trustees.

Induction and training of trustees

In line with good governance, we put in place an induction process for New Board members.

Organisational Structure

The day to day operations of the Trust are managed by the Trust’s Senior Management Team. The Senior Management Team is given strategic direction by the Board of Trustees (The Board) regarding the provision and operation of the services. The Chief Executive is the officer with delegated authority in respect of day to day management. In addition he Board of Trustees may delegate any of its powers to committees in accordance with its articles. Committees will only consider matters which fall within the defined area of responsibility that the Board has delegated to them. The board had delegated certain responsibilities to the following Sub Groups: Change Board

Finance and Risk Sub Committee Culture Sub Committee Leisure Sub Committee

The Board has ultimate responsibility for the governance of the Trust and directs, supports and challenges the Senior Management team in its work. Through the provision of such direction and guidance, via the establishment of key policies, the Trust benefits from the foundation of good governance and a balanced Board of trustees, that is both divers and effective.

The Current Senior Management team consist of: Jane Sellwood –CEO

Marian Barnes – Accountant (From Mitchell Meredith Chartered Accountants) Ian Carter– Wellbeing Operations Manager

Wendy Groves – Business Development and Finance Manager & Secretary Leon Phibben – People and Learning Manager

Employee Involvement

Merthyr Tydfil Leisure Trust is committed to delivering excellent services to its customers and we recognise and appreciate that it is our employees who are key to the success of the Trust. The trust employs on average 100 staff depending on the time of year and we are unwavering in our commitment to their wellbeing and development. The Trust is committed to continuously improving our services and our performance for our customers and we fully recognise that our people development and continued learning is essential to help us to achieve this.

MERTHYR TYDFIL LEISURE TRUST LIMITED

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

Reference and administrative details

Company number 09172730 Charity number 1160964 Registered office Central Library High Street Merthyr Tydfil CF47 8AF Trustees H L Kester (Chair) A G Jones M E Jones - appointed 29/6/21 M T Anderson J C Ashdown S Methuen (Vice Chair) D A Lewis Company secretary W M Groves Chief Executive Officer K J Sellwood Other Key management personnel W M Groves - Head of Leisure Auditors Azets Audit Services Ty Derw Lime Tree Court Cardiff CF23 8AB Bankers Barclays Bank PLC 47 High Street Merthyr Tydfil CF47 8DL

Auditor

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.

The trustees' report was approved by the Board of Trustees.

J Smith

Trustee Dated: 31 March 2023

MERTHYR TYDFIL LEISURE TRUST LIMITED

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 MARCH 2022

The trustees, who are also the directors of Merthyr Tydfil Leisure Trust Limited for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company Law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

MERTHYR TYDFIL LEISURE TRUST LIMITED

INDEPENDENT AUDITOR'S REPORT

TO THE TRUSTEES OF MERTHYR TYDFIL LEISURE TRUST LIMITED

Opinion

We have audited the financial statements of Merthyr Tydfil Leisure Trust Limited (the ‘charity’) for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 1.2 in the financial statements, which indicates that there is uncertainity about future trading conditions relating to the recovery from the impacts of the Covid 19 pandemic as well as the increasing cost of electricity and gas. As stated in note 1.2, these events or conditions, along with the other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

MERTHYR TYDFIL LEISURE TRUST LIMITED

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF MERTHYR TYDFIL LEISURE TRUST LIMITED

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of 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 charity’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.

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

MERTHYR TYDFIL LEISURE TRUST LIMITED

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF MERTHYR TYDFIL LEISURE TRUST LIMITED

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the charity’s trustees, as a body, in accordance with part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Craig Yearsley FCCA (Senior Statutory Auditor)
for and on behalf of Azets Audit Services 31 March 2023
Chartered Accountants
Statutory Auditor Ty Derw
Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB

Azets Audit Services is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under of section 1212 of the Companies Act 2006.

MERTHYR TYDFIL LEISURE TRUST LIMITED

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 MARCH 2022

Unrestricted Restricted Total Unrestricted Total Unrestricted Restricted Total
funds funds funds funds
2022 2022 2022 2021 2021 2021
Notes £ £ £ £ £ £
Income from:
Donations and legacies 3 160,930 - 160,930 2,767 - 2,767
Charitable activities 4 3,686,262 355,553 4,041,815 3,302,994 1,027,697 4,330,691
Investments 5 119 - 119 381 - 381
Total income 3,847,311 355,553 4,202,864 3,306,142 1,027,697 4,333,839
Expenditure on:
Charitable activities 6 4,161,695 348,994 4,510,689 2,918,819 952,727 3,871,546
Gross transfers between
funds - - - (18,524) 18,524 -
Net (expenditure)/income for
the year/
Net (outgoing)/incoming
resources (314,384) 6,559 (307,825) 368,799 93,494 462,293
Other recognised gains and losses
Actuarial gain/(loss) on
defined benefit pension
schemes 1,627,000 - 1,627,000 (1,183,000) - (1,183,000)
Net movement in funds 1,312,616 6,559 1,319,175 (814,201) 93,494 (720,707)
Fund balances at 1 April 2021 (3,863,302) 362,363 (3,500,939) (3,049,101) 268,869 (2,780,232)
Fund balances at 31 March
2022 (2,550,686) 368,922 (2,181,764) (3,863,302) 362,363 (3,500,939)

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

MERTHYR TYDFIL LEISURE TRUST LIMITED

BALANCE SHEET

AS AT 31 MARCH 2022

2022 2021
Notes £ £ £ £
Fixed assets
Tangible assets 10 535,741 271,866
Current assets
Stocks 11 34,577 33,545
Debtors 12 299,099 348,138
Cash at bank and in hand 958,937 821,557
1,292,613 1,203,240
Creditors: amounts falling due within
one year 14 (666,118) (596,982)
Net current assets 626,495 606,258
Total assets less current liabilities 1,162,236 878,124
Creditors: amounts falling due after
more than one year 16 - (14,063)
Provisions for liabilities (3,344,000) (4,365,000)
Net liabilities (2,181,764) (3,500,939)
Income funds
Restricted funds 19 368,922 362,363
Unrestricted funds
Designated funds 20 60,000 -
General unrestricted funds 733,314 501,698
Pension reserve (3,344,000) (4,365,000)
(2,550,686) (3,863,302)
(2,181,764) (3,500,939)

MERTHYR TYDFIL LEISURE TRUST LIMITED

BALANCE SHEET (CONTINUED)

AS AT 31 MARCH 2022

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 March 2022, although an audit has been carried out under section 144 of the Charities Act 2011.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements under the requirements of the Companies Act 2006, for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Trustees on 31 March 2023

J Smith Trustee

Company Registration No. 09172730

MERTHYR TYDFIL LEISURE TRUST LIMITED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022

2022
Notes
£
£
Cash flows from operating activities
Cash generated from operations
24
459,437
Investing activities
Purchase of tangible fixed assets
(308,113)
Investment income received
119
Net cash used in investing activities
(307,994)
Financing activities
Repayment of borrowings
(14,063)
Net cash (used in)/generated from
financing activities
(14,063)
Net increase in cash and cash equivalents
137,380
Cash and cash equivalents at beginning of year
821,557
Cash and cash equivalents at end of year
958,937		 2021
£
(5,403)
381
14,063		 £
676,252
(5,022)
14,063
685,293
136,264
821,557

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

Charity information

Merthyr Tydfil Leisure Trust Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is Central Library, High Street, Merthyr Tydfil, Mid Glamorgan, CF47 8AF, United Kingdom.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the defined pension liability at fair value. The principal accounting policies adopted are set out below.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

1.2 Going concern

The Trustees assess whether the use of going concern is appropriate i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The Trustees make this assessment in respect of a period of one year from the date of approval of the financial statements.

The Trust, along with other businesses and leisure providers, is facing significant levels of uncertainty relating to the recovery from the impacts of the Covid 19 pandemic as well as the cost of electricity and gas. For leisure providers across the UK, the information coming through from sector bodies is that while usage of facilities is recovering, with an average of 86% usage of public leisure (excluding swimming) when compared to pre-Covid visitor numbers, this does not correspond to a full return of income. Not only has the return level of customers stabilised at a lower level than pre-Covid, and therefore income has stagnated, but the number of people on concessionary or pay-as-you-go membership has increased. This reflects the impact of cost of living and the reduction in disposable income of the public. Leisure and culture trusts receive a management fee from their local authorities to manage the services on their behalf. However, these contributions have remained flat, a real terms reduction, or they have decreased in the past few years . This trend forced operators to be more reliant on income from trading which is also reduced, making them now victims of their own success, and therefore leaving little to invest back into the service or to manage the significantly increased expenditure.

In addition to the issues facing the Trust in relation to post-COVID recovery, the massive increases in utilities and the exclusion of sports facilities from the latest round of government support has seen that the Trust is faced with an increase in power costs in the year to 31/03/2024 in the region of £570,000.

After reviewing the trust's forecasts and projections to 31 March 2022 and at the time of approving the trustees have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. New measures, controls and procedures have been put in place since the end of financial year to 31 March 2019, which it is hoped will enable the trust to build and grow its reserves over the current and future years.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

The Trust currently has a positive level of general reserves, although these have reduced in the current year following the slow recovery from the effects of the Covid 19 pandemic and the reduction of Covid 19 funding. However these increased costs are not sustainable and without changes to the current operational model the Trust will face cashflow issues by the end of the 2024 financial year.

As stated above, this level of cost increase will have a significant impact on the activities of the Trust and the Trustees have identified that urgent measures are needed to cut costs. However, the Trustees are also keen to ensure that the services and activities offered to the residents of Merthyr Tydfil and surrounding area are protected as much as possible in the challenging economic climate. The Trust operates on the basis of a contract with Merthyr Tydfil County Borough Council that dictates the services and activities provided. The Trustees have therefore approached Merthyr Tydfil County Borough Council to ask them to work in partnership with the Trust to identify the services and activities that should be prioritised. Meetings to this effect are already taking place and there is broad agreement from both elected Councillors and Officers of the Local Authority that, incollaboration with the Trust, a recovery plan is being put in place to protect both the services and the organisation.

The Trustees believe that the relationship between the Council and the Leisure and Culture Trust will be treated as a partnership rather than as a client-supplier one.. This includes the collaborative co-design and co-development of services, rather than simply thepurchase of services in the market. This will enable the Trust to continue to trade while working with Merthyr Tydfil County Borough Council to produce a business plan which will enable the Trust to continue to operate and to ensure that the services and service delivery meet the requirements of the Local Authority.

At the date of signing the financial statements,no clear plan is yet in place that clearly demonstrates the going concern of the Trust, therefore a material fundamental uncertainty exists at the point of signing. With Council support, the Trustees are confident that a solution will be found. On the basis of the willingness of Merthyr Tydfil County Borough Council to work in partnership with the Trust to make appropriate changes to the service level agreement, the Trustees believe it is appropriate to adopt the going concern basis in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

1.4 Incoming resources

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount.

Income from grants is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably. Income from grants is deferred only when the terms and conditions of the grant permit the income to be deferred to future periods.

Certain income is received in advance of the provision of the relevant service and as such is deferred until the service commences.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

The management fee is an unrestricted fund which is available for use at the discretion of the trustees in furtherance of the general objectives of the charitable company. The income is invoiced and recognised in the period to which it relates.

1.5 Resources expended

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:

Expenditure on charitable activities includes all costs relating to the furtherance of the charity’s objectives as stated in the trustees’ report and their associated support costs.

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

An analysis has been provided for the charitable activities on a departmental basis.

The departments are defined as follows:

Merthyr Tydfil Leisure Centre Aberfan Leisure Centre Libraries Museums Redhouse Other activities

Costs where possible are attributed directly to the activity in which they relate. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Support costs include central functions and have been allocated to activity cost category on a basis consistent with the use of resources.

Governance costs comprise all costs involving public accountability of the charity and its compliance with regulation and good practice.

It is not the policy of the charitable company to show incoming resources net of expenditure.

1.6 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings 25% straight line/ over contract term Fixtures and fittings 25% staight line Computers 33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in net income/(expenditure) for the year.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

1.7 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.8 Stocks

Stocks are stated at the lower of cost or net realisable value.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charity transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.11 Taxation

As a registered charity Merthyr Leisure Trust Limited is entitled to the exemption from taxation in respect of income and capital gains received with sections 478-489 of the Corporation Tax Act 2010 and section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects purposes only.

1.12 Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13 Retirement benefits

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in income/(expenditure) for the year.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other recognised gains and losses in the period in which they occur and are not reclassified to income/(expenditure) in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

1 Accounting policies

(Continued)

The Trust operates a defined benefit pension scheme. The scheme, the Rhondda Cynon Taf County Borough Council Pension Fund, is a multi-employer defined benefit scheme. This is part of the Local Government Pension Scheme (the "LGPS").

On the 1 April 2015 the Trust was admitted to the Local Government Superannuation Scheme (LGPS), a defined benefit scheme. The funding deficit accruing to 31 March 2015 in respect of employees relocating to Merthyr Tydfil Leisure Trust was retained by Merthyr Tydfil county Borough Council (MTCBC). The Trust is, therefore, only responsible for any increase in liabilities occurring after the transfer date, with the Authority acting as guarantor for the previously accrued net deficit.

The LGPS is a funded defined benefit plan with benefits earned up to 31 March 2014 being linked to final salary. Benefits after 31 March 2014 are based on a Career Average Revalued Earnings Scheme. Details of the benefits earned over the period covered by this disclosure are set out in "The Local Government Pensions Scheme Regulations 2016" and "The Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014".

The funded nature of the LGPS requires participating employers and its employees to pay contributions into the fund, calculated at a level intended to balance the pension liabilities with investment assets. Information on the framework for calculating contributions to be paid is set out in LGPS Regulations 2013 and the Fund's Funding Strategy Statement. An actuarial valuation of the Fund was carried out at 31 March 2019 and as part of that valuation a new Rates and Adjustment Certificate was produced for the three-year period from 1 April 2017.

The Fund Administering Authority, Rhondda Cynon Taf County Borough Council, is responsible for the governance of the fund.

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

Retirement benefit scheme

As set out in notes, the charity operates a defined benefit pension scheme for all qualifying employees. The accounting cost of these benefits and the present value of the pension liabilities involved judgements about uncertain events including such factors as the life expectancy of members, the salary progression of current employees, price inflation and the discount rate used to calculate the net present value of the future pension payments. Estimates are used for all of these factors in determining the pension costs and liabilities incorporated in the financial statements. The assumptions reflect historical experience and judgement regarding future expectations and external actuarial specialists are also used to assist the exercise.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

3 Donations and legacies

Donations and gifts
Charitable activities
Merthyr Tydfil Leisure Centre
Aberfan Leisure Centre
Libraries
Management fees
Museums
Redhouse
Other activities
Analysis by fund
Unrestricted funds
Restricted funds		 Unrestricted
Unrestricted
funds
funds
2022
2021
£
£
160,930
2,767
2022
2021
£
£
511,001
565,425
313,232
239,036
58,915
221,930
2,489,060
2,424,353
164,076
148,324
328,156
517,118
177,375
214,505
4,041,815
4,330,691
3,686,262
3,302,994
355,553
1,027,697
4,041,815
4,330,691		 Unrestricted
Unrestricted
funds
funds
2022
2021
£
£
160,930
2,767
2022
2021
£
£
511,001
565,425
313,232
239,036
58,915
221,930
2,489,060
2,424,353
164,076
148,324
328,156
517,118
177,375
214,505
4,041,815
4,330,691
3,686,262
3,302,994
355,553
1,027,697
4,041,815
4,330,691
2021
£
565,425
239,036
221,930
2,424,353
148,324
517,118
214,505
4,330,691
3,302,994
1,027,697
4,330,691

4 Charitable activities

5 Investments

Unrestricted Unrestricted
funds funds
2022 2021
£ £
Interest receivable 119 381

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

6 Charitable activities

Merthyr Tydfil Leisure Centre
Aberfan Leisure Centre
Libraries
Museums
Redhouse
Other activities
Share of support costs (see note 7)
Share of governance costs (see note 7)
Analysis by fund
Unrestricted funds
Restricted funds		 2022
£
1,093,813
586,931
568,898
502,925
281,524
380,130
3,414,221
1,033,474
62,994
4,510,689
4,161,695
348,994
4,510,689		 2021
£
1,031,754
467,860
440,631
333,654
298,378
267,207
2,839,484
968,589
63,473
3,871,546
2,918,819
952,727
3,871,546

The amount of support and governance costs attributable to each activity is as follows: Merthyr Tydfil Leisure Centre: £361,834 (2021: £340,581) Aberfan Leisure Centre: £93,200 (2021: £87,725) Libraries: £120,611 (2021: £113,527) Museums: £93,200 (2021-: £87,725) Redhouse: £120,611 (2021: £113,527) Other activities: £307,011 (2021: £288,978)

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

7 Support costs

Staff costs
Establishment costs
Legal and professional
Repairs and
maintenance
Office expenses
Printing, postage &
stationery
Sundry expenses
Advertising
Bad debts
Bank charges
Accountancy and audit
fees
Analysed between
Charitable activities		 Support
costs
Governance
costs
£
£
489,360
6,660
70,409
1,437
331,807
6,772
336
7
54,948
1,121
1,762
36
58,098
1,186
9,960
203
(1,424)
-
18,218
372
-
45,200
1,033,474
62,994
1,033,474
62,994		 2022Support costs Governance
costs
£
£
£
496,020
445,001
6,938
71,846
76,063
1,552
338,579
363,442
7,417
343
241
5
56,069
47,420
968
1,798
1,484
30
59,284
17,378
355
10,163
1,864
38
(1,424)
2,455
50
18,590
13,241
270
45,200
-
45,850
1,096,468
968,589
63,473
1,096,468
968,589
63,473		 2021
£
451,939
77,615
370,859
246
48,388
1,514
17,733
1,902
2,505
13,511
45,850
1,032,062
1,032,062

Governance costs includes payments to the auditors of £9,600 for audit fees (2021: £9,600) for audit fees.

8 Trustees

None of the trustees (or any persons connected with them) received any remuneration from the charity during the current or prior year.

No trustees were reimbursed for expenses during the current or prior year.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

9 Employees

Number of employees

The average monthly number of employees during the year was:

Staff
Employment costs
Wages and salaries
Social security costs
Other pension costs		 2022
Number
177
2022
£
1,756,602
126,427
860,147
2,743,176		 2021
Number
103
2021
£
1,694,558
115,683
578,000
2,388,241

During the year the charity made redundancy and termination payments which totalled £nil (2021: £nil). There were no amounts outstanding at the current or prior year end.

The total amount paid to key management personnel for their services to the charity during the year totalled £145,604 (2021: £117,061)

10 Tangible fixed assets

Tangible fixed assets
Cost
At 1 April 2021
Additions
At 31 March 2022
Depreciation and impairment
At 1 April 2021
Depreciation charged in the year
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021		 Land and
buildings
Fixtures and
fittings
£
£
276,375
173,162
67,280
220,265
343,655
393,427
42,518
138,930
18,329
19,355
60,847
158,285
282,808
235,142
233,857
34,232		 Computers
£
31,944
20,568
52,512
28,168
6,553
34,721
17,791
3,776		 Total
£
481,481
308,113
789,594
209,616
44,237
253,853
535,741
271,866

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

11
Stocks
Finished goods and goods for resale
12
Debtors
Amounts falling due within one year:
Trade debtors
Other debtors
Prepayments and accrued income
13
Loans and overdrafts
Other loans
Payable after one year
Amounts included above which fall due after five years:
Payable by instalments		 2022
£
34,577
2022
£
223,134
39,504
36,461
299,099
2022
£
-
-
-		 2021
£
33,545
2021
£
149,417
143,022
55,699
348,138
2021
£
14,063
14,063
14,063

A loan amount of £14,063 was received in December 2020 from WCVA with interest payable after 12 months at a rate of 2%. The entire loan balance was repaid in November 2021.

14 Creditors: amounts falling due within one year

Notes
Other taxation and social security
Deferred income
15
Trade creditors
Other creditors
Accruals and deferred income		 2022
£
31,190
8,811
58,718
327,108
240,291
666,118		 2021
£
27,581
5,457
180,971
267,890
115,083
596,982

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

15 Deferred income

Other deferred income
Balance as at 1st April
Income received in the year
Released to income
Balance as at 31st March		 2022
£
8,811
2022
£
5,457
414,852
(411,498)
8,811		 2021
£
5,457
2021
£
6,569
354,892
(356,004)
5,457

Deferred income relates to performance related grant funding, membership income and events income received in advance and which relates to future financial periods.

16 Creditors: amounts falling due after more than one year

16
Creditors: amounts falling due after more than one year
Borrowings
17
Provisions for liabilities
Notes
Retirement benefit obligations
18		 2022
£
-
2022
£
3,344,000
3,344,000		 2021
£
14,063
2021
£
4,365,000
4,365,000

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

18 Retirement benefit schemes

On the 1 April 2015 the Trust was admitted to the Local Government Superannuation Scheme (LGPS), a defined benefit scheme. The funding deficit accruing to 31 March 2015 in respect of employees relocating to Merthyr Tydfil Leisure Trust was retained by Merthyr Tydfil county Borough Council (MTCBC). The Trust is, therefore, only responsible for any increase in liabilities occurring after the transfer date, with the Authority acting as guarantor for the previously accrued net deficit.

The charity operates a defined benefit pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.

Defined benefit schemes

Key assumptions

Defined benefit schemes
Key assumptions
2022 2021
% %
Discount rate 2.7 2.1
Expected rate of increase of pensions in payment 2.8 2.6
Expected rate of salary increases 4.05 3.85
RPI Inflation 2.80 2.6
CPI Inflation 2.80 2.6

Mortality assumptions

The assumed life expectations on retirement at age 65 are:

Retiring today
- Males
- Females
Retiring in 20 years
- Males
- Females		 2022
Years
21.6
23.9
22.6
25.4		 2021
Years
21.8
24.1
22.8
25.6
Amounts recognised in the profit and loss account:
Current service cost
Net interest on defined benefit liability/(asset)
Total costs		 2022
£
768,000
89,000
857,000		 2021
£
515,000
63,000
578,000

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

18
Retirement benefit schemes
Amounts taken to other comprehensive income:
Actual return on scheme assets
Less: calculated interest element
Return on scheme assets excluding interest income
Actuarial changes related to obligations
The amounts included in the balance sheet arising from the charity's
obligations in respect of defined benefit plans are as follows:
Present value of defined benefit obligations
Fair value of plan assets
Deficit in scheme
Movements in the present value of defined benefit obligations:
Liabilities at 1 April 2021
Current service cost
Benefits paid
Contributions from scheme members
Actuarial gains and losses
Interest cost
At 31 March 2022		 (Continued)
2022
2021
£
£
(204,000)
(2,040,000)
178,000
142,000
(26,000)
(1,898,000)
(1,601,000)
3,081,000
2022
2021
£
£
12,197,000
12,703,000
(8,853,000)
(8,338,000)
3,344,000
4,365,000
2022
£
12,703,000
768,000
(38,000)
98,000
(1,601,000)
267,000
12,197,000
2022
£
(204,000)
178,000
(26,000)
(1,601,000)
2022
£
12,197,000
(8,853,000)
3,344,000

The defined benefit obligations arise from plans which are wholly or partly funded.

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

18
Retirement benefit schemes
Movements in the fair value of plan assets:
Fair value of assets at 1 April 2021
Interest income
Return on plan assets (excluding amounts included in net interest)
Benefits paid
Contributions by the employer
Contributions by scheme members
At 31 March 2022
The fair value of plan assets at the reporting period end was as follows:
Equity instruments
Debt instruments
Property
Cash		 (Continued)
2022
£
8,338,000
178,000
26,000
(38,000)
251,000
98,000
8,853,000
2022
2021
£
£
5,966,922
6,045,050
2,204,397
1,717,628
646,269
525,294
35,412
50,028
8,853,000
8,338,000
2022
£
5,966,922
2,204,397
646,269
35,412
8,853,000

Restricted funds The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes: Movement in funds
Movement in funds		 Balance at
Incoming
Resources
Transfers
Balance at
Incoming
Resources
Balance at		 1 April 2020
resources
expended
1 April 2021
resources
expended
31 March 2022		 £
£
£
£
£
£
£
£		 Merthyr Tydfil County Borough Council - Capital
2,574
-
(702)
-
1,872
2,916
(3,619)
1,169		 Arts Council of Wales
23,283
-
-
-
23,283
23,283
-
46,566		 Creative Industry
-
-
-
-
-
5,298
(5,298)
-		 COVID-19
-
233,846
(142,946)
-
90,900
3,500
(21,372)
73,028		 Collection Move
-
-
-
-
-
60,675
(60,675)
-		 Summer of Fun
-
-
-
-
-
5,000
(5,000)
-		 Connect and Flourish
-
-
-
-
-
38,802
(8,242)
30,560		 Welsh Government - Capital
242,387
-
(15,228)
-
227,159
-
(15,228)
211,931		 The Dunhill Medical Trust
-
-
-
18,524
18,524
-
(18,524)
-		 The Federation of Museum and Art Galleries of Wales
625
-
-
-
625
-
(542)
83		 Winter of Wellbeing
-
-
-
-
-
9,395
(3,810)
5,585		 Job Retention Scheme
-
793,851
(793,851)
-
-
206,684
(206,684)
-		 268,869
1,027,697
(952,727)
18,524
362,363
355,553
(348,994)
368,922
19

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

20 Designated funds

The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:

Balance at
1 April 2021
£
Sylvia Crawshay Legacy
-
-
21
Analysis of net assets between funds
Unrestricted
Restricted
Total
Unrestricted
2022
2022
2022
2021
£
£
£
£
Fund balances at 31
March 2022 are
represented by:
Tangible assets
488,005
47,736
535,741
42,835
Current assets/(liabilities)
245,309
321,186
626,495
472,926
Long term liabilities
-
-
-
(14,063)
Provisionsand
pensions
(3,344,000)
-
(3,344,000)
(4,365,000)
(2,610,686)
368,922
(2,181,764)
(3,863,302)		 Transfers
Balance at
31 March 2022
£
£
60,000
60,000
60,000
60,000
Restricted
Total
2021
2021
£
£
229,031
271,866
133,332
606,258
-
(14,063)
-
(4,365,000)
362,363
(3,500,939)

22 Related party transactions

Merthyr Tydfil Leisure Trust Limited is the trustee of the charity Aberfan Disaster Fund and Centre (charity number: 251829).

There were no transactions between the two charities during the current or prior year. No balances were outstanding at 31st March 2022 (2021: £nil).

There were no other disclosable related party transactions during the year (2021 - none).

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

23 Operating lease commitments

At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Within one year
Between two and five years
In over five years		 2022
£
25,002
100,008
200,016
325,026		 2021
£
25,002
100,008
225,018
350,028

Lessor

At the reporting end date the charity had contracted with tenants for the following minimum lease payments:

2022 2021
£ £
Within one year 203,105 203,105
Between two and five years 109,524 312,524
In over five years 2,921 2,921
315,550 518,550
24 Cash generated from operations 2022 2021
£ £
Surplus/(deficit) for the year (307,825) 462,293
Adjustments for:
Investment income recognised in statement of financial activities (119) (381)
Depreciation and impairment of tangible fixed assets 44,238 30,296
Difference between pension charge and cash contributions 606,000 336,000
Movements in working capital:
(Increase) in stocks (1,032) (870)
Decrease/(increase) in debtors 49,039 (127,729)
Increase/(decrease) in creditors 65,782 (22,245)
Increase/(decrease) in deferred income 3,354 (1,112)
Cash generated from operations 459,437 676,252

MERTHYR TYDFIL LEISURE TRUST LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2022

25 Analysis of changes in net funds
At 1 April 2021 Cash flowsAt 31 March 2022
£ £ £
Cash at bank and in hand 821,557 137,380 958,937
Loans falling due after more than one year (14,063) 14,063 -
807,494 151,443 958,937