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2021-12-31-accounts

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

Patron :

HER MAJESTY THE QUEEN

President:

Vice Admiral P M Bennett, CB, OBE

Registered Charity Number 207405

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

Page
Report of the Trustees 1-5
Report of the Independent Auditors 6-8
Statement of Financial Activities 9
Balance Sheet 10
Statement of Cash Flows 11
Notes to the Financial Statements 12-20

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

REPORT OF THE TRUSTEES

The Trustees present their report with the financial statements of the charity for the year ended 31[st] December 2021. The Trustees have adopted the provisions of the 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 issued in July 2014.

LEGAL AND ADMINISTRATIVE INFORMATION

Name of the Charity

The official name of the charity is the ‘Royal Naval Benevolent Society for Officers’ (RNBSO). However, in 2008 the Trustees agreed to adopt the working title of the ‘Royal Navy Officers’ Charity’ (RNOC).

The Council structure and Trustees

The Council members, who are the Trustees of RNBSO, are as follows:

President - Admiral Sir Mark Stanhope, GCB, OBE, DL to 15 Sept 2021 President - Vice Admiral P M Bennett, CB, OBE from 15 Sept 2021 Chairman – Rear Admiral M Kimmons, CB Deputy Chairman - Commander E E Marland, Royal Navy Honorary Treasurer – Lieutenant W P Austin, Royal Navy Surgeon Commander G F Chirnside, Royal Navy Commander I Fyfe-Green Royal Navy from 21 April 2021 Commander R M Grainger, Royal Navy Commander G P Hockley, LVO, Royal Navy Commander B F M Hughes, Royal Navy The Venerable M G Poll, Royal Navy Commodore A Picton, Royal Navy to 27 January 2021 Commodore A A Ross, Royal Navy from 21 April 2021 Commander M Westwood, Royal Navy from 27 January 2021 Lieutenant S Williams Royal Navy from 27 Jan 2021

The Officers and Advisers of the Council are:

Chief Executive Officer Commander M Goldthorpe, BEM, Royal Navy Principal Address & Contact Details 70, Porchester Terrace London, W2 3TP Tel No: 020 7402 5231 E-Mail: rnoc@ arno.org.uk Auditor Moore Kingston Smith LLP Devonshire House 60 Goswell Road London, EC1M 7AD Bankers

Child & Co. (Bankers) 1 Fleet Street, London, EC4Y 1BD

Solicitors

Gregory Rowcliffe Milners, 1 Bedford Row, London, WC1R 4BZ

Investment Managers

Cazenove Capital Management Limited, 12 Moorgate, London EC2R 6DA

1

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

STRUCTURE, GOVERNANCE & MANAGEMENT

Governing Documents

The charity was founded in 1739 and was incorporated by Royal Charter as the Royal Naval Benevolent Society in 1838. Extant amendments to the Royal Charter were granted in 1996 (change of name to Royal Navy Benevolent Society for Officers) and 1997 (inclusion of Warrant Officers holding Warrants before 1st April 1956).

The charity is governed by a set of rules, which were last amended in 2019 and approved by the members of the Society at the Annual General Meeting in July 2019.

The Council

The members of the governing Council meet thrice yearly and are, for the purposes of charity law, the Trustees of RNBSO. Trustees may be elected to the Council for a period of three years and retire by rotation, albeit offering themselves for re-election each year, if they remain eligible. The President is elected by Trustees from amongst its senior members. The Chairman and Deputy Chairman are elected from the Trustees by the Council to serve in those offices for a period of one year. They may also offer themselves for re-election, as long as they remain eligible.

The RNBSO is a subsidiary charity of the RNRMC but retains its own Trustees for the day-to-day administration of the charity. The RNRMC is, however, the Corporate Member with a power of veto at a General Meeting. In addition the Corporate Member is entitled to nominate a Trustee to the board; the current nominated trustee is Commander M Westwood RN.

Trustees Induction and Training

New members of the Council attend the NCVO run Trustee Induction Course, receive an induction pack, which includes a description of their duties and responsibilities, and current policy documents for the charity. Further inhouse and external training is delivered if required.

Management and Administration

The executive business of the charity is administered by the CEO, supported by three staff members jointly employed by the charity and ARNO which shares the same premises. All members of the Council give their time voluntarily and receive no benefits other than travelling expenses.

Volunteers and Related Parties

The RNBSO is also the sole Trustee of the ARNO Charitable Trust (CT). In addition, it manages the RN Scholarship Fund (RNSF) as a sub-charity. Work continues to subsume the RNSF into the main RNBSO Fund.

Risk Management

The Trustees monitor the principal risks in the charity via a Risk Matrix that is scrutinised by the Finance and Administration Sub Committee (FASC) and discussed by the Board annually. The Trustees believe that the charity remains, under normal circumstances, both sustainable and resilient, in its structure, governance and administration. The Risk Matrix identifies the following areas as those of the highest potential risk if not mitigated:

Risk Mitigation
Loss of key Staff Robust supersession planning
Ongoing review of records, systems, plans and projects
Internal cross desk training
Financial Viability Close scrutinybyFASC,Audit,Regular reviews
Compliance Operating in an honest and ethical manner
Monitoring changes in regulation/legislation
Ensuringhighqualityand timelylegal advice

2

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

OBJECTIVES & ACTIVITIES

Objects

The governing document enables relief to be given to Officers and former Officers of the Royal Navy, the Royal Marines, the Royal Naval Reserve, the Royal Naval Volunteer Reserve, the Royal Marine Forces Volunteer Reserve and the Queen Alexandra’s Royal Naval Nursing Service, their spouses, former spouses and dependants who are in need.

When reviewing the objectives of the charity and in planning for the future, the Trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit.

PUBLIC BENEFIT

In shaping our objectives for the year and planning our activities, the trustees have considered the Charity Commission’s guidance on public benefit, including the guidance ‘Public benefit: running a charity (PB2) ’.

RNBSO is a membership organisation as well as a charity and on being established only members were eligible for financial assistance. In 1997 Trustees agreed to widen the criteria so that all serving and retired officers, whether members or not, would be eligible for benevolence in the future. Furthermore, the list of beneficiaries was widened to include spouses, dependent children and former spouses. Recently, with the approval of the Charity Commission, former officers of the Woman’s Royal Naval Service have also become eligible to receive assistance.

Grant Making Policy

In accordance with its Royal Charter, the charity delivers its objects for public benefit by enabling financial relief to be extended by the Trustees to all officers of the Naval Service and their dependants who are in financial distress.

SIGNIFICANT ACHIEVEMENTS

The RNBSO continues to meet the need of all beneficiaries, in the main, from its own investment portfolio. In recent years and especially during the Covid Pandemic this income has been bolstered by a number of generous donations. In addition to regular beneficiaries, the number of new applicants continues to increase and in some cases applications are particularly complex. Applications are normally dealt with within 2 working days although in emergency cases can be resolved within 24 hours. A copy of the latest Impact Report can be accessed at the charity website. www.rnoc.org.uk. The ARNO/RNOC website www.arno.org.uk is accessed on a regular basis and all IT systems have been updated to ensure the latest compliance.

FINANCIAL REVIEW

Investment Controls and Restrictions

The Trustees ensure that the capital held by RNBSO is invested prudently and conservatively over the long term for the ultimate benefit of beneficiaries. The aim is to achieve a balance of income and capital growth through an agreed investment strategy. Following advice and consideration Trustees agreed to switch the bespoke fund of fund approach focussed on income producing assets into the Cazenove Responsible Multi-Asset Fund (distribution units). In addition to providing income from investments and capital this fund addresses various ESG and geographic requirements.

Cazenove Capital Management continues to manage the charity’s Investment Portfolio on a discretionary basis. The investment performance is measured against a number of benchmarks which are regularly reviewed by Trustees.

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THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

Investment Performance

The year of 2021 was dominated by three key narratives: the resurgence of Covid-19 concerns with the spread of new variants; central banks’ reaction to high inflation figures; and concerns over Chinese growth centring around the growing property sector crisis. Whilst this resulted in heightened volatility during the period, global equity markets proved resilient which was beneficial to the Charity’s investment portfolio which has around 70% allocated to this asset class.

The year-end investment valuation for the combined RNBSO portfolios stood at £16,958,757 as at 31st December 2021 – a welcome recovery year on year. The Unrestricted portfolio generated a total return of +14.2% over 12 months, against a composite benchmark of +13.1%. The portfolio benefitted from being invested in the more economically sensitive parts of the equity market combined with a core allocation to US listed equities which had another excellent year of performance.

In terms of the Fund’s positioning, we head into 2022 with a full weighting in equities relative to our strategic allocation. Forecasts for economic and corporate earnings growth continue to suggest maintaining exposure to the asset class. Our approach stands to benefit from ongoing economic recovery, though we remain focused on longerterm themes such as the energy transition, technology, government reprioritisation and healthcare. Away from equities, we have a preference for alternative investments over fixed income. We continue to expect bond yields to rise from current low levels as central banks raise policy interest rates and inflation remains higher than pre-pandemic levels. Allocating to alternative assets could help better protect against inflation and market drawdowns in the current environment. These asset allocation views are also reflected in the positioning of the Responsible Multi-Asset Fund and with a new total return policy that the Charity has chosen to adopt – allows us more flexibility in making further tactical changes to the investments.

Financial Outcome

Incoming resources for the year amounted to £708,449 and resources expended £725,672 giving rise to a net expenditure of £17,223 before recognised gains and losses on investments. Investment income was £429,524 and legacies/donations, for which the Council are extremely grateful, £278,925.

The total sum expended on grants during the year was £500,289 compared to £451,255 in 2020. As in previous years the amount of applications from serving personnel continues to rise. Grants continue to be administered in a timely manner and it is extremely rare that valid applications are not met in full.

As a result of Covid 19, 2020 and 2021 has been a particularly difficult period with a significant reduction in income from the investment portfolio. This reduction in income has necessitated a drawdown of Reserves and it is anticipated that some expenditure of capital will be required in the next 12 months to ensure sufficient operating funds are available. The situation is being closely monitored, including regular updates from the Investment managers and at this stage Trustees remain optimistic.

Reserves Policy

The aim of the charity is to maintain sufficient resources to continue to be self-financing in perpetuity. It aims to hold its free reserves to a level equivalent to six months of its own expenditure, which would require a liquid reserve of around £250k. At the year end funds amounted to £17.1m of which £303k are restricted and are therefore not freely available. The remaining funds are therefore £16.8m, the majority of which are represented by investments which the Trustees deem to be held for the longer term in order to generate an income stream for the charity and remain sustainable for future generations.

Fundraising Principles

The RNOC’s income has historically been obtained from investments and therefore there has been no requirement to fundraise. During the Pandemic the charity has spent all allocated reserves and has realised additional income through sale of assets. RNOC have therefore conducted active fundraising, primarily, via the Association of Royal Navy Officers’ (ARNO) membership and other initiatives including the “Big Give”. It is hoped that this will be a temporary measure and will cease once markets/investment income return to pre-Covid levels. No complaints were received in the year in respect of fundraising practices.

4

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31[st] DECEMBER 2021

FUTURE PLANS

Future Activities and Aims

The need for benevolence continues and the full and true consequences of the pandemic remain unknown. The charity’s Benevolence Sub-Committee closely monitor trends, grants and emerging cases recommending, where and when necessary, increases and additional resources.

The standard annuity grant for 2021 was £3,000 pa. During 2022 the Benevolence subcommittee will review the level of grant using data from the Rowntree Foundation along with evidence from casework making any necessary observations and recommendations to the board.

STATEMENT OF TRUSTEES RESPONSIBILITIES

The Trustees are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and UK Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales 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 of the charity for that period. In preparing these financial statements, the Trustees are required to:

Trustees are responsible for keeping proper 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 Charities Act 2011. 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.

In so far as the charity’s Trustees are aware:

Signed on behalf of the Trustees.

Rear Admiral M Kimmons CB Chairman

23 February 2022

5

REPORT OF THE INDEPENDENT AUDITORS TO MEMBERS OF THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS

Opinion

We have audited the financial statements of The Royal Naval Benevolent Society for Officers for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and 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 FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of 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.

Conclusions relating to going concern

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.

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 charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other 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 such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:

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REPORT OF THE INDEPENDENT AUDITORS TO MEMBERS OF THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 5, the trustees 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 charity 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 regulations made under section 154 of that Act.

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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Explanation as to what extent 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, 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.

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REPORT OF THE INDEPENDENT AUDITORS TO MEMBERS OF THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charity.

Our approach was as follows:

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 the 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.

Use of our report

This report is made solely to the charity's trustees, as a body, in accordance with Chapter 3 of Part 8 of the Charities Act 2011. 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 auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charity and charity's trustees as a body, for our audit work, for this report, or for the opinion we have formed.

Moore Kingston Smith LLP Statutory auditor Devonshire House 60 Goswell Road London EC1M 7AD

Moore Kingston Smith LLP is eligible to act as auditor in terms of Section 1212 of the Companies Act 2006.

Date: 24 February 2022

8

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31[ST] DECEMBER 2021

Notes
INCOME & ENDOWMENTS
Donations and legacies
2
Investment income
3
Total operating income
EXPENDITURE
Raising funds
Investment manager’s fees
Advertising
Charitable activities
Grants
5
Other charitable activities
4
Total operating expenditure
Net operating
income/(expenditure)
Net gains/(losses) on
investments
11
Net (expenditure)/income
Gross transfers between funds
15
Net movement in funds
Total funds brought forward
Total funds carried forward
14		 Total
Unrestricted
Funds
278,925
421,138
700,063
58,511
-
456,450
166,872
681,833
18,230
1,778,775
1,797,005
-
1,797,005
15,020,866
16,817,871		 Total
Restricted
Funds
-
8,386
8,386
-
-
43,839
-
43,839
(35,453)
2,311
(33,142)
-
(33,142)
336,705
303,563		 Funds 2021
278,925
429,524
708,449
58,511
-
500,289
166,872
725,672
(17,223)
1,781,086
1,763,863
-
1,763,863
15,357,571
17,121,434		 Funds 2020
48,612
448,159
496,771
52,386
2,380
451,255
144,773
650,794
(154,023)
(674,261)
(828,284)
-
(828,284)
16,185,855
15,357,571

9

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS BALANCE SHEET AT 31[ST] DECEMBER 2021

Fixed assets
Investments
11
Current assets
Debtors
12
Cash at bank and in hand
Liabilities
Creditors falling due within one year
13
Net current assets
Net assets
The funds of the charity
Restricted funds
14
Unrestricted funds
14
Total charity funds		 £
23,011
162,515		 2021
£
16,958,757
162,677		 £
22,926
164,609		 2020
£
15,234,308
123,263
185,526
(22,849)		 187,535
(64,272)
17,121,434 15,357,571
303,563
16,817,871		 336,705
15,020,866
17,121,434 15,357,571

The financial statements on pages 9 to 20 were approved by the Trustees on 23 February 2022 and signed on their behalf by:

Rear Admiral M Kimmons CB Chairman

W P F Austin Honorary Treasurer

10

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31[ST] DECEMBER 2021


Cash (outflow) from operating activities
Net cash used in operating activities
Cash flows from investing activities
Investment income and interest received
Proceeds from disposal of fixed asset investments
excluding endowment funds
Acquisition of fixed asset investments excluding
endowment funds
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2021
£
(488,255)
429,524
4,031,711
(3,975,074)
486,161
(2,094)
164,609
162,515		 2020
£
(563,642)
448,069
2,771,219
(2,722,813)
496,475
(67,167)
231,776
164,609

Reconciliation of net income/ (expenditure) to net cash flow from operating activities

Net income/(expenditure) including endowments
Adjustments for:
Net (gains)/losses on investments
Investment income
(Increase) in debtors
(Decrease) in creditors
Net cash used in operating activities		 2021
£
1,763,863
(1,781,086)
(429,524)
(85)
(41,423)
(488,255)		 2020
£
(828,284)
674,261
(448,069)
(7,770)
46,220
(563,642)

The charity has no net debt and accordingly no net debt note is presented.

11

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

1. ACCOUNTING POLICIES

a) Basis of preparation

These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by (the revaluation of land and buildings and) investments being measured at fair value through income and expenditure within the Statement of Financial Activities.

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The charity is a public benefit entity for the purposes of FRS 102 and therefore the charity also prepared its financial statements in accordance with the 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 (The FRS 102 Charities SORP) and the Charities Act 2011.

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 pound.

The financial statements comprise the charity and its subsidiary, the Royal Naval Scholarship Fund (RNSF), under a Charity Commission Scheme.

The principal accounting policies adopted in the preparation of the financial statements are set out below.

b) Going Concern

The trustees have assessed whether the use of the going concern basis is appropriate and have considered possible events or conditions that might cast significant doubt on the ability of the charity to continue as a going concern including Covid-19. The trustees have made this assessment for a period of at least one year from the date of approval of the financial statements. In particular the trustees have considered the charity’s forecasts and projections and have taken account of pressures on donation and investment income. After making enquiries the trustees have concluded that there is a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The charity therefore continues to adopt the going concern basis in preparing its financial statements.

c) Income

All income is recognised when there is entitlement to the funds, the receipt is probable and the amount can be measured reliably.

Legacies are recognised following probate and once there is sufficient evidence that receipt is probable and the amount of the legacy receivable can be measured reliably. Where entitlement to a legacy exists but there is uncertainty as to its receipt or the amount receivable, details are disclosed as a contingent asset until the criteria for income recognition are met.

Income is deferred when the donor attaches conditions outside the charity's own control or specifies that the resources are to be used in a future accounting period.

d) Expenditure

Liabilities are recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category.

Grants payable are payments made to third parties in the furtherance of the charitable objects of the Charity. Unconditional grant offers are accrued once the recipient has been notified of the grant award and its payment is probable. Grant awards that are subject to the recipient fulfilling performance or other conditions are accrued when the recipient has been notified of the grant and either the performance condition is met or any remaining unfulfilled condition attaching to the grant is outside of the control of the Charity.

12

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

1. ACCOUNTING POLICES (Continued)

e) Volunteers and donated services and facilities

The value of services provided by volunteers is not incorporated into these financial statements. Where services are provided to the charity as a donation that would normally be purchased, this contribution is included in the financial statements at an estimate based on the value of the contribution to the charity.

f) Irrecoverable VAT

Irrecoverable VAT is charged against the category of resources expended for which it was incurred.

g) Allocation of overhead and support costs

Overhead, support and governance costs are allocated between the cost of raising funds and charitable activities. Overhead, support and governance costs relating to charitable activities have been apportioned between activities.

h) Costs of raising funds

The costs of raising funds consist of investment management fees, other direct costs of raising funds and an apportionment of overhead, support and governance costs.

i) Charitable activities

Costs of charitable activities include grants payable, other costs directly associated with providing benevolence to beneficiaries and an apportionment of overhead, support and governance costs.

j) Governance costs

Governance costs comprise all costs involving the public accountability of the charity and its compliance with regulation and good practice. These costs include costs related to statutory audit, legal fees and Trustee meeting expenses together with an apportionment of overhead and support costs.

k) Fixed asset investments

Investments are stated at market value as at the balance sheet date. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.

Changes in fair value and gains and losses arising on the disposal of investments are credited or charged to the income or expenditure section of the Statement of Financial Activities as ‘gains or losses on investments’ and are allocated to the appropriate fund holding or disposing of the relevant investment.

l) Realised and unrealised gains and losses on investments

All gains and losses are taken to the income and expenditure section of the statement of financial activities as they arise. Realised gains and losses on investments are calculated as the difference between sale proceeds and opening market value or purchase date if later. Unrealised gains and losses are calculated as the difference between the market value at the end of the year and opening market value, or purchase date if later.

m) Funds structure

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by the donor.

Unrestricted funds comprise those funds which the Trustees are free to use for any purpose in furtherance of the charitable objects. Unrestricted funds include designated funds where the Trustees, at their discretion, have created a fund for a specific purpose.

13

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS

1. ACCOUNTING POLICES (Continued)

n) 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.

o) Financial Instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's balance sheet when the company 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.

With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. See notes 12 and 13 for the debtor and creditor notes.

p) Employee Benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

q) Critical accounting estimates and areas of judgement

In the view of the trustees in applying the accounting policies adopted, no judgements were required that have a significant effect on the amounts recognised in the financial statements nor do any estimates or assumptions made carry a significant risk of material adjustment in the next financial year.

14

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

2. VOLUNTARY INCOME

General donations
Legacies
Donated services
General donations
Legacies
Donated services		 Unrestricted
2021
£
50,997
224,178
3,750
278,925
Unrestricted
2020
£
31,862
13,000
3,750
48,612		 Restricted
2021
£
-
-
-
-
Restricted
2020
£
-
-
-
-		 Total
2021
£
50,997
224,178
3,750
278,925
Total
2020
£
31,862
13,000
3,750
48,612

Donated services represent audit and accountancy fees paid on behalf of the charity by the Royal Navy & Royal Marines Charity (RNRMC). The expenditure is shown under governance costs (see note 7).

The charity is a named beneficiary of a residuary legacy and an interim distribution has been recognised as income in these financial statements. The balance that remains receivable has not been accrued in these financial statements, as the amount to be received cannot be reliably measured.

3. INVESTMENT INCOME

Dividends
Interest on cash deposits
Dividends
Interest on cash deposits		 Unrestricted
2021
£
421,125
13
421,138
Unrestricted
2020
£
438,787
90
438,877		 Restricted
2021
£
8,386
-
8,386
Restricted
2020
£
9,282
-
9,282		 Total
2021
£
429,511
13
429,524
Total
2020
£
448,069
90
448,159

15

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

4. ANALYSIS OF CHARITABLE EXPENDITURE

Benevolence
Benevolence
. ANALYSIS OF GRANTS
Benevolence grants
Scholarships
Total
Benevolence grants
Scholarships
Total		 Grants Payable
(see note 5)
£
500,289
500,289
Grants Payable
(see note 5)
£
451,255
451,255
PAYABLE		 Other
Direct
Costs
£
-
-
Other
Direct
Costs
£
-
-
Grants to
Institutions
£
-
-
-
Grants to
Institutions
£
-
-
-		 Support
Costs
(see note 6)
£
166,872
166,872
Support
Costs
(see note 6)
£
144,773
144,773
Grants to
Individuals
£
456,450
43,839
500,289
Grants to
Individuals
£
436,255
15,000
451,255		 Total 2021
£
667,161
667,161
Total 2020
£
596,028
596,028
Total
2021
£
456,450
43,839
500,289
Total
2020
£
436,255
15,000
451,255

5. ANALYSIS OF GRANTS PAYABLE

The number of grants paid to individuals in the current year was 148 (2020: 147).

16

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

6. ALLOCATION OF SUPPORT COSTS AND OVERHEADS

The Trustees consider that no or at least a very minimal amount of supports costs and overheads can be attributed to the governance costs therefore they are all apportioned to charitable activities.

Analysis of support costs:

Management costs
Establishment costs
Administrative costs
Governance costs (See note 7)		 2021
£
115,093
33,000
11,972
6,806
166,871		 2020
£
90,228
33,000
11,638
9,907
144,773

7. ANALYSIS OF GOVERNANCE COSTS

Auditor’s remuneration
Legal and professional fees
Annual report costs
Other		 Total
2021
£
3,750
1,854
-
1,202
6,806		 Total
2020
£
3,220
2,505
1,750
2,432
9,907

8. TRANSACTIONS WITH MEMBERS OF THE COUNCIL

No Trustees received emoluments in the year (2020: none). 5 trustees received reimbursement of travel expenses and other admin expenses of £157 (2020: 2 Trustees receiving £42) from RNSBO.

9. ANALYSIS OF STAFF COSTS

Salaries and wages
Social security costs
Pension costs		 2021
£
179,670
20,431
27,354
227,455		 2020
£
121,133
13,907
19,207
154,247

Employees’ responsibilities are split between the charity and the Association of Royal Navy Officers (ARNO). Since 1 October 2008 staff have been paid by RNBSO and a recharge made to ARNO. The disclosures above relate to the total payroll responsibilities of the charity.

One employee (2020: one employee) had emoluments of £70,000-£80,000. The cost to this charity is less than £60,000 as a portion of their salary and associated costs are re-charged to ARNO (see note 17).

Key management personnel include the Trustees and Chief Executive. The total employee benefits of the charity's key management personnel were £73,204 (2020: £74,018). No Trustees received emoluments in the year.

17

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

10. STAFF NUMBERS

The average number of staff employed was 4 (2020: 2 staff) and the average number of full-time equivalent employees (including casual and part time staff) during the period was as follows:

11.
FIXED ASSET INVESTMENTS
2021
Movements in fixed asset investments
£
Market value brought forward
15,076,606
Additions
3,975,074
Disposals
(3,991,712)
Net gains/(losses)
1,781,086

16,841,054
Add cash
117,703
Market value carried forward
16,958,757
Analysis of market value of investments by type:
2021
£
Equities
11,724,526
Bonds
1,907,789
Multi-Asset Funds
163,803
Alternative Investments
2,859,237
Cash
303,402
16,958,757
Analysis of market value of investments between those held within and outside the United
16,958,757
2021
Numbers
Direct charitable
4
2021
£
Within the United Kingdom
10,218,996
Outside the United Kingdom
6,739,761		 2020
£
15,949,735
2,722,813
(2,921,681)
(674,261)
15,076,606
157,702
15,234,308
2020
£
10,222,916
1,986,332
145,959
2,534,379
344,722
15,234,308
Kingdom:
15,234,308
2020
Numbers
2
2020
£
9,706,653
5,527,655		 2020
£
15,949,735
2,722,813
(2,921,681)
(674,261)
15,076,606
157,702
15,234,308
2020
£
10,222,916
1,986,332
145,959
2,534,379
344,722
15,234,308
Kingdom:
15,234,308
2020
Numbers
2
2020
£
9,706,653
5,527,655		 2020
£
15,949,735
2,722,813
(2,921,681)
(674,261)
15,076,606
157,702
15,234,308
2020
£
10,222,916
1,986,332
145,959
2,534,379
344,722
15,234,308
Kingdom:
15,234,308
2020
Numbers
2
2020
£
9,706,653
5,527,655
15,234,308

18

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

12.
DEBTORS
Due from Royal Navy and Royal Marines Charity
Prepayments
Other debtors
13.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Accruals
Due to ARNO
Grant creditor		 2021
£
3,750
10,287
8,974
23,011
2021
£
19,849
-
3,000
22,849		 2020
£
3,750
11,933
7,243
22,926
2020
£
18,326
45,946
-
64,272

14. ANALYSIS OF CHARITABLE FUNDS Analysis of unrestricted fund movements

General funds
Analysis of restricted
RNSF		 Balance at
01.01.2021
£
15,020,866
fund movements
Balance at
01.01.2021
£
336,705		 Income
£
700,063
Income
£
8,386		 Expenditure
£
(681,833)
Expenditure
£
(43,839)		 Investment
gains
£
1,778,775
Investment
gains
£
2,311		 Balance at
31.12.2021
£
16,817,871
Balance at
31.12.2021
£
303,563

The Royal Naval Scholarship Fund is a subsidiary of the charity and aggregated in its financial statements under a Uniting Direction issued by the Charity Commission. The Fund was transferred to RNBSO from ARNO Charitable Trust and it originated from the proceeds of the sale of the Royal Naval School at Eltham.

15. TRANSFER BETWEEN FUNDS

There were no transfers between funds during the period.

19

ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31[ST] DECEMBER 2021

16. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Fixed asset investments
Current assets
Other net current liabilities
Fixed asset investments
Current assets
Other net current liabilities		 Unrestricted
Fund
£
16,641,958
185,526
(9,613)
16,817,871
Unrestricted
Fund
£
14,918,567
166,571
(64,272)
15,020,866		 Restricted
Funds
£
316,799
-
(13,236)
303,563
Restricted
Funds
£
315,741
20,964
-
336,705		 Total 2021
£
16,958,757
185,526
(22,849)
17,121,434
Total 2020
£
15,234,308
181,735
(64,272)
15,351,711

17. RELATED PARTY TRANSACTIONS

Association of Royal Navy Officers (ARNO)

ARNO is a membership association for which the Trustees of the charity are also the members of ARNO’s council.

During the year the net management, administration and establishment costs recharged by the charity to ARNO amounted to £67,803 (2020: £19,611). At the year end the charity owed ARNO £nil (2020: £45,946).

18. ULTIMATE CONTROLLING PARTY

During the year the charitable company was under the control of the Royal Navy and Royal Marines Charity (a registered charity incorporated in England and Wales, registered company number 6047294, registered charity number 1117794 and also a registered charity in Scotland, charity number SC041898), which has the right of veto in general meetings of the charity. Copies of the Royal Navy and Royal Marines Charity consolidated financial statements can be obtained from Building 29, HMS Excellent, Whale Island, Portsmouth, PO2 8ER.

20

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021

CHARITABLE ACTIVITIES IN 2021

Grant Making

Almost 150 grants were made during the year and the total sum expended on direct grants to individuals was £500,289. Retired officers and their dependants continue to make up a high proportion of cases requiring the charity’s help. In the main these are widows of officers who held wartime or National Service commissions and are often on low incomes. Although there has been a slight decrease in the total number of grants awarded a large number of the applications received are complex and often involve a number of agencies.

As in previous years grants have been provided to help with the cost of nursing and care home fees, mobility aids, household repairs, the replacement of white goods and debts. Sadly the number of cases involving divorce, separation and occasional domestic abuse/violence has risen. In addition to the financial assistance offered there remains a significant number of members of both ARNO and the RNBSO telephoning the office for advice and assistance in a wide range of matters. Due to our increased presence on social media there has been an increase in non-members seeking similar advice.

A number of representative cases dealt with recently are listed below;

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021

DONATIONS AND LEGACIES - 2021

Donations

Donations and Legacies this year amounted to £278,925 – once again greatly enhanced by many generous contributions via ARNO and the Big Give. Every donation no matter the amount is equally appreciated. Details of how you can support the charity are include on the final page of this report. Please be aware that the RNBSO is the only charity which covers the full range of officer beneficiaries and receives no funding from central government or other grant giving organisations. In previous years it has been the practice to list donors however with such a large number it is impractical to do so. On behalf of the Trustees of the RNOC and all our beneficiaries please forgive this change in policy and accept our heartfelt and sincere thanks.

A statement enabling the charity to reclaim income tax on donations under the Gift Aid rules is included at the end of this report and members are asked to complete a copy when making donations. In addition a number of legacies were received and the CEO once again appeals to members to consider remembering the charity when considering legacies. With this is mind, members may wish to take account of the notes provided on the last page of this report. The RNBSO is the only charity which covers the full range of officer beneficiaries.

RNBSO MEMBERSHIP AND OBITUARIES – 2021

At the end of 2021 the charity’s membership stood just below 600. Sadly this reflects the deaths of 21 known members and their names are listed below. In addition a number of members have asked to be removed from the list of members due to ill health. A full membership list is maintained by the CEO who will provide a copy should any member request one.

Date
 Name
 Rank
1951 G K Findlay Lieutenant Commander
1960 M A Phelp Lieutenant Commander
1962 D W Foster Captain
1974 T H BradburyCB Rear Admiral
1974 R Porteous Commander
1978 A C Dyson Lieutenant Commander
1978 I B Sutherland Captain
1980 A D Barrett,CBE,RD**,DL Commodore
1982 J A Stephenson Captain
1982 J J Streatfield-James Captain
1983 R T N Best Commander
1983 A J Lyall,MBE Commodore
1987 J H R Jorgensen MBE Lieutenant Commander
1988 P Hames Captain
1988 Sir John Mortimer Forbes,KCB Vice Admiral
1989 A N A MacDonald Captain
1994 HRH The Duke of Edinburgh,KG,KT,OM,GBE Admiral of the Fleet
1996 R G Banks Commander
1997 S W Howick Captain
1998 A E Guyatt Commander
2001 M S Williams,CBE Commodore

REPORT OF THE 2021 ANNUAL GENERAL MEETING

The President, Admiral Sir Mark Stanhope, opened the 2021 AGM, which was held on Wednesday, 15 September via Zoom. He welcomed and thanked the members of the RNBSO for providing their continuing support of the event.

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021

The President offered his thanks to all the Trustees for their continuing dedication and support over the past year. Many of them gave a great deal of time and effort, for which he was extremely grateful. He made a special welcome to the newly co-opted Trustees. Admiral Stanhope then informed the meeting that this would be his last as President and that upon completion of the meeting he would hand over to Vice Admiral Paul Bennett. He concluded by welcoming the Chairman, Rear Admiral Mike Kimmons and Chief Executive Officer, Commander Mike Goldthorpe before asking the Chairman to present the Annual Report for 2021.

The Chairman thanked Admiral Stanhope for his opening remarks and also for the support he gave as President. He also welcomed all the members of RNBSO and guests.

Moving on to the business of the meeting he began by thanking his predecessor Surgeon Commodore Jim Sykes for his many years’ service formerly as a Trustee and latterly as Chair. Following on he drew attention to the minutes of the 2019 AGM (the 2020 AGM was postponed due to Covid) which were adopted by the members. He reported that demand for charitable assistance continued apace resulting in expenditure overtaking investment income, albeit careful application of Reserves and an increase in donations and legacies had meant that all eligible applications had been met. Members were then updated on the range of grants provided both in financial and needs terms. It was also made clear that the RNOC are now the only charity available to serving and retired Officers and their spouses after the OA have ceased taking on new cases and have never supported serving personnel. Looking ahead the Chair was pleased to report that in relation to our links with other Service charities we continued to enjoy a good working relationship with the other naval charities, including SAIL the NCC and Greenwich Hospital – the bottom line being the support of our beneficiaries and delivering the best available support. In order to deliver that support he noted and thanked SSAFA and the RN FPS for the invaluable assistance provided by their respective caseworkers and staff. He concluded this section by adding that the RNOC were continuing to develop a clearer relationship with the RNRMC.

The Chairman then invited Wayland Austin to present the financial report. Wayland began by reiterating that Covid had had a significant impact on investment income but that through careful planning and management, bolstered by a high level of donations, we had ended both 2019 and 2020 in a relatively good position. Cazenove under the management and good stewardship of Alex Bailey and Nathalie Krekis remain responsive to our requirements. He drew attention to the charity’s statutory accounts in the 2020 Report which was contained once again within the ARNO Yearbook. There were no questions from the floor and Wayland concluded his report.

A vote then followed and members approved the report and accounts for the year ending 31st December 2020.

Moving to the election of the Council, in accordance with Rule 4.4a of the Society, Commander Ian Fyfe-Green, Rear Admiral Mike Kimmons, Commodore Angus Ross and Lieutenant Samuel Williams, all having been coopted, were ratified as a Trustees.

The business of the meeting being over the President thanked everyone for their contribution before closing the meeting.

Rear Admiral M Kimmons CB Chairman

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021

FINANCIAL HELP TO THE RN OFFICERS’ CHARITY

How you can help

As you can see from earlier pages of this report, the charity receives income from a number of sources, primarily its own investments, but also by donations from generous individuals and organisations. There are constant calls on the charity’s funds these days, so further contributions, both small and large, are always extremely welcome and are put to very good use.

It is appreciated that the majority of members gave a donation through their payment for life membership of RNBSO but members can still give much needed support in the following ways:-

By Donation:

Please send your donation to the Director at the address on the front cover of this report. It will be acknowledged and listed in the Annual Report – anonymously if requested. Such donations can provide extra income for the charity under the ‘Gift Aid’ scheme. The ‘Change of Address’ page of this report can provide a convenient way of making the appropriate declaration required by the scheme.

By Gifting Shares:

It is now possible for individuals to donate shares and securities to the charity and gain substantial tax relief in doing so.

By Legacy:

Legacies are a very important source of income for the charity. If you would like to remember the charity in your will you can do so by including the following words, depending on whether you wish to make a specific legacy or leave the residue of your estate to the charity:

Specific Legacy:

“I give and bequeath to the Royal Navy Officers’ Charity the sum of ….. , free of all duty, such sum to be applied to the general relief purposes of the said Charity

Residuary Legacy:

“I give and bequeath all ( or a specified share ) the residue of my estate absolutely to the Royal Navy Officers’ Charity, such residue to be applied to the general purposes of the said Charity.

THE ROYAL NAVAL BENEVOLENT SOCIETY FOR OFFICERS ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021

GIFT AID DECLARATION

Boost your donation by 25p of Gift Aid for every £1 you donate

Gift Aid is reclaimed by the charity from the tax you pay for the current tax year. Your address is needed to identify you as a current UK taxpayer.

In order to Gift Aid your donation you must tick the box below:

Name of Charity: ROYAL NAVY OFFICERS’ CHARITY

I am a UK taxpayer and understand that if I pay less Income Tax and/or Capital Gains Tax in the current tax year than the amount of Gift Aid claimed on all my donations it is my responsibility to pay any difference.

My Details

----- Start of picture text -----
Title ____ First name or initial(s) ____
Surname __________
Full Home address ________
__________
Postcode ____ Date _____
----- End of picture text -----

Please notify the charity if you:

If you pay Income Tax at the higher or additional rate and want to receive the additional tax relief due to you, you must include all your Gift Aid donations on your Self-Assessment tax return or ask HM Revenue and Customs to adjust your tax code.

CHANGE OF ADDRESS / RANK / DECORATIONS

If your address, rank, title or decorations have altered recently, please complete and return this slip.

----- Start of picture text -----
Rank...................................................Decorations................................
Name.....................................................................................................
Address.................................................................................................
...............................................................................................................
Post Code........................ E-Mail address........................................
----- End of picture text -----