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2020-12-31-accounts

THE UNION JACK CLUB

A Charitable Company Limited by Guarantee governed by a Memorandum and Articles of Association

Registered Charity Number: 208731 Registered Company Number: 00080683

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2020

The Union Jack Club

A Charitable Company Limited by Guarantee governed by a Memorandum and Articles of Association

Sandell Street, Waterloo, London SE1 8UJ

Patron:

Her Majesty the Queen

Governing Council

President:

Vice Admiral Sir David Steel KBE DL

Vice President: Honorary Treasurer

Lieutenant Commander N G N Ashford FCA FSI Mr David Cooper MBA FCA

Trustees

Air Commodore C Adams CBE AFC (Resigned 16.12.2020) Mr D E P Albert Air Commodore M Barnes Colonel J Brown Mr W A Cowpe Mr P E Davidson FRICS

Mrs R Garside Air Commodore J Linter OBE MA Captain TFW Martin OBE RN Brigadier J Stopford CBE (Appointed 16.12.2020) Mrs S V Swan WO1 G Haughton OBE MBA

Chief Executive Officer:

Mr S C T Atkins

Secretary:

Mrs Zoe Nield

Solicitors:

Ashurst LLP London Fruit and Wool Exchange 1 Duval Square London E1 6PW

Auditors:

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

Bankers:

Barclays Bank PLC UK Banking 1 Churchill Place London E14 5HP

Offices of the Club:

Sandell Street Waterloo London SE1 8UJ

Company Registration Number: 00080683 Registered Charity Number: 208731

Page: 1

The Union Jack Club

A Charitable Company Limited by Guarantee governed by a Memorandum and Articles of Association

Sandell Street, Waterloo, London SE1 8UJ

GENERAL COMMITTEE

(As at 31 December 2020)

Warrant Officer 1 B Biggar Warrant Officer 1 P Clark Warrant Officer 1 M Jarvis Warrant Officer 1 A Lamont Warrant Officer 1 J Lowther Warrant Officer R Mealand Warrant Officer 1 S McFadden Warrant Officer 1 K Mills Warrant Officer 1 G Paton Warrant Officer 1 L Reeve Warrant Officer 1 V Stokes Mr P Houldsworth Mr J Ray Mr V Silvester

Warrant Officer 1 A Driver Warrant Officer 1 B Henderson Warrant Officer 1 W Moore Warrant Officer 1 A Parker Warrant Officer 1 M Turnbull Warrant Officer 1 I Wilson Warrant Officer 1 R Wilson Warrant Officer 1 D Young MAcr T Buxton Warrant Officer A Culley Warrant Officer S Cotman Warrant Officer D Eastgate Warrant Officer B Hagan MAcr B Kayll Warrant Officer P Langley

Page: 2

THE UNION JACK CLUB COUNCIL'S REPORT and STRATEGIC REVIEW FOR THE YEAR ENDED 31 DECEMBER 2020

The Council, as the Governing Body of the Union Jack Club (formerly known as The Association of The Union Jack Club) and Trustees of the Charity, present their report and accounts for the year ended 31st December 2020 in accordance with applicable accounting standards, 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), the Companies Act 2006 and the Charities Act 2011.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Union Jack Club

The Union Jack Club consisted of 15 life members on 31 December 2020, all of whom stand surety for the guarantee as required in the Memorandum of Association. The Articles of Association empower the Governing Council to elect new members.

New members are elected by recommendation based on their expertise and qualifications. Members are kept up to date on Trustee issues by the distribution of pamphlets and briefs.

Members of the Council

The members of Council during the year are shown on page 1.

At the virtual Annual General Meeting of the Union Jack Club held on 4th June 2020, Vice Admiral Sir David Steel KBE, DL, being Director of the Company retiring by rotation, was re-elected as Director of the Company for a term of three years as defined in the Articles. Air Commodore Colin Adams CBE AFC, Mr David Albert, Mr David Cooper and Captain Tim Martin OBE RN, being Directors of the Company retiring by rotation, were re-elected as Directors of the Company for a term of three years as defined in the Articles, notwithstanding the provision of article 32.

The daily operation of the Union Jack Club is delegated to the Chief Executive assisted by the Management Team. Members of the Council meet four times a year. They review the accounts for the previous year and deliberate on the budget proposals put forward by the Chief Executive for the following year. Members of the Council monitor the progress of the Budget throughout the year and assess the risks faced by the Union Jack Club, see below.

General Committee

Members of the General Committee are shown on page 2.

The General Committee’s main duties under the overall control of the Council are to represent the membership and ensure that members’ views and opinions are conveyed to the Council and Officials of the Club. It advises the Council on entrance fees, annual subscriptions and accommodation charges, and decides on the election of ex-service members.

Investment powers and policy

During the year the investments of The Union Jack Club were managed by Smith & Williamson Investment Management Limited, under a Discretionary Investment Management Agreement. The objectives of the portfolios are to seek to maximise the total return on the portfolio while investing prudently and without exercising undue risk. The return objective of the main investment portfolio is to outperform RPI plus 4% pa.

Additionally, the Union Jack Club invests in Property Income Trust for Charities; the fund managed by Mayfair Capital Investment Management Limited.

Remuneration Policy of Senior Management Personnel

In relation to deciding remuneration for the Charity’s senior executives, the Charity considers the potential impact of remuneration levels and will take account of the following additional principles:

To ensure that the Charity can access the types of skills, experiences and competencies that it needs in its senior staff, the specific scope of these roles in the Charity and the link to pay.

The nature of the wider employment offer made to senior employees, where pay is one part of a package that includes personal development, personal fulfilment and association with the public benefit delivered.

Remuneration for the year ended 31 December 2020 comprised salary, performance incentive, pension contributions and healthcare benefit. There are no other pecuniary benefits for senior or other staff at the Charity.

Page: 3

THE UNION JACK CLUB COUNCIL'S REPORT and STRATEGIC REVIEW (Continued) FOR THE YEAR ENDED 31 DECEMBER 2020

OBJECTS AND ACTIVITIES

The objects of the Union Jack Club are to promote the welfare of serving and veteran enlisted members of the Regular, Reserve, and Auxiliary forces of the Crown, their spouses and partners and their families, as defined by the Council of the Union Jack Club, in establishing, maintaining, and conducting a residential Club for their use and accommodation.

The principal activity of the Union Jack Club continues to be the provision of all the normal facilities of a residential Club in London for enlisted members and ex-members of the Her Majesty's Armed Forces, their spouses / partners and families.

STRATEGIC REPORT

Risk Management

The Trustees have a risk management strategy which comprises:

The availability of sufficient financial resources has been identified as a main risk. The management of this is through regular review of available funds, active management of trade debtors, creditors and working capital to ensure there is an adequate and appropriate maintenance of the building to allow the charity to meet its beneficiaries' needs and other objectives.

The non financial risks arising from fire, health and safety, food hygiene, GDPR and safety of members, guests and staff are managed by robust policies, procedures and regular training of staff.

The COVID-19 pandemic in 2020 has resulted in considerable change and actions to ensure the Club is managed appropriately, which includes COVID-19 health and safety risk assessment, regular financial and operational reviews.

Governance and Internal Control

Risk assessment is the responsibility of Council.

The Council aims to ensure that:

The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include:

The Council has introduced a formal risk management process to assess business risks and implement risk management strategies. As part of this process the Council has reviewed the adequacy of the Charity’s current internal controls.

The Union Jack Club (Trading) Limited

The Union Jack Club (Trading) Limited, a wholly owned subsidiary of the Union Jack Club, purchases, under strict controls, any accommodation that is not required for the beneficiaries of the Charity. The accounts of the company are consolidated with those of the Charity.

Page: 4

THE UNION JACK CLUB COUNCIL'S REPORT and STRATEGIC REVIEW (Continued) FOR THE YEAR ENDED 31 DECEMBER 2020

PUBLIC BENEFIT

The Trustees confirm that they have complied with the duty in section 17 (1) of the Charities Act 2011 to have due regard to the Charity Commission’s general guidance on public benefit, ‘Charities and Public Benefit’. The Union Jack Club’s charitable purpose is enshrined in its objects as described.

ACHIEVEMENTS AND PERFORMANCE

At the end of the year 2020, the Union Jack Club Group had a Net Operating loss of £1,683,663 (2019 Net Operating surplus £522,727). There was a gain on investments of £ 378,378 (2019 gain £818,536 ) which decreased Net Income to a loss of £1,305,284 (2019 gain £1,341,263).

Improvements to the Club over the year have included the introduction of membership cards for serving members and their spouse/partner, refurbishment 14 double/ twin ensuite bedrooms, 29 single ensuite bedrooms, 1 suite, I fully accessible and 2 family bedrooms alongside bar carpet, furniture, security, plant and IT upgrades.

The Union Jack Club also received a legacy for £138,742 (2019 nil) and voluntary donations of £42,257 (2019 £30,360) generously donated by members and guests during the year, which are used in the development and maintenance of the Club. All capital projects completed during the year represent the Club's fixed assets additions which are depreciated over 5 , 10 or 20 years.

FINANCIAL REVIEW

The impact of the COVID-19 pandemic has been considerable, which has resulted in the Club restructuring with 19 roles being terminated, taking out the Corona Business Interruption loan for £1,500,000 and maximising use of the Government Job Support scheme (Furlough) and business rates holiday. The financial statements consist of the consolidated results of The Union Jack Club and The Union Jack Club (Trading) Limited, and the consolidated and Charity balance sheets. Principal sources of income were membership income of £476,316 (2019 £499,041), residential services to members of £2,122,224 (2019 £6,890,544) and income generated from non-members of £440,101 (2019 £1,485,695),Government Job Support scheme(Furlough) grants £1,057,274. Operating expenditure consisted mainly of the provision of membership and residential services of £5,790,128 (2019 £7,437,722 ) and the cost of servicing non-members of £266,484 (2019 £892,546). At the end of the year the Group had net operating loss of £1,305,284 (2019 surplus £522,727). Net Movement in funds for 2020 resulted in a loss of £1,321,084 (2019 gain £1,325,563) after taking into account changes on investment assets, actuarial change in pension liabilities, transfers and utilisation of funds.

Land and buildings have been included in the accounts at net book value of £2.3 million (2019 £2.4 million). The Council considers that the market value of the freehold land and buildings is considerably in excess of the book values.

Reserves policy

As The Union Jack Club is a charity and also a company limited by guarantee it does not rely upon public subscription in order to achieve its charitable objectives.

The Club’s reserves consist of the buildings and contents, without which it could not function, two investment portfolios which are managed by professional investors under the direction of the Trustees, and a trading company of which the charity is the sole shareholder.

The Club achieves its objectives of providing, maintaining and continuously improving reasonably priced accommodation and all the amenities of a London Club for current and former enlisted members of the Armed Forces and their families by relying where necessary upon the income generated from investments to fund pensions and to make good any loss incurred in any year.

The Council has reviewed the Club's needs for reserves in line with the guidance issued by the Charity Commission. The review concluded that, in order to allow the Charity to be managed efficiently, and ensure the Club can continue to maintain and improve the accommodation and amenities, and cope through periods of changes in trading and in the event of sudden major disruption or disasters such as the current pandemic, a general unrestricted spendable or free reserve (as defined by the Charity Commission) should aim to be no less than 6 months operating costs, which in a normal trading year would be expected to equate to approximately £4.5m.

Page: 5

THE UNION JACK CLUB COUNCIL'S REPORT and STRATEGIC REVIEW (Continued) FOR THE YEAR ENDED 31 DECEMBER 2020

Reserves Policy (continued)

At the 31st December 2020, the Club's total reserves amounted to £11,065,276 of which £4,752,722 was tied up in the Club's building and fixed assets, and so not freely spendable. In addition a £1,138,742 is designated as the Infrastructure Fund and an unrealised revaluation reserve of £1,843,997 leaving £3,329,815 free unrestricted funds. Due to the COVID-19 pandemic the free unrestricted reserves are lower than the reserves target. The reserves policy is reviewed on an annual basis to ensure it meets the changing needs of the Club.

Note 16 includes the utilisation of the designated funds.

Investment performance

The investment portfolio consists of two segregated funds. The first, designated the "Matching Portfolio", is designed to cover the liabilities of a very small number of discretionary pensions and was valued at £290,348 as at 31 December 2020. The second fund, called the 'Main Portfolio', was valued on the 31st December 2020 at £5,812,411. The Main Portfolio produced a total return of 6.49% compared to its benchmark of RPI plus 4% (4.9%). The Matching Portfolio produce 5.91% of the total portfolio value. The Investment in Property Income Trust for Charities was valued at the 31st December 2020 at £549,671 a 4.83% decrease on the previous year.

FUTURE PLANS

The Union Jack Club plan is to refurbish 14 double/twin, 6 king size, 23 single, 2 family unsuited bedrooms and 1 disabled bedroom, to replace Lifts 5,6 & 7 controls, reline cold water tanks, along with CCTV and IT improvements during 2021. As a result of a significant legacy the Gascoigne room will be completed in March 2021.

Statement of Council's Responsibilities

The Trustees (who are also directors of The Union Jack Club for the purposes 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 required Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the charity and the group, and of its income and expenditure for that period. In preparing these financial statements, the trustees are required to:

The Trustees are responsible for ensuring 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 Companies Act 2006. They are also responsible for safeguarding the assets of the Charity company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

This report was approved by the Governing Council on 9th March 2021.

Z Nield MIH

Company Secretary

Page: 6

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS and TRUSTEES OF THE UNION JACK CLUB

Opinion

We have audited the financial statements of The Union Jack Club (the 'company')for the year ended 31 December 2020 which comprise the Group Statement of Financial Activities, the Group and Parent Charitable Company Balance Sheets, the Group 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 Republic of 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 charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

We draw your attention to the going concern statement in note 2 to the financial statements which describes the impact of the COVID-19 pandemic on the group’s activities. Our opinion is not modified in this respect.

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 charitable company'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.

Page: 7

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS and TRUSTEES OF THE UNION JACK CLUB

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements [the strategic report or]in the trustees’ annual report.

We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Act 2011 require us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 6, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of 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 group and parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent 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 the Companies Act 2006 and section 151 of the Charities Act 2011 and report in accordance with those Acts.

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.

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.

Page: 8

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS and TRUSTEES OF THE UNION JACK CLUB

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

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 charitable company.

Our approach was as follows:

Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those . charged with governance and obtaining additional corroborative evidence as required.

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

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the . effectiveness of the group and parent charitable company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates . and related disclosures made by the trustees.

Conclude on the appropriateness of the trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and parent charitable company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are . inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or parent charitable company to cease to continue as a going concern.

Page:9

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS and TRUSTEES OF THE UNION JACK CLUB

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.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and, in respect of the consolidated financial statements, 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 charitable company’s members and trustees those matters which 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 charitable company, the charitable company’s members, as a body, and the charity’s trustees, as a body, for our audit work, for this report, or for the opinion we have formed.

Neil Finlayson (Senior Statutory Auditor)

for and on behalf of Moore Kingston Smith LLP, Statutory Auditor

Devonshire House 60 Goswell Road London EC1M 7AD

Date:

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

Page: 10

THE UNION JACK CLUB CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

( Incorporating Income and Expenditure Account ) FOR THE YEAR ENDED 31 DECEMBER 2020

2020

Note
INCOME + ENDOWMENTS
Donations and legacies
3
HMRC Furlough Claims
Trading activities
4
Other Income
Other Income - Insurance Claim
7
Investment Income
5
Charitable Activities
Subscriptions
6
Provision of residential services
6
Total Operating Income
EXPENDITURE
Raising Funds
Trading activities
4
Fundraising and publicity
Investment management fees
Finance costs
Finance cost of pension liability
14
Total cost of raising funds
Charitable Activities
Provision of membership and residential services
Total Operating Expenditure
8
Net Operating Income / (Expenditure)
Net gain on investment assets
10
Net Income
Transfer between Funds
Actuarial loss on pension scheme
15
Gross transfer between funds
16
Utilisation of fund
16
Net Movement in Funds
Fund balances brought forward
1 January 2020
Fund balances carried forward at
31 December 2020
17 a)		 Unrestricted
Fund
£
273,201
1,057,274
440,101
19,771
12,653
85,718
1,888,718
476,316
2,122,224
4,487,258
266,484
29,908
37,340
43,060
4,000
380,793
5,790,128
6,170,921
(1,683,663)
378,378
(1,305,284)
(15,800)
(138,742)
-
(1,459,826)
11,386,360
9,926,534		 Infrastructure
Fund
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
138,742
-
138,742
1,000,000
1,138,742		 Total
2020
£
273,201
1,057,274
440,101
19,771
12,653
85,718
1,888,718
476,316
2,122,224
4,487,258
266,484
29,908
37,340
43,060
4,000
380,793
5,790,128
6,170,921
(1,683,663)
378,378
(1,305,284)
(15,800)
-
-
(1,321,084)
12,386,360
11,065,276

The statement of financial activities, which incorporates the income and expenditure account, includes all gains and losses recognised in the year. All incoming resources and resources expended are derived from continuing activities.

Page : 11

THE UNION JACK CLUB CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES ( Incorporating Income and Expenditure Account ) FOR THE YEAR ENDED 31 DECEMBER 2019

2019
Note
INCOME + ENDOWMENTS
Donations and legacies
3
Trading activities
4
Other Income
Other Income - Insurance Claim
7
Investment Income
5
Charitable Activities
Subscriptions
6
Provision of residential services
6
Total Operating Income
EXPENDITURE
Raising Funds
Trading activities
4
Fundraising and publicity
Investment management fees
Finance costs
Finance cost of pension liability
15
Total cost of raising funds
Charitable Activities
Provision of membership and residential services
Total Operating Expenditure
8
Net Operating Income / (Expenditure)
Net gain on investment assets
10
Net Income
Transfer between Funds
Actuarial loss on pension scheme
15
Gross transfer between funds
Utilisation of fund
Net Movement in Funds
Fund balances brought forward
1 January 2019
Fund balances carried forward at
31 December 2019
17 b)		 Unrestricted
Fund
£
7,274
1,485,695
70,909
14,149
125,537
1,703,564
499,041
6,890,544
9,093,149
892,546
96,413
35,277
102,662
5,800
1,132,698
7,437,722
8,570,420
522,727
818,536
1,341,263
(15,700)
(663,013)
663,013
1,325,563
10,060,797
11,386,360		 External
Building Repairs
Fund
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
663,013
(663,013)
-
1,000,000
1,000,000		 Total
2019
£
7,274
1,485,695
70,909
14,149
125,537
1,703,564
499,041
6,890,544
9,093,149
892,546
96,413
35,277
102,662
5,800
1,132,698
7,437,722
8,570,420
522,727
818,536
1,341,263
(15,700)
-
-
1,325,563
11,060,797
12,386,360

The statement of financial activities, which incorporates the income and expenditure account, includes all gains and losses recognised in the year. All incoming resources and resources expended are derived from continuing activities.

Page: 12

THE UNION JACK CLUB BALANCE SHEET

FOR THE YEAR ENDED 31 DECEMBER 2020

Notes
Fixed Assets
Tangible assets
9
Investments
10
Current Assets
Stocks
11
Debtors
12
Cash at bank and in hand
Liabilities
Creditors: Amounts falling due
within one year
13
14
Net Current Assets
Total Assets less Current Liabilities
Creditors: Amounts falling due
after more than one year:
14
Discretionary pension provision
15
Net Assets
Accumulated Funds
Unrestricted Funds:
Designated Revaluation reserve
16
Designated Fixed Asset reserve
16
Designated Infrastructure Fund
16
Income and Expenditure reserve
16
17 a)		 2020
2019
£
£
5,142,722
5,880,300
6,652,433
6,538,834
11,795,156
12,419,134
73,671
78,624
881,504
383,407
412,479
1,634,575
1,367,654
2,096,606
(529,353)
(2,485,494)
(91,976)
-
746,324
(388,888)
12,541,479
12,030,246
(1,408,024)
(241,900)
(242,800)
10,891,555
11,787,446
1,843,997
1,869,523
4,752,722
5,412,301
1,138,742
1,000,000
3,156,094
3,505,623
10,891,555
11,787,446
Charity		 2020
2019
£
£
5,142,722
5,880,300
6,652,431
6,538,832
11,795,153
12,419,132
86,802
95,340
193,275
435,979
1,300,641
1,715,744
1,580,717
2,247,063
(568,694)
(2,037,033)
(91,976)
-
920,048
210,030
12,715,200
12,629,162
(1,408,024)
(241,900)
(242,800)
11,065,276
12,386,360
1,843,997
1,869,523
4,752,722
5,412,301
1,138,742
1,000,000
3,329,815
4,104,536
11,065,276
12,386,360
Group		 2020
2019
£
£
5,142,722
5,880,300
6,652,431
6,538,832
11,795,153
12,419,132
86,802
95,340
193,275
435,979
1,300,641
1,715,744
1,580,717
2,247,063
(568,694)
(2,037,033)
(91,976)
-
920,048
210,030
12,715,200
12,629,162
(1,408,024)
(241,900)
(242,800)
11,065,276
12,386,360
1,843,997
1,869,523
4,752,722
5,412,301
1,138,742
1,000,000
3,329,815
4,104,536
11,065,276
12,386,360
Group
12,419,132
95,340
435,979
1,715,744
2,247,063
(2,037,033)
-
210,030
12,629,162
(242,800)
12,386,360
1,869,523
5,412,301
1,000,000
4,104,536
12,386,360

The financial statements were approved and authorised for issue by the Governing Council of The Union Jack Club on 9th March 2021 and were signed below on its behalf by:

President

Vice Admiral Sir David Steel KBE DL

Honorary Treasurer

Mr David Cooper MBA, FCA

Page: 13

THE UNION JACK CLUB CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

Cash flow from operating activities
Net cash provided by operating activities
Cash flows from investing activities
Investment income and interest received
Finance costs
(Decrease) / Increase in cash held by investment manager
Proceeds from disposal of fixed asset investments
Acquisition of fixed asset investments
Payments to acquire tangible fixed assets
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2020
£
(632,989)
85,718
(43,060)
129,057
2,274,275
(2,138,549)
(89,553)
217,888
(415,101)
1,715,744
1,300,643		 2019
£
1,706,828
125,537
(102,662)
(86,857)
460,680
(915,863)
(1,344,934)
(1,864,099)
(157,271)
1,873,014
1,715,744

Reconciliation of net income to net cash flow from operating activities

Net income
Adjustments for:
Less investment income
Add finance costs
Add depreciation and disposal of tangible fixed assets
Add Loss / (Subtract Profit) on investment assets
Add / (Subtract) Pension provision adjustment
Decrease / (Increase) in stocks
Decrease / (Increase) in debtors
(Decrease) / Increase in creditors
Increase / (Decrease) in Long Term Creditors
Net cash provided by operating activities		 2020
2019
£
£
(1,321,084)
1,325,563
(85,718)
(125,537)
43,060
102,662
827,132
802,039
(378,378)
(818,536)
(900)
1,700
8,538
(35,204)
242,703
(26,520)
(1,376,366)
480,661
1,408,024
-
(632,989)
1,706,828

Page: 14

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

1 COMPANY INFORMATION

The Union Jack Club, a registered charity, is a company limited by guarantee, not having a share capital and is incorporated in England and Wales. In the event of a winding up, each member may be required to contribute an amount not exceeding £1 towards the settlement of the Club's liabilities. The registered office is Sandell Street, Waterloo, London, SE1 8UJ.

2 ACCOUNTING POLICIES

Accounting Convention

The financial statements are prepared under the historical cost convention, modified by the inclusion of certain freehold land and buildings at a valuation (note 9) and fixed asset investments at market value (note 10), and in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The Charitable Company and its subsidiaries are a public benefit group 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), the Companies Act 2006 [under the provision of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410)], and the Charities Act 2011.

The financial statements consolidate The Union Jack Club and its subsidiary, The Union Jack Club (Trading) Limited. A separate Statement of Financial Activities and Income and Expenditure Account are not presented for the Charity itself as the Charity has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006.

The financial statements are prepared in sterling, which is the financial currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest pound.

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

Going Concern

The financial statements have been prepared on a going concern basis which assumes the charity and trading company will continue in operational existence for the foreseeable future. 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 chariy and trading company to continue as a going concern. The impact of the COVID-19 pandemic has been considerable on the Club, reducing its ability to operate normally for many months during 2020 resulting in a significant drop in income during the year. The Club took swift action to restructure with 19 roles being made redundant, taking out a Coronavirus Business Interruption Scheme loan for £1,500,000 and maximising use of the Government Job Support Scheme (Furlough) and business rates holiday. The Trustees have reviewed the forecasts and projections prepared by management for a period of at least twelve months from the date of approval of these financial statements. These show that the Club is projected to make a further deficit for the year 31st December 2021 because of the continuing impact of COVID-19. These forecasts have been prepared on a conservative basis, and whilst the Trustees believe the assumptions and estimates used in their preparation are reasonable, they are hopeful that the situation will improve during the course of 2021.

Following a review of the financial situation, the Trustees are confident that given its strong asset base, including its unrestricted investment portfolio, the charity and trading company has sufficient reserves to cover the projected deficit and therefore the financial statements are properly prepared on a going concern basis.

Page: 15

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

2 ACCOUNTING POLICIES (Continued)

Tangible Fixed Assets

Tangible fixed assets with a cost of £5,000 or more are capitalised. Depreciation of tangible fixed assets is provided, on a straight line basis, at amounts estimated to write off the cost over their expected useful life as follows:

Freehold buildings 10 - 50 years Major plant items 20 years Furniture, fittings and sundry equipment 5 & 10 years (where appropriate) Computer equipment 3 & 5 years (where appropriate)

The Club's collection of paintings and clocks is carried at valuation and is not depreciated on the grounds that any depreciation charge would be immaterial. Certain fixed assets in Furniture & Fittings are now recognised as having 5 years of useful life.

Provision for Residential Services (Income and Expenditure)

This represents the amounts derived from the provision of services, which fall within the Club's ordinary activities, all of which are continuing.

Donations, Legacies and Gifts

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

Donations, legacies and gifts are included in incoming resources when receivable. When donors specify that donations, legacies or gifts are for particular purposes, they are treated as restricted income.

Subscriptions

Subscriptions income derives from subscription fees of members. The subscription period runs in conjunction with the financial year.

Trading Income

Trading income consists of income generated by the subsidiary from the provision of accommodation and catering to non members.

Investments

Interest receivable and income from investments are included on the basis of the amount earned during the year. Investments are classified as fixed assets in accordance with the Charities SORP. Both realised and unrealised gains and losses are recognised in the Statement of Financial Activities.

Financial assets/liabilities measured at amortised cost

Cash and cash equivalents include cash at banks and in hand and short term deposits with a maturity date of three months or less.

Debtors and creditors receivable or payable within one year of the reporting date are carried at their at transaction price. Debtors and creditors that are receivable or payable in more than one year and not subject to a market rate of interest are measured at the present value of the expected future receipts or payment discounted at a market rate of interest.

Operating Leases

Rentals under operating leases have been charged to the Statement of Financial Activities on a straight line basis.

Resources Expended

Resources expended are included in the Statement of Financial Activities on an accruals basis. 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.

Certain expenditure is directly attributable to specific activities and has been included in those cost categories. Certain other costs, which are attributable to more than one activity, are apportioned across cost categories on the basis of occupancy rates between the Charity and its subsidiary, and the proportion of time spent by staff on those activities.

Page: 16

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

Pension Contributions

The Union Jack Club pays defined contributions towards stakeholder pension schemes for qualifying employees. The annual cost is expensed in the Statement of Financial Activities.

Provision is made in the financial statements for the Council's estimated liability in respect of existing discretionary pensions directly paid by the Club within the Statement of Financial Activities, Balance Sheet and Cash Flow Statement in accordance with FRS 102 SORP module 'Retirement and post-employment benefits'.

The Union Jack Club contributes to money purchase schemes for certain senior employees; contributions are assessed on entry as a level monetary amount payable over the employee's expected career with the Club. The Union Jack Club also provides the contributory Group Personal Pension Plan for all qualifying employees. The Plan in set up in line with government requirements under NEST.

Stocks

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

Fund Accounting

Funds held by the Charity are either:

Unrestricted general funds - these are funds which can be used in accordance with the charitable objects at the discretion of the Council.

Restricted funds - these are funds that can only be used for particular purposes specified by the donor or when funds are raised for particular purposes within the objects of the Charity.

Unrestricted designated funds - these funds represent funds which have been separately designated by the Trustees of the Charity, as part of unrestricted funds.

Critical accounting estimates and areas of judgement

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements.

In the view of the Trustees in applying the accounting policies adopted, apart from the estimate listed below, 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. Judgements included in these accounts: the pension estimate in Note 15a.

3 DONATIONS, GIFTS AND LEGACIES

a)

b)

Individual Donations
Legacy
Gift Aid Claim On Subs & Donations
Service non-public funds
Individual Donations
Legacy
Gift Aid Reclaim On Subs & Donations
Service non-public funds		 Unrestricted
£
42,257
138,742
92,202
-
273,201
Unrestricted
£
30,360
-
(23,086)
-
7,274		 Restricted
£
-
-
-
-
-
Restricted
£
-
-
-
-
-		 2020
£
42,257
138,742
92,202
-
273,201
2019
£
30,360
-
(23,086)
-
7,274

Page: 17

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

4 NET INCOME FROM TRADING ACTIVITIES OF SUBSIDIARY (all unrestricted for current and prior year)

The Union Jack Club has one wholly owned subsidiary, The Union Jack Club (Trading) Limited, which operates the trading activity of the Club and gifts its taxable profit to the Club. A summary of the results of the subsidiary is shown below:

Turnover
Cost of sales
Gross profit
Administration expenses
Operating profit
Other income
Profit on Ordinary Activities before taxation
Tax on Profit on Ordinary Activities
Retained earnings brought forward
Gift Aid Distribution to The Union Jack Club
Retained earnings carried forward		 2020
£
440,101
(262,115)
177,986
(4,369)
173,617
105
173,722
-
598,914
(598,914)
173,722		 2019
£
1,485,695
(888,590)
597,105
(3,956)
593,149
5,765
598,914
-
563,526
(563,526)
598,914

The Union Jack Club's trading activities include an amount of £256,077 (2019 £865,324) for rent and other services charged by the Club to its subsidiary which is eliminated on consolidation. The group's trading activities consist of the turnover of the subsidiary as shown above. Expenditure of £266,484 (2019 £892,547) is also included which comprises cost of sales and administration expenses.

5 INVESTMENT INCOME (all unrestricted for current and prior year)

UK listed
Overseas listed
UK bank deposit interest
Total for the Group		 2020
£
59,378
24,710
84,088
1,629
85,718		 2019
£
41,172
78,480
119,652
5,885
125,537

Page: 18

THE UNION JACK CLUB

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

6
INCOMING RESOURCES FROM CHARITABLE ACTIVITIES
Subscriptions
Provision of residential services
Accommodation
Catering and bar sales		 2020
£
476,316
1,447,509
674,715
2,598,540		 2019
£
499,041
4,737,049
2,153,495
7,389,585

All of the above was unrestricted for the current and in the prior year.

7 INSURANCE CLAIM

2020 2019
£ £
12,653 14,149
12,653 14,149
2020
£		 2019
£		 2019
£
Other Income - Insurance Claim
8
RESOURCES EXPENDED
a)
EXPENDITURE ON RAISING FUNDS
2020
Trading activities
Fundraising and publicity
Investment management fees
Finance costs
Finance cost of pension liability
EXPENDITURE ON CHARITABLE ACTIVITES
Provision of membership and
residential services
Total Operating Expenditure
b)
EXPENDITURE ON RAISING FUNDS
2019
Trading activities
Fundraising and publicity
Investment management fees
Finance costs
Finance cost of pension liability
EXPENDITURE ON CHARITABLE ACTIVITES
Provision of membership and
residential services
Total Operating Expenditure
Including auditor remuneration of £8,598 (2019 £9,320)		 Staff
Costs
£
-
-
-
-
-
-
3,921,048
3,921,048
Staff
Costs
£
-
-
-
-
-
-
4,828,978
4,828,978		 Other
£
266,484
29,908
37,340
43,060
4,000
380,793
1,065,971
1,446,764
Other
£
892,546
96,413
35,277
102,662
5,800
1,132,698
1,819,956
2,952,654		 12,653
12,653		 14,149
14,149
Depreciation
£
-
-
-
-
-
-
803,109
803,109
Depreciation
£
-
-
-
-
-
-
788,788
788,788		 Total
2020
£
266,484
29,908
37,340
43,060
4,000
380,793
5,790,128
6,170,921
Total
2019
£
892,546
96,413
35,277
102,662
5,800
1,132,698
7,437,722
8,570,420

All of the above was unrestricted for the current and in the prior year.

Page: 19

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

c) ANALYSIS OF SUPPORT COSTS

Provision of membership and residential services includes support costs as follows:

Administration staff costs
Legal and other professional		 2020
£
629,488
47,414
676,902		 2019
£
720,032
40,194
760,226

Basis of allocation:

The above costs are fully allocated to the provision of membership and residential services.

d)
STAFF COSTS
Wages and salaries
Pension contributions
Employer's National Insurance Contributions
Termination Costs
Club staff costs
The number of employees receiving emoluments of £60,000
or more was as follows:
£60,001 - £70,000
£70,001 - £80,000
£90,001 - £100,00
£100,001 - £110,01
£150,001 - £160,000
£160,001 - £170,000		 2020
£
3,409,273
107,814
282,496
121,465
3,921,048
2020
No.
1
-
-
1
-
1
3		 2019
£
4,343,397
93,525
392,056
-
4,828,978
2019
No.
-
1
1
1
-
3

During the year, contributions to pension schemes totalled £20,150 in respect of two of the three higher paid employees (2019 - £19,375 in respect of two employees).

The average monthly number of employees during the year
was as follows:
Management and Administration
Union Jack Club staff		 2020
No.
8
145
153		 2019
No.
10
165
175

Note: On average 127 of the 153 employees were Permanent Staff (2019 - 128 of the 175 employees were Permanent staff)

e) TRUSTEES AND KEY MANAGEMENT PERSONNEL

No trustee received emoluments in the period (2019 - £NIL). Total travel expenses of 2020 - £1,077 (2019 - £2,278) were paid to 5 (2019 - 5) Trustees during the period.

Key management personnel included the Trustees, Chief Executive and senior staff reporting directly to the Chief Executive. The total emoluments of the Charity's key management personnel were £336,858 (2019 £382,387).

Page: 20

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

Charity

9 TANGIBLE FIXED ASSETS

TANGIBLE FIXED ASSETS
Group and Charity
Cost
At 1 January 2020
Additions
Disposals
Removal of fully depreciated assets
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
Disposals
Removal of fully depreciated assets
At 31 December 2020
Net Book Value
At 31 December 2020
At 31 December 2019		 Freehold
Land and
Buildings
£
6,855,561
360
-
-
6,855,921
4,409,781
190,153
-
-
4,599,934
2,255,987
2,445,780		 Furniture,
Fittings and
Equipment
£
6,220,158
89,193
(68,918)
(646,235)
5,594,198
2,785,637
612,956
(44,895)
(646,235)
2,707,463
2,886,735
3,434,520		 Total
£
13,075,719
89,553
(68,918)
(646,235)
12,450,120
7,195,418
803,109
(44,895)
(646,235)
7,307,398
5,142,722
5,880,300

Fixed assets held by the Union Jack Club are as detailed above.

Freehold land and buildings comprise the Union Jack Club's premises at 91 Waterloo Road, Gascoigne Room and Sandell Street. The Union Jack Club's premises were built as part of a redevelopment, completed in 1975, for which the Union Jack Club provided the site but paid only a small part of the building costs. These premises were revalued in 1975 at £3.9m and is being depreciated at £78,000 per year. It should be recognised that the value of the premises has substantially increased in value. The other costs represent additions since 1975. In accordance with the transitional arrangements of the original FRS 15, Tangible Fixed Assets, the valuation has not been updated.

Page: 21

THE UNION JACK CLUB

NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

10
FIXED ASSET INVESTMENTS
Group
Investments at market value:
At 1 January
Additions
Disposals
Net realised loss on disposal
Net unrealised investment gain ( loss)
Cash held by investment manager
At 31 December
Investments comprise:
UK equities and funds
Overseas equities
Cash held
Historical cost at 31 December
Club
As above
Investment in subsidiary undertaking		 2020
£
6,409,775
2,138,552
(2,274,275)
(80,395)
458,773
6,652,431
-
6,652,431
3,816,129
2,836,302
-
6,652,431
6,538,832
6,652,431
2
6,652,433		 2019
£
5,136,056
915,863
(460,680)
(8,973)
827,509
6,409,775
129,057
6,538,832
3,693,910
2,715,865
129,057
6,538,832
5,008,252
6,538,832
2
6,538,834
11
STOCKS
Brexit Stocks
Shop
Catering
Bar		 2020
2019
£
£
46,996
34,654
-
-
9,471
16,092
17,204
27,878
73,671
78,624
Charity		 2020
2019
£
£
46,996
34,654
13,131
16,715
9,471
16,092
17,204
27,878
86,802
95,340
Group		 2020
2019
£
£
46,996
34,654
13,131
16,715
9,471
16,092
17,204
27,878
86,802
95,340
Group
95,340

Page: 22

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

12
DEBTORS
Trade debtors
Amounts owed by subsidiary
Other debtors
Prepayments and accrued income
13
CREDITORS: Amounts falling due
within one year
Trade creditors
Amount owed to subsidiary
Other creditors
Other tax and social security creditors
Accruals and deferred income
14
CREDITORS: Amounts falling due
after one year
Barclays Business Loan - Short Term
Barclays Business Loan - Long Term		 2020
2019
£
£
1,631
93,572
693,675
-
165
20,298
186,034
269,537
881,504
383,407
2020
2019
£
£
54,418
269,865
-
539,036
2,043
6,584
233,527
420,817
239,366
1,249,191
529,353
2,485,494
2020
2019
£
£
91,976
-
1,408,024
1,500,000
-
Charity
Charity
Charity		 2020
2019
£
£
7,077
146,144
-
-
165
20,298
186,034
269,537
193,275
435,979
2020
2019
£
£
69,487
325,065
-
-
2,043
6,584
254,798
452,371
242,366
1,253,013
568,694
2,037,033
2020
2019
£
£
91,976
-
1,408,024
1,500,000
-
Group
Group
Group		 2020
2019
£
£
7,077
146,144
-
-
165
20,298
186,034
269,537
193,275
435,979
2020
2019
£
£
69,487
325,065
-
-
2,043
6,584
254,798
452,371
242,366
1,253,013
568,694
2,037,033
2020
2019
£
£
91,976
-
1,408,024
1,500,000
-
Group
Group
Group
-

15 PENSION PROVISION

a) Discretionary Pensions

Discretionary pensions have been granted to certain employees, which are paid by the Club directly. A provision Pension payments are charged against the provision which is re-assessed annually and any adjustment, including the liability arising on the granting of new pensions, is charged to the Statement of Financial Activities. In line with the requirements of FRS 102 SORP module 'Retirement and post-employment benefits', published details in respect of these liabilities are provided below. The key FRS 102 SORP module 'Retirement and post-employment benefits' assumptions used to value the liabilities are set out in the following table. The table also sets out the present value of the FRS 102 SORP module 'Retirement and post-employment' liabilities. This present value is equal to the gross pension liability.

Assumptions 2020 2019 2018
Price inflation 3.0% 3.0% 3.3%
Discount rate 0.9% 1.7% 2.5%
Pension increases 3.0% 3.0% 3.3%

As the pension group is too small to do any specific mortality investigations, standard tables (PA92) have been used with a typical adjustment to allow for membership characteristics and for future longevity improvements (medium cohort projection with a two year age adjustment).

Page: 23

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

15 PENSION PROVISION (Continued)

The gross pension liability under FRS 102 SORP module 'Retirement and post-employment benefits moved as follows during the year to 31 December 2020

Gross pension liability at start of year
Pensions paid
Interest on gross pension liability
Actuarial gain		 2020
£
(242,800)
20,700
(4,000)
(15,800)
(241,900)		 2019
£
(241,100)
19,800
(5,800)
(15,700)
(242,800)

The following amounts are included as (charges)/credits in the Statement of Financial Activities:

Past service cost
Interest on gross pension liability
Actuarial gain		 -
(4,000)
(15,800)		 -
(5,800)
(15,700)

Other Pension Arrangements

The Union Jack Club commenced paying defined contributions towards stakeholder pension schemes for certain existing employees from 1 June 2001. The annual cost is expensed in the statement of financial activities.

The Union Jack Club also contributes to money purchase schemes for senior management. Contributions are determined after consulting the Club's independent pension advisers.

The Union Jack Club provides the contributory pension scheme for all employees. At the end of 2020 there were 74 employees in the scheme. The Club contributed 3% and the employee 5% of the employee's salary. The remainder of employees decided to opt out of the scheme. The annual cost is expensed in the statement of financial activities.

Page: 24

THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2020

16 MOVEMENT ON RESERVES

At 1 January 2020
Surplus / (Deficit) for the year
Net Gains and transfers
Utilisation of funds
At 31 December 2020		 Revaluation
Reserve
£
1,869,523
-
(25,526)
-
1,843,997		 Income and
Expenditure
Reserve
£
4,104,536
(1,683,662)
908,941
-
3,329,815		 Fixed Asset
Designated
Fund
£
5,412,301
-
(659,579)
-
4,752,722		 Infrastructure
Fund
Total
£
£
1,000,000
12,386,360
-
(1,683,662)
138,742
362,578
-
-
1,138,742
11,065,276

Included in the income and expenditure reserve is a pension liability of £241,900 (2019 £242,800 )

Net gains and transfers represents the actuarial gain / (loss) on pension liabilities, realised and unrealised gains / (losses) on investments and any transfers to / from designated funds. It also includes a transfer between the revaluation reserve and the income and expenditure reserve of £78,000 which is the difference between the depreciation on the historic cost (£Nil) and the revalued amount (£3.9 million), of freehold buildings completed in 1975. The depreciation rate is 2% straight line.

In 2014 Trustees made the decision to formally recognise the monies tied up in the tangible fixed assets of the charity as a designated fund, to make it clear to the reader of the accounts that this money is not freely expendable on the Charity's activities. A transfer was made from unrestricted general funds to reflect this.

The Tangible Fixed Assets designated fund is utilised over the lifetime of the assets.

In 2018 the Trustees made the decision to cover any forthcoming major repairs externally or internally to the building by creating a major repair fund. In 2019 the Trustees decided to retitle the fund as Infrastructure fund which was utilised during the year to develop the front entrance and reception. The Trustees have decided to continue the £1,000,000 infrastructure fund which was established in the 2019 accounts, to which they also have added the legacy of £138,742 which will be specifically utilised for the refurbishment of the Gascoigne room.

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THE UNION JACK CLUB NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 31 DECEMBER 2020

17 ANALYSIS OF NET ASSETS BY FUND

a)
2020
Tangible fixed assets
Investments
Net assets
Debtors > One Year
Creditors > One Year
b)
2019
Tangible fixed assets
Investments
Net assets
Debtors > One Year
Creditors > One Year		 Revaluation
Reserve
£
390,000
1,453,997
-
-
-
1,843,997
Revaluation
Reserve
£
468,000
1,401,523
-
-
-
1,869,523		 Income and
Expenditure
Reserve
£
-
4,059,692
1,012,023
-
(1,741,900)
3,329,815
Income and
Expenditure
Reserve
£
-
4,137,309
210,027
-
(242,800)
4,104,536		 Infrastructure
Fund
£
-
1,138,742
-
-
-
1,138,742
External
Repair
Fund
£
-
1,000,000
-
-
-
1,000,000		 Fixed Asset
Designated
Fund
£
4,752,722
-
-
-
-
4,752,722
Fixed Asset
Designated
Fund
£
5,412,301
-
-
-
-
5,412,301		 2020
Total
£
5,142,722
6,652,431
1,012,023
-
(1,741,900)
11,065,276
2019
Total
£
5,880,301
6,538,832
210,027
-
(242,800)
12,386,360

18 COMMITMENTS

The total capital commitments contracted for at the balance sheet date but not provided for in these financial statements were £185,646 in respect of Cold Water Tanks, Lift 5,6,7 works, CCTV upgrade and New Website. (2019 - £nil).

19 OPERATING LEASE COMMITMENTS

OPERATING LEASE COMMITMENTS
The charity had annual operating lease commitments as follows: 2020 2019
Within 1 year 10,213 10,213
Between 1 and 5 years 4,256 13,618

20 RELATED PARTY TRANSACTIONS

Accommodation sales between UJC and UJCT during the year were £61,890 (2019 £192,875). Room Hire sales between UJC and UJCT during the year were £ 124,797 (2019 £379,073). Food sales between UJC and UJCT during the year were £53,399 (2019 £181,192). Liquor sales between UJC and UJCT during the year were £15,991 (2019 £112,183).

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