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2020-12-31-accounts

Charity Registration No. 226684

Company Registration No. 00034118 (England and Wales)

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

LEGAL AND ADMINISTRATIVE INFORMATION

Council Members Rear Admiral A R Rymer CEng
(Chairman)
Colonel C E H Ackroyd TD RD DL
(Vice Chairman)
Mr A J Cobb FCiH
Commander A E Mizen RN
Mrs A C Rodgers FCA
Mr I H Currie FCA
Mr D J Foster FCA
Commander J F J Simpson RN
Commander S J Snowball RN
Chief Executive Officer Commander P C Keefe RN
Secretary Commander P C Keefe RN
Charity number 226684
Company number 00034118
Principal address 1 Shakespeare Terrace
126 High Street
Portsmouth
Hampshire
PO1 2RH
Registered office 1 Shakespeare Terrace
126 High Street
Portsmouth
Hampshire
PO1 2RH
Auditor Jones Avens Limited
Piper House
4 Dukes Court
Bognor Road
Chichester
West Sussex
PO19 8FX
Bankers Lloyds Bank Plc
38 London Road
North End
Portsmouth
Hampshire
PO2 0LR

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

LEGAL AND ADMINISTRATIVE INFORMATION

Solicitors

Blake Morgan LLP Harbour Court Compass Road North Harbour Portsmouth Hampshire PO6 4ST

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

CONTENTS

Page
Council Members' report 1 - 8
Statement of Council members' responsibilities 9
Independent auditor's report 10 - 12
Statement of financial activities 13
Balance sheet 14
Statement of cash flows 15
Notes to the financial statements 16 - 31

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

The Council members present their report and financial statements for the year ended 31 December 2020.

The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the charity's Articles of Association, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)”.

Objectives and activities

The Church of England Soldiers', Sailors' & Airmen's Clubs (short title: CESSAC) originated in Aldershot in 1857 to provide an alcohol-free, non-proselytising home-from-home for soldiers. Its founding precept (circa 1881) included its intention: "to provide for the Nation's soldiers, places where they can resort and find rest and healthy recreation and where they can associate on terms of friendly intercourse". The success of the original facility resulted in many others being opened over the years (and many closing again to match changing demand). Apart from the fact that the charity’s reach has extended to cover sailors and then airmen, that precept remains as true today. CESSAC's principal aims are still, therefore, the operation of homely, welcoming amenity centres at military bases in support of the Armed Forces and the promotion of the latter’s efficiency. At 31 December 2020, there were 8 such centres, 4 in one group (all in Cyprus) and another group with 3 in UK and one in the Falklands.

Other aims were added in the 1970s; to relieve persons who have served in H.M. Forces and the dependants of such persons as are in need of assistance including the provision and management of housing. This enabled CESSAC to contribute to the establishment of CESSA Housing Association Limited (CESSA HA), a separate charitable organisation that owns and operates sheltered housing for elderly ex-Service people, their spouses, widows, widowers and immediate relatives. CESSAC has since provided grants to CESSA HA and other eligible charities in furtherance of this aim.

CESSAC still shares its Head Office and some staff with CESSA HA, although both organisations have their own Boards and operate independently. The latter is accountable to the Regulator of Social Housing and the Financial Conduct Authority. The relationship with CESSA HA resulted in CESSAC entering into an agreement with Greenwich Hospital, a Crown Royal Navy Charity, to manage its sheltered housing (GHSH) for former members of the Naval Service in the 1980s. Although reviewed regularly, this symbiotic relationship continues to this day, providing advantages for all parties.

CESSAC is a founder member (1939) of the Council for Voluntary Welfare Work (CVWW), which enables it to operate in Armed Forces establishments at home and abroad under a charter with the Ministry of Defence (MoD). The Charter between the MoD and CVWW recognises that the amenity centres provided by member organisations require a certain amount of primary trading in order to be sustainable. The income received is therefore one indicator of whether the centres are being used by the beneficiaries and hence meeting their welfare needs. However, there are many factors outside the charity’s control, particularly changes in the number of Service personnel present in any location, and just because a centre operates at a loss does not mean it is not needed. For this reason, the current and anticipated use of each centre is regularly reviewed against the perceived benefit being provided in an attempt to best match the running costs across all of them with the likely income overall. Thus a loss-making centre perceived to be meeting a particular welfare need can be supported financially by surpluses generated elsewhere. This is detailed in a separate Impact Statement focussed on the charity’s stakeholders, visible on its website. The current aim is that CESSAC’s proportion of Head Office costs are funded by income on investments and from other sources. Major improvements/repairs are paid for from the growth in the capital value of the investments.

The Council members have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake. The beneficiaries and the respective public benefits are detailed separately at the end of this report under each of the 4 registered objects. The Council members completed a strategic review in 2015 from which they confirmed that the objects (see page 7) did not need to be revised and established clear priorities for the subsequent detailed business plans.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Due to the nature of CESSAC and its objects, its activities have already been described above; mainly the operation of its amenity centres (for objects i & iii) and ongoing support to CESSA HA and GHSH (object ii), as well as other eligible charities. Significant grants are only made when funds permit (but smaller grants for objects ii, iii & iv are made annually – see Note 9). While CESSAC welcomes volunteers, particularly in places like the Falklands, the nature of its work generally results in reliance on paid staff.

In 2012 the charity loaned CESSA HA £520,000 at an interest rate of 2.5% (renewed in 2017 for a further 3 years) that enabled the latter to save money by redeeming its expensive mortgages (taken out when rates were over 10%). This arrangement also provided a better income for the charity than was available from its deposit accounts. Accordingly, the remaining balance of this beneficial loan was recorded as a Designated Fund (Note 24). Following the latest review of the terms of the loan which took place in April 2020, CESSA HA decided to repay the loan in full during the year ended 31 December 2020, which was noted to be beneficial for both entities.

Achievements and performance

General . CESSAC operates primarily in the “hospitality sector” which has taken a very significant hit in most countries as a result of restrictions imposed to manage the Coronavirus pandemic. Our head office team and area managers responded magnificently, quickly assessing the potential impact on demand and the effects of developing government restrictions in different territories on our ability to operate. They also conscientiously assessed the opportunities to protect our future output and reduce the impact on our staff by taking advantage of emerging, complex, government support mechanisms. CESSAC quickly established regular Board briefings to provide both assurance and effective decision-making in response to a fast changing, and potentially critical situation.

Inevitably, CESSAC’s charitable output has been significantly reduced by a combination of the following factors: periods when centres were closed; only able to offer a take-away service; or operating with restricted capacity. Only the UK Government provided grants via the charity (mainly for those ‘furloughed’), whereas staff ‘suspended’ in Cyprus could claim a reduced benefit individually (when eligible), depending on their Social Insurance contribution record. These differences are therefore reflected in the accounts, bolstering the turnover in UK. The impact on operations in our centres is covered below.

The Board would like to record its appreciation of the highly professional and innovative response of our top team and managers. In unprecedented times the impact on our bottom line has been limited enabling CESSAC to sustain a position from which it can respond swiftly as demand returns to “normal”. The Board is also most grateful for the understanding and commitment of all staff, who in many respects have borne the brunt, personally, of national restrictions on their work and their income, with varying degrees of government support.

Perhaps unsurprisingly, there were no developments about the hoped-for cafe at RAF Cosford in 2020. More positively, staff started exploring whether CESSAC might open a centre on Thorney Island and have been approached by RAF Scampton. CESSAC will continue to pursue these potential opportunities and others that may arise as we emerge from the pandemic.

Other work focussing on our charitable output and future plans continued. The Welfare Amenity Committee (WAC) undertook its annual review of centre performance, confirming the continued relevance and charitable output of all of them. CEO continues to represent CESSAC at meetings of CVWW and Cobseo, the Confederation of Service Charities. These provide invaluable information, insight and opportunities to work with other charities. The WAC & Council undertook their biennial review of strategy this year, concluding that there was no need for radical changes and assessing that beneficiary use would return to more normal levels once permitted. The review encompassed the policies on reserves and investments. Council also agreed a document formally recording the charity’s relationship with the charitable Housing Association it helped establish, as recommended in the Charity Commission’s guidance on the relationship between charities and non-charities.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Centres in the Falklands and UK . These are straightforward coffee shops or cafes providing a homely and welcoming environment for Service personnel and their families, often adjacent to recreational facilities and/or the chaplaincy. Accordingly, each has a relatively modest turnover (all under £100K) with the Falklands and Blandford the highest. The Falklands has been much more insulated from the pandemic, but although the Oasis never closed there were several months when a take-away service was all that could be offered. This restriction inevitably reduced the use and turnover, but some costs were also saved. However, there have been a number of other challenges, starting with the authorities stating in January that the agreement for CESSAC to stay wouldn’t be renewed when it ran out on 30 June. After considerable effort from Head Office (including a fortuitously-timed visit from the Director of Operations) a 6-month extension was granted and then a further 12-month one until the end of 2021. In UK, Blandford, Colchester & Woodbridge have spent long and different periods closed this year, Colchester suffering particularly after the area was placed in the then ‘tier 2’ restrictions. All closed again for the second lockdown on 5 November and, given the revised Government tier 2 restrictions that applied to all from 2 December, they did not re-open before the end of the year.

Centres in Cyprus . Unlike the other centres, all four of CESSAC’s locations in Cyprus include shops selling a permitted variety of often UK-sourced goods difficult to otherwise obtain. The rise of internet shopping has continued to reduce turnover in shops, which resulted in an aspiration to reduce costs by bringing the shops into the cafes wherever possible. This had long been the case at Nicosia but was implemented successfully in Akrotiri last year as previously reported. In 2020, this was achieved at Dhekelia by recommissioning the long-hidden double-door between the two halves of the building, and unexpectedly completed at Episkopi for the reason that follows. The year started spectacularly badly with a big storm that blew-away the new beach kiosk at Dhekelia and damaged the café at Episkopi beyond economic repair. An insurance payment of €5.5k for the kiosk was only received in January 2021 and it is now planned to replace it. Fortunately, Episkopi station staff offered a new location where the café & shop could be combined. The latter took some time and effort, compounded by lockdowns, so it was perhaps fortunate the Team Leader’s position happened to have been vacant since December 2019 (and remains so). Due to the pandemic, the Cypriot Government required all the centres to close from March and to re-open in June, and sometimes since only to operate a take-away service. The extended closure inevitably meant a significant amount of time-limited stock had to be written off. Fortunately, the Area Manager made most of this available to the beneficiaries & staff, generating a significant number of donations to the charity, including for many Easter eggs taken by stations for distribution as a welfare gesture to families.

In the second-half of the year, the ongoing and varying restrictions constrained the ability of beneficiaries to make use of the centres, so the number of trading hours were therefore reduced to cut costs. Most staff have been retained, albeit sadly on lower pay, but it has been necessary at Dhekelia to adopt a 5-day week for the winter (it was normally 7) so 5 staff had to leave in November. Towards the end of the year, the Team Leader at Dhekelia also departed, further increasing the load on the Area Manager. In a potentially positive development at Nicosia, CESSAC continues to explore a potential change of Centre location, but the pandemic has stalled progress.

All four centres remain well supported by the Command chain and valued by the thousands of UK Service personnel and their families, but understandably generated much less income (and expenditure) due to the pandemic. Similarly, there was much less call for donations to support the community, which were a fraction of normal (Note 9). The pandemic prevented a fair being organised this year.

Ex-Service personnel & their families . CESSAC has continued to enable CESSA HA to make savings through sharing a Head Office and staff and managing 91 sheltered flats at three sites on behalf of Greenwich Hospital. It normally funds an annual Christmas meal for the tenants of all CESSA HA schemes, but these could not be held due to the Covid-19 restrictions. Instead, it funded vouchers to the same value at a cost of £3,680 (see Note 9).

Fundraising . CESSAC does not undertake fundraising from the public itself and its Collection Boxes were introduced into locations to underline the point that it is a charity. Unsurprisingly, they have not generated much this year.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Investment performance . The investment elements have performed well from a historical perspective as well as generating invaluable income – this year £99,527, mainly from Armed Forces Charities Growth & Interest Fund (AFCGIF) distribution units. The fall in income has been mainly caused by the reduction in dividend payments, but this should be temporary. Despite the initial fall early in the pandemic, CESSAC’s investments performed well increasing by £115,471.

Financial review

The results for the year are set out on page 13. It is clearly sad that the net movement in funds shows a loss of £46,814, but is unsurprising given the constrained trading due to the restrictions, and thankfully it is offset by the rise on investments already mentioned. It also includes a gain on exchange of £11,716. Therefore, the actual operating position showed a loss of £174,001, which is only £32k worse than 2019.

Head Office has continued to play its part in keeping costs down and supporting all the operations and governance. This is illustrated at Note 10, where it can be seen that support costs are low and the overall net costs are considered fully justified in support of CESSAC's charitable objectives. The Council, through the WAC, keeps a close check on the operating position.

Reserves policy

The reserves policy is reviewed annually and in 2020 operational reserves were maintained at 9 months’ of turnover, £1,020,000, to cover the number of centres and dispersion of cash between different banks/ currencies. Other reserves are maintained to fund repairs/improvements of the Clubs and/or make donations in furtherance of the charity’s aims (see Note 24). However, since the trading income alone has been insufficient to fund centre operations for some years, the charity expects to continue to use income from investments to enable the charitable output to continue.

Investment policy . The Council members ensure that the capital held by CESSAC is invested prudently and conservatively over the long term for the ultimate benefit of meeting its objectives. Their policy is to increase both capital and income from the investments over the long term. The reserves are invested across a number of financial institutions; the greater part is in AFCGIF units, currently managed by BlackRock, with most of the rest in a Charles Stanley discretionary managed portfolio at medium low risk. The remainder is in a Virgin Money Charity Deposit Account. Following the review of strategy, in discussion with Charles Stanley, it was agreed that the target for annual payments, from the total-return approach adopted, should be increased from £35k to £45k. This should still enable the portfolio to maintain value against inflation while replacing the interest payments due previously on the now-repaid mixed-purpose loan.

Principal Risks and Uncertainties

The Council has taken a risk-based approach to internal controls, including directing members to undertake internal auditing. The most significant risks to the charity relate to investments, since little capital is tied up in any individual centre. The Council follows a policy of spreading these at medium to low risk as described in the Investment Policy, reviews their performance at every opportunity and has an Investment Panel to oversee the investment environment between meetings. Before the arrival of the Coronavirus pandemic, the Council members had assessed the major risks to which the charity is exposed, and were satisfied that systems are in place to mitigate exposure to them. Although (like with most organisations) a pandemic of such scale had not previously been considered a risk, no obvious measures in advance could have mitigated the immediate effects. The charity will resume serving its beneficiaries once the restrictions on both it and them have been lifted. The financial impact will depend on the duration of the enforced closures.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Over the charity’s 130 years since incorporation, it has usually been alterations in the Armed Forces that have both presented new opportunities and/or caused existing centres to close. It is for this reason that most current centres have not received significant capital and are developed with the assistance of the relevant establishment and funding sought from other sources. Therefore, the success or failure of individual centres is unlikely to present a significant risk. The UK Government completed a Defence & Security review in March 2021, which does not appear to have any obvious direct effects.

Withdrawal from any centre is considered if sustained losses there cannot be justified by the assessed charitable benefit in that location, but otherwise service is maintained as long as the overall performance of the charity is satisfactory. Loss of the Greenwich Hospital contract would deprive the charity of some income and the economies inherent in shared facilities. This is mitigated by demonstrating the efficiency and added value provided to the management of the sheltered housing. The risk policy is regularly reviewed and the register is maintained in a detailed matrix. A clear system is operated to ensure that every risk is reviewed either by Council or WAC at least annually.

2021 & Plans for the future

Events since 31 December 2020 and the date these accounts are approved are covered in Note 25, so are not repeated here. CESSAC operates in a number of countries and the effect of the pandemic has differed in each. Similarly, the public-health restrictions imposed by the respective Governments have not been the same. Accordingly, uncertainty about how Covid-19 will affect the rest of 2021 and thereafter differs by country also.

In UK, the long lockdown appears to have been sufficiently well-observed to reduce transmission, plus the extensive vaccination programme and the take-up rate should enable UK to follow the published roadmap. Therefore, after a period of partial opening and then a normal summer hiatus, UK centres might return to normal trading in September, when the financial support is due to end. Meanwhile, efforts will continue to explore potential new centres at Thorney Island and RAFs Cosford and Scampton.

The situation in Cyprus is much less positive, with increasing rates of infection, lower compliance with lockdown, less vaccination and with no Government financial support for CESSAC. The longer any restrictions remain in place in Cyprus, the greater the losses that will be generated. Some improvement work is intended in Cyprus if trading conditions/cash flow permits, including a new beach kiosk at Dhekelia.

Long term, Service personnel should be less affected by the economic consequences and so it is felt that CESSAC’s facilities should resume their welfare role for beneficiaries in its isolated locations, once the restrictions have abated. This was illustrated in Cyprus last autumn where the cafes were full (allowing for social distancing) as soon as restrictions were temporarily lifted.

Going Concern

The only element of funding that was restricted is from 2019, which is the balance of some money contributed by the station at Akrotiri towards some work there. Rolling forecasts are maintained for both cash-flow and income & expenditure, both of which currently predict a better year ahead than 2020. The Council firmly believes the charity remains a going concern, since the likely rate of loss should be containable for significantly more than 12 months and centres should be ready to start operating again soon after restrictions are lifted.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Structure, governance and management

CESSAC is a charity (No. 226684) and a company limited by guarantee and not having share capital, registered in England (No. 00034118). It does not trade for profit, is exempt from Corporation Tax and is VATregistered. (No. 675 8276 83). Its Memorandum and Articles of Association govern the charitable company, including the appointment and reappointment of its members of Council.

CESSAC is governed by the Council, which met 5 times in 2020 (4 times via Microsoft Teams due to the pandemic) with 94% attendance. The WAC meets three times a year and reports its activities at the next Council meeting and seeks approval for any strategic decisions. The Council and WAC are assisted in their responsibilities by the Chief Executive Officer (CEO) who manages the operations and personnel.

None of the Council members has any beneficial interest in the company. All of the Council members are members of the company (except Mrs Rodgers, who is co-opted) and guarantee to contribute £1 in the event of a winding up. Trustees indemnity insurance up to £500K is provided as part of a portfolio of policies.

The Council members, who are also the directors for the purpose of company law, and who served during the year were:

Rear Admiral A R Rymer CEng (Chairman) Colonel C E H Ackroyd TD RD DL (Vice Chairman) Mr A J Cobb FCiH Air Commodore D J Hamilton-Rump RAF (Resigned 24 June 2020) Commander A E Mizen RN Mrs A C Rodgers FCA Mr I H Currie FCA Mr D J Foster FCA Commander J F J Simpson RN Commander S J Snowball RN

Advertisements are made to attract potential members/trustees, whose applications are then considered by the Council. Those selected as members are eligible to sit on committees and vote at general meetings. Potential trustees are invited to an informal meeting with the Chairman. This is followed by a brief from the CEO and an invitation to attend the next Council meeting as an observer. A formal invitation to join the Council will follow if both parties agree, followed by induction conducted by the CEO. New trustees are co-opted until election is considered at the next AGM. Training is offered regularly and the Council reviews Charity Commission e-mails, Governance & Leadership/Charity Finance magazines and other material to keep up to date.

The Charity Governance Code. Performance against the Charity Code of Governance 2017 and the Cobseo aide-memoire have been assessed, and the updated version issued in late 2020 is being studied. The organisation met all criteria, save for one or two relating to Equality and Diversity, which history and recruitment opportunities render difficult for us to achieve, notwithstanding a stated Policy in this area, applied across the organisation. Subject to the usual ebb and flow of representation in a relatively small organisation, gender balance overall has been satisfactory. However, an underlying requirement for military experience, and the need to maintain a range of skills and qualifications against low turnover, together with some geographical restrictions, have limited the available field from which minority involvement in governance matters can be drawn. In order to maximise the opportunity for minority participation in future, recruitment criteria, advertising and procedures will be reviewed.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Remuneration policy. All of the members are unpaid volunteers. The overall purpose of remuneration policy for the staff at all levels, together with their terms and conditions of service, is to attract and retain those with appropriate skills, experience and competencies who are committed to delivering the relevant charitable work and purposes. Although CESSAC does not engage in substantive levels of fundraising or voluntary work, the esteem and value derived from working in the charitable sector are noted, as recommended. With a principal aim of fairness and no overriding factors, save for affordability, the following will be taken into account when deciding remuneration:

Relationships . CESSAC shares a common root with the Aldershot Church of England Services Trust, and three of the former’s members are appointed as trustees for the latter. CEO is CESSAC's trustee for CVWW.

Asset cover for funds

The charity has no significant restricted funds and therefore no analysis of funds is given in the notes.

Registered charitable objects

The objects for which the Charity is established are below in ‘inverted commas’, each followed by a summary of the benefits delivered to the respective beneficiaries:

(i) ‘To open, carry on, establish and maintain Church of England Soldiers', Sailors' & Airmen's Clubs or Centres in military stations and other places at home and abroad, and to assist local or other efforts to open, carry on, establish and maintain such clubs or centres’. The aim remains to provide homely facilities for serving personnel and/or their families. The benefit they derive from the centres is amply demonstrated by their use and the strength of support from the chain of command.

(ii) ‘To further the religious and charitable work of the Church of England amongst those serving in H.M. Forces’. This is achieved by working with Service Chaplains wherever possible, without impinging on the non-religious nature of the centres. It includes offering a grant to help Service-sponsored ordinands (Note 9).

(iii) ‘To relieve persons who have served in H.M. Forces and the dependants of such persons as are in need of assistance including the provision and management of housing’. This aim is clear and currently largely, but not exclusively, delivered through the assistance provided to CESSA Housing Association & GHSH.

(iv) ‘To promote the efficiency of H.M. Forces by the provision of facilities and equipment for educational, recreation and leisure pursuits for those serving in H.M. Forces, whether at Church of England Soldiers', Sailors' & Airmen's Clubs or Centres or elsewhere and whether at home or abroad’. This is a recognised broad Object to enable a wide range of support to be provided for the benefit of serving personnel as needs arise. The level of the losses over recent years has meant that this aim is currently supported by a number of small grants to other organisations, listed for Cyprus at Note 9.

Auditor

In accordance with the charity's articles, a resolution proposing that Jones Avens Limited be reappointed as auditor of the charity will be put at a General Meeting.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

COUNCIL MEMBERS' REPORT (CONTINUED)(INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2020

Disclosure of information to auditor

Each of the Council members has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

The Council members' report was approved by the Board of Council Members.

..............................

Rear Admiral A R Rymer CEng (Chairman) Council Member Dated: .........................

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

STATEMENT OF COUNCIL MEMBERS' RESPONSIBILITIES

FOR THE YEAR ENDED 31 DECEMBER 2020

The Council members, who are also the directors of Church of England Soldiers', Sailors' & Airmen's Clubs for the purpose of company law, are responsible for preparing the Council Members' Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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

In preparing these accounts, the Council members are required to:

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

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

INDEPENDENT AUDITOR'S REPORT

TO THE COUNCIL MEMBERS OF CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

Opinion

We have audited the accounts of Church of England Soldiers', Sailors' & Airmen's Clubs (the ‘charity’) for the year ended 31 December 2020 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and the notes to the accounts, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 the accounts section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard, and the provisions available for audits of small entities, in the circumstances set out in note 22 to the accounts, 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 Council members' 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 Council members 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 accounts and our auditor’s report thereon. The Council members are responsible for the other information. Our opinion on the accounts does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts 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 accounts 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.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE COUNCIL MEMBERS OF CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

Matters on which we are required to report by exception

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

Responsibilities of Council members

As explained more fully in the statement of Council members' responsibilities, the Council members, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Council members 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 Council members 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 Council members either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

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.

Identification and assessment of irregularities including fraud

As part of our approach to identifying and assessing the risks of material misstatement in respect of irregularities we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the charitable company, including The Companies Act 2006 and The Charities Act 2011.

We also made appropriate enquiries of management as well as considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE COUNCIL MEMBERS OF CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

Audit response to risks of irregularities including fraud

In addressing the identified risk, our procedures included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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

Claire Norwood BSc FCA ATII (Senior Statutory Auditor) for and on behalf of Jones Avens Limited

.........................

Chartered Accountants Statutory Auditor

Piper House 4 Dukes Court Bognor Road Chichester West Sussex PO19 8FX

Jones Avens Limited is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under of section 1212 of the Companies Act 2006.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Unrestricted
funds funds
2020 2019
Notes £ £
Income and endowments from:
Voluntary income 3 55,710 5,685
Charitable activities 4 558,331 1,188,390
Investments 5 99,527 110,894
Other income 6 92,448 88,074
Total income 806,016 1,393,043
Expenditure on:
Raising funds 7 6,156 4,597
Charitable activities 8 973,861 1,530,428
Total resources expended 980,017 1,535,025
Net operating deficit (174,001) (141,982)
Net gains/(losses) on investments 13 115,471 343,470
Net (outgoing)/incoming resources (58,530) 201,488
Other recognised gains and losses
Other gains or losses 15 11,716 (13,909)
Net movement in funds (46,814) 187,579
Fund balances at 1 January 3,655,117 3,467,538
Fund balances at 31 December 3,608,303 3,655,117

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

All income and expenditure derive from continuing activities.

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

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

BALANCE SHEET

AS AT 31 DECEMBER 2020

Notes
Fixed assets
Tangible assets
16
Investments
17
Current assets
Stocks
19
Debtors
20
Cash at bank and in hand
Creditors: amounts falling due within
one year
21
Net current assets
Total assets less current liabilities
Income funds
Unrestricted funds
Designated funds
24		 2020
£
£
82,553
3,005,496
3,088,049
130,278
49,638
436,978
616,894
(96,640)
520,254
3,608,303
3,608,303
3,608,303
3,608,303		 2019
£
£
88,176
3,212,014
3,300,190
153,475
38,724
299,226
491,425
(136,498)
354,927
3,655,117
3,655,117
3,655,117
3,655,117		 2019
£
£
88,176
3,212,014
3,300,190
153,475
38,724
299,226
491,425
(136,498)
354,927
3,655,117
3,655,117
3,655,117
3,655,117
3,300,190
354,927
3,655,117
3,655,117
3,655,117

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 December 2020, although an audit has been carried out under section 144 of the Charities Act 2011.

The Council members are responsible for ensuring that the charity keeps accounting records which comply with section 386 of the Act and for preparing accounts which give a true and fair view of the state of affairs of the company as at the end of the financial year and of its incoming resources and application of resources, including its income and expenditure, for the financial year in accordance with the requirements of sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to accounts, so far as applicable to the company.

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

The accounts were approved by the Council Members on .........................

.............................. .............................. Rear Admiral A R Rymer CEng (Chairman) Commander J F J Simpson RN Trustee Trustee

Company Registration No. 00034118

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

Notes
Cash flows from operating activities
Cash absorbed by operations
27
Investing activities
Purchase of tangible fixed assets
Proceeds on disposal of tangible fixed
assets
Repayment of investment loans and
receivables
Purchase of investments
Proceeds on disposal of investments
Interest received
Net cash generated from investing
activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
Cash and cash equivalents at end of year		 2020
2019
£
£
£
£
(271,134)
(157,459)
(10,015)
(32,084)
247
500
284,125
32,094
(40,000)
(103,579)
77,864
113,408
99,527
110,894
411,748
121,233
-
-
140,614
(36,226)
299,226
338,586
(2,862)
(3,134)
436,978
299,226

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

Charity information

Church of England Soldiers', Sailors' & Airmen's Clubs is a private company limited by guarantee incorporated in England and Wales. The registered office is 1 Shakespeare Terrace, 126 High Street, Portsmouth, Hampshire, PO1 2RH.

1.1 Accounting convention

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

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

The accounts have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the Council members have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Council members continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

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

Designated funds comprise funds which have been set aside at the discretion of the Council members for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.

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

1.4 Incoming resources

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

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Income from government and other grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

1 Accounting policies

(Continued)

Income from charitable trading activities principally represents retail sales and other income in CESSAC's Services Centre in Cyprus and at CESSAC Centres in the UK and elsewhere with other operating income arising from fees for managing sheltered lettings, owned by other charitable bodies, for ex-members of HM Forces and their spouses.

1.5 Resources expended

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

Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back office costs, finance, personnel, payroll and governance costs which support the charity's activities. These costs have been allocated between cost of raising funds and expenditure on charitable activities. The bases on which support costs have been allocated are set out in note 10.

1.6 Tangible fixed assets

Tangible fixed assets are measured at cost net of depreciation and any impairment losses.

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

Land and buildings 2% straight line basis Leasehold properties Cyprus improvements 10% straight line basis Furniture, fittings & equipment 10 - 25% straight line basis Vehicles 20% straight line basis

Freehold land is not depreciated.

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

1.7 Fixed asset investments

Listed investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in income and expenditure. Transaction costs are expensed to income and expenditure as incurred.

The fixed asset investment loan is initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investment is assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in income and expenditure.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

1 Accounting policies

(Continued)

1.8 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). No such indications were noted.

1.9 Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost.

1.10 Cash and cash equivalents

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

1.11 Financial instruments

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

Financial instruments are recognised when the charity becomes party to the contractual provisions of the instrument.

Basic financial assets

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

Other financial assets

Other financial assets, including investments in equity instruments are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in net income/(expenditure), except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through income and expenditure, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.

If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in net income/(expenditure) for the year.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

1 Accounting policies

(Continued)

Derecognition of financial assets

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

Basic financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in or in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Derecognition of financial liabilities

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

1.12 Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

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

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

1.13 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14 Leases

Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.

1.15 Foreign exchange

Transactions denominated in foreign currencies are recorded at the rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. All differences are included in net outgoing resources.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

1 Accounting policies

(Continued)

1.16 Taxation

CESSAC is a registered charity and is not subject to taxation on income. Any income tax recovered on investment income and covenanted subscriptions is included with the respective income.

1.17 Government Grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover, including the Coronavirus Job Retention Scheme and other Coronavirus related support are recognised as income over the periods when the related costs are incurred.

2 Critical accounting estimates and judgements

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

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

3 Voluntary income

Unrestricted Unrestricted
funds funds
2020 2019
£ £
Donations and gifts 198 5,685
Government grants 55,512 -
55,710 5,685
Government grants received
Coronavirus Job Retention Scheme grant 51,532 -
Discretionary Covid-19 grants 3,980 -
55,512 -

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

4 Charitable activities

Supporting HM
Forces in the
UK and
overseas
Centres in
Cyprus
supporting HM
Forces
overseas
2020
2020
£
£
Sales within charitable
activities
91,939
452,940
Other income
8,476
4,976
100,415
457,916		 Total
2020
Supporting HM
Forces in the
UK and
overseas
Centres in
Cyprus
supporting HM
Forces
overseas
2019
2019
£
£
£
544,879
236,165
952,225
13,452
-
-
558,331
236,165
952,225		 Total
2019
£
1,188,390
-
1,188,390

Charitable trading income

Incoming resources derive from UK and overseas activities plus income from charitable trading activites deriving from CESSAC Centres in Cyprus supporting HM Forces overseas.

5 Investments

Unrestricted Unrestricted
funds funds
2020 2019
£ £
Income from listed investments 96,166 102,444
Interest receivable 3,361 8,450
99,527 110,894

6 Other income

Unrestricted Unrestricted
funds funds
2020 2019
£ £
Net gain on disposal of tangible fixed assets 247 (1,124)
Management fees and office rent 92,201 89,198
92,448 88,074

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

7 Raising funds

Investment management
Charitable activities
Supporting
HM Forces
in the UK
and
overseas
Centres in
Cyprus
supporting
HM Forces
overseas
2020
2020
£
£
Staff costs
142,002
216,604
Depreciation and
impairment
4,754
14,260
Cost of supplies
34,233
222,235
Operating costs
32,252
143,870
213,241
596,969
Grant funding of activities
(see note 9)
-
55
Share of support costs
(see note 10)
86,233
48,332
Share of governance costs
(see note 10)
12,193
16,838
311,667
662,194		 Total
2020
Supporting
HM Forces
in the UK
and
overseas
2019
£
£
358,606
198,952
19,014
4,753
256,468
81,517
176,122
38,540
810,210
323,762
55
-
134,565
95,076
29,031
13,509
973,861
432,347		 2020
£
6,156
6,156
Centres in
Cyprus
supporting
HM Forces
overseas
2019
£
350,101
12,576
475,484
180,747
1,018,908
3,582
56,936
18,655
1,098,081		 2019
£
4,597
4,597
Total
2019
£
549,053
17,329
557,001
219,287
1,342,670
3,582
152,012
32,164
1,530,428

8 Charitable activities

9 Grants payable

CESSAC made the following principal donations in the UK:

Grants to CESSA HA tenants for Christmas vouchers/social functions - 2020: £3,680 (2019: £3,444).

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

9 Grants payable (Continued)
CESSAC Cyprus donations and sponsorship 2020:
Various smaller donations € 55
_
€ 55
_
CESSAC Cyprus donations and sponsorship 2019:
RAF Akrotiri Oasis Centre internet € 286
Episkopi Station boxing ring € 500
Episkopi Stn swimming lessons € 1,000
Dhekelia Station € 2,000
Episkopi Station Comedy Night € 300
Various smaller donations € 109
_
€ 4,195
_
10
Support costs
Staff costs
Depreciation
Head office costs
Travel & related costs
Audit fees
Legal and professional
Committee costs and
expenses
Analysed between
Charitable activities		 Support
costs
Governance
costs
£
£
114,720
21,852
202
38
19,643
-
-
-
-
3,871
-
2,863
-
407
134,565
29,031
134,565
29,031		 2020
£
136,572
240
19,643
-
3,871
2,863
407
163,596
163,596		 Support
costs
Governance
costs
£
£
120,583
22,967
202
38
30,133
-
1,094
-
-
4,994
-
3,344
-
821
152,012
32,164
152,012
32,164		 2019
£
143,550
240
30,133
1,094
4,994
3,344
821
184,176
184,176

The charity initially identifies the costs of its support functions. It then identifies those costs which relate to the governance function. Having identified its governance costs, the remaining support costs together with the governance costs are apportioned between the charitable activities undertaken in the year.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

11 Council Members

None of the Council members (or any persons connected with them) received any remuneration during the year, but 5 of them were reimbursed a total of £227 travelling expenses (2019 - 6 were reimbursed £603).

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

12 Employees

Number of employees

The average monthly number of employees during the year was:

Full time (UK, FI & BFG)
Part time (UK, FI & BFG)
Full time (Cyprus)
Part time (Cyprus)
Employment costs
Wages and salaries
Social security costs
Other pension costs		 2020
Number
3
7
5
17
32
2020
£
457,100
23,916
14,162
495,178		 2019
Number
4
8
5
23
40
2019
£
649,595
31,638
11,370
692,603

Chief Executive Remuneration

The Chief Executive, the only Senior Executive, is one of the members of staff jointly employed with a related party, Church of England Soldiers', Sailors' and Airmen's Housing Association Ltd (the ‘association’). The Chief Executive is not a Director, but was an ordinary member of the association's defined contribution pension scheme (The Social Housing Pension Scheme administered by The Pension Trust) carrying no special terms. He has no other individual pension arrangement to which either entity makes a contribution. The main outputs of the two entities are: CESSAC’s Charity Centres; and sheltered housing. The latter encompasses schemes belonging to the association and those managed by CESSAC for Greenwich Hospital. The division of the costs for all joint employees is regularly reassessed in proportion to the value of contribution to each entity. The 2019 re-assessment of the share of such costs led to CEO’s being 50% each for 2020 to the association and to CESSAC. (Until 2019 CEO’s shares had been 34% & 66% respectively). This resulted in the share of costs below (excluding national insurance contributions):

2020 2019
CESSAC Emoluments £37,113 £48,701
Association Emoluments £37,113 £25,252
Total Emoluments £74,226 £73,953
CESSACpension contribution £3,711 £4,870
Associationpension contribution £3,711 £2,525
Totalpension contributions £7,422 £7,395

There were no employees whose annual remuneration was £60,000 or more.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

13 Net gains/(losses) on investments
Unrestricted Unrestricted
funds funds
2020 2019
£ £
Revaluation of investments 125,026 331,240
Gain/(loss) on sale of investments (9,555) 12,230
115,471 343,470

14 Taxation

No charge to corporation tax arises on the results for the year.

15 Other gains or losses

Other gains or losses
Unrestricted Unrestricted
funds funds
2020 2019
£ £
Foreign exchange (losses)/gains 11,716 (13,909)

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

16
Tangible fixed assets
Cost
At 1 January 2020
Additions
Disposals
Exchange adjustments
At 31 December 2020
Depreciation and impairment
At 1 January 2020
Depreciation charged in the year
Eliminated in respect of disposals
Exchange adjustments
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019		 Land and
buildings
£
12,000
-
-
-
12,000
3,840
480
-
-
4,320
7,680
7,920		 Leasehold
properties
£
905,491
-
-
53,887
959,378
894,438
4,288
-
53,231
951,957
7,421
61,749		 Furniture,
fittings &
equipment
£
620,467
10,015
-
32,879
663,361
554,264
13,726
-
29,919
597,909
65,452
15,507		 Vehicles
£
54,287
-
(8,295)
2,499
48,491
51,287
1,000
(8,295)
2,499
46,491
2,000
3,000		 Total
£
1,592,245
10,015
(8,295)
89,265
1,683,230
1,503,829
19,494
(8,295)
85,649
1,600,677
82,553
88,176

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

17 Fixed asset investments

Listed
investments
Other
investments
£
Cost or valuation
At 1 January 2020
2,927,889
284,125
Additions
40,000
-
Valuation changes
125,026
-
Disposals
(87,419)
(284,125)
At 31 December 2020
3,005,496
-
Carrying amount
At 31 December 2020
3,005,496
-
At 31 December 2019
2,927,889
284,125
2020
Other investments comprise:
£
Loans
-		 Total
£
3,212,014
40,000
125,026
(371,544
3,005,496
3,005,496
3,212,014
2019
£
284,125

Fixed asset investments revalued

Listed investments include an investment portfolio managed by Charles Stanley and an Armed Forces Common Investment Fund managed by Black Rock and are included on the basis of market value, with an historical cost of £2,445,303 (2019 - £2,464,604).

18
Financial instruments
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
19
Stocks
Finished goods and goods for resale		 2020
£
3,005,496
2020
£
130,278		 2019
£
2,927,889
2019
£
153,475

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

20
Debtors
Amounts falling due within one year:
Trade debtors
Other debtors
Prepayments and accrued income		 2020
£
1,504
9,200
38,934
49,638		 2019
£
3,366
85
35,273
38,724

21 Creditors: amounts falling due within one year

Notes
Other taxation and social security
Government grants
23
Trade creditors
Accruals and deferred income		 2020
£
9,016
4,524
14,078
69,022
96,640		 2019
£
19,487
4,270
61,884
50,857
136,498

22 Auditor's ethical standards

In common with many entities of our size and nature we use our auditors to assist with the preparation of the statutory financial statements.

23 Government grants

The deferred grant relates to a grant received in 2019 from the Royal Air Force Akrotiri of £7,899 for purchase of various fixtures and fittings of which £4,524 had yet to be spent as at 31 December 2020. During 2019, an amount of £3,629 was utilised for purchase of various fixtures and fittings.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

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

24 Designated funds

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

Balance at
1 January 2019
£
Operating cost reserve
1,250,000
Investment in CESSA Housing
Association Limited
316,219
Capital fund for future opportunities
1,901,319
3,467,538		 Transfers
Balance at
1 January 2020
£
£
-
1,250,000
(32,094)
284,125
219,673
2,120,992
187,579
3,655,117		 Transfers
Balance at
31 December
2020
£
£
(230,000)
1,020,000
(284,125)
-
467,311
2,588,303
(46,814)
3,608,303		 Transfers
Balance at
31 December
2020
£
£
(230,000)
1,020,000
(284,125)
-
467,311
2,588,303
(46,814)
3,608,303
3,608,303

Reserves have been established as follows:

A further reserve had been established representing the investment in social housing by way of a long term loan to Church of England Soldiers' Sailors' and Airmen's Housing Association Limited which was repaid in full during the year.

25 Events after the reporting date

UK entered a third lockdown at the beginning of January 2021 so the cafes there were closed until early June, re-opening initially on a 3-day-a-week basis. The Government’s decision to extend the furlough scheme until September was therefore most welcome, as were the number of discretionary grants for individual centres received via local Councils.

Cyprus entered a second lockdown on 10 January 2021, when Dhekelia & Nicosia were shut completely due to local circumstances. Akrotiri & Episkopi were at least able to operate a take-away service within the British camps, providing a valued charitable output in this difficult time for the Service personnel and their families there. Whereas the Government had provided financial assistance to individuals directly during the first lockdown, this changed for the second to employers needing to apply more like the UK system. After receiving acknowledgement for the details submitted every month, at the end of April CESSAC was suddenly notified it was not eligible for financial support, just as restrictions were tightened to address increasing infection rates and hospitalisations. An explanation has been requested so that a challenge could be considered. A partial relaxation of measures from 10 May enables cafes to serve customers outside, which will be offered at Akrotiri and Episkopi. Dhekelia will re-open similarly, but only Friday to Sunday initially. Service indoors with restrictions is predicted from 1 June.

The Falklands had a brief 3-week lockdown in February 2021, finishing just in time for a new Assistant Manager to arrive, which relieved the pressure on the Manager.

In other news, although the UK Government agreed a deal with the EU on 24th December 2020, it is not thought this has any significant consequences for the charity’s operations. This is even true in Cyprus, because CESSAC’s role is covered in the Treaty of Establishment, that precedes UK’s & Cyprus’ membership of the EU. However, some food items originating in or passing through UK to CESSAC’s local suppliers have experienced availability problems due to delays since 1 January.

CHURCH OF ENGLAND SOLDIERS', SAILORS' & AIRMEN'S CLUBS

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

26 Related party transactions

There were no disclosable related party transactions during the year (2019 - none).

27 Cash generated from operations 2020 2019
£ £
(Deficit)/surpus for the year (58,530) 201,488
Adjustments for:
Investment income recognised in statement of financial activities (99,527) (110,894)
Foreign exchange differences 13,824 (1,968)
(Gain)/loss on disposal of tangible fixed assets (247) 1,124
Loss/(gain) on disposal of investments 9,555 (12,230)
Fair value gains and losses on investments (125,026) (331,240)
Depreciation and impairment of tangible fixed assets 19,254 17,569
Movements in working capital:
Decrease in stocks 14,499 36,825
(Increase)/decrease in debtors (11,390) 1,825
(Decrease)/increase in creditors (34,054) 35,772
Increase in deferred income 508 4,270
Cash absorbed by operations (271,134) (157,459)

28 Analysis of changes in net funds

The charity had no debt during the year.

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