THE ROYAL ARTILLERY ASSOCIATION REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 Registered Charity No: 238197
CONTENTS Trustee and Administrative Information Trustee's Report Independent Auditors, Report 9-12 Statement of Financial Activities 13 Balance Sheet 14 Cash Flow Statement 15 Notes to the Financial Statements 16-22
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE AND ADMINISTRATIVE INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2022 Patron Her Late Majesty Queen Elizabeth11 Iuntil 8, September 20221 Trustee During the year ended 31 December 2022, and up to the date of approval of this report, the Corporate Trustee of the Association was.. The Royal Artillery Charitable Fundlcc No.. 2102021.. President of the RAA Lieutenant General Sir Andrew Gregory KBE CB DL Chairman ofthe RAA Brigadier MN Pountain CBE Chairman ofthe RACF Trustees & RA Board of Management Major General DM Cullen CB OBE RACF trustees during the accountlng period Brigadier MN Pountain CBE Colonel MB Bishop MBE VR Colonel RC Christopher MBE Colonel CE Comport OBE DL TD Colonel MAA Dornan Colonel C Fletcher-wood OBE Colonel RC Harmer ADC Colonel C Palmer Colonel MD Relph MBE Colonel G Taylor Lieutenant Colonel SJ Howe Major AJ Dines TD Major JO Leighton TD Warrant Officer Cla55 1 IRASMIL Sanders (Appointed 7, June 20221 (Appointed 7, June 20221 (Appointed 7" June 20221 (Appointed 7, June 20221 A number of trustees are also involved in the governance of other charities referred to in this report. All trustees have made a declaration listing any related parties and potential conflicts of interest. Reglmental Secretary Bankers Col IRetdl M G J Carter Lloyds TSB PIC 19121 Powys Street Woolwich SE18 6JZ Solicitors Wilsons Alexandra House st john's Street Salisbury Wiltshire SPI 2SB Auditors Saffery Champness LLP 71 Queen Victoria Street London EC4V 4BE Addre55 Artillery House, Royal Artillery Barracks, Larkhill, Wiltshire, SP4 8QT Reglstered Charity No-. 238197 Page I
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Introduction The trustee presents the Royal Artillery Association IRAAI report and accounts for the year ended 31" December 2022. The charity's funds are also included in the Group Account5 of the Royal Artillery Charitable Fund IRACFI. Ob'ects The RAA was established in 1920 for the purpose of furthering Gunner comradeship and looking after the welfare of ex-members of the Royal Artillery and their dependents. The objects of the RAA are.. To promote the efficiency of the Royal Artillery bv= Maintaining contact between past and present members of the Royal Artillery, fostering mutual friendship between them and providing for social gatherings for them and,. bl Fostering esprit de corps, comradeship and the welfare of the Royal Artillery and preserving its traditions. To relieve either generally or individually members of the RAA or past and present members of the Royal Artillery, and their dependants, who are in conditions of need, hardship or distress. ani5ation The RAA'S sole trustee is the incorporated charity known as the RACF- Charity Number 210202. The RAA works c105ely with a number of other charities, in particular the Royal Artillery General Charitable Trust IRAGCTI, the Royal Artillery Institution IRAII and the RACF, whose objects also support and promote efficiency within the Royal Artillery. The tru5tee5 of the RACF meet as part of the Royal Artillery Board of Management IRA BOMI which is the body responsible for the efficient coordination and management of the RACF, RAA and Royal Artillery Institution IRAII. The RA Bom meets under its Chairman at least twice each vear. In the month leading up to the Board meetings, the meetings of the Investment Committee, the Welfare Committee, the Finance and General-Purpose Committee and the RAA National Executive Committee INECI take place. The reports of these committees form part of the agenda for the RA Bom meetings at which policy concerning the RAA is discussed ènd decisions are made. The Chairman of the RA Bom 15 a member of the Master Gunner's Committee and updates members bi-annually on business undertaken by the Board. The RAA is a membership organisation. Members may belong to local or national branche5, serving batteries of the Royal Artillery or as individual members. Members, views, concerns and suggestions are channelled through their branch or Battery to regional representatives who are members of the National Executive CommitteelNECI. A Royal Artillery Assembly, which includes the RAA'S AGM is held each year usually in May. At the AGM members are elected to go forward as nominees to represent the RAA on the RACF board of trustees. There re three RAA representatives at any one time. They are nominated for a three-year term and may be re- elected at the end of that term. Nominations go forward to the RACF trustees who are invited to appoint nominees in accordance with the RACF Articles of Association. The governing documents of the RAA are.. the Charity Commission Scheme; the Rules of the RAA and,. the RAA General Administrative Instructions IGAlsl- GAIS were again reviewed in 2022 and a number of minor change5 were approved by the trustee. Page 2
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Governance In addition to the Charity's Scheme, the Investment Committee and the Finance & General-Purpose Committee have their own directives laid down by the RA Bom. Direction to the RAA NEC is contained in the RAA Rules and GAIS. Secretariat policies, which are agreed by the committees, trustee and the Bom, are in place in order to ensure the smooth and effective running of the charity. The charity'5 risk reElSter is reviewed annually by the trustee. The register follows the model recommended by the Charity Commission. Identified risks are managed as laid down in the Risk Management Plan. For specific items detailed briefs are sent to the trustee SD that members can consider issues in depth before meetings. Members a150 receive regular reports on the value and movement of the charitW5 investment portfolio. The Chairman of the trustee and the Regimental Secretary meet regularly lusually weeklyl to discuss issues. Chari Commission Governance Code The trustee, as one of the Royal Artillery charities, comes under the umbrella of the Confederation of Service Charities Icobseol. Cobseo in consultation with the Charity Commission has produced a Service charity toolkit based on the 2017 Charity Commission Governance guide. The trustee board carried out a self- assessment process using the toolkit in 2019. This has enabled the board to identify where a number of enhancements can be considered to improve governance. This included a resolution to limit the tenure of trustees. A further self-assessment review was conducted in 2022. Overall this showed an improvement since 2019 but identified some areas for further review. Ke Mana ement Personnel The Regimental Secretary is the Chief Executive of the RAA and is responsible for: the day-to-day management of the charity's business,. implementing policies agreed by the RACF trustee and- the management of the staff. He is supported by the RAA Secretary and his staff of two. The Finance Secretary is responsible to the Regimental Secretary for the accounting of funds and all financial records. Review of Flnancial Activities The charity's funds continue to be employed to support the efficiency of the Royal Artillery by supporting comradeship and promoting esprit de corps, and to relieve need, hardship or distress as stated in its Objects. The results of the charity's activities are summarised on page 13. In 2022 the charity had an excess of expenditure over income, before gains on investments, of £66,70612021.. Excess of expenditure over income £72,231). After Investment10ss of £125,858,12021'. gains of £111,708) there was a net decrease of funds of £192,56412021.' net increase of £39,477). Investment losses were directly attributable to market movements following the invasion of Ukraine. Total central income increased by £40,215 to £121,199. This was mainly due to a an increase in donation, and subscriptions, the largest intrease was donations from RACF due to increase in Battery Grants in 2022. In 2022, there was I legacy totalling £5,00012021: 1 totalling £2,000) and 29 donations giving £7,18912021.. 35 totalling £6,079). Income collected through the Service Pay Giving Scheme from officers, soldiers and members of the Reserve regiment has decreased slightly by £599 to £39,840. Page 3
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Review of Financlal Actlvltles contlnued This year RAA received a grant of £29,163 from RACF for Battery grants12021- £0 due to the high level of legacy income). Income from Branch events and subscriptions to date are £120,09312021.. £67,446), thi5 is mainly due to increase in activities due to all COVID restriction being lifted. Total expenditure increased by £87,337 to £307,998. This is due a steady increase in branch activities, RAA Assembly being held for the first time since 2019, the start of the production of the commeration items for RAA 100, which were delayed due to COVID and the number of comradeship events attracting RAA grants. There are five main income streams. They are.. Branch Income and SLJbscriptions Donations including donations from RACF Seivice Pay Giving Scheme ISPGSI, where all serving personnel are encouraged to give part of their pay to the charity. Investment income. Legacie5. This year a large proportion of Income came branch Income and subscriptions which was 50% of our Income. Income from SPGS117%1, Income from donations 16% and Investment income18Yol remained a consistent source of revenue. The trustee approves the forecast of income and expenditure annually and monitors it regularly through the Finance & General Purpose Committee and at Board meeting5. Charitable Activities The RAA supports charitable activity by.. making grants to support comradeship and welfare,. raising and maintaining the profile of the RAA in order to improve comradeship for Gunners, both serving and retired,. providing support to members and,. planning and organi5ing national RAA events. Apart from support to national RAA events, branches, staff and running costs, the RAA made 32 grants worth £29,163 to batteries to promote comradeship and esprit de corps12021'. 21 totalling £22,3371. One grant worth £750 was made in support of branche512021'. 2 totalling £6871. Grants are allocated to enhance the collectivÈ well-being of the Regiment and its individual members, serving and retired, by supplementing shortfalls in funding on comradeship projects. Public Benefit The Object of the RAA is to promote efficiency within the Royal Artillery by: providing comradeship to serving and retired members of the Regular and Re5eNe regiment,. and by aiding those same members and their dependants in cases of need. Inextricably linked wilh this Object is the aim of contributing to the public good by service to the Sovereign , the country and all its citizens. The RAA contributes considerable public benefit to the local and national community by relieving need and providing comradeship to members of the regimental family. Thi5 in turn maximises the likelihood of the charitvs beneficiaries maintaining their place as valuable self-sufficient members of the community, who are able to make a positive contribution to society. The trustee has had regard to the Charity Commission'5 8uidance on Public Benefit. Page 4
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Future Plans The charity has sufficient funds to support its future operations to deliver its charitable Objects. Research carried out by the Royal British Legion has shown that there 15 Still a very large ex-service communitv, however those ex-servicemen who Saw service in the Second World War and during National Service will gradualSy diminish over the next 10 years. Work has commenced on improvin8 the ASSocaton'S ability to promote the RAA amongst the recently retired and serving 501diers and recruit new members. Reserves Pollc The trustee's policy is to maintain a sufficient level of reSee5, within the investment portfolio to provide: a stable base for the charity's continuing activities,. sufficient funds to cover routine management and administrative costs,. make provision for any emerBency applications for grants which arise from time to time. The effect on the charitls investments as a result of the sltuation in Ukraine demon5trate5 the benefit of maintaining strong reserves in order to be able weather such market fluctuations while maintaining required levels of investment income. Total funds as at 31 December 2022 were £1,861,32912021'. £2,053,893). Unrestricted reserves included funds for the ladies section of £79212021.. £7921, and were £1,623,434 at the vear-end12021.. £1,803,566) of which are all free reserves. Designated Funds were £237,89512021'. £250.3271 for the purpose of RAA Branches. Our risk-based approach to determining our free reserves requirement Is carried out, based on the anticipated future needs of the regimental family, and the management of financial risks, particularly the uncertainty of future income from other sources. Trustees review the level of reserves regularly to ensure funds are available to deliver commradeship, welfare seNices and programme5, and to secure, as far as possible, future financial viability. Following that review, we determined that we should hold a minimum of £1,500,000 in free reserves to be assured that we are able to sustain the support we provide to the regimental family in the long term as well as meet other obligations, irrespective of fluctuations In income and without creating the need to actively fundraise. This sum, held as part of our investment portfolio, is judged to be capable of generating sufficient investment income to meet foreseeable needs. With free reserves of £1,623,43412021.. £1,803,566) currently exceed this requirement. The trustees are content that the additional funds we hold provide ability to disinvest in order to support major capital projects if and when required, but in the meantime are held as investments generating additional income income. In 2022 the charity's investments generated £19,862 of income. This was 8% of total income, Investment income decreased by £7,598 from 2021, which was due to the current volatility of the markets, which has imparted on dividends. Despite the fall in returns, without this income, the charitf s activities and support to those in need would be significantly curtailed. The trustees believes that investments should be maintained at the current levels, in order to generate income and provide for current needs whilst ensuring the charity remains well placed to meet future requirements. The trustee recogni5es that it has no long term tnandated liability for any particular level of benevolence. There is therefore the ability either to reduce expenditure to match any reduction in income or to liquidate unrestricted assets to make additional funds available in year, however as irkdicated above, this Page 5
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Reserves Polic continued would need to be balanced by the requirement to maintain investment as a means of providing income for futuregenerations. Unrestricted funds were £1,623,434 12021.. £1,803,566) most of which 15 represented by investments, which provide a Significant part of the charity's income but are available for spending if necessary. Investment Polic The trustee's Investment Committee meets twice a year to consider the peiformance of the RAA'S investments, which are managed on a discretionary basis by BlackRock Investment Management IUKI Ltd. The investment objective is to create sufficient income and capital growth to enable the charity to carry out its charitable objectives. The charity is expected to exist in perpetuity and investments are managed to meet the investment objective and ensure this sustainability. The charity's funds are invested on an aliquot proportion in the same funds as the other Gunner welfare l efficiency charities. This is in order to achieve economies of scale in relation to investment cost. The trustees have given the fund managers discretion to manage the portfolio within an agreed risk profile and against agreed benchmarks. This Is contained in a written directive. At the bi-annual meeting with the investment managers the Investment Committee considers the state of the financial markets and measLtres the fund managers, on-going performance against specific agreed benchmarks, namely 25% FTSE All Share Index, 35% MSCI World ex UK Index, IOYO MSCI Emerging Markets Index, 7.5% FtSE All Stocks Gilt Index, 5Yo iBoxx Sterling Non-Gilts Index, IO% IPD UK All Balanced Funds Index, 5Yo Alternative (IA Sector Targeted Absolute Return) and 2.5% Cash (Sterling Overnight Index Average). Having compared performances over the last 1, 3 and 5 years, the Investment Committee are of the view that the investment5 have done reasonably well in relation to the market and relevant benchmarks over the longer term. While there is currently no case to prompt a change of investment policy, the performance of the fund manager will be subject to further review this year. Environment31 Governance and Social Considerations The RAA'S investments are not managed with any specific environmental, social and governance IESGI restrictions. However it is expected that the RA charities, investment managers have clearly defined ESG investment policies and that the investments are managed by an investment company which is a signatory the UN Principles of Responsible Investment and which takes account of Envlronmental, Social and Governance IESGI factors in their research and investment decision making process. Fundraisin The trustee is very clear that all fundraising must be leEal, open, honest and respectful. Nationally the charity does not actively engage in regular and organised fundraising, although it does make provision through its website to receive donations and legacies. It receives the bulk of its income throughlnvestments, the Royal Artillery's 'service giving scheme, and from grants made by the RACF. The facility exSsts for individuals or organisations to make voluntary donations online. The charity does not work with any Page 6
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Fundralsin commercial partner or professional fundraiser5 except in order to operate an online donation facility through online options such as 'Enthuse' and 'Just Giving. The charity does not solicit funds through direct approaches to individuals via mailshots or online unless consent has been obtained. Branches and individuals, if they wish, may raise funds for the charity and if so are provided with sealed collection buckets. In most cases branches prefer to raise funds for the RACF. In the event of a complaint about any such activity, it is investiEated by the Regimental Secretary. (No complaints were received in 20221. As a charity that deals with vulnerable veterans and their dependants, all staff are aware of the requirement to treat everyone fairly and kindly with no intrusive or persistent requests or approaches for funds or pressure to donate. Trustee Trainin Trustee responsibilities and necessary training are taken very seriously. All new members of the trustee board are briefed by the Regimental Secretary on their roles and responsibilities. They are provided with the Charity Commissioners handbook "The Essential Trustee" as well as 3 copy of the Scheme. Recent RAA accounts, meeting minutes and policy documents are also provided. Trustee briefing5 and training take place and members of the Board are encouraEed to attend external trustee training and investment briefs. Risk Mana ement The trustee maintains a continuous oversight of the principal areas of the RAA'S operatlDns and the major risks which may arise. In the opinion of the trustee, the charity has established resources and review systems which, under normal condition5. should allow the risks identified to be mitl8ated to an acceptable level. A risk management plan is produced and approved by the trustee each year and actively managed bv the trustee, the Regimental Secretary and his staff. The main risks are: Insufficient income to meet the need= Thi5 is managed by careful budgetinE, the investment and reserves policy and controlling the level of support provided to beneficiaries. Fraud.. This is guarded against by having policies in place to ensure re8ular checks are made and that all transactions are properly authorised by two signatories. Conflict of interest amonBSt trustee members.. A register of trustee's interests is kept and updated annually. At the start of committee and Bom meetings, trustees are reminded to declare any conflict arising from the agenda so that appropriate action can be taken. Reputational damage arising from activities such as inappropriate fundraising.. This is mitigated by robust Rules and General Administrative Instructions IGAlsl and the monitoring of branch fundraising activitie5. Remuneration Poli No member of the trustee board is paid for services as a trustee or related work. thouEh travel and subsistence costs incurred as a trustee are reimbursed. The trustee reviews staff 5alarie5 annually and takes into account the MOD pay awards for similar grades, when agreeing any pay increases. Em The RAA aims to be an organisation for which employees enjoy working and where they feel supported, valued, empowered and developed. Employees are kept fully informed about the aims and objectives of the Page 7
THE ROYAL ARTILLERY ASSOCIATION TRUSTEE'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 Em ees continued charity and how it is achieving them. Employees are encouraged to make suggestions to help improve working processes and to achieve best practice. The charity is an equal opportunities employer and is committed to training and developing its staff and consider the MOD pay awards for similar grades, when recommending any pay increases. Statement of Trustee's Res onsibilities The trustee is responsible for preparing the Trustee's Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standard5 (United Kingdom Generally Accepted Accounting Practice). Charity law requires the trustee to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the charity. These include detai15 of income and expenditure and of the application of resources for the accounting period. In preparing these financial statements, the trustee is required to.. Select suitable accounting policies and then apply them consistentlyi Adhere to the methods and principles in the Charities Statement of Recommended Practice (Charities SORP IFRS 10211,. Make judgements and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material departures which are to be disclosed and explained in the financial statementS,' Prepare the financièl statements on a going concern basis, unless it is inappropriate to presume that the charity will continue in business. The trustee Is also responsible for safeguarding the assets of the charity, including taking reasonable steps to prevent and detect fraud and other irregularities. The financial statements have been prepared in accordance wlth the accounting policies set out in the notes to the accounts and comply with the Charities Acts 2011 and,. 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 IFRS 1021 (Charities SORP IFRS 10211. Statement as to Disclosure of Infomiation to Auditors In so far as the trustee is aware.. there is no relevant audit information of which the charitvs auditor is unaware,. and the trustee has taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. On beh If of the trustee.. 2023 Chairman of the RAA trustee IRACFI Board Majo enera DM Cullen CB OBE Page 8
THE ROYAL ARTILLERY ASSOCIATION INDEPENDENT AUDITORS. REPORT TOTHE TRUSTEE FOR THE YEAR ENDED 31 DECEMBER 2022 Opinion We have audited the financial statements of the Royal Artillery Association for the year ended 31 December 2022 which comprise the statement of financial activitie5, balance sheet, cash flow statement and notes to the financial statement5, including significant accounting policies. The financial ieporting 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.. Eive a true and fair view of the state of the charity's affairs as at 31 December 2022 and of its incoming resources and application of resources for the year then ended. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice- and have been prepared in accordance with the requirements of the Charities Act 2011. Basis for opinion We conducted our audit in accordance with International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standard5 are further described in the Auditor'5 responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethlcal requirements that are relevant to our audit of the financial statements in the UK, including the FRCS Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these reqLJirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provlde a basis for our oplnion. Conclusion5 relating to going concern In auditing the financial statements, we have concluded that the trustee's use of the Boing 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 trustee with respect to going concern are described in the relevant sections of this report. Other information The trustee is responslble for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditorfs report thereon. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misslatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,. we are required to report that fact. Page 9
THE ROYAL ARTILLERY ASSOCIATION INDEPENDENT AUDITORS. REPORTTO THE TRUSTEE FOR THE YEAR ENDED 31 DECEMBER 2022 We have nothing to report in this regard. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Charitie5 (Account5 and Reports) Regulations 2008 require us to report to you if, in our opinion= the information given in the Trustee's Annual Report is inconsistent in any material respect with the financial statements,. or the charity has not kept sufficient accounting records,. or the financial statements are not in agreement with the accounting records and returns,. or we have not received all the information and explanations we require for our audit. Responsibilitles of the trustee As explained more fully in the Trustee's Responsibilities Statement set out on pages 8, the trustee is responsible for the preparation of the financial 5tatement5 and for being satisfied that ihey give a true and fair view, and for such internal control as the trustee determines 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 trustee is 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 accountin8 unless the trustee either intends to liquidate the charity or to cease operations, or have no reallstic alternative but to do so. Auditors, responsibilities for the audit of the financial 5tatement5 We have been appointed as auditors under the Charities Act 2011 and report in accordance with regulations made under that Act. Our objectives are to obtèin reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors, report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS IUKI will always detect a material misstatement when it exists. Misstatements can arise from fraud or eiror 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below. Identifying and assessing risks related to irregularities.. We assessed the susceptibility of the charity's financial statements to material misstatement and how fraud might occur, including through discussions with informed management, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated a5 intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the charity bv discussions Wlth informed management and updating our understanding of the sector in which the charity operates. Page 10
THE ROYAL ARTILLERY ASSOCIATION INDEPENDENT AUDITORS, REPORTTO THE TRUSTEE FOR THE YEAR ENDED 31 DECEMBER 2022 Law5 and regulations of direct significance in the context of the charity include the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008 and guidance issued by the Charity Commission for England and Wales. Audit response to risks identified= We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial Statement disclosures. We reviewed the charity's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the charity's policies and procedures for compliance with law5 and regulations with members of management responsible for compliance. During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partnerfs review included ensuring that the team had approached their work with appropriate professional scepticism and thu5 the capacity to identify non-compliance with laws and regulations and fraud. There are inherent limitations in the audit procedures described above and the further removed non- compliance with laws and regulations is from the event5 and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is hi8her than the risk of not detecting one resulting from error, as fraud may involve deliberate Concealment by, for example, forgery or intentional misrepresentations, or throu8h collusion. A further description of our responsibilities is available on the Financial Reporting Council's webslte at.. www.frc.or auditorsres onsibilities. This description forms part of our auditor's report. Use of our report Th15 report is made solely to the charity's trustee, as a bodyi in accordance with Part 4 of the Charities IAccounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the trustee those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the trustee as a bodyj for our audit work, for this report, or for the opinions we have formed. Page 11
THE ROYAL ARTILLERY ASSOCIATION INDEPENDENT AUDITORS. REPORTTO THE TRUSTEE FOR THE YEAR ENDED 31 DECEMBER 2022 Saffery Champness LLP Chartered Accountants Statutory Auditors 71 Queen Victoria Street London EC4V4BE Date.. ? Thu 1023 Sattery Champness LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006 Page 12
THE ROYAL ARTILLERY ASSOCIATION STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2022 Unrestrlcted Funds Income and ex enditure Note 2022 2021 Income Donations & Legacies incl Subscriptions Investment income Registration fees oiher Income 97,551 19,862 985 2,801 49,920 27,460 680 2,924 Total of Income 121,199 80,984 Branch events and subscriptions 120,093 67,446 Total Income 241,292 148,430 Ex enditure Raising funds Charitable activities Branch expenditure Total ex enditure 2,184 155,101 63,376 220,661 175,473 132,525 307,998 Netlexpenditurelbefore Ilosses118ains on investments 166,7061 172,2311 Net Ilossesl/gain5 on investments Net Income and net movement in funds 1125,8581 1192,5641 111,708 39,477 Total funds brought forward 2,053,893 2,014,416 Total funds carried forward 1,861,329 2,053,893 The notes on pages 16 to 22 form part of these financial statements. Page 13
THE ROYAL ARTILLERY ASSOCIATION BALANCE SHEEr 31 DECEMBER 2022 Note 2022 2021 Fixed assets Investments 1,058,128 1,182,151 Current assets Debtors Cash Branch cash 3,396 594,620 237,896 835,912 79,614 609,701 250,327 939,642 Current liabilities Creditors.. Amounts falling due within one 10 132,7111 167,9001 year Net current assets 803,201 871,742 Net assets 1,861,329 2,053,893 Funds Unrestricted Designated li li 1,623,434 237,895 1,803,566 250,327 12 1,861,329 2,053,893 Approved by the trustee on ¢J4£L2023 D M Cullen CBOBE Major General Chairman of the RAA Trustee IRACFI Board The notes on pages 16 to 22 form part of these financial statements. Page 14
THE ROYAL ARTILLERY ASSOCIATION CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 2022 2021 Note Net cash used in operatlng activities 145,5391 547,535 Cash flows from investin activities Dividends, interest and rents from investment5 Purchase of investments Proceeds from sale of investments 19,862 1193,4971 191,677 27,460 11,203,581) 1,203,520 Net cash used in investing actlvltles 18,042 27,399 Net increase in cash & cash equivalents Cash & cash equivalents at the beginning of the year 127,4971 860,240 574,934 285,306 Cash and cash equivalents at end of the year 832,743 860,240 Notes to the cash flow statement Reconclllatlon of net movement In funds to net cash flow from opeyating activities 2022 2021 Net movement in funds Loss/lgainl on investments Investment income Decrease in debtors (Decreasellincrease in creditors Net cash used in operating activities 1192,5641 125,858 119,8621 76,218 135,1891 145,539 39,477 1111,7081 127,4601 614,958 32,268 547,535 Analysis of cash and cash equivalents and net debt Atljan 2022 Cash flow At 310ec 2022 Cash on short term dep051t Cash current account Cash held by branches Cash balance before investments Cash held in Investments Net cash provided by operating activities 598,736 10,965 250,327 860,028 212 860,240 14,5521 110,5291 112,4311 127,5121 15 127,4971 594,184 436 237,896 832,516 227 832,743 Page 15
THE ROYAL ARTILLERY A550CIATION NOTES TO THE FINANCIAL STATEMENT5 FOR THE YEAR ENDED 31 DECEMBER 2022 Actountin olicies Basis of accounting The financial statements have been prepared under the historic c05t convention, except for listed investments which are included at their market value. The accounts (financial statements) have been prepared in accordance with the Statement of Recommended Practice.. Accounting and ReportinE bv Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 Icharities SORP IFRS 10211.the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland IFRS 1021, the Charities Act 2011 and UK Generally Accepted AccountinE Practice. The accounts (financial statementsl have been prepared to give a 'true and fair, view and have departed from the Charities IAtcount5 and Reportsl Regulations 2008 only to the extent required to provide a 'true and fair view,. This departure has involved following Charities SORP IFRS 1021 rather than the Accounting and Reporting by Charities Statement of Recommended Practice effective from 2005 which has since been withdrawn. The Royal Artillery Association constltutes a public benefit entity as defined by FRSIO2. Preparation of a cash flow statement A cashflow statement is provided at page 15. Branches Branch transactions with third parties are accounted for gross in the financial statements and branch assets and liabilities are incorporated into the balance sheet. Indtvidual branches receive donations to spend on comradeship within their branches and local area. Branch events are sponsored by these funds. Investment5 Investment5 are shown in the balance sheet at their market value. The unrealised movement in market value from one year to another is recognised in the Statement of Financial Activities. Donations and legacies Including Subscrlptions Subscriptions and donations are recognised as income when the amounts are receivable. Legacie5 are recognised when received or receipt is probable and the value can be measured with sufficient Investment income Investment income is credited to the statement of financial activities when its receipt is probable and the amount receivable can be measured reliably. Page 16
THE ROYAL ARTILLERY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS contlnued FOR THE YEAR ENDED 31 DECEMBER 2022 Fund Accountlng Unrestricted funds are available to use to further any of the purposes of the charity. Going Concern The trustee has reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thu5, they continue to adopt the going concern basis in preparing the annual financial statements. Expenditure and support Costs Expenditure is recognised in the period in which it 15 incurred and includes attributable VAT which cannot be recovered. Support costs are those costs which have not been directly allocated to an activity of the charity but nevertheless support these activities. All costs relate to the core charitable activities except branch expenditure which is shown separately. Pensions staff costs are recharged from RACF. Staff are enrolled in a NEST pension scheme. Contributions are charged in the Statement of Financial Activities as they become payable. Grant expenditure Grants payable are payments made in furtherance of the charitable objects of the charity. These are accrued once the recipient has been notified of the grant award. The notification gives the recipient a reasonable expectation that they will receive the grant. Provi5ion5 for grants are made when the intention to make a grant has been communicated to the recipient but there is uncertainty as to the timing of the grant or the amount of grant payable. Cash and cash equivalents Cash and cash equivalent5 include cash in hand, depo55ts held at call with banks and other short-term liquid investments with original maturities of three months or less. Financial instruments The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recogni5ed at transaction value and subsequently measured at their settlement value except for bank loarbs which are subsequentlv measured at amortlsed cost using the effective interest method. Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayment5 are valued at the amount prepaid net of any trade discounts due. Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of fijnds to a thlrd party and the amount due to Page 17
THE ROYAL ARTILLERY A550CIATION NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 31 DECEMBER 2022 Financial Instruments continued settle the obligation can be measured or estimated reliably. Creditors and provisions are normallv recognised at their settlement amount after allowing for any trade discounts due. Critical estimate and judgements and key sources of estimation uncertalnty In the application of the charity's accounting policies, the trustee 15 required to make judgements, estimates and assumptions about the carrying amount of assets and liabilitie5 that are not readily apparent from other sources. The 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 effects both current and future perlods. There is no critical estimate, judgements or key sources of estimation in 2022 or 2021. Donation5 & Le acies incl subscri tions 2022 2021 serving regiment (Service pay Giving Scheme) Legacies Legacies lover provision) General Donations Donations- RAA 100 Donations- RACF Donations- Branch Liaison Officer Intangible Income- Wages in Kind 39,840 5,000 40,439 2,000 114,9171 6,079 87 7,189 29,163 2,923 13,436 3,227 13,005 97,551 49,920 istration fees 2022 2021 Current year 985 680 985 680 other Income 2022 2021 RAA Event Income Merchandise Income Christma5 Card Income Bank Interest 1,572 144 774 311 1,302 188 1,409 25 2,801 2,924 Page 18
THE ROYAL ARTILLERY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 31 DECEMBER 2022 Raisin funds 2022 2021 Investment Management Fees 2,184 2.184 Chayitable activltles 2022 2021 RA Assemblv RA Assembly Awards NMA Gunner Sundav RAA 100 NMA Maintenance Regimental Welfare/Comradeship Manser8h Award Grant to RAM Miscellaneous grants under £1,000 4,424 382 3,615 1,684 10,020 453 2,543 1,674 32,488 23,024 I,ioo 29,913 579 12,200 1,060 1,000 63,877 62,282 Support costs to Charitable Activities.. Administrative Salaries recharges by RACF Employer Pension Contribution Wages in kind 54,087 2,021 13,436 69,544 53,898 2,614 13,005 69,517 Travelling and 5ub515tence lincl. SBI NEC, Regional Reps, District travel & subsislence Branch travel office costs lincl. publicity & postage) Publicity Miscellaneous Costs Governance cost5.. Legal fees lincluding trustee trainingl Professional Fee5 Audit 10,297 1,376 18,236 4,449 12 1,996 6,669 3,481 6,340 212 2,922 168 280 5,406 3,510 42,052 23,302 Total charitable activities 175,473 155,101 Note.. 2022 charitiable expenditure reflects additional activlty post COVID and reflect a similar level of spending to 2018 and 2019. Page 19
THE ROYAL ARTILLERY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 31 DECEMBER 2022 Charitable activities continued The trustee / RACF trustees received no remuneration or any other payments other than refund of travel and subs1Stence costs. £826 for out of pocket travel expen5e5 was claimed in 2022 by I trustee12021.' £944 by one trusteel. Fixed assets investments 2022 2021 Quoted Investment5.' Market value at l January Net additions/cash movements at cost Sale Proceeds- Investments 1,182,151 193,497 1191,6771 1125,8581 1,071,871 1,203,581 11,203,520) Net realised/ unrealised investment gairks/llossesl Cash Commitments 111,708 15 11,4891 Market value at 31 December 2022 1,058,128 1,182,151 Historical cost at 31 December 2022 1,044,553 1,072,003 There are no indlvidual holdings which are considered to be significant. Debtors 2022 2021 RAGCT- Gift Aid 27 27 Accrued SeNlce Giving Income Legacies Receivable 3,369 3,364 76,223 3,396 79,614 2022 2021 Cash on Short term De osit Lloyds TSB Bank PLC- Current account Lloyds TSB Bank PLC- Deposit account 436 594,184 10,965 598,736 594,620 609,701 10 Creditor5 - amounts fallin due withln one ear 2022 2021 RA Charitable Fund Creditors and accruals 28,777 3,934 34,295 33,605 32,711 67,900 Page 20
THE ROYALARTILLERY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 31 DECEMBER 2022 li Movement in funds Balance at I January 22 Incoming Resources Outgoing Resources Net Loss on Investment Balance at 31 December 22 Unrestricted Ladies Section Amenitie5 General Fund 792 792 1,802,774 1,803,566 121,199 121,199 175,473 175,473 1125,8581 1125,8581 1,622,642 1.623,434 Designated funds Branches 250,327 120,093 132,525 237,895 Total 2,053,893 241,292 307,998 1125,858 1,861,329 2021 Com arison Balance at I January 21 Incoming Resources Outgoing Resources Net Gains on Balance at 31 December 21 Investment Unrestrirted Ladies Section Amenities General Fund 792 792 1,767,367 1,768,159 80,984 157,285 157,285 111,708 111,708 1,802,774 1,803,566 Designated funds Branches 246,257 67,446 63,376 250,327 Total 2,014,416 148,430 220,661 111,708 2,053,893 Page 21
THE ROYAL ARTILLERY ASSOCIATION NOTES TO THE FINANCIAL STATEMENTS continued FOR THE YEAR ENDED 31 DECEMBER 2022 12 Anal Sis of net a55ets between funds Net Total Investments Current assets Unrestricted funds: General Ladies Section Amenities 1,058,128 564,514 792 565,306 1,622,642 792 1,623,434 1,058,128 Designated funds.. Branches 237,895 237,895 1,058,128 803,201 1,861,329 2021 Com arison Net Total Investment5 Current assets Unrestricted funds.. General Ladies Section Amenities 1,182,151 620,623 792 621,415 1,802,774 792 1.803,566 1,182,151 Designated funds.. Branches 250,327 250,327 1,182,151 871,742 2,053,893 13. Related ar transactions Income of £39,84012021'. £40,439) was received from the Royal Artillery General Charitable Trust IRAGCTI. A number of the RACF trustees are also trustees of the RAGCT. This Income relates to accrued Income from the Service Giving Scheme, which were voluntary contributions from service personnel. At the year end, a balance of E3,37012021'. £3,364) is included within debtor5 for this income. An amount of £28,77712021'. £34,295 1 is intluded within creditors for the RACF. The RACF is the corporate trustee of the RAA. This income relates to Investment fees owed from RAA to RACF. The RACF made £29,16312021: £nill 8rant to to the RAA in 2022. Paee 22