**THE VICTORY (SERVICES) ASSOCIATION (A company limited by guarantee)**
**CONSOLIDATED REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023**
Registered Company No. 429298 Registered Charity No. 261307
**THE VICTORY (SERVICES) ASSOCIATION**
## **REPORT AND FINANCIAL STATEMENTS**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**CONTENTS**|**Page**|
|---|---|
|Reference and administrative details|1|
|Chair’s Statement and the Strategic Report|2-3|
|Trustees’ Report|4-10|
|Independent Auditors’ report|11-13|
|Consolidated statement of financial activities|14|
|Consolidated balance sheet|15|
|Association balance sheet|16|
|Consolidated cash flow statement|17|
|Notes to the financial statements
|18 - 28|
## **THE VICTORY (SERVICES) ASSOCIATION**
## **REFERENCE AND ADMINISTRATIVE DETAILS**
## **PATRON-IN-CHIEF**
Her Majesty the Queen GCVO
## **PRESIDENT**
General Sir Richard Barrons KCB CBE
## **CHAIR**
Major General J S Kerr CBE
## **VICE-CHAIR**
Colonel P R Rossiter
## **HONORARY TREASURER**
Lieutenant Colonel R Ward
## **DIRECTORS**
Mr P Brackley Air Vice-Marshal S Chisnall CB Mrs P Clayton Major General C J Harvey OBE QVRM TD (appointed 27[th] March 2023) Air Commodore P Higgins (retired 27[th] March 2023) Major General J S Kerr CBE Mr C N B Lacey Major C Marment FCSI Major General J S Mason MBE RM (appointed 15[th] June 2022) Mrs C Newhall-Caiger Mr G Roberts Colonel P R Rossiter Lieutenant Colonel R Ward
## **SECRETARY**
Air Commodore N P Beet CBE
## **BANKERS**
NatWest plc 69 Baker Street PO Box No 2 London W1U 6AT
## **AUDITORS**
Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG
## **SOLICITORS**
Charles Russell Speechlys 5 Fleet Place London EC4M 7RD
## **REGISTERED ADDRESS**
63-79 Seymour Street London W2 2HF
Bates Wells LLP 10 Queens Street Place London EC4R 1BE
1
## **THE VICTORY (SERVICES) ASSOCIATION**
## **CHAIR’S STATEMENT AND THE STRATEGIC REPORT**
## **FOR THE YEAR ENDED 31 MARCH 2023**
I am delighted to submit my report on the financial statements for the year which ended on 31st of March 2023.
The Directors of the Victory (Services) Association, which controls the Victory Services Club. together with the exceptional team of professional staff have all worked hard to deliver a successful year in the face of a challenging economic backdrop caused by both international and national factors, which followed hard on the heels of the COVID pandemic. I am extremely grateful for the resilience of the staff, the enduring support of the members of the Victory Services Club and all those who use our impressive facilities who collectively have ensured that our recovery has continued with a number of notable highlights which are detailed in the following paragraphs.
The invasion of the Ukraine on 24th February 2022, repeated disruption caused by transport strikes, and the economic distress caused by financial uncertainty, sharply rising prices and inflation have had a telling effect on the Club's operations and our staff and members. The Club is nothing without our excellent staff and in response to the financial pressures the Remuneration Committee and the Board responded with a number of measures to ease the burden including pay rises, the award of a discretionary extra week’s pay, three months of additional contributions to meet food and travel costs and a number of other measures to support the staff. Our members have repeatedly expressed their gratitude to the staff for their exceptionally high standards of work and loyalty. We are also very grateful to our diverse membership who repeatedly write in recognition of the staff. In December 2022, our membership donated £30,539 for the Staff Fund. In the year we saw membership increase from the 1st April 2022 by 1,838 to 59,941 by 31[st] March 2023. The membership has returned to the Club in considerable numbers and the average occupancy of our available bedrooms was 84% across the whole year. We have also witnessed an increasing use of the Club’s seven event rooms for members functions (celebrating birthdays and anniversaries), in addition to an increase in utilisation by Regimental Associations and Corporate companies, many of which are return bookings which is a positive indicator of both the high levels of standards and value which we provide. Naturally, the Club was exceptionally busy following the very sad loss of Her Majesty Queen Elizabeth II on 8[th] September 2022.
We are very proud that during the year we fulfilled our charitable objectives by providing an excellent venue for esprit de corps activities, but also the relief of hardship through the delivery of our Respite and Welfare Break scheme. In the year we provided 171 two-night free stays in the Club to families drawn from the UK Armed Forces and those who have recently left. A total of 514 individuals stayed with us for free during the year, and in addition we provided 30 breaks to servicemen and servicewomen (together with their children) who are recommended to us by the Armed Forces for Reward and Recognition breaks for their exceptional military service. The Club has again provided discounted event spaces for all sizes of charitable activities including award evenings, conferences and small meetings. When possible the Club has provided a number of free meeting rooms to assist other charities to deliver their objectives. The Club has also assisted our neighbouring school through the provision of our Facilities Management team to help with short term issues and also to provide our Carisbrooke Hall for large school events and productions.
Following the creation of a single Board consisting of twelve Trustees on 28[th] March 2023, and combined with the need to add focus to two specific areas, a Membership Committee was formed which met for the first time on 10[th] May 2022, and includes representatives from the Trustees, staff and currently serving personnel. In addition a Communications and Marketing Committee was formed on 25[th] May 2022 to provide direction and guidance to our Sales and Marketing staff. The creation of these two subcommittees has provided greater impetus for these key activities and much welcomed support for the staff.
The Club has undertaken a number of necessary infrastructure projects, the largest of which was the refurbishment of eighteen bedrooms on the second floor of the Centenary Wing, and the creation of two new family bedrooms with bunk beds for the children. Work started in January 2023 and the project was completed at the end of April prior to the Royal Coronation on 6th May 2023. Other key notable projects included the completion of Phases 2 and 3 of the Fire Alarm upgrade to a wireless system and the refurbishment of the Centenary service lift.
The Club was able to achieve all of the aforementioned, without overburdening our members with high charges, while also increasing our cash position through increased utilisation of our bedrooms, event spaces and dining facilities. This led to an increase in income from FY 2021/22 from £6,223,263 to £9,470,912. Last year I reported our end-of-year cash position as £2,725,041 and through the loyalty of our members, sheer industry and effective cost control, our end-of year position on 31[st] March 2023 is £4,265,045, which again includes our residual and declining CBIL which remains untouched. In Financial Year 2023-24 we look forward to continuing to deliver our charitable activities and take forward the works to reabsorb one of our sub-lets, in addition to the refurbishment of the Clubhouse’s front facade on Seymour Street (which is a lease condition) and making further improvements to our bedroom stock for the enjoyment of our members. More detail will follow at page eight. The retention and recruitment of high quality staff will be a constant feature as it has been during the reporting period.
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The Board of the Victory (Services) Association has every confidence that we are very much a going concern and we look forward to another successful year in 2023-24.
Major General Seumas Kerr CBE Chair
The Board of Trustees submits its report together with the audited financial statements of the Association for the year ended 31[st] March 2023.
3
## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEES’ REPORT**
## **FOR THE YEAR ENDED 31 MARCH 2023**
The Trustees (who are also the Directors for the purposes of the Companies Act) present their report, incorporating the Strategic Report, for the year ended 31[st] March 2023.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Reference and Administrative Information**
The Victory Services Club was founded in 1907 and is registered with the Charity Commission of England and Wales under charity number 261307. The Trustees, Secretary, principal advisors and addresses are listed on page 1..
The Victory (Services) Association, company registration number 429298, was incorporated on the 7[th] February 1947 and it controls the Victory Services Club. The Victory (Services) Association is a charitable company limited by guarantee and does not have a share capital. The Charity is governed by its Memorandum and Articles of Association and limits the liability of each member to £1. The Trustees are Directors of the company for the purposes of the Companies Act 2006.
## **Board of Trustees**
The Board of Trustees determines the general policy of the Association. The Trustees are legally responsible for the overall management, finances and control of the Club. The recruitment and selection of new Trustees to serve on the Board and the Association’s sub-committees is first considered by the Nominations Committee, prior to the submission of recommendations to the Board of Trustees and necessary approval. Potential new Trustees, and all appointees to subcommittees and senior Trustee roles, are assessed for their suitability in terms of knowledge, skills, experience and availability. New Trustees are inducted into the workings of the Charity by the Chair and Chief Executive/Club Secretary, with the latter providing a pack including the Charity Commission’s guidance for Trustees and the Club’s Business Plan. Trustees attend up to five meetings a year and all Trustees receive the minutes of each meeting.
Changes to the Board of Trustees within the year are highlighted as follows:
- Major General C J Harvey OBE QVRM TD (appointed 27th March 2023)
- Air Commodore P Higgins (retired 27th March 2023)
- Major General J S Mason MBE RM (appointed 15[th] June 2022)
No Trustee has any financial interest in the Association, nor draws any benefits. The Association reimbursed travelling expenses of £764 (2022: £645) to certain Trustees for attendance at meetings.
4
## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEES’ REPORT (Continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
The Association operates the following sub-committees and working group:
|**Committee/Working Group**|**Chaired by**|
|---|---|
|Nominations Committee|Major General Seumas Kerr|
|Marketing and Communications Committee|Mrs Petra Clayton|
|Membership Committee|Mr Gethin Roberts|
|Remuneration Committee|Major General Seumas Kerr|
|Investment Committee|Major Charles Marment|
|Trading Committee|Lieutenant Colonel Richard Ward|
|Governance Working Group|Colonel Philippe Rossiter|
The day-to-day management of the Association is delegated to the Chief Executive/Club Secretary, who is supported by the Operations Director and the Finance and HR Director, who together comprise the Senior Management Team. The Chief Executive/Club Secretary attends all Trustee meetings and meetings of the Association’s Sub-committees. Relevant members of the Senior Management Team also attend meetings of sub-committees when required.
## **VSC (Trading) Limited**
The Association holds 100% of the share capital of VSC (Trading) Limited, registered number 03532841. This company is responsible for using the Association’s facilities and resources which fall outside the charitable objectives of the Association by generating income to support the charitable objectives. All trading surpluses are distributed by Gift Aid to the Association. A summary of the results of the company are shown in note 11 of the financial statements.
## **Investment powers and policy**
## **Powers**
In furtherance of the objects of the Association, but not otherwise, the Association shall have the power to invest monies of the Association not immediately required for its purposes in or upon such investments, securities or property as may be thought fit, subject nevertheless to such conditions (if any) as may for the time being, be imposed or required by law. The investments of the Victory Services Association Limited are managed by Investec, Blackrock and M&G.
5
## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEES’ REPORT (Continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **Policy**
It is the policy of the Association to run the Club from trading surpluses and only to call upon investment reserves when essential for capital improvements. For the present it is the Association’s aim to achieve maximum growth while at the same time protecting the real value of investments. The Investment Committee re-invests the dividends in the fund. The value of the Association’s long-term investments should not be reduced below £1,000,000 at market value unless exceptional circumstances are approved by the Board of Trustees.
## **Risk management**
The Board of Trustees is required to include a statement that the major risks to which the Association is exposed, as identified by the Board of Trustees, have been reviewed and that the systems in place will mitigate those risks. The Board of Trustees reviews the formal risk management process to assess business risks and implement risk management strategies. This involves identifying the types of risks the charity faces, listing them in terms of potential impact and likelihood of occurrence, and identifying means of mitigating the risks. The Board of Trustees fully recognises the significant importance of effective internal controls on expenditure and payment and takes every action to minimise this risk. At each Trustees’ meeting one risk is considered in detail. The Senior Management Team are responsible for day-to-day monitoring of all risks on behalf of the Board of Trustees. The principal risks the Association faces and their mitigation strategies are as follows:-
|
follows:-||
|---|---|
|**Risk**|**Mitigation and Controls**|
|Risk 1: Business Downturn. Supplier price increases,
competition from other Clubs/hotels, erosion of prices and
inflation affecting consumer.|-
Regular cashflow review by SMT and Honorary
Treasurer.
-
Prompt identification and action on price increases
through purchasing and stock control procedures.
-
Regular benchmarking with industry associations
and competitors.
-
Comprehensive review process through various
reports (End of Day, Weekly Sales, Monthly
Management).
-
Cashflow and Business Performance Reports
reviewed at everymeetingbythe Board.|
|Risk 2: Business Downturn. Members decide not to use the
Club, or renew their membership and the Club fails to
recruit a matching or higher number of members.|-
Monitoring of attrition and joiners rates, and analysis
of reasons.
-
Membership Committee support to the Membership
Secretary and staff.
-
Efforts to attract new members through regular
communications (Club Talk, social media).
-
Priority actions lists and periodic progress briefings
to the Board.
-
Adjust pricing sensitively due to members' reduced
disposable income.|
|Risk 3: Failure to retain and then recruit a quality, motivated
workforce which causes the Club to be unable to deliver
our three values of Value, Service and Courtesy.|-
Ongoing monitoring of staff turnover, pay, benefits,
and facilities.
-
Benchmarking with the London hospitality sector for
appropriate compensation.
-
Monitoring of leave taken, sickness rates, and
overtime worked.
-
Close engagement with Managers to gauge morale
and workload.|
|Risk 4: Cyber-crime or inadequate IT policies leading to
reputational risk and an inability to manage the Club.|-
IT and Disaster Recovery policies developed with
advice from 3rd party consultants.
-
Measures in place to minimize cyber risk: managed
IT support, automated patching and updates,
firewall, DNS protection, user email security training,
cyber insurance.
-
Application patch management and failover internet
lines.
-
Consultancyfor Disaster Recovery.|
6
Risk 5: The Club is unable to raise sufficient cash to pay - Planned rebuilding of reserve funds to meet lease the lease extension premium. The Church Commissioners extension/purchase. decide not to renew our lease. - The Board of Trustees’ focus on the matter and financial target setting. - Effective management of sub-let leases to fulfil contractual duties.
## **CHARITABLE OBJECTIVES, VISION, MISSION AND ACTIVITIES**
The objectives of the Charity are:
- (i) To promote military efficiency and esprit de corps by bringing together members of the Armed Forces of the Crown, former members of the Armed Forces of the Crown and members of the Armed Forces of the Commonwealth and Foreign countries with whom they are currently allied and by improving the conditions of life of such persons.
- (ii) To relieve need, hardship or distress among persons who have served in the Armed Forces of the Crown and their dependants.
The Club’s Vision is to be the leading military members’ Club, where membership is cherished, and outstanding standards of services are the norm.
The Club’s Mission is to deliver outstanding Value, Service and Courtesy.
## **Public Benefit**
The Board of Trustees has had due regard to the Charity Commission guidance in deciding how to implement the Charity’s object for the benefit of the public. The work carried out by the Charity to further the charitable objectives is highlighted in the Chair’s statement.
By way of expansion on those points the Trustees and staff have been focused on our two objectives to ensure that we continue to provide a benefit to our members and the wider military ‘family’. To meet the Charity’s first objective we provide a smart, comfortable, and modern venue for esprit de corps activities. Specifically, these include informal and formal meetings, and Ships, Regimental and Squadron dinners, and conferences. The Club hosts an increasing number of military Association events due to a more effective marketing programme, and a pricing model which is 25% cheaper than a commercial non-military event being held in the Club. The intent of providing an enjoyable event that is affordable, which allows individuals from all ranks to participate and be accommodated at very reasonable prices has again been maintained. In FY 2022/23 single shared facility bedrooms which are only available for members was £64.50
Our RWB scheme, as mentioned by the Chair earlier, is a unique offer in London which provides free accommodation and all meals for a two-night stay to a family consisting of two adults and usually up to three school age children; this offer is extended to an accompanying carer if necessary. Over the last five years we have hosted 1,941 individuals under this scheme. Our Trustees are committed to annually increasing the numbers benefitting from this offer. This is achieved by the Club’s staff frequently engaging with the leading military charities and the single Service and Defence Medical Rehabilitation staff to seek nominations. The Club also continues to offer sixty free weekend Reward and Recognition breaks to members of the serving Armed Forces who are recommended to us. This scheme is generously funded by the Nuffield Trust for the Forces of the Crown. With the previously noted support for other charities the Club has given discounted charges for meeting and event rooms. In addition, SSAFA and the War Widows were given the Carisbrooke Hall for free one day with refreshments for a theatre production on Bereavement, which if hired to a corporate company would have cost £5,000. We have also hosted the Marble Arch Community Panel, and the Paddington Community Panel which involves local churches, schools, and other non-military charities and they have paid a discounted rate.
## **Remuneration of senior staff**
The Board of Trustees, supported by the salaried Senior Management Team, comprise the key management personnel of the charity in charge of directing and controlling, running and operating the Association on a day-to-day basis. All trustees give their time freely and no trustee received remuneration in the year. Details of trustees’ expenses and related party transactions are disclosed in note 8 to the accounts. The pay of the Senior Management Team and all staff is reviewed biannually by the Remuneration Committee which reports to the Board of Trustees. The Remuneration Committee considers comparative data from several external sources including the Association of London Clubs, and the Institute of Hospitality.
7
## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEE’S REPORT (Continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **Capital and Works Expenditure**
In the reporting period the Club carried out a range of capital and maintenance projects. The Chair highlighted the project to refurbish eighteen bathrooms on the 2nd floor of the Centenary Wing and the creation of two additional family suites. This project was completed in April 2023 at a cost of £360,000 and has greatly improved the facilities for our members. In year the club completed the annual survey of the front facade onto Seymour Street and also the roof and chimney stacks £which has identified a requirement for repair and redecoration work as required in the terms of our lease, but also to address water ingress and HSAW issues. Owing to access challenges the frontage of the Club will be fully scaffolded, which has contributed to the project cost of £365,000 in FY 2022/23. In June 2022 the club completed the £50,000 upgrade to a Wi-Fi capability which had been largely funded by a generous grant from the Army Central fund in the previous year. In addition, the Club installed the cabling for a music system in the Lounge Bar to add some ambience in the room when many members are not present. Owing to the age of the building the Club’s decision to install a wireless fire alarm detection system across a number of phases has now seen the completion of three phases in the Memorial Wing, with the Centenary Wing to be addressed next.
## **Plans for the Future** .
The Club’s linkages to the Armed Forces community, both serving and retired, will continue to be developed through the newly formed Membership Committee, which has already increased the number of invitations to Garrison family days and military conferences. A programme of actions has been developed with an increased marketing budget which will see the continuing increase in membership numbers going forward. We also anticipate hosting higher numbers of the free respite breaks which the Club provides, owing to the increasing awareness of these special opportunities at the VSC.
In FY 2023/24 the Club will carry out a project to replace the air conditioning plant in the Centenary Wing second floor bedrooms at a cost of £75,000 and spend £40,000 to install energy saving measures. Given the age of some of our IT systems, in FY 23/24 the Club will install new computer servers for the Club’s main accounts which will cost £45,000 and also spend £10,000 on replacement PC hardware. Later in FY 2023/24 the Club will take forward all necessary work to be ready to reabsorb the Al Balad sublet back into the Club when the tenant vacates on the 4th of June 2024. The capital works will cost £500,000 in FY 2024/25 and a compensation payment of £80,000 will also have to be paid in accordance with legislation. In FY 24/25 the ensuite bathrooms on the third floor of the Centenary Wing will be refurbished at a rough order of costs of £320,000.
## **FINANCIAL REVIEW**
The Consolidated Statement of Financial Activities shows a net surplus £690,205 (2022: £386,030). The surplus is after a loss in our investments of £149,765 (2022: gain £385,550). As the Investments are held for the long term, the Investment Committee does not propose a change in investment strategy. The accumulated funds at the balance sheet date totals £15,277,389 (2022: £14,587,184).
## **Fixed assets**
In the opinion of the Board of Trustees the market value of the leasehold premises is significantly higher than the book value, details of which are given in the notes to the financial statements. However, because of the various covenants in the lease, it is not practicable to ascertain with any degree of precision, the market value of the leasehold premises.
The investments held by the Association have been acquired in accordance with the powers available to the Trustees.
8
## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEE’S REPORT (Continued)**
**FOR THE YEAR ENDED 31 MARCH 2023**
## **Fundraising**
The Association does not actively fundraise from the public although grants are sought from grant making bodies. Some members have left bequests to the Association, and have voluntarily made some donations, for which we are most grateful. We have not received any complaints in respect of fundraising activity. In 2022/23 there were also no complaints.
## **Reserves policy**
In the year to the 31 March 2020 the Trustees carried out a review of the Reserves Policy. Using the Charity Commission guidance, the Trustees decided that the Charity needed to better ensure the long-term interests of the Charity and its beneficiaries were protected. Hence, the updated Reserves Policy was approved in October 2019 and consists of the following elements:
- The Charity’s unrestricted reserve to cover business downturn, property and staff risk would be built up to twelve months of operating costs (currently calculated at £7.18m);
- The designated fixed asset fund at the net book value of the fixed assets £8,686,010 (2022: £9,137,220);
- At 31[st ] March 2023, the Charity had total reserves of £15,277,389 (2022: £14,587,184). Of the total, £192,641 relates to restricted funds (2022: £197,845) and £8,686,010 is included in a designated fund which reflects the net book value of tangible fixed assets (2022: £9,137,220).
The Trustees further decided to review the Reserves Policy going forward as part of the annual budgeting process, or when the Charity’s strategy is reviewed and when the risks faced by the Charity significantly change.
As at 31[st] March 2023, the Charity had general, unrestricted reserves, excluding restricted and designated reserves of £6,398,738 (2022: £5,252,119).
## **Investment performance**
At 31[st] March 2023 investment balances were:
- Armed Forces Common Investment Fund: £601,758 (2022: £649,775).
- M&G Charifund: £1,988,103 (2022: £2,002,367).
- M&G Charibond: £279,468 (2022: £301,828).
- Investec Wealth & Investment Limited: £1,393,650 (2022: £1,457,513).
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## **THE VICTORY (SERVICES) ASSOCIATION**
## **TRUSTEE’S REPORT (Continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
The loss on investments was £149,765 (2022:gain £385,550). At the end of the financial year, the Charity’s total investments stood at £4,262,979 (2022: £4,403,775).
## **STATEMENT OF TRUSTEES’ RESPONSIBILITIES**
The Trustees are responsible for preparing Trustees’ Report and the financial statements in accordance with applicable law and regulations **.**
Company law requires the Trustees to prepare financial statements for each financial year. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of the affairs of the charitable company and of the group and of the surplus or deficit of the charitable company for that period. In preparing these financial statements the Trustees are required to:
- Select suitable accounting policies and apply them consistently.
- Observe methods and principles in the Charities SORP.
- Make judgements and estimates that are reasonable and prudent.
- State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.
- Prepare the financial statements on the going concern basis unless it is inappropriate to assume that the charitable company will continue in operation.
The Trustees are also responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustees also confirm that they have made all necessary enquiries and taken such steps that they ought to, to ensure that they become aware of any relevant audit information and that they confirm that the Association’s auditors have been made aware of such information.
In approving this Trustees’ Report, the Board are also approving the Strategic Report included herein in their capacity as company directors.
## **BY ORDER OF THE BOARD**
63/79 Seymour Street Air Commodore N P Beet CBE London, W2 2HF
10
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF THE VICTORY (SERVICES) ASSOCIATION**
## **Independent auditor’s report to the members of The Victory (Services) Association Limited**
## **Opinion**
We have audited the financial statements of The Victory (Services) Association Limited for the year ended 31 March 2023 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Association balance Sheet, the Consolidated Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:
- give a true and fair view of the state of the group’s and of the parent charitable company’s affairs as at 31 March 2023 and of the group’s and parent charitable company’s net movement in funds, including the income and expenditure, 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 Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
## **Other information**
The trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Report, incorporating the Strategic Report, and the Chair’s Statement. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
11
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF THE VICTORY (SERVICES) ASSOCIATION**
- the information given in the Trustees’ Report (which includes the strategic report and the directors’ report prepared for the purposes of company law) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors’ report included within the Trustees’ Report have been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the group and the parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Report (which incorporates the strategic report and the directors’ report).
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent charitable company; or
- the parent charitable company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of trustees for the financial statements**
As explained more fully in the trustees’ responsibilities statement set out on page 10, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the group’s and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor’s responsibilities for the audit of the financial statements**
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:
Based on our understanding of the group and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to charity and company law applicable in England and Wales and Scotland , and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and the Charities Act 2011.
12
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF THE VICTORY (SERVICES) ASSOCIATION**
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to income recognition. Audit procedures performed by the engagement team included:
- Discussions with management including consideration of known or suspected instances of noncompliance with laws and regulation and fraud;
- Reviewing the controls and procedures of the group relevant to the preparation of the financial statements to ensure these were in place throughout the year;
- Evaluating management’s controls designed to prevent and detect irregularities;
- Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and
- Challenging assumptions and judgements made by management in their critical accounting estimates, in particular donation and legacy recognition.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
## **Use of our report**
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Vikram Sandhu (Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP, Statutory Auditor 10 Queen, Street Place, London EC4R 1AG
13
## **THE VICTORY (SERVICES) ASSOCIATION**
## **CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES**
## **(including Income and Expenditure account)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**Note**
**INCOME FROM:**
Donations and legacies
3
Charitable activities
Membership
Catering and accommodation
Trading activities
Investments
4
**TOTAL INCOME**
**EXPENDITURE ON:**
Raising funds
Fundraising and publicity
Charitable activities
Catering and accommodation
Membership and central allocation
**TOTAL EXPENDITURE**
6
Net gains/(losses) on investments
**NET INCOME /(EXPENDITURE)**
5
Transfer between funds
**NET MOVEMENT IN FUNDS**
**Reconciliation of funds:**
Total funds brought forward
**TOTAL FUNDS CARRIED FORWARD**|**Unrestricted**
**Funds**
**£**
369,637
1,144,723
6,779,690
932,513
244,349
9,470,912
1,166,599
6,122,289
1,304,741
8,593,629
(149,765)
727,519
(32,110)
695,409
14,389,339
15,084,748|**Restricted**
**Funds**
**£**
-
-
-
-
-
-
-
37,314
37,314
-
(37,314)
32,110
(5,204)
197,845
192,641|**Total Funds**
**2023**
**£**
369,637
1,144,723
6,779,690
932,513
244,349
9,470,912
1,166,599
6,122,289
1,342,055
8,630,943
(149,765)
690,205
-
690,205
14,587,184
15,277,389|**Total Funds**
**2022**
**£**
404,298
1,016,661
4,065,223
501,445
235,636|
|---|---|---|---|---|
|||||6,223,263|
|||||593,607
4,438,084
1,191,092|
|||||6,222,783|
|||||385,550
386,030
-|
|||||386,030
14,201,154|
|||||14,587,184|
All transactions are derived from continuing activities. The split between unrestricted and restricted donations and legacies for the current and previous year is shown in note 3.
All recognised gains and losses are included in the Statement of Financial Activities.
14
**THE VICTORY (SERVICES) ASSOCIATION**
**Company Number: 429298**
## **CONSOLIDATED BALANCE SHEET**
## **AT 31 MARCH 2023**
|**Note**
**FIXED ASSETS**
Tangible assets
9
Investments
10
**CURRENT ASSETS**
Stocks
12
Debtors
13
Cash at bank and in hand
**CREDITORS: amounts falling due**
14
**within one year**
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS CURRENT LIABILITIES**
**CREDITORS:**falling due after more than 1 year
14
**TOTAL NET ASSETS OR LIABILITIES**
**FUNDS**
15
Restricted funds
Unrestricted funds:
Designated funds
General funds|**£**
**£**
8,686,010
4,262,979
12,948,989
48,906
314,787
4,265,045
4,628,738
(1,600,338)
3,028,400
15,977,389
(700,000)
15,277,389
192,641
8,686,010
6,398,738
15,084,748
15,277,389
**2023**|**£**
**£**
9,137,220
4,403,775
13,540,995
37,183
368,715
2,725,041
3,130,939
(1,084,750)
2,046,189
15,587,184
(1,000,000)
14,587,184
197,845
9,137,220
5,252,119
14,389,339
14,587,184
**2022**|**£**
**£**
9,137,220
4,403,775
13,540,995
37,183
368,715
2,725,041
3,130,939
(1,084,750)
2,046,189
15,587,184
(1,000,000)
14,587,184
197,845
9,137,220
5,252,119
14,389,339
14,587,184
**2022**|
|---|---|---|---|
||||13,540,995
2,046,189|
||||15,587,184|
||||14,587,184|
||||197,845
9,137,220
5,252,119|
||||14,389,339|
|||||
||||14,587,184|
The consolidated surplus of the Association was £690,205 (2022: surplus of £386,030 ).
The financial statements were approved and authorised for issue by the members of the Council on 5th July 2023 and were signed below on its behalf by:
Major General Seumas Kerr Chairman
Lieutenant Colonel Ward Honorary Treasurer
15
**THE VICTORY (SERVICES) ASSOCIATION**
**Company Number: 429298**
## **ASSOCIATION BALANCE SHEET**
## **AT 31 MARCH 2023**
|**Note**
**FIXED ASSETS**
Tangible assets
9
Investments
10
Investment in trading company
11
**CURRENT ASSETS**
Stocks
12
Debtors
13
Cash at bank and in hand
**CREDITORS:**amounts falling within one year
14
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS CURRENT LIABILITIES**
Creditors falling due after more than 1 year
14
**NET ASSETS**
**FUNDS**
15
Restricted funds
Unrestricted funds:
Designated funds
General funds|**£**
**£**
8,686,010
4,262,979
2
12,948,991
48,906
1,614,391
2,834,361
4,497,658
(1,469,260)
3,028,398
15,977,389
(700,000)
15,277,389
192,641
8,686,010
6,398,738
15,084,748
15,277,389
**2023**|**£**
**£**
9,137,220
4,403,775
2
13,540,997
37,183
495,665
2,558,934
3,091,782
(1,045,595)
2,046,187
15,587,184
(1,000,000)
14,587,184
197,845
9,137,220
5,252,119
14,389,339
14,587,184
**2022**|**£**
**£**
9,137,220
4,403,775
2
13,540,997
37,183
495,665
2,558,934
3,091,782
(1,045,595)
2,046,187
15,587,184
(1,000,000)
14,587,184
197,845
9,137,220
5,252,119
14,389,339
14,587,184
**2022**|
|---|---|---|---|
||||13,540,997
2,046,187|
||||15,587,184|
||||14,587,184|
||||197,845
9,137,220
5,252,119|
||||14,389,339|
|||||
||||14,587,184|
The financial statements were approved and authorised for issue by the members of the Council on 5th July 2023 and were signed below on its behalf by:
Major General Seumas Kerr Chairman
Lieutenant Colonel Ward Honorary Treasurer
16
## **THE VICTORY (SERVICES) ASSOCIATION**
## **CONSOLIDATED STATEMENT OF CASHFLOWS**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**Note**
**£**
**£**
**Cash Flow from operating activities**
21
2,264,578
**Cash flows from investing activities**
Rents receivable
205,975
Income from investments
18,543
Other interest receivable
19,831
Interest paid
24,481
Payments to acquire tangible fixed assets
(684,434)
Disposal of tangible fixed assets
-
Purchase of investments
(216,156)
Proceeds from sale of investments
207,187
**Net cash provided by (used in) investing activities**
(424,573)
**Cash flows from financing activities**
Cash inflows /(outflows) from borrowing
(300,000)
1,540,004
Cash and cash equivalents at the beginning of the year
2,725,041
**Total cash and cash equivalents at the end of the year**
4,265,045
**Analysis of changes in net debt**
**At start of year**
**Cash-flows**
Cash and cash equivalents
2,725,041
1,540,004
1,540,004
Loans falling due within one year
(300,000)
300,000
Loans falling due after more than one year
(1,000,000)
-
**Total**
1,425,041
1,840,004
**Analysis of cash and cash equivalents**
**2023**
**£**
Cash at bank and in hand
3,765,045
Notice deposits (less than 3 months)
500,000
**Total Cash and cash equivalents**
4,265,045
**Change in cash and cash equivalents in the**
**year**
**2023**|**£**
**£**
1,017,377
223,182
11,676
778
(435,861)
340
(260,591)
162,190
(298,286)
(200,000)
519,091
2,205,950
2,725,041
**Other non-cash**
**changes**
**At end of year**
4,265,045
**2022**|**£**
**£**
1,017,377
223,182
11,676
778
(435,861)
340
(260,591)
162,190
(298,286)
(200,000)
519,091
2,205,950
2,725,041
**Other non-cash**
**changes**
**At end of year**
4,265,045
**2022**|
|---|---|---|
||**Other non-cash**
**changes**||
|||(200,000)
519,091|
|||2,205,950|
||||
|||2,725,041|
|||**At end of year**
4,265,045|
||(300,000)
300,000|(300,000)
(700,000)|
||-|3,265,045|
|||**2022**
**£**
2,225,041
500,000|
|||2,725,041|
17
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **1. ACCOUNTING POLICIES**
The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:
## **(a) Basis of Accounting**
The financial statements have been prepared in accordance with 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) (Second edition effective 1 January 2019) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
The Victory (Services) Association meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). The accounts are prepared in pounds sterling, rounded to the nearest pound.
Group financial statements have been prepared in respect of the Association and its wholly owned trading subsidiary, VSC (Trading) Limited. The subsidiary has the same accounting reference date as the Association. No separate profit and loss account is presented for The Victory (Services) Association as provided by Section 408 of the Companies Act 2006.
## **(b) Subscriptions**
Subscription income is recognised in the period in which it is received.
## **(c) Grants, legacies and donations**
Grants, legacies and donations are accounted for when their payment to the Association is confirmed and quantifiable.
Government grant income represents the total amount claimed from HMRC under the Coronavirus Job Retention Scheme. The income is accounted for in the period in which the associated salary costs are made to furloughed staff.
## **(d) Investment income**
Investment income is accounted for in the period that it is receivable.
## **(e) Other income**
Other income is accounted for in the period in which it falls due. Income received in advance is treated as deferred income and included in creditors.
## **(f) Allocation of Expenditure**
Expenditure is charged directly to the cost centre to which it relates. Support costs area allocated based on income generated. Governance costs consist of those costs which relate to the overall running of the Association, including meeting statutory and regulatory requirements.
## **(g) Financial instruments**
Basic financial instruments are initially recognised at transaction value and subsequently measured at amortised cost with the exception of investments which are held at fair value. Financial assets held at amortised cost comprise cash at bank and in hand, together with trade and other debtors. A specific provision is made for debts for which recoverability is in doubt. Cash at bank and in hand is defined as all cash held in instant access bank accounts and used as working capital. Financial liabilities held at amortised cost comprise all creditors except social security and other taxes and provisions.
## **(h) Investments**
Investments are included at market value at the balance sheet date. Realised and unrealised gains and losses on investments are included in the Statement of Financial Activities.
## **(i) Tangible fixed assets**
Expenditure on fixed assets more than £1,000 is capitalised and depreciated over the asset’s expected useful life as follows:
- Leasehold premium is amortised over approximately 60 years.
- Furniture, equipment, electrical works and improvements to premises are depreciated by equal annual instalments over 5 to10 years
- Computer equipment is depreciated by equal instalments over 5 years.
- En suite bedrooms, lifts and other leasehold improvements are depreciated by equal instalments over 10 to 25 years
18
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **(j) Stocks**
Stocks are valued at the lower of cost or net realisable value.
## **(k) Debtors**
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
The Victory (Services) Association meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). The accounts are prepared in pounds sterling, rounded to the nearest pound.
Debtors are reviewed at the year-end for evidence of required impairment to their settlement amount. A Bad debts provision is calculated based on a conservative basis.
## **(l) Cash at bank and in hand**
Cash at bank and cash in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **(m) Fund Accounting**
_**Unrestricted funds**_ comprise accumulated surpluses and deficits on general funds - they are available for use at the discretion of the Council in furtherance of the general charitable objectives.
_**Designated funds**_ are amounts that have been put aside at the discretion of the Council. At the year-end they comprise a fixed asset fund which represents the extent to which funds are invested in fixed assets for use by the charity and therefore not available for other purposes (see note 15).
_**Restricted funds**_ are funds subject to specific restricted conditions imposed by the donors or the Council.
## **(n) Leasing and hire purchase commitments**
Provision is made annually for the estimated cost of obligations under the lease of the Association’s premises.
Rentals under operating leases have been charged to the Statement of Financial Activities on a straight-line basis.
## **(o) Preparation of accounts on a going concern basis**
The Council Members consider there are no material uncertainties about the Charity’s ability to continue as a going concern. The review of our financial position, reserves levels and future plans gives the Council confidence the charity remains a going concern for the foreseeable future.
## **(p) Critical accounting judgements and key sources of estimation uncertainty**
In the application of the accounting policies, Council Members are required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affected current and future periods. The main item within the financial statements where judgements and estimates have been made is in relation to estimating the useful economic life of tangible fixed assets.
## **(q) Pension arrangements**
## a) _Group personal pensions_
The Association provides group personal pension arrangements for certain employees. Contributions are made both by the Association and the employee into individual pension plans with a leading pension provider.
## b) _Automatic enrolment_
The Association joined the Government auto enrolment scheme in May 2014. Eligible members of staff are automatically enrolled unless the staff member explicitly chooses to opt out. The Association currently contributes 5% (2022: 5%) of pensionable salary to the scheme.
19
**THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **2. INCOME**
Income represents amounts receivable by the Association and its subsidiary from its membership and the services provided, net of value added tax recoverable. All income arose in the United Kingdom.
|**3.**
**GRANTS, LEGACIES, DONATIONS AND FUNDRAISING**
_Restricted voluntary income_
Grants
_Unrestricted voluntary income_
Grants
Legacies
Gift Aid on membership subscriptions and donations
Donations
**4.**
**INVESTMENT INCOME**
Rents receivable
Investment income
Other interest receivable
**5.**
**NET (EXPENDITURE)/INCOME FOR THE YEAR**
This is stated after charging the following:
- Amortisation of leasehold property
- Depreciation on other fixed assets
- Auditors remuneration for audit services
for audit services
for other services
- Operating lease rentals|**2023**
**£**
-
-
70,000
93,528
175,278
30,831
369,637
**2023**
**£**
205,975
18,543
19,831
244,349
**2023**
**£**
12,654
1,114,884
20,385
-
60,124|**2022**
**£**
40,000|
|---|---|---|
|||40,000
104,027
94,070
154,496
11,705|
|||404,298|
|||**2022**
**£**
223,182
11,676
778|
|||235,636|
|||**2022**
**£**
12,654
1,243,017
18,725
-
36,106|
20
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**6.**
**EXPENDITURE**
**a)**
**ANALYSIS OF EXPENDITURE**
**Raising Funds**
Fundraising and publicity
**Expenditure on charitable activities:**
Catering and accommodation
Membership and central allocation
**TOTAL EXPENDITURE**|**Support Costs**
**Staff Costs**
**Other Direct**
**Total**
**£**
**£**
**£**
**£**
330,986
452,506
383,107
1,166,599
2,411,471
2,701,185
1,009,633
6,122,289
397,120
851,381
93,554
1,342,055
3,139,577
4,005,072
1,486,294
8,630,943
**FOR THE YEAR ENDED 31 MARCH 2023**|**Support Costs**
**Staff Costs**
**Other Direct**
**Total**
**£**
**£**
**£**
**£**
330,986
452,506
383,107
1,166,599
2,411,471
2,701,185
1,009,633
6,122,289
397,120
851,381
93,554
1,342,055
3,139,577
4,005,072
1,486,294
8,630,943
**FOR THE YEAR ENDED 31 MARCH 2023**|
|---|---|---|
|||8,630,943|
Fundraising and publicity expenditure includes support, staffing and other costs associated with commericial events activity and marketing.
Expenditure includes £764,575 incurred by VSC (Trading) Limited (2022: £287,752). Of the total expenditure, £37,314 was restricted (2022: £34,394).
## **b) ANALYSIS OF SUPPORT COSTS**
**The costs above include support costs which are allocated on the basis of income generated.**
|**Raising Funds**
Fundraising and publicity
**Expenditure on charitable activities:**
Catering and accommodation
Membership and central allocation
**TOTAL SUPPORT COSTS:**|**Office**
**expenses**
**£**
23,481
171,599
28,974
224,054|**Property**
**costs**
**Other support**
**costs**
**Governance**
**costs**
**£**
**£**
**£**
223,377
73,674
10,454
1,632,445
538,414
69,013
275,632
90,909
1,605
2,131,454
702,997
81,072
**FOR THE YEAR ENDED 31 MARCH 2023**|**Total**
**£**
330,986
2,411,471
397,120|
|---|---|---|---|
||||3,139,577|
|**c)**
**GOVERNANCE COSTS**
Wages and salaries
Legal and professional, including audit
Council and Committee expenses|**2023**
**£**
10,454
69,013
1,605
81,072|**2022**
**£**
9,281
52,398
988|
|---|---|---|
|||62,667|
21
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**6.**
**EXPENDITURE (COMPARATIVE)**
**d)**
**ANALYSIS OF EXPENDITURE**
**Raising Funds**
Fundraising and publicity
**Expenditure on charitable activities:**
Catering and accommodation
Membership and central allocation
**TOTAL EXPENDITURE**|**Support Costs**
**Staff Costs**
**Other Direct**
**Total**
**£**
**£**
**£**
**£**
218,715
161,967
212,925
593,607
1,915,704
1,897,246
625,134
4,438,084
433,382
654,543
103,167
1,191,092
2,567,801
2,713,756
941,226
6,222,783
**FOR THE YEAR ENDED 31 MARCH 2022**|**Support Costs**
**Staff Costs**
**Other Direct**
**Total**
**£**
**£**
**£**
**£**
218,715
161,967
212,925
593,607
1,915,704
1,897,246
625,134
4,438,084
433,382
654,543
103,167
1,191,092
2,567,801
2,713,756
941,226
6,222,783
**FOR THE YEAR ENDED 31 MARCH 2022**|
|---|---|---|
|||6,222,783|
## **e) ANALYSIS OF SUPPORT COSTS**
## **The costs above include support costs which are allocated on the basis of income generated.**
|**Raising Funds**
Fundraising and publicity
**Expenditure on charitable activities:**
Catering and accommodation
Membership and central allocation
**TOTAL SUPPORT COSTS:**|**Office**
**expenses**
**£**
19,388
159,127
40,027
218,542|**Property**
**costs**
**£**
169,642
1,392,361
350,241
1,912,244|**Other support**
**costs**
**£**
20,404
311,818
42,126
374,348
**3**|**Governance**
**costs**
**£**
9,281
52,398
988
62,667|**Total**
**£**
218,715
1,915,704
433,382|
|---|---|---|---|---|---|
||||||2,567,801|
22
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**7.**
**STAFF NUMBERS AND COSTS**
The average number of persons employed during the year were as follows
Accommodation
Catering
Membership
Support
The aggregate payroll costs of these persons were as follows
Salaries and wages
Social security costs
Pension scheme contributions|**2023**
**No.**
61
48
3
9
119
**£**
3,541,788
325,477
148,262
4,015,527|**2022**
**No.**
43
39
2
5|
|---|---|---|
|||90|
|||**£**
2,383,703
216,720
113,333|
|||2,713,756|
Included in the above are termination payments of £1,088 (2022: £0). The number of employees whose emoluments, excluding pension contributions and employer's national insurance who were in excess of £60,000 were:
|£60,000 - £69,999
£70,000 - £79,999
£80,000 - £89,999
£90,000 - £99,999
£100,000 - £109,999
£120,000 - £129,999|**2023**
**No.**
-
1
1
1
-
1
4|**2022**
**No.**
1
1
1
-
1
-|
|---|---|---|
|||4|
Contributions of £43,948 were paid on behalf of these employees into a money purchase pension scheme (2022: £44,615)
The total employee benefits of the key management personnel of the Charity were £334,747 (2022: £308,680).
## **8. COUNCIL MEMBERS' REMUNERATION AND REIMBURSED EXPENSES**
No remuneration is paid to any member of the Council. Reimbursements of travelling expenses totalling £764 (2022: £645) were paid to certain Council members for attendance at the Charity's meetings.
23
**THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**9.**
**TANGIBLE ASSETS**
**Consildated and Association**
**Cost or Valuation**
At 1 April 2022
Additions
Disposals
At 31 March 2023
**Depreciation & Amortisation**
At 1 April 2022
Charged in Year
Disposals
At 31 March 2023
**Net Book Value**
At 31 March 2023
At 31 March 2022|**£**
837,952
-
-
837,952
473,360
12,654
-
486,014
351,938
364,592
**Long Leasehold**
**Buildings**|**£**
19,363,030
684,434
(242,220)
19,805,244
10,590,402
1,114,884
(234,114)
11,471,172
8,334,072
8,772,628
**Leasehold**
**improvements,**
**fixtures, fittings**
**and equipment**|**£**
20,200,982
684,434
(242,220)
**Total**|
|---|---|---|---|
||||20,643,196|
||||11,063,762
1,127,538
(234,114)|
||||11,957,186|
||||8,686,010|
||||9,137,220|
Substantially all the fixed assets are for direct activities in furtherance of the Charity’s objectives. The lease on the property at 63/79 Seymour Street, London, W2 2HF was renewed during 2001 for a further 125 years.
The subsidiary company did not own any fixed assets during the year (2022: None).
|**10.**
**INVESTMENTS**
Market value at 1 April 2022
Additions
Disposal
Net gains/(losses) on investments
Market value at 31 March 2023
Historical cost at 31 March 2023|**£**
4,403,775
216,156
(207,187)
(149,765)|
|---|---|
||4,262,979|
|||
||2,709,151|
Investments are held as units in managed funds operated by M & G Securities Limited, listed on the UK Stock Exchange and with the Armed Forces Common Investment Fund, managed by BlackRock Investment Management Limited and Investec Wealth & Investment Limited as follows:
|Armed Forces Common Investment Fund
M & G Charifund
M & G Charibond
Investec Wealth & Investment Limited|**£**
601,758
1,988,103
279,468
1,393,650|
|---|---|
||4,262,979|
At 31 March 2023 the investment revaluation reserve was £ 1,553,828 (2022: £1,727,007 ). The subsidiary company did not own any investments during the year (2022: None).
24
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **11. INVESTMENT IN TRADING COMPANY**
The Association holds 100% of the share capital of VSC (Trading) Limited (Company registration number 03532841) which is responsible for the provision of accommodation, catering and conference facilities.
|The Association’s investment in the trading company was as follows:
VSC (Trading) Limited|**2023**
**£**
2|**2022**
**£**
2|
|---|---|---|
The subsidiary is registered in England and Wales and pays under Gift Aid its entire profits as computed for corporation tax purposes to the Association.
|**Profit and Loss Account**
Turnover
Cost of Sales
**Gross profit**
Administration expenses (net of interest receivable)
**Operating profit**
Interest receivable and similar income
**Profit before tax**
**Profit for the financial year**|**2023**
**£**
932,579
(180,620)
751,959
(583,955)
168,004
4,634
172,638
172,638|**2022**
**£**
501,445
(107,892)|
|---|---|---|
|||393,553
(179,860)|
|||213,693
17|
|||213,710|
|||213,710|
In 2020/21, the loss in the Trading company was acknowledged as a one-off only as trading activities were closed during the Coronavirus lockdowns.
|**Balance sheet**
Current assets
Current liabilities
Amounts owed to the Association
**Net assets**
Share capital
Profit and loss account brought forward
Profit for the year
Gift aid to parent charity
Profit and loss account carried forward
**Capital and reserves**
**12.**
**STOCK**
**Consolidated and Association**
Food and wine
Club shop|**2023**
**£**
1,527,257
(131,617)
(1,223,000)
**172,640**
2
173,725
172,638
(173,725)
172,638
**172,640**
**2023**
**£**
43,280
5,626
48,906|**2022**
**£**
272,400
(39,653)
(59,020)|
|---|---|---|
|||**173,727**|
|||2
(39,985)
213,710
-|
|||173,725|
|||**173,727**|
|||**2022**
**£**
31,458
5,725|
|||37,183|
25
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**13.**
**DEBTORS**
Trade debtors
Amounts due from group undertaking
Other debtors
Prepayments and accrued income
**14.**
**CREDITORS: Amounts falling**
**due within one year**
Trade creditors
Other creditors including taxation and social
security
CBIL Loan
Accruals and deferred income
**CREDITORS: Amounts falling due after one year**
CBIL Loan
**Total**|**2023**
**2022**
**£**
**£**
135,861
125,584
-
-
30,623
65,423
148,303
177,708
314,787
368,715
**2023**
**2022**
**£**
**£**
524,204
286,043
500,094
285,684
300,000
300,000
276,040
213,023
1,600,338
1,084,750
700,000
1,000,000
2,300,338
2,084,750
**Consolidated**
**Consolidated**|**2023**
**2022**
**£**
**£**
43,797
20,682
1,223,000
213,710
197,237
84,458
150,357
176,817
1,614,391
495,667
**2023**
**2022**
**£**
**£**
524,204
286,042
386,851
248,630
300,000
300,000
258,205
210,923
1,469,260
1,045,595
700,000
1,000,000
2,169,260
2,045,595
**Association**
**Association**|**2023**
**2022**
**£**
**£**
43,797
20,682
1,223,000
213,710
197,237
84,458
150,357
176,817
1,614,391
495,667
**2023**
**2022**
**£**
**£**
524,204
286,042
386,851
248,630
300,000
300,000
258,205
210,923
1,469,260
1,045,595
700,000
1,000,000
2,169,260
2,045,595
**Association**
**Association**|
|---|---|---|---|
||||1,045,595
1,000,000|
||||2,045,595|
In April 2020, the Club obtained a government backed CBIL Loan for £1,500,000. The Trustees approved the loan to support the Club through the pandemic and maintain liquidity. The loan is for six years, with a fixed interest rate of 2.10% for five years, with no interest or repayments in the first year. Loan repayments commenced in July 2021.
|**15.**
**FUNDS**
**Unrestricted Funds**
Designated Funds
Fixed Assets
Significant Capital Projects Fund
General Funds
**Restricted Funds**
_Grants_
The Nuffield Trust
Respite & Welfare Breaks Reserve
ABF Soldiers' Charities
_Legacies_|**At 1 April 2022**
**£**
9,137,220
-
5,252,119
14,389,339
21,047
75,000
1,798
100,000
197,845
14,587,184|**Income**
**£**
-
-
9,470,912
9,470,912
-
-
-
-
9,470,912|**Expenditure**
**£**
-
-
(8,593,628)
(8,593,628)
(3,406)
(32,110)
(1,798)
-
(37,314)
(8,630,942)|**Transfers/**
**gains/**
**(losses)**
**£**
(451,210)
-
269,335
(181,875)
-
32,110
-
32,110
(149,765)|**At 31 March**
**2023**
**£**
8,686,010
-
6,398,738|
|---|---|---|---|---|---|
||||||15,084,748
17,641
75,000
-
100,000|
||||||192,641|
||||||15,277,389|
The year end restricted fund balance represents £17,641 from the Nuffield Trust for the funding of Reward and Recognition breaks, and a £100,000 legacy towards the refurbishment of adapted bedrooms. As part of our charitable objectives, the Club maintains its Respite & Welfare reserve of £75k to support those who take advantage of the Charity's respite and welfare breaks.
26
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
|**15.**
**FUNDS (comparative)**
**Unrestricted Funds**
Designated Funds
General Funds
**Restricted Funds**
_Grants_
The Nuffield Trust
ABF Soldiers' Charities
Respite & Welfare Breaks Reserve
Army Central Fund
_Legacies_
**Other specific donations**|**At 1 April 2021**
**£**
9,957,369
4,027,708
13,985,077
24,619
16,458
75,000
100,000
216,077
14,201,154|**Income**
**£**
-
6,183,263
6,183,263
-
-
40,000
-
40,000
6,223,263|**Expenditure**
**£**
-
(6,188,388)
(6,188,388)
(3,572)
(14,660)
(16,163)
-
(34,395)
(6,222,783)|**Transfers/**
**gains/**
**(losses)**
**£**
(820,149)
1,229,536
409,387
-
16,163
(40,000)
-
(23,837)
385,550|**At 31 March**
**2022**
**£**
9,137,220
5,252,119|
|---|---|---|---|---|---|
||||||14,389,339
21,047
1,798
75,000
-
100,000|
||||||197,845|
||||||14,587,184|
The year end restricted fund balance represents £21,047 from the Nuffield Trust for the funding of Reward and Recognition breaks, £1,798 from the ABF Soldiers' Charites and £75,000 to fund those who take advantage of the Charities respite and welfare breaks and a £100,000 legacy towards the refurbishment of adapted bedrooms.
## **16. ANALYSIS OF FUND BALANCES BETWEEN NET ASSETS**
|Tangible fixed assets
Investments
Net current assets
Long term liabilities
Tangible fixed assets
Investments
Net current assets
Long term liabilities|**Restricted**
**Funds**
**£**
-
-
192,641
-
192,641
**Restricted**
**Funds**
**£**
-
-
197,845
-
197,845|**General**
**Funds**
**Designated**
**Funds**
**£**
**£**
-
8,686,010
4,262,979
-
2,835,759
-
(700,000)
-
6,398,738
8,686,010
**General**
**Funds**
**Designated**
**Funds**
**£**
**£**
-
9,137,220
4,403,775
-
1,848,344
-
(1,000,000)
-
5,252,119
9,137,220
**AT 31 MARCH 2023**
**AT 31 MARCH 2022**|**Total**
**£**
8,686,010
4,262,979
3,028,400
(700,000)|
|---|---|---|---|
||||15,277,389|
||||**Total**
**£**
9,137,220
4,403,775
2,046,189
(1,000,000)|
||||14,587,184|
27
## **THE VICTORY (SERVICES) ASSOCIATION**
## **NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **FOR THE YEAR ENDED 31 MARCH 2023**
## **17. CAPITAL COMMITMENTS**
Commitments for capital expenditure for which no provisions have been made in these financial statements were as follows:
|**18.**
**OPERATING LEASE COMMITMENTS**
**Land &**
**Buildings**
**Other**
Leases which expire:
**£**
**£**
In one to five years
-
60,124
After five years
577,500
-
577,500
60,124
**2023**
Authorised and contracted for works for the lift upgrades (Memorial Wing), replacement
AC units (Centenary Wing) and new card system for bedrooms.|**2023**
**2022**
**£**
**£**
136,895
131,838
**Land &**
**Buildings**
**Other**
**£**
**£**
-
36,106
597,750
-
597,750
36,106
**2022**|**2022**
**£**
131,838|
|---|---|---|
|||36,106|
## **19. MEMBERS' LIABILITY**
The Charity is governed by its Memorandum and Articles of Association and limits the liability of each member to £1. The members of the Council are Directors of the company for the purposes of the Companies Act 2006 and serve as Trustees of the charitable company.
## **20. PENSION COMMITMENTS**
The Association operates a Group pension arrangement. The overall pension charge for the year was £148,262 (2022: £113,333. At 31 March 2023, contributions of £34,740 were outstanding (2022: £16,973.06)
## **21. RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH INFLOW**
|**RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH INFLOW**|||
|---|---|---|
|**Net movement in funds**
Dividends, interest and rents from investments
Interest Paid
Net losses/ (gains) on investments
Depreciation and amortisation charges
Increase/ (Decrease) in creditors
Decrease/ (Increase) in debtors
(Increase)/ Decrease in stocks
**Net Cash generated by operating activities**|**2023**
**£**
**690,205**
(244,349)
24,481
149,765
1,127,538
582,588
(53,928)
(11,723)
**2,264,578**|**2022**
**£**
**386,030**
(235,636)
-
(385,550)
1,255,671
32,798
(26,280)
(9,656)|
|||**1,017,377**|
## **22. RELATED PARTY TRANSACTIONS** At the year end VSC (Trading) Limited (the subsidiary) owed The Victory (Services) Association £1,223,000 (2022: £59,020)
||**2023**|**2022**|
|---|---|---|
||**£**|**£**|
|Payments from VSC (Trading) Limited to parent charity for shared resources|39,985|6,995|
|Profits donated by VSC (Trading) to The Victory (Services) Association|173,725|-|
## **23. POST BALANCE SHEET EVENTS** There were no post balance sheet events to disclose.
28