2021-03-31-accounts

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

Company number: 293432 Charity Number: 305962 Scottish Charity Number: SC039057

Report and financial statements For the year ended 31 March 2021

Army Cadet Force Association

For the year ended 31 March 2021

Reference and administrative information .................................................................................... 1 Trustees’ annual report ................................................................................................................ 3 Independent auditor’s report ...................................................................................................... 17 Statement of financial activities (incorporating an income and expenditure account) .................. 22 Balance sheet ............................................................................................................................. 23 Statement of cash flows .............................................................................................................. 24 Notes to the financial statements ............................................................................................... 25

Army Cadet Force Association

Reference and administrative information

For the year ended 31 March 2021

Company number	293432
Country of incorporation	United Kingdom
Charity number	305962	SC039057
Country of registration	England & Wales	Scotland
Registered office	Holderness House
and operational address	51-61 Clifton Street
	London EC2A 4DW
Patron	Her Majesty The Queen
President	Lieutenant General Sir Andrew Graham Bt CB CBE
Trustees	Trustees, who are also directors under company law, who served
	during the year and up to the	date of this report were as follows:
Chair	Kevin AbrahamA B C
Vice Chair	Jemma Herlihy (nee Ralph)C
Treasurer	Alan GoodwinA B
	Wendy AdamsC
	Joanne Brocklehurst	Resigned 22 Feb 21
	Andrew CassidyC F
	David ChippD	Appointed 30 Jul 21
	Ruadhri DuncanA
	David Fuller	Resigned 9 Feb 21
	Sir Andrew Graham Bt	Resigned 9 Feb 21
	Catherine HarrisonB
	David KaneC E
	Emily Lincoln-Gordon	Resigned 9 Feb 21
	Nigel Sarling	Resigned 9 Feb 21
	Russell Stafford-Tolley	Resigned 9 Feb 21
	Justin Tarka	Appointed 10 Apr 21
	Christopher Tearney
	Nicholas Williams
	Agata ZukowskaA

[A] denotes membership of the Finance and General Purposes Committee
[B] denotes membership of the HR and Remuneration Committee
[C] denotes membership of the Nominations and Governance Committee
[D] denotes membership of the ACFA Wales Committee
[E] denotes membership of the ACFA Northern Ireland Committee
[F] denotes membership of the ACFA Scotland Committee

Army Cadet Force Association

Reference and administrative information

For the year ended 31 March 2021

Key management	Murdo Urquhart	Chief Executive
personnel	Richard Walton	Deputy Chief Executive
	Faye Meakin	Head of Development	Appointed 5 July 2021
Bankers	Lloyds Bank plc
	Butler Place
	London SW1H 0PR
Investment	Waverton Investment Management
managers	16 Babmaes Street
	London SW1Y 6AH
Auditor	Sayer Vincent LLP
	Chartered Accountants and Statutory Auditor
	Invicta House
	108-114 Golden Lane
	London EC1Y 0TL
Solicitor	Bates Wells
	10 Queen Street Place
	London EC4R 1BE

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

The trustees present their report and the audited financial statements for the year ended 31 March 2021.

Reference and administrative information set out on page 1 and 2 forms part of this report. The financial statements comply with current statutory requirements, the memorandum and articles of association, the requirements of a directors’ report as required under company law, and the Statement of Recommended Practice - Accounting and Reporting by Charities: SORP applicable to charities preparing their accounts in accordance with FRS 102.

Objectives and activities

Purposes and aims

The Army Cadet Force Association has two charitable objects:

(1) To give mental, moral and physical training to young people and so to form and develop the character of each as to enable them to make a good start in life and to develop in them principles of good citizenship.
(2) To promote the efficiency of the Army Cadet Force through fostering the activities of Army Cadets and advancing the youth leadership abilities of Army Cadet Force Adult Volunteers

The charity’s first purpose is therefore to provide activities or access to activities that will educate, develop and broaden the interests of young people, including the 38,000 who are cadets in the Army Cadet Force (ACF). Young people meet in one of 1,700 community-based ACF Detachments across the whole of the UK; these detachments are grouped into “ACF Counties” roughly based in one or more geographical or historical Local Authority areas. The Association looks to enhance young peoples’ development both through the delivery of support to ACF Counties and by the making of grants to support individual cadets; to support local initiatives; or, to help existing ACF Counties to improve their resilience and so ensure they are able to deliver development opportunities to young people for many years to come.

The Association offers grants to enable cadets to take part in a wide range of activities and also runs an annual event at which cadets have the opportunity to perform music in front of a large audience or to attend a formal dinner with their instructors. Finally, the charity carries out functions in the interests of the ACF as a whole such as the provision of insurance cover against accidents, travel difficulties and to provide legal help.

To further the charity’s second object the charity assists the Army’s chain of command to coordinate national training for the Duke of Edinburgh award scheme, First Aid and Sport, also contributing to the delivery of courses for ACF adult volunteers across these areas. With a grant from the MoD the ACFA is able to support the delivery of Piping and Drumming Qualifications Board and BTEC accredited qualifications across the UK. Both the trustees and the staff of the

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

charities invest time in promoting the ethos and activities of the ACF to wide audiences including school leadership and local communities as well as supporting ACF adult volunteers with access to information and introductions to useful organisations and individuals.

In respect of the second object, a particularly important but intangible role of the Association is to act as an adviser to HM Government, predominately the Ministry of Defence and Army, and other bodies on ACF matters. This is because the Association is part of the ACF’s “corporate memory”, briefing and informing the leaders of the day, doing this whilst remaining an impartial but enthusiastic supporter of the important and ongoing development of the ACF as a modern and vibrant youth service.

In particular the Association acts, informally, as the Army chain of command’s ‘conscience’ as it runs what in effect is a wonderful national youth movement (the ACF) made possible by adult volunteers (predominantly civilians with no previous military service) who as ACF officers and instructors give their time to train cadets. The financial and material support for the ACF comes from the Army, which quite rightly imposes necessary training safety and safeguarding regimes through its chain of command. The Association plays a part in making this relationship work by representing the interests of the volunteers who train cadets by providing support and views to the Army, including contributing to the development of central policies and direction needed to run the ACF. This is done formally by attending Ministry of Defence and Army cadet steering and working group meetings, developing cadet strategy and policies, and informally through constant ongoing dialogue with the chain of command by the Association’s President, Chair, trustees and senior members of the Secretariat.

The trustees review the aims, objectives and activities of the charity each year in the light of these charitable objects. This report looks at what the charity has achieved and the outcomes of its work in the reporting period. The trustees report the success of each key activity and the benefits the charity has brought to those groups of people that it is set up to help. The review also helps the trustees ensure the charity's aims, objectives and activities remained focussed on its stated purposes.

The enduring priority for association’s trustees is to ensure that young people are able to develop through membership of the ACF. This means a focus on some key areas:

Providing useful and developmental membership services in order to support Cadet Force Adult Volunteers (CFAVs) to deliver a high-quality cadet experience.
Supporting the ACF as an organisation to deliver certain activities that support the rounded development of cadets.
Supporting ACF Counties, Regions and Centres to deliver innovative developmental training to young people.
Removing barriers, such as cost, to individual cadet participation in ACF activities.
Advocating for the ACF to key influencers in order that the benefits of participating in ACF activity are widely understood and well supported.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity's aims and objectives and in planning its future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives that have been set.

Our Values

As a charity dedicated to improving the lives of young people we feel it is important to have clearly articulated values. In particular as a charity that supports the Army Cadets, a values-led youth organisation, it is important that our values align. Our values are:

TRUSTWORTHY . We are inclusive and principled. We make values-based judgements and think deeply about our programmes and activities. We want our staff to accept one another for who they are and build positive relationships.
ABIDING . We learn from the past and plan for the future. Retaining our best staff is as important to us as recruiting quality new team members.
COMMITTED . We are dedicated in our mission to empower young people through cadet activities and our staff enable us to inspire young people to achieve their future ambitions.
COURAGEOUS . We want our staff to speak up and feel confident they will be heard. We are at our best when all have the courage to do what is right.

Impact of Coronavirus Restrictions on the Charity’s Operation

The trustees have carefully considered the impact of the UK’s coronavirus restrictions on the operations of the charity. The impact of COVID-19 on the last year centred mainly on the charity’s ability to give and monitor grants. Cadet activity levels dropped off across the entire ACF, and all ACF Detachments closed. Correspondingly, our usual grant programmes were temporarily suspended and instead the trustees established two temporary grant programmes: The Hardship Relief Fund and the Rejuvenation Fund. Given the ongoing restrictions normal grant making is expected to pick up in the final two quarters of the next financial year.

Our investment income is likely to be reduced in the short term. In the medium term the trustees are alive to the possibility that anticipated Government funding cuts might lead to a reduction in income. In this situation the charity may need to prioritise particular activities. The charity is looking at a range of options as to the best way to effectively discharge its objects and is investing significantly in communicating its identity, purpose, values and impact more effectively. This work will enable the charity to have constructive conversations with a range of potential funders in order to diversify the work we do in support of our charitable objects.

Achievements and performance

The charity's main activities and who it tries to help are described below. All its charitable activities focus on the cadets, volunteers and counties of the ACF and are undertaken to further the Army Cadet Force Association’s charitable purposes for the public benefit.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

The Association uses MoD funding to deliver programmes of activity for young people in the ACF. This includes acting as the licenced provider for the Duke of Edinburgh Award, first aid and music qualifications. We help administer public performances and ceremonial activity, whether in support of the Festival of Remembrance in London, coordinating national sporting events and competitions, or parading the ACF’s massed Pipes and Drums for HM The Queen at Balmoral Castle.

The Association’s grant programme gave out less funds in 2020-21 than in 2019-20. This is because we were unable to give out our normal activity grants and instead shifted predominately to giving Hardship Relief grants. In support of cadets and volunteers we paid grants of £377,402 (2020 - £115,595). In support of ACF Counties, Regions and Centres we paid grants of £3,500 (2020 - £309,566).

Grant Programmes

The Association furthers its objects through the awarding of grants to individual cadets and adult volunteers, or to ACF Counties. The Association normally makes grants each year to cadets, adult volunteers and to ACF Counties. This year, with the cessation of cadet activities, the trustees were proactive in assessing the potential risks of COVID-19 on the long-term sustainability of the ACF, it was quickly apparent that the impact of lockdowns, ill health, family disruption and a loss of connection to the ACF could lead to qualified and experienced adult volunteers choosing to leave the ACF. The trustees therefore decided to establish a temporary grant fund, the Hardship Relief Fund, that aimed to support adult volunteers in order that they would be in a position to continue volunteering once cadet activity restarted. 412 grants were awarded totalling £359k and supported volunteers with a range of costs to support hardship in their everyday lives.

Grants made to cadets seek to make activities more accessible, irrespective of a young person’s financial means. Adult volunteer grants are intended to make qualifications accessible to all, thus improving the youth leadership abilities of adult volunteers. This also enables individuals to evidence the skills and experience they have developed through the ACF to prospective employers. Here are some examples of how Association grants have supported cadets and volunteers this year:

Various ACF Counties: Funded part of the cost of 12 (2020 22) ILM Level 5 qualifications for new Company-level volunteers and ILM Level 4 qualifications for new volunteer Officers.
Various ACF Counties. Awarded 5 (2020 4) Cadet adventurous training bursaries to attend an Outward Bound Trust Skills For Life Award - 19 Day Course. Because of the pandemic those awarded grants in 2020 attended courses in the year ending 2021.

Grants to ACF Counties, Regions and Centres are generally to support the purchase of equipment or the development of facilities that will improve the experience of many cadets over a number of years. Here are some examples of Association grants in this category:

Cadet Training Centre, Frimley Park: Funded improvements to the student welfare facilities.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

Bristol ACF, Cornwall ACF, Devon ACF, Dorset ACF, Gloucestershire ACF, Somerset ACF and Wiltshire ACF: Funded the cost of new tutor literature to support the delivery of Duke of Edinburgh Award within the County.

Beneficiaries of our services

The main way in which the Association delivers benefit to its beneficiaries is through the provision of grants and provision of support to the ACF in terms of people to deliver specified activities agreed with the Army’s chain of command. As explained earlier in the report, grants are made either to support the ACF County and its ability to deliver the cadet programme, or to individual cadets and volunteers to enable them to access the full range of opportunities in the ACF. This year we have expanded our support to adult volunteers in order to enable them to continue volunteering their time and their talents after the pandemic by ensuring the personal impact of COVID on them is as low as possible and that the fraternal bond with the ACF remains strong.

In order to measure the difference that these grants and activities have made the trustees ask for reports from grant recipients. These detail the impact of the grant and are used to help the trustees to decide both what funding to bid for and how best to structure the Association’s grant programmes in the future.

In an unusual grant-giving period the Hardship Relief Fund sought to provide relief to volunteers across the entire UK in order to help them continue to volunteering in the ACF. Examples (most are anonymised unless permission to use a name has been given) of the impact of these grants include:

“Being allowed a grant from the Fund, literally allowed me to breathe a sigh of relief and improved my mental health. Once again. I thank you very much.”
Darren, an Adult Volunteer from Hampshire, said “The Hardship Fund came at a time where it was such a life line for me to be able to get small essentials that I could not afford and for this I was so grateful.”
“This hardship relief fund helped me enormously as without it things could have been serious as I had no income being self-employed and it was desperate. I can’t thank everybody enough and it has enabled me to sleep at night and strengthened even more my commitment to the Army Cadet Force.”
“It has been a huge help for me and my family during such difficult times. I feel proud to be part of such a wonderful organisation and am grateful for the assistance.”
“The grant came at an important time for me and my family. It allowed me to pay our mortgage for three months which then allowed me the breathing space to find new employment and stopped us going into arrears. The relief this gave us as a family was huge.”
Tim, an Adult Volunteer for 8 years who lives in West Sussex, was hit hard by the COVID19 pandemic. “Finding myself in such a position that my family really needed some financial support was hard to come to terms with after so many years of being so selfsufficient, but knowing that there are support mechanisms in place such as the ACFA Hardship Relief Fund made a huge positive impact to me and my family.”

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

“When I had to shield due to Covid the hardship fund helped me pay my rent and feed my children until I gained universal credit. It really helped me in a hard time.”

Financial review

The statement of financial activities for the year is set out on page 22 of the financial statements. A summary of the financial results and the work by the Association is set out below.

Income for the year included donations and legacies of £4,824,823 (2020 – £4,302,015), income for supporting cadets and volunteers of £2,845 (2020- £3,099), other trading activities of £45,401 (2020 – 61,444) and investment income and interest of £68,141 (2020 - £74,067). Total gross income amounted to £4,941,210 (2020 - £4,440,625).

Expenditure for the year comprised costs of raising funds of £600 (2020 - £9,496), costs of activities in support of ACF Counties of £2,126,737 (2020 – £2,172,205) and costs of supporting cadets and volunteers of £2,015,731 (2020 – £2,140,855). Total expenditure amounted to £4,233,068 (2020 - £4,322,556).

Net income for the year before investment gains/losses amounted to £708,142 (2020 - £118,069). In particular this was owing to curtailed activity as a result of the coronavirus restrictions. A sum of £560k was left over from a restricted donation to support Army Cadet marketing. This restricted fund is planned to be spent on recruiting new cadets and adult volunteers after coronavirus restrictions have been lifted. A further sum of £198k in restricted funding, received during the year, remains in hand to support the development of Cadet Digital Services in the coming year.

Investment Policy and Performance

The trustees expect the charity to exist in perpetuity and its investment policy is designed to support the long-term financial health of the charity. The Association adopted its current investment policy in July 2020; its stated objectives are to:

Produce the best financial return within an acceptable level of risk.
Generate a return of CPI plus 3% per annum over the long term (defined as a five-year average), after expenses.

The Association has adopted a total return approach to investment, generating the investment return from income and capital gains or losses. It is expected that if in any one year the total return is insufficient to meet the growth target, in the long term the real value of the investments will still grow in accordance with the investment objectives above.

The Association has decided not to invest in assets that the trustees consider to be contrary to the spirit of its objects, particularly if they run counter to the values of the charity. In particular

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

tobacco, alcohol and pornography are excluded from our investments. The trustees have agreed a process with our investment managers as to how these restrictions are to be applied.

During the year net gains on the fair value of investments amounted to £488,933 (2020 – net losses of £18,651). The investment objective is to generate a return of CPI plus 3% per annum over the long term. The five-year average (CPI + 3%) to the end of March 2021 has been calculated as 4.78% (March 2020 - 4.74%). As at 31 March 2021 the three-year average (since moving the portfolio to Waverton) shows a return of 7.86% (2020: two-year average of 3.01%). The trustees recognise that this three-year average is a shorter period than the five-year average that is the benchmark and are therefore satisfied with the investment performance in the year.

In order to support the efficient delivery of our programme of charitable work and to efficiently manage cash flow, the trustees have directed that funds earmarked for use in the next two years are to be held in cash deposit accounts of no more than 24 months in duration. At present the funds held on deposit of £300,192 (2020 - £704,266). Fixed term deposits with a maturity date before 1 July 2021, or a notice period under 90 days, are treated as cash.

Principal risks and uncertainties

The trustees examine the major risks that the Association faces each financial year during routine board meetings and in meetings between the senior trustees and the Chief Executive. The charity has systems in place to monitor and control these risks to mitigate any impact that they may have on the Association's activities in the future.

The key risks for the charity, as identified by the trustees, are described below together with the principal way in which they are mitigated:

Coronavirus Restrictions. The Association has seen significant change in its grants profile during a year of coronavirus restrictions. While the trustees felt it right to deliver two significant new grant programmes during the year they are conscious that, as cadet activity restarts, there will be new financial pressures on the ACF and the young people involved. This could lead to significant over or under demand against the grant funding, which is quite difficult to predict. The trustees are looking at diversifying the activities of the charity to enable it to deliver its objects in new ways.
Financial Risk. As the Association’s funding comes largely from a single source (the Army’s Headquarters Regional Command) there is a risk that any government savings drive or call for in-year efficiencies could impact upon funding. The Trustees mitigate this risk by: maintaining reserves to cover a loss of funding in the short-term should the charity need to adjust to a lower-income model; having a formalised Memorandum of Understanding with HQ Regional Command outlining what funding is required and how it will be used; and through the Finance and General Purposes Committee exercising oversight of the financial status of the charity.
Resilience Risk. A temporary or permanent loss of the Holderness House building due to fire, flood or other emergency. The Trustees mitigate this risk by: seeking assurance from

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

Greater London Reserve Forces and Cadets Association (the landlord) that the building is compliant with the appropriate regulations; holding adequate insurance; operating a resilient remote-desktop capability through a third-party supplier and having access to office locations across the UK.
Staff Risk. The success of the Association’s programme of work depends on well-motivated staff committed to the cause of the ACF and ACFA. The Trustees seek to ensure this by: having appropriate recruitment, complaints and HR policies and ensuring they are adhered to; a system of annual staff appraisal; holding appropriate insurance; ensuring the policies are kept up to date and are easily accessible to all staff and managers; and obtaining appropriate specialist HR advice for individual issues.
Governance Risk. The success of the ACFA’s programme of work depends on good governance. The trustees seek to ensure this by: having appropriate recruitment and appointment processes; regular reviews of the board’s structure, competence and diversity; monitoring and adopting best practice recommendations from the charity regulators; holding appropriate insurance to protect trustees; and ensuring trustees retire at a rate of approximately a third each year.

Reserves policy and going concern

The Reserves Policy defines the target level of reserves as an amount sufficient to maintain ongoing operations and programmes for three months. The calculation of average monthly operating costs includes all recurring, predictable expenses such as salaries, office costs, expenses, marketing, insurance and charity projects including bursaries and grants. Depreciation, in-kind, and other non-cash expenses are not included in the calculation. The calculation of average monthly expenses also excludes one-time or unusual, capital purchases. The amount of the reserve fund target minimum will be calculated each year after approval of the annual budget, reported to the Finance and General Purposes Committee and included in the regular financial reports.

In making this policy the trustees chose to treat long term investments as funds invested to generate income for the charity and they are therefore excluded from the reserves calculation. Funds invested for this purpose generated an income of £65,901 (2020: £60,356).

The minimum reserves allowed under this policy is £1,088,926 (2020: £1,166,904). Free reserves were £1,118,538 (2020: £1,195,822). The trustees are therefore satisfied that the reserves are within the target level.

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these accounts. The trustees have made this assessment in respect to a period of one year from the date of approval of these accounts.

The trustees of the charity have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

Fundraising

The charity is not a member of the Fundraising Regulator because it does not engage in the kind of fundraising activity that would make this a requirement. The charity’s approach to fundraising activity is to seek grants from organisations in order to achieve a particular aim, for example to invest in the sustainability of existing ACF Counties. Where an individual or group with an interest in the cadet movement would like to support cadets, we invite them to make a donation to the ACFA. We do not use a professional fundraiser or a commercial participator.

We offer the facility for individuals to make one off or repeat donations online and offer membership of the ACFA to ACF Counties. We have received no complaints about fundraising.

We do not contact our members or supporters to solicit donations, although this is something we might consider doing should we have a specific fundraising objective in the future.

Plans for the future

This coming year the Association will concentrate on three key areas. Firstly, the Association will conclude the final round of its Hardship Relief Fund, which has enabled adult volunteers suffering financial hardship caused by COVID-19 to keep volunteering as cadet activity restarts and additionally provide “Rejuvenation Funding” to our member ACF counties across the UK to aid them in welcoming cadets back to training and new young people into the ACF. Secondly the Association will review its approach to fundraising with a view to generating new income streams. Thirdly the Association will conclude its review of the charity’s purpose and identity and launch its new name and identity both internally to its constituency and externally to working partners and other bodies.

Structure, governance and management

The Army Cadet Force Association (ACFA) is a registered charity and a company limited by guarantee, not having a share capital. The entity was incorporated on 26 October 1934 and registered as a charity with the Charity Commission for England and Wales on 24 September 1962 and the Office of the Scottish Charity Regulator on 10 November 2007. It is governed by its memorandum and articles of association which were most recently adopted on 21 November 2015.

All trustees give their time voluntarily and receive no benefits from the charity. Any expenses reclaimed from the charity are set out in note 9 to the accounts.

The Chief Executive of the charity is Colonel (Retired) Murdo Urquhart OBE, who heads a small team of staff comprising Richard Walton, the Deputy Chief Executive, and an additional 13 members of staff who carry out the primary work of the charity across the UK. In addition, there are 38 members of staff who are employed to carry out various functions for the ACF.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

The trustees subscribe to the principles of the Charity Governance Code. The trustees believe in it and conducted a major review of governance in 2020 leading to a refreshing evolutionary and cultural change. Most of the changes are already implemented, which hopefully has been brought to life in the course of reading this report. Of note the trustees are committed to maintaining an inclusive and diverse Board and, to that end, established a Nominations and Governance Committee this year and a more formal and transparent recruitment processes designed to encourage eligible applications from applicants with a wider range of backgrounds.

The annual budget is agreed by the Finance and General Purposes Committee. The senior trustees (Chair, Vice Chair, and Treasurer) are consulted by the Chief Executive on a regular basis and on all matters that are considered by him to be strategic, novel or contentious. These consultations are largely conducted by telephone and e-mail or at informal “management board” meetings.

There are a number of formal trustee meetings. The ACFA Board of Trustees meets in summer, autumn and winter. Amongst other papers the Board receives:

A report from the Finance and General Purposes Committee; for the summer meeting this report incorporates the audited financial statements of the Association. The audited financial statements are agreed and signed off at this meeting.
Reports from all other sub-committees.
An updated register of the diverse risks being managed by the charity.

The Board has six sub committees. They are:

The Finance and General Purposes Committee carries out the overall financial management of the Association (including agreeing the annual budget, the raising, investment and direction of funds, and the oversight of financial processes) and the regular review of the charity’s governance arrangements. This committee also sets the overall policy for grants and decides and monitors how grant making decisions are made. The Committee consists of the Treasurer, the Investments Adviser, the Chair of the Board and the Marketing Adviser. It meets three times per year approximately one month before each board meeting and reports at every board meeting.
The HR and Remuneration Committee is a joint sub-committee of the Combined Cadet Force Association and the Army Cadet Force Association. It is responsible for technical advice and guidance relating to all values-based systems and policies to ensure that the Associations are following legislation and considering best practice in relation to their employees, independent contractors and volunteers. The Committee consists of the ACFA Chair of Trustees, ACFA Treasurer, an ACFA Regional Trustee and two members from the CCFA Board of Trustees. It meets twice per year: in summer to consider policy and structure; and in winter to set the pay and conditions for employees from the following April. It reports back to both Boards of Trustees.
The Nominations and Governance Committee comprises the Chair, Vice Chair and includes at least two additional trustees. This committee is responsible for trustee development (including mentoring of new trustees), recruitment, monitoring and taking action to improve board diversity; ensuring the board has all the skills needed to govern effectively;

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

researching and recommending candidates for ambassadorial roles (such as President) to the full board.

The ACFA Scotland Committee is chaired by Colonel AH Cassidy OBE ACF and includes additional members elected by the ACF Counties in Scotland. This committee represents the interests of ACF adult volunteers and cadets in Scotland to the board. Through its President and Chair, it acts in an advisory capacity to the Army’s regional command HQ in Scotland, the ACF in Scotland, the Scottish Government and to other Scottish and regional authorities and Non-Governmental Organisations (NGOs) on ACF and youth-related matters. The committee will provide some financial support to the ACF in Scotland.
The ACFA Wales Committee is chaired by Colonel D Hammond ACF and includes additional members elected by the ACF counties in Wales. This committee, through its President and Chair, can provide advice and represent the ACF to the Army’s regional command HQ in Wales, the ACF in Wales, to the Welsh Government and NGOs in Wales. The committee will provide some financial support to the ACF in Wales.
The ACFA Northern Ireland Committee is chaired by Colonel DJ Kane OBE ACF and includes additional members elected by the ACF Counties in Northern Ireland. This committee represents the interests of ACF adult volunteers and cadets in Northern Ireland to the board. Through its President and Chair, it acts in an advisory capacity the Army’s regional command HQ in Northern Ireland, to the ACF in Northern Ireland, the Northern Ireland Executive and to other regional authorities and NGOs on ACF and youth-related matters. The committee will provide some financial support to the ACF in Northern Ireland.

Appointment of trustees

Trustees are appointed for a period of three years and encouraged to serve for only a single term to ensure regular turnover of trustees. Where a successor cannot be found, or where a particular skill or attribute is needed, a trustee could stand for re-election and there is no restriction in the articles on the number of times an individual can stand for re-election.

Trustees are private individuals who are recruited to bring particular skills to the board in order to improve the ability of the trustees to govern the charity.

The board seeks to balance members with lived experience of the ACF and members with specialist skills. Careful thought by the board goes into ensuring that they are diverse, but not only in the commonly accepted sense of gender, ethnicity etc. Collectively they also need to represent a fair balance of more senior and more junior cadet force adult volunteers who each bring different experience to the board.

Whether recruiting individuals with specialist and skills and knowledge to help the board mitigate risks or recruiting volunteers from within the ACF to represent the beneficiary community, the same recruitment process is used. A vacancy is advertised as widely as possible and applications invited and then applicants who fulfil the criteria are interviewed by the Nominations and Governance Committee.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

If a trustee is appointed during the year they are co-opted by the trustees and then formally elected at the next AGM for a period of three years.

Trustee induction and training

The trustees reviewed and refined the process for onboarding new trustees. In addition to the existing briefing programme, new trustees are now mentored by another trustee. There are four parts to trustees’ induction. New trustees:

are provided with a pack of information about ACFA and are given links to the Charity Commission’s website to read about being a trustee and the Commission’s Code of Conduct;
visit the charity’s offices in London to meet the key staff;
receive an introductory brief by the Chair and Chief Executive explaining how ACFA seeks to fulfil its charitable objects, supports the Army’s chain of command to run the ACF and deliver cadet training, and how ACFA represents the interests of the adult volunteers who deliver that training; and,
for trustees with no experience of the ACF, the offer to facilitate a visit to an ACF County; either during a parade night at a detachment location or during a cadet camp.

Related parties and relationships with other organisations

The Association has relationships with all ACF Counties and adult volunteers from across the UK. The trustees ensure that they keep good records of who is associated with which ACF County and absent themselves from any decision making that could give a real or perceived benefit to their ACF County (most commonly the award of a grant). Such related party transactions are disclosed in note 11 to the accounts.

The charity shares offices and staff with an independent sister charity, the Combined Cadet Force Association (1170994). The two charities employ staff on joint contracts which are managed through the Army Cadet Force Association and the staff costs relating to CCFA are recharged to that charity.

Remuneration policy for key management personnel

The Trustees consider that they together with the Chief Executive and the Deputy Chief Executive comprise the key management of the charity in charge of directing and controlling, running and operating the charity on a day-to-day basis.

All employees are jointly contracted by ACFA with our sister charity the Combined Cadet Force Association. Five trustees sit on the Joint Remunerations Committee from the CCFA and ACFA to ensure that they exercise their responsibilities for oversight of the remuneration of their employees. In setting the salary levels for both Associations, the trustees commissioned a benchmarking exercise in 2020 which was conducted by the Executive staff supported by an

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

external professional body. The Remunerations Committee is tasked each year to ensure that all salaries, including those of the senior officers of the charity, are commensurate with the policy.

Statement of responsibilities of the trustees

The trustees (who are also directors of the Army Cadet Force Association for the purposes of company law) are responsible for preparing the trustees’ annual report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:

Select suitable accounting policies and then apply them consistently
Observe the methods and principles in the Charities SORP
Make judgements and estimates that are reasonable and prudent
State whether applicable UK Accounting Standards and statements of recommended practice 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 presume that the charity will continue in operation

The trustees are 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.

In so far as the trustees are aware:

There is no relevant audit information of which the charitable company’s auditor is unaware
● The trustees have 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

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charity in the event of winding up. The total number of such guarantees at 31 March 2021 was 127 (2020: 191). The trustees are members of the charity but this entitles them only to voting rights. The trustees have no beneficial interest in the charity.

Army Cadet Force Association

Trustees’ annual report

For the year ended 31 March 2021

Auditor

Sayer Vincent LLP was re-appointed as the charitable company's auditor during the year and has expressed its willingness to act in that capacity.

The trustees’ annual report has been approved by the trustees on 30 July 2021 and signed on their behalf by

Kevin Abraham Chair

Independent auditor’s report

To the members of

Army Cadet Force Association

Opinion

We have audited the financial statements of Army Cadet Force Association (the ‘charitable company’) for the year ended 31 March 2021 which comprise the statement of financial activities, balance sheet, statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Give a true and fair view of the state of the charitable company’s affairs as at 31 March 2021 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended
Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
Have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended)

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 charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 Army Cadet Force Association'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.

Independent auditor’s report

To the members of

Army Cadet Force Association

Other Information

The other information comprises the information included in the trustees’ annual report other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. 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 misstatements, 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.

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:

The information given in the trustees’ annual report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The trustees’ annual report has 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 charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
The 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; or
The directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the trustees’ annual report and from the requirement to prepare a strategic report.

Independent auditor’s report

To the members of

Army Cadet Force Association

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ annual report, 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 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 charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in 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 are set out below.

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

We enquired of management and the finance and general purposes committee, which included obtaining and reviewing supporting documentation, concerning the charity’s policies and procedures relating to:
Identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance;

Independent auditor’s report

To the members of

Army Cadet Force Association

Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected, or alleged fraud;
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
We inspected the minutes of meetings of those charged with governance.
We obtained an understanding of the legal and regulatory framework that the charity operates in, focusing on those laws and regulations that had a material effect on the financial statements or that had a fundamental effect on the operations of the charity from our professional and sector experience.
We communicated applicable laws and regulations throughout the audit team and remained alert to any indications of non-compliance throughout the audit.
We reviewed any reports made to regulators.
We reviewed the financial statement disclosures and tested these to supporting documentation to assess compliance with applicable laws and regulations.
We performed analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments, assessed whether the judgements made in making accounting estimates are indicative of a potential bias and tested significant transactions that are unusual or those outside the normal course of business.

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 is available 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 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. 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.

Independent auditor’s report

To the members of

Army Cadet Force Association

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.

Judith Miller (Senior statutory auditor) 20 August 2021

for and on behalf of Sayer Vincent LLP, Statutory Auditor Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

Sayer Vincent LLP is eligible to act as auditor in terms of section 1212 of the Companies Act 2006

The Army Cadet Force Association

Statement of financial activities (incorporating an income and expenditure account)

For the year ended 31 March 2021

Unrestricted £ 2,976,823 2,845 45,401 68,141	Restricted £ 1,848,000 - - -	2021 Total £ 4,824,823 2,845 45,401 68,141	Unrestricted £ 4,204,798 3,099 61,444 74,067
3,093,210	1,848,000	4,941,210	4,343,408
600 1,251,145 2,008,234	- 965,592 7,497	600 2,216,737 2,015,731	9,496 2,097,791 2,140,855
3,259,979	973,089	4,233,068	4,248,142
(166,769) 488,933	874,911 -	708,142 488,933	95,266 (18,651)
322,164 -	874,911 -	1,197,075 -	76,615 (11,596)
322,164 3,997,924	874,911 48,348	1,197,075 4,046,272	65,019 3,932,905
4,320,088	923,259	5,243,347	3,997,924

All of the above results are derived from continuing activities. There were no other recognised gains or losses other than those stated above. Movements in funds are disclosed in Note 20 to the financial statements.

The Army Cadet Force Association

Company no. 00293432

Balance sheet

As at 31 March 2021

Note Fixed assets: 13 14 Current assets: 15 16 Liabilities: 17 20 Total unrestricted funds Restricted income funds Unrestricted income funds: Designated funds Stock Debtors The funds of the charity: Creditors: amounts falling due within one year Net current assets Total net assets Investments Cash at bank and in hand Short term deposits Tangible assets General funds Total charity funds	£ 27,605 96,653 700,192 1,530,226	2021 £ £ 63,481 3,118,175 3,181,656 - 38,510 704,266 833,178 1,575,954 (378,844) 2,061,691 5,243,347 923,259 2,736,640 1,261,284 4,320,088 5,243,347	2020 £ 65,462 2,783,700
			2,849,162 1,197,110
	2,354,676 (292,985)
	3,138,069 1,182,019
			4,046,272
			48,348 3,997,924

			4,046,272

Approved by the trustees on 30 July 2021 and signed on their behalf by

Jemma Herlihy Alan Goodwin Vice Chair Treasurer

The Army Cadet Force Association

Statement of cash flows

For the year ended 31 March 2021

£ £ 1,197,075 22,377 (488,933) 880 (68,141) (58,143) (85,859) (27,605) 491,651 68,141 (21,276) 153,612 - 200,477 692,128 1,540,462 2,232,590 At 1 April 2020 Cash flows £ £ 833,178 697,048 704,266 (4,074) 3,018 (846) 1,540,462 692,128 2021	£ £ 1,197,075 22,377 (488,933) 880 (68,141) (58,143) (85,859) (27,605) 491,651 68,141 (21,276) 153,612 - 200,477 692,128 1,540,462 2,232,590 At 1 April 2020 Cash flows £ £ 833,178 697,048 704,266 (4,074) 3,018 (846) 1,540,462 692,128 2021	£ £ 99,418 17,321 18,651 - (74,067) (21,441) 312,597 - 352,479 74,067 (29,878) 3,106,178 (3,122,259) 28,108 380,587 1,159,875 1,540,462 Other non- cash changes At 31 March 2021 £ £ - 1,530,226 - 700,192 2,172 - 2,232,590 2020	£ £ 99,418 17,321 18,651 - (74,067) (21,441) 312,597 - 352,479 74,067 (29,878) 3,106,178 (3,122,259) 28,108 380,587 1,159,875 1,540,462 Other non- cash changes At 31 March 2021 £ £ - 1,530,226 - 700,192 2,172 - 2,232,590 2020
68,141 (21,276) 153,612 -		74,067 (29,878) 3,106,178 (3,122,259)
At 1 April 2020 £ 833,178 704,266 3,018		Other non- cash changes £ - -
	692,128 1,540,462		380,587 1,159,875
	2,232,590		1,540,462
	Cash flows £ 697,048 (4,074) (846)		At 31 March 2021 £ 1,530,226 700,192 2,172
1,540,462	692,128	-	2,232,590

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

1 Accounting policies

a) Statutory information

The Army Cadet Force Association is a charitable company limited by guarantee and is incorporated in England and Wales. It is registered with the Charity Commission for England and Wales and with the Office of the Scottish Charity Regulator.

The registered office address and principal place of business is Holderness House, 51-61 Clifton Street, London, EC2A 4DW.

b) Basis of preparation

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) - (Charities SORP FRS 102), The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.

In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The nature of the estimation means the actual outcomes could differ from those estimates. Any significant estimates and judgements affecting these financial statements are detailed within the relevant accounting policy below.

c) Public benefit entity

The charity meets the definition of a public benefit entity under FRS 102.

d) Going concern

The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern.

The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

e) Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.

Donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged by not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfuilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfulled in the reporting period.

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

Income received in advance of the provision of a specified service is deferred until the criteria for income recognition are met.

Dividends are recognised once the dividend has been declared and notifcation has been received of the dividend due.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

f) Donations of gifts, services and facilities

Donated professional services and donated facilities are recognised as income when the charity has control over the item or received the service, any conditions associated with the donation have been met, the receipt of economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), volunteer time is not recognised so refer to the trustees’ annual report for more information about their contribution.

On receipt, donated gifts, professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

1 Accounting policies (continued)
g) Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

h) Fund accounting Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure which meets these criteria is charged to the fund.

Unrestricted funds are donations and other incoming resources received or generated for the charitable purposes.

Designated funds are unrestricted funds earmarked by the trustees for particular purposes.

i) Expenditure and irrecoverable VAT
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:
Costs of raising funds relate to the costs incurred by the charity in managing its investment portfolio.
Expenditure on charitable activities includes the costs undertaken to further the purposes of the charity and their associated support costs.

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

j) Grants payable

Grants payable are made to third parties in furtherance of the charity's objects. Single or multi-year grants are accounted for when either the recipient has a reasonable expectation that they will receive a grant and the trustees have agreed to pay the grant without condition, or the recipient has a reasonable expectation that they will receive a grant and that any condition attaching to the grant is outside of the control of the charity.

Provisions for grants are made when the intention to make a grant has been communicated to the recipient but there is uncertainty about either the timing of the grant or the amount of grant payable.

k) Allocation of support costs

Resources expended are allocated to the particular activity where the cost relates directly to that activity. However, the cost of overall direction and administration of each activity, comprising the salary and overhead costs of the central function, is apportioned based on an estimate of staff time spent on each activity.

Governance costs are the costs associated with the governance arrangements of the charity. These costs are associated with constitutional and statutory requirements and include any costs associated with the strategic management of the charity’s activities.

l) Operating leases

Rental charges are charged on a straight line basis over the term of the lease.

m) Tangible fixed assets

Items of equipment are capitalised where the purchase price exceeds £200. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use. Major components are treated as a separate asset where they have significantly different patterns of consumption of economic benefits and are depreciated separately over its useful life.

Where fixed assets have been revalued, any excess between the revalued amount and the historic cost of the asset will be shown as a revaluation reserve in the balance sheet.

Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:

Leasehold improvements
Fixtures and fittings
Computer equipment

4 years 4 - 5 years 4 - 5 years

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

1 Accounting policies (continued)

n) Listed investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. Any change in fair value will be recognised in the statement of financial activities. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading “Net gains/(losses) on investments” in the statement of financial activities. The charity does not acquire put options, derivatives or other complex financial instruments.

o) 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.

p) Short term deposits

Short term deposits includes cash balances that are invested in accounts with a maturity date of between 3 and 12 months.

q) 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.

r) Creditors and provisions

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 funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
s) 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 recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

t) Pensions

The Association makes contributions to defined contribution pension schemes on behalf of its employees. Contributions are charged to the statement of financial activities in the periods to which they relate. The Association has no liability under the scheme other than for the payment of those contributions.

2 Income from donations and legacies

Income from donations and legacies
Donations Legacies Ministry of Defence grant Donated services	Unrestricted £ 15,236 - 2,929,547 32,040	£ 285,534 - 1,562,466 - Restricted	2021 Total £ 300,770 - 4,492,013 32,040	Unrestricted £ 35,384 - 4,137,014 32,400	2020 Total £ £ 67,217 102,601 30,000 30,000 - 4,137,014 - 32,400 97,217 4,302,015 Restricted
	2,976,823	1,848,000	4,824,823	4,204,798

The Ministry of Defence makes an annual Grant in Aid to enable the charity to operate in support of the Army Cadets. It also makes grants for specified purposes, predominately in support of the Cadet Digital Services project and for Army Cadet Marketing.

The Marine Society and Sea Cadets made a large donation (£161,616) this year to support the Cadet Digital Services project.

The Charles Brotherton Trust continue their long-standing support (£275) enabling Adventure Training for young people in Leeds.

The Reserve Forces and Cadets Association for Greater London kindly donates office space to the ACFA. This is recognised at the estimated cost of securing suitable alternative office space

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

3 Income from charitable activities

3 Income from charitable activities
4 Collective insurance policy premiums Events and awards Merchandise sales Other Total Income from other trading activities Supporting cadets and volunteers Subscriptions	Unrestricted £ 2,845	£ - Restricted	2021 Total £ 2,845	Unrestricted £ 3,099	£ - Restricted	2020 Total £ 3,099
	Unrestricted £ 19,446 10,320 12,869 2,766	£ - - - - Restricted	2021 Total £ 19,446 10,320 12,869 2,766	Unrestricted £ 34,772 26,525 - 147	£ - - - - Restricted	2020 Total £ 34,772 26,525 - 147
	45,401	-	45,401	61,444	-	61,444

Income from collective Insurance policy premiums has dropped this year as no overseas activity has taken place. This means that no collective travel policies have been required.

5 Income from investments

Dividends Bank interest	2021 2020 Total Total £ £ 65,901 60,356 2,240 13,711 68,141 74,067

All income from investments is unrestricted.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

6a Analysis of expenditure (current year)

Staff costs (Note 9) Grant making (Note 7) Direct activity costs Cadet Digital Services AGM dinner costs Insurance Marketing and advertising Audit fees Legal and professional Trustee expenses Investment manager fees Office expenses Travel Other Depreciation Support costs Governance costs Total expenditure 2021 Total expenditure 2020	Raising funds £ - - - - - - - - - - 600 - - - - 600 - - 600 9,496	Charitable activities	Charitable activities	Governance costs £ - - - - - - - 8,625 36,720 155 - - - - - 45,500 - (45,500) - -	Support costs £ 36,885 - - - - 22,701 - - - - - 82,559 3,544 - 22,358 168,047 (168,047) - - -	2021 Total 2020 Total £ £ 1,432,388 1,625,016 380,902 425,161 370,381 720,510 1,249,960 664,692 - 5,616 22,701 11,424 622,175 712,850 8,625 18,390 36,720 4,975 155 5,778 600 9,496 82,559 81,244 3,544 19,036 - 1,047 22,358 17,321 4,233,068 4,322,556 - - - - 4,233,068 4,322,556
		Supporting ACF Counties £ 174,903 3,500 139,533 1,249,960 - - 622,175 - - - - - - - - 2,190,071 20,984 5,682 2,216,737 2,172,205	Supporting cadets and volunteers £ 1,220,600 377,402 230,848 - - - - - - - - - - - - 1,828,850 147,063 39,818 2,015,731 2,140,855

The Army Cadet Force Association

Notes to the financial statements For the year ended 31 March 2021

6b Analysis of expenditure (prior year)

Staff costs (Note 9) Grant making (Note 7) Direct activity costs Cadet Digital Services AGM dinner costs Insurance Marketing and advertising Audit fees Legal and professional Trustee expenses Investment manager fees Office expenses Travel Other Depreciation Support costs Governance costs Total expenditure 2020	Raising funds £ - - - - - - - - - - 9,496 - - - - 9,496 - - 9,496	Charitable activities	Charitable activities	Governance costs £ - - - - - - - 18,390 4,975 5,778 - - - - - 29,143 - (29,143) -	Support costs 2020 Total £ £ 39,734 1,625,016 - 425,161 - 720,510 - 664,692 - 5,616 11,424 11,424 - 712,850 - 18,390 - 4,975 - 5,778 - 9,496 81,244 81,244 19,036 19,036 1,047 1,047 17,321 17,321 169,806 4,322,556 (169,806) - - - - 4,322,556
		Supporting ACF Counties £ 179,396 309,566 199,888 664,692 5,616 - 712,850 - - - - - - - - 2,072,008 85,520 14,677 2,172,205	Supporting cadets and volunteers £ 1,405,886 115,595 520,622 - - - - - - - - - - - - 2,042,103 84,286 14,466 2,140,855

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

7 Grant making

ACFA provides financial grants to ACF Counties, adult volunteers and cadets for a wide variety of individual development needs including provision of sports equipment and help to attend courses and expeditions.

A list of the ACF Counties and Regions that have received grants in the year from the ACFA is at note 23.

2021 No of awards Supporting ACF Counties and Regions 1 - - 7 - 1 412 7 6 - - Scotland IT and equipment grants General Grants Regional Sports Grants Duke of Edinburgh's Award Equipment Audit - current year Net income / (expenditure) for the year Operating lease rentals payable: Auditor's remuneration (excluding VAT): This is stated after charging / (crediting): Depreciation At the end of the year Supporting Individuals General Grants CVQO vocational awards Matthew Bacon Bursary Sailing Hardship Relief Fund Leeds London	2021 £ 3,500 - - 4,397 - 2,081 359,139 6,005 5,780 - -	2020 £ 266,716 42,850 108,685 - 4,495 - - - - 250 2,165
	380,902	425,161
	2021 £ 22,377 4,987 10,450	2020 £ 17,321 4,987 10,250

8 Net income / (expenditure) for the year

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

9 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel

Staff costs were as follows:

Redundancy and termination costs Salaries and wages Social security costs Employer’s contribution to defined contribution pension schemes Recruitment and other payroll costs	2021 2020 £ £ 1,181,531 1,337,410 5,380 46,681 110,315 125,949 98,277 114,976 36,885 - 1,432,388 1,625,016

The redundancy and termination costs were settled and paid at the balance sheet date.

Recruitment and other payroll costs were support costs for running and providing payroll activities during the year.

No employee earned more than £60,000 during the year (2020: nil).

The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day to day basis comprises the trustees, the Chief Executive, and the Deputy Chief Executive. The total employee benefits (including pension contributions and employer's national insurance) of the key management personnel were £90,523 (2020: £142,725).

The charity contributes towards the provision of pension benefits for some employees at the rate of 10% per annum. The contributions payable were £98,277 (2020: £112,164). Of this total, £NIL (2020: £NIL) were contributions payable in respect of these £NIL (2020: NIL) employees earning more than £60,000.

The charity trustees were neither paid nor received any other benefits from employment with the charity in the year (2020: £nil). No charity trustee received payment for professional or other services supplied to the charity (2020: £nil).

Trustees' expenses represents the payment or reimbursement of travel and subsistence costs totalling £200 (2020: £5,403) incurred by 2 (2020: 9) individuals relating to attendance at meetings of the trustees.

10 Staff numbers

The full time equivalent staff carrying out work for the ACFA during the year was 39 (2020: 49).

Because the ACFA shares its back office functions with the Combined Cadet Force Association it has chosen to employ all staff across both charities on joint contracts. This means that the charities gain flexibility and economies in how staff support the charities. However this joint contract arrangement requires ACFA to disclose the average number of employees for the two charities combined. This is taken as a head count based on number of staff employed. During the year this was 51 (2020: 64).

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

11 Related party transactions

On occasion grants are awarded to ACF Counties with which trustees are adult volunteers. Decisions about who to award funds to are made in accordance with the grants policy and formally delegated authority. On the rare occasion a trustee or staff member's ACF County has applied for a grant, that individual will not be a party to the discussion of that application. If they normally have a part to play in the grants decision making process, they will ensure that they are not involved in either the discussion or the decision.

There were 5 (2020: seven) related party transactions of this type relating to two (2020: three) trustees totalling £537 (2020: £6,194) during the year.

One additional related party transaction took place this year. A person connected with a trustee was awarded an individual grant. The potential conflict was identified on receipt of the application and the following measures were in place for the grant making process:

All applications were anonymised before they were considered by the trustees. Only the grants staff (two people) knew the identity of the applicants.
Trustees with ACF connections did not see, or make decisions on, applications from volunteers in their own geographical area of the ACF. Trustees were not told which region applications came from in advance so they could not inadvertently influence each other.
The staff providing secretariat to the board were not informed who each applicant was before the panel and saw only anonymised information.

Once decisions had been made, but before grants were awarded, this information was communicated to the Chair of Trustees to check that the potential conflict of interest had been properly managed. The Chair then reported back to the full board and the trustees are content that this process prevented conflicts of interest from affecting the decision making process.

There are no donations from related parties which are outside the normal course of business and no restricted donations from related parties.

12 Taxation

The charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

13 Tangible fixed assets

Fixtures and fittings £ 49,669 4,046 -	Computer equipment £ 43,436 17,230 (899)	Total £ 93,105 21,276 (899)
53,715	59,767	113,482
16,976 11,572 -	10,667 10,805 (19)	27,643 22,377 (19)
28,548	21,453	50,001
25,167	38,314	63,481
32,693	32,769	65,462

All of the above assets were purchased with unrestricted funding and are used for charitable purposes.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

14 Listed investments

14 Listed investments
15 Fair value at the end of the year Fair value at the start of the year Additions at cost Cash held by investment broker pending reinvestment Disposal proceeds Net gain on change in fair value Cash UK Common investment funds UK fixed interest Investments comprise the following: Stock Merchandise	2021 £ 2,780,682 - (153,612) 488,933	2020 £ 2,783,252 3,122,259 (3,106,178) (18,651)
	3,116,003 2,172	2,780,682 3,018
	3,118,175	2,783,700
	2021 £ 3,116,003 - 2,172	2020 £ 2,733,622 47,060 3,018
	3,118,175	2,783,700
	2021 £ 27,605	2020 £ -
	27,605	-

During the year, the charity commenced selling merchandise to the public.

16 Trade debtors Prepayments Debtors Accrued income Other debtors	2021 2020 £ £ 348 - 541 2,167 82,211 11,726 13,553 24,617 96,653 38,510

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

17 Creditors: amounts falling due within one year

Pension contributions Deferred income (note 18) Trade creditors Accruals Taxation and social security Grants payable	2021 2020 £ £ 54,694 40,262 39,560 37,671 16,184 - 6,478 248,760 129,559 24,440 46,510 27,711 292,985 378,844

18 Deferred income

Deferred income comprises funds for ACFA insurance income

Balance at the beginning of the year Amount released to income in the year Amount deferred in the year Balance at the end of the year	2021 2020 £ £ 27,711 54,878 (27,711) (27,167) 46,510 - 46,510 27,711

19a Analysis of net assets between funds (current year)

Analysis of net assets between funds (current year)
Tangible fixed assets Net assets at 31 March 2021 Fixed asset investments Net current assets	General unrestricted £ 63,481 192,741 925,797	Designated £ - 2,925,434 212,635	Restricted Total funds £ £ - 63,481 - 3,118,175 923,259 2,061,691 923,259 5,243,347
	1,182,019	3,138,069

19b Analysis of net assets between funds (prior year)

Net assets at 31 March 2020 Tangible fixed assets Fixed asset investments Net current assets	General unrestricted £ 65,462 47,060 1,148,762	Designated £ - 2,736,640 -	Restricted Total funds £ £ - 65,462 - 2,783,700 48,348 1,197,110 48,348 4,046,272
	1,261,284	2,736,640

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

20a Movements in funds (current year)

At 1 April 2020 £ - - 7,041 - 355 1,000 500 - 585 7,763 1,104 30,000	Income & gains £ 1,209,500 514,582 1,535 120,942 - - - 275 200 966 - -	Expenditure & losses £ (649,321) (316,271) - - - - - - - (4,397) - (3,100)
48,348	1,848,000	(973,089)
2,736,640 - - -	- - - -	- - - -
2,736,640	-	-
1,261,284	3,582,143	(3,259,979)
3,997,924	3,582,143	(3,259,979)
4,046,272	5,430,143	(4,233,068)

The narrative to explain the purpose of each fund is given at the foot of the note below.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

20b Movements in funds (prior year)

At 1 April 2019 £ - 2,736 355 - - - - 5,259 5,599 -	Income & gains £ 12,965 27,538 - 20,710 500 250 2,750 2,504 - 30,000	Expenditure & losses £ (5,924) (35,706) - (25,874) - (250) (2,165) - (4,495) -
13,949	97,217	(74,414)
-	-	-
-	-	-
3,932,905	4,343,408	(4,266,793)
3,932,905	4,343,408	(4,266,793)
3,946,854	4,440,625	(4,341,207)

Purposes of restricted funds

Army Cadet Marketing fund - These funds are granted to the ACFA in order to promote the Army Cadets and to recruit new cadets and adult volunteers.

Cadet Digital Services fund - These funds are granted to the ACFA in order to run and develop a variety of digital services for the cadets.

Cadet Music fund - This fund is to support Army Cadets to learn an instrument or take part in music performances around the world. Activities supported by this fund include instrument purchase, uniform purchase and support for cadets to travel overseas.

Cadet Sports fund - The sports fund exists to support Army Cadet sport across the UK.

Chris Wood Memorial fund - Colonel Chris Wood ACF had a long career in the Territorial Army and the ACF. His sudden death in August 2018 led to the creation of this fund to support adult volunteer leadership development.

Duke of Edinburgh Award fund - This fund is to support Army cadets and adult volunteers to undertake the volunteering section of the Duke of Edinburgh award.

Grenadier fund - The ACFA is grateful to the Grenadier Guards Trust for supporting cadets in affilliated detachments to take part in cadet activities.

Leeds fund - The ACFA is grateful to the Charles Brotherton Trust for supporting cadets in the Leeds area to take part in Adventure Training activities.

London fund - The ACFA is grateful to the Knights of the Round Table and the Masonic Charitable Foundation for supporting cadets in the London area to take part in cadet activities.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

20 Purposes of restricted funds (continued)

Matthew Bacon Bursary fund - In September 2005, Major Matthew Bacon of the Intelligence Corps was tragically killed by a roadside bomb in Iraq. Major Bacon was a former Surry ACF cadet, as well as being a career soldier. He was a keen participant in many types of adventurous training, which also formed an important part of his life.

His parents, Mr and Mrs Roger Bacon, set up a bursary in their son's name as a means of celebrating his life. The bursary enables army cadets to take part in an Outward Bound Trust 'Skills for Life Award', which would otherwise be beyond their means.

Sailing fund - This fund seeks to support Army Cadets to undertake a range of short sailing expeditions around the UK .

South East Essex fund - The ACFA received a generous legacy of £30,000 from the estate of Arthur Jopson, a former CFAV in C Company of Essex ACF. Mr Jopson specified his gift was for the benefit of cadets and CFAVs in the South East of Essex.

Purposes of designated funds

Income generation fund - The trustees have set aside these funds specifically for the purpose of generating income to support the grants programme. This fund is invested and more details about the perfomance of the investments can be found in note 14.

Northern Irish fund - These funds are set aside to enable local decision making in running the Northern Irish Branch.

Scottish fund - These funds are set aside to enable local decision making in running the Scottish Branch.

Welsh fund - These funds are set aside to enable local decision making in running the Welsh Branch.

21 Operating lease commitments payable as a lessee

The charity's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods

Less than one year One to five years	2021 2020 £ £ 4,987 4,987 8,728 13,715 13,715 18,702 Equipment

22 Legal status of the charity

The charity is a company limited by guarantee and has no share capital. The liability of each member in the event of winding up is limited to £1.

The Army Cadet Force Association

Notes to the financial statements

For the year ended 31 March 2021

23 ACF Counties and Regions that have received grants from the ACFA in the year:

1 Northern Ireland Battalion ACF 2 Northern Ireland Battalion ACF Black Watch ACF Cheshire ACF City of London & North East Sector ACF Cornwall ACF Derbyshire ACF East Region ACF Essex ACF Greater London South East Sector ACF Greater Manchester ACF Hampshire & Isle of Wight ACF

Kent ACF LONDIST Northern Ireland Region North East Region North West Region Scottish Region South East Region South West Region Suffolk ACF Welsh Region West Midlands Region Yorkshire North and West ACF

Contents

Reference and administrative information

For the year ended 31 March 2021

Reference and administrative information

For the year ended 31 March 2021

Trustees’ annual report

Objectives and activities

Purposes and aims

Trustees’ annual report

For the year ended 31 March 2021

Trustees’ annual report

For the year ended 31 March 2021

Our Values

Impact of Coronavirus Restrictions on the Charity’s Operation

Achievements and performance

Trustees’ annual report

For the year ended 31 March 2021

Grant Programmes

Trustees’ annual report

Beneficiaries of our services

Trustees’ annual report

Financial review

Investment Policy and Performance

Trustees’ annual report

For the year ended 31 March 2021

Principal risks and uncertainties

Trustees’ annual report

For the year ended 31 March 2021

Reserves policy and going concern

Trustees’ annual report

Fundraising

Plans for the future

Structure, governance and management

Trustees’ annual report

For the year ended 31 March 2021

Trustees’ annual report

For the year ended 31 March 2021

Appointment of trustees

Trustees’ annual report

Trustee induction and training

Related parties and relationships with other organisations

Remuneration policy for key management personnel

Trustees’ annual report

For the year ended 31 March 2021

Statement of responsibilities of the trustees

Trustees’ annual report

Auditor

To the members of

Army Cadet Force Association

Opinion

Basis for opinion

Conclusions relating to going concern

Army Cadet Force Association

Other Information

Opinions on other matters prescribed by the Companies Act 2006

Matters on which we are required to report by exception

Army Cadet Force Association

Responsibilities of trustees

Auditor’s responsibilities for the audit of the financial statements

Capability of the audit in detecting irregularities

To the members of

Army Cadet Force Association

Use of our report

Army Cadet Force Association

The Army Cadet Force Association

Statement of financial activities (incorporating an income and expenditure account)

For the year ended 31 March 2021

Balance sheet

As at 31 March 2021

Statement of cash flows

For the year ended 31 March 2021

For the year ended 31 March 2021

a) Statutory information

b) Basis of preparation

For the year ended 31 March 2021

h) Fund accounting Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure which meets these criteria is charged to the fund.

k) Allocation of support costs

l) Operating leases

m) Tangible fixed assets