THE ROYAL BRITISH LEGION ANNUAL REPORT & ACCOUNTS 2017 ROYALTHE REPORT ANNUAL LEGION BRITISH
THE ROYAL BRITISH LEGION ANNUAL REPORT & ACCOUNTS
YEAR ENDED 30 SEPTEMBER 2 017
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CONTENTS
Foreword 4 Financial overview 6 Trustees’ report 10 Independent auditor’s report 48 Statements of financial activities 52 Balance sheets 54 Cash flow statements 55 Notes to the accounts 56
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FOREWORD
annual meeting: we want to become a ‘team of teams’.
Support takes many forms. The inspirational strength and determination of today’s Armed Forces community were on full display at the Invictus Games in Toronto, where we hosted 260 family members of those competing. The Legion’s campaigning work, ensuring that Government policy and services consider the needs of our Armed Forces personnel and their families, is another way we offer support. Our Count Them In campaign has also CHARLES BYRNE, Director General and TERRY WHITTLES, National Chairman ensured that the Office for National Statistics (ONS) will recommend a This review gives us an opportunity challenge. The Royal British Legion new question about the Armed Forces to step back and remind ourselves of led a consortium of service charities community be included in the next why we’re here. The Royal British to bid for and win the contract to census in England and Wales. Legion has an extraordinary dual provide the Veterans’ Gateway. This purpose: we provide support for the new service provides a first point of Of course, despite developments in Armed Forces community in the here contact through telephone calls, email service provision and campaigning and now, while keeping alive the or live chat for any veteran who is keeping us busy in the present, we memory and legacy of those who unsure of where to turn to for help. never forget the past. This year, the have served. This puts those we serve first, ensuring centenary of the First World War has that they can find the support they marked some significant events. The best way to illustrate our support need from whichever organisation Passchendaele 100 attracted the role is through the stories of the is best able to provide it. This is nation’s attention. The Poppy Appeal, people the Legion has helped. People a significant step forward in despite all the fears that donations like Harris Tatakis, a former Royal collaboration across the sector. might decline over the years, actually Marine. By funding new medical raised more funds than ever before. treatment unavailable on the NHS, The key to making Veterans’ Gateway We also remembered the contribution we helped rebuild his life. a success will be collaboration with of women, with the Women at War our partner organisations. We often 100 event at the National Memorial Stories such as Harris’s and the others work well at a grassroots level. Arboretum. There was a real sense of in this report show the difference we Now we are putting more effort into spirited commemoration. Young and can make to people’s lives when we systematically and strategically old mixed. It was busy, buzzing and can find the help they need. There building these bridges more widely exciting. It was as much a celebration. are, however, more than 400 military between our organisations. The charities providing welfare support. goal is to achieve what was best We were also particularly proud to Making it easy for an individual to described with three words that struck co-host the unveiling by HM The find the services they need is a huge a chord with us at the Combat Stress Queen of the Iraq and Afghanistan
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Memorial in London, marking 25 Keeping the focus on internal The Legion has a duty to remind years since the start of the conflicts. developments, we should mention the nation of that legacy and keep The number of families who attended our values review and the launch of it alive. was truly moving and we were newly defined Values and Behaviours. delighted to play our part and ensure Our people’s behaviour and attitude To keep us fit for purpose, we that the opening was well managed have a huge impact on our instigated a review of the Royal and delivered with dignity. effectiveness as an organisation. Our Charter that defines our operating values define the things we stand for remit. The consultation process will To provide services and to organise and the high standards we expect of begin this year. We must show that events well requires an efficient, everyone. Both are critical if we are we are a contemporary, relevant well-managed and modern to perform our duty well and achieve organisation with a vital role for organisation. Our aim is operational our joint mission to support and today. Visiting the Legion’s clubs, excellence: we want to learn and commemorate effectively. operations and offices around the improve, and each time get better at country, as we both do, reveals just what we do. This year has seen us do Those values will help us carry out the how the Legion remains highly a lot of work internally to improve our big plans we have for 2018, details relevant. Our activities of corporate services with investment in of which you’ll find under each Remembrance, fundraising and IT, HR and finance systems, and the division’s section in this report. The service provision help people, but appointment of a new IT Director. upcoming trial of the community hub they also bring people together. In We also created the new post of at Galanos House, and the many doing what we do, the Legion can Director of Membership and Remembrance events, including the be a powerful force for good in our Volunteering. Both roles will help us Great Pilgrimage 90, will make this communities and across our country. improve the representation of our year at least as busy as the last, not members and volunteers in board- least because we are now in the final level decisions, and will improve centenary year. Our Thank You communications to members and movement will see us lead the nation volunteers as well as staff. in showing our gratitude to all those who served in uniform and on the Another administrative challenge Home Front. The sacrifice of that TERRY WHITTLES comes with new legislation around generation changed the world, National Chairman fundraising, information and bringing in an era of technical and data protection. Our investment cultural advances from which we have in IT systems, in processes and all benefited. Indeed, the world we training means we are well prepared now enjoy 100 years on can be seen to comply with these changes as the extraordinary legacy of the CHARLES BYRNE in regulation. men and women of that generation. Director General
“OUR ACTIVITIES OF REMEMBRANCE, FUNDRAISING AND SERVICE PROVISION HELP PEOPLE, BUT THEY ALSO BRING PEOPLE TOGETHER”
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FINANCIAL OVERVIEW
WHERE THE MONEY COMES FROM
£ MILLION %
1 The Poppy Appeal 49.2 30.9 2 Donations, legacies and events 46.8 29.4 3 Lotteries and trading 21.7 13.6 4 Fees charged to care home residents 16.6 10.4 5 Grants received for welfare services and Remembrance 13.1 8.2 6 Membership subscriptions 5.2 3.3 7 Investment income 6.0 3.8 8 Other 0.6 0.4
TOTAL INCOME 159.2 100
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8
6 7 5 1 4
Total £159.2M
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2
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3 1
Total £2.5M
2
WHERE THE MONEY GOES Capital costs £ MILLION %
1 Open Accounts implementation 0.8 32.0 2 NMA development 1.3 52.0 3 Other 0.4 16.0
TOTAL CAPITAL COSTS 2.5 100
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FINANCIAL OVERVIEW
9 1 8 2
Total 3 £155.3M 4 7 5 6
WHERE THE MONEY GOES Operational costs £ MILLION %
1 Poppy Appeal 13.9 8.9 2 Donations, legacies and events 12.9 8.3 3 Lotteries and trading 12.6 8.1 4 Remembrance 7.4 4.8 5 Comradeship 0.9 0.6 6 Care homes and break centres 30.9 19.9 7 Welfare services 57.4 37.0 8 Membership 8.6 5.5 9 Communication and campaigns 10.7 6.9
TOTAL OPERATIONAL COSTS 155.3 100
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TRUSTEES’ REPORT
OPERATIONS
The Royal British Legion has been supporting members of the Royal Navy and Royal Marines, British BUILDING A STRONGER Army, Royal Air Force, Reservists and their families since 1921. Our support starts after seven days of service SUPPORT NETWORK FOR and continues through life, long after service is over. If OUR ARMED FORCES there is ever a reason we can’t help, our vast network means we will know someone who can. We know the COMMUNITY needs of the Armed Forces community are complex, so our partner charities and organisations can help offer SIMPLIFYING OUR SERVICES advice and support on everything from post-traumatic Our diverse range of services covers employment, finance, stress disorder to housing. independent living, respite, recovery and care. We either offer services directly, or work with partners to direct support wherever and whenever it’s needed. While our ABOVE Mr Hyatt, a veteran, offering is vast, it’s also complex, so this year we focused and his wife, Mrs Hyatt, who receive support from our team on rationalising our own services to make navigation and of Admiral Nurses use simpler. This was complicated because of the way our
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services interconnect; any change to one service would home and hospital visits – offering companionship affect several other services at the same time. We are also to those who can’t get out to socialise. seeing our client community come to us with increasingly complex needs, making the rationalisation process even Through BCS, nearly 5,000 individual home visits to more involved. Even so, customer satisfaction reached isolated members of the Armed Forces community were 89% this year, up from 82% in 2016, which indicates completed, with a further 3,000 telephone chats. a move in the right direction. NEW CAPACITY-BUILDING GRANTS BRANCH COMMUNITY SUPPORT (BCS) To help other organisations in the Armed Forces charity 2017 also saw the introduction of our new Branch sector improve or expand their services, we launched Community Support (BCS) scheme. Its role is to support our a new, capacity-building, grant programme. It invested branches in delivering a wide range of local community £167,000 in 28 organisations. support activities. 622 membership branches are registered on the scheme, taking part in support work such as: Investing in other organisations’ capacity and capability, rather than typical project-based funding, was new for the bereavement support – providing standards for funerals Armed Forces charity sector. It required some managing of and comradeship for families the expectations of those submitting grant applications, but community events – holding coffee mornings or other one measure of the success of this new scheme is that we similar events for veterans and their families (often received more applications of a fundable standard than working with area teams to provide information as well) we had funds available. telephone buddies – keeping in contact with housebound and vulnerable veterans to provide comradeship and support
LEFT John McCarthy, Advice and Information Team Leader
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Three examples of successful capacity-building grants we awarded are:
Stoll: We gave a grant of £9,850 to Stoll to help towards their ‘Mental Health First Aid’ and ‘What Matters for Independence’ training costs. Waterloo Uncovered: We gave a grant of £9,540 to this interesting charity, which combines world-class archaeology with veteran care and recovery. Our funds have been given to help with capacity-building within the project. The Warrior Programme: We gave a grant of £5,500 to this programme to go towards building e-learning environments.
CONTINUING TO BUILD OUR EXTERNAL GRANTS PROGRAMME In addition to our new capacity-building grants, we awarded 90 grants worth £3.2 million through our usual external grants programme. Three examples of grants we gave this year are: The Matthew Project: We made a grant of £130,438 towards the Outside the Wire project, delivering alcohol and drug misuse support to veterans in East Anglia and Essex. SSAFA Norton House: We made a grant of £33,062 towards the running costs of SSAFA Norton House, Headley Court, which provides practical (accommodation, travel, essentials) and emotional support to families and dependants of serving military personnel receiving treatment at the Defence Medical Rehabilitation Centre. X-Forces: We made a grant of £48,420 towards the VETERANS’ GATEWAY Military In Business (MIB) Networks and Mentoring project, which delivers mentoring support and information events Our biggest and most satisfying achievement in 2017 was to ex-Service personnel starting their own businesses. Veterans’ Gateway, a new 24/7 telephone line and online information portal that provides a single point of contact for veterans and their families seeking support.
There are more than 2,000 registered Armed Forces charities. One of the findings of independent research commissioned by the Legion was that more than half of veterans (54 per cent) found the sheer number of charity providers confusing. The research also revealed that 45 per cent were unsure who to turn to if they needed help. Veterans’ Gateway was set up to address this issue. A consortium of charities comprised of The Royal British Legion, Poppyscotland, SSAFA the Armed Forces Charity, Combat Stress and Connect Assist, were awarded a £2 million grant by the MoD to provide the service.
To achieve this, we needed to build a network of partner organisations able to respond to enquiries about a wide range of needs, including finance, employment, physical health, mental wellbeing, living independently, families
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TRUSTEES’ REPORT
FACING PAGE A Veterans’ Gateway Supervisor at the contact centre in Wales
AIMS FOR 2018
Next year, we will focus on several important projects:
and communities. We now have 31 referral partners from A major pilot project to combat social isolation in the inside and outside the military support sector, including the Armed Forces community. Social isolation and loneliness NHS and other centralised social services, with more to be are common in society. In 2018 we will develop an agreed, covering the full spectrum of needs. We also have understanding of how the Armed Forces community, a growing list of 70 information providers who promote regardless of age, is affected – and how we can help. Veterans’ Gateway and are listed on the website as Creating an Overseas Offi ce in Operations to better organisations that can help. support our overseas branches. While most of our clients reside in the UK, many do not. During 2018 we will Launching the new Veterans’ Gateway was a real improve our ability to work with partner agencies and challenge. Government requirements meant that we had Overseas Branches to help as many people as possible. a very tight timescale of only four months to plan, build, Constructing a Community Hub and 10-bed extension at test and deliver the new service, as well as build a Galanos House. The Community Hub will open up network of referral and information partners. services to the local Armed Forces community, and enable those who are not residents at Galanos House to Nevertheless, we launched to the public in June 2017, benefi t from daytime respite breaks, helping them after a soft launch in April. It has been a great success and maintain dignity and make new friends. has already become a key resource for veterans and Completing a full end-to-end review of our benefi ciary families seeking support. pathways, focusing on identifying improvements to their journey in their time of need. Between April and mid-November 2017 we saw: Working with partners, we will map the needs of the almost 130,000 visits to the website Armed Forces community against the services currently over 3,000 contacts made to the service centre provided, identifying gaps and developing plans to almost 600 referrals made to our partners. introduce new services where needed.
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OPERATIONS RESULTS: 2017 AT A GLANCE
38,771 families contacted the Legion’s helpline and Area offices 4,683 households benefited from the Legion’s for assistance Family Breaks Service
85,118 visits to our Pop In Centres Our Benefits, Debt and Money Advice service supported 2,459 families, helping to secure them £3.8 million in debt write-offs and new/increased statutory benefits
Dunkirk Memorial House received the prestigious Admiral Nurses supported 962 Level 1 award by Dementia Care Matters for our families who care for a beneficiary Butterfly Model, and Galanos House retained its with dementia ‘Outstanding’ rating
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TRUSTEES’ REPORT 5,112 HOMES
SUPPORTED BY OUR HANDY VAN SERVICE
5,112 homes supported by our handy van service, which helps ex-Service £3.4 million in external grants awarded to people and their families with small household 118 projects, reaching 28,763 beneficiaries repairs and adaptations
ATTENDED OUR BREAK CENTRES 507 people attended the Battle Back Centre, which supports wounded, injured and sick Service personnel. We also ran our first 7,837 individuals attended a Legion Break Battle Back courses for veterans. Centre or participated in a child’s Adventure Break
A further £5.2 million of Government funds were released for beneficiaries of the War Pension and Armed Forces Compensation schemes. This was paid to beneficiaries as one-off awards and/or regular payments
INVICTUS
GAMES 28 COUNTRIES WORLDWIDE Beneficiaries in 28 countries outside the UK were supported As part of a group of military charities, we supported 260 families and friends of athletes to attend the Invictus Games
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THOSE WE SERVE
HARRIS TATAKIS
Harris ‘Tats’ Tatakis, 39, is a former Royal Marine Commando, who served with 3 Commando Brigade in Kosovo, Iraq and Afghanistan.
In 2007 an Improvised Explosive Device (IED) blew up the Land Rover Harris was travelling in, shattering his left leg, shin and ankle, breaking his right foot, rupturing both ear drums and causing brain damage. Tats was medically discharged in 2011. HM Treasury using income generated from the LIBOR rate fixing fines, Harris After a two-year rehabilitation, the became the first UK veteran to receive tinnitus that remained long after the the revolutionary ‘Levo’ treatment, other injuries was the most difficult which uses iPod technology to treat thing for Harris to cope with. tinnitus during sleep.
“There is not enough understanding “The Legion has helped to change my of how life-limiting tinnitus can be life for the better,” said Harris. “It’s – the need for low background noise fair to say that the treatment – and to distract you, combined with indeed the Legion – has given my life constantly keeping yourself occupied back to me.” to stop your brain focusing on the noises it’s being bombarded with – it’s hugely tiring.” “THE LEGION HAS HELPED TO CHANGE MY LIFE FOR THE BETTER. IT’S FAIR TO SAY THAT THE With the Legion providing support through the Veterans’ Hearing Fund, TREATMENT – AND INDEED THE LEGION – HAS a £10 million commitment from GIVEN MY LIFE BACK TO ME”
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TRUSTEES’ REPORT
ADAM AND JODIE OLDER
Adam and Jodie Older from Speaking during the break, Adam Hampshire both serve in the Army. said, “We’ve loved every minute of it. Adam, 33, is a Sergeant with the 27 Just being able to take time out of our Regiment RLC and has served in busy schedules is so good.” Afghanistan, Northern Ireland and Cyprus. Jodie, 29, serves as a In fact, the family enjoyed it so Private/Healthcare Assistant with the much they returned again in 2017. Queen Alexandra’s Royal Army “We had heard about the Legion’s Nursing Corps. breaks before but we always thought they were for injured personnel. It’s Deployments and training schedules been brilliant.” have put pressure on the young couple, especially with the arrival of their daughter, Isabella. Adam and Jodie both admit life “can be hard” with them both serving.
The young family turned to the Legion for help. In 2015, they spent a week in Weston-super-Mare on a break at Somerset Legion House. It gave the Older family a chance to relax and spend quality time together.
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ROB FRENCH
Rob French, 35, from Somerset served as a Royal Marine from 2006-2013, reaching the rank of Lance Corporal.
After breaking his wrist while on tour in Afghanistan in 2008, Rob didn’t realise the extent of his injury, and was sent home from deployment.
Two weeks later, Rob’s friend Ben Whatley was killed providing covering fire from a position Rob thinks he might have been selected for.
Rob said, “I still live with that guilt now. It’s part of my PTSD [post- traumatic stress disorder].”
After several operations on his injured wrist, Rob was left unable to grip his weapon. Along with the PTSD, it meant he was medically discharged in 2013.
The Legion helped Rob gain his MoD compensation/war pension at a tribunal in 2014 and signposted him to another military charity providing PTSD counselling and help with the transition to civilian life.
Since returning home, Rob has organised several events in aid of the Legion and in memory of his fallen friends.
”The Royal British Legion has helped me through a very hard transition “THE ROYAL BRITISH LEGION HAS HELPED ME from being a strong confident Royal Marine commando to an injured THROUGH A VERY HARD TRANSITION FROM civilian,” he said. “So I want to give BEING A STRONG CONFIDENT ROYAL MARINE a small something back.” COMMANDO TO AN INJURED CIVILIAN. SO I WANT TO GIVE A SMALL SOMETHING BACK”
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TRUSTEES’ REPORT
REMEMBRANCE
We champion Remembrance and ensure that all deliverable waypoints for our commemorative activities. those who have fought and died in conflicts past and It has two core objectives: present are remembered. We will ensure that the unique contribution made by those who have served, and their Primary objective: To encourage Remembrance to families, is understood, observed, and that Remembrance be understood and observed by all and handed on is passed on to the next generation. to future generations Secondary objectives: To attract new, younger and We support Remembrance services and events across the more diverse audiences with Remembrance activities UK. From special events in your community to major they find relevant and engaging. This will be achieved national commemorations – including the Festival of by working with our partners and members, inspiring Remembrance at the Royal Albert Hall and the Cenotaph and delivering appropriate commemorations of march past by veterans on Whitehall. service and sacrifice at a national, local or individual level and by championing the Legion’s unparalleled Remembrance role. PLANNING THE FUTURE The Remembrance strategy gives the Legion a defined OF REMEMBRANCE ambition and framework for its best-known charitable remit. We are the nation’s leading charity promoting In 2017, the Legion produced a five-year Remembrance Remembrance of the service and the sacrifice of our strategy and work plan that was approved by the Armed Forces, veterans and their families. Board of Trustees, featuring defined objectives and
Southport Sea Cadets were able to watch our immersive First World War virtual reality videos on mobile devices using cardboard headsets
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COMMEMORATING PASSCHENDAELE 100 To commemorate the CONFLICT centenary of the First World War Battle of Passchendaele 2017 saw us deliver on plans to mark three major (also known as the Third commemorations as we continued our work to remember Battle of Ypres), we and safeguard the memory of those who have fought partnered with our and died in confl icts past and present. ambassador, TV historian Dan Snow (pictured, right). Together we created a series of immersive virtual reality (VR) videos that brought the First World War to life, from the experiences of those on the front line to nurses battling to treat the fl ood of casualties.
In-pensioners from the Royal Hospital Chelsea participated in the launch of the videos, which garnered widespread national publicity. The content featured on the Market Square in Ypres and at the special exhibition in the build-up to the Passchendaele 100 National Commemorative events. Pete Dunning, Veteran and Legion Ambassador We also distributed more than 1,000 cardboard VR by the Iraq and Afghanistan Memorial headsets to schools and community groups across England, Scotland and Wales. Our Passchendaele 100 web page was the second most visited on the Legion website, while UNVEILING OF THE IRAQ AND our videos were watched more than 800,000 times. AFGHANISTAN MEMORIAL On 9 March 2017 our patron, HM The Queen, unveiled a new memorial honouring the UK Armed Forces personnel and civilians involved in confl icts in Iraq and Afghanistan from 1990 to 2015.
The unveiling followed a dedication on Horse Guards Parade. This was attended by 2,500 guests representing the many groups, military and civilian, whose efforts over 25 years in Iraq and Afghanistan are recognised. Attendees included current Service personnel, veterans, civil servants and charity workers.
The event generated more than 38 items of media coverage, with younger veterans interviewed on Sky News, Good Morning Britain and regional radio.
Our social media team reported live from the event on Twitter and Instagram, with these results: ABOVE Chelsea Pensioners from the Royal Hospital Chelsea attended the launch of our virtual reality Our social media content engaged 12,305 people content for Passchendaele 100 within 24 hours FACING PAGE The Royal British We gained 267 new social media followers on the day Legion marked the centenary of the – 27% more than an average week formal recognition of the WAAC by holding a Drumhead Ceremony We received 562% more engagement on Twitter than and Reception at the National our daily average Memorial Arboretum
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TRUSTEES’ REPORT
“IT WAS WONDERFUL TO SEE SO MANY FEMALE VETERANS AND SERVICEWOMEN TOGETHER IN THE SAME PLACE. WE HAVE SUCH A GREAT BOND, NO MATTER WHAT COLOUR OUR UNIFORM”
Commander Rosie Wilson OBE Chair, WRNS100
“I FOUND IT TO BE AN EMOTIONAL OCCASION, IN TERMS OF BEING WOMEN AT WAR 100 We hosted the landmark Women at War 100 event at the MOVED BY THE READINGS AND IT National Memorial Arboretum on 7 July 2017. The BEING AN ACT OF REMEMBRANCE, occasion brought together more than 1,000 serving and AS WELL AS ONE OF CELEBRATION. veteran women to celebrate 100 years of women’s contributions to the British Armed Forces since 1917, NOT ONLY DID IT REFLECT ON when the Women’s Army Auxiliary Corps (WAAC) WOMEN WHO HAD SERVED IN became the first all-women unit in the UK Armed Forces. THE LAST 100 YEARS BUT ALSO The event was reported across national media, with LOOKED TO THE FUTURE” highlights including BBC News, ITV News, Channel 4 News, Channel 5 News and BBC Radio 5 Live, while it Dr Samantha Philo-Gill reached 70 regional TV and 68 regional radio stations. Women at War historian and researcher
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AIMS FOR 2018
To ensure that Remembrance is more fully understood and supported by all ages, backgrounds, religious and ethnic communities, we will continue to develop new relationships and audiences. This will involve identifying effective and relevant advocates to help us achieve our diversity goals.
2018 FIRST WORLD WAR CENTENARY MOVEMENT In 2018, the nation will come together to mark 100 years since the end of the First World War. We will commemorate and pay tribute to the First World War generation and the 1.1 million British and Commonwealth lives sacrificed during the war.
To mark this defining moment in history, The Royal British Legion is inviting the British public to say ‘Thank You’ to the First World War generation who served, sacrificed and changed our world.
Members of the public from all walks of life can join our movement to express their gratitude to those who gave themselves to the war effort and rebuilt a better
nation from its darkest hour. Between 8 August and ©IWM (Q 47901) 11 November 2018, we will be asking the nation to say Thank You in their own way; whether online, at work or GREAT PILGRIMAGE 90 where they live. Ten years after the end of the First World War, veterans and war widows visited the battlefields of the Somme and Ypres before marching to the Menin Gate in Ypres on 8 August 1928. It remains the largest membership event in the Legion’s history.
Exactly 90 years later, thousands of Legion members will recreate the 1928 Great Pilgrimage to visit the same battlefields. Then, on 8 August 2018, they will carry their standards along the same route to the Menin Gate, to commemorate the last 100 days of the war and represent an entire generation that served while defending their country. ©IWM E(AUS) 2078 ©IWM E(AUS) 2078
ABOVE A British Legion Pilgrimage. Service at the Menin Gate, Ypres, 1928
LEFT West Indian troops stacking 8-inch shells at a dump on the Gordon Road, Ypres, October 1917
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TRUSTEES’ REPORT
David Iveson, painted into his surroundings at Cardiff Arms Park in Cardiff for the Legion’s Count Them In campaign CAMPAIGNING We have a long and proud history of campaigning Armed Forces community be included in the next census at all levels of government to support the Armed Forces in England and Wales. community. Our campaigning helps make their voices heard and, over the years, has improved the lives of our The ONS, which leads on the census in England and service people, veterans and their families. Wales, was initially opposed to our recommendation but agreed to test a new question following our campaigning efforts. The question was tested in summer 2017, while we SPEAKING UP FOR continued to make the case to ONS officials and increased THE ARMED FORCES the number of MPs and councils who supported us. COMMUNITY IN AN Persuading the ONS to change their position in just 18 months was an important achievement on behalf of the UNPREDICTABLE YEAR Armed Forces community – one which was only made possible thanks to the tireless support of the Legion staff, COUNT THEM IN volunteers and members across the country. In 2017 we sought to advance our campaign to persuade the UK and devolved governments to include the Armed If the UK Government, and ultimately Parliament, Forces community in the 2021 census. agrees to accept the ONS’s recommendation, not only will this produce useful data in the coming years, it This campaign is vital because a lack of reliable data will also provide important symbolic recognition of the prevents us from supporting our beneficiary community Armed Forces community. more effectively. Best estimates suggest that one in 10 of the UK population are members of the Armed Forces INSULT TO INJURY CAMPAIGN community, yet there is very limited information about 2017 was the year when our Insult to Injury campaign where they are or what their needs might be. achieved most of its objectives. Following Government announcements from April 2017, injured veterans in On 19 October 2017 we achieved a landmark success Great Britain no longer have to surrender most of their when the Office for National Statistics (ONS) said military compensation to pay for their social care. This, they would recommend a new question about the and other Insult to Injury campaign recommendations,
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RIGHT Children from the Armed Forces community at a Legion Adventure Break
will benefit at least 4,000 veterans and see around BEST-PRACTICE GUIDE FOR £20 million per annum potentially retained by injured SERVICE CHILDREN IN EDUCATION veterans with social care needs. We produced a new best-practice guide for England and Wales in 2017: ‘Supporting Service Children In School’ 2017 GENERAL ELECTION MANIFESTO was launched at the conferences of the two largest The 2017 snap general election disrupted our timelines, political parties. but we pulled out all the stops and managed to produce a complete manifesto within three weeks. Children in Service families face particular challenges, such as emotional strain due to parents being deployed, The manifesto highlighted the Legion’s top priorities for frequent house moves and problems with admission into supporting the Armed Forces community. In it, we called schools. The guides, one for England and one for Wales, upon the new Government to: look at the best ways to support Service children in school. They share examples of good practice from across both Ensure questions concerning the Armed Forces nations, recommending ways in which local authorities, community feature in the next census in 2021 schools and families can improve Service children’s Invest in research on ‘what works’ in treating veterans experience in education. with Gulf War illnesses Provide a package of support to corporate signatories of the Armed Forces Covenant Enable veterans to receive treatment for Non-Freezing Cold Injury through Defence Medical Services Ensure divorced or separated spouses and partners of Service personnel can access housing support on the same terms as other Armed Forces families.
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POLICY SUCCESS FROM WALES MANIFESTO 2016 Three of the seven recommendations in the 2016 Wales manifesto have now been met, with another recommendation in progress. The three met recommendations are:
Ensuring injured Welsh veterans can keep all their military compensation when accessing social care Giving Welsh veterans access to mental health services – the Welsh Government has announced a further £100,000 for mental health services Producing an Armed Forces Housing Pathway, outlining what members of the Armed Forces community are entitled to on a local and national level.
GREATER MANCHESTER MANIFESTO 2017 We produced and distributed our Greater Manchester manifesto in February 2017 in response to the powers of the new Mayor of Greater Manchester, who can make decisions locally that will affect the Armed Forces community throughout Greater Manchester.
Our recommendations asked the new Mayor to:
Provide leadership on the delivery of the Armed Forces Covenant by appointing an advocate for the Armed Forces community Improve public services’ knowledge and awareness of the size and needs of the Armed Forces community Ensure reservists and Armed Forces families get the support to which they are entitled Give the Armed Forces community access to clear and consistent housing advice and get the support to which they are entitled Deliver access to specialist mental health treatment
and support for the Armed Forces community across ABOVE Greater Manchester Greater Manchester. Manifesto 2017
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TACKLE SOCIAL ISOLATION IN THE ARMED FORCES COMMUNITY Social isolation amongst the Armed Forces community is a top priority for the Legion, as we know it can affect many. We will publish new research to help better understand the nature of the problem and how it can be addressed.
CONTINUE OUR INSULT TO INJURY CAMPAIGN IN NORTHERN IRELAND We will continue efforts to deliver our Insult to Injury campaign in Northern Ireland, which has in part been delayed by the suspension of the Northern Ireland Executive.
PURSUE OUR MANIFESTO RECOMMENDATIONS We will continue to pursue our recommendations in the Legion’s 2017 General Election Manifesto, 2017 Greater Manchester Manifesto and our Wales 2016 manifesto.
RAISING MONEY AND CREATE A NEW RESEARCH STRATEGY SUPPORT AT THE HIGHEST LEVEL Research helps us inform the way we operate and the We held several engagement events in both Parliament services we prioritise, as well as support the wider sector. and the devolved legislatures during the Poppy Appeal in We will introduce a more strategic, proactive, coordinated November. Together with the Industry and Parliament Trust, and professional approach to undertaking research. we challenged parliamentarians to ride as fast as they could on a static bike in Portcullis House, Westminster, ESTABLISH NEW REGIONAL CAPACITY to raise money for the Poppy Appeal. Over 12 hours, FOR CAMPAIGNING 80 parliamentarians cycled a total of 203 kilometres, Recognising that decisions affecting the Armed Forces competing against their colleagues as well as serving community are increasingly made at different levels members of the Armed Forces. and across the UK, we will establish new, dedicated capacity across England and Scotland to support the development of local, regional and devolved AIMS FOR 2018 campaigning. This will further embed the Legion’s position at the heart of a national network. MAKE FURTHER PROGRESS WITH COUNT THEM IN Our top priority for 2018 is to make further progress with the Count Them In campaign. Now the ONS has confirmed that it will recommend an additional census question on the Armed Forces Community, we must ensure that the UK Government supports the ONS recommendation in its census white paper and that Parliament gives its approval. The next step is to make sure the statistical agencies in Scotland and Northern Ireland make the same recommendation to their governments as the ONS.
PRODUCE ANOTHER BEST-PRACTICE GUIDE FOR SERVICE PROVIDERS Following our widely welcomed best-practice guide for Frank Simpson painted into his surroundings supporting Service children in education, we will produce at Portico Library in further guides to improve the resources available for both Manchester for the Legion’s Count Them In the Armed Forces community and local authorities. campaign
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TRUSTEES’ REPORT
MEMBERSHIP & VOLUNTEERING Our Membership is a 257,500-strong community. RAISING THE PROFILE Each member plays a vital role in supporting our charity and championing Remembrance across the UK and OF MEMBERSHIP overseas. Members have their say in the way we run things by voting through the branch network. They provide With hundreds of thousands of members and a network of support, to help those who need it, via our Branch more than 2,700 branches and sub-branches, effective Community Support (BCS) scheme. communication is vital. 2017 saw us make a concerted effort to improve communication and raise the profile of As well as our members, the dedication and commitment Membership across the organisation. of thousands of volunteers is also critical in helping us to achieve our charitable objectives. More than 120,000 To do this we clarified the role of the Membership Council, volunteers contribute an estimated 2.5 million hours each changing it into an effective consultative body that year, giving their time and energy in their own unique works in collaboration across the organisation. The way – whether it’s collecting for the Poppy Appeal, Council is now making decisions more quickly, embracing organising fundraising events or offering advice and the use of digital technology to facilitate decision-making information to the Armed Forces community in our Pop In outside meetings. Centres across the UK. The Legion also created a new Directorate of Membership & Volunteering, enhancing communication with members and non-members across the organisation.
Working closely with our third-party supplier which manages Membership renewals, we have been able to identify and address a number of problems with the renewals process and supporting IT systems, resulting in a much-improved customer experience.
The modernisation of the Women’s Section continued throughout 2017. The Women’s Section is now administered and governed in line with the rest of the Membership, with a dedicated representative on the Membership Council. The Chairman of the Women’s Section continues to be a member of the Board of Trustees.
AIMS FOR 2018: MEMBERSHIP
Despite Membership decline slowing in 2017 (down to 4 per cent versus 8 per cent last year), our ABOVE Ellie Parke, a young Standard Bearer at Annual Conference main goal for 2018 is to develop a new, compelling Membership proposition. To attract new members, we are reviewing our current recruitment methodology and exploring new approaches and technologies in order to reach a wider demographic and meet the needs of a modern Membership.
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IMPROVING STANDARDS AND ENCOURAGING VOLUNTEERING EXCELLENCE
“Volunteering has provided me with a schedule to Feedback from the Volunteer Survey also recommended my week, comradeship, a feeling of being of value, that we launch the Survey nearer to the Poppy Appeal emotional support, and an opportunity for me to repay period to make it easier to engage with Fundraising the Legion by helping to carry out our work” Volunteers. So this year the survey ran from August to the – Pop In Centre Information Volunteer. end of 2017, with results to be published in 2018. Each survey will help review and shape our work priorities so In 2017, improvements were planned for the way we we can continue to develop and support the relationship support volunteers. These included repeating our biannual with our volunteers. Volunteer Survey to understand who our volunteers are, what they do, and gauge their views on volunteering for We also launched the Armed Forces Volunteer Leaders the Legion. Network, a forum with volunteer leaders from across the military charity sector. Its aim was to share good practice, In the 2015 Volunteer Survey, only 67 per cent of volunteers support consistency in volunteer management and work on felt they got the support they needed to carry out their role collaborating and sharing resources and expertise. well. To address this, we have begun to upskill our staff by offering volunteer management training. Using National Occupational Standards as a framework, staff workshops and consultations were held across the Legion to develop training content for a blended learning package.
To do this properly we need a full database of the kind ABOVE Two members at that a volunteer management system provides. We the Annual Conference in therefore began developing the brief for such a system. Southport, Merseyside
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AIMS FOR 2018: VOLUNTEERING
We will use the results of the Volunteer Survey to review CROSS-SECTOR COLLABORATION our strategy and set our work priorities accordingly. We will continue to build cross-sector collaboration The survey is designed to understand the experience of through the Armed Forces Volunteer Leaders Network. volunteers at the Legion at particular stages, such as The network, which includes SSAFA, Help for Heroes and recruitment, induction or training, as well gauging general Blind Veterans, is dedicated to improving the support satisfaction. The analysis of the results allows us to have for volunteers in all our charities by working together to a wider understanding of volunteers’ experience. Where it share and develop best practices and explore ways to identifies specific areas that need improvement, it allows collaborate in the future. Over the next few months the us to prioritise accordingly. network will be focusing on better understanding the impact of new data protection regulations on volunteering EXCELLENCE IN VOLUNTEER MANAGEMENT and developing further collaboration on volunteer training. We are developing the Excellence in Volunteer Management package – training that will give anyone who works with volunteers the skills they need to better support and manage them. The package, which is being developed in line with volunteer management best practice, will be launched with a rolling implementation plan across all Directorates, to be completed by the end of 2018. We will also develop new face-to-face training, online learning and workbooks in 2018.
Once the wider work on our IT infrastructure has been completed, our top priority will be to restart the work on the Volunteer Management System. It will enable us to:
Store the records of all our volunteers in one place Ensure statutory compliance Streamline communication with volunteers ABOVE A young volunteer with Build a greater understanding of what they do a resident at Galanos Care Home Report more effectively on the impact they have BELOW Volunteers, Ben Poku, Better celebrate and recognise their successes. Claire Trafford and William Olando in one of our Pop In Centres
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FUNDRAISING Getting involved in fundraising is easy. It doesn’t matter FUNDRAISING PREFERENCE SERVICE how old you are, what skills you have or where you’re We worked closely with the Fundraising Regulator to help from. It’s about rolling up your sleeves and taking part. develop the new Fundraising Preference Service, an Whether it’s the Poppy Appeal, a charity walk, a run, online tool that helps members of the public control their bike rides or even a pub quiz, everyone can play a part charity communications. We are registered with the in helping us be there and continue to raise money for our Fundraising Regulator and comply with all the key Armed Forces community. principles of its Promise. We’re proud that we could offer our support and expertise in developing this valuable service, but it did present challenges due to EVOLVING OUR the resources we had to devote to it. FUNDRAISING APPROACH THE FUNDRAISING PROMISE We launched our Fundraising Promise in March 2017 as Our purpose is to raise the funds we need in a recommitment to the values and ideals the Legion has a sustainable and appropriate way. In 2017, we always held. The Promise puts our supporters at the front looked to innovate our fundraising beyond the Poppy and centre of every activity. Where we cannot guarantee Appeal and individual giving while improving the the highest standards, we will change our way of working fundraising experience with a renewed commitment to include more knowledge and monitoring, or limit our to a responsible approach. activity until we have greater confidence in our systems.
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on our high streets. They generate significant funds and POPPY APPEAL media interest and further remind the general public of the AND COMMUNITY sacrifices made by the Armed Forces community every day. FUNDRAISING Highlights include the cast of Strictly Come Dancing supporting the London Poppy Day, and £22,000 being 2016 POPPY APPEAL raised in Cardiff, which was aided by the fact that there The 2016 Poppy Appeal, with support from Community was a rugby union match between Wales and Australia Fundraising (CF) raised £49.2 million, around £1.6 million at the Principality Stadium on the same day. Overall the more than 2015, and demonstrated the ongoing passion City Poppy Days contributed nearly £1 million to the and commitment of our Poppy Appeal Organisers, overall Poppy Appeal total. Collectors and CF staff. BUILDING ALL-YEAR-ROUND The 2016 Poppy Appeal was supported by 17 Premier COMMUNITY FUNDRAISING League football clubs, who helped to distribute pins, The main focus of our Community Fundraising teams raising more than £55,000. continues to be the Poppy Appeal. They provide excellent relationship management to supporters, organisations and We sent out more than 15,000 updated schools Kids partners across the country throughout the year and are Packs during the appeal and also supported the continuing to diversify their fundraising activities. Passchendaele 100 Centenary by distributing 220,000 Passchendaele 100 Poppy Pins. We supported this activity We continue to develop year-round fundraising using with a new online ordering system which improved both both merchandise and fundraising ideas to inspire the productivity and the overall supporter experience. public to support the Legion. One example is the North West Region, which has increased its income from CITY POPPY DAYS ACROSS THE UK IN 2016 all-year-round fundraising outside of Remembrance We have continued to grow our City Poppy Days during to £122,000, with events in Manchester, Chester, Poppy Appeal with activity taking place in Birmingham, Tatton Park and Wythenshawe. Bristol, Cardiff, Carlisle, Leeds, London, Manchester, Newcastle, and Plymouth. Across the country our CF teams are also working with corporate partners. Current partners include Tesco, Arriva, The City Poppy Days are an opportunity for uniformed Nexus, Virgin Trains East Coast, the Co-op, BAE Systems personnel from the three services to engage with the public and Jaguar Land Rover.
FACING PAGE Poppy Appeal collectors at London Poppy Day
LEFT Cyclists at the four-day professional bike ride from London to Paris which raises money for the Armed Forces community
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SUCCESSFUL CORPORATE PARTNERSHIPS
Corporate partners helped raise £5.1 million in 2017 to support the Armed Forces community, and also gave hundreds of hours in volunteering during the Remembrance period.
After a combined total of almost 40 years, our top three corporate partners – Marks & Spencer, Coventry Building Society and Sainsbury’s – continued to support us through sales of poppy merchandise and financial products.
Coventry Building Society has decided to continue its corporate partnership with us after almost 10 years together, during which they will have raised £15 million Team Legion for us. Every year since 2008, Coventry Building Society runner at the London Marathon has made a significant donation. They made us their Corporate Charity in 2012 and now also support us by fundraising and volunteering staff time. GROWING MASS EVENTS
During the Poppy Appeal in November 2016, we held eight family-friendly, 5km Poppy Runs across England in collaboration with British Military Fitness. We also offered virtual runs, with supporters taking part as far away as Dubai and Sydney. One of our park runs attracted more than 4,000 people, while almost 4,500 people participated virtually. Revamped with a professional event setup, the runs raised £48,000.
April 2017 saw the Legion’s largest ever team run the London Marathon and raise £200,000. We had coverage on the BBC website and an interview with our runners was shown on BBC TV.
Following the long-term success of the London Poppy Walk we trialled two more walks, one in Liverpool and one in Portsmouth. Nearly 1,700 supporters took part and collectively raised £118,000.
RIGHT Children taking part in one of the Legion’s Poppy Walks
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In May 2017, we unveiled a new Corporate Football and during November 2016 we planted more than Tournament at QPR’s Loftus Road ground in London, which 120,000 Little Remembrance Crosses sent to us by our will be an annual fixture. Our new partner Gardman Ltd, supporters. This project, together with ongoing direct the UK’s leading garden product wholesaler, raised marketing campaigns, generated £12.9 million in 2017. more than £350,000 from poppy-themed products. Golden Charter, the UK’s largest independent funeral PASSCHENDAELE 100 POPPY PIN plan provider, also joined us and has brought in more We created a limited edition Passchendaele 100 Poppy than £130,000 so far. Pin to commemorate the centenary of the Battle of Passchendaele, made from the brass shell fuses used in the battle. The pin raised nearly £1 million for the charity and INDIVIDUAL GIVING had a significant Remembrance impact. 2017 was another successful year for the Poppy Shop and in total 2017 was another successful year in terms of donations our supporters bought jewellery, clothing and household from our generous supporters. The Poppy Lottery and goods totalling £6.6 million. our raffles generated £8.7 million while also allowing a number of our supporters to win some very generous cash prizes. Income from Legacies reached £21.7 million AIMS FOR 2018 in 2017, largely as a result of generous gifts in wills made by many who wished to continue supporting our work with Our main goals this year are to meet or exceed our the Armed Forces community after they had passed away. income targets so that we can meet the Legion’s Our Direct Marketing campaign continues to perform well, financial needs, while continuing to innovate and diversify our fundraising efforts beyond the Poppy Appeal. Key activities will include:
In 2018 we will start our fourth innovation cycle where we develop new fundraising products. We will continue training in innovation techniques for our fundraising staff and will run our annual product portfolio review to help us better prioritise investment 2018 marks the centenary of the end of the First World War. We will work with new and existing corporate partners on activities to celebrate the wartime heritage of their businesses and products, while helping raise more funds for our vital welfare work We are already planning Poppy Walks for summer 2018, when we will offer 12 routes in different cities across England and Wales As ever, we will look for ways, beyond fundraising, for our corporate partners to help us support the Armed Forces community, such as collaborating around veteran employability. We’ll also be marking some key partnership milestones, including 10 years of fundraising support from Coventry Building Society, which will have raised more than £15 million by the end of 2018 The EU General Data Protection Regulation (GDPR), which aims to give control back to citizens and residents over their personal data, means we must change how we use, manage, protect and administer data in the future. We are making significant changes within our business to ensure that all aspects of GDPR are implemented by the deadline of May 2018.
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BOARD OF TRUSTEES
AIR MARSHAL TERRY WHITTLES UNA CLEMINSON BEM TD DAVID WALKER CB CBE AFC MA BSc National Chairman National Vice-Chairman RAF (Retd) Terry was elected as the National Una was appointed as a Trustee in May National President Chairman in 2016. He joined the Army 2016, and elected as National Vice- David was appointed as the National in 1966 and served as a Linguist in the Chairman. She retired as a registered President in May 2016. He joined Intelligence Corps. Terry retired from the General Nurse in 2012 and was a Major the RAF in 1978, completing tours in Regular Army in 1981 with the rank of in the Territorial Army. Una has been Germany, the US and the UK before Warrant Offi cer; he then served in the a member of the Legion since 1971 and becoming the Military Assistant to the Territorial Army for 12 years before was previously a Trustee between 2010 Minister of Defence. He was appointed retiring with the rank of Major. and 2012. Having been involved with Assistant Chief of the Air Staff in 2003, Following positions in the Civil Service welfare all her life, Una brings a wealth and was later responsible for the RAF’s among others Terry retired from of experience to the Board. fast jet forces and the RAF Support full-time employment. Helicopter Force. Most recently he became Deputy Commander of the NATO Joint Force Command, before retiring from the RAF in 2013.
RODNEY BEDFORD (from May 2017) ADRIAN BURN FCA (to May 2018) PAT CHRIMES (from April 2017)
Rod Bedford served for 19 years in the Appointed as a Trustee in 2009 and Pat Chrimes was elected as Chairman Grenadier Guards, and then for 18 re-appointed in 2015, Adrian chairs the of the Women’s Section in April 2017 years in the Kent Police. As a member Audit and Risk Management Committee. following a successful period of three of the Legion for 25 years, Rod remains After spending most of his career as years as Vice-Chairman. Pat takes her dedicated to its causes, especially a partner in a City fi rm of Chartered seat on the Board of Trustees as the comradeship and welfare. The memory of Accountants, Adrian has held a number of Chairman of the Women’s Section in the fallen, the future of the living, support non-executive directorship appointments. accordance with the Rules contained in and comradeship have always been the Prior to his appointment to The Royal the Royal Charter. reasons for his membership of the Legion. British Legion in 2009, he was for several Rod was elected to the Board of Trustees years a Trustee, and Chairman of the in May 2017 and currently serves on the Finance Committee, of the NSPCC. Branch Property Trusts Trustee Committee. He retires from his appointment at The Royal British Legion in May 2018.
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JASON COWARD DENISE EDGAR LIEUTENANT COLONEL JOE FALZON OSJ BEM Jason has been an Appointed Trustee Denise joined the Board of Trustees in since 2014 and was re-elected to the 2010, and was re-elected in 2014 and Joe was elected as a Trustee in 2014 Board in 2017. He runs his own 2017. She has been actively involved and re-elected in 2017. He joined the marketing consultancy and has with the Legion for the past 25 years Army in 1963 and retired in 2001 with worked with many commercial and and brings a great deal of membership the rank of Lieutenant Colonel. He served third-sector organisations over the years. experience to the Board. Denise is as the Legion’s Head of Governance & He has a particular Board focus on a member of the Branch Property Trusts Administration from 2001 until 2010, Brand and Marketing, and also serves Trustee Committee. when he took early retirement. Joe brings on the Property Committee and as a wealth of administrative experience to Vice-Chairman of the Membership the Board. Council. Jason is also a Trustee at the National Memorial Arboretum.
OVERLEAF » Biographies of 9 further Trustees
ROGER GARRATT (to February 2018) PAUL HARRIS QGM (from February Roger was elected as a Trustee in May 2018) 2016. Roger joined the Royal Navy Paul Harris served 32 years as an Army in 1962 and served until 1992. Offi cer, retiring in 2006 in the rank of Roger resigned from the Board in Lieutenant Colonel. He worked with an February 2018. international company and then owned a successful management consultancy business. He has since retired from full time employment. Paul believes that as Legion ambassadors in their local and regional areas, Branch members are vital to the charity’s success.
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BOARD OF TRUSTEES
MARILYN HUMPHRY (to April 2017) MAJOR GENERAL LIEUTENANT COLONEL DAVID JOLLIFFE CB FRCP COLIN KEMP Elected as Chairman of the Women’s Section in 2014, Marilyn, by virtue of David was appointed as a Trustee in Colin was elected as a Trustee in her Offi ce, was a member of the Board 2012 and re-appointed in 2015. He 2014. He joined the Army as an Army of Trustees in accordance with the was commissioned into the Royal Army Apprentice in 1965 and retired in 2001 Rules contained in the Royal Charter Medical Corps in 1967 and retired in with the rank of Lieutenant Colonel. until April 2017. 2003 with the rank of Major General. Colin is an advocate of strong The Legion’s work on behalf of the ex- membership and strives to promote Service and serving community is close membership values and to foster to David’s heart, and he is able to add ceremonial roles and duties to good his personal contribution to that work. effect. He is a Trustee at the National David is a member of the Audit and Risk Memorial Arboretum and serves on the Management Committee. Audit and Risk Management Committee.
ANTHONY MACAULAY PHILIP MOORE CATHERINE QUINN
Anthony Macaulay was appointed Philip was appointed as a Trustee Catherine was appointed as a Trustee in as a Trustee in 2011 and reappointed in 2014 and re-appointed in 2017. 2013 and re-appointed in 2016. She is in 2014. He is a retired lawyer Philip brings a wealth of fi nancial currently Private Secretary to HRH The who has extensive business and experience to the Board and chairs the Duchess of Cambridge. She has served commercial experience. He is Finance Committee. on several boards, most recently being a member of the Finance Committee appointed to the Charity Commission and the Property Committee. Board, and brings a welcome breadth of experience to our own Board of Trustees.
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BOARD OF TRUSTEES
ANNY REID OBE MARTYN TIGHE (to November 2016) Anny was elected as a Trustee in May 2016. She served in the Princess Mary’s Martyn was re-elected as a Trustee in RAF Nursing Service for 30 years, for 2014 and resigned in November 2016. the last four of which she was Chairman He joined the Army in 1974 and retired of the Princess Mary’s RAF Trust. Anny in 1996 with the rank of Warrant Offi cer. has been County Chairman of both Martyn then joined the Staffordshire Gloucestershire RBL and Gloucestershire Police as a member of the Support Staff RBL Women’s Section for fi ve years. She and retired in 2014. brings a wide breadth of experience of all aspects of the Legion to the Board.
LIEUTENANT COLONEL DAVID WHIMPENNY
David was elected as a Trustee in 2013 and re-elected in 2016. He was commissioned from the Royal Military Academy Sandhurst in 1985 and retired from the Army in the rank of Lieutenant Colonel in December 2017. He now works as a Programme Management Consultant. David remains passionate in his support of The Royal British Legion and its relevance in today’s society. He serves on the Governance and Finance Committees and is Chairman of the Board of Trustees at the National Memorial Arboretum.
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CO-OPTED MEMBERS KEY COMMITTEES OF THE BOARD Membership Council OF TRUSTEES AND Colin Kemp (Chairman) The Trustees would like to recognise the CURRENT MEMBERSHIP support given by the following co-opted Jason Coward (Vice-Chairman) members, who bring their special expertise to Mike Alderson the boards and committees on which they sit: Audit & Risk Management Committee Stuart Allen David Bennett Rees FIA Adrian Burn FCA (Chairman) Gordon Barker Air Vice-Marshal Anthony Stables Major General David Jolliffe CB FRCP David Brown Dr Jonathan Wittmann Lieutenant Colonel Colin Kemp Jane Brown Jenny Rowe Finance Committee Bob Chambers Philip Moore (Chairman) National President John Clark Anthony Macaulay Air Marshal David Walker Emma Cox CB CBE AFC MA BSc RAF (Retd) David Whimpenny Phil Davies David Bennett Rees FIA National Vice-Presidents Noel Duston Dr Jonathan Wittmann Peter Howells CBE OStJ TD DL Paul Harris Geoffrey Medcalf MBE Governance Committee Dilys Hooper Geoff Barwell OBE JP Terry Whittles (Chairman) Ralph Howard-Williams Una Cleminson National Chaplain Syed Mahmood Catherine Quinn Garry Mills The Right Reverend James Newcome DL David Whimpenny John Morrison Helen Picken Property Committee David Swann Lieutenant Colonel Joe Falzon OSJ BEM (Chairman) Philip Wilson Anthony Macaulay Jason Coward
Conference Committee Anny Reid OBE (Chairman) Sue Kelly Hugh Ashton-Moore Sam Lockhart Noel Duston John Morrison
Branch Property Trusts Trustee Committee Air Vice-Marshal Anthony Stables (Chairman) Jenny Rowe (Vice Chairman) Rod Bedford Denise Edgar Lieutenant Colonel Joe Falzon OSJ BEM Anny Reid OBE
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BOARD OF TRUSTEES
EXECUTIVE BOARD Independent Auditor National Life Vice-Presidents Deloitte LLP Dame Mary Bridges DBE Director General 2 New Street Square Doris Ingham OBE Charles Byrne London EC4A 3BZ Maureen Lodder OBE Director of Finance & Commercial Patricia Valler OBE Investment Manager Daniel Oppenheimer (from April 2017) Wendy Bromwich JP Cazenove Capital Nick Lewis (to April 2017) Marilyn Humphry Management Limited Commercial Director 12 Moorgate National Vice-Presidents and Patronesses Stephen Cooper (to March 2017) London EC2R 6DA Auriol, Marchioness of Linlithgow Elizabeth, The Dowager Countess of Director of Information Management & Legal Advisor Scarborough LVO Technology Withers The Right Honourable the Countess Bathurst Paul Clements (from May 2017) 16 Old Bailey The Lady Grey of Codnor London EC4M 7EG Director of Fundraising Baroness Grey-Thompson DBE Claire Rowcliffe Joanne Andrew-Steer MBE WOMEN’S SECTION Sara Jones CBE OStJ DL JP Director of Operations Betty Underhill OBE Antony Baines President Janie Martin DL HRH The Princess Royal Director of Remembrance Jane Lewin-Smith and Marketing Chairman Charity Registration Number Gary Ryan Pat Chrimes 219279 Director of Human Resources and Vice Chairman Principal office Organisational Development Karen Brown Caren Thomas (to June 2017) The Royal British Legion Chair of Finance Sue Donaldson (from June 2017) Haig House Sandra Fishlock 199 Borough High Street Director of Membership & Volunteering Central Committee London Emma Cannings (from July 2017) Pat Ayres MBE SE1 1AA Jennie Bailey CONSULTANTS AND ADVISORS Jane Buxton Banker Margaret Cook Lloyds Bank Jackie Crean Charities Sandra Fishlock 4th Floor Elizabeth Harrison 25 Gresham Street Vera Parnaby London EC2V 7HN Vera Rogers Sandra Saban Marie Skells Angela Swift Doreen Warlow
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FINANCIAL REVIEW
Total income for the year was £159.2 million outside of the Poppy Appeal. The 3 per cent increase in compared with £151.3 million in 2016. Of our total the cost of raising funds reflects continuing investment to income, £35.8 million relates to income from charitable diversify our fundraising streams to secure sustainability for activities, which increased by £9.0 million, reflecting the future, together with the cost of complying with new grants received for the Aged Veterans’ Healthy Living fundraising and data protection regulations. Programme, the Commemorative Events Programme and the Veterans’ Gateway. These grants partly Expenditure on Remembrance and ceremonial activities funded a significant expansion in our welfare provision was £7.4 million, which includes the costs of running during the year. the National Memorial Arboretum. We spent £8.6 million on supporting our Membership (partially offset by Total expenditure was £155.3 million in the year Membership fees of £5.2 million), which includes the compared to £146.9 million in 2016. Expenditure on costs of the Membership Department and the Legion charitable activities was £115.9 million (2016: £108.8 magazine, together with the running costs of our million). Within this, our expenditure on care activities, Branches, Counties and Districts. which include our care homes and break centres, increased by £2.6 million. This increase arose from a full Overall, the Legion generated a small surplus before gains year of operating costs related to the new dementia wing and losses of £3.9 million (2016: £4.4 million). We will at Maurice House, together with an increase in staffing continue to invest our surpluses to support our five-year costs as we seek to improve staff recruitment and retention strategy around capital projects and improved services across our care services. in support of our beneficiaries.
Community welfare costs were £57.4 million; in this area we expanded our services, launching the Veterans’ FINANCIAL INVESTMENTS Gateway and increasing our support to beneficiaries through the Aged Veterans’ Healthy Living Programme. The market value of the Legion’s investment portfolio We also increased the value of grants awarded to other increased by £8.3 million during the year, driven by organisations by £2.8 million; the main grants went to strong equity markets. At the year end the total value of the Officers’ Association (£2.1 million), the Royal the Group’s investments was £149.8 million (2016: Commonwealth Ex-Services League (£1.1 million), Shelter £141.5 million). The portfolio is managed through three (£0.7 million) and Action on Hearing Loss (£0.6 million). investment managers; Cazenove manage the charity’s main investment portfolio, Sarasin & Partners manage Almost 60 per cent of the Legion’s income continues to be Poppyscotland’s investments and CCLA manage branch generated through voluntary donations, with the Poppy related investments, including those held in legacy and Appeal being the most important fundraising activity in the property trusts. year. The November 2016 Poppy Appeal generated £49.2 million, a 3 per cent increase on the previous year’s The mandates agreed with Cazenove and Sarasin & total of £47.6 million. However, general donations income Partners specify the level of risk that can be undertaken by fell by £4.3 million, with the largest decrease in direct defining asset classes and ranges, benchmarks and marketing, reflecting the difficulty of attracting new donors acceptable volatility. The investment managers have total in a highly competitive and increasingly regulated market. discretion within these parameters. All investments must comply with the Legion’s ethical policy, which is one of Expenditure on raising funds was £39.4 million, with the ‘Responsible Investment’. Investment managers are cost of the Poppy Appeal accounting for just over a third expected to engage with companies on social, of this. Of the remainder, £8.0 million relates to the cost of environmental and business ethics issues and to exercise raising funds through commercial activities, which includes the Legion’s voting rights, following the policy. The the cost of stock sold via Poppy Shop, and £9.6 million investment mandate agreed states that investments should relates to the cost of raising other donations and legacies not be made in property.
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Cazenove: services to beneficiaries can continue during a period of The portfolio outperformed its investment objective, driven unforeseen reduced income. Our reserves policy is set with by strong equity markets in the UK, US and Europe. The reference to the financial risks facing the charity. The value of the portfolio increased to £121.1 million (2016: Legion is heavily dependent on volunteer support and £115.7 million) over the year and generated £2.2 million donations from the public to enable it to carry out its work. (2016: £2.0 million) of investment income. The mandate Our biggest risk is that our income suddenly drops agreed is as follows: because of unforeseen factors beyond our control. In these To achieve a rate of return in excess of RPI + 2 per cent circumstances, reserves would need to fund operating over the medium term. expenditure while the organisation was put back onto a stable footing. The Trustees have agreed that, given the Sarasin & Partners: key financial risks facing the charity, the Legion should During the 12-month period under review, the seek to hold reserves to cover approximately six months’ Poppyscotland portfolio maintained its value at £10.8 unrestricted expenditure. million and generated £0.4 million (2016: £0.4 million) of investment income, equivalent to 4 per cent on a total Almost half of the Legion’s total reserves are restricted in return basis. The mandate agreed is as follows: nature and can only be used for the purpose specified by To achieve a rate of return in excess of RPI + 2 per cent the donor (or, in the case of Branch Property Trusts, for the over the medium term. purposes set out in the trust’s governing document). The Legion sets its reserves policy with reference to liquid and Charities Official Investment Fund (COIF) available unrestricted funds. Unrestricted funds, excluding with CCLA: functional fixed assets of £76.7 million and programme- Branch and County investments of £7.9 million (2016: related reserves of £6.1 million (both of which are backed £7.5 million) are held in a mix of listed investments by assets not readily convertible into cash), totalled £103.8 and unit trusts. million (2016: £95.4 million), representing 10 months’ unrestricted expenditure (see note 29). We plan to invest some of these reserves in support of our five-year strategy, PENSION including the construction of a community hub and ten- bedded extension at Galanos House, the construction of a new care home and the delivery of Remembrance The pension deficit has reduced from £19.1 million to activities, including further improvements to the site at the £6.2 million, primarily due to changes in the longevity National Memorial Arboretum. assumptions used by the actuary. The significant reduction in the reported deficit highlights the sensitivity of the calculations to relatively small changes in the underlying assumptions. INVESTMENT PROPERTIES
The Royal British Legion and the pension fund trustees are Most properties held by The Royal British Legion as trustee working together to agree a funding plan for removing the (predominantly under Branch Property Trusts) are let to pension deficit over an appropriate period of time and we independent commercial operations, primarily affiliated do not expect the funding position of the pension fund to social clubs. In most cases, the local Legion Branch will materially affect the Legion’s ability to meet its charitable also have part-time use of the property under the terms of objectives in the future. the lease.
Previously 35 properties, whose value was £3.2 million, RESERVES were included within the Legion’s property portfolio. These are properties held in the name of The Royal British Legion where the branch committee is the charity trustee and has The Royal British Legion holds reserves to ensure that
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the legal responsibility for the administration of the restriction on £6.8 million was removed from Branch property. The Branch Property Trust programme has led to Property Trust funds and a further £6.6 million was a greater understanding of the nature of these trusts and, transferred to specially created Legion Area Trust Funds. following legal advice obtained during the year, it has These funds will now be used to support the Legion’s been decided that it is not appropriate to include them beneficiaries in a wider geographical area and for within the Legion’s accounts. specific projects and activities forming part of the Legion’s corporate strategy. This includes the development and The Legion’s methodology with regard to the valuation of expansion of care homes and related services. There is investment properties is to re-value one-fifth of the a clear strategy for freeing up the remaining funds over the properties each year and to carry out a review of the next two to three years, as well as proceeds from future remainder to identify any event that would impair the sales if a property is no longer needed. valuation. During the year the Legion disposed of 12 (2016: 24) investment properties realising proceeds of £3.8 million (2016: £6.4 million). PROGRAMME-RELATED INVESTMENTS BRANCH PROPERTY TRUSTS Programme-related investments mainly consist of property A Branch Property Trust is a property or the proceeds of its repair loans that are interest-free secured loans to sale that is held in a separate charitable trust in connection beneficiaries living in their own home to provide housing with a Legion Branch. Its charitable purposes are usually improvements. Programme-related investments totalled restricted to a specific geographical area. £6.2 million at the year-end (2016: £6.6 million).
2017 2016 Restricted Investment GRANT MAKING Property Reserve £61.1m £61.5m Included in our welfare services expenditure are grants Restricted Branch made to individuals in immediate need after an assessment Property Trust Fund £44.5m £47.0m of the beneficiary’s financial situation. In 2017, The Royal Number of properties 338 351 British Legion spent £10.5 million on individual grants (2016: £10.2 million). In both volume and value, ‘mobility’ related grants, such as riser-recliner chairs and At 30 September 2017, the Legion held £61.1 million powered scooters, were most common. The Legion also (2016: £61.5 million) (see note 30) in the restricted awards grants to households whose case is managed by investment property reserve, representing the market value a partner agency, such as SSAFA or the Royal Air Forces of 338 (2016: 351) properties predominantly held under Association. Branch Property Trusts. In addition, £44.5 million (2016: £47.0 million) was held in restricted Branch Property Trust The grant of £2.1 million made to the Officers’ Association funds comprising sale proceeds, interest and other income, (OA) is a contractual commitment. Other grants are made from the properties previously held in trust. to organisations where a third party has skills or facilities that are unavailable within the Legion’s own resources. In The Legion is continuing a programme of work to remove 2017, excluding OA, grants were awarded to 143 or widen the restrictions on Branch Property Trusts that organisations totalling £11.2 million (2016: 113 have served their purpose, so that these funds can be used organisations, £8.4 million). more effectively and across the broader range of services needed by our beneficiaries today. During the year decisions were made on 78 Branch Property Trusts. The
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the National Memorial Arboretum and Poppyscotland. The RISK MANAGEMENT AND strategic risk register is presented to the Board of Trustees INTERNAL CONTROL twice a year and reviewed by the Executive Board on a quarterly basis to ensure it is kept up to date and active. The Board of Trustees has responsibility for the oversight of risk management within The Royal British Legion. It has Risk assurance is provided to the Trustees and members of approved a framework through which major risks are the Executive Board through line management and internal identified, assessed, effectively addressed and monitored. audit, and independently through external audit.
The framework defines the strategic and operational risk The five major areas of risk identified by the Legion are management processes that the Legion follows to ensure detailed below, with selected controls from our risk that identification and mitigation of risk is carried out register. appropriately throughout the business. This is done in three stages: At their last review, the Trustees were satisfied that there by appropriate policies are suitable procedures in place to mitigate these risks. a network of Risk Champions (responsible for identifying risk within each directorate) The annual internal audit plan is drawn up by reference to a Head of Risk Management who facilitates the risk the risk register and audits focus on the mitigating controls management processes through our IT system, Magique. that address the key risks. The Audit and Risk Management Committee receives copies of all internal audit reports in The Legion’s directorate-level risk registers have been which opinions are expressed on the effectiveness of the combined to create a Legion-wide register, which includes mitigating controls that have been reviewed.
Risk Mitigation Fundraising dependency on voluntary fundraising activities will always Several sources of income ex. Poppy Appeal, Legacy and Mass events be a major issue to the Legion Regularly investigating new income generating products Maintenance of a six-month reserve policy Reputational risk arising from incidents that negatively impact Proactive media management and monitoring operations including inappropriate fundraising, major fraud, cybercrime Contract management with third party suppliers of fundraising support or data loss Recruitment of compliance officer to the fundraising directorate Fraud policy, investigation and reporting Cyber controls checked regularly Penetration testing across the Legion’s supplier network Financial risk due to inadequate budgetary control, market movements Budgeting linked to operational plan in investment portfolio and liabilities of defined benefit pension scheme Financial systems and controls Expert financial advice informs investment policy Finance committee oversight Failure to meet General Data Protection Data audits and action plans Regulations (GDPR) Review of outsourced services where suppliers are managing sensitive personal data Staff and volunteer training and awareness Failure to keep the people we work with safe Appropriate Legion-wide policies and procedures, supported by training Safeguarding of beneficiaries when delivering services, whether in our care homes, break centres or at home Safeguarding of young people during Poppy Appeal
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The Board of Trustees meets eight times per year and STRUCTURE, GOVERNANCE comprises 16 Trustees: AND MANAGEMENT the National Chairman and National Vice-Chairman are elected by Voting Branches; The Royal British Legion has a head office in London seven Trustees are elected by all Voting Branches; where the Director General and the supporting Board of six Trustees are appointed by the Board of Trustees. seven Executive Directors are based. There is a network of Invitation is by open advertisement and selection takes offices in England, Ireland, Scotland and Wales, which place through the Governance Committee; and provides facilities for beneficiaries, local members, the Chairman of the Women’s Section is elected annually volunteers and staff. Care home services and Poppy by the members of the Women’s Section at the Women’s Breaks are delivered through the Legion’s premises around Section National Conference. the country. The National Memorial Arboretum, the home of the Armed Forces Memorial, is situated in Alrewas, Trustees are elected or appointed for an initial three-year Staffordshire and the Legion’s Contact Centre is based in period and are eligible for a further two terms of three Cardiff. Headquarters for Poppyscotland are located in years. The Chairman and Vice-Chairman may only serve Edinburgh. The charity’s branches are located throughout one term of three years however the Vice-Chairman may England, Wales, Ireland and overseas. also serve one term of three years as National Chairman if so elected by Voting Branches. Newly elected trustees are The Legion’s governing document is its Royal Charter of given induction training on their duties and responsibilities Incorporation and Schedules, which was first granted in as members of the Board of Trustees. Training needs are 1925. The Board of Trustees has the responsibility for its reviewed on an annual basis and specific training is given implementation and review, but Royal Charter to trustees as required. amendments require a special resolution at the Annual Conference before they can be subsequently ratified by a Trustees receive no remuneration but are reimbursed for special resolution of the Board of Trustees and allowed by the cost of attending meetings and other official functions. Her Majesty the Queen in council. Trustees are invited to lead and officiate on pilgrimages and the costs involved in that duty are included in the Directors’ roles are evaluated using the Hay job evaluation declared figure for trustee expenses (Note 15). system, and this supports a process of pay benchmarking. There is an independent Governance Committee comprised of trustees, which oversees and reviews COMMITTEES OF directors’ remuneration at least annually. THE BOARD
The Board of Trustees has seven committees that report to BOARD OF TRUSTEES it, all of which have written terms of reference.
The Board of Trustees is responsible for the overall Two of the committees facilitate membership matters: governance, policy and work of The Royal British Legion. Membership Council has responsibility for the direction All substantive decisions are made by the Board of and implementation of all membership issues; and Trustees within the bounds of the Royal Charter and the Conference Committee oversees the organisation of the Legion’s vision, mission and charitable objectives. Annual Conference. The Board of Trustees provides overall strategic direction, while administration of the charity is delegated to the Two committees form an integral part of the governance of Director General and through him to the Board of the charity: Executive Directors. Governance Committee makes recommendations on trustee appointments, overseas staffing arrangements
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and monitors governance best practice; and Audit and Risk Management Committee reviews the CORPORATE STRUCTURE significant judgments made in the accounts before board approval. It provides for regular communication between The Royal British Legion has an extensive corporate the trustees and the external and internal auditors, structure comprising: monitors risk management procedures, and approves the the charity; internal audit programme. 11 wholly owned subsidiaries, nine of which are included in the consolidated accounts and two of which Three committees oversee the resources of the charity: are dormant; and Finance Committee reviews, recommends and monitors the Irish ex-Service Trust, for which it acts on behalf of compliance with the reserves and investment policies Her Majesty’s Government as the distributory agent. and provides oversight of IM&T. It reviews the annual budget and financial performance against budget, Further details of the activities and performance of oversees and monitors the investment portfolio and subsidiaries are given in Note 14 to the accounts. addresses any other financial matters referred to it by In addition there are four active organisations which share the Board of Trustees; part of our name. Property Committee recommends strategy and monitors Royal British Legion Industries Limited (RBLI) which performance in relation to functional property provides employment, training and support for people, developments, oversees significant acquisitions or including those with disabilities, plus care and support disposals and ensures these properties are appropriately for ex-Service Men and Women and their families; maintained; and Royal British Legion Poppy Factory Limited in Richmond Branch Property Trusts (BPT) Trustee Committee (the Poppy Factory), which creates paid meaningful recommends strategy and monitors compliance in employment opportunities for wounded, injured and sick relation to the management of properties, income and ex-Service Men and Women; assets held by the Branch Property Trusts and approves The Royal British Legion Attendants Company Trust, property disposals. which promotes the rehabilitation and resettlement of men and women of Her Majesty’s Armed Forces who are The day-to-day management of the charity is delegated to in need of assistance in civilian life; and the Director General and through him to the Board of Royal British Legion Scotland, which helps Scottish Executive Directors. ex-Service Men and Women of all ages to adapt to civilian life.
These four companies are separate charitable trusts with PUBLIC BENEFIT no common shareholding and no other form of control by The Royal British Legion. The results of these companies The trustees have given due regard to the public benefit are therefore not included in the consolidated accounts of guidance published by the Charity Commission. They the Legion. believe that the extensive welfare support provided to our beneficiaries along with the other charitable activities undertaken, satisfies the public benefit requirements of the Charities Act 2011. ROLE OF THE MEMBERSHIP AND VOLUNTEERS
The Royal British Legion is a membership organisation overseen by a Board of Trustees through the Membership Council. Around 257,500 members are organised through approximately 2,700 branches operating across England, Wales, Northern Ireland and
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the Isle of Man, with a further 98 branches overseas and Guidance and advice on volunteer management and eight National branches. support is provided by the centrally based Volunteer Support Unit (VSU). The VSU focuses on creating a Branches: flexible framework to develop volunteer opportunities and undertake local welfare activities as part of the Branch professionalising the experience of our volunteers. As part Community Support scheme; of the new corporate strategy, the volunteer strategy’s undertake their own fundraising, with central support for vision is ‘Inspiring and developing volunteering that is the Poppy Appeal; valuable, versatile, and valued.’ To support this vision, the recruit and retain members; volunteer strategy will focus on developing the two-way ensure that Remembrance is undertaken locally; and relationship between the Legion and its volunteer family. act as Legion representatives in their local community. Branches report into 52 County, District and Section STATEMENT OF TRUSTEES’ committees which consist entirely of volunteers. The Legion provides operational and administrative support to the RESPONSIBILITIES membership structure delivered by the staff of the Membership Department and a network of Membership The trustees are responsible for preparing the Trustees’ Support Officers located across England, Wales and Report and the financial statements in accordance with Northern Ireland. applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted The Women’s Section successfully transitioned to the Accounting Practice). The law applicable to charities in governance and administration processes of the Legion England and Wales requires the trustees to prepare membership during the year, and now has representation financial statements for each financial year that give a true on the Membership Council. The Women’s Section and fair view of the state of affairs of the charity, of the continues to provide care and support for the ex-Service incoming resources, and of the application of resources of community through their own welfare schemes, such as the charity for that period. financial support to ex-Service women, wives, widows and widowers of ex-Service personnel and their children. In preparing these financial statements, the Trustees are required to: Many members of the Legion belong to one of the 433 select suitable accounting policies and then apply them clubs (2016: 456) that use the Legion’s name under consistently; licence but which are independent entities; therefore, their observe the methods and principles in the Charities financial results are not included in these accounts. There SORP; are 242 clubs (2016: 254) that occupy premises owned make judgements and estimates that are reasonable by the Legion and leased to the club. and prudent; state whether applicable accounting standards have The Legion depends on the dedication and commitment of been followed; and thousands of volunteers who commit their time and energy prepare the financial statements on a going-concern in supporting our charitable objectives. Volunteers add basis unless it is inappropriate to presume that the value to almost every area of Legion activities, from charity will continue in business. casework and fundraising to improving the quality of life of our care home residents. The Legion has over 120,000 The Trustees are responsible for keeping proper volunteers contributing an estimated 2.5 million hours per accounting records that disclose with reasonable accuracy year. This is potentially worth £18.0 million a year to the at any time the financial position of the charity and enable charity. Our youngest volunteer is 16, and oldest is 102, them to ensure that the financial statements comply with with 52 per cent undertaking more than one role. the Charities Act 2011 and the Charity (Accounts and
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Reports) Regulations 2008. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Trustees’ Report (pages 10 to 47), for and on behalf of the trustees
Terry Whittles, National Chairman 12 April 2018
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INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF THE ROYAL BRITISH LEGION REPORT ON THE AUDIT BASIS FOR OPINION
OF THE FINANCIAL We conducted our audit in accordance with International STATEMENTS 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 OPINION the financial statements section of our report.
In our opinion the financial statements: We are independent of the group and of the parent charity give a true and fair view of the state of the group’s and in accordance with the ethical requirements that are the parent charity’s affairs as at 30 September 2017 relevant to our audit of the financial statements in the UK, and of the group’s and the parent charity’s incoming including the FRC’s Ethical Standard, and we have fulfilled resources and application of resources for the year our other ethical responsibilities in accordance with these then ended; requirements. We believe that the audit evidence we have have been properly prepared in accordance with obtained is sufficient and appropriate to provide a basis United Kingdom Generally Accepted Accounting for our opinion. Practice including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and CONCLUSIONS RELATING have been prepared in accordance with the Charities Act 2011. TO GOING CONCERN
We have audited the financial statements of The Royal We are required by ISAs (UK) to report in respect of the British Legion (the ‘charity’) and its subsidiaries (the following matters where: ‘group’) which comprise: the trustees’ use of the going concern basis of the consolidated and parent charity statements of accounting in preparation of the financial statements is financial activities; not appropriate; or the consolidated and parent charity balance sheets; the trustees have not disclosed in the financial the consolidated and parent charity cash flow statements any identified material uncertainties that may statements; and cast significant doubt about the group’s and the parent the related notes 1 to 34. charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve The financial reporting framework that has been applied months from the date when the financial statements are in their preparation is applicable law and United Kingdom authorised for issue. Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard We have nothing to report in respect of these matters. applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
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OTHER INFORMATION AUDITOR’S
The trustees are responsible for the other information. The RESPONSIBILITIES FOR THE other information comprises the information included in the AUDIT OF THE FINANCIAL annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial STATEMENTS statements does not cover the other information and we do not express any form of assurance conclusion thereon. We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance In connection with our audit of the financial statements, our with the Act and relevant regulations made or having responsibility is to read the other information and, in doing effect thereunder. so, consider whether the other information is materially inconsistent with the financial statements or our knowledge Our objectives are to obtain reasonable assurance about obtained in the audit or otherwise appears to be materially whether the financial statements as a whole are free from misstated. If we identify such material inconsistencies or material misstatement, whether due to fraud or error, and apparent material misstatements, we are required to to issue an auditor’s report that includes our opinion. determine whether there is a material misstatement in the Reasonable assurance is a high level of assurance, but is financial statements or a material misstatement of the other not a guarantee that an audit conducted in accordance information. If, based on the work we have performed, we with ISAs (UK) will always detect a material misstatement conclude that there is a material misstatement of this other when it exists. Misstatements can arise from fraud or error information, we are required to report that fact. and are considered material if, individually or in the aggregate, they could reasonably be expected to influence We have nothing to report in respect of these matters. the economic decisions of users taken on the basis of these financial statements. RESPONSIBILITIES OF A further description of our responsibilities for the audit of the financial statements is located on the Financial TRUSTEES Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our As explained more fully in the trustees’ responsibilities auditor’s report. statement, the trustees 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 USE OF OUR REPORT the trustees determine is necessary to enable the preparation of financial statements that are free from This report is made solely to the charity’s trustees, as a material misstatement, whether due to fraud or error. body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been In preparing the financial statements, the trustees are undertaken so that we might state to the charity’s trustees responsible for assessing the group’s and the parent those matters we are required to state to them in an charity’s ability to continue as a going concern, disclosing, auditor’s report and for no other purpose. To the fullest as applicable, matters related to going concern and using extent permitted by law, we do not accept or assume the going concern basis of accounting unless the trustees responsibility to anyone other than the charity and the either intend to liquidate the group or the parent charity charity’s trustees as a body, for our audit work, for this or to cease operations, or have no realistic alternative but report, or for the opinions we have formed. to do so.
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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
Under the Charities (Accounts and Reports) Regulations 2008 we are required to report in respect of the following matters if, in our opinion: the information given in the financial statements is inconsistent in any material respect with the trustees’ report; or sufficient accounting records have not been kept by the parent charity; or the parent charity financial statements are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Deloitte LLP Statutory Auditor London, United Kingdom 24 April 2018
Deloitte LLP is eligible for appointment as auditor for the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
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FINANCIALS
The Royal British Legion Consolidated Statement of Financial Activities for the year ended 30 September 2017
Note Unrestricted Restricted Total Total funds funds 2017 2016 2017 2017 £’000 £’000 £’000 £’000 INCOME AND ENDOWMENTS FROM Donations and legacies 4 86,466 6,267 92,733 94,082 Charitable activities 5 22,067 13,696 35,763 26,781 Other trading activities 6 21,305 2,821 24,126 23,278 Investments 7 2,763 3,211 5,974 5,198 Other 576 2 578 1,917 Total income 133,177 25,997 159,174 151,256
EXPENDITURE ON Raising funds 8 34,064 5,308 39,372 38,048 Charitable activities Care 9 27,830 764 28,594 26,044 Personnel Recovery Centres 9 2,282 - 2,282 1,530 Community welfare 9 42,933 14,421 57,354 47,750 Membership 9 8,056 568 8,624 9,873 Comradeship 9 874 - 874 854 Communications and campaigning 9 10,744 - 10,744 12,040 Remembrance and ceremonial 9 1,864 5,583 7,447 10,718 Total charitable activities 9 94,583 21,336 115,919 108,809 Total expenditure 128,647 26,644 155,291 146,857
Net income/(expenditure) before investment gains 4,530 (647) 3,883 4,399 Net gains on disposal of investments 69 1,359 1,428 2,795 Unrealised gains on revaluation of investments 3,711 3,303 7,014 7,405 Net income before tax 8,310 4,015 12,325 14,599 Taxation credit 11 1 - 1 848 Net income for the year 8,311 4,015 12,326 15,447 Transfers between funds 31 1,456 (1,456) - -
OTHER RECOGNISED GAINS/(LOSSES) Actuarial gains/(losses) on defined benefit pension scheme 16a 13,486 229 13,715 (9,286)
Net movement in funds 23,253 2,788 26,041 6,161
Fund balances brought forward at 1 October 163,043 162,700 325,743 319,582
Fund balances carried forward at 30 September 186,296 165,488 351,784 325,743
The notes on pag es 56 to 82 form part of the financial statements. All amounts relate to continuing operations, and all gains and losses recognised in the year are included in the Statement of Financial Activities.
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The Royal British Legion Charity Statement of Financial Activities for the year ended 30 September 2017
Note Unrestricted Restricted Total Total funds funds 2017 2016 2017 2017 £’000 £’000 £’000 £’000 INCOME AND ENDOWMENTS FROM Donations and legacies 4 89,795 1,405 91,200 92,246 Charitable activities 5 26,158 11,678 37,836 27,963 Other trading activities 6 5,615 17 5,632 6,277 Investments 7 2,763 2,817 5,580 4,794 Other 576 (76) 500 1,913 Total income 124,907 15,841 140,748 133,193
EXPENDITURE ON Raising funds 8 26,374 4 26,378 26,546 Charitable activities Care 9 27,830 764 28,594 26,044 Personnel Recovery Centres 9 2,282 - 2,282 1,530 Community welfare 9 45,869 11,553 57,422 51,113 Membership 9 8,056 528 8,584 9,873 Comradeship 9 874 - 874 854 Communications and campaigning 9 10,744 - 10,744 12,040 Remembrance and ceremonial 9 1,864 2,127 3,991 2,820 Total charitable activities 9 97,519 14,972 112,491 104,274 Total expenditure 123,893 14,976 138,869 130,820
Net income before investment gains 1,014 865 1,879 2,373 Net gains on disposal of investments 69 1,359 1,428 2,795 Unrealised gains on revaluation of investments 3,711 3,162 6,873 6,540 Net income for the year 4,794 5,386 10,180 11,708 Transfers between funds 31 6,875 (6,875) - -
Transfer to newly incorporated subsidiary 14 (2,482) - (2,482) -
OTHER RECOGNISED GAINS/(LOSSES) Actuarial gains/(losses) on defined benefit pension scheme 16a 13,486 - 13,486 (8,994)
Net movement in funds 22,673 (1,489) 21,184 2,714
Fund balances brought forward at 1 October 159,614 136,074 295,688 292,974
Fund balances carried forward at 30 September 182,287 134,585 316,872 295,688
The notes on pages 56 to 82 form part of the financial statements. All amounts relate to continuing operations, and all gains and losses recognised in the year are included in the Statement of Financial Activities.
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The Royal British Legion Consolidated and Charity Balance Sheets as at 30 September 2017
Note Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Fixed assets Intangible assets 17 3,183 2,576 3,183 2,576 Tangible assets 18 89,503 91,174 73,591 76,295 Investments 19 149,801 141,452 137, 595 130,737 Investment properties 20 61,112 61,492 61,112 61,492 Programme related investments 21 6,164 6,575 6,187 6,598 Total fixed assets 309,763 303,269 281,668 2 7 7, 6 9 8
Current assets Stocks 2,459 1,738 - - Debtors 22 14,970 7, 5 4 4 18,257 10,688 Cash at hand and in bank 23 74,032 73,265 61,357 61,944 Total current assets 91,461 82,547 79,614 72,632
Current liabilities Creditors: Amounts falling due within one year 24 (29,162) (23,465) (26,046) (20,136) Net current assets 62,299 59,082 53,568 52,496 Total assets less current liabilities 372,062 362,351 335,236 330,194 Creditors: Amounts falling due after more than one year 24 (13,482) (16,563) (13,482) (16,563) Provisions for liabilities 26 (619) (941) (619) (941) Net assets excluding pension liability 3 57,9 61 344,847 321,135 312,690 Defined benefit pension liability 16b (6,177) (19,104) (4,263) ( 17, 0 0 2 ) Net assets 351,784 325,743 316,872 295,688 Funds Total unrestricted funds 29 186,296 163,043 182,287 159,614 Total restricted funds 30 165,488 162,700 134,585 136,074 Total funds 351,784 325,743 316,872 295,688
The notes on pages 56 to 82 form part of the financial statements. The financial statements of The Royal British Legion, registered charity no. 219279, were approved by the Board of Trustees and authorised for issue on 12 April 2018. These were signed on its behalf by:
Terry Whittles National Chairman
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The Royal British Legion Cash Flow Statements for the year ended 30 September 2017
Group Group Charity Charity 2017 2016 2017 2016 Note £’000 £’000 £’000 £’000 Net cash absorbed by operating activities A (3,178) (2,043) (4,505) (6,974) Cash flows from investing activities: Dividends, interest and rents from investments 5,974 5,198 5,580 4,794 Proceeds from the sale of tangible fixed assets - 97 - - Purchase of tangible fixed assets (1,499) (12,597) - (2,341) Purchase of intangible fixed assets (1,003) (1,936) (1,003) (1,936) Proceeds from sale of investments 3,773 6,401 3,773 6,401 Purchase of investments (3,300) (23,567) (1,950) (23,546) Transfer to newly incorporated subsidiary - - (2,482) - Net cash provided/(absorbed) by investing activities 3,945 (26,404) 3,918 (16,628) Change in cash and cash equivalents in the year 767 (28,447) (587) (23,602) Cash and cash equivalents at the beginning of the year 73,265 101,712 61,944 85,546 Cash and cash equivalents at the end of the year 23 74,032 73,265 61,357 61,944
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 A. Reconciliation of net income to net cash flow from operating activities Net income for the year (as per the Statement of Financial Activities) 12,326 15,447 10,180 11, 70 8 Adjustments for: Depreciation, amortisation and impairment charges 3,566 3,160 3,100 2,778 Gains on investments (8,442) (10,200) (8,301) (9,334) Dividends, interest and rents from investments (5,974) (5,198) (5,580) (4,794) Loss on sale of tangible fixed assets - 20 - 98 (Increase)/decrease in stock (721) 201 - - Decrease in programme related investments 411 3,768 411 3,768 Increase in debtors ( 7, 4 2 6 ) (2,046) ( 7, 5 6 9 ) (924) Increase/(decrease) in creditors 2,616 ( 7,9 8 7 ) 2,829 (10,985) (Decrease)/increase in provisions (322) 322 (322) 322 Adjustment to pension funding 788 470 747 389 Net cash absorbed by operating activities (3,178) (2,043) (4,505) (6,974)
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The Royal British Legion Notes to the Accounts for the Year Ended 30 September 2017
1 PRINCIPAL Restricted funds represent grants, donations, legacies (trading) activities and investment management and property which are given by the donor for fees. ACCOUNTING specific purposes and which must be used for that • Charitable activities includes expenditure directly purpose. All restricted funds are held within the related to the delivery of the services (including POLICIES Benevolent fund unless otherwise stated. Restricted staff costs) provided by the charity to eligible funds include permanent endowment funds which beneficiaries and includes the cost of residential are not material and are not therefore shown care, welfare break centres, community welfare Accounting convention separately on the face of the balance sheet. The services, and Remembrance and comradeship. The financial statements have been prepared National Memorial Arboretum and its subsidiary, It also includes the cost of supporting and in accordance with United Kingdom Generally NMA (Enterprises) Limited, and The Earl Haig Fund maintaining the Legion’s extensive membership and Accepted Accounting Practice, including the Scotland and its subsidiary the Lady Haig Poppy the costs of campaigning on behalf of beneficiaries. ‘Statement of Recommended Practice applicable to Factory (Poppyscotland Group) funds are held within The cost of evaluating, supporting and managing charities preparing their accounts in accordance restricted funds since their objects are narrower than charitable programmes is also included and further with the Financial Reporting Standard applicable those of The Royal British Legion group. analysed in the notes to the accounts. in the UK and Republic of Ireland (FRS 102)’, and • C ertain campaign costs are allocated between applicable UK law. The financial statements are Income Cost of raising funds and Charitable activities prepared on an accruals basis except that the results Income is recognised in the year in which the Legion on the basis of the percentages of space within from branches have been extracted from returns is entitled to receipt of that income and when the the literature relating to fundraising and raising submitted on a receipts and payments basis. The amount can be measured with reasonable accuracy. awareness respectively. Branch financial year runs from 1 July to 30 June. The In accordance with this policy: • S upport costs include the central functions such Branch results included in these accounts are for the • Le gacies are included as follows: Pecuniary as general management, financial administration, year to 30 June 2017 with prior year comparatives legacies are recognised when the legacy has been information technology, human resources, (2016) for the year to 30 June 2016. received or if, before receipt, there is sufficient governance and facilities management. evidence to provide the necessary certainty that The group meets the definition of a public benefit the legacy will be received. Residual legacies are Grants payable are recognised in the Statement of entity under FRS 102 and the financial statements recognised on receipt of Estate Accounts. Legacies Financial Activities when awarded and the recipient have been prepared under the historical cost subject to a life interest held by another party are has a valid expectation of receipt, thus creating a convention, unless otherwise stated in the relevant not recognised. constructive or legal obligation. accounting policy note. • G rants are included when the conditions for recognition have been complied with. Future grant expenditure commitments are included Group financial statements • D onations are accounted for in the year of receipt. within creditors on the balance sheet at their net These financial statements comprise the central Poppy Appeal donations are accounted for when present value, using a discount rate equivalent to the General and Benevolent funds vested in the Board of banked. yield on Treasury Gilts over the period of the grant. Trustees in accordance with The Royal British Legion’s • F undraising lottery income is recognised when the (“the Legion”) Royal Charter. As agreed with the lottery draw has taken place. Income received in Allocation of costs Charity Commission and in accordance with FRS 102, advance for future lottery draws is deferred until the Where possible, the Legion’s operating costs, they include the results, assets and liabilities of the lottery draw takes place. which include staff costs, are allocated directly to Legion’s counties, districts, branches and Women’s • F ees from residential care homes are recognised on the various categories of charitable expenditure or Section. The Legion’s policy is to consolidate results an accruals basis. cost of raising funds. Where costs are not directly of all branches, counties and districts based upon • M embership fees are recognised on an accruals attributable to any category, they have been receipt of individual returns. Where returns are basis. apportioned on an appropriate basis to reflect, in not received, assets are included at the previously • I nvestment income from the centrally held each case, an estimate of the efforts and resources reported value adjusted for known transactions. The investment portfolio is accounted for on an accruals devoted to each category of activity – see note 13. subsidiaries and organisations listed in note 14 have basis and includes dividends declared but not yet Activities which are predominantly outsourced bear been consolidated on a line-by-line basis. received. Investment income includes rental income no allocation of support costs. earned by branches. Four organisations which carry the Legion’s name • Income received through branches from fundraising Stocks, poppies and wreaths but are not controlled by the Legion have not been and other activities is recognised for branches The majority of stock relates to Poppy Shop products included in these financial statements, namely, Royal on the basis of branch returns for the year to held for resale by Royal British Legion Trading Ltd. British Legion Industries, The Royal British Legion 30 June 2017. Stock also includes poppies and wreaths produced Poppy Factory Limited, The Royal British Legion The economic value of time given by volunteers is not at the Lady Haig Poppy Factory which are Attendants Company Trust and Royal British Legion included in these financial statements. manufactured for external resale. Stocks are valued Scotland. The accounts do not include the results of at the lower of cost and net realisable value and affiliated social clubs which are not controlled by the Expenditure include direct costs of labour and materials plus charity, but are separately registered organisations Expenditure is accounted for on an accruals basis. allocation of general overheads. Poppies and licensed to use the Legion’s name. Irrecoverable VAT is included with the expense items wreaths produced for distribution during the to which it relates. Expenditure comprises: Poppy Appeal are expensed immediately. Fund accounting • C ost of raising funds includes expenditure on Unrestricted funds are expendable at the discretion poppies and other fundraising items, staff and Staff pension schemes of the Trustees in furtherance of the objects of related expenditure of the Poppy Appeal, costs of There are three staff pension schemes, which are the charity. the central fundraising department, commercial accounted for in accordance with FRS102 section 28.
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These are the Royal British Legion Staff Pension Fund lease if less. Leasehold improvements are depreciated Financial Instruments (a defined benefit scheme closed to future accrual), over the term of the lease. The head office building, Financial assets and financial liabilities are the Earl Haig Defined Benefit Scheme, and the Group Haig House, is depreciated over its expected useful recognised when the group becomes a party to the Flexible Retirement Plan (a defined contribution life of 33 years. contractual provisions of the instrument. The group scheme). Further details are included in note 16 to only has financial assets and financial liabilities of the accounts. Plant, machinery and equipment where capitalised is a kind that qualify as basic financial instruments. included at cost. Depreciation is provided over five Basic financial instruments are initially recognised For the defined benefit schemes, valuations are years from the month of first use. at transaction price (including transaction costs) and undertaken by an independent actuary. The current subsequently measured at their settlement value. service costs of the Earl Haig Defined Benefit Scheme Software, databases and licenses where capitalised are charged to employee costs over the anticipated are included at cost, which includes the cost of Trade and other debtors are recognised at the period of employment. Net pension finance income internal development where applicable. Depreciation settlement amount due after any discount offered or costs are included immediately in other income or is provided over five years from the month of first use. and net of any bad debt provision. Prepayments employee costs as appropriate. Actuarial gains and are valued at the amount prepaid net of any losses are recognised immediately on the face of the Tangible and intangible fixed assets which are trade discounts due. Creditors and provisions are Statement of Financial Activities. The Legion’s share under construction are classified as Assets Under recognised where the company has a present of the scheme deficits is included as a liability in the Construction and are transferred into the obligation resulting from a past event that will balance sheet. appropriate category on completion, when probably result in the transfer of funds to a third depreciation then commences. party, and the amount due to settle the obligation For the defined contribution scheme, the amount can be measured or estimated reliably. Creditors and charged to the Statement of Financial Activities The useful economic lives and residual lives of provisions are normally recognised at their settlement represents the employer contributions payable fixed assets are reviewed at the end of each amount after allowing for any trade discounts due. for the year. accounting year to consider whether there has been an impairment. Impairments are charged to the Investments and bank deposits Statement of Financial Activities. 2 CRITICAL Fixed asset investments are stated at market value. ACCOUNTING Gains and losses arising from either the change in Heritage assets market value or on sale are included in the Statement The Armed Forces Memorial (AFM) is included as JUDGEMENTS AND of Financial Activities. Income from listed investments a heritage asset in the accounts of The National is accrued when due for payment. Interest on Memorial Arboretum Company at a nominal value of KEY SOURCES deposits is accrued on a daily basis. £1. The Trustees consider that the cost of ascertaining a definite value through a surveyor’s valuation OF ESTIMATION Properties not used for charitable purposes are significantly outweighs the benefit gained from such UNCERTAINTY classified as investment properties and are included a valuation. in investments at market value. Investment properties are revalued on a rolling five-year basis with 20% Finance and Operating Leases In application of the accounting policies, which are of properties revalued each year by an external Instalments payable under operating leases are described in note 1, the Trustees are required to make qualified surveyor. The remaining 80% of properties charged to the Statement of Financial Activities on a judgements, estimates and assumptions about the are reviewed for material changes. straight line basis over the period of the lease. Any carrying amounts of assets and liabilities that are lease incentives (such as rent free periods) are spread not readily apparent from other sources. The Programme related investments are held at the over the life of the lease. The group does not have estimates and associated assumptions are based amount invested less any impairment. These are any finance leases. on historical experience and other factors that are reviewed on an annual basis and any impairment considered to be relevant. Actual results may differ is immediately recognised in the Statement of Taxation from these estimates. Financial Activities. The activities of the Legion and its charitable subsidiaries are exempt from corporation tax The estimates and underlying assumptions are Tangible and intangible under Chapter 3 of Part 11 to the Corporation Tax reviewed on an ongoing basis. Revisions to fixed assets Act 2010 to the extent that they are applied to accounting estimates are recognised in the year in Purchases of individual tangible and intangible fixed the organisation’s charitable objects. The trading which the estimate is revised if the revision affects assets costing over £50,000, or purchases related subsidiaries do not generally pay UK corporation tax only that year, or in the year of the revision and to capital projects costing over £50,000 in total, because their policy is to pay their taxable profits as future years if the revision affects both current and are capitalised. Gift Aid to the Legion. future years.
Functional properties (freehold and leasehold) used Foreign exchange The Trustees do not consider there are any critical by the charity are included at cost, where known, or The Legion has no significant exposure to foreign judgements or key sources of estimation uncertainty valuation at date of acquisition. Branch properties exchange gains or losses. Foreign branches and requiring disclosure that are not already described acquired or gifted before 1 October 1995 where the districts make returns once a year and their results, within note 1 above. original cost cannot be established are included at a along with those of the Royal British Legion Republic nominal value of £1 each. Depreciation on functional of Ireland subsidiary, are included in these accounts properties is provided on the cost of buildings on a converted to Sterling at the exchange rate as at 30 straight line basis over 50 years or the term of the September 2017.
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3 Group Comparative Statement of Financial Activities Unrestricted Restricted Total funds funds 2016 2016 2016 £’000 £’000 £’000 INCOME AND ENDOWMENTS FROM Donations and legacies 86,631 7, 4 51 94,082 Charitable activities 19,972 6,809 26,781 Other trading activities 21,559 1,719 23,278 Investments 1,597 3,601 5,198 Other 120 1,797 1,917 Total income 129,879 21,377 151,256
EXPENDITURE ON Raising funds 33,720 4,328 38,048 Charitable activities Care 25,401 643 26,044 Personnel Recovery Centres 1,462 68 1,530 Community welfare 41,206 6,544 4 7, 75 0 Membership 8,584 1,289 9,873 Comradeship 854 - 854 Communications and campaigning 11,838 202 12,040 Remembrance and ceremonial 2,089 8,629 10,718 Total charitable activities 91,434 17, 3 75 108,809 Total expenditure 125,154 21,703 146,857
Net income/(expenditure) before investment gains/(losses) 4,725 (326) 4,399 Net gains/(losses) on disposal of investments 5,002 (2,207) 2,795 Unrealised gains on revaluation of investments 4,764 2,641 7, 4 0 5 Net income before tax 14,491 108 14,599 Taxation credit 848 - 848 Net income for the year 15,339 108 15,447 Transfers between funds 19,989 (19,989) -
OTHER RECOGNISED LOSSES Actuarial losses on defined benefit pension scheme (8,994) (292) (9,286)
Net movement in funds 26,334 (20,173) 6,161
Fund balances brought forward at 1 October 136,709 182,873 319,582
Fund balances carried forward at 30 September 163,043 162,700 325,743
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3a Charity Comparative Statement of Financial Activities Unrestricted Restricted Total funds funds 2016 2016 2016 £’000 £’000 £’000
INCOME AND ENDOWMENTS FROM Donations and legacies 90,438 1,808 92,246 Charitable activities 24,595 3,368 2 7,9 6 3 Other trading activities 6,217 60 6,277 Investments 1,598 3,196 4,794 Other 120 1,793 1,913 Total income 122,968 10,225 133,193
EXPENDITURE ON Raising funds 26,442 104 26,546 Charitable activities Care 25,401 643 26,044 Personnel Recovery Centres 1,462 68 1,530 Community welfare 46,845 4,268 51,113 Membership 8,584 1,289 9,873 Comradeship 854 - 854 Communications and campaigning 11,838 202 12,040 Remembrance and ceremonial 2,089 731 2,820 Total charitable activities 9 7, 0 7 3 7, 2 01 104,274 Total expenditure 123,515 7, 3 0 5 130,820
Net income/(expenditure) before investment gains/(losses) (547) 2,920 2,373 Net gains/(losses) on disposal of investments 5,002 (2,207) 2,795 Unrealised gains on revaluation of investments 4,764 1,776 6,540 Net income for the year 9,219 2,489 11, 70 8 Transfers between funds 25,932 (25,932) -
OTHER RECOGNISED LOSSES Actuarial losses on defined benefit pension scheme (8,994) - (8,994)
Net movement in funds 26,157 (23,443) 2,714
Fund balances brought forward at 1 October 133,457 159,517 292,974
Fund balances carried forward at 30 September 159,614 136,074 295,688
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4 Donations and legacies Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Voluntary income Donations 21,885 26,140 23,750 2 7, 2 4 8 Legacies 21,650 20,308 21,231 19,913 The Poppy Appeal 49,198 4 7, 6 3 4 46,219 45,085 Total donations and legacies 92,733 94,082 91,200 92,246
The total of the Poppy Appeal launched in October 2016 in England, Wales and Northern Ireland was £46.219 million (2016: £45.085 million). This includes cash collected of £43.511 million (2016: £42.735 million), legacies of £373,000 (2016: £448,000) and other donations of £2.335 million (2016: £1.902 million). The Poppy Appeal in Scotland raised £2.875 million (2016: £2.549 million), and a further £104,000 was raised by the Royal British Legion Republic of Ireland.
In 1922 the Officers’ Association transferred the Poppy Appeal to the Legion in return for a payment of 7.5% of the net amount received from street collections. The amount due to the Officers’ Association for the Poppy Appeal was £2.120 million payable as a grant (2016: £2.042 million) – see note 10. At 30 September 2017 the Legion had been advised of its interest in residuary and pecuniary legacies with estimated values of £1.026 million (2016: £1.100 million) and these are included in the accounts. Not included in the accounts are interests in 16 life interest legacies (2016: 11) with a value of £323,000 (2016: £191,000) where the conditions for acceptance had not been met. The Legion has also been notified of residuary legacies estimated at a potential value of £18.760 million (2016: £9.782 million). These residuary legacies are not recognised in these accounts as confirmation of entitlement has not been received and the value cannot be confirmed at the balance sheet date. Included in Donations above, is pro bono legal support of £125,000 (2016: £106,000) from Trowers & Hamlins LLP, J A Kemp, Mayer Brown LLP, Withers LLP, Bluefin Insurance Services and RSA.
5 Charitable activities Group Group Charity Charity 2017 2016 2017 2016 £’000 Restated £’000 £’000 £’000
Grants for welfare services and Remembrance Aged Veterans’ Healthy Living Programme 4,622 710 4,622 710 Grant from Poppy Lottery - - 4,091 4,622 Ex-service charities and other organisations (almonisation) 2,666 2,377 2,571 2,245 Contributions for Remembrance activities 2,118 2, 711 1,742 178 Grants towards capital projects 1,200 - 1,200 - Other grants and contributions 2,505 518 1,332 82 Total grants for welfare services and Remembrance 13,111 6,316 15,558 7, 8 3 7
Fees from residential care homes 16,586 15,750 16,587 15,750 Membership fees 5,226 4,248 5,219 4,235 Income from charitable services 840 467 472 141 Total other income from charitable activities 22,652 20,465 22,278 20,126
Total income from charitable activities 35,763 26,781 37, 8 3 6 2 7,9 6 3
Almonisation income is the contribution from other charities towards Immediate Needs Grants paid by the Legion when the recipient of assistance is also the beneficiary of these other charities.
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6 Other trading activities Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Fundraising events income 2,381 2,633 2,304 2,525 Fundraising lotteries 8,697 10,074 2,528 3,214 Income from commercial activities 12,337 10,033 89 - Licence fees and royalties 127 128 127 128 Advertising in the Legion magazine 584 410 584 410 Total income from other trading activities 24,126 23,278 5,632 6,277
7 Investment income Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Dividends and interest on listed investments 2,566 1,918 2,190 1,918 Investment income on funds held by branches 605 980 605 621 Rentals from investment properties 2,218 1,909 2,205 1,896 Bank deposit interest 585 391 580 359 Total investment income 5,974 5,198 5,580 4,794
Rentals from investment properties with a market value of £61.112 million (note 20) at 30 September 2017 (2016: £61.492 million) are in most cases received by branches in relation to the rental of properties by Legion clubs. The clubs are independent entities which use the Legion’s name under licence and promote the work of the Legion in return for discounted rentals, which in many cases are lower than could be obtained in a commercial environment.
8 Cost of raising funds Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Donations costs 8,046 8,503 5,958 8,413 Legacies costs 1,583 1,092 1,567 1,092 Poppy Appeal costs 13,867 12,448 13,138 10,344 Cost of raising voluntary income 23,496 22,043 20,663 19,849 Fundraising events costs 3,273 3, 511 3,253 3,481 Fundraising lotteries costs 4,261 5,327 2,085 3,128 Commercial activities (trading) 7,999 7,12 3 34 44 Cost of activities to raise funds 15,533 15,961 5,372 6,653 Investment management 343 44 343 44 Total cost of raising funds 39,372 38,048 26,378 26,546
The total cost of raising funds for the group of £39.372 million (2016: £38.048 million) includes direct costs of £35.319 million (2016: £34.338 million) and allocated support costs of £4.053 million (2016: £3.710 million). Allocated support costs are described in further detail at note 13.
Certain direct costs of campaigns have a parallel purpose of increasing public awareness and fundraising, and as a result these costs have been allocated between the cost of raising funds in note 8 and charitable activities in note 9 on the basis of the percentages of space within the literature relating to fundraising and raising awareness respectively. The total expenditure of this nature is £7.859 million (2016: £9.533 million) of which £4.841 million (2016: £5.810 million) remains within cost of raising funds representing the fundraising element of the literature, and £3.018 million (2016: £3.723 million) has been reallocated into charitable activities representing the raising awareness element.
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9 Analysis of charitable activities Note Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000
Residential care homes 22,360 20,621 22,360 20,621 Welfare break centres 6,234 5,423 6,234 5,423 Total care 28,594 26,044 28,594 26,044
Personnel Recovery Centres 2,282 1,530 2,282 1,530
Welfare grants to individuals 10,490 10,170 9,751 9,475 Grants to other organisations 10 13,330 10,486 14,984 15,437 Information, advice and support 29,915 22,456 29,091 21,563 Welfare cost in branches, counties and districts 3,619 4,638 3,596 4,638 Total community welfare 57, 3 5 4 4 7, 75 0 57,422 51,113
Central membership support 3,953 3,569 3,913 3,569 Recruitment, development, training 455 812 455 812 Support to branches with clubs 294 397 294 397 The Legion magazine 1,073 855 1,073 855 Membership costs in branches, counties and districts 2,849 4,240 2,849 4,240 Total membership 8,624 9,873 8,584 9,873
Comradeship 874 854 874 854
Direct cost of communication and campaigning 7, 72 6 8,317 7, 72 6 8,317 Allocated cost of communication and campaigning 3,018 3,723 3,018 3,723 Total communication and campaigning 10,744 12,040 10,744 12,040
Festival of Remembrance 732 558 732 558 Ceremonial and commemorative events 2,335 2,378 2,275 2,208 Remembrance tours 984 54 984 54 National Memorial Arboretum operating costs 3,396 7, 7 2 8 - - Total Remembrance and ceremonial 7,447 10,718 3,991 2,820
Total cost of charitable activities 115,919 108,809 112, 491 104,274
The total cost of charitable activities for the group of £115.919 million (2016: £108.809 million) includes direct costs of £99.112 million (2016: £93.221 million) and allocated support costs of £16.807 million (2016: £15.588 million). Allocated support costs are described in further detail at note 13.
As stated in note 8, the cost of charitable activities includes an allocation of £3.018 million (2016: £3.723 million) relating to costs associated with space within campaign literature relating to raising awareness.
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10 Grants awarded to other organisations Note Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Grants awarded by the Charity:
The Officers' Association 4 2,120 2,042 2,120 2,042 National Memorial Arboretum - - 1,892 5,635 Royal Commonwealth ex-Services League 1,127 - 1,127 - Poppyscotland - - 1,046 - Shelter 698 - 698 - Action on Hearing Loss 591 - 591 - Personnel Recovery Centres 450 - 450 - Alabare Christian Care & Support 427 - 427 - Northumbria University 374 - 374 - Royal Star & Garter Homes 318 - 318 - CAIS 306 - 306 - Alzheimer's Support 282 - 282 - Somme Nursing Home 215 385 215 385 Imperial College of Science, Technology and Medicine 167 1,510 167 1,510 Stoll Housing for Veterans 116 693 116 693 Combat Stress 84 851 84 851 Services Sound and Vision Corporation 80 810 80 810 Fields Trust - 600 - 600 Grants to 117 other charities and voluntary organisations (2016: 98) 4,691 2,911 4,691 2,911 under £250,000
Grants made by Poppyscotland
Citizens Advice Scotland 487 350 - -
Grants to 16 other charities and voluntary organisations (2016: 12) 775 334 - - under £250,000
Grants awarded by Royal British Legion Republic of Ireland:
Grant to 1 charity (2016: nil) under £250,000 22 - - -
Total grants to other organisations 13,330 10,486 14,984 15,437
Grants awarded may relate to commitments for multiple future years. For more information on grant commitments see note 25.
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11 Ta xa t i o n Group Group 2017 2016 £’000 £’000 Current tax credit: UK corporation tax 1 - Adjustment in respect of prior years - 848 Total tax credit on income 1 848
The taxation credits and charges above arise in the trading subsidiary operations.
The differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK Corporation tax to the surplus before tax in the trading subsidiary operations is as follows:
Group Group 2017 2016 £’000 £’000 Surplus on ordinary activities before tax 4,540 3,464 Surplus on ordinary activities multiplied by applicable rate of corporation tax of 19.5% (2016: 20.0%) 885 693 Effects of: Post balance sheet event: effect of gift aid donations (see note 34) (886) (693) Tax charge for the year (1) -
12 Net incoming resources for the year is stated after charging: Group Group Charity Charity 2017 2016 2017 2016 £’000 Restated £’000 £’000 £’000
Fees payable to the charity's auditor for the audit of the charity's annual accounts 149 174 149 174 Fees payable to the charity's auditor for the audit of the subsidiaries' annual 90 90 - - accounts Fees payable to the charity's auditor for other services: Assurance services other than audit or independent examination 4 7 2 2 Tax advisory services 3 10 - 7 Other advisory services - 5 - 5 Branch, county and district audit and examination fees 64 57 64 57 Depreciation, amortisation and impairment charges 3,566 3,160 3,100 2,778 Rentals under operating leases 3,539 3,322 3,490 3,257
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13 Support costs Head Office Facilities Human Finance Governance Total Subsidiaries Total Central Management Resources and IT 2017 Charity 2017 Group 2017 2017 2017 2017 £’000 2017 £’000 2017 £’000 £’000 £’000 £’000 £’000 £’000
Donations costs 115 122 83 540 40 900 312 1,212 Poppy Appeal costs - 316 217 1,403 103 2,039 146 2,185 Fundraising events costs 49 51 35 228 17 380 18 398 Fundraising lotteries costs 33 35 24 155 11 258 - 258 Cost of raising funds 197 524 359 2,326 171 3,577 476 4,053
Residential care homes - 1,356 929 2,023 443 4,751 - 4,751 Welfare break centres - 388 266 579 127 1,360 - 1,360 Care - 1,744 1,195 2,602 570 6,111 - 6,111 Personnel Recovery Centres - 7 5 10 2 24 - 24 Information, advice and 690 900 617 3,994 294 6,495 374 6,869 support Welfare cost in branches, 43 45 31 201 15 335 11 346 counties and districts Community welfare 733 945 648 4,195 309 6,830 385 7, 215 Central membership support 94 99 68 439 32 732 40 772 Recruitment, development, 15 16 11 72 5 119 - 119 training Support to branches with clubs 5 6 4 25 2 42 - 42 The Legion magazine ------Membership costs in branches, 30 31 21 138 10 230 - 230 counties and districts Membership 144 152 104 674 49 1,123 40 1,163 Comradeship 33 35 24 156 12 260 - 260
Direct cost of communications 117 123 84 545 40 909 - 909 and campaigning Communications and 117 123 84 545 40 909 - 909 campaigning Ceremonial and 13 14 10 63 5 105 36 141 commemorative events Remembrance tours 3 3 2 13 1 22 - 22 NMA operating costs ------962 962 Remembrance and ceremonial 16 17 12 76 6 127 998 1,125
Charitable activities 1,043 3,023 2,072 8,258 988 15,384 1,423 16,807
Total support costs 1,240 3,547 2,431 10,584 1,159 18,961 1,899 20,860
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13 Support costs continued Head Office Facilities Human Finance Governance Total Subsidiaries Total Central Management Resources and IT 2016 Charity 2016 Group 2016 2016 2016 2016 Restated 2016 Restated 2016 Restated Restated Restated Restated £’000 Restated £’000 Restated £’000 £’000 £’000 £’000 £’000 £’000 Donations costs 111 33 52 377 33 606 90 696 Poppy Appeal costs - 144 235 1,669 148 2,196 381 2,577 Fundraising events costs 43 13 21 148 13 238 30 268 Fundraising lotteries costs 31 9 15 105 9 169 - 169 Cost of raising funds 185 199 323 2,299 203 3,209 501 3,710
Residential care homes - 548 891 2,144 561 4,144 - 4,144 Welfare break centres - 127 206 494 129 956 - 956 Care - 675 1,097 2,638 690 5,100 - 5,100 Personnel Recovery Centres ------Information, advice and 898 337 549 3,904 345 6,033 359 6,392 support Welfare cost in branches, ------counties and districts Community welfare 898 337 549 3,904 345 6,033 359 6,392 Central membership support 141 42 68 481 42 7 74 38 812 Recruitment, development, 88 26 42 302 27 485 - 485 training Support to branches with clubs 23 7 11 77 7 125 - 125 The Legion magazine 3 1 2 11 1 18 - 18 Membership costs in branches, 124 36 59 421 37 677 - 677 counties and districts Membership 379 112 182 1,292 114 2,079 38 2,117 Comradeship 51 15 25 175 15 281 - 281 Direct cost of communications 134 39 64 456 40 733 - 733 and campaigning Communications and 134 39 64 456 40 733 - 733 campaigning Ceremonial and 15 5 7 52 5 84 170 254 commemorative events Remembrance tours ------NMA operating costs ------711 711 Remembrance and ceremonial 15 5 7 52 5 84 881 965
Charitable activities 1,477 1,183 1,924 8,517 1,209 14,310 1,278 15,588
Total support costs 1,662 1,382 2,247 10,816 1,412 17, 519 1,779 19,298
Support costs are allocated on the basis of FTE staff numbers. Support costs associated with the awarding of grants to individuals and organisations are included within information, advice and support above.
The prior year figures have been restated in order to allocate support costs relating to the Women’s Section totalling £231,000 across the same headings as those used for the remainder of the Legion. These were previously combined with support costs in subsidiaries.
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14 Activities of consolidated subsidiaries and organisations The Legion has 11 wholly owned subsidiaries, nine of which are consolidated into these accounts as described below. There are a further two subsidiaries which are dormant.
The results of the subsidiary entities are shown in the table below. All subsidiaries have 30 September year ends and are registered in the UK, with the exception of Royal British Legion Republic of Ireland (registered in the Republic of Ireland).
National NMA Poppyscotland Royal British Royal British Royal British Royal British Remembrance Memorial (Enterprises) Group Legion Legion Trading Legion Poppy Legion Travel Arboretum 2017 2017 Republic of 2017 Lottery Developments 2017 Company £’000 £’000 Ireland £’000 2017 2017 £’000 2017 2017 £’000 £’000 £’000 £’000
Turnover/incoming 4,651 2,357 6,773 2,931 9,582 6,284 23 50 resources Expenditure (4,192) (2,346) (5,664) (207) (9,028) (6,284) (55) (26) Net incoming/(outgoing) 459 11 1,109 2,724 554 - (32) 24 resources Assets 17, 8 3 4 539 13,496 2,750 5,008 5,722 122 134 Liabilities (725) ( 411) (2,529) (26) (1,033) (5,722) (126) (86) Net assets 17,10 9 128 10,967 2,724 3,975 - (4) 48
National NMA Poppyscotland Royal British Royal British Royal British Royal British Remembrance Memorial (Enterprises) Group Legion Legion Trading Legion Poppy Legion Travel Arboretum 2016 2016 Republic of 2016 Lottery Developments 2016 Company £’000 Restated Ireland £’000 2016 2016 £’000 2016 £’000 2016 £’000 £’000 £’000 £’000 Turnover/incoming 11, 5 4 4 1,490 5,581 - 8,504 6,820 1,755 39 resources Expenditure (8,150) (1,891) (5,303) - (8,353) (6,820) (1,739) (32) Net incoming/(outgoing) 3,394 (401) 278 - 151 - 16 7 resources Assets 17, 7 11 556 12,542 - 4,292 5,987 162 101 Liabilities (1,061) (439) (2,684) - (871) (5,987) (134) (77) Net assets 16,650 117 9,858 - 3,421 - 28 24
The principal activities of the subsidiaries are as follows: • Royal British Legion Trading Limited – a trading company which markets • National Memorial Arboretum Company Limited – a charitable company a range of goods and services to members and supporters of the Legion, operating an arboretum with memorial plots dedicated to those who and generates income from third parties through the use of corporate suffered or lost their lives in the service of their country. partnerships. Its expenditure includes profits paid to the Legion of £3.421 • NMA (Enterprises) Limited – a trading company which is wholly owned million (2016: £4.112 million). by the National Memorial Arboretum Company Limited, and provides • Royal British Legion Poppy Lottery Limited – a charitable company which services to NMA visitors. Its expenditure includes profits paid to the undertakes the marketing and provision of a weekly lottery to members National Memorial Arboretum Company Limited of £522,000 (2016: and supporters of the Legion. Its expenditure includes grants paid to the £518,000). Legion of £4.091 million (2016: £4.622 million). Other lottery activities • Poppyscotland (The Earl Haig Fund Scotland) – a charitable company that are carried out by the parent charity. supports those in need who have served in the Armed Forces and their • Royal British Legion Developments Limited – a trading company which dependants in Scotland. The charitable company has one subsidiary, develops or improves properties, principally those owned by the The Lady Haig Poppy Factory Limited, whose principal activity is the Legion. Its expenditure includes profits paid to the Legion of £29,000 employment of disabled ex-Service personnel to manufacture poppies (2016: £16,000). and wreaths and to provide framing and printing services. The results • Remembrance Travel Limited – a travel company delivering pilgrimages above are those of the consolidated Poppyscotland Group. and associated travel activity. Its expenditure includes profits paid to the • Royal British Legion Republic of Ireland – a charitable company that Legion of £14,000 (2016: £8,000). supports those in need who have served in the Armed Forces and • Royal British Legion Family and Support Lottery Limited (formerly their dependants in the Republic of Ireland. During the year, net assets Royal British Legion Prizes Limited) and Poppy Travel Limited totalling £2.482 million were transferred from the charity to this newly – dormant subsidiaries. incorporated subsidiary.
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15 Information regarding employees and Trustees Total 2017 Total 2016 Average number of employees (full time equivalent) during the year No. No. Raising funds 185 168 Charitable activities Care services and Personnel Recovery Centres 620 580 Community welfare services 334 281 Membership services 54 107 Comradeship 12 2 Communication and campaigning 43 34 Remembrance and ceremonial 6 4 Total charitable activities 1,069 1,008 Support and governance 97 84 Total charity full-time equivalent staff 1,351 1,260 Subsidiaries average number of employees (full-time equivalent) during the year Poppyscotland Group 75 76 National Memorial Arboretum Group 78 69 Royal British Legion Trading 10 9 Total group full-time equivalent staff 1,514 1,414
The group incurred costs of £8.536 million (2016: £5.379 million) on agency staff including their recruitment fees which are not included in the staff costs below.
Group Group Charity Charity Staff costs comprise: 2017 2016 2017 2016 £’000 £’000 £’000 £’000
Wages and salaries 36,996 35,252 33,417 31,826 National Insurance contributions 3,214 3,032 2,921 2,758 Pension costs 3,019 2,766 2,531 2,337 Total staff costs 43,229 41,050 38,869 36,921 The number of staff paid over £60,000 during the year (salary plus taxable benefits excluding pension contributions) was: Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000
£60,000 - £69,999 9 7 9 7 £70,000 - £79,999 8 9 8 9 £80,000 - £89,999 3 3 2 2 £90,000 - £99,999 1 - 1 - £100,000 - £109,999 2 - 1 - £110,000 - £119,999 - 2 - 2 £120,000 - £129,999 2 2 2 2 £130,000 - £139,999 - - - - £140,000 - £149,999 1 1 1 1
The key management personnel of the group comprise the members of the parent charity’s Executive Board. The total remuneration (including pension contributions and employer’s National Insurance contributions) paid in respect of key management personnel for the year was £1.046 million (2016: £1.078 million).
The Legion operates a transparent Pay Policy which is communicated to all staff. Salary levels are regularly benchmarked against other comparable organisations across the private, public and third sectors. The compensation of Legion Directors is subject to annual review by a Governance Committee comprising four Trustees including the Chairman and Vice-Chairman.
During the year the total expenses reimbursed to 9 (2016: 12) Board of Trustee members amounted to £40,000 (2016: £53,000). This principally represents reimbursed travelling expenses for attending meetings and official engagements, and includes the costs of Trustees officiating at Remembrance tours. The Legion has purchased insurance to protect the charity from loss arising from neglect or default of its Trustees, and to indemnify the Trustees against the consequences of neglect or default on their part. No Trustee or person related or connected by business to them has received any remuneration from the Legion, nor have they entered into any other transaction or contract with the Legion during the year.
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16 Staff pension funds
The Royal British Legion group pension arrangements comprise those of the Legion and subsidiaries. Pension schemes are as follows: 1. Group Flexible Retirement Plan (GFRP) 2. The Royal British Legion Staff Pension Fund (DB Fund) 3. Stanplan F (Earl Haig Fund, ‘EH Fund’)
GFRP: This is the scheme available to all Legion group employees (excluding Poppyscotland) and is provided by Standard Life. The GFRP scheme was introduced on 1 April 2010 and is a defined contribution scheme. The liability of the employer is limited to the contributions it makes, which amounted to £2.652 million (2016: £2.686 million), of which £264,000 (2016: £233,000) remained payable at the year end. DB Fund: This is a multi-employer defined benefit scheme. The other employers participating in the scheme are Royal British Legion Industries and the Royal British Legion Poppy Factory. The DB Fund was closed to new members on 31 October 2002 and on 1 April 2010 was closed to accrual from the remaining members. The most recent formal actuarial valuation was carried out as at 1 April 2017. The results of this valuation have been updated to 30 September 2017 by a qualified actuary. In accordance with the current Schedule of Contributions, the Legion is not required to pay any ongoing deficit contributions into the Fund. Contributions are made in relation to administrative costs. EH Fund: This is a defined benefit pension scheme available only to employees of Poppyscotland. The last full actuarial valuation of the EH Fund was carried out as at 31 March 2016. As a result of the 2016 triennial valuation the employer agreed to pay a one-off deficit contribution of £100,000, followed by annual deficit contributions of £75,000 per year for 8 years, increasing by 3% annually. The Poppyscotland pension scheme is included in restricted funds. The Legion accounts for defined benefit schemes in accordance with section 28 of FRS102 (Employee Benefits) and identifies each entity’s share of the pension scheme assets and liabilities. A summary of the movement in pension assets and liabilities for the group’s defined benefit pension funds is shown below.
16a Amounts recognised in the Statement of Financial Activities EH Fund DB Fund Total EH Fund DB Fund Total 2017 2017 2017 2016 2016 2016 £’000 £’000 £’000 £’000 £’000 £’000 Current service cost (39) - (39) (78) - (78) Administration expenses (168) (563) (731) (68) (325) (393) Net interest (50) (412) (462) (66) (292) (358) Amount charged to net incoming resources (257) (975) (1,232) (212) (617) (829) Actuarial (losses)/gains 553 15,482 16,035 (1,264) (16,340) ( 17, 6 0 4 ) Return on assets excluding amount included in net interest (324) (1,996) (2,320) 972 7, 3 4 6 8,318 Amount recognised in other comprehensive income 229 13,486 13,715 (292) (8,994) (9,286)
Total (decrease)/increase in net funds (28) 12,511 12,483 (504) (9,611) (10,115)
16b Reconciliation to the Balance Sheet EH Fund DB Fund Total EH Fund DB Fund Total 2017 2017 2017 2016 2016 2016 £’000 £’000 £’000 £’000 £’000 £’000 Market value of assets 5,541 69,547 75,088 5,997 73,206 79,203 Present value of defined benefit obligation (7,455) (73,810) (81,265) (8,099) (90,208) (98,307) Pension liability recognised in the Balance Sheet (1,914) (4,263) (6,177) (2,102) (17,002) (19,104)
16c Analysis of changes in the value of the fund liabilities over the year EH Fund DB Fund Total EH Fund DB Fund Total 2017 2017 2017 2016 2016 2016 £’000 £’000 £’000 £’000 £’000 £’000 Value of liabilities at start of year (8,099) (90,208) (98,307) (6,767) (74,384) (81,151) Current service costs (39) - (39) (78) - (78) Interest cost (191) (2,129) (2,320) (254) (2,765) (3,019) Member contributions (6) - (6) (12) - (12) Benefits paid 327 3,045 3,372 276 3,281 3,557 Actuarial (losses)/gains 553 15,482 16,035 (1,264) (16,340) (17,604) Value of liabilities at end of year ( 7, 4 55 ) (73,810) (81,265) (8,099) (90,208) (98,307)
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16d Analysis of changes in the value of the fund assets over the year EH Fund DB Fund Total EH Fund DB Fund Total 2017 2017 2017 2016 2016 2016 £’000 £’000 £’000 £’000 £’000 £’000 Market value of assets at start of year 5,997 73,206 79,203 5,038 66,765 71,803 Return on assets excluding amount included in net interest (324) (1,996) (2,320) 972 7, 3 4 6 8,318 Administration expenses (168) (563) (731) (68) (325) (393)
Employer contributions 216 228 444 131 228 359 Interest income 141 1,717 1,858 188 2,473 2,661 Member contributions 6 - 6 12 - 12
Benefits paid (327) (3,045) (3,372) (276) (3,281) (3,557) Market value of assets at end of year 5,541 69,547 75,088 5,997 73,206 79,203
16e Asset classes DB Fund 2017 DB Fund 2016 Market Value % of Total Market Value % of Total £’000 fund assets £’000 fund assets Equities 17, 4 4 0 25% 14,596 20% Bonds 7,19 8 10% 20,653 28% Gilts 10,315 15% 15,984 22% Cash 3,129 4% 1,015 1% Annuities 2,563 4% 4,343 6% Other assets 28,902 42% 16,615 23% Total fund assets 69,547 73,206
The actual return on assets over the year was (279) 9,819
EH Fund 2017 EH Fund 2016 Market Value % of Total Market Value % of Total £’000 fund assets £’000 fund assets Equities 2,426 44% 3,422 57% Cash 107 2% 40 1% Annuities 625 11% 782 13% Other assets 2,383 43% 1,753 29% Total fund assets 5,541 5,997
The actual return on assets over the year was (183) 1,160
The Legion’s assets have been taken as the proportion of the total fund assets that the Legion’s liability valuation bears to the total fund’s liability valuation.
The assets are invested in a diversified portfolio.
During 2018, contributions of £228,000 and £157,000 are expected to be paid into the DB Fund and EH Fund respectively.
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16f Actuarial assumptions Financial assumptions (both funds) 2017 2016 % p.a. % p.a.
Discount rate 2.6 2.4 Retail price index inflation 3.3 3.1 Consumer price index inflation 2.3 2.1 Salary increases 3.3 3.1 Rate of increases of pensions in payment: Capped at 5% or RPI if less 3.2 3.0 Capped at 5% or CPI if less 3.2 3.1 Capped at 3% or CPI if less 2.1 1.9
Capped at 2.5% or CPI if less 1.9 1.8 Rate of increase for deferred pensioners 2.3 2.1
Mortality assumptions (both funds) 2017 2016 Life expectancies at age 60: Males Females Males Females
Current pensioner now aged 60 27. 5 y e a r s 29.5 years 28.8 years 31.5 years
Future pensioner now aged 40 29.1 years 31.1 years 30.7 years 33.5 years
17 Intangible fixed assets Software, Assets under Total Group Databases construction and Charity and Licenses £’000 £’000 £’000 At cost or valuation At 1 October 2016 611 2,022 2,633 Additions 777 226 1,003 Transfers 1,793 (1,793) - At 30 September 2017 3,181 455 3,636
Accumulated depreciation At 1 October 2016 (57) - (57) Charge for the year (396) - (396) At 30 September 2017 (453) - (453)
Net book value at 30 September 2017 2,728 455 3,183 Net book value at 30 September 2016 554 2,022 2,576
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18 Group tangible fixed assets including functional property Freehold Other Leasehold Plant, Assets under Total homes freehold property and machinery construction Group £’000 £’000 leasehold and equipment £’000 £’000 improvements £’000 £’000 At cost or valuation At 1 October 2016 60,652 27,642 10,441 4,686 12,029 115, 450 Additions - - 202 2 1,295 1,499 Transfers - (91) 12,258 - (12,167) - At 30 September 2017 60,652 2 7, 551 22,901 4,688 1,157 116,949
Accumulated depreciation At 1 October 2016 (13,449) (4,632) (3,144) (3,051) - (24,276) Charge for the year (1,102) (554) (1,104) (410) - (3,170) Transfers - 31 (31) - - - At 30 September 2017 (14,551) (5,155) (4,279) (3,461) - ( 2 7, 4 4 6 )
Net book value at 30 September 2017 46,101 22,396 18,622 1,227 1,157 89,503 Net book value at 30 September 2016 4 7, 2 0 3 23,010 7, 2 9 7 1,635 12,029 91,174
18a Charity tangible fixed assets including functional property Freehold Other Leasehold Plant, Assets under Total homes freehold property and machinery construction Charity £’000 £’000 leasehold and equipment £’000 £’000 improvements £’000 £’000 At cost or valuation At 1 October 2016 60,652 26,685 6,875 4,246 - 98,458 At 30 September 2017 60,652 26,685 6,875 4,246 - 98,458
Accumulated depreciation At 1 October 2016 (13,449) (4,320) (1,390) (3,004) - (22,163) Charge for the year (1,102) (537) (672) (393) - (2,704) At 30 September 2017 (14,551) (4,857) (2,062) (3,397) - (24,867)
Net book value at 30 September 2017 46,101 21,828 4,813 849 - 73,591 Net book value at 30 September 2016 4 7, 2 0 3 22,365 5,485 1,242 - 76,295
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19 Investments Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Market value at 1 October 141,452 106,601 130,737 96,771 Net additions 3,300 23,567 1,950 23,546 Investment gain/(loss) on revaluation 5,049 11,28 4 4,908 10,420 Market value at 30 September 149,801 141,452 137, 595 130,737
The asset distribution of the investment portfolio at 30 September is presented below.
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Equities: UK 29,726 30,401 25,461 26,787 Overseas 20,644 17, 3 3 0 20,584 17, 3 3 0 Total equities 50,370 4 7, 7 31 46,045 4 4,117
Bonds: UK 29,051 32,605 23,504 28,037 Overseas 8,445 2,836 8,445 2,836 Total bonds 37, 49 6 35,441 31,949 30,873
Cash: UK 15,674 16,980 15,673 16,980 Overseas 1,144 - - - Total cash 16,818 16,980 15,673 16,980
Hedge funds – UK 18,601 6,718 18,601 6,718
Portfolio funds – UK 10,413 18,997 10,413 18,997
Other: UK 8,375 7, 3 0 8 7, 55 3 4,725 Overseas 7, 72 8 8,277 7, 3 61 8,327 Total other 16,103 15,585 14,914 13,052
Total investments 149,801 141,452 137, 595 130,737
£121.094 million of the investments are managed by Cazenove Capital Management Limited (2016 restated: £115.681 million). The strategy is to maintain the real value of assets and target an investment return of RPI plus 2%. The investments are held at market value, normally using prices obtained from an independent pricing source. Funds and unit trusts are generally priced on a net asset value basis. Structured products are valued on a market to market basis. Unquoted investments are valued in accordance with the International Private Equity and Venture Capital valuation guidelines or held at cost. Investments where a price is not readily available, that are held in an execution-only portfolio, will be valued at the last publicly available price.
Other investments include investments held by branches, and balances relating to the Arthur Atock Memorial Trust and Devon Community Trust.
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20 Investment properties Group and Charity Group and Charity 2017 2016 £’000 £’000 Market value at 1 October 61,492 68,979 Disposals at market value (3,773) (6,401) Net gain/(loss) on revaluation of investment properties 3,393 (1,086) Market value at 30 September 61,112 61,492
Investment properties primarily comprise 338 properties (2016: 351 properties) which are owned by the Legion but are let to independent commercial operations, primarily affiliated social clubs. The Legion’s valuation methodology is to revalue its investment properties on a five-year rolling basis, with 20% being revalued each year. For the year ended 30 September 2017, 73 properties were externally revalued (2016: 77 properties) and a revaluation gain of £3.428 million (2016: £980,000) was recognised in the accounts. This revaluation was completed by Bruton Knowles, a firm of qualified surveyors, on the basis of open market value for existing use. The remaining 80% of investment properties are reviewed internally by a qualified surveyor for any material changes on an annual basis, and as a result of this exercise further revaluations gains totalling £1.875 million (2016: nil) have been recognised.
The net gain on revaluation of the investment properties at 30 September 2017 takes account of a reduction of £3.240 million (2016: £4.861 million) arising from the fact that there is now uncertainty about whether the Legion has a beneficial interest in a number of local property trust properties in which it was thought previously to have had such an interest, and following receipt of legal advice it is now not considered appropriate to include these at market value.
The remainder of the net gain on revaluation relates to profits on disposal of £1.330 million (2016: £2.795 million).
21 Programme related investments Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Loans to external organisations Sir Oswald Stoll Foundation 913 874 913 874 Other schemes unrestricted Loans for property repairs (PRL) 5,176 5,268 5,176 5,268 Programme related investments unrestricted 6,089 6,142 6,089 6,142 Other schemes restricted Be The Boss scheme (BTB) 75 433 75 433 Group loans - - 23 23 Total programme related investments 6,164 6,575 6,187 6,598
21a Programme related investments movement during the year Sir Oswald PRL BTB Total Group Total Stoll loans loans Group loans Charity Foundation £’000 £’000 £’000 £’000 £’000 £’000
Opening balance at 1 October 2016 874 5,268 433 6,575 23 6,598 Interest 80 - 4 84 - 84 Repayments and security deposits (41) (92) (58) (191) - (191) Write-offs and bad debt provision movements - - (304) (304) - (304) Closing balance at 30 September 2017 913 5,176 75 6,164 23 6,187
The Legion has provided a number of loans in furtherance of its charitable objectives as follows:
Sir Oswald Stoll Foundation – a secured loan repayable over 10 years issued towards the development costs of a veterans’ housing centre. An interest rate of 4% is applied to the principal issued on the anniversary of the loan agreement (17 September 2013).
Property Repair Loans – interest free secured loans to beneficiaries living in their own homes to provide housing improvements. The majority are lifetime loans as they are repayable on the sale of property. The minimum amount for a loan is £2,000 and the maximum allowed is £25,000. The Legion ceased issuing new loans in 2013.
Be the Boss loans – a scheme (now closed) originally supported by the Ministry of Defence which provides financial support through loans and grants to recent UK service leavers who are interested in setting up or expanding their own business. The loans are repayable within four years and an annual rate of interest of 9.4% is charged.
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22 Debtors
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000
Trade debtors 4,813 1,630 4,514 1,294 Amounts due from consolidated entities - - 4,867 4,966 Other debtors 1,540 1,694 1,218 1,380 Prepayments and accrued income 8,617 4,220 7, 6 5 8 3,048 Total debtors 14,970 7, 5 4 4 18,257 10,688
23 Cash at hand and in bank and short-term deposits Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Cash held centrally Short-term deposits 38,907 3 7, 6 91 38,552 3 7, 2 8 4 Cash at hand and in bank 21,535 21,369 9,215 10,455 60,442 59,060 47, 767 4 7, 7 3 9
Cash held by branches 13,590 14,205 13,590 14,205 Total cash 74,032 73,265 61,357 61,944
24 Creditors Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000
Creditors falling due within one year Trade creditors 4,106 1,639 3,401 1,637 Amounts due to consolidated entities - - 393 - Grant commitments (see note 25) 9,700 8,845 9,700 8,800 Accruals 11,0 41 11,16 5 9,427 8,893 Deferred Income 1,492 1,558 616 620 Other creditors 2,823 258 2,509 186 Total creditors falling due within one year 29,162 23,465 26,046 20,136
Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000
Creditors falling due after more than one year External grant commitments (see note 25) Due within two to five years 13,482 16,563 13,482 16,563 Total creditors falling due after more than one year 13,482 16,563 13,482 16,563
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25 Grant commitments Personnel Centre for Blast Other Charity Charity Total Poppyscotland Group Total Recovery Injury Studies 2017 2017 Group 2017 Centres 2017 £’000 £’000 2017 £’000 2017 £’000 £’000 £’000 Opening balance at 1 October 10,956 5,089 9,318 25,363 45 25,408 Grants awarded - - 13,599 13,599 - 13,599 Unwinding of discount 450 167 - 617 - 617 Payments during the year (1,584) (1,574) (13,239) (16,397) (45) (16,442) Closing balance at 30 September 9,822 3,682 9,678 23,182 - 23,182
26 Provisions for liabilities Group Group Charity Charity 2017 2016 2017 2016 £’000 £’000 £’000 £’000 Opening balance at 1 October 941 619 941 619 Provisions raised in year - 322 - 322 Provisions written back in year (322) - (322) - Closing balance at 30 September 619 941 619 941
27 Group operating lease commitments Land and Vehicles and Land and Vehicles and buildings equipment buildings equipment 2017 2017 2016 2016 £’000 £’000 £’000 £’000
At 30 September the Group had annual commitments under non-cancellable operating leases as follows: Within one year 1,541 277 1,250 536 Within two to five years 4,435 352 4,696 374 Over five years 4,609 - 4,716 - Total 10,585 629 10,662 910
27a Charity operating lease commitments Land and Vehicles and Land and Vehicles and buildings equipment buildings equipment 2017 2017 2016 2016 £’000 £’000 £’000 £’000
At 30 September the Group had annual commitments under non-cancellable operating leases as follows: Within one year 1,496 256 1,207 523 Within two to five years 4,092 316 4,524 374 Over five years 4,400 - 4,652 - Total 9,988 572 10,383 897
28 The Royal British Legion Women’s Section The Legion’s accounts (charity) include the financial results for The Royal British Legion Women’s Section. The Women’s Section, which is constituted under The Royal Charter, is a membership organisation for women with 399 (2016: 616) branches and 13,518 (2016: 25,061) members.
The Women’s Section contributed £801,000 (2016: £1.021 million) towards the Legion’s incoming resources. It provides care and support for the ex-service community by means of various welfare work schemes such as financial help to ex-Service women, wives, widows and widowers of ex-Service personnel and their children. Their total charitable expenditure amounted to £839,000 (2016: £1.326 million). The section currently holds net assets of £5.123 million (2016: £5.161 million). While the funds of the Women’s Section are unrestricted in nature, they are administered separately from other Legion funds. Women’s Section funds are held in designated reserves to reflect this separation.
In 2016, the Women’s Section and the Board of Trustees of The Royal British Legion submitted a plan for the modernisation of the Women’s Section to the Board of Trustees. As a result, the Women’s Section was included in the governance structures of The Royal British Legion from 1 October 2017.
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29 Group unrestricted funds Opening Incoming Resources Gains/(losses) Transfers Closing Balance resources expended £’000 £’000 Balance 1 Oct 2016 £’000 £’000 30 Sept 2017 £’000 £’000
Central benevolent fund 31,905 103,787 ( 10 7, 5 0 2 ) 3,469 (380) 31,279 General fund 3,647 5,058 (4,492) - (116) 4,097 Other unrestricted funds 59,869 8,409 (5,523) 311 5,349 68,415 95,421 117, 2 5 4 (117,517) 3,780 4,853 103,791 Functional fixed asset reserve 75,054 - (2,311) - 3,927 76,670 Programme related investment reserve 6,141 80 - - (132) 6,089 Pension reserve ( 17, 0 0 2 ) - (975) 13,486 228 (4,263) Charity unrestricted funds 159,614 117, 3 3 4 (120,803) 17, 2 6 6 8,876 182,287 Subsidiaries' funds 3,429 15,843 (7,843) - ( 7, 4 2 0 ) 4,009 Total group unrestricted funds 163,043 133,177 (128,646) 17, 2 6 6 1,456 186,296
Opening Incoming Resources Gains/(losses) Transfers Closing Balance resources expended £’000 £’000 Balance 1 Oct 2015 £’000 £’000 30 Sept 2016 £’000 £’000
Central benevolent fund 14,284 101,920 (98,974) 9,405 5,270 31,905 General fund 3,562 3,996 (3,911) - - 3,647 Other unrestricted funds 38,362 5,793 ( 7,13 3 ) 361 22,486 59,869 56,208 111,709 (110,018) 9,766 2 7, 75 6 95,421 Functional fixed asset reserve 75,100 3,100 (2,384) - (762) 75,054 Programme related investment reserve 9,768 - (3,627) - - 6,141 Pension reserve ( 7, 619 ) (292) (97) (8,994) - ( 17, 0 0 2 ) Charity unrestricted funds 133,457 114, 517 (116,126) 772 26,994 159,614 Subsidiaries' funds 3,252 15,362 (8,180) - ( 7, 0 0 5 ) 3,429 Total group unrestricted funds 136,709 129,879 (124,306) 772 19,989 163,043
The Central benevolent fund incorporates the core activities of the Legion, such as operating residential care homes and welfare break centres, giving grants, providing resettlement training, giving pension claims advice, and acting as the custodian of Remembrance. The proceeds from the annual Poppy Appeal collection are allocated to this fund.
The General fund is used to support the administration of the membership of the Legion.
The Functional fixed asset reserve represents the value of the Legion’s functional fixed asset portfolio (such as residential care homes and welfare break homes), used by the charity in the delivery of its charitable objectives.
The Programme related investment reserve represents the value of the programme related investments used by the charity in the delivery of its charitable objectives. The unrestricted reserve excludes Be The Boss loans, which are included within restricted funds (see note 30).
The Pension reserve is a specific allocation of unrestricted funds in relation to the Royal British Legion Staff Pension Fund.
The Subsidiaries’ funds represent funds held in subsidiaries.
Other unrestricted funds includes all other unrestricted funds designated for specific activities, including funds held by branches and counties, Women’s Section funds, and funds designated for use in a particular geographical area.
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29a Charity unrestricted funds Opening Incoming Resources Gains/(losses) Transfers Closing Balance resources expended £’000 £’000 Balance 1 Oct 2016 £’000 £’000 30 Sept 2017 £’000 £’000
Central benevolent fund 31,905 111,36 0 (113,0 24 ) 3,469 (2,431) 31,279 General fund 3,647 5,058 (4,492) - (116) 4,097 Other unrestricted funds 59,869 8,409 (5,573) 311 5,399 68,415 95,421 124,827 (123,089) 3,780 2,852 103,791 Functional fixed asset reserve 75,054 - (2,311) - 3,927 76,670 Programme related investment reserve 6,141 80 - - (132) 6,089 Pension reserve ( 17, 0 0 2 ) - (975) 13,486 228 (4,263) Total charity unrestricted funds 159,614 124,907 (126,375) 17, 2 6 6 6,875 182,287
Opening Incoming Resources Gains/(losses) Transfers Closing Balance resources expended £’000 £’000 Balance 1 Oct 2015 £’000 £’000 30 Sept 2016 £’000 £’000
Central benevolent fund 14,284 110,371 (106,363) 9,405 4,208 31,905 General fund 3,562 3,996 (3,911) - - 3,647 Other unrestricted funds 38,362 5,793 ( 7,13 3 ) 361 22,486 59,869 56,208 120,160 ( 117, 4 0 7 ) 9,766 26,694 95,421 Functional fixed asset reserve 75,100 3,100 (2,384) - (762) 75,054 Programme related investment reserve 9,768 - (3,627) - - 6,141 Pension reserve ( 7, 619 ) (292) (97) (8,994) - ( 17, 0 0 2 ) Total charity unrestricted funds 133,457 122,968 (123,515) 772 25,932 159,614
30 Group restricted funds
Opening Incoming Resources Gains/ Transfers Closing Balance resources expended (losses) £’000 Balance 1 Oct 2016 £’000 £’000 £’000 30 Sept 2017 £’000 £’000 Investment property reserve 61,492 - - 3,393 (3,773) 61,112 Income and sales proceeds from property held in 47,047 2,339 (2,148) 361 (3,066) 44,533 corporate trusteeship Grants for specific purposes 4,888 8,862 (8,991) - (44) 4,715 Programme related investment reserve 576 - - - (499) 77 Donor restricted legacies and donations 11,83 0 3,944 (2,786) 109 (112) 12,985 Branch and county funds 4,892 314 (281) 420 405 5,750 Charity Commission schemes 1,602 60 - 101 (1) 1,762 Homes’ residents’ amenity funds 1,082 369 (713) - 235 973 The Arthur Atock Memorial Trust 1,279 (103) (19) 88 2 1,247 British Korean Veterans (1981) Relief Fund 156 2 (4) 1 - 155 Samsung British Korean Veterans Scholarship Fund 437 15 - (23) - 429 Permanent endowments 793 17 (34) 71 - 847 Total charity restricted funds 136,074 15,819 (14,976) 4,521 (6,853) 134,585 Poppyscotland Group 11,96 0 5,355 (5,623) 141 1,046 12,879 Poppyscotland pension provision (2,102) - (41) 229 - (1,914) National Memorial Arboretum Group 16,768 4,373 (5,819) - 1,892 17, 214 Royal British Legion Republic of Ireland - 450 (185) - 2,459 2,724 Total group restricted funds 162,700 25,997 (26,644) 4,891 (1,456) 165,488
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30 Group restricted funds (continued)
Opening Incoming Resources Gains/ Transfers Closing Balance resources expended (losses) £’000 Balance 1 Oct 2015 £’000 £’000 £’000 30 Sept 2016 £’000 £’000 Investment property reserve 68,979 - - ( 7, 4 8 7 ) - 61,492 Income and sales proceeds from property held in 62,632 2,568 (2,344) 6,716 (22,525) 47,047 corporate trusteeship Grants for specific purposes 8,687 969 (2,063) - (2,705) 4,888 Programme related investment reserve 576 - - - - 576 Donor restricted legacies and donations 10,794 3,622 (2,001) 117 (702) 11,83 0 Branch and county funds 3,755 1,316 (179) - - 4,892 Charity Commission schemes 1,422 48 - 132 - 1,602 Homes' residents' amenity funds 1,087 651 (656) - - 1,082 The Arthur Atock Memorial Trust 651 628 - - - 1,279 British Korean Veterans (1981) Relief Fund 141 9 (3) 9 - 156 Samsung British Korean Veterans Scholarship Fund - 404 - 33 - 437 Permanent endowments 793 10 (59) 49 - 793 Total charity restricted funds 159,517 10,225 ( 7, 3 0 5 ) (431) (25,932) 136,074 Poppyscotland Group 11,313 4,401 (4,934) 865 315 11,96 0 Poppyscotland pension provision (1,729) - (81) (292) - (2,102) National Memorial Arboretum Group 13,772 6,751 (9,383) - 5,628 16,768 Total group restricted funds 182,873 21,377 (21,703) 142 (19,989) 162,700
Restricted funds represent grants, donations, legacies and property which are given by the donor for specific purposes and which must be used for that purpose. All restricted funds are held within the Benevolent fund. Restricted funds include permanent endowment funds which are not material and are not therefore shown separately on the face of the balance sheet.
The investment property reserve represents the estimated market value of £61.112 million (2016: £61.492 million) representing a portfolio of 338 properties (2016: 351 properties) owned by the Legion and, in most cases, occupied by social clubs licensed by the Legion to use its name. Many of these properties are held under trust deeds which provide that, if they are sold, the proceeds must be applied in accordance with the terms of the original trust deeds. In most cases, the beneficiaries of such deeds will also be the beneficiaries of The Royal British Legion, but in some cases the relevant deed may limit support in the first instance to ex-Service persons in a defined geographical area.
As a result, income from these properties is held as restricted funds pending agreement with the Charity Commission on how the restrictions contained within the trust deeds can be widened to best serve the Legion’s beneficiaries, at which point the funds are transferred to other reserves as appropriate. The value of these reserves at 30 September 2017 was £44.533 million (2016: £47.047 million), which includes both investment income and sales proceeds.
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30a Charity restricted funds
Opening Incoming Resources Gains/ Transfers Closing Balance resources expended (losses) £’000 Balance 1 Oct 2016 £’000 £’000 £’000 30 Sept 2017 £’000 £’000 Investment property reserve 61,492 - - 3,393 (3,773) 61,112 Income and sales proceeds from property held in 47,047 2,339 (2,148) 361 (3,066) 44,533 corporate trusteeship Grants for specific purposes 4,888 8,862 (8,991) - (44) 4,715 Programme related investment reserve 576 - - - (499) 77 Donor restricted legacies and donations 11,83 0 3,944 (2,786) 109 (112) 12,985 Branch and county funds 4,892 314 (281) 420 405 5,750 Charity Commission schemes 1,602 60 - 101 (1) 1,762 Homes’ residents’ amenity funds 1,082 391 (713) - 213 973 The Arthur Atock Memorial Trust 1,279 (103) (19) 88 2 1,247 British Korean Veterans (1981) Relief Fund 156 2 (4) 1 - 155 Samsung British Korean Veterans Scholarship Fund 437 15 - (23) - 429 Permanent endowments 793 17 (34) 71 - 847 Total charity restricted funds 136,074 15,841 (14,976) 4,521 (6,875) 134,585
Opening Incoming Resources Gains/ Transfers Closing Balance resources expended (losses) £’000 Balance 1 Oct 2015 £’000 £’000 £’000 30 Sept 2016 £’000 £’000 Investment property reserve 68,979 - - ( 7, 4 8 7 ) - 61,492 Income and sales proceeds from property held in 62,632 2,568 (2,344) 6,716 (22,525) 47,047 corporate trusteeship Grants for specific purposes 8,687 969 (2,063) - (2,705) 4,888 Programme related investment reserve 576 - - - - 576 Donor restricted legacies and donations 10,794 3,622 (2,001) 117 (702) 11,83 0 Branch and county funds 3,755 1,316 (179) - - 4,892 Charity Commission schemes 1,422 48 - 132 - 1,602 Homes’ residents’ amenity funds 1,087 651 (656) - - 1,082 The Arthur Atock Memorial Trust 651 628 - - - 1,279 British Korean Veterans (1981) Relief Fund 141 9 (3) 9 - 156 Samsung British Korean Veterans Scholarship Fund - 404 - 33 - 437 Permanent endowments 793 10 (59) 49 - 793 Total charity restricted funds 159,517 10,225 ( 7, 3 0 5 ) (431) (25,932) 136,074
31 Transfers between restricted and unrestricted funds During the year the group made net transfers of £1.456 million (2016: £19.989 million) from restricted to unrestricted reserves. The most significant transfers are described below.
The Legion carried out further work in respect of the income and sale proceeds held from properties in corporate trusteeship. In its role as corporate trustee, the Legion made use of provisos on 56 trusts (2016: 107 trusts) resulting in the release of £6.544 million (2016: £22.224 million) from restricted into unrestricted funds (included in other unrestricted funds in note 29 above). The Legion has opted to designate these funds for welfare activity. In addition, £295,000 (2016: nil) has been transferred to the Central benevolent fund as a result of identifying balances relating to six properties which are not restricted.
Reserves totalling £2.482 million were transferred from unrestricted to restricted funds in respect of assets transferred to the new Royal British Legion Republic of Ireland subsidiary. The transfer amount of £2.459 million shown in note 29 is net of a £23,000 donation made by the subsidiary to one of the Legion’s break centres.
An amount of £1.892 million (2016: £5.628 million) was transferred from unrestricted to restricted funds in respect of funding provided by the charity to the National Memorial Arboretum. Similarly, a transfer of £1.046 million (2016: £315,000) was made from unrestricted to restricted funds in respect of funding provided by the charity to Poppyscotland.
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32 Analysis of group net assets between funds Unrestricted Restricted Total Unrestricted Restricted Total 2017 2017 2017 2016 2016 2016 Fund balances are represented by £’000 £’000 £’000 £’000 £’000 £’000 Intangible and tangible assets 76,774 15,912 92,686 78,871 14,879 93,750 Investments 64,579 152,498 217, 07 7 5 7,12 8 152,391 209,519 Current assets 82,764 8,697 91,461 79,492 3,055 82,547 Current and non current liabilities (33,558) (9,705) (43,263) (35,446) (5,523) (40,969) Defined benefit pension liability (4,263) (1,914) (6,177) ( 17, 0 0 2 ) (2,102) (19,104) Total funds 186,296 165,488 351,784 163,043 162,700 325,743
33 Related party transactions During the year ended 30 September 2017, the following transactions have taken place between the charity and other members of the Legion group: • The charity received a grant of £4.091 million from Royal British Legion Poppy Lottery (2016: £4.622 million). • The charity received donations of profits from Royal British Legion Trading, Royal British Legion Developments and Remembrance Travel of £3.421 million, £29,000 and £14,000 respectively (2016: £4.112 million, £16,000 and £8,000 respectively). • Grant funding of £1.842 million and a donation of £50,000 were provided by the charity to the National Memorial Arboretum Company (2016: grant funding of £5.635 million). • Grant funding of £700,000 and donations of £346,000 were provided by the charity to the Poppyscotland Group. • The charity purchased goods and services valued at £134,000 from Royal British Legion Trading. • The charity purchased goods and services valued at £23,000 from NMA (Enterprises), and £1,000 from the National Memorial Arboretum Company. • A donation of £23,000 was received by the charity from the Royal British Legion Republic of Ireland. • At 30 September 2017, there was an outstanding loan balance of £23,000 owed to the charity by Remembrance Travel (2016: £23,000).
In addition, the following balances were outstanding between the charity and other members of the Legion group at 30 September 2017:
Charity Charity 2017 2016 Amounts receivable from consolidated entities £’000 £’000 Royal British Legion Poppy Lottery 4,353 4,949
Royal British Legion Trading 365 229
Poppyscotland Group 121 125
Remembrance Travel 16 10
NMA (Enterprises) 9 434
Royal British Legion Developments 3 10 Total amounts receivable from consolidated entities 4,867 5,757
Charity Charity 2017 2016 Amounts payable to consolidated entities £’000 £’000 National Memorial Arboretum Company 274 791
Royal British Legion Republic of Ireland 119 -
Total amounts payable to consolidated entities 393 791
The Royal British Legion is a member organisation of the Royal Commonwealth Ex-Services League (RCEL). Three of the Legion’s Trustees hold positions within the RCEL as detailed below. The RCEL shares office space and certain services with the Legion which had an estimated value of £43,000 during the year (2016: £49,000). RCEL does not make payments to the Legion for these services. In addition, in September 2012, the Legion approved a grant of £600,000 to the RCEL to be paid over a period of five years. The final instalment of this grant was paid on 2 October 2017, and on 7 September 2017 the Trustees approved a further grant to the RCEL of £1.2 million to be paid over a period of five years commencing in 2018.
Organisation Related party Position at the Legion Position at related party organisation Royal Commonwealth Terry Whittles Trustee Trustee Ex-Services League Major General David Jolliffe Trustee Honorary Medical Adviser Lieutenant Colonel Joe Falzon Trustee Council Member for Malta
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34 Events after the reporting period On 22 January 2018, gift aid totalling £4.013 million relating to the 2017 profits of Royal British Legion Trading and Remembrance Travel was paid to the charity; consequently no tax is payable by these subsidiaries in respect of the year ended 30 September 2017.
On 25 January 2018, gift aid of £128,000 relating to the 2017 profits of NMA (Enterprises) was paid to the National Memorial Arboretum Company, supplementing a further £405,000 paid on account during the financial year; consequently no tax is payable by NMA (Enterprises) in respect of the year ended 30 September 2017.
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The Royal British Legion, Haig House, 199 Borough High Street, London SE1 1AA T 020 3207 2100 E [email protected] W www.britishlegion.org.uk Registered Charity Number: 219279
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