ANNUAL REPORT
& ACCOUNTS
2013
Where the money comes from
Where the money goes
Fig 1 – how the income was raised £m
Fig 2 – how the money was spent £m
5%
4%
4%
20%
1%
32%
11%
4%
14%
18%
1%
1%
7%
7%
42%
29%
The Poppy Appeal
39.5
Running our Care Homes and Break Centres
21.5
Donations and legacies
36.1
Providing welfare services to our beneficiaries
51.2
Events, lotteries and trading
17.3
Supporting our Membership
8.2
Fees charged to Care Home residents
13.3
Campaigning on behalf of our beneficiaries
8.7
Grants to pay for welfare services and Remembrance
6.6
Remembrance
5.5
Membership subscriptions
5.5
Comradeship
0.9
Investment income
4.6
Raising the money
Other income
1.7
Governing the charity
TOTAL
124.6
1 77
For Every
£
raised...
...we spend
p
on charitable
activities
TOTAL
25.1
1.4
122.5
What we own (£m)
Buildings used by the charity
71.9
Buildings occupied by third parties
88.8
Working capital used to run the organisation
40.7
Investments held to ensure we honour our commitments
Other assets and liabilities
TOTAL
103.8
(4.3)
300.9
1
The Trustees are pleased to present their report
and audited accounts for The Royal British Legion
(the Legion or the Charity) and its subsidiaries
(the Group) for the year ended 30 September 2013.
Photograph : Elliot Payne
FORE WORD
Foreword
The 4th of August 2014 will mark the 100th
anniversary of Britain’s entry into the First
World War, a time when, in the words of
Sir Edward Grey: “The lamps are going out
all over Europe; we shall not see them lit
again in our lifetime.”
John Crisford
National Chairman
But a candle of hope was lit in 1921 when
The British Legion was founded by veterans
in the aftermath of WW1. Nearly a century
on, Service men and women, veterans and
their families still call on us for help with
almost every aspect of their daily lives.
In our role as the national custodian of
Remembrance, our mission remains to honour
the fallen and support the living.
Many of the challenges facing veterans
returning from WW1 affect serving personnel,
veterans and their families today. Whether it’s
finding employment or housing, coping with
financial stress, or living with physical and
psychological challenges, the Legion is still
ready and able to assist, standing shoulder to
shoulder with all who Serve.
Chris Simpkins
Director General
In 2013, we introduced improvements to help
more of today’s Armed Forces community
access our services more easily and
effectively. We rolled out new online selfhelp tools and launched a new freephone
helpline. We also opened the first of sixteen
high street information and advice centres
located close to Service communities, in
addition to outreach sites around the country.
This is just the start of our journey to become
a more agile, responsive and effective Armed
Forces charity.
Encouraged by our campaign, every local
authority in Wales and Scotland, and almost
all the local authorities in England, have now
signed Armed Forces Community Covenants. In
practice, this means the principles of the Armed
Forces Covenant will be upheld at a local level;
a commitment which will positively affect the
lives of Service people for years to come.
The 2013 Festival of Remembrance reached
a record viewing audience of 6.5 million,
no doubt thanks to the moving contribution
of the last surviving British Dambuster,
Squadron Leader Johnnie Johnson DFM,
and the poignant performance of The Poppy
Girls. Commemorative events will take
centre stage in the coming year as nations,
communities and individuals come together
to remember the start of the First World War.
2014 will also mark the 70th anniversary
of a number of significant Second World
War engagements, including the Normandy
Landings and the Battles of Kohima and
Imphal in north-east India.
Our beneficiaries are at the heart of
everything we do – and we’re making the
Legion work better for them. We’re making
it easier for people to find the Legion, and
easier too for our beneficiaries to find the
support they need that helps them regain the
control and independence they want in their
lives. We aim to provide a fully integrated
service in ways that we have never done
before, working in collaboration with other
Service charities and organisations that can
support our beneficiaries.
JOHN CRISFORD
NATIONAL CHAIRMAN
CHRIS SIMPKINS
DIRECTOR GENERAL
Front cover image : Rt Hon Mark Francois, MP, Minister of State for the Armed Forces joins
National Chairman John Crisford at the opening of the Legion’s first ‘Pop In’ advice centre.
3
Our Vision
The nation fully embraces and upholds
the welfare, interests and memory of
the Armed Forces community.
Our Mission
To be the No. 1 provider of welfare,
comradeship, representation and Remembrance
for the Armed Forces community.
CONTENT S
Contents
06
DIRECT SUPPORT
16
REMEMBRANCE
24
COMRADESHIP
28
REPRESENTATION
34
FUNDRAISING
38
THE FUTURE
39
FINANCIALS
5
DIRECT SUPPORT
We said:
WE WILL
Start the process of opening new
Area Offices across the UK
WE WILL
Develop our knowledge base
WE WILL
Develop volunteer roles
across the Legion
WE WILL
Expand our dementia care services
through the Admiral Nurse Service
DIRE C T SUPPORT
7
See what we did >>
DIRECT SUPPORT
What we did:
This year we answered 206,626
requests for help. We helped Felix,
who was injured in a car crash, we
gave Bill a holiday when he needed
a break and we helped Emma-Jayne
secure her children’s financial future.
Last year we made big changes so
that we could help more people than
ever before.
Our online tools are now backed
up by a vast knowledge base
of information, giving access
to guidance 24 hours a day.
Our new freephone number is
answered by friendly, informed
staff and our first high street
Area Office was officially opened
in December 2013.
DIRE C T SUPPORT
9
There are now three integrated
ways to contact the Legion:
ONLINE
Using our self-help and
webchat resources
IN PERSON
At a high street
advice centre or
outreach location
BY PHONE
Via our new freephone number:
0808 802 8080
The first of 16 new ‘Pop In’
advice centres in the heart of
Liverpool offers a welcoming space for
Service personnel, veterans and their
families to get practical help and advice.
Our Pop In advice centre in Liverpool
DIRECT SUPPORT
Help in so many ways
• Our volunteer roles have also
undergone a big change. As a result
we are now seeing more people
face to face. Complex needs are
being identified earlier, and picked
up and addressed more quickly. We
are also holding a growing number
of surgeries in outreach locations
across the UK to widen the contact
points through which we can be
reached. We can now be found
within military bases, alongside
charity partners and in local
authority spaces.
• Alongside our colleagues at
Poppyscotland, we’re working
hard to ensure that beneficiaries
throughout the UK experience a
consistent level of support. We’re
also making Pop In centres available
for charity partners to use. By being
more collaborative, we hope to offer
a more rounded service for anyone
walking through our door.
• We are empowering people to help
themselves. This year we worked
with the Ministry of Defence and
the independent charity Standard
Life Charitable Trust to create a new
toolkit called MoneyForce, which
brings financial planning into basic
training for the first time and helps
Service families and Service leavers
achieve financial fitness. We also
introduced a new website platform
at www.moneyforce.org.uk
• We helped Service leavers find
civilian employment through
SORTED!, a consortium of seven
Armed Forces charities coming
together to help people find and
retain work. The consortium’s
website is www.sorted.org.uk
• Meanwhile, our own employment
support scheme, CivvyStreet,
awarded grants to help beneficiaries
with training, tools and courses. It
can be found at www.civvystreet.org
DIRE C T SUPPORT
Felix’s story
Ex-Royal Artillery Gunner, Felix
Agbotsu was en route to take part
in a charity event in 2004 when
he was involved in a car crash that
fractured his spine and left him
paralysed from the neck down.
When his time at the National Spinal
Injury Centre at Stoke Mandeville Hospital
came to an end, Felix spent 18 months as
an in-patient at one of our Care Homes,
Lister House.
“The support and care I received from
Lister House was fantastic,” explains Felix.
“The staff really helped me to adjust to life
as a quadriplegic.”
When Felix left Lister House we funded
adaptations to his mobility vehicle, without
which he would have been housebound.
We have also helped Felix with specialist
mobility equipment, including a bed hoist.
“I’ve received help from the Legion for
almost 10 years now,” he says, “and
they’ve always been very supportive.
They’ve made my life much easier.”
“The Legion have always
been very supportive.
They’ve made my life
much easier.”
Felix Agbotsu
11
DIRECT SUPPORT
The Winters family enjoyed a Legion Family Break
DIRE C T SUPPORT
13
The Battle Back
Centre ( Lilleshall )
Investment
• We continue to invest in dementia
care. We have broken turf on a new
dementia wing at Dunkirk Memorial
House, our Care Home in Somerset.
The new wing will provide space
for 30 beds, all with en suite shower
rooms, and is set to open in 2014.
• The Royal Star and Garter Home in
Surrey opened its new dementia
wing in October 2013, funded by a
£2 million grant from the Legion. 26
specially equipped en suite rooms
now form a specialist dementia unit.
The grant, approved by the Trustees
in 2008, is one of the largest we have
made and recognises this growing
veterans’ need.
• The Battle Back Centre, a specialist
recovery centre in Shropshire, is run
jointly between the Legion and the
MOD. It uses sports and adventurous
training activities to give injured
personnel the confidence and selfesteem they need to resume their
Service career or return to
Civvy Street.
Ex-Royal Marine Ady Cole, one of the course
directors says:
“We get the trust of the guys
quite quickly, then assess
their needs. Some of those are
obviously physical but many are
psychological, and that’s what
we concentrate on. A lot of good
work is done over a cup of tea.”
Prince Harry at Imperial College London
• His Royal Highness Prince Henry
of Wales, officially opened The
Royal British Legion Centre for Blast
Injury Studies at Imperial College
London in October 2013. Civilian
engineers and scientists undertake
pioneering work alongside military
doctors at the Centre to mitigate the
effects of roadside bombs and IEDs.
Our partnership with Imperial College
London sits alongside our commitment
to the Defence Recovery Capability
supporting all wounded, injured and
sick Service personnel.
• Ben Upton leads our Admiral Nurse
Service in the West Midlands, helping
family carers navigate through the
dementia journey. “The needs of the
carers and the person with dementia
can be complex. We take a holistic
approach. The positive experience I’ve
had working with this client group and
this generation has been nothing but
amazing. I’d never do anything else.”
• Lorna Pancott is an Activities
Co-ordinator at Bennet House, our
Break Centre in Northern Ireland.
“During the summer and over the
Easter period we have Service and
ex-Service families on much-needed
family breaks. We have daily outings,
tenpin bowling, craft classes, and
picnic lunches. I enjoy every part of my
job. When people are on their own, they
can be quite introverted on the day they
arrive but by the end of it they’ve made
a friend, they’ve done different things
and they’ve gone away refreshed and
with a totally different mindset. Over
10,000 people have enjoyed a free
holiday with us this year.
DIRECT SUPPORT
Emma-Jayne
and Kaitlin’s story
Emma-Jayne Webster and her
daughter Kaitlin’s world changed
forever on 2 September 2009 when
Lance Corporal Richard James
Brandon of the Corps of Royal
Electrical and Mechanical Engineers
(REME), Emma-Jayne’s fiancé and
Kaitlin’s father, was killed by a
roadside IED in Afghanistan.
“The Royal British Legion helped me by
finding out where I stood legally on things
with regard to finances, and obtaining what
I’d been told by Richard before he died that
me and the children would be entitled to.
The Legion eased the burden and offered a
lot of advice about things that I didn’t know
how to sort out. They helped me secure the
children’s futures really, and get the money
I needed.”
“The Legion
helped me secure
the children’s futures”
Emma-Jayne Webster
DIRE C T SUPPORT
Bill’s story
Bill Speakman VC, one of five
living holders of the Victoria Cross,
served in the Army for 25 years.
He was awarded the Victoria
Cross for his heroic actions during
an engagement in the Korean
War, leading charge after charge
and keeping the enemy at bay
long enough for his company to
withdraw safely.
Bill became the first VC invested by
Queen Elizabeth II. “I was really nervous
and I could tell she was too,” recalls Bill.
“She asked me how I was and I replied,
‘I’m fine ma’am’.”
After he retired, Bill developed
osteoarthritis, which limited his mobility;
we secured funding for an electric scooter
to help him get around. We also helped Bill
move to Cornwall after his doctor suggested
the warmer weather could help ease his
condition and he has enjoyed a holiday at
Byng House, one of our Break Centres.
“The Legion has helped me in so many
different ways. I would recommend anyone
in the Armed Forces to contact them if they
need help.”
“The Legion has
helped me in so
many different ways.”
Bill Speakman VC
15
REMEMBRANCE
We said:
WE WILL
Honour and commemorate the sacrifices
made by the Armed Forces community
in service of the nation
WE WILL
Ensure people of all ages understand the
importance of Remembrance, so those
sacrifices are never forgotten
WE WILL
Continue to plan and raise funds for
the expansion of visitor facilities at the
National Memorial Arboretum
Our ‘Silence In The Square’ event
on 11 November drew thousands
of people to Trafalgar Square.
They reflected while listening
to the vocal stylings of tenor
Paul Potts, before observing the
Two Minutes Silence and casting
poppy petals in the Trafalgar
Square fountains.
REMEMBRANCE
17
Zoe Tapper and Adrian Lester at
Silence in the Square 2013
What we did:
Remembrance sits at the heart
of British life and culture. People
of all ages, abilities, beliefs and
backgrounds join together throughout
the year, and especially in November,
to acknowledge those who have given
their lives on active service to the
nation. It is also a time to reflect upon
the service and sacrifices made daily
by the entire Armed Forces family,
and the human cost of conflict in
general. Ensuring that Remembrance
continues as a national observance
with contemporary relevance and
meaning is key to our mission as its
acknowledged custodian.
The moving sight of 10,000 veterans
and civilians taking part in the
ceremonial march past the Cenotaph
drew millions of television viewers
on Remembrance Sunday. Organised
by the Legion, the 2013 event saw, for
the first time, the amalgamated 16/5th
Queen’s Royal Lancers taking part
in the dispersal from Whitehall. This
regimental association is most notably
recognised for having the final British
soldier to be killed in action during
WW1, Private George Edwin Ellison of
the 5th Royal Irish Lancers. Pte Ellison
was shot by a sniper 90 minutes
before the Armistice came into effect
on 11 November, 1918.
REMEMBRANCE
The Poppy Girls
REMEMBRANCE
19
The Poppy Girls
A record number of viewers, 6.5 million,
watched the Festival of Remembrance
on BBC Television. Produced by the
Legion, the Festival saw The Poppy
Girls, five talented young singers from
military families, perform the official
Poppy Appeal single The Call (No Need
to Say Goodbye) in front of Her Majesty
The Queen. Megan, Florence, Alice,
Bethany and Charlotte were drawn
from auditions, which attracted 1,000
hopefuls. The Poppy Girls also sang
to Prime Minister David Cameron at
10 Downing Street and appeared on
the BBC’s The One Show.
Our free ‘Schools Pack’ of learning
resources focused on a ‘then and now’
Remembrance theme in the
run-up to this Centenary year, and
was enthusiastically received by
some 2.5m young people.
The Festival of Remembrance 2013
2.5m
YOUNG PEOPLE RECEIVED OUR FREE SCHOOLS PACK
REMEMBRANCE
REMEMBRANCE
21
Veterans March Past at the Cenotaph
Commemorative events
There is hardly a soul in the UK whose
ancestors were not directly affected
by the First World War, and all of us live
with its effects today. Losses were felt
in towns and villages up and down the
country, as more than one million lives
were sacrificed by men and women
from the British Empire.
The Legion will be at the
forefront of Centenary
commemorations throughout
2014-2018. We are working
with organisations and
individuals across the UK to
develop a meaningful and
appropriate range of Centenary
events, partnerships and
projects. These will reflect our
welfare and Remembrance
values and engage with
communities at national,
regional and local levels.
2014 will also see major commemorative
events taking place in June to mark
the 70th anniversary of the Normandy
Landings. The Legion will be leading
national observances at Bayeux
Cathedral and Cemetery and assisting
with other British commemorations as
the Normandy Veterans Association
prepare for their final reunion prior to
laying up their colours later this year.
REMEMBRANCE
REMEMBRANCE
23
National Memorial Arboretum
Dambusters crests at the NMA
The nation’s year-round
centre of Remembrance, the
National Memorial Arboretum
(NMA) in Staffordshire, attracts
hundreds of thousands of
visitors each year, including
many school groups.
• New visitor facilities are planned
for the site including a dedicated
education centre, Remembrance
interpretation area, and an event
space. We are currently reviewing
construction plans to ensure best
value for money is achieved and
new funding initiatives are
being developed.
Armed Forces Memorial
In May 2013, Legion staff and volunteers at the
National Memorial Arboretum planted 11,000
commemorative crests, each with a personal
message of tribute and thanks from members of
the public, to mark the 70th anniversary of the
Dambusters raid.
• Already home to more than 200
dedicated memorials, the NMA
recently welcomed the Legion’s new
Never Forget memorial; a memorial to
the wartime service of the Religious
Society of Friends (or Quakers) and
the Bevin Boys memorial. The Bevin
Boys memorial was designed by
former Bevin Boy, Harry Parkes and
commemorates the 48,000 young
men, many of them conscripts, who
joined regular miners down the coal
mines in the dangerous but vital
work to keep supplies of coal flowing
during World War II.
• A ceremony to remember and give
thanks to those who gave their lives
in the Service of their country in 2012
took place in July 2013, after 52 new
names were added to the Portland
stone walls of the Armed Forces
Memorial. All 52 names were read out
during the service and the families of
the fallen laid wreaths at the base of
the memorial.
COMRADESHIP
COMRADE SHIP
National Memorial Arboretum, Armed Forces Day
25
We said:
WE WILL
Continue to strengthen our links
with the Armed Forces, raising
the Legion’s profile at all levels
of the Service community
See what we did >>
COMRADESHIP
Cadets and veterans came
together for a spirited debate
in the House of Lords.
House of Lords 2013 / Photography Annabel Moeller
COMRADE SHIP
27
What we did:
This year we introduced free
Legion membership for serving
men and women and launched
Service leaver membership - a
year’s free membership for those
about to leave the Armed Forces.
The schemes help us ensure
military personnel are up to
date with the range of support
services and challenge events
we offer.
We joined forces with the House of
Lords, the English-Speaking Union, Air
Cadets, Army Cadets and Sea Cadets
to bring together 47 veterans and 146
cadets for a special debate in the House
of Lords. Three teams of cadets and
veterans passionately and eloquently
discussed the legacy of the First World
War and how it has shaped the nation
today. It was only the seventh time
in history that non-members of the
Lords had been allowed to debate in
the chamber. The cadets, between 14
and 18 years of age, demonstrated the
importance of Remembrance to young
people today.
Combined Services Rugby captains Sergeant
Jane Leonard and Chief Petty Officer Dave
Pascoe wearing Legion branded kit
B & Q staff onboard with
the Poppy Seed campaign
• Support for the Legion at Combined
Services Rugby matches during the
November Remembrance period
saw Tri-Service teams take on
the mighty Barbarians and Exeter
University, proudly sporting poppybranded shirts. The matches also
gave supporters the chance to don
their own poppy-emblazoned gear
– part of our exciting new range of
Poppy Shop products and clothing.
• The Legion began because the
Armed Forces community needed
a voice. Today, 320,000 members
show their support for the work we
do, connected through Branches and
Clubs around the UK and overseas.
Our members make an invaluable
contribution to our work and share
the common cause of supporting the
Service community.
• As part of our plans to commemorate
the Centenary of the First World
War, we are encouraging people
to plant poppy seeds across the
UK. The idea, conceived by the
Greenhithe and Swanscombe
Branch in Kent, is to cover the nation
in poppies as a poignant tribute.
The branch instigated the project and
found that their idea really took off.
They were sending out poppies to
other Legion branches, schools and
community groups in a bid to get as
many people as possible involved in
Centenary commemorations.
Branch Treasurer Graham MentorMorris says, “We contacted an awful
lot of people, including communities
and local government departments,
and got DEFRA approval.” The
campaign has even earned the backing
of Prime Minister David Cameron.
The whole Legion family is now involved
in the campaign and we’ve teamed
up with B&Q to sell poppy seeds
nationwide with a donation from every
packet sold going to support our work.
Graham says that the branch is thrilled
with the campaign’s success so far
and the way in which it has captured
so many people’s imaginations. “The
branch is very happy,” he says. “We
want thousands upon thousands of
bright red poppies growing everywhere
for the Centenary. It’s a silent, very
inexpensive tribute and everybody can
get involved. It’s such a simple thing.”
320,000
ROYAL BRITISH LEGION MEMBERS
REPRESENTATION
We said:
WE WILL
Extend the Legion’s campaigning influence to
achieve the greatest impact for our beneficiaries
WE WILL
Ensure that the principles of the Armed Forces
Covenant are not forgotten
REPRE SENTAT ION
29
What we did:
Our focus in the past year has
been on encouraging local
authorities to sign Armed Forces
Community Covenants – and
we’ve enjoyed standout success.
Community Covenants are voluntary
statements of mutual support between
civilian and Armed Forces communities
that reinforce the nation’s Armed
Forces Covenant at a local level.
We successfully lobbied for their
introduction in 2011, and since then
every local authority in Wales and
Scotland, and almost all the local
authorities in England, have pledged
their support. This has been achieved
by working closely with local councils
to raise awareness of the importance
of their serving and ex-Service
personnel and their families.
We have produced a ‘Best Practice
Guide to Community Covenants’
for councils, which contains lots
of helpful ideas and examples of
how councils can transform their
relationship with the local Armed
Forces community and implement
tangible and practical measures.
Examples of positive developments
include additional priority for
social housing to the Armed Forces
community; allowing children to go on
the list for a school place before they
have an exact moving date; recognition
of the Armed Forces community as
a group to be considered in setting
strategic priorities and placing greater
importance on those with injuries
sustained as a result of service.
See what else we did >>
REPRESENTATION
Our team in Wales worked with
BLESMA to place pressure on the
Welsh Government to encourage
rehabilitation investment in NHS
services. This resulted in the
recent announcement of a new
clinical pathway for veterans in
need of prosthetics.
We also held awareness-raising
events in Parliament for MPs
with constituencies in Wales,
the Midlands and London. The
events gave local beneficiaries
the chance to speak to their
representatives about their
experiences post-Service and the
support they received from us.
“It was an honour and a
privilege to be asked by
the Legion to speak to
Welsh MPs in the Houses of
Parliament. It is my opinion
that absolutely nothing can
change if we as voices,
veterans who feel neglected
and isolated, do not address
the basic issues that are
causing us to feel neglected:
unwanted, unneeded and
unloved. I credit the Legion
as they provided me with
a platform to talk to MPs
about my own experience.
I was then able to express
that there needs to be more
of a ‘coming together’ which
is focused on prevention,
treatments and support
services for
ex-Service veterans.”
Andy Davies, beneficiary
REPRE SENTAT ION
Community Covenants
LOCAL AUTHORITIES
THAT HAD SIGNED A
COMMUNITY COVENANT
AT THE END OF
LOCAL AUTHORITIES
THAT HAD SIGNED A
COMMUNITY COVENANT
AT THE END OF
ENGLAND
70%
ENGLAND
SCOTLAND
88%
SCOTLAND
WALES
WALES
2012
Area Manager for London,
Ryan Allain and beneficiaries
Jeffrey Button and David Forbes
following a Legion event at the
Houses of Parliament
41%
2013
95%
100%
100%
31
33
Volunteers and the cast
of Strictly Come Dancing
at London Poppy Day.
FUNDRAISING
To our incredible volunteers,
Poppy Appeal Organisers,
runners, cyclists, cake bakers,
Poppy Lottery players,
triathletes, singers, street
collectors, rugby players,
Strictly Come Dancers, skydivers, picnickers, and more,
who help us raise money all
year-round...
THANK YOU!
for your amazing support –
we couldn’t do it without you.
Daredevil singer Katie Melua
jumped out of a plane at 13,000ft
to enjoy an airborne Poppy Picnic
with our extreme human flight
team Jump4Heroes, while boy
band Union J launched our Poppy
Picnic campaign in the company of
military families.
Supporters took on challenge
events across the country; from the
Virgin Money London Marathon to
the Karrimor Great Trail Challenge in
the Lake District; and from Pedal to
Paris to the Great North Run.
Marks and Spencer, Sainsbury’s,
Barclays plc, Premiership football
clubs and Coventry Building Society
are just a few of our growing stable
of corporate supporters who help us
in a surprising variety of ways, from
providing contactless handheld
terminals for London Poppy Day
(Barclays) to selling our popular
Poppy Brooches in their retail
outlets (M&S). We look forward to
continuing and growing this area of
support in the future.
The closest thing to crazy that
she’s ever been...daredevil
Katie Melua jumped out of a
plane at 13,000ft to enjoy an
airborne Poppy Picnic.
F UNDRAISING
35
Holly Bannister-Haynes
at Pedal to Paris
Nichola Rowlands at the Virgin
Money London Marathon
FUNDRAISING
Londoners were proud to see their
Armed Forces personnel in uniform
turning out to support London
Poppy Day, raising more than £1m in
a day. One office worker went to a
nearby cashpoint, withdrew his daily
allowance of £300 and handed
it over in exchange for a poppy.
We are grateful for the huge show of
support on the day:
From Their Royal Highnesses The Duke
and Duchess of Cambridge, who met
with collectors, to the Prime Minister,
who invited the Poppy Routemaster
Bus to Downing Street.
From London Mayor Boris Johnson,
who fired off an Honourable Artillery
Company cannon to announce the
event, to the Strictly Come Dancing
cast, who joined Service personnel
collecting in Covent Garden.
From Transport for London to Network
Rail, who provided free transport for
Service personnel in their poppyliveried carriages.
This year the Poppy Day model has also
extended to cities and towns around
the country, including Manchester,
Birmingham, Swansea and Bristol.
Bristol Poppy Day
HRH The Duchess of Cambridge
at London Poppy Day
F UNDRAISING
37
Meanwhile, our new range of
poppy and British-themed
merchandise is going down a storm,
with online shoppers flocking to
www.poppyshop.org.uk. Our designer
sportswear is a big hit and the Buckley
brooch has proved a phenomenal
success; worn by stars from
Jessica Ennis-Hill to Joan Collins.
Young Royals also favoured the
brooch, with The Duchess of
Cambridge, Zara Phillips and Her
Royal Highness Princess Beatrice
all spotted wearing one. Princess
Beatrice was also a guest at the
annual Poppy Ball this year, while her
sister, HRH Princess Eugenie kindly
agreed to act as its Patron.
Poppy Appeal collectors from the
Ahmadiyya Muslim Youth Association
HRH The Duke of Cambridge
at London Poppy Day
Some of our new
poppy merchandise
Mayor of London Boris Johnson
In May, Jamie Cunningham, then aged 16, took over from
his brother Tom as the youngest Poppy Appeal Organiser
in the country. Pictured here with their mum, Viv
THE FUTURE
We will:
Play a leading role in First World
War Centenary commemorative
events during 2014-2018
Broaden the base
of groups supporting
our Remembrance and
fundraising work
Expand our work in
theatrical performance
as an aid to recovery
Conduct the largest
household survey of
veterans since 2005
Build on the number of
ways that people can
support us year-round
Open more high street and
outreach locations to reach
more beneficiaries
Broaden the reach
of our military
membership scheme
Open a new dementia wing
at Dunkirk Memorial House
Continue our work on Branch
Property Trusts to ensure Legion
assets are used to best serve our
current beneficiaries
39
FINANCIAL REVIEW
FINANCIALS
Financial review
Whilst the Legion’s financial position appears very strong, with closing reserves in excess
of £300 million, the majority of these reserves are tied up in fixed assets; either functional
assets such as Residential Care Homes and Welfare Break Centres or properties held under
Branch Property Trusts (see section overleaf).
Over the last two years, in recognition
of a greater understanding of the
restrictions created by these trusts,
some £150 million has been transferred
from unrestricted to restricted
reserves. Work is in hand with the
Charity Commission to implement
schemes to free up the assets and
the associated reserves and we are
pleased to report the first release was
achieved in February 2014. However,
in the meantime, Free Reserves, being
those reserves immediately available to
spend at the discretion of the Trustees,
have been limited. On 30 September
2012, the Legion held free reserves
of £6.2 million, representing less than
one month’s forward unrestricted
expenditure. To maximise the use
of these Free Reserves pending the
expected release from restricted
funds, the Legion is carefully managing
its budgets to match expenditure to
voluntary income raised.
The difficult fundraising environment
represented a further financial
challenge in 2013. Against a backdrop
of falling sector incomes, the Legion’s
voluntary income fell by 9%. Even the
Poppy Appeal, previously immune to
the economic downturn, suffered a
£3.3 million decline. To mitigate the
impact of reduced income, the Legion
identified and delivered significant
savings and through careful financial
management generated net incoming
resources before transfers of £2.1m
for the year, of which £1.6m relates to
unrestricted funds.
The Legion continued to direct 77p in
every £1 raised towards its charitable
activities. However, expenditure on
welfare reduced by £11.2 million.
This is partly due to the accounting
treatment for multi-year grant funding,
as welfare expenditure last year
included an additional £3.5m funding
provision for the Personnel Recovery
Centres. The implementation of the
Legion’s new operating model led to
a managed reduction in the value of
individual welfare grants awarded
to beneficiaries as the Legion moved
towards a new model of personalised
advice and support delivered through
the new Area Office structure,
the new Contact Centre in Cardiff
and a revamped, user-friendly and
informative website.
The Legion’s total funds increased
by £11.6 million supported by an
unrealised gain on the value of the
Legion’s investments of £5.6 million,
an actuarial gain on the defined
benefit pension scheme of £3.7 million
and a £0.2 million increase in the value
of the Legion’s investment property
portfolio. The Legion ended the year
with a strong balance sheet and high
levels of liquidity. Group cash and
investments totalled £155 million at
30 September 2013; however, the
majority of these assets continue
to be restricted or designated in
nature and not immediately available
to spend on the Legion’s general
charitable purposes. Whilst the
Trustees are confident that the
restrictions on some of these funds
can be liberated, this will take time. In
the interim, elements of our welfare
expansion programme, particularly
the capital expansion programme
will remain on hold and we will
continue to carefully monitor our
expenditure, whilst ensuring that
our limited unrestricted funds are
directed towards those beneficiaries
in greatest need.
F INANCIAL S
Branch Property Trusts
The Legion is the corporate Trustee
of some 775 branch property trusts,
of which some 470 trusts still hold
properties occupied by Legion
branches and/or leased to social clubs
licensed by the Legion. The remaining
properties have been sold and the
proceeds are held in trust funds.
The trust deeds under which these
properties are held specify the
governance of the properties and in the
event of disposal, how any proceeds
of sale are to be used. Following a
review of these trusts in 2011, we
identified that the purposes of these
trusts, whilst broadly in line with those
of the Legion, in most cases contained
certain restrictions, usually defining
the geographical area in which the
funds could be used.
At 30 September 2012, the balance
on these Branch Property Trusts
was £93 million of property value
and £58 million of disposal proceeds.
During the year, the total value of the
funds reduced by £1.6m as realised
gains on the disposal of properties,
rental income and investment income
were offset by trust expenditure,
including direct welfare expenditure
on beneficiaries living within the trust
area of benefit and eligible expenditure
incurred by the Branch connected
to the Branch Property Trust. The
closing balance at 30 September 2013
comprised £89 million of property value
and £60 million of disposal proceeds.
Work has been continuing with the
Charity Commission to resolve how
we can widen the trust restrictions
to best serve the Legion’s current
beneficiaries. A pilot public
consultation exercise was launched in
November 2013 covering ten Branch
Property Trusts. The consultation
exercise sought to identify beneficiary
need in the trust area of benefit
whilst canvassing the opinion of
beneficiaries, local members and other
stakeholders on potential future uses
for surplus trust funds. As a result of
this exercise, in February 2014, the BPT
Trustee Committee agreed the first
decisions about future use of funds.
This resulted in the first release of
funds from restricted into unrestricted
funds, totalling £300,000 with further
release of funds anticipated once
agreement has been reached with
the Charity Commission about our
proposals. The results of this and
future pilot consultation exercises will
inform the Legion’s future strategy on
the management and application of
Branch Property Trusts.
Reserves
As set out in Note 23, the Legion’s
unrestricted reserves at 30 September
2013 comprise Free Reserves of
£6 million and designated reserves
of £116m. Free reserves comprise the Central
Benevolent Fund, which is the excess
of income received over expenditure
and is immediately available for use at
the discretion of the Trustees. During
the year, the Trustees have considered
the risks incurred in undertaking the
Legion’s charitable work and have
determined that a target Free Reserves
level of between three and six months’
unrestricted expenditure is desirable
and commensurate with the type of
work we undertake.
At 30 September 2013, the Free
Reserves of £6 million equated to a
little over three weeks of unrestricted
expenditure. However, free reserves
are calculated after providing for
some £16.7 million for the Legion’s
long-term grant commitments which
will crystallise over nine years, and
other liabilities which are of a recurring
nature. Taking these factors into
account, together with the anticipated
release of funds from the Branch
Property Trusts, the Trustees are of the
view that, despite the shortfall against
target-free reserves, the Legion
has adequate working capital for its
foreseeable requirements.
During the year, a new designated
fund was created by the Trustees to
hold the Women’s Section funds of
£5 million, reflecting their separate
administration from the rest of the
unrestricted funds of the charity.
The deficit on the Legion’s defined
benefit pension scheme reduced
from £6 million to £1.2 million as a
result of higher corporate bond yields
and strong investment returns. The
scheme was closed to new members
in 2002 and closed to future accrual
from its remaining members on 1 April
2010. The Legion is seeking to manage
the pension liabilities through a
Pensions Increase Exchange exercise,
offering members with non-statutory
increases earned before 1997 the
opportunity to take a higher pension
now, in exchange for giving up future
increases on part of their pension.
41
FINANCIALS
Branch, County
and District funds
The value of the Legion’s investment
portfolio increased by 7% to
£104 million.
During the year, the Legion implemented
a change in the field year end from 30
September to 30 June. These accounts
therefore include the results of the
Legion’s Branches, Counties and
Districts for the nine months from 1
October 2012 to 30 June 2013. There has
been no material impact on the results
for the year or on the Legion Group
assets and liabilities at 30 September
2013 as a result of this change.
The mandate agreed with Cazenove
has the following dual objectives:
Investment policy
and performance
The Trustees hold investments to meet
the needs of the reserves policy stated
above. The investment portfolio is
invested through investment managers.
The charity’s main investment portfolio
(representing 75% of the value of funds
under management at 30 September
2013) is managed by Cazenove
Capital Management Limited. The
Poppyscotland portfolio is managed by
Sarasin & Partners. Branch and County
investments are predominantly held in
the COIF Charity Investment Fund
with CCLA.
The mandates agreed with the Legion’s
investment managers specify the
level of risk that can be undertaken
by defining asset classes and ranges,
benchmarks and acceptable volatility.
The investment managers have total
discretion within these parameters. No
specific ethical investment restriction
is placed on the investment managers’
remit as the Trustees are content that
the corporate socially responsible
investment policies of the current
investment managers meet their needs.
• To minimise the risk of the assets
falling by more than 10%; and
• To maintain the real value of assets
and target an investment return in
excess of annual increases in the
Retail Price Index.
The Cazenove fund achieved its target
of delivering an investment return in
excess of RPI. The balance of assets
within the Cazenove portfolio continued
to shift as the investment managers
moved towards the new benchmarks of
24% for equities, 66% for bonds and 10%
for hedge funds, divesting equity and
hedge fund holdings to invest in bonds
as the opportunity arose. While the
repositioning of the portfolio continues,
subject to market conditions, the level
of cash held remains relatively high, at
24% of the total portfolio, awaiting for
prospects for bonds to improve.
The Sarasin mandate with
Poppyscotland has traditionally been
higher risk than that for Cazenove
given the requirement for sustainable
income from the Poppyscotland
portfolio. During the year, a transition
plan was agreed which will see the
risk profile of the portfolio move closer
to that of Cazenove. This transition
will be implemented subject to market
conditions over the next two years.
Grant making
Grants are made to individuals
in immediate need following an
assessment of the beneficiary’s
financial situation. These grants, in
the form of cash, goods or services,
are small in value but large in volume.
In 2013, we provided 25,926 individual
grants (2012: 24,908) at a cost of
£14.3 million (2012: £18.2 million).
The average cost of these grants has
reduced reflecting the move towards a
new model of personalised advice and
support for beneficiaries.
External grant giving is applied where
a third party has skills or facilities
unavailable within the Legion’s
resources. In 2013, grants were
awarded to 31 organisations totalling
£3.8 million (2012: 57 organisations
totalling £8 million).
Organisational structure,
governance and management
The Legion has a head office in
London where the Director General
and the supporting Board of five
Executive Directors are based. There
is a network of offices in England,
Ireland, Scotland and Wales which
provides facilities for beneficiaries,
local members, volunteers and staff.
Care Home services and Poppy Breaks
are delivered through the Legion’s
premises around the country. The
Poppy Calls service is organised from
a call centre in Huntingdon, and a
Contact Centre has recently opened
in Wales. The National Memorial
Arboretum, the home of the Armed
Forces Memorial, is situated in
Alrewas, Staffordshire. The charity’s
2,445 branches are located throughout
England, Wales and Northern Ireland
and overseas.
F INANCIAL S
The Legion’s governing document is the
Royal Charter which was first granted
in 1925. The Board of Trustees has the
responsibility for its implementation
and review but amendments to the
Charter require the passing of a Special
Resolution at an Annual Conference
before they can be subsequently
ratified by a Special Resolution of the
Board of Trustees and allowed by Her
Majesty the Queen in Council.
Board of Trustees
The Board of Trustees is responsible for
the overall governance, policy and work
of the Legion. All substantive decisions
are made by the Board of Trustees
within the bounds of the Royal Charter
and the Legion’s Vision, Mission and
charitable objects. The Board provides
overall policy direction; management
of the charity is delegated to the
Director General and through him to the
Board of Executive Directors. Current
membership of the Executive Board is
shown on page 71 of this report.
The Board of Trustees meets six times
per year and comprises 16 Trustees
as follows:
• The Chairman and Vice-Chairman
are elected by all branches;
• Seven Trustees are elected by
all branches;
• Six Trustees are appointed by the
Board of Trustees. Invitation is by
open advertisement and selection
takes place through the Governance
Committee; and
• The Chairman of the Women’s
Section is elected by the members of
the Women’s Section at the Women’s
Section National Conference.
Trustees are elected or appointed
for an initial three-year period and
are eligible for a further two terms of
three years. The Chairman and ViceChairman may only serve one term of
three years.
Newly elected Trustees are given
induction training on their duties and
responsibilities as members of the
Board of Trustees. Training needs
are reviewed on an annual basis and
specific training is given to Trustees
as required.
Trustees receive no remuneration
but are reimbursed for the cost of
attending meetings and other official
functions. Some Trustees are invited
to lead and officiate on pilgrimages
and the costs involved in that duty
are included in the declared figure for
Trustee expenses (Note 13).
The names of Trustees who served in
the year are shown on page 70.
Statement of Trustees’
Responsibilities relating to the
Annual Report and Accounts
The Trustees are responsible for
preparing the Trustees’ Report and the
financial statements in accordance
with applicable law and United
Kingdom Accounting Standards
(United Kingdom Generally Accepted
Accounting Practice).
The law applicable to charities
in England and Wales requires
the Trustees to prepare financial
statements for each financial year
which give a true and fair view of
the state of affairs of the charity
and of the incoming resources and
application of resources of the charity
for that period.
In preparing these financial statements,
the Trustees are required to:
• select suitable accounting policies
and then apply them consistently;
• observe the methods and principles
in the Charities SORP;
• make judgements and estimates that
are reasonable and prudent;
• state whether applicable accounting
standards have been followed,
subject to any material departures
disclosed and explained in the
financial statements; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
charity will continue in business.
The Trustees are responsible for
keeping proper accounting records
that disclose with reasonable accuracy
at any time the financial position of the
charity and enable them to ensure that
the financial statements comply with
the Charities Act 2011 and the Charity
(Accounts and 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.
43
FINANCIALS
Committees of the Board
Corporate structure
The Board of Trustees has seven
committees that report to it, all of
which have written terms of reference.
The Legion has an extensive corporate
structure comprising:
Two of the Committees facilitate the
communication with members:
• eight wholly owned subsidiaries,
six of which are included in the
consolidated accounts and two of
which are dormant; and
The Membership Council – has
responsibility for the direction and
implementation of all membership issues;
The Conference Committee –
oversees the organisation of the
Annual Conference.
Two Committees form an integral part
of the governance of the charity:
The Governance Committee – makes
recommendations on Trustee
appointments and monitors
governance best practice;
The Audit Committee – reviews the
significant judgements made in the
accounts prior to Board approval. It
provides for regular communication
between the Trustees and the external
and internal auditors, monitors risk
management procedures and approves
the internal audit programme.
Three Committees oversee the
resources of the charity:
The Finance Committee – reviews,
recommends and monitors compliance
with the reserves and investment
policies. It reviews the annual budget,
oversees and monitors the Investment
Portfolio and addresses any other
financial matters referred to it by the
Board of Trustees;
The Property Committee –
recommends strategy and monitors
performance in relation to functional
property developments, oversees
significant acquisitions or disposals
and ensures these properties are
appropriately maintained;
The Branch Property Trusts (BPT)
Trustee Committee – recommends
strategy and monitors compliance
in relation to the management of
properties, income and assets held by
the Branch Property Trusts.
• the Charity;
• acting as the custodian trustee for
one charity and the distributory
agent for another.
Three of the Legion’s six active wholly
owned subsidiaries are trading entities.
The three charitable subsidiaries are
Royal British Legion Poppy Lottery
Limited, the National Memorial
Arboretum Company Limited and the
Earl Haig Fund (Scotland) (trading
as Poppyscotland). Further details
on the activities and performance of
subsidiaries are given in Note 11 to the
accounts.
The Legion is the custodian Trustee
for the Samsung Royal British
Legion Korean Veterans Association
Scholarship Fund (charity number
1051545) with net assets of £385,000
at 30 September 2013. The assets of
the charity are predominantly held
as investments. The object of the
charity is to advance the education of
the public by way of scholarships to
members of HM forces, their spouses
and descendants, with preference
given to dependants of HM Forces
Korean Veterans. This falls within the
Legion’s object to further the education
of beneficiaries and their spouses,
children and dependants. The assets
are held separately from those of the
Legion in COIF Charities Fixed Interest
Funds and M&G Investment Funds.
In addition there are three active
companies which for historic reasons
share our logo.
• Royal British Legion Industries Limited
(RBLI) which provides employment,
training and support for people,
including those with disabilities, plus
care and support for ex-Service men,
women and families;
• Royal British Legion Poppy
Factory Limited in Richmond (the
Poppy Factory), which creates
paid meaningful employment
opportunities for wounded, injured
and sick ex-Service men and
women; and
• The Royal British Legion Attendants
Company Trust which promotes the
rehabilitation and resettlement of
men and women of Her Majesty’s
Armed Forces who are in need of
assistance in civilian life.
These three companies are separate
charitable trusts with no common
shareholding and no other form of
control by the Legion. The results of
these companies are therefore not
included in the consolidated accounts
of the Legion.
Role of the membership
and volunteers
The Legion is a membership
organisation overseen by a Board of
Trustees through the Membership
Council. Around 300,000 members are
organised through a branch structure
of which there are approximately 2,445
branches operating across England,
Wales, Northern Ireland, and the Isle
of Man, with a further 88 branches
overseas. Branches:
• administer welfare in their area;
• undertake their own fundraising
with central support for the Poppy
Appeal;
• recruit and maintain members; and
• act as representatives in their
local community.
F INANCIAL S
Branches report into 52 County and
District Committees; the Committees
of Branches, Counties and Districts
consist entirely of volunteers. The
Legion provides operational support
to the Membership structure and
oversees the delivery of welfare
services by the provision of paid staff
located in each County and District.
There is a separate Women’s Section
within the Legion which is constituted
under the Royal Charter and had over
830 branches and 36,000 members
at 30 September 2013. 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 exService personnel and their children.
Many members belong to one of the
516 clubs which use the Legion’s
name under licence but which are
independent entities and therefore
their financial results are not
included in these accounts. 279 clubs
occupy premises which are owned
(or leased from third parties) by the
Legion and leased to the club under a
commercial lease.
The Legion is also grateful for the
valuable support of approximately
2,800 Operations volunteers including
caseworkers and visitor volunteers,
around 4,700 Poppy Appeal Organisers
and the countless volunteers who, with
members, support us and assist in the
annual Poppy Appeal collection and the
day-to-day operations of the Legion at
District, County and Branch level.
Risk management
and internal control
The Board of Trustees has
responsibility for the oversight of
risk management within the Legion.
It has approved a Framework for the
management of risk through which
major risks are identified, assessed,
effectively addressed and monitored.
The implementation and operation
of the Framework is delegated to the
Director General. The Framework
comprises:
• Risk policies, that set out the limits to
the amount of governance, financial,
operational and reputational risk that
the Legion is prepared to accept,
tolerate or be exposed to at any
point in time (the Risk Appetite) and
summarise the measures that have
been established to address each
particular type of risk;
• Risk processes, that result in
the informed consideration and
evaluation of the impact and
likelihood of risks that affect
the achievement of the Legion’s
key objectives, the selection of
appropriate responses to mitigate
those risks and the taking of actions
to enhance those responses which
do not reduce risk to within, or as a
consequence of events occurring
that are outside of, the Legion’s Risk
Appetite; and
• Risk assurance, provided to the
Trustees and the members of
the Executive Board through line
management or independently by
Internal Audit, that risks are being
managed within the Risk Appetite
that has been set.
The key risks to the achievement of
the Legion’s objectives, together with
the mitigating controls and further
actions required, are recorded in a Risk
Register. The Register is kept under
review by the Executive Board and
is reported to the Board of Trustees
through the Audit Committee every
six months.
The annual Internal Audit plan is drawn
up by reference to the Risk Register
and audits undertaken focus on the
mitigating controls that address the key
risks. The Audit Committee receives
copies of all Internal Audit reports in
which opinions are expressed on the
effectiveness of the mitigating controls
that have been reviewed.
For and on behalf of the Trustees
John Crisford, Chairman
27 March 2014
Board of Trustees
45
FINANCIALS
Independent Auditors’ Report to the Trustees of the Royal British Legion
We have audited the financial
statements of The Royal British Legion
for the year ended 30 September 2013
which comprise the Consolidated
Statement of Financial Activities, the
Consolidated and Charity Balance
Sheets, the Consolidated Cash Flow
Statement and the related notes. The
financial reporting framework that
has been applied in their preparation
is applicable law and United Kingdom
Accounting Standards (United
Kingdom Generally Accepted
Accounting Practice).
Respective responsibilities of
Trustees and auditors
As explained more fully in the
Statement of Trustees’ Responsibilities
set out on page 43, the trustees are
responsible for the preparation of
financial statements which give a true
and fair view.
Our responsibility is to audit and
express an opinion on the financial
statements in accordance with
applicable law and International
Standards on Auditing (UK and
Ireland). Those standards require us
to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
This report, including the opinions,
has been prepared for and only for
the charity’s trustees as a body in
accordance with section 144 of the
Charities Act 2011 and regulations
made under section 154 of that Act
(Regulation 30 of The Charities
(Accounts and Reports) Regulations
2008) and for no other purpose. We do
not, in giving these opinions, accept
or assume responsibility for any other
purpose or to any other person to
whom this report is shown or into
whose hands it may come save where
expressly agreed by our prior consent
in writing.
Scope of the audit of the
financial statements
An audit involves obtaining evidence
about the amounts and disclosures
in the financial statements sufficient
to give reasonable assurance that
the financial statements are free
from material misstatement, whether
caused by fraud or error. This includes
an assessment of: whether the
accounting policies are appropriate
to the group’s and parent charity’s
circumstances and have been
consistently applied and adequately
disclosed; the reasonableness of
significant accounting estimates
made by the trustees; and the
overall presentation of the financial
statements. In addition, we read
all the financial and non financial
information in the annual report to
identify material inconsistencies
with the audited financial statements
and to identify any information that
is apparently materially incorrect
based on, or materially inconsistent
with, the knowledge acquired by
us in the course of performing the
audit. If we become aware of any
apparent material misstatements
or inconsistencies we consider the
implications for our report.
Pedal to Paris
F INANCIAL S
47
Opinion on financial
statements
In our opinion the financial statements:
• give a true and fair view of the
state of the group’s and the parent
charity’s affairs as at 30 September
2013, and of the group’s incoming
resources and application of
resources and cash flows, for the
year then ended;
• have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting
Practice; and
• have been prepared in accordance
with the requirements of the
Charities Act 2011 and Regulation
15 of The Charities (Accounts and
Reports) Regulations 2008.
Matters on which we are
required to report by exception
We have nothing to report in respect
of the following matters where the
Charities Act 2011 requires us to report
to you if, in our opinion:
• the information given in the Annual
Report is inconsistent in any
material respect with the financial
statements; 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.
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London, 27 March 2014
PricewaterhouseCoopers LLP is eligible to act, and has been
appointed, as auditor under section 144(2) of the Charities Act 2011
FINANCIALS
Consolidated Statement of
Financial Activities for the year
ended 30 September 2013
NOTE
Unrestricted
funds
£’000
Voluntary income
2
68,958
Activities for generating funds
2a
15,467
Investment income
2b
Restricted
funds
£’000
Total
2013
£’000
Total
2012
£’000
6,648
75,606
82,893
1,830
17,297
18,540
Incoming Resources:
Incoming resources from generated funds:
Total incoming resources from generated funds
1,538
3,069
4,607
5,310
85,963
11,547
97,510
106,743
Incoming resources from charitable activities
3
18,670
7,030
25,700
25,319
Other incoming resources
4
1,232
116
1,348
754
105,865
18,693
124,558
132,816
Total incoming resources
Resources expended:
Cost of generating voluntary income
5
12,129
1,777
13,906
13,400
Activities to generate funds
5
9,138
1,833
10,971
15,187
Investment management costs
5
Total cost of generating funds
237
-
237
352
21,504
3,610
25,114
28,939
Total charitable activities
6
81,587
14,382
95,969
110,085
Governance costs
8
1,199
201
1,400
1,515
104,290
18,193
122,483
140,539
1,575
500
2,075
(7,723)
3,924
(3,924)
-
-
5,499
(3,424)
2,075
(7,723)
16a
3,670
1,951
5,621
5,393
-
244
244
920
14a
3,686
4
3,690
(7,162)
Total resources expended
Net incoming/(outgoing) resources before transfers
Transfer between funds
25
Net incoming/(outgoing) resources before other recognised
gains and losses
Other recognised gains and losses:
Gain on investments
Gains on investment properties
Actuarial gain/(loss) on defined benefit pension scheme
12,855
(1,225)
11,630
(8,572)
Fund balances brought forward at 1 October
Net movement in funds
111,270
177,964
289,234
297,806
Fund balances carried forward at 30 September
124,125
176,739
300,864
289,234
The notes on pages 51 to 69 form part of the financial statements. All amounts relate to continuing operations.
There is no material difference between the net incoming/(outgoing) resources before transfers and the net incoming/(outgoing)
resources for the financial year stated above and their historical costs equivalents.
All gains and losses recognised in the year are included in the Statement of Financial Activities.
F INANCIAL S
Consolidated and Charity Balance Sheets
as at 30 September 2013
NOTE
2013
Group
£’000
2012
Group
£’000
2013
Charity
£’000
2012
Charity
£’000
Fixed assets:
Tangible assets
15
76,575
75,007
73,286
72,067
Investments
16
192,593
189,849
182,593
180,969
Programme related investments
17
Total fixed assets
10,375
9,867
10,398
10,890
279,543
274,723
266,277
263,926
Current assets:
1,170
902
-
-
Debtors
18
4,698
9,607
10,393
12,465
Cash at hand and in bank and short-term deposits
19
51,308
50,843
41,353
43,359
57,176
61,352
51,746
55,824
(15,605)
(20,334)
(12,540)
(17,517)
Stock
Total current assets
Liabilities:
Creditors: Amounts falling due within one year
20
Net current assets
Total assets less current liabilities
41,571
41,018
39,206
38,307
321,114
315,741
305,483
302,233
Creditors: Amounts falling due after one year
20
(16,740)
(18,234)
(16,740)
(18,234)
Provisions for liabilities and charges
21
(862)
(891)
(862)
(891)
303,512
296,616
287,881
283,108
(2,648)
(7,382)
(1,186)
(5,992)
300,864
289,234
286,695
277,116
Net assets excluding pension liability
Defined benefit pension liability
14b
Net assets
Funds:
Unrestricted funds:
Free and designated reserves
23
122,243
114,800
122,280
114,838
General fund
23
3,068
2,462
3,068
2,462
125,311
117,262
125,348
117,300
Pension reserve
14b
(1,186)
(5,992)
(1,186)
(5,992)
Total unrestricted funds
23
124,125
111,270
124,162
111,308
178,201
179,354
162,533
165,808
Restricted funds:
Benevolent fund
Pension reserve
14b
(1,462)
(1,390)
-
-
Total restricted funds
24
176,739
177,964
162,533
165,808
300,864
289,234
286,695
277,116
Total funds
The notes on pages 51 to 69 form part of the financial statements.
Approved by the Board of Trustees on 27 March 2014
J Crisford, National Chairman
49
FINANCIALS
Consolidated Cash Flow Statement
for the year ended 30 September 2013
2013
£’000
2012
£’000
£’000
£’000
Net cash inflow/(outflow) from operating activities:
Net incoming/(outgoing) resources
2,075
(7,723)
Investment income
(4,607)
(5,310)
Depreciation – tangible fixed assets
3,528
2,164
-
2,241
(1,044)
577
Impairment of tangible fixed assets
Notional defined benefit pension income
Gain on sale of tangible fixed assets
(79)
-
Gain on sale of investment property
385
475
Increase in stock
(268)
(334)
Increase in programme related investments
(508)
(1,380)
Decrease in debtors
4,909
1,463
(Decrease)/increase in creditors
(6,223)
2,976
(Decrease)/increase in provisions
(29)
525
(1,861)
(4,326)
Returns on investment and servicing of finance:
3,497
4,128
Interest received
723
945
Income from branch investments and deposits
387
Investment income received
237
4,607
5,310
Capital expenditure and investing activities:
Purchase of tangible fixed assets
(5,101)
(1,692)
84
-
Purchase of fixed asset investments
(1,783)
(1,267)
Sale of fixed asset investments
4,519
3,361
Sale of tangible fixed assets
Net cash inflow (a)
(2,281)
402
465
1,386
(a) Increase in cash and short-term deposits
Cash and short-term deposits at 1 October
Increase in cash and short-term deposits
Cash and short-term deposits at 30 September
50,843
49,457
465
1,386
51,308
50,843
F INANCIAL S
Notes to the Accounts for the year ended 30 September 2013
1. Principal accounting policies
Accounting convention
The financial statements are prepared on a
going concern basis under the historical cost
convention as modified by the revaluation of listed
investments and certain properties. They have
been prepared in accordance with the Statement
of Recommended Practice – Accounting and
Reporting by Charities as revised in 2005 (‘SORP
2005’), applicable accounting standards in the
United Kingdom and the Charities Act 2011. The
financial statements are prepared on an accruals
basis except that the results from branches
have been extracted from returns submitted
on a receipts and payments basis. The Branch
results included in these accounts are for the nine
month period from 1 October 2012 to 30 June 2013
due to a change in the Branch year end from 30
September to 30 June. The principal accounting
policies are set out below and have been applied
consistently with the prior year.
Group financial statements
These financial statements comprise the central
General and Benevolent funds vested in the Board
of Trustees in accordance with The Royal British
Legion’s (‘The Legion’) Royal Charter. As agreed
with the Charity Commission and in accordance
with SORP 2005, they include the results, assets
and liabilities of the Legion’s counties, districts,
branches and Women’s Section. The Legion’s
policy is to consolidate results of all branches,
counties and districts based upon receipt of
individual returns. Where returns are not received,
assets are included at the previously reported
value adjusted for known transactions. The
subsidiaries and organisations listed in note 11
have been consolidated on a line by line basis.
Uniform accounting policies have been
applied across the group except where stated.
Intra-group transactions have been eliminated
on consolidation.
Three organisations which carry the Legion’s
name but are not controlled by the Legion have
not been included in these financial statements,
namely, Royal British Legion Industries, The Royal
British Legion Poppy Factory Limited and The
Royal British Legion Attendants Company Trust.
The accounts do not include results of affiliated
social clubs which are not part of the charity, but
are separately registered organisations licensed
to use the Legion’s name.
The Legion has taken advantage of the provisions
of paragraph 397 of SORP 2005 not to provide a
separate Statement of Financial Activities for
the charity. The results of the charity for the year
were: total incoming resources £103,731k (2012:
£119,665k), total expenditure £101,103k (2012:
£126,260k) with an overall surplus after gains and
losses of £9,580k (2012: loss of £7,547k).
Fund accounting
Unrestricted funds include designated funds and
are expendable at the discretion of the Trustees in
furtherance of the objects of the charity.
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 unless otherwise
stated. Restricted funds include permanent
endowment funds which are not material and
are not therefore shown separately on the
face of the balance sheet. The NMA Group and
Poppyscotland Group funds are held within
restricted funds since their objects are narrower
than those of the group.
Incoming resources
Income is recognised in the period in which
the Legion is entitled to receipt of that income
and when the amount can be measured with
reasonable accuracy. In accordance with
this policy:
Legacies are included as follows: Pecuniary
legacies are recognised when the legacy has been
received or if, before receipt, there is sufficient
evidence to provide the necessary certainty that
the legacy will be received. Residual legacies
are recognised on receipt of Estate Accounts.
Legacies subject to a life interest held by another
party are not recognised until they can be
measured and the Legion is certain that they will
be received.
Grants are included when the conditions for
recognition have been complied with.
Gifts in kind are included in the Statement of
Financial Activities at their estimated value
(usually the price that the Legion estimates it
would have to pay in the open market for an
equivalent item).
Donations are accounted for in the period of
receipt. Poppy Appeal donations are accounted for
when banked.
Fundraising lottery income is recognised when the
lottery draw has taken place. Income received in
advance for future lottery draws is deferred until
the lottery draw takes place.
Fees from residential Care Homes are recognised
on an accruals basis.
Affiliation fees are recognised on an accruals basis.
Investment income from the centrally held
investment portfolio is accounted for on an
accruals basis and includes dividends declared
but not yet received. Investment income includes
rental income earned by branches.
The economic value of time given by volunteers is
not included in these financial statements.
51
FINANCIALS
1. Principal accounting policies (continued)
Resources expended
Poppy Appeal
Expenditure is accounted for on an accruals
basis. Irrecoverable VAT is included with the
expense items to which it relates. Resources
expended comprise:
Poppy Appeal expenditure is accounted for in the
financial year in which it occurred. The cost of
poppies is charged to the cost of generating funds
and the cost of Remembrance wreaths is charged
to Remembrance and ceremonial activities.
Cost of generating funds includes expenditure
on poppies and other fundraising items, staff
and related expenditure of the Poppy Appeal,
costs of the central fundraising department,
commercial (trading) activities and investment
management fees.
Charitable activities include expenditure directly
related to the delivery of the services (including
staff costs) provided by the charity to eligible
beneficiaries and comprises the cost of residential
care, welfare Break Centres, community welfare
services and Remembrance and comradeship.
It also includes the cost of supporting and
maintaining the Legion’s extensive membership
and the costs of campaigning on behalf of
beneficiaries. The cost of evaluating, supporting
and managing charitable programmes is also
included and further analysed in the notes to
the accounts.
Certain costs of campaigns are allocated between
Cost of generating funds and Charitable activities
on the basis of the percentages of space within
the literature relating to either fundraising or
raising awareness.
Governance costs represent the costs of
governance arrangements which relate to the
general running of the charity as opposed to
the direct management functions inherent in
generating funds, service delivery and
programme or project work.
Stock, poppies and wreaths
In support of one of the Legion’s prime charitable
objectives, poppies and wreaths are produced by
The Royal British Legion, The Royal British Legion
Poppy Factory Limited (‘Poppy Factory’) and the
Lady Haig Poppy Factory (the subsidiary of the Earl
Haig Fund). The Poppy Factory and the Lady Haig
Poppy Factory also provide sheltered employment
for disabled ex-Service people.
Stock relates to Poppy Shop products as well
as poppies and wreaths produced at the Lady
Haig Poppy Factory which are manufactured
for resale. Poppy Shop and the Lady Haig Poppy
Factory stock is valued at the lower of cost and
net realisable value and includes direct costs of
labour and materials plus allocation of general
overheads. Poppies and wreaths produced by
the Legion, and those manufactured by the
Poppy Factory but transferred to the Legion,
are expensed immediately.
Staff pension schemes
Future commitments to fund Personnel Recovery
Centres are included in the balance sheet at their
net present value, using a discount rate equivalent
to the yield on Treasury Gilts over the same period.
Pensions are accounted for in accordance with
FRS17 Retirement Benefits, with a valuation
undertaken by an independent actuary. The Royal
British Legion Staff Pension Fund, a defined benefit
scheme, is closed to future accrual. The current
service costs of the Earl Haig Defined Benefit
Scheme are charged to employee costs over the
anticipated period of employment. Net pension
finance income or costs are included immediately
in other incoming resources or employee costs
as appropriate. Actuarial gains and losses
are recognised immediately on the face of the
Statement of Financial Activities. The Legion’s
share of the scheme deficits is included as a
liability in the balance sheet. Details of the pension
schemes are included in note 14 to the accounts.
The amounts charged to the Statement of Financial
Activities for defined contribution schemes
represent the contributions payable in the period.
Allocation of costs
Investments and bank deposits
Where possible, the Legion’s operating costs,
which include staff costs, are allocated directly to
the various categories of charitable expenditure,
cost of generating funds, or governance costs.
Where costs are not directly attributable to
any category, they have been apportioned on
an appropriate basis to reflect, in each case, an
estimate of the efforts and resources devoted to
each category of activity – see note 10. Activities
which are predominantly outsourced bear no
allocation of support costs.
Fixed asset investments are stated at market
value. Gains and losses arising from either the
change in market value or on sale are included
in the Statement of Financial Activities. Income
from listed investments is accrued when due
for payment. Interest on deposits is accrued on
a daily basis. Properties not used for charitable
purposes are classified as investment properties
and are included in investments at market value.
Investment properties are revalued every five
years by an independent surveyor and in the
intervening period values are adjusted using
Support costs include the central functions such
as general management, financial administration,
information technology, human resources and the
provision of office facilities at the head office.
Grants payable are recognised in the Statement
of Financial Activities when awarded and the
recipient has a valid expectation of receipt, thus
creating a constructive or legal obligation.
composite indices to reflect the broad nature
of the Legion’s investment property portfolio.
Investments in subsidiaries are included at cost.
Programme related investments are held at the
amount invested less any impairment. These are
reviewed on an annual basis and any impairment
is immediately recognised in the Statement of
Financial Activities.
Tangible fixed assets
Purchases of individual items of tangible fixed
assets costing over £50,000 are capitalised.
Functional properties (freehold and leasehold)
used by the charity are included at cost, where
known, or valuation at dates of acquisition.
Branch properties acquired or gifted before
1 October 1995 where the original cost cannot
be established are included at a nominal value of
£1 each. Depreciation on functional properties is
provided on the cost of buildings on a straight line
basis over 50 years or the term of the lease if less.
Leasehold improvements are depreciated over the
term of the lease. The head office building, Haig
House, is depreciated over its expected useful life
of 33 years.
Plant, machinery and equipment where capitalised
are included at cost. Depreciation is provided over
5 years from the month of first use.
Tangible fixed assets which are under construction
are classified as Assets under construction and
are transferred into the appropriate category
on completion.
Useful economic lives and residual lives of fixed
assets are reviewed at the end of the accounting
period to consider whether there has been an
impairment. Impairments are charged to the
Statement of Financial Activities.
Leases
Rentals payable under operating leases are
charged to the Statement of Financial Activities on
a straight line basis over the period of the lease.
Taxation
The activities of the Legion and its charitable
subsidiaries are exempt from corporation tax under
Schedule 6 Finance Act 2010 and Corporation Tax
Act 2010 to the extent that they are applied to the
organisation’s charitable objects. The trading
subsidiaries do not generally pay UK corporation
tax because their policy is to pay taxable profits as
Gift Aid to the Legion.
Foreign exchange
The Legion has no significant exposure to foreign
exchange. Foreign branches and districts make
returns once a year and the results are included
in these accounts converted to sterling at the
exchange rate at June 2013.
F INANCIAL S
Unrestricted
2013
£’000
Restricted
2013
£’000
Total
2013
£’000
Total
2012
£’000
Donations
20,813
2,668
23,481
27,768
Legacies
11,179
1,417
12,596
12,322
The Poppy Appeal
36,966
2,563
39,529
42,803
Total
68,958
6,648
75,606
82,893
2
53
Analysis of incoming resources from generated funds
Voluntary income
The declared total of the Poppy Appeal launched in October 2012 in England, Wales and Northern Ireland was £36,966k (prior year: £40,089k). This includes cash collected of £35,330k
(prior year: £37,690k), legacies of £236k (prior year £447k) and other donations of £1,400k (prior year: £1,952k). The Poppy Appeal in Scotland raised £2,563k (prior year: £2,714k).
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 £1,670k paid as a grant (prior year: £1,865k).
At 30 September 2013 the Legion had been advised of its interest in residuary and pecuniary legacies with estimated values of £537k (2012: £1,028k) and they were included in the
accounts. Not included in the accounts are interests in 16 life interest legacies (2012: 33) with a value of £378k (2012: £965k) where the conditions for acceptance have not been met.
The Legion has also been notified of residuary legacies estimated at a potential value of £6,852k. 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.
Unrestricted
2013
£’000
Restricted
2013
£’000
Total
2013
£’000
Total
2012
£’000
2a Activities for generating funds
Fundraising events income
Fundraising lotteries
Income from commercial activities
Total
1,844
119
1,963
2,880
10,274
169
10,443
11,009
3,349
1,542
4,891
4,651
15,467
1,830
17,297
18,540
Unrestricted
2013
£’000
Restricted
2013
£’000
Total
2013
£’000
Total
2012
£’000
1,490
2b Investment income
Dividends and interest on listed investments
929
621
1,550
Investment income on funds held by branches
248
139
387
237
Rentals from investment properties
332
1,615
1,947
2,638
Bank deposit interest
Total
29
694
723
945
1,538
3,069
4,607
5,310
Rentals from investment properties with a market value of £88,837k at 30 September 2013 are in most cases received by branches in relation to the rental of properties by Legion
clubs. The clubs are independent financial 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. The reduction in rental income is due to the change in branch year end as outlined in note 1.
Unrestricted
2013
£’000
3
Restricted
2013
£’000
Total
2013
£’000
Total
2012
£’000
Incoming resources from charitable activities
Fees from residential Care Homes
13,091
183
13,274
12,874
Grants for welfare services and Remembrance:
Ex-Service charities and other organisations (almonisation)
Contributions towards other services
Ministry of Defence
Total grants for welfare services and Remembrance
Affiliation fees
Income from charitable services
Total
-
4,809
4,809
5,654
26
798
824
1,423
-
922
922
55
26
6,529
6,555
7,132
5,451
12
5,463
4,888
102
306
408
425
18,670
7,030
25,700
25,319
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.
FINANCIALS
Total
2013
£’000
Total
2012
£’000
Licence fees and royalties
208
220
Advertising in the Legion magazine
744
432
Gains on sale of functional property
79
-
4
Other incoming resources
Finance income on pension
180
-
Other income
137
102
1,348
754
Total other incoming resources
Direct
costs
£’000
Support
costs
£’000
Total
2013
£’000
Total
2012
£’000
12,497
1,409
13,906
13,400
Fundraising events costs
1,550
82
1,632
3,183
Fundraising lotteries costs
5,540
83
5,623
7,847
Commercial activities (trading)
3,716
-
3,716
4,157
10,806
165
10,971
15,187
237
-
237
352
23,540
1,574
25,114
28,939
5
Cost of generating funds
Cost of generating voluntary income
Total cost of generating voluntary income
Investment management
Total cost of generating funds
Certain 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 generating
funds in note 5 and Charitable activities in note 6 on the basis of the percentages of space within the literature relating to either fundraising or raising awareness. The total
expenditure of this nature is £8,947k (2012: £15,040k) of which £5,331k (2012: £8,670k) remains within Cost of generating funds representing the fundraising element of the literature
and £3,616k (2012: £6,370k) has been reallocated into Charitable activities representing the raising awareness element.
F INANCIAL S
NOTE
Direct
costs
£’000
Support
costs
£’000
Total
2013
£’000
Total
2012
£’000
2,058
-
2,058
5,507
Residential Care Homes
14,487
2,268
16,755
17,776
Welfare Break Centres
4,205
519
4,724
4,214
Total care services
18,692
2,787
21,479
21,990
14,190
-
14,190
18,220
3,765
-
3,765
7,742
21,077
3,902
24,979
24,716
6
55
Analysis of charitable activities
Personnel Recovery Centres
Welfare grants to 25,926 individuals (2012: 24,908)
Grants to other organisations
Information, advice and support
Welfare cost in branches, counties and districts
Total community welfare services
7
6,184
-
6,184
5,625
45,216
3,902
49,118
56,303
2,401
627
3,028
3,218
Recruitment, development and training
140
289
429
418
Support to branches with clubs
417
141
558
481
The Legion magazine
1,106
12
1,118
1,119
Membership costs in branches, counties and districts
2,640
426
3,066
3,067
Total membership services
6,704
1,495
8,199
8,303
744
167
911
641
Direct cost of communication and campaigning
4,712
346
5,058
4,505
Allocated cost of communication and campaigning
3,616
-
3,616
6,370
Total communication and campaigning
8,328
346
8,674
10,875
Central membership support
Comradeship
Festival of Remembrance
Ceremonial and commemorative events
Remembrance tours
National Memorial Arboretum operating costs
555
13
568
479
1,754
170
1,924
1,965
108
14
122
301
1,368
503
1,871
1,480
2,241
-
-
-
Assets under construction expensed
1,045
-
1,045
-
Total Remembrance and ceremonial
4,830
700
5,530
6,466
86,572
9,397
95,969
110,085
National Memorial Arboretum Visitors Centre Impairment
Total charitable activities
As stated in note 5, Charitable activities contain an allocation of £3,616k (2012: £6,370k) relating to costs associated with the percentages of space within the literature relating to
raising awareness.
Some of the costs related to the previous development plans for the new visitor centre at the National Memorial Arboretum, which had been capitalised as assets under construction,
have been expensed during the year, resulting in a one-off charge of £1,044,605.
FINANCIALS
Total
2013
£’000
Total
2012
£’000
The Officers' Association (see note 2)
1,670
1,927
Imperial College of Science, Technology and Medicine
1,552
1,705
Stoll (formerly Sir Oswald Stoll Foundation)
148
149
The Royal British Legion Poppy Factory
100
-
Royal Commonwealth Ex-Service League
-
654
Goodwin Development Trust
-
500
SkillForce
-
450
MediCinema
-
410
Thrive
-
205
Age Concern Liverpool & Sefton
-
180
Alabaré Christian Care and Support
-
180
Community Housing & Therapy
-
105
(520)
-
271
603
247
183
-
150
7
Grants awarded to other organisations
Grants issued by the Charity:
Grants to other charities withdrawn in the year
Grants to 13 other charities and voluntary organisations (2012: 28)
under £100k
Grants made by Poppyscotland:
Citizens Advice Scotland
Scottish Veterans Garden City
Grants to 13 other charities and voluntary organisations (2012: 16)
under £100k
297
341
3,765
7,742
Total
2013
£’000
Total
2012
£’000
Support to Trustees and volunteers
360
448
Statutory reporting and strategy
269
290
Internal and external audit and tax services
771
777
1,400
1,515
Total grants to other organisations
Grants awarded may relate to commitments for multiple future years. For more information on grant commitments see note 20.
8
Total
Governance costs
F INANCIAL S
9
Total
2013
£’000
Total
2012
£’000
194
182
Net incoming/(outgoing) resources for the year is stated after charging:
Auditors remuneration
Other fees paid to auditors
Branch, county and district audit fees
Depreciation
NMA Visitor Centre Impairment
6
6
115
142
3,528
2,164
-
2,241
329
368
1,861
999
Operating lease rentals:
Vehicles and equipment
Land and buildings
Head Office
Central
£’000
Facilities
Management
£’000
Human
Resources
£’000
Finance
and IT
£’000
Women’s Section
and other entities
£’000
Total
2013
£’000
Total
2012
£’000
69
1,574
1,569
10 Support costs
Cost of generating funds
123
104
173
1,105
-
439
728
1,620
-
2,787
3,254
Community welfare services
738
227
376
2,405
156
3,902
3,974
Membership services
344
83
138
880
50
1,495
1,431
Communication and campaigning
82
20
33
211
-
346
358
Comradeship
40
10
16
101
-
167
56
Remembrance and ceremonial
20
5
8
50
617
700
618
1,224
784
1,299
5,267
823
9,397
9,691
Care services
Charitable activities
Governance costs
Total
24
6
9
60
29
128
137
1,371
894
1,481
6,432
921
11,099
11,397
Support costs are allocated on the basis of headcount.
57
FINANCIALS
11 Activities of consolidated subsidiaries and organisations
The Legion has eight wholly owned subsidiaries, six of which are consolidated into these accounts as described below, and two which are dormant.
The results of the subsidiary entities are shown in the table below. All subsidiaries are registered in the UK and have 30 September year ends.
Remembrance
Travel
£’000
National
Memorial
Arboretum
Group
£’000
Royal British
Legion Trading
Royal British
Legion
Developments
Royal British
Legion Poppy
Lottery
Poppyscotland
Group
£’000
£’000
£’000
£’000
Turnover/incoming resources
146
5,236
3,205
2,180
6,936
4,787
Expenditure
(146)
(4,632)
(3,205)
(2,178)
(6,936)
(4,278)
Other gains/(losses)
-
-
-
-
-
936
Net incoming resources
-
604
-
2
-
1,445
Assets
122
5,646
2,034
956
4,847
11,959
Liabilities
(72)
(1,272)
(2,034)
(956)
(4,847)
(2,128)
Net assets
50
4,374
-
-
-
9,831
The principal activities of the subsidiaries are as follows:
Remembrance Travel Limited – a travel company delivering pilgrimages and associated travel activity. Its expenditure includes profits paid to the Legion of £26k (2012: £22k).
The National Memorial Arboretum Company Limited – a charitable company operating an arboretum with memorial plots dedicated to those who suffered or lost their lives in the
service of their country. The charitable company has one subsidiary NMA (Enterprises) Ltd, a trading company providing services to visitors to the National Memorial Arboretum.
The results above are those of the consolidated NMA Group.
Royal British Legion Trading Limited – a trading company which markets a range of goods and services to members and supporters of the Legion. Its expenditure includes profits paid
to the Legion of £1,372k (2012: £1,053k).
Royal British Legion Developments Limited – a trading company which develops or improves properties, principally those owned by the Legion. Its expenditure includes profits paid to
the Legion of £49k (2012: £nil).
Royal British Legion Poppy Lottery Limited – a charitable company which undertakes the marketing and provision of a weekly lottery to members and supporters of the Legion. Its
expenditure includes grants paid to the Legion of £3,804k (2012: £750k). Other lottery activities are carried out by the parent charity.
The Earl Haig Fund Scotland (Poppyscotland) – a charitable company that supports those in need who have served in the Armed Forces and their dependants, in Scotland. The
charitable company has one subsidiary, The Lady Haig Poppy Factory Limited, whose principal activity is the employment of disabled ex-Service personnel to manufacture poppies
and wreaths and to provide framing and printing services. The results above are those of the consolidated Poppyscotland Group.
Travel and Learn Limited – a dormant subsidiary.
Poppy Travel Limited – a dormant subsidiary.
12 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 around 830 branches and 36,000 members.
The Women’s Section contributed £1,018k (2012: £1,172k) 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 £1,120k (2012: £1,187k). The section currently holds net assets of £5,364k (2012: £5,330k).
Whilst the funds of the Women’s Section are unrestricted in nature, they are administered separately from other Legion funds. During the year, Women’s Section funds were
transferred to a new designated reserve to reflect this separation. £5,330k was transferred from the Central Benevolent Fund into the Women’s Section designated reserve,
representing the funds held by the Women’s Section at the beginning of the financial year.
F INANCIAL S
Total
2013
No.
Total
2012
No.
122
118
Care services
514
493
Community welfare services
271
253
Membership services
109
89
23
23
Remembrance and ceremonial
6
3
Comradeship
4
4
Total charitable activities
927
865
Support and governance
81
85
1,130
1,068
Poppyscotland
77
67
National Memorial Arboretum
38
38
4
4
1,249
1,177
Total
2013
£’000
Total
2012
£’000
59
13 Information regarding employees and Trustees
Average number of employees (full time equivalent) during the year
Generating funds
Charitable activities:
Communication and campaigning
Charity’s total full-time equivalent staff
Subsidiaries average number of employees during the year:
Royal British Legion Trading
Total group full-time equivalent staff
At 30 September 2013 the Legion had 1,518 (2012: 1,490) full- and part-time staff on the payroll.
The Royal British Legion incurred costs of £2.8m (2012: £2.3m) on agency staff including their recruitment
fees which are not included in the staff costs below.
Staff costs comprise:
29,841
28,411
National Insurance contributions
2,596
2,638
Pension costs
2,163
2,154
34,600
33,203
Total
2013
No.
Total
2012
No.
£60,001 - £70,000
10
10
£70,001 - £80,000
5
1
£80,001 - £90,000
1
2
£90,001 - £100,000
3
2
£100,001 - £110,000
1
1
£110,001 - £120,000
2
2
£120,001 - £130,000
-
-
£130,001 - £140,000
-
1
£140,001 - £150,000
1
-
Wages and salaries
Total
The number of staff paid over £60,000 during the year (salary plus taxable benefits excluding pension contributions) was:
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.
No Trustee or person related or connected by business to them has received any remuneration from the Legion nor have they entered into any transaction, contract or other
arrangement with the Legion during the year. During the year the total expenses reimbursed to 15 (2012: 19) Board of Trustee members amounted to £96k (2012: £136k). This
principally represents reimbursed travelling expenses in attending meetings and official engagements, and includes the costs of Trustees officiating at Remembrance tours. The
Legion purchased insurance at a cost of £5k (2012: £7k) 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.
FINANCIALS
14 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 employees (including the National Memorial Arboretum but 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 £2,143k, of which
£177k 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 last full actuarial valuation of the
DB Fund was completed at 1 April 2011. This showed a deficit on the fund of £2.4m of which the Legion’s share was £1.9m. The employers agreed to make payments of £921k p.a.
for three years up to 31 March 2012 with additional payments of £300k p.a. in respect of the administration expenses of the fund. The Legion agreed to pay 77% of the overall deficit
contributions of £709k p.a. plus an additional £231k p.a. in respect of the administration expenses of the fund. During the accounting year beginning 1 October 2013, the Legion
expects to pay £940k to the DB Fund.
EH Fund: This is a defined benefit pension scheme available only to employees of Poppyscotland. The last actuarial valuation of the EH Fund was carried out as at 30 September
2013. A new Schedule of Contributions has been signed as a result of the 2013 triennial valuation and as a result the employer has agreed to pay annual contributions of £27k per year
increasing by 3% annually with the expectation that the funding shortfall will be eliminated within five years.
The Legion accounts for defined benefit schemes in accordance with FRS17 Retirement 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:
EH Fund
2013
£’000
DB Fund
2013
£’000
Total
2013
£’000
EH Fund
2012
£’000
DB Fund
2012
£’000
Total
2012
£’000
14a Amounts recognised in the Statement of Financial Activities
Analysis of amounts charged to net incoming/(outgoing) resources
Current service cost
Past service cost
Previously unrecognised surplus deducted from
service costs
(107)
-
(107)
(97)
-
(97)
-
-
-
-
(762)
(762)
-
-
-
-
762
762
(213)
(2,512)
(2,725)
(226)
(2,851)
(3,077)
Expected return on fund assets
165
2,692
2,857
151
2,430
2,581
Total decrease in net incoming/(outgoing) resources
(155)
180
25
(172)
(421)
(593)
4
3,686
3,690
(668)
(7,631)
(8,299)
Interest on liabilities
Actuarial gains/(losses)
Limit on recognition of assets
-
-
-
-
1,137
1,137
Total gains/(losses) recognised
4
3,686
3,690
(668)
(6,494)
(7,162)
(151)
3,866
3,715
(840)
(6,915)
(7,755)
Total increase/(decrease) in net funds
EH Fund
2013
£’000
DB Fund
2013
£’000
Total
2013
£’000
EH fund
2012
£’000
DB fund
2012
£’000
Total
2012
£’000
14b Reconciliation to the Balance Sheet
Description
Market value of assets
4,119
60,463
64,582
3,944
58,096
62,040
Present value of liabilities
(5,581)
(61,649)
(67,230)
(5,334)
(64,088)
(69,422)
Pension liability recognised in the Balance Sheet
(1,462)
(1,186)
(2,648)
(1,390)
(5,992)
(7,382)
DB Fund
2012
£’000
Total
2012
£’000
EH Fund
2013
£’000
DB Fund
2013
£’000
Total
2013
£’000
EH Fund
2012
£’000
14c Analysis of changes in the value of the fund liabilities over the year
Value of liabilities at start of year/period
5,334
64,088
69,422
4,178
54,375
Service cost
107
-
107
97
-
97
Interest cost
213
2,512
2,725
226
2,851
3,077
19
-
19
21
-
21
-
-
-
-
(762)
(762)
(2,546)
Member contributions
Past service cost
Benefits paid
Actuarial (gains)/losses
Value of liabilities at end of year
58,553
(148)
(2,610)
(2,758)
(108)
(2,438)
56
(2,341)
(2,285)
920
10,062
10,982
5,581
61,649
67,230
5,334
64,088
69,422
F INANCIAL S
EH Fund
2013
£’000
DB Fund
2013
£’000
Total
2013
£’000
EH Fund
2012
£’000
DB Fund
2012
£’000
Total
2012
£’000
3,944
58,096
62,040
3,551
54,750
58,301
165
2,692
2,857
151
2,430
2,581
Actuarial gains
60
1,345
1,405
252
2,431
2,683
Employer contributions
79
940
1,019
77
923
1,000
Member contributions
19
-
19
21
-
21
(148)
(2,610)
(2,758)
(108)
(2,438)
(2,546)
4,119
60,463
64,582
3,944
58,096
62,040
DB Fund
2013
£’000
DB Fund
2012
£’000
DB Fund
2011
£’000
14d Analysis of changes in the value of the fund assets over the year
Market value of assets at start of year/period
Expected return on fund assets
Benefits paid
Market value of assets at end of year
14e History of assets, liabilities, experience gains and losses
DB Fund
2010
£’000
DB Fund
2009
£’000
DB Fund
Market value of fund assets
60,463
58,096
54,750
53,104
48,937
Value of fund liabilities
(61,649)
(64,088)
(54,375)
(56,981)
(51,912)
(1,186)
(5,992)
375
(3,877)
(2,975)
-
(2)
253
(184)
(185)
(Deficit)/surplus in the fund
(Losses)/gains arising on fund liabilities:
Due to experience
% of liabilities
Due to changes of basis*
% of liabilities
0%
2,341
4%
0%
(10,060)
(16)%
0%
3,500
6%
0%
(4,420)
(8)%
0%
(6,324)
(12)%
Experience gains:
Arising on fund assets
% of assets
1,345
2,431
381
2%
4%
1%
EH Fund
2013
£’000
EH Fund
2012
£’000
EH Fund
2011
£’000
1,593
3%
EH Fund
Market value of fund assets
4,119
3,944
3,551
Value of fund liabilities
(5,581)
(5,334)
(4,178)
Deficit in the fund
(1,462)
(1,390)
(627)
(427)
43
(49)
(Losses)/gains arising on fund liabilities:
Due to experience
% of liabilities
Due to changes of basis*
% of liabilities
(8)%
371
7%
1%
(963)
(18)%
(1)%
180
4%
Experience gains/(losses):
Arising on fund assets
% of assets
60
1%
252
6%
(401)
(11)%
* Changes of basis relate to changes in the actuarial assumptions used as detailed below (note 14g).
The cumulative amount of actuarial gains and losses recognised (since 2002) on the DB Fund is a cumulative loss of £9,146k and (since 2011) on the EH Fund
is a cumulative loss of £934k.
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.
1,615
3%
61
FINANCIALS
DB Fund
2013
Market value
£’000
DB Fund
2012
% of Total
fund assets
Market value
£’000
DB Fund
2011
% of Total
fund assets
Market value
£’000
DB Fund
2010
% of Total
fund assets
Market value
£’000
% of Total
fund assets
14f Asset class
Equities
16,487
27%
13,860
24%
11,675
21%
30,193
57%
Bonds
20,020
33%
20,870
36%
19,124
35%
16,140
30%
Gilts
9,087
15%
9,277
16%
9,952
18%
2,985
6%
Cash
412
1%
356
1%
1,130
2%
3,786
7%
Other assets
14,457
24%
13,733
23%
12,869
24%
-
-
Total
60,463
58,096
54,750
53,104
4,037
4,861
3,455
4,429
The actual return on assets over
the year was
EH Fund
2013
EH Fund
2012
EH Fund
2011
Market Value
£’000
% of Total
fund assets
Market Value
£’000
% of Total
fund assets
Market Value
£’000
3,393
82%
1,878
48%
1,736
49%
-
0%
321
8%
539
15%
% of Total
fund assets
Asset class
Equities
Bonds
Gilts
-
0%
725
18%
502
14%
Property
-
0%
551
14%
527
15%
Cash
196
5%
198
5%
247
7%
LDI funds
530
13%
-
0%
-
0%
-
0%
271
7%
-
0%
Other assets
Total
The actual return on assets over
the period was
4,119
3,944
3,551
225
403
(340)
2013
% p.a.
2012
% p.a.
14g Actuarial assumptions
Financial assumptions (both funds)
Discount rate
4.50
4.00
Retail price inflation
3.10
2.50
Consumer price inflation
2.10
1.50
Salary increases
3.10
2.50
Capped at 5% or RPI if less
3.00
2.40
Capped at 5% or CPI if less
3.10
3.10
Capped at 3% or CPI if less
1.90
1.40
Capped at 2.5% or CPI if less
1.80
1.35
Rate of increase for deferred pensioners
2.10
1.50
% p.a.
% p.a.
DB Fund
5.10
4.70
EH Fund
5.70
3.70
Rate of increases of pensions in payment:
Expected return on assets:
For the DB Fund, the overall assumption for the expected return on assets of 5.10% as at 30 September 2013 has been derived by calculating the weighted average of the expected
rate of return for each asset class. A further deduction of 0.57% to the expected return was made to allow for administrative expenses.
For the EH Fund, the overall assumption for the expected return on assets of 5.7% as at 30 September 2013 has been derived by calculating the weighted average of the expected rate
of return for each asset class. A further deduction of 1.34% to the expected return was made to allow for administrative expenses.
The following mortality assumptions have been used for both funds:
2013
2012
Males
Females
Males
Females
Current pensioner now aged 60 in 2013
28.9 years
31.9 years
28.9 years
32.0 years
Future pensioner now aged 40 in 2013
30.9 years
34.0 years
31.0 years
34.0 years
Life expectancies at age 60
F INANCIAL S
Freehold
homes
Other
freehold
£’000
63
Plant
machinery and
equipment
Assets
under
construction
Total
Group
£’000
Leasehold
property and
leasehold
improvements
£’000
£’000
£’000
£’000
15 Tangible fixed assets
15a Group Tangible fixed assets including functional property
At cost or valuation:
54,083
27,732
5,763
3,075
1,103
91,756
Additions
66
755
541
283
3,456
5,101
Disposals
-
(169)
(10)
-
-
(179)
54,149
28,318
6,294
3,358
4,559
96,678
(9,340)
(2,272)
(3,463)
(1,674)
-
(16,749)
(962)
(576)
(472)
(473)
(1,045)
(3,528)
-
167
7
-
-
174
At 30 September 2013
(10,302)
(2,681)
(3,928)
(2,147)
(1,045)
(20,103)
Net book value at 30 September 2013
43,847
25,637
2,366
1,211
3,514
76,575
Net book value at 30 September 2012
44,743
25,460
2,300
1,401
1,103
75,007
At 1 October 2012
At 30 September 2013
Accumulated depreciation:
At 1 October 2012
Charge for the year
Disposals
Freehold homes include the freehold assets of both the residential Care Homes and the welfare Break Centres. Freehold and leasehold properties are stated at cost or valuation at the date
of acquisition so far as historical records permit. Where an accurate cost is not available the Trustees have valued each functional property at a nominal cost of £1.
Heritage assets of £539k are included within the plant, machinery and equipment category. These include trees included at a cost of £289k which are an inherent part of the National
Memorial Arboretum. Heritage assets are not depreciated but are annually assessed for any impairment.
Freehold
homes
Other
freehold
£’000
£’000
Leasehold
property and
leasehold
improvements
£’000
Plant
machinery
equipment
Assets
under
construction
Total
Charity
£’000
£’000
£’000
15b Charity Tangible fixed assets including functional property
At cost or valuation:
54,083
27,619
880
2,337
345
85,264
Additions
65
133
431
283
2,621
3,533
Disposals
-
(2)
-
-
-
(2)
54,148
27,750
1,311
2,620
2,966
88,795
(9,340)
(2,266)
(325)
(1,266)
-
(13,197)
(962)
(565)
(335)
(450)
-
(2,312)
-
-
-
-
-
-
At 30 September 2013
(10,302)
(2,831)
(660)
(1,716)
-
(15,509)
Net book value at 30 September 2013
43,846
24,919
651
904
2,966
73,286
Net book value at 30 September 2012
44,743
25,353
555
1,071
345
72,067
At 1 October 2012
At 30 September 2013
Accumulated depreciation:
At 1 October 2012
Charge for the year
Disposals
FINANCIALS
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
103,756
96,937
93,756
88,057
88,837
92,912
88,837
92,912
192,593
189,849
182,593
180,969
16Investments
Investment portfolio (note 16a)
Investment properties (note 16b)
Total investments
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
96,937
91,452
88,057
83,355
1,785
1,267
1,597
1,054
(587)
(1,175)
(587)
(975)
5,621
5,393
4,689
4,623
103,756
96,937
93,756
88,057
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
13,577
16a Investment portfolio
Market value at 1 October 2012
Additions at cost
Disposals at value realised
Investment gain on revaluation
Market value at 30 September 2013
The asset distribution of the investment portfolio at 30 September 2013 is presented below.
Equities
22,034
19,665
15,120
Overseas
6,879
6,957
6,879
6,957
Total equities
28,913
26,622
21,999
20,534
Bonds
28,714
27,480
27,231
25,936
Cash
25,320
18,916
25,320
18,916
717
6,620
717
6,620
Absolute Return Trust for Charities (Portfolio Funds)
5,518
5,539
5,518
5,539
COIF Charity Investment Fund
5,373
4,894
5,373
4,894
62
48
62
48
10,953
10,481
10,953
10,481
Overseas – common investment funds and gilt edged stock
5,805
4,958
5,805
4,958
Others
3,334
1,860
1,731
612
103,756
96,937
93,756
88,057
UK
Hedge funds
Portfolio funds
Charinco Common Fund
Total portfolio funds
Total
65
F INANCIAL S
Group
2013
%
Group
2012
%
21.2
20.3
Equities:
UK
Overseas
6.6
7.2
Total equities
27.8
27.5
Bonds
27.7
28.4
Cash
24.4
19.6
0.7
6.8
Absolute Return Trust for Charities (Portfolio Funds)
5.3
5.7
COIF Charity Investment Fund
5.2
5.0
Charinco Common Fund
0.1
0.0
10.6
10.7
Overseas – common investment funds and gilt edged stock
5.6
5.1
Others
3.2
1.9
100.0
100.0
Hedge funds
Portfolio funds
Total portfolio funds
Total
£77,659k of the investments are managed by Cazenove Capital Management Limited. The strategy is to maintain the real value of assets and target an investment return in excess of
RPI. No one investment was held which represented more than 5% of the total portfolio. Listed investments were valued at middle market value at the year end.
Charity and Group
2013
£’000
Charity and Group
2012
£’000
16b Investment properties
92,912
Market value at 1 October 2012
Additions
Disposals at market value
95,638
182
-
(4,946)
(3,171)
Investment property gain on revaluation
689
445
Market value at 30 September 2013
88,837
92,912
Within investment properties are some 480 properties which are owned by the Legion but are let to independent commercial operations, primarily affiliated social clubs. As at 1 October
2010 a full valuation by an external surveyor was completed on the basis of open market value for existing use and these properties are included in the accounts at market value.
The estimated values of the property portfolio at September 2011, September 2012 and September 2013 were derived using a composite index reflecting house price, residential
development land and commercial property indices to reflect the broad nature of the Legion’s investment property portfolio. A revaluation gain of £1,934k has been included in these
accounts to reflect an estimated increase in the property portfolio of 2.2% since the last full valuation in 2010.
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
3,000
3,000
3,000
3,000
Loans for property repairs (PRL)
6,371
6,331
6,371
6,331
Be the Boss scheme (BTB)
1,002
533
1,002
533
2
3
2
3
-
-
23
1,023
10,375
9,867
10,398
10,890
17
Programme related investments
17a Loans to external
organisations
Royal British Legion Industries (RBLI)
Other schemes:
Small Business loans (SBL)
Group loans
Total programme related investments
During the year, the Legion forgave a loan of £1,000k made to the National Memorial Arboretum in 2009 to enhance the existing Visitor Centre.
FINANCIALS
PRL
loans
£’000
RBLI
loan
£’000
BTB
loans
£’000
Small business
loans
£’000
Total
Group
£’000
Group
loans
£’000
Total
Charity
£’000
17b Programme related investments movement during the year
Opening balance at 1 October 2012
New loans issued
Loan forgiven
Repayments and security deposits
Closing balance at 30 September 2013
6,331
3,000
533
3
9,867
1,023
40
-
685
-
725
-
10,890
725
-
-
-
-
-
(1,000)
(1,000)
-
-
(216)
(1)
(217)
-
(217)
6,371
3,000
1,002
2
10,375
23
10,398
The Legion has provided a number of loans in furtherance of its charitable objectives as follows:
Royal British Legion Industries loan - a secured loan repayable by 31 December 2015 issued for the sheltered accommodation project for ex-Service personnel. An interest rate of
0.5% below the base rate is applied to the principle.
Property Repairs Loans - interest free secured loans to beneficiaries living in their own home 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 £2k and the maximum allowed is £25k.
Be the Boss loans - a scheme funded 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.
Small Business Loans - this scheme was run by the Legion to encourage employment of ex-Service personnel. These are unsecured interest-free loans. The scheme has now ceased
and has been replaced by the Be the Boss scheme.
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
1,150
830
1,054
721
-
-
5,630
3,422
Other debtors
1,758
3,860
1,683
3,853
Prepayments and accrued income
1,790
4,917
2,026
4,469
Total
4,698
9,607
10,393
12,465
Charity
2012
£’000
18Debtors
Trade debtors
Amounts due from consolidated entities
Total
Group
2013
Total
Group
2012
Total
Charity
2013
Total
Charity
2012
£’000
£’000
£’000
£’000
Short-term deposits
25,911
34,225
24,839
32,906
Cash at hand and in bank
25,397
16,618
16,514
10,453
Total
51,308
50,843
41,353
43,359
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
2,487
2,597
1,536
1,138
-
-
375
158
Grant commitments
4,184
8,722
3,979
8,557
Accruals and deferred income
7,945
8,064
5,734
6,771
989
951
916
893
15,605
20,334
12,540
17,517
9,976
9,595
9,976
9,595
6,764
8,639
6,764
8,639
16,740
18,234
16,740
18,234
19 Cash at hand and in bank and short-term deposits
20Creditors
Creditors falling due within one year:
Trade creditors
Amount due to consolidated entities
Other creditors
Total creditors falling due within one year
Creditors falling due after one year:
External grant commitments:
Due within two to five years
Due over five years
67
F INANCIAL S
Group
2013
£’000
Group
2012
£’000
Charity
2013
£’000
Charity
2012
£’000
366
21 Provisions for liabilities and charges
Dilapidations provision
Opening balance at 1 October:
891
366
891
Amounts utilised in year
(52)
-
(52)
-
Provisions raised in year
23
525
23
525
862
891
862
891
2013
Charity and
Group Total
£’000
2012
Charity and
Group Total
£’000
Closing balance at 30 September
2013
Land and
buildings
£’000
2013
Vehicles and
equipment
£’000
22 Operating lease commitments
At the year end, the Legion was committed to payments during the next year in respect of operating leases which expire:
within one year
273
17
290
476
within two to five years
283
479
762
412
over five years
311
-
311
164
867
496
1,363
1,052
Total
Transfers within
unrestricted funds
£’000
Incoming
resources
£’000
Resources
expended
£’000
Gains/
(losses)
£’000
Transfers
£’000
6,217
(5,330)
79,072
(80,731)
2,815
3,924
5,967
6,217
(5,330)
79,072
(80,731)
2,815
3,924
5,967
27,923
Balance
1 Oct 2012
£’000
Balance
30 Sept 2013
£’000
23 Unrestricted funds
Free reserves
Central benevolent fund
Total Free reserves
Designated funds
Branch, county and district funds
Women’s section
Programme related investments reserve
Designated functional fixed asset reserve
Total designated funds
General fund
Charity unrestricted funds excluding
pension reserves
Pension reserve
Total charity unrestricted funds
Intergroup funds
Total group unrestricted funds
27,281
-
3,579
(3,559)
622
-
-
5,330
1,018
(1,217)
233
-
5,364
9,867
-
726
(218)
-
-
10,375
71,473
-
3,250
(2,072)
-
-
72,651
108,621
5,330
8,573
(7,066)
855
-
116,313
2,462
-
5,573
(4,967)
-
-
3,068
117,300
-
93,218
(92,764)
3,670
3,924
125,348
(5,992)
-
180
940
3,686
-
(1,186)
111,308
-
93,398
(91,824)
7,356
3,924
124,162
(38)
-
12,467
(12,466)
-
-
(37)
111,270
-
105,865
(104,290)
7,356
3,924
124,125
The Legion’s free reserves comprise the Central benevolent fund, incorporating the core activities of the Legion such as operating residential Care Homes and welfare Break
Centres, giving grants, providing resettlement training, advising on pension claims service and acting as the custodian of Remembrance. The proceeds from the annual Poppy Appeal
collection are allocated to this fund. In addition, work continues on the release of funds from Branch Property Trusts as covered in note 25.
The Legion’s designated funds include:
Branch, County and District funds, which have been built up by the Legion’s branch network over many years. The income thereon is used to support the activities of the Legion’s
branches and counties.
Women’s Section. Whilst the funds of the Women’s Section are unrestricted in nature, they are administered separately from other Legion funds. During the year, Women’s Section
funds were transferred to a new designated reserve to better reflect this separation. £5,330k was transferred from Central benevolent fund into the Women’s Section designated
reserve, representing the funds held by the Women’s Section at the beginning of the financial year.
The Programme related investments reserve, which represents the value of the programme related investments used by the charity in the delivery of its charitable objectives.
The Functional fixed asset reserve, which represents mainly the value of the Legion’s functional portfolio (such as residential Care Homes and welfare break homes), used by the
charity in the delivery of its charitable objectives.
The General fund, which is used to support the administration of the membership at the Legion.
The Pension reserve is a specific allocation of unrestricted funds in relation to the Royal British Legion Staff Pension Fund.
FINANCIALS
Balance
1 Oct 2012
£’000
Incoming
resources
£’000
Resources
expended
£’000
Gains/
(losses)
£’000
Transfers
£’000
Balance
30 Sept 2013
£’000
24 Restricted funds
Benevolent fund
Investment property reserve
92,912
-
Income and sales proceeds from property held in corporate Trusteeship
57,781
2,532
(1,923)
-
(4,075)
-
88,837
5,055
(3,233)
60,212
Grants for specific purposes
2,524
823
(2,078)
-
(4)
1,265
Donor restricted legacies and donations
8,990
6,132
(4,566)
88
(2,350)
8,294
Charity Commission schemes
1,132
50
-
82
-
1,264
Homes’ residents’ amenity funds
1,122
640
(685)
-
-
1,077
The Arthur Atock Memorial Trust
471
127
-
53
-
651
British Korean Veterans (1981) Relief Fund
107
14
(7)
11
-
125
Permanent endowment
769
15
(20)
44
-
808
165,808
10,333
(9,279)
1,258
(5,587)
162,533
Poppyscotland Group
9,776
4,739
(4,206)
937
48
11,294
Poppyscotland pension provision
(1,390)
-
(76)
4
-
(1,462)
National Memorial Arboretum Group
3,770
3,621
(4,632)
-
1,615
4,374
177,964
18,693
(18,193)
2,199
(3,924)
176,739
Total charity restricted funds
Total group restricted funds
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 £88,837k representing a portfolio of some 536 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, these properties are 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. Similar conditions apply to any income as well as sale proceeds relating to these properties, the value of which is currently
estimated at £60,212k.
F INANCIAL S
69
25 Transfers between restricted and unrestricted funds
During the year the Legion carried out further work in respect of the income relating to properties held under trust deeds and any sales proceeds. As a result of this work £3,234k was
released from restricted to unrestricted funds predominantly relating to eligible expenditure on the trusts.
£1,663k was transferred from unrestricted to restricted funds which represents funding provided from the charity to Poppyscotland and the National Memorial Arboretum.
Other transfers of £2,354k from restricted and unrestricted funds represent the application of restricted income to fund unrestricted expenditure where the nature of the
expenditure meets the conditions imposed by the donor. This transfer related to a number of transactions.
Unrestricted
2013
£’000
Restricted
2013
£’000
Total
2013
£’000
Total
2012
£’000
26 Analysis of group net assets between funds
Fund balances are represented by:
Tangible assets
73,284
3,291
76,575
75,007
Investments
39,308
163,660
202,968
199,716
Current assets
44,328
12,848
57,176
61,352
Current and non-current liabilities
(31,609)
(1,598)
(33,207)
(39,459)
Defined benefit pension liability
Total funds
(1,186)
(1,462)
(2,648)
(7,382)
124,125
176,739
300,864
289,234
27 Contingent assets
There are 68 branches where the ownership of properties is unclear. These properties, in the main donated to the Legion and occupied by Legion branches, operate under local trust
deeds. Depending on the drafting of these deeds, the Legion may or may not have an interest in the freehold of the property.
28Commitments
Capital expenditure on properties used as residential Care Homes of £1,185k (2012: £2,642k) had been authorised and contracted for at 30 September 2013 and related to a new
dementia unit at Dunkirk Memorial House.
29 Related party transactions
Advantage has been taken of exemptions under FRS8 Related Party Disclosures not to disclose balances with or transactions between the Legion and its wholly-owned subsidiaries.
The Royal British Legion Poppy Factory Limited (Poppy Factory) is a charitable organisation which shares the Legion’s name but is not controlled by the group which produces
poppies and wreaths for the Legion at cost. During the year the Legion paid £2,185k (2012: 2,236k) to the Poppy Factory. The related party relationships are detailed below. All
members of the Legion’s Board of Trustees resigned as Trustees of the Poppy Factory in April 2013.
The Royal British Legion is a member organisation of the Royal Commonwealth Ex-Services League (RCEL). Three of the Legion’s staff and Trustees are on the RCEL Standing
Committee on Welfare Programmes as detailed below. RCEL shares office space and certain services with the Legion which had an estimated value of £38k (2012: £39k). In addition,
in September 2012, the Legion approved a grant of £600k to RCEL to be paid over a period of five years. The first instalment of £120k was paid in September 2013.
As explained in note 2, 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.
Two Legion Trustees were also Trustees of the Officers’ Association during the year as indicated below. The amount paid to the Officers’ Association for the Poppy Appeal was
£1,670k (2012: £1,865k). All members of the Legion’s Board of Trustees resigned as Trustees of the Officers’ Association in October 2012.
Related Party
Position at the Legion
Position at Related Party Organisation
The Royal British Legion Poppy Factory
Eddie Hefferman
John Crisford
Trustee (to May 2013)
Chairman (from May 2013)
Trustee to April 2013
Trustee to April 2013
Royal Commonwealth Ex-Services League
Major General David Jolliffe
John Farmer
Sue Freeth
Trustee
Chairman (to May 2013)
Director of Operations
Hon Medical Adviser
Member of Standing Committee on Welfare Programmes
Member of Standing Committee on Welfare Programmes
The Officers’ Association
John Farmer
Dr Chris Simpkins
Chairman (to May 2013)
Director General
Trustee to October 2012
Trustee to October 2012
Organisation
None of the Trustees or other related parties has undertaken any material transactions with the Legion during the year
other than as disclosed above. FINANCIALS
Board of Trustees
Co-opted Members
Chairman
John Crisford (from May 2013)
The Trustees would like to
recognise the support given by
the following co-opted members,
who bring their special expertise
to the boards and committees on
which they sit:
Flt Lt Ian C Melia MA FCA
RAuxAF
John Farmer (to May 2013)
Vice-Chairman
Terry Whittles
Trustees
Wendy Bromwich JP
Paul Orchard-Lisle FRICS
Adrian Burn FCA
David Bennett Rees FIA
Denis Compton (to May 2013)
John Tedder
Denise Edgar
Paul Smiddy
Eddie Hefferman MBE
(to May 2013)
National President
Vice Admiral Peter Wilkinson
CB CVO
Dr Diana Henderson
Maj Gen David Jolliffe CB FRCP
Anthony Macaulay
Bill Parkin (from May 2013)
Keith Prichard MBFIM
National Vice-Presidents
Peter Howells CBE OstJ, TD DL
His Grace the Duke of Wellington
KG, LVO, OBE, MC, DL FKC
Alan Ronaldson (to May 2013)
His Grace the Duke of
Westminster KG, CB, OBE,
TD, DL
Jenny Rowe (to May 2013)
Geoffrey Medcalf MBE
Colonel Neil Salisbury
(from May 2013)
Geoff Barwell OBE JP
Catherine Quinn (from May 2013)
David Spruce (from May
to December 2013)
National Chaplain
The Right Reverend
Nigel McCulloch KCVO
Key Committees of the Board of
Trustees and Current Membership
Audit Committee
Adrian Burn (Chairman)
BPT Trustee Committee
Keith Prichard
Terry Whittles
David Jolliffe (from May 2013)
Chris Simpkins
Finance Committee
John Graham
John Crisford (Chairman)
(from May 2012 to May 2013)
Stephen Cooper
David Spruce (Chairman) (from
May to December 2013)
Terry Whittles (Chairman)
(from December 2013)
Anthony Macaulay
Jenny Rowe (to May 2013)
Bill Parkin (from May 2013)
Governance Committee
John Farmer (Chairman)
(to May 2013)
Keith Prichard (Chairman)
Membership Council
Martyn Tighe (Chairman)
Denise Edgar
Alan Cathery
Timothy McManus
John Clark
Rod Bedford
Roger Garratt
Martin Forde
Colin Kemp
John Crisford (Chairman)
(from May 2013)
Stuart Allen
Catherine Quinn (from May 2013)
John Morrison
Terry Whittles
Bill Burn
Jenny Rowe (to May 2013)
John Sayles (to May 2013)
Martyn Tighe (from May 2013)
Alan Higbee (from May 2013)
Property Committee
Martyn Tighe
Anthony Macaulay (Chairman)
Lieutenant Colonel David
Whimpenny (from May 2013)
John Crisford (to May 2013)
Keith Prichard
Denise Edgar (from May 2013)
Conference Committee
Eddie Hefferman (Chairman)
(to May 2013)
David Whimpenny (Chairman)
(from May 2013)
Tony Goodwin
Sue Kelly
Ray Mann
Terry Whittles (to May 2013)
Alan Ronaldson (to May 2013)
Neil Salisbury (from May 2013)
Bill Parkin (from May 2013)
Philip Wilson
F INANCIAL S
Executive Board
Director General
Dr Chris Simpkins DMA,
HonDUniv, DL
Deputy Director General and
Director of Finance
John Graham FCA DChA
Commercial Director
Stephen Cooper DIP ARCH RIBA
MRICS ACIRib FRSA
Director Fundraising
Charles Byrne
Director Operations
Sue Freeth
Director Human Resources and
Organisational Development
Sharron Lewis-James
Chief Financial Officer
Helen Downie ACA
Consultants
and Advisors
Bankers
Lloyds TSB Commercial
Public & Community Sector
3rd Floor
25 Gresham Street
London EC2V 7HN
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside,
London, SE1 2RT
Investment Managers
Cazenove Capital Management
Limited
12 Moorgate
London EC2R 6DA
71
Women’s Section
President
HRH The Princess Royal
National Life Vice-Presidents
Central Committee
Dame Mary Bridges DBE
Chairman
Maureen Cole OBE
Wendy Bromwich JP
Vice-Chairman
Marilyn Humphry
Honorary Treasurer
Lynne Joyce
May Arnold OBE
Doris Ingham OBE
Elsie Nash OBE
Patricia Valler OBE
National Vice-Presidents
Central Committee Members
Lady Bromley-Davenport
(to 1 June 2013)
Joanne Andrew-Steer MBE
Viscountess Brookeborough
Patricia Berry
The Rt Hon the Countess
Bathurst
Patricia Chrimes
Margaret Cook
Hazel Crosby
Margaret Earley
Sheila Fear (to 25 April 2013)
Jacqueline Graham
Margaret Harris
Fiona Havergal
Baroness Grey-Thompson DBE
Her Grace The Duchess of
Grafton GCVO
Auriol, Marchioness
of Linlithgow
The Rt Hon The Countess of
Scarbrough LVO
Rachel Lucas
The Lady Luke
(to 1 November 2012)
Ann Morris RGN
Betty Underhill OBE
Joan Murray
The Lady Grey of Codnor
(from 1 August 2013)
Averil Rosser
Janet Salter
Kay Scase
Patricia Scott
Marie Skells (from 25 April 2013)
Barbara Todd (to 25 April 2013)
Julia Walker (from 1 July 2013)
Sara Jones CBE DL JP OStJ
Barbara Frankland
Valerie Kerr-Wilson
Mrs J Martin DL
(from 1 February 2013)
National Secretary
Anthony Beattie
SHOULDER TO SHOULDER
WITH ALL WHO SERVE
THE ROYAL BRITISH LEGION
HAIG HOUSE
199 BOROUGH HIGH STREET
LONDON SE1 1AA
T: 020 3207 2100
WWW.BRITISHLEGION.ORG.UK
REGISTERED CHARITY NUMBER: 219279

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