The trustees present their annual report and financial statements for the year ended 31 March 2024.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)".
The Association was set up in 1977 to continue the operation of the Chester City Baths (opened in 1901). Our mission is the promotion and provision of affordable facilities for the benefit of the residents of Chester and District for all aspects of health, fitness and competitive swimming and related activities, with particular emphasis on teaching children and adults to swim for their safety, well-being and enjoyment, and to provide a centre of excellence for the training of swimming coaches, teachers, officials, lifeguards and other water related activities.
Policies
The Association endeavors to minimise pool hire costs by maximizing utilisation of water time with a combination of Association paid staff supported by voluntary Trustees.
Principal Activity
The principal activity of the company throughout the year was that of operating and maintaining the Victorian swimming baths based in Chester.
The trustees have paid due regard to guidance issued on public benefit by the Charity Commission in deciding what activities the charity should undertake.
The leadership team are incredibly proud to have re-opened the swimming baths post-Covid, this is particularly pleasing since many similar organisations have remained closed. However after re-opening one of our two pools in April 2021, the Trustees have had to implement significant increases in charges to maintain the viability of the Baths.
Following the closure of the building during the COVID period, our second pool needed significant repair work. The funding needed for this work was successfully raised from a wide range of sources and the repairs completed. The financial position of the Baths remains finely balanced and our Trustees and staff are working hard to ensure that we have sufficient business for second pool to cover the incremental staffing and utility costs before we re-open it.
The one pool that is open continues to operate at a very high level of occupancy.
Last year we were able to add £64,087 to our reserves. This year our reserves reduced by £32,565 to £103,599 primarily because of our commitment to hold prices to pool users through to December 2023. Whilst the new year is a challenging one as a result of further increases in operating costs we have reviewed our charges upwards and are focusing additional efforts on our fundraising which was particularly successful in 2023.
We continue to work closely with Cheshire West and Chester Council who are our landlord and our local authority on plans for developing the City Baths building and its uses in order to ensure long term sustainability.
Reserves policy
Our reserves policy was established in January 2003 and states that financial reserves are required to fund the following:
The unexpected replacement of major items of ageing plant & equipment that arise from time to time, and which cannot be accommodated within the annual extraordinary maintenance budget and for which grant funding is not available.
Unexpected major repairs not included in the annual extraordinary maintenance budget.
Major items of capital equipment that cannot reasonably be accommodated within the annual operating budget and for which grant funding is not available.
The target minimum level of financial reserves is currently set at £250,000. Actual free reserves as at 31 March 2024 were £86,643 and the Charity continues to work to rebuild these balances to ensure future sustainability. At the same time the Charity is working on a range of improvement projects within the building to enhance the facilities available to users.
The trustees have assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
For the methods, policies and procedures for the recruitment, appointment, induction and training of new Trustees we closely follow the guidance offered in the Charity Commission booklet CC3, Responsibilities of Charity Trustees, February 2008 (updated May 2018). Up to now appointments have been made from the broad community of swimmers and parents of swimmers that use the City Baths, chosen for the particular skills and time commitment that we need and that they have to offer. Prospective appointees are given a copy of the above booklet so that they can understand their responsibilities before accepting. Our induction pack includes the Memorandum & Articles of Association and past minutes of board meetings and management accounts.
Training is through discussions with other board members.
The trustees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Chester City Baths Limited (the charity) for the year ended 31 March 2024.
As the trustees of the charity (and also its directors for the purposes of company law) you are responsible for the preparation of the financial statements in accordance with the requirements of the Companies Act 2006 (the 2006 Act).
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act). In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
Since the charity’s gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of ICAEW, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Investments
The statement of financial activities includes all gains and losses recognised in the year.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Chester City Baths Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is Union Street, Chester, CH1 1QP.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (as amended for accounting periods commencing from 1 January 2016). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments at fair value. The principal accounting policies adopted are set out below.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other grants and donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Direct expenses includes costs associated with pool hire, vending and bar purchases recognised on an accruals basis.
Admin costs include expenses not directly attributable to the operational activities of the charity recognised on an accruals basis.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The company operates a defined contribution workplace pension scheme for the benefit of all eligible employees. Payments into the scheme are charged as an expense as they fall due.
In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Grants
Unrestricted funds
Pool hire
Bar takings
Administration
Insurances
Legal and accountancy
Telephone
Repairs and renewals
Light and heat
Water supply and sewerage
Independent examination fees
Governance costs includes payments to the accountants of £2,300 (2023 - £2,200) for independent examination fees.
None of the trustees (or any persons connected with them) received any remuneration or expenses from the charity during the year.
The average monthly number of employees during the year was:
Bar expenditure
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
There were no disclosable related party transactions during the year (2023 - none).