The Council members present their report and financial statements for the year ended 31 December 2024.
The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the charity's Articles of Association, 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 Church of England Soldiers', Sailors' & Airmen's Clubs (short title: CESSAC) originated in Aldershot in 1857 to provide an alcohol-free, non-proselytising home-from-home for soldiers. Its founding precept (circa 1881) included its intention: "to provide for the Nation's soldiers, places where they can resort and find rest and healthy recreation and where they can associate on terms of friendly intercourse". The success of the original facility resulted in many others being opened over the years (and many closing again to match changing demand). Apart from the fact that the charity’s reach has extended to cover sailors and then airmen, that precept remains as true today. CESSAC's principal aim is still, therefore, the operation of homely, welcoming amenity centres at military bases to improve the morale and wellbeing of service personnel and/or their families. At 31 December 2024, there were 9 such centres, 3 in one group (all in Cyprus) and another group with 5 in UK and one in the Falklands.
Other aims were added in the 1970s; to relieve persons who have served in H.M. Forces and the dependants of such persons as are in need of assistance including the provision and management of housing. This enabled CESSAC to contribute to the establishment of CESSA Housing Association Limited (CESSA HA), a separate charitable organisation that owns and operates sheltered housing for elderly ex-Service people, their spouses, widows, widowers and immediate relatives. CESSAC has since provided grants to CESSA HA and other eligible charities in furtherance of this aim.
CESSAC still shares its Head Office and some staff with CESSA HA, although both organisations have their own Boards and operate independently. The latter is accountable to the Regulator of Social Housing and the Financial Conduct Authority. The relationship with CESSA HA resulted in CESSAC entering into an agreement with Greenwich Hospital, a Crown Royal Navy Charity, to manage its sheltered housing (GHSH) for former members of the Naval Service in the 1980s. Although reviewed regularly, this symbiotic relationship continues to this day, providing advantages for all parties.
CESSAC is a founder member (1939) of the Council for Voluntary Welfare Work (CVWW), which enables it to operate in Armed Forces establishments at home and abroad under a Memorandum of Understanding (MoU) with the Ministry of Defence (MoD. The MoU between the MoD and CVWW recognises that the amenity centres provided by member organisations require a certain amount of primary trading in order to be sustainable. The income received is therefore one indicator of whether the centres are being used by the beneficiaries and hence meeting their welfare needs. However, there are many factors outside the charity’s control, particularly changes in the number of Service personnel present in any location, and just because a centre operates at a loss does not mean it is not needed. For this reason, the current and anticipated use of each centre is regularly reviewed against the perceived benefit being provided in an attempt to best match the running costs across all of them with the likely income overall. Thus, a loss-making centre perceived to be meeting a particular welfare need can be supported financially by surpluses generated elsewhere. This is detailed in a separate Impact Statement focussed on the charity’s stakeholders, visible on its website. The current aim is that CESSAC’s proportion of Head Office costs are funded by income on investments and from other sources. Major improvements/repairs are paid for from the long-term growth in the capital value of the investments.
The Council members have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake. The beneficiaries and the respective public benefits are detailed separately at the end of this report under each of the 4 registered objects. The Council members review the strategy every 2 years to provide clear priorities for the detailed business plan, and have continued to confirm that the objects (see page 5) do not need to be revised.
Due to the nature of CESSAC and its objects, its activities have already been described above; mainly the operation of its amenity centres (for objects i & iii) and ongoing support to CESSA HA and GHSH (object ii), as well as other eligible charities. Significant grants are only made when funds permit (but smaller grants for objects ii, iii & iv are made annually – see Note 11). While CESSAC welcomes volunteers, particularly in places like the Falklands, the nature of its work generally results in reliance on paid staff.
General. Following the Royal Family’s reconsideration of patronages CESSAC was honoured to be informed, on 4 May 2024, that His Majesty The King would be CESSAC’s Patron in succession to Her Majesty Queen Elizabeth II. In June 2024 we completed our plans to establish a new CESSAC Centre which opened at the Defence Intelligence Training Group (DITG) Chicksands. Other work, has included the recruitment of a new CEO who assumed post in September 2024. The Welfare Amenity Committee (WAC) undertook its annual review of centre performance, confirming the continued relevance and charitable output of all of them. However, in common with many organisations in the “hospitality” sector it has also been necessary to carefully monitor the financial performance of all Centres. As a result, the CEO and DOps have been focussing on new ways to deliver our services across Defence, whilst exploring innovations that may provide alternative income streams that bolster our Centres, reduce the annual deficit, and ensure the long term sustainability of the charity. CEO continues to represent CESSAC at meetings of CVWW and Cobseo, the Confederation of Service Charities. These networks provide invaluable information and are presenting emerging opportunities to exploit increased partnering across the Services 3rd Sector.
Centres in the Falklands and UK. These are straightforward coffee shops or cafes providing a homely and welcoming environment for Service personnel and their families, often adjacent to recreational facilities and/or the chaplaincy. Accordingly, each has a relatively modest turnover (all under £100K) with the Falklands and Blandford experiencing the highest outturn and Woodbridge and Aldershot the lowest.
Centres in Cyprus. Unlike our centres in the UK, some of CESSAC’s locations in Cyprus have historically included shops selling a permitted variety UK goods difficult to otherwise obtain. The rise of internet shopping and changing habits has now reduced the use of these shops to such an extent, that all locations have now drawn down their stocks and shops have been closed. CEO will visit Cyprus in early 2025 to review the delivery of our operations on the island and to discuss ideas to improve turnover, performance and delivery of charitable objectives in Dhekelia.
Engagement across the Stations and Garrisons. The centres remain well supported by the Command chain and valued by the thousands of UK Service personnel and their families.
Ex-Service personnel & their families. CESSAC has continued to enable CESSA HA to make savings through sharing a Head Office and staff and managing 91 sheltered flats at three sites on behalf of Greenwich Hospital.
Fundraising. CESSAC does not undertake fundraising from the public itself and its Collection Boxes were introduced into locations to underline the point that it is a charity. Unsurprisingly, they are generating a reducing amount with the rise of electronic payment.
Investment performance. CESSAC's investment portfolio has performed well from a historical perspective, generating valuable income to help support the charities operations. In 2024 investment income was £110,005 with gains of £134,977. However, at the time of submitting this report, early 2025 has seen a marked volatility of global markets. CESSAC takes a total return approach to its investments, as recommended for many charities, and typically draws around £45k from the Charles Stanley portfolio and a further £72k from Blackrock each year. The Board will discuss any requirement to withdraw extra funds to meet the increased cost of charitable operations with our professional discretionary fund manager, and carefully consider its impact in the context of our investment policy.
The results for the year are set out on page 12. The charity’s balance sheet remains just over £3 million providing a reassuring reserve to ensure sustainability and support our charitable aims. However, the year saw the net movement of funds fall by £107,969, broadly on a par with 2023. The major factors in this reduction were a net operating deficit of £237,053, relieved by gains on investments of over £134K, and a small exchange rate loss of £5,893. Increased staff and operating costs during a period of higher inflation, together with stock disposal /write off as we move away from providing shop facilities all help explain the c £57K increase in the operating deficit from 2023. Income and growth on our investments is used to meet our charitable aims and subsidise operations. The underlying gap between operational income and expenditure, especially during this extended period of reduced income and growth on our investments, is clearly unwelcome and work has begun intended to improve the position during 2025/26, and year on year, as our new CEO and the DOps generate new initiatives as well as concentrate on operational efficiencies and alternate income streams.
Head Office has continued to play its part in keeping costs down and supporting all the operations and governance. This is illustrated at Note 8, it can be seen that the costs of support and governance has increased by £12,971 this year; due in part to the recruitment, arrival and handover period of the new CEO and other inflationary increases for the cost of externally contracted services, including Audit, Utilities, Supplies, IT Support etc. Overall net costs are considered fully justified in support of CESSAC's charitable objectives. The Council, through the WAC, keeps a close check on the operating position.
Reserves policy
The reserves policy is reviewed annually and in 2024 operational reserves were maintained at 9 months’ of turnover, £1,000,000 (see Note 23), to cover the number of centres and dispersion of cash between different banks/currencies. Other reserves are maintained to fund repairs/improvements of the Clubs and/or make donations in furtherance of the charity’s aims (see Note 23). However, since the trading income alone has been insufficient to fund centre operations for some years, the charity expects to continue to use income from investments to enable the charitable output to continue.
Investment policy. The Council members ensure that the capital held by CESSAC is invested prudently and conservatively over the long term for the ultimate benefit of meeting its objectives. Their policy is to to maintain sustainability by increasing both capital and income from the investments over the long term. The reserves are invested across a number of financial institutions; the greater part is in AFCGIF units, currently managed by BlackRock, with most of the rest in a Charles Stanley discretionary managed portfolio at medium low risk. The remainder is in a Virgin Money Charity Deposit Account.
Principal Risks and Uncertainties
The Council has taken a risk-based approach to internal controls, including directing members to undertake internal assurance. The most significant risks to the charity relate to investments, since little capital is tied up in any individual centre. The Council follows a policy of spreading these at medium to low risk as described in the Investment Policy, reviews their performance at every opportunity and has an Investment Panel to oversee the investment environment between meetings. The Council members have assessed the major risks to which the charity is exposed and are satisfied that systems are in place to mitigate exposure to them.
Over the charity’s 133 years since incorporation, it has usually been alterations in the Armed Forces that have both presented new opportunities and/or caused existing centres to close. It is for this reason that most current centres have not received significant capital and are developed with the assistance of the relevant establishment and funding sought from other sources. Therefore, the success or failure of individual centres is unlikely to present a significant risk. The new UK Government is expected to deliver its own Strategic Defence & Security Review in 2025 and this will be carefully scrutinised in due course, to provide an assurance that the charities objects, operational locations and purpose retain a continued relevance in the future shape and operation of Defence.
Withdrawal from any centre is considered if sustained losses there cannot be justified by the assessed charitable benefit in that location, but otherwise service is maintained as long as the overall performance of the charity is satisfactory. Loss of the Greenwich Hospital agreement would deprive the charity of some income and the economies inherent in shared facilities. This is mitigated by demonstrating the efficiency and added value provided to the management of the sheltered housing, which has resulted in a five-year agreement until 31 January 2028. The risk policy is regularly reviewed and the register is maintained in a detailed matrix. A clear system is operated to ensure that every risk is reviewed either by Council or WAC at least annually.
2025 & Plans for the future
The Council undertook its two-yearly review of the charity’s strategy in Autumn 2024. It remained broadly unchanged and, recognising the underlying gap between operational income and expenditure and continuing low investment yields, strongly supports efforts to improve the operating position and explore alternative opportunities to deliver the charities objects in new ways. We will explore opportunities for closer collaboration with other charities that form the CVWW, and work closely with Station/Garrison and Base Commanders to understand need, to assess the perceived value of existing Centres and to exploit opportunities to improve the lives of our beneficiaries and the wider-military community. The ACF, ACEST and other sources of grant funding, have continued to support CESSAC where opportunities are presented: their support remains both important and greatly appreciated.
Going Concern
Rolling forecasts are carefully maintained for both cash-flow and income & expenditure. These forecasts continue to show a deficit across its operations, however, this is expected to plateau in 2025 and improve from 2026 onwards. The Council firmly believes that the charity remains a going concern; supported and assured by our Audit Team and demonstrated by our financial reserves.
CESSAC is a charity (No. 226684) and a company limited by guarantee and not having share capital, registered in England (No. 00034118). It does not trade for profit, is exempt from Corporation Tax and is VAT-registered. (No. 675 8276 83). Its Memorandum and Articles of Association govern the charitable company, including the appointment and reappointment of its members of Council.
CESSAC is governed by the Council, which met 4 times in 2024 with 94% attendance. The WAC meets three times a year and reports its activities at the next Council meeting and seeks approval for any strategic decisions. The Council and WAC are assisted in their responsibilities by the Chief Executive Officer (CEO) who manages the operations and personnel.
None of the Council members has any beneficial interest in the company. All of the Council members are members of the company and guarantee to contribute £1 in the event of a winding up. Trustees indemnity insurance up to £500K is provided as part of a portfolio of policies.
The Council members, who are also the directors for the purpose of company law, and who served during the year were:
Advertisements are made to attract potential members/trustees, whose applications are then considered by the Council. Those selected as members are eligible to sit on committees and vote at general meetings. Potential trustees are invited to an informal meeting with the Chairman. This is followed by a brief from the CEO and an invitation to attend the next Council meeting as an observer. A formal invitation to join the Council will follow if both parties agree, followed by induction conducted by the CEO. New trustees are co-opted until election is considered at the next AGM. Training is offered regularly and the Council reviews Charity Commission e-mails, Governance & Leadership/Charity Finance magazines and other material to keep up to date.
The Charity Governance Code. Performance against the Charity Code of Governance 2017 and the Cobseo aide-memoire have been assessed. The organisation met all criteria, save for one relating to Equality and Diversity, which history and recruitment opportunities render difficult for us to achieve, notwithstanding a stated Policy in this area, applied across the organisation. Subject to the usual ebb and flow of representation in a relatively small organisation, gender balance overall has been satisfactory. However, an underlying requirement for military experience, and the need to maintain a range of skills and qualifications against low turnover, together with some geographical restrictions, have limited the available field from which minority involvement in governance matters can be drawn. In order to maximise the opportunity for minority participation in future, recruitment criteria, advertising and procedures are kept under review.
Remuneration policy. All of the members are unpaid volunteers. The overall purpose of remuneration policy for the staff at all levels, together with their terms and conditions of service, is to attract and retain those with appropriate skills, experience and competencies who are committed to delivering the relevant charitable work and purposes. Although CESSAC does not engage in substantive levels of fundraising or voluntary work, the esteem and value derived from working in the charitable sector are noted, as recommended. With a principal aim of fairness and no overriding factors, save for affordability, the following will be taken into account when deciding remuneration:
The scope of individual responsibilities; any fundamental change; and performance against short and long term expectations and objectives.
Affordability (sustainability) of the total cost of remuneration awards when measured against the needs.
The likely impact on the beneficiaries.
Comparability in appropriate sectors, together with: national remuneration trends and minimum wage regulations; inflation; and applicable local/overseas factors.
The remuneration ratio between Senior and other staff in the organisation.
The combined effect of pay and other elements of wider remuneration packages, including any non-consolidated awards.
Relationships. CESSAC shares a common root with the Aldershot Church of England Services Trust, and three of the former’s members are appointed as trustees for the latter. CEO is CESSAC's trustee for CVWW.
The charity has no significant restricted funds and therefore no analysis of funds is given in the notes.
Registered charitable objects
The objects for which the Charity is established are below in ‘inverted commas’, each followed by a summary of the benefits delivered to the respective beneficiaries:
(i) ‘To open, carry on, establish and maintain Church of England Soldiers', Sailors' & Airmen's Clubs or Centres in military stations and other places at home and abroad, and to assist local or other efforts to open, carry on, establish and maintain such clubs or centres’. The aim remains to provide homely facilities for serving personnel and/or their families. The benefit they derive from the centres is amply demonstrated by their use and the strength of support from the chain of command.
(ii) ‘To further the religious and charitable work of the Church of England amongst those serving in H.M. Forces’. This is achieved by working with Service Chaplains wherever possible, without impinging on the non-religious nature of the centres. It includes offering a grant to help Service-sponsored ordinands (Note 11).
(iii) ‘To relieve persons who have served in H.M. Forces and the dependants of such persons as are in need of assistance including the provision and management of housing’. This aim is clear and currently largely, but not exclusively, delivered through the assistance provided to CESSA Housing Association & GHSH.
(iv) ‘To promote the efficiency of H.M. Forces by the provision of facilities and equipment for educational, recreation and leisure pursuits for those serving in H.M. Forces, whether at Church of England Soldiers', Sailors' & Airmen's Clubs or Centres or elsewhere and whether at home or abroad’. This is a recognised broad Object to enable a wide range of support to be provided for the benefit of serving personnel as needs arise. The level of the losses over recent years has meant that this aim is currently supported by a number of small grants to other organisations, listed for Cyprus at Note 11.
In accordance with the charity's articles, a resolution proposing that Sumer Audit be reappointed as auditor of the charity will be put at a General Meeting.
This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.
The Council members' report was approved by the Board of Council Members.
The Council members, who are also the directors of Church of England Soldiers', Sailors' & Airmen's Clubs for the purpose of company law, are responsible for preparing the Council Members' Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the Council members to prepare accounts 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, including the income and expenditure, of the charitable company for that year.
In preparing these accounts, the Council members are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts; and
- prepare the accounts on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Council members are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the accounts comply with the Companies Act 2006. 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.
Opinion
We have audited the accounts of Church of England Soldiers', Sailors' & Airmen's Clubs (the ‘charity’) for the year ended 31 December 2024 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and the notes to the accounts, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the accounts section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the Council members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Council members with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the accounts and our auditor’s report thereon. The Council members are responsible for the other information. Our opinion on the accounts does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the accounts or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:
the information given in the financial statements is inconsistent in any material respect with the Council members' report; or
sufficient accounting records have not been kept; or
the financial statements are not in agreement with the accounting records; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of Council members' responsibilities, the Council members, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Council members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Council members are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Council members either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Identification and assessment of irregularities including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
· Obtaining an understanding of the legal and regulatory framework that the charity operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
· Obtaining an understanding of the charity's policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud;
· Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the association for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety and employment law, as well as compliance with the UK Companies and Charities Acts.
In addition to the above, our procedures to respond to risks identified included the following:
· Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
· Reviewing minutes of meetings of the board and senior management.
· Reading correspondence with regulators
· Challenging assumptions and judgements made by management in their significant accounting estimates; and
· Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company’s members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Sumer Audit is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
Investments
Raising funds
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
The members have not required the company to obtain an audit of its financial statements under the requirements of the Companies Act 2006, for the year in question in accordance with section 476.
Church of England Soldiers', Sailors' & Airmen's Clubs is a private company limited by guarantee incorporated in England and Wales. The registered office is 1 Shakespeare Terrace, 126 High Street, Hampshire, Portsmouth, PO1 2RH.
The accounts have been prepared in accordance with the charity's Memorandum & Articles of Association, 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 2019). The charity is a Public Benefit Entity as defined by FRS 102.
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 accounts have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the Council members have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Council members continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the Council members in furtherance of their charitable objectives.
Designated funds comprise funds which have been set aside at the discretion of the Council members for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.
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 donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Income from government and other grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred.
Income from charitable trading activities principally represents retail sales and other income in CESSAC's Services Centre in Cyprus and at CESSAC Centres in the UK and elsewhere with other operating income arising from fees for managing sheltered lettings, owned by other charitable bodies, for ex-members of HM Forces and their spouses.
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:
Expenditure on charitable activities undertaken to further the purposes of the charity and their associated support and governance costs.
Costs of raising funds comprise the costs of the investment portfolio management.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back office costs, finance, personnel, payroll and governance costs which support the charity's activities. These costs have been allocated between cost of raising funds and expenditure on charitable activities. The bases on which support costs have been allocated are set out in note 8.
Tangible fixed assets are measured at cost 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:
Freehold land is not depreciated.
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.
Listed 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 income and expenditure. Transaction costs are expensed to income and expenditure as incurred.
The fixed asset investment loan is initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investment is assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in income and expenditure.
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). No such indications were noted.
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 at the lower of replacement cost and cost.
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 Company 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 when the charity becomes party to the contractual provisions of the instrument.
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.
Other financial assets, including investments in equity instruments are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in net income/(expenditure), except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through income and expenditure, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in net income/(expenditure) for the year.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charity transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities, including trade and other payables, 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in or in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Government Grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
In the application of the charity’s accounting policies, the Council members 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.
Sale of goods
Incoming resources derive from UK and activities in British HM Forces bases overseas including income from charitable trading activities.
Raising funds
The charity initially identifies the costs of its support functions. It then identifies those costs which relate to the governance function. Having identified its governance costs, the remaining support costs together with the governance costs are apportioned to the charitable activities undertaken in the year.
Included within governance costs are fees payable to the charity's auditors of £5,875 (2023: £3,385) for the audit and £1,190 (2023: £1,140) for other services.
Cost of supplies
Operating costs
None of the Council members (or any persons connected with them) received any remuneration during the year, but 7 of them were reimbursed a total of £1,069 travelling expenses (2023 - 7 were reimbursed £1,156).
CESSAC made the following principal donations in the UK:
Annual grant to a sponsored ordinand - 2024: £nil (2023: £820)
CESSAC Cyprus made the following donations:
Various small donations - 2024 €122 (2023: €312)
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The average monthly number of employees during the year was:
The transfer between restricted and unrestricted funds represents the restricted funds spent on fixed asset additions.
Listed investments include an investment portfolio managed by Charles Stanley and an Armed Forces Common Investment Fund managed by Black Rock and are included on the basis of market value, with an historical cost of £2,528,768 (2023 - £2,576,808).
The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
ACEST grants were provided in 2022 to cover the purchase of a new coffee machine and for some refurbishment/upgrade works at Blandford. The 2023 grant was provided to cover the cost of replacement furniture at Aldershot.
The Army Central Fund grant was provided to cover the cost of a coffee machine for the new Chicksands Centre.
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.
Reserves have been established as follows:
An operating cost reserve equal to nine months' charitable activity (£1,000,000).
A capital fund for future opportunities and investment.
Donations totalling £325 were received from Trustees during the year.
The charity had no material debt during the year.