In the accompanying Statement of Financial Activity (SOFA) expenditure includes both the direct cost of the activity plus supporting costs which are apportioned on a basis consistent with the use of resources and is based on either the number of staff working on that activity or time allocated to support the activity. When comparing income against expenditure some activities such as Careers and Education, National Aerospace Library (NAL) and Publications and Information show a loss for the year. However, it should be noted that these activities are also supported by Membership Income which is not reallocated in the SOFA and are part of the benefits supplied by the Society to its members.

The Trustees have considered a number of factors in concluding that the adoption of a going concern basis in the preparation of these financial statement is appropriate. This includes a review of the budget and forecast including cash flow for up to December 2029 and the review of risks facing the charity. These forecasts incorporate key challenges surrounding the impact from ongoing cost of living crisis and have considered sensitivities surrounding our income in particular on Venue Hire. The Society has a strong portfolio of investment and financial performance and these continue to be monitored regularly. The Trustees have reviewed the key assumptions within forecast and satisfied that the current level of free reserves and cash balances are adequate to meet the Society’s obligations as they fall due.

Total income increased by 4.1% to £6,189,878 with total unrestricted income increasing by 4.4% to £5,936,310.

Income from Other Trading Activities, room hire services, income generated £755,951, reduced by 14.7% in 2024 from £886,425. The room hire activity is run by the trading subsidiary Aeronautical Trading Limited (ATL), which made a loss of £57,384 (2023: £88,366 profit) due to increased operating administrative costs. There are no plans to change the activities of this business, which involves the provision of facilities to external customers and the running of the Members’ facilities. The Society continued to lease (under licence to third parties) offices on the 4th and 5th floor, overall, this had generated £222,526 in 2024 (2023: £218,163). Room sponsorship had generated £48,286 (2023: £73,702)..

Investment Income increased to £293,285 in 2024 from £214,969 in 2023. Of this, £118,920 (2023: £96,328) was reinvested by the Society during the year.

Expenditure increased by 18.3% to £5,847,294 with total unrestricted spending increasing by 16.2% to £5,579,375 as a result of the Society returning to in-person events and office usage.

The net incoming resources (before gains on investments) for the year produced a surplus of £342,584 (2023: £1,003,006). During the year, the Society had gains on its investment of £88,032 and actuarial losses on the Society’s Pension Scheme of £2,000. The net movement of funds for the year was a surplus of £428,616 (2023: £935,940).

•  The overall income for Room Hire Services (Operated by Aeronautical Trading Limited) was down by 18.69% and finished the year at £483,453 (see note 18 of the accounts). The Society received income from other Trading activities including leased offices (under licence) on 4th and 5th floors, at £222,526 and room sponsorship income at £48,286 in 2024.

•  The financial statements reflect the full financial position of the Defined Benefits Pension Scheme which became a closed scheme on 31 March 2001. The Scheme must be accounted for under FRS102 and under FRS102 the scheme’s liabilities are valued based on assumptions derived from yields on AA rated corporate bonds and gilts. Changes in the assumptions applied to the Scheme’s liabilities have resulted in a decline in the FRS102 deficit since 2022, which showed a pension scheme asset in these years. As the scheme was closed to future accruals, the Trustees feel that the recoverability of the asset is too remote and this had not been recognised in the accounts in 2024. The Society contributed £76,000 to the fund in 2024.

•  From 1 April the staff pension arrangements are in the form of Group Personal Pensions with Standard Life, in 2021 this was transferred to Aegon. The Society makes contributions, but the funds are owned by and are the responsibility of the individual staff members. From August 2015 the Society adopted Automatic Enrolment and received an acknowledgement of re-declaration of compliance in September 2024 from the Pension Regulator.

•  Functional Assets are also used by Aeronautical Trading Limited and these are included in support costs.

•  No.4 Hamilton Place Purchase, Valuation and Charges on the Property - In March 2009, the Society purchased the freehold of No.4 Hamilton Place at a cost of £4,859,755. Prior to the purchase, No.4 Hamilton Place was leased from the Crown Estates; in 2002 the lease was revalued by the Trustees on a draft valuation of £3,864,407 (based on existing use). From 2009 the Trustees have decided to add this valuation to the actual cost of the purchase of £4,859,755 to value the property in the Balance Sheet at £8,167,913 (less depreciation on property) as at 31/12/2024. At the time of purchase in March 2009 the Market Value of the freehold interest in No.4 Hamilton Place was £11,700,000.

•  Charges on No.4 Hamilton Place – The Society’s bankers, HSBC, have taken out a charge (not exceeding £4,255,000) on No.4 Hamilton Place to act as security against their loan. The mortgage was fully repaid in July 2024 and the charge was removed in the same year. The Trustees of the Society’s Defined Benefit Pension Scheme (closed) have taken out a second charge on No.4 Hamilton Place to cover the Society’s obligations if the Society defaults on its payments to the scheme. In return, by agreement with the Trustees of the Scheme, the Society will continue to pay reduced contributions to the Scheme in future years at a rate of £76,000.

The most recent valuation on a discontinued basis was at 1 April 2022 which showed that the scheme’s assets fully covered its priority liabilities and 77% of the remaining liabilities on that date the actual valuation shows a deficit of £982k.

The Board of Trustees establishes and periodically reviews the Risk Register. This is actively managed by the Audit Committee. The Chief Executive and Audit Committee are responsible for ensuring that risk registers and management plans are reviewed regularly by the executive staff and at appropriate governance meetings, and that risk-management plans are acted upon, updated, and monitored to eliminate, minimise, or otherwise avoid identified risks. They are also responsible for highlighting risk developments to the Board of Trustees throughout the year.

The Trustees have introduced a new Risk Management Policy which sets out the Royal Aeronautical Society’s commitment to continuously identifying and managing risks in a timely and effective manner and describes the standard of risk management that the Board of Trustees and stakeholders can expect with regards to the design, development and delivery of Royal Aeronautical Society services and activities.

The principal risks identified in 2024 were:

•  Governance - Reputational damage from association with a member or volunteer was mitigated by having robust recruitment, including DBS checks for the Trustees, Council Members and those who work with children. The framework of delegations was reviewed and implemented to mitigate any unauthorised decision making. Strong internal control processes protect the Society against not meeting the regulatory and financial reporting requirements. The Data Retention Policy was updated, and work is now in progress to implement the process across the Society to minimise the data protection breach.

•  Safeguarding - The new RAeS Safeguarding Policy was approved in 2024, with implementation, communications and adoption programme in place to prevent any inappropriate management of safeguarding incident.

•  Financial - Regular reviews and monitoring its budget and finances by key management to mitigate the overspending and/or spending on non-priorities, financial fraud and loss of income streams. The financial controls and reserve policy were reviewed monitored and in 2024, to eliminate and minimise any financial risk.

•  IT - Enhanced security protocols, continuous threat monitoring and regular staff awareness training protect against potential cyber threats. Robust project management processes phased roll out of solutions and rigorous testing schedules are in place as well as workforce planning and resource management to minimise negative impact of the digital transformation programme.

•  Venue - Preventative maintenance plans were in place with regular inspections to proactively address any concerns in addition to a comprehensive business continuity plan and adequate secure storage and insurance coverage for assets.

See here for full details of the Consolidated Statement of Financial Activities (SOFA).