Virgin Money Giving Limited Annual Report and Accounts 2012 · during 2012. Firstly, by using social media and by enhancing the eﬀ ectiveness of our marketing communications to

Virgin Money Giving LimitedAnnual Reportand Accounts2012

At Virgin Money Giving we have a very simple ambition:to help people raise more money for charity.

Over

£72 million

raised for charities by VirginMoney Giving fundraisers in 2012(including Gift Aid).

Growth of over

25%

in year-on-year donations through Virgin Money Giving.

Over

6,500

charities registered with VirginMoney Giving at the end of 2012.

Over

£5 millionextra delivered to charity since launchcompared to our main competitor becauseof our not-for-profi t business model.

Highlights for 2012 include:

Over 2.8 million donors, 239,000 fundraisers and 6,500 charities have used Virgin Money Giving to raise almost £160 million since launch in October 2009.

Virgin Money Giving is a not-for-profi t business createdby Virgin Money to make everyone better off .

Gift Aid collected on

87%

of all donations made through Virgin Money Giving in 2012.

Over

1.88 milliondonations made during the year by Virgin Money Giving customers.

Our relationship with Virgin Money Giving has really strengthened our fundraising here at the Dame Kelly Holmes Legacy Trust. We value their commitment to supporting our fundraisers, from the moment

they register their interest right through to beyond their chosen event. Their professionalism is second to none, and they are always at the end of the phone to off er support, guidance and advice. Their expertise in this fi eld, combined with their personable approach, makes them a fantastic charity partner and it is a genuine pleasure to work with them.‘‘ ‘‘

Ryan Bahia - Event Manager Dame Kelly Holmes Legacy Trust

We have over 6,500 registered charity partners:

Chairman’s Statement 2

Executive Director’s Review 3

Company Information 4

Directors’ Report 5

Independent Auditor’s Report 9

Statement of Comprehensive Income 11

Balance Sheet 12

Statement of Changes in Equity 13

Cash Flow Statement 14

Notes to the Financial Statements 15

Virgin Money Giving Annual Report 2012 I 0 1

Online giving is an easy way for people to make donationsto charity and it is an effi cient way for charities to raise funds. Online giving currently accounts for only a small proportion of personal giving in the UK, but it is growing rapidly, despite pressure on overall consumer giving levels. Against a background where personal giving has fallen by 20% year-on-year, online giving through Virgin Money Giving increased by 25% in 2012.

Virgin Money Giving is a not-for-profi t subsidiary of Virgin Money. We charge a fee of 2% of the amount donated to cover our costs and we believe that our not-for-profi t business model is the best solution for this sector. A higher fee, to provide a profi t margin, would reduce the amount that we pass on to charities, but a zero charge would lead to losses which would limit our ability to provide an eff ective service to charities and support growth in the business. We believe our not-for-profi t model will enable us to create a sustainable business for the future.

As a commercially-run subsidiary of a banking business,Virgin Money Giving benefi ts from Virgin Money’s skillsand experience in areas such as secure money transmission , contact centre management, and process and operations design. This ensures we deliver an eff ective service to our fundraisers and our charity partners.

Our fee of 2% of donations is based on our view of our costs when Virgin Money Giving is operating at scale. As a result of this approach, Virgin Money Giving has made losses in its early years and these losses have been absorbed by VirginMoney Holdings (UK) Limited. In 2012, Virgin MoneyGiving made a pre-tax loss of £419,000, a considerableimprovement on its loss of £1.035 million in 2011. If infuture Virgin Money Giving makes a profi t, we shall usethis profi t to either enhance our services for donors and charities, or to reduce our fees.

I should like to take this opportunity to thank all the Virgin Money Giving Team for their contribution to our strongperformance in 2012. The online giving market in the UK should continue to grow and Virgin Money Giving intendsto play an important role in supporting that growth.

Sir Tom ShebbeareChairman

Virgin Money Giving aims to make online giving easy, and to contribute to a major shift in personal charitable donationstowards the online channel. ‘‘ ‘‘

Sir Tom ShebbeareChairman 19 March 2013

02 I Virgin Money Giving Annual Report 2012

We were delighted to welcome more than 1,750 new charities during the year, taking the total number of charities that can receive donations through Virgin Money Giving to over 6,500. We recognise that off ering high quality support to charities is fundamental to the success of our business and so we continued to invest in our technical infrastructure and operational capability during the year. Virgin Money Giving received over 15 million website visitors in 2012 and our website availability was over 99.9%.

We continued our role as the offi cial fundraising partnerof the Virgin London Marathon, which is sponsored byVirgin Money, and supported the event to reach a newfundraising record of £52. 8 million for the year, £1 7.8 million of which was raised through Virgin Money Giving (including Gift Aid). We continue to extend the number of events where we are the offi cial fundraising partner.

We saw two important developments in the businessduring 2012. Firstly, by using social media and by enhancing the eff ectiveness of our marketing communications to our fundraisers, we saw the average amount raised by eachfundraiser increase. Secondly, we saw increasing demand for giving through mobile devices and we have invested in technology to make it easier for people to make donations through Virgin Money Giving in this way. This enhancedservice will be available in early 2013.

Overall, by the end of 2012, donations totalling £159.3 million (including Gift Aid) had been made through Virgin Money Giving since it was launched in October 2009. Because of our not-for-profi t model, we estimate this means an extra £5. 1 million has been delivered to charities compared to our main competitor, an amount that can make a really signifi cant diff erence to the work that the charities do.

Jo BarnettExecutive Director

During 2012, donations made to charities through Virgin Money Giving, includingthe associated Gift Aid, amounted to£72.3 million, an increase of 25% overthe corresponding fi gure for the previous year. Almost 1.9 million donations were made through Virgin Money Giving during the year.

‘‘ ‘‘

Jo BarnettExecutive Director 19 March 2013

Virgin Money Giving Annual Report 2012 I 03

Company Informationn


PATRON Holly Branson

EXECUTIVE DIRECTORS Jo Barnett Pete Ball Jayne-Anne Gadhia

NON-EXECUTIVE DIRECTORS Sir Tom Shebbeare (Chairman) Judy Gibbons

COMPANY SECRETARY Stephen Pearson

COMPANY NUMBER 02733492

REGISTERED OFFICE Discovery House Whiting Road Norwich NR4 6EJ

AUDITOR KPMG LLP 15 Canada Square London E14 5GL


Directors’ Report

The Directors present their report and the fi nancial statements for the year ended 31 December 2012.

Principal ActivitiesThe principal activity of Virgin Money Giving Limited (“the Company”) is the operation of an online charity fundraising website for the effi cient administration and management of charitable donations on behalf of charities and fundraisers in the UK. Virgin Money Giving Limited was established in 2009 as a not-for-profi t business.

Review of Business and Future DevelopmentsVirgin Money Giving enjoyed a very successful third full year of trading following its launch in October 2009. Donations totalled £ 72.3m in the year ( including Gift Aid), 25% higher than that achieved in 2011. By the end of 2012, over 100,000 fundraising pages had been created during the year and the number of charities registered had reached over 6,500. As a result of its not-for-profi t objectives and its highly competitive charging structure, Virgin Money Giving has, since launch, helped fundraisers raise £1 59.3m ( including Gift Aid).

The Company is the offi cial online fundraising partner of the Virgin London Marathon. Through its support, Virgin Money Giving helped the event raise a record breaking £52.8m in 2012 of which over £1 7.8m ( including Gift Aid) was raised through Virgin Money Giving .

The Company continues to enjoy access to the infrastructure and fi nancial services expertise of the Virgin Money Group to ensure that virginmoneygiving.com is both reliable and secure. The Company complies with the Payment Card Industry Data Security Standard (PCI-DSS) to maintain robust security over card details provided during the donation process.

As a not-for-profi t business, Virgin Money Giving is committed to charging charities the minimum fees required to cover running costs. Any profi t achieved after covering operating costs will be used to further develop the service off ered to charities and fundraisers or to reduce fees.

During 2013, Virgin Money will continue a programme of investment and development of Virgin Money Giving, with the objective of continuing to help charities increase the amount they raise.

2012 2011

Key Performance Indicators

Total number of registered charities 6,559 4,798

Value of donations (£’000) ( including Gift Aid) 72,288 57,525

Loss before tax (£’000) (419) (1,035)

Number of fundraiser pages created 103,074 87,440

Gift Aid penetration rate 87% 87%

Average donation amount (£) 41 34

For the year ended 31 December 2012

Directors’ Report

The Company is a subsidiary of Virgin Money Holdings (UK) Limited. The risks and key performance indicators facing the wider Virgin Money Group are explained in more detail in the consolidated fi nancial statements of Virgin Money Holdings (UK) Limited.

Principal Risks and UncertaintiesThe Company faces risks in relation to competition in the UK charitable giving market. Both inherent and residual operational risks have been assessed quarterly by VMG via a standardised Risk Control Self Assessment (RCSA) process with reference to an impact/probability matrix which is approved by the Risk Committee and which is aligned to the expected and acceptable level of annual operational losses. There are no residual risks which have been identifi ed as being ‘Red’ risks requiring additional Board oversight.

Not for Profi t Status The Company operates as a not-for-profi t business.

Related Party TransactionsVirgin Money Personal Financial Service Limited, also a member of the Virgin Money Holdings Group of Companies, acts as an agent for Virgin Money Giving Limited. Charitable donations and the associated Gift Aid are held in client money designated trust accounts and paid directly to the charities. No charge is made for this service. Virgin Money Personal Financial Service Limited complies with the Payment Card Industry Data Security Standard and also the requirements of the Payment Services Regulations.

DividendsThe Company is not in a position to pay dividends. Under the Company’s Memorandum and Articles of Association, the Company is restricted from paying dividends of more than £100 per year.




Directors’ Report

DirectorsThe current composition of the Board of Directors together with details of appointments and resignations up to the date of this report is as follows:

Executive DirectorsJo BarnettPete BallJayne-Anne Gadhia (appointed 6 December 2012) Stephen Newman (resigned 6 December 2012)

Non-Executive DirectorsSir Tom ShebbeareJudy Gibbons

Company SecretaryJasan Fitzpatrick (resigned 23 May 2012) Stephen Pearson (appointed 23 May 2012)

Going ConcernThe Directors are satisfi ed at the time of approval of the fi nancial statements that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts. The Company’s use of the going concern basis for the preparation of the accounts is discussed in Note 1.


Directors’ Report

Statement of Directors’ ResponsibilitiesThe Directors are responsible for preparing the Directors’ Report and the fi nancial statements in accordance with applicable law and regulations.

Company Law requires the Directors to prepare Company fi nancial statements for each fi nancial year. Under that law the Directors have elected to prepare the Company fi nancial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and applicable law.

Under Company Law the Directors must not approve the fi nancial statements unless they are satisfi ed that they give a true and fair view of the state of aff airs of the Company and of their profi t or loss for that period. In preparing the Company fi nancial statements, the Directors are required to:

› select suitable accounting policies and then apply them consistently

› make judgements and estimates that are reasonable and prudent

› state whether they have been prepared in accordance with IFRS as adopted by the EU.

The Directors are responsible for keeping adequate accounting records that are suffi cient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the fi nancial position of the Company and enable them to ensure that its Financial Statements comply with the Companies Act 2006. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and fi nancial information included on the company’s website. Legislation in the UK governing the preparation and dissemination of fi nancial statements may diff er from legislation in other jurisdictions.

Auditor and Disclosure of Information to the AuditorSo far as every Director is aware at the date of this report, there is no relevant audit information needed in preparation of the auditor’s report of which the auditor is not aware. The Directors have taken the steps they need to have taken as Directors to make themselves aware of any relevant audit information and to establish that the auditor is also aware of that information.

Under section 487(2) of the Companies Act 2006, KPMG LLP will be deemed to have been reappointed as auditor 28 days after these fi nancial statements were sent to members, or 28 days after the latest date prescribed for fi ling the accounts with the registrar, whichever is earlier.

This report was approved by the Board on 19 March 2013 and signed on its behalf by:

Sir Tom ShebbeareChairman Registered No. 02733492




Independent Auditor’sss RReeeppoorrrtt TTooo TThheee MMMeeemmmbbbeerrssss Of Virgin Money Giving Limited

We have audited the fi nancial statements of Virgin Money Giving Limited for the year ended 31 December 2012 as set out on pages 1 1 to 21. The fi nancial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the EU.

The report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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.

Respective Responsibilities of Directors and AuditorAs explained more fully in the Directors’ Responsibilities Statement set out on page 8, the Directors are responsible for the preparation of the fi nancial statements and for being satisfi ed that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the fi nancial 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 (APB’s) Ethical Standards for Auditors.

Scope of the Audit of the Financial StatementsA description of the scope of an audit of fi nancial statements is provided on the Financial Reporting Council’s website at:www.frc.org.uk/ auditscopeukprivate

Opinion on Financial StatementsIn our opinion the fi nancial statements:

› give a true and fair view of the state of the Company’s aff airs as at 31 December 2012 and its loss for the year then ended

› h ave been properly prepared in accordance with IFRS as adopted by the EU

› have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on Other Matters Prescribed by The Companiies AAcct 2200000666In our opinion the information given in the Directors’ Report for the fi nancial year for which the fi nancial statements are prepared is consistent with the fi nancial statements.

Independent Auditor’sss RReeeppoorrtt TTooo TThheee MMMeeemmmbbbeerrssss Of Virgin Money Giving Limited

Matters on Which We are Required to Report by ExceppptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

› adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us

› the fi nancial statements are not in agreement with the accounting records and returns

› certain disclosures of directors’ remuneration specifi ed by law are not made

› we have not received all the information and explanations we require for our audit.

Philip Merchant (Senior Statutory Auditor)for and on behalf of KPMG LLP, Statutory AuditorChartered Accountants15 Canada Square LondonE14 5GL

19 March 2013



Statement of Comprehhheennssivvee InnccooommmeeeFor the year ended 31 December 2012

Note 2012 2011

£’000 £’000

Revenue 2 2,265 1,857

Operating expenses 3 (2,684) (2,892)

Loss before taxation (419) (1,035)

Taxation 5 103 274

Loss for the year (316) (761)

Loss for the year attributable to owners (316) (761)

The notes on pages 1 5 to 2 1 form an integral part of these fi nancial statements

Note 2012 2011

£’000 £’000

Assets

Amounts owed by group undertakings 103 274

Trade and other receivables 7 1,983 58

Cash at bank 10 68 104

Total current assets 2,154 436

Total assets 2,154 436

Liabilities

Amounts owed to group undertakings 5,102 3,006

Trade and other payables 8 38 100

Total current liabilities 5,140 3,106

Total liabilities 5,140 3,106

Equity

Issued capital 9 – –

Retained earnings (2,986) (2,670)

Total equity (2,986) (2,670)

Total equity and liabilities 2,154 436

The notes on pages 15 to 2 1 form an integral part of these fi nancial statements.

The fi nancial statements were approved and authorised for issue by the Board and were signed on its behalf on 19 March 2013.

Sir Tom Shebbeare

Chairman

As at 31 December 2012

Balance Sheet



Statement of Changesss innn EEqquuiityy

Ordinary Retained share capital earnings Total equity

£’000 £’000 £’000

Balance at 1 January 2011 – (1,909) (1,909)

Loss for the year – (761) (761)

Balance at 1 January 2012 – (2,670) (2,670)

Loss for the year – (316) (316)

Balance at 31 December 2012 – (2,986) (2,986)

The notes on pages 1 5 to 2 1 form an integral part of these fi nancial statements.


Cash Flow Statement

Note 2012 2011

£’000 £’000

Cash fl ows from operating activities

Operating loss for the year ( 419) (1,035)

(Increase) in trade and other receivables (1,925) (14)

Decrease in amounts due from group undertakings – 6

(Decrease)/increase in trade and other payables (62) 79

Cash generated from operations ( 2, 406) (964)

Income taxes received 274 358

Net cash from operating activities (2,132) (606)

Cash fl ows from fi nancing activities

Increase in amounts due to group undertakings 2,096 662

Net cash from fi nancing activities 2,096 662

Net (decrease)/increase in cash and cash equivalents (36) 56

Cash and cash equivalents at 1 January 104 48

Cash and cash equivalents at 31 December 10 68 104

The notes on pages 1 5 to 2 1 form an integral part of these fi nancial statements.




Notes to the Financiall SSttaateemmmmeenntss

1. Accounting Policies

1.1 Reporting entityVirgin Money Giving Limited is a company registered in England and Wales.

1.2 Basis of preparationThe fi nancial statements, which should be read in conjunction with the Directors’ Report, have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

The fi nancial statements have been prepared under the historical cost convention.

The accounting policies set out below have been applied consistently to all periods presented in these fi nancial statements.

The Company has net liabilities of £2,986k at 31 December 2012 (2011: £2,670k) and benefi ts from the support of its parent, Virgin Money Holdings (UK) Limited. The Directors have been provided with an undertaking from Virgin Money Holdings (UK) Limited that, for a period of at least 12 months from the date of approval of these fi nancial statements, it will continue to make available such funds as are needed by the Company and in particular will not seek repayment of the amounts currently made available. In light of this undertaking, the Directors consider that it is appropriate for the fi nancial statements to be prepared on a going concern basis.

1.3 RevenueRevenue comprises the fair value for services, net of value added tax, rebates and discounts.

Fees charged to charities for registering with Virgin Money Giving Limited are recognised from the date on which the charity completes the registration process and the fee becomes payable.

The 2% commission charged on donations and event fees is recognised from the date donations and event fees are transacted on the website.

1.4 Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash fl ows.

1.5 TaxationTaxation comprises current tax and deferred tax. Current tax and deferred tax are recognised in profi t or loss except to the extent that there are items that are recognised directly in equity or other comprehensive income.

Current tax is based on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary diff erences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied to temporary diff erences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary diff erences, to the extent that it is probable that future taxable profi ts will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.



Notes to the Financiall SSttaateemmmmeenntssFor the year ended 31 December 2012

1. Accounting Policies (continued)

1.6 Share capitalOrdinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax eff ects.

1.7 DividendsDividends paid on the Company’s ordinary shares are recognised as a reduction in equity in the period in which they are paid.

1.8 Accounting estimates and judgementsThe preparation of fi nancial statements in conformity with IFRS requires Management to make judgements, estimates and assumptions that aff ect the application of accounting policies and the reported amounts of assets and liabilities at the date of the fi nancial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on Management’s best knowledge of the amount, actual results ultimately may diff er from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements are discussed below:

Revenue recognitionThe Company receives income from charities in the form of registration fees. Management has exercised judgement in determining when these fees will be collected and therefore estimated the appropriate revenue.

1.9 Accounting developmentsThe following new standards, amendments to standards or interpretations are mandatory for the fi rst time for fi nancial years during 2012 and have been endorsed for adoption by the EU, but have no material fi nancial impact on the Company. These are applicable from 1 January 2012 unless otherwise stated:

( i) Amendment to IAS 12, ‘Income taxes’ on deferred tax.

(ii) Amendment to IFRS 7, Financial Instruments: Disclosures – Transfers of Financial Assets (eff ective for annual periods beginning from 1 July 2011).

1. 10 Standards, interpretations and amendments to published standards that are not yet eff ective and the early adoption of standardsThe Company has not early adopted any standards or interpretations during 2012.

The following new standards, amendments to standards or interpretations that are relevant to the Company have been issued and have been endorsed by the EU but are not eff ective for fi nancial years beginning 1 January 2012:

(i) Amendment to IAS 1, Presentation of fi nancial statements, on other comprehensive income (OCI)

( ii) Amendment to IFRS 7, Financial Instruments: Disclosures – Off setting Financial Assets and Financial Liabilities

( iii) IFRS 10, Consolidated fi nancial statements

(iv ) IFRS 11, Joint arrangements

(v) IFRS 12, Disclosures of interests in other entities

( vi) IFRS 13, Fair value measurement

( vii) IAS 19, (revised 2011), Employee benefi ts .

(v iii) IAS 27, Separate fi nancial statements

(ix) IAS 28, Investments in associates and joint ventures

(x) Amendment to IAS 32, Financial Instruments: Presentation on off setting fi nancial assets and fi nancial liabilities.



Notes to the Financiall SSttaateemmmmeenntss

1. Accounting Policies (continued)

The following new standards, amendments to standards or interpretations that are relevant to the Company have been issued but are not eff ective for fi nancial years beginning 1 January 2012 and have not been endorsed by the EU:

( i) IFRS 9, Financial instruments

Phase III of IFRS 9 may aff ect the way a company reports hedging instruments and how the companies treat the ineff ective proportion of these instruments. This phase received an exposure draft in December 2011 and has passed. IFRS 9 has an eff ective date of January 2015.

2. Revenue

Revenue is generated entirely from activities to promote charitable giving in the UK. All revenue is derived from the UK.

3. Operating Expenses

2012 2011

£’000 £’000

Rental of VMG system from parent company 426 426

Other recharges from parent undertaking 1,621 1,851

Other operating charges 637 615

Total 2,684 2,892

The Company has entered into a service level agreement with Virgin Money Holdings (UK) Limited. Under the terms of this agreement, the Company’s systems were developed by the Virgin Money Group and the costs of these systems were capitalised in Virgin Money Management Services Limited (also a member of the Virgin Money Holdings Group of companies). The Company pays a rental charge to Virgin Money Holdings for the use of these systems, with this rental charge being equivalent to the depreciation charge on the underlying assets.

Other operating charges refl ect IT software costs, card payment costs, legal fees and other administration expenses.

In addition to the costs above of £2,684,000 the Company’s immediate parent, Virgin Money Holdings (UK) Limited incurred an additional £675,665 (2011: £460,269) of cost in support of Virgin Money Giving Limited , which it did not recharge to the Company.

Auditor’s remuneration

2012 2011

£’000 £’000

Audit of these fi nancial statements 13 1 3

Fees paid to the company’s auditor, KPMG LLP for services other than the statutory audit of the company are not disclosed in Virgin Money Giving Limited’s accounts since the consolidated accounts of Virgin Money Giving Limited’s parent, Virgin Money Holdings (UK) Limited, are required to disclose non-audit fees on a consolidated basis.

4. Employee Information

The Company did not directly employ any staff during the year. Payment is made to Virgin Money Holdings (UK) Limited for the services provided by individuals in support of the business.

Director’s remuneration is not disclosed within these accounts since the consolidated accounts of Virgin Money Giving Limited’s parent, Virgin Money Holdings (UK) Limited, is required to disclose director’s remuneration on a consolidated basis.



5. Taxation

2012 2011

£’000 £’000

Current tax

Loss subject to corporation tax group relieved (103) (274)

Total tax credit in comprehensive income (103) (274)

Tax losses are surrendered to other Group companies where required through Group relief and the value of the losses surrendered is recovered in full.

Reconciliation of eff ective tax rateThere were no factors that aff ected the tax charge for the year which has been calculated on the profi ts on ordinary activities before tax at the eff ective rate of corporation tax in the UK of 24.5% (2011: 26.5%).

6. Deferred Taxation

The deferred taxation assets not recognised in the fi nancial statements, in accordance with the Company’s accounting policy, are as follows:

2012 2011

£’000 £’000

Tax losses 20 22

Unrecognised deferred tax asset 20 22

Deferred tax (not recognised) at 1 January 22 23

Movement due to tax rate change (2) (1)

Deferred tax not recognised at 31 December 20 22

7. Trade and other Receivables

2012 2011

£’000 £’000

Trade debtors 76 49

Other debtors 1,907 9

Total 1,983 58

The Company’s exposure to credit risk and impairment losses related to trade and other receivables is disclosed in Note 11.

Of the £1,907k other debtors, £1,893k relates to amounts owed to the Company by HMRC in respect of outstanding Gift Aid settlements.



8. Trade and other Payables

2012 2011

£’000 £’000

Social security and other taxes 12 6

Other creditors 26 94

Total 38 100

The Company’s exposure to liquidity risk related to trade and other payables is disclosed in Note 11.

9. Issued Capital

Share Capital

2012 2011

Shares £’000 Shares £’000

Allotted, called up and fully paid ordinary shares of £1 each 2 – 2 –

The Company has £2 of ordinary shares as at 31 December 2012. These have been rounded to zero on the balance sheet.

10. Cash and Cash Equivalents

2012 2011

£’000 £’000

Bank balances 68 104

Cash and cash equivalents in the statement of cash fl ows 68 104

The Company’s exposure to interest rate risk and a sensitivity analysis for fi nancial assets and liabilities is disclosed in Note 11.

The credit quality of cash and cash equivalents by reference to Moody’s credit ratings is set out in the table below:

Credit quality of cash and cash equivalents

2012 2011

£’000 £’000

A rating (2011: A rating) 68 104



11. Financial Instruments

The Company has various fi nancial assets such as trade receivables and cash and short-term deposits which arise directly from its operations.

Financial InstrumentsManagement determines the classifi cation of its fi nancial instruments at initial recognition. Financial assets can be classifi ed in the following categories:

(1) loans and receivables

(2) available for sale

(3) held to maturity

(4) fi nancial assets at fair value through profi t and loss.

All the Company’s fi nancial assets are classifi ed as loans and receivables. They comprise the amounts due by group undertakings, amounts owed by related undertakings, trade and other receivables, and cash and cash equivalents.

All the Company’s fi nancial liabilities are classifi ed as fi nancial liabilities at amortised cost and comprise amounts owed to group undertakings, amounts owed to related undertakings, trade and other payables, and provisions.

Loans and Receivables and Financial Liabilities at amortised costLoans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market, whose recoverability is based solely on the credit risk of the customer and where the Company has no intention of trading the loan. Both loans and receivables and fi nancial liabilities are initially recognised at fair value including direct and incremental transaction costs. Subsequent recognition is at amortised cost using the eff ective interest rate method, less any provision for impairment.

The main risks arising from the Company’s fi nancial instruments are credit risk, market risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks which are summarised below.

Credit RiskThe Company trades only with recognised, credit worthy third parties. It is the Company’s policy that all counterparties who wish to trade on credit terms are subject to credit verifi cation procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not signifi cant.

With respect to credit risk arising from other fi nancial assets of the Company, which comprise cash and cash equivalents, the Company’s exposure to credit risk arises from default of the counterparty, with the maximum exposure equal to the carrying amount of these instruments. No signifi cant transactions occur outside of the UK and the carrying amount of fi nancial assets represents the maximum credit exposure.

Liquidity RiskLiquidity risk is the risk that the Company is unable to meet its obligations as they fall due.

The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have suffi cient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company’s short term liquidity requirements are supported by a facility with Virgin Money Holdings (UK) Limited. Overall liquidity of the Virgin Money Holdings (UK) Limited Group is managed centrally.



11. Financial Instruments (continued)

Market RiskMarket risk is the risk that the value of, or net income arising from, the Company’s assets and liabilities changes as a result of changes to interest rates or exchange rates . The objective of market risk management is to manage and control market risk exposures within acceptable parameters, whilst optimising return.

Currency RiskThe Company is not exposed to currency risk.

Interest Rate RiskThe cash and cash equivalents held expose the Company to risks associated with the eff ects of fl uctuations in the prevailing levels of market interest rates on its fi nancial position and cash fl ows. No sensitivity analysis has been performed on interest income as any changes in the interest rates would not have a material impact on the reported results.

Fair valuesThere are no diff erences between the carrying amounts and fair values of fi nancial assets and liabilities.

Trade and other Receivables/PayablesFor receivables/payables with a remaining life of less than one year, the notional amount is deemed to refl ect the fair value.

12. Related Party Transactions

Transaction value Balance outstanding Year ended As at 31 December 31 December

2012 2011 2012 2011

£’000 £’000 £’000 £’000

Recharges and trading balances with group undertakings (171) (90) 103 274

Loan balances with group undertakings (2,096) (2,277) (5,102) (3,006)

The Company transacts with Virgin Money Holdings (UK) Limited, as described in Note 3.

13. Ultimate Parent Company

The Company is a subsidiary of Virgin Money Holdings (UK) Limited, a company registered in England and Wales.

Virgin Money Holdings (UK) Limited is the smallest and largest group in which the fi nancial statements of the Company are consolidated. The consolidated fi nancial statements of Virgin Money Holdings (UK) Limited may be obtained from Companies House, Crown Way, Cardiff CF4 3UZ.

The Company’s direct and ultimate controlling party is Virgin Money Holdings (UK) Limited.

14. Subsequent Events

There have been no material events after the reporting period requiring disclosure between 31 December 2012 and the signing of these accounts.

virginmoneygiving.com

Issued by Virgin Money Giving Limited

Registered offi ce: Discovery HouseWhiting Road, Norwich NR4 6EJ

Registered in England no. 02733492

Documents

Virgin Money Giving Limited Annual Report and Accounts 2012 · during 2012. Firstly, by using social media and by enhancing the eﬀ ectiveness of our marketing communications to