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2022-03-31-accounts

Charity Registration number 10796414 Company Registration number 03701005

ROYAL HOSPITAL CHELSEA APPEAL LIMITED (Limited by Guarantee)

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

1

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

COMPANY INFORMATION

DIRECTORS & TRUSTEES C Trewhitt
Gen Sir A Bradshaw
G Lashko
COMPANY SECRETARY N Cattermole
REGISTERED OFFICE The Royal Hospital Chelsea
Royal Hospital Road
London
SW3 4SR
BANKERS Barclays Bank PLC
1 Churchill Place
London
E14 5HP
AUDITOR PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
SOLICITORS Taylor Wessing
5 New Street Square
London EC4A 3TW
COMPANY NUMBER 03701005
CHARITY NUMBER 1076414

2

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

CONTENTS
Page
Report of the Trustees and Directors 4 - 7
Independent Auditor's Report 8 - 10
Consolidated Statement of Financial Activities 11
Statement of Financial Activities - Company only 12
Balance Sheets 13
Consolidated Cashflow Statement 14
Notes to the Financial Statements 15- 27

3

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

REPORT OF THE TRUSTEES AND DIRECTORS FOR THE YEAR ENDED 31 MARCH 2022

The Trustees, who are also the Directors of the Charitable Company, have pleasure in presenting their report together with the audited Group Financial Statements for the year ended 31 March 2022 in accordance with the Companies Act 2006, the Statement of Recommended Practice “Accounting and Reporting by Charities” (FRS 102) and the company’s Memorandum and Articles of Association.

The names of those who served as Trustees of the Charity and Directors of the Charitable Company are listed on page 2. In this report they are referred to as “Trustees.”

OBJECTIVES, ACTIVITIES AND PUBLIC BENEFIT

The objects of the Charitable Company, as set out in the Charitable Company's Memorandum of Association, are to engage in activities “for the exclusive benefit of the Royal Hospital Chelsea (RHC)”. The RHC provides a home for army veterans and, although it is not registered with the Charity Commission, HMRC has accepted that its activities are charitable.

The emphasis on fundraising and other income generation activities has been, and will continue to be, on three distinct yet related purposes. First, raising funds to bridge the gap between the Grant-in-Aid and the RHC’s annual running costs. Second, generating income to fund new projects, such as the ambition to enhance our outreach services and to develop the planned heritage centre in the Soane Stable Block. Third, income generation for capital investment in order to guarantee the long-term survival of the RHC on its historic site.

The successful achievement of these objectives requires, in addition to normal fundraising, the development of current businesses to maximise their potential, the identification of new income generation opportunities, and the raising of public awareness and support through an active marketing and communications operation.

The strategies employed to achieve the Charitable Company's objectives have been to build and sustain the Charitable Company's business development, commercial services and fundraising activities with the aim of generating additional capital and revenue streams needed to secure the future of the institution of the RHC. This is achieved by directing the marketing and external communication activities with the aim of advancing the public awareness of the work of the RHC and of the Army’s contribution to the nation.

The Trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the Charitable Company's aims and objectives and in planning its future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives that have been set.

The Company subscribes to the Code of Fundraising Practice of the Fundraising Regulator. No complaints about fundraising or allegations of breaches of the Code have been made. No third party or commercial fundraisers are used, fundraising activity is conducted entirely by staff employed by the RHC (the company’s parent organisation). The bulk of funds raised are from legacies, grants from trusts and foundations and income from events and donations solicited by the Friends of the RHC, which is run by the fundraising staff. There is also the Governor’s Circle which has a higher level of membership subscription and enhanced benefits including an annual dinner and privileged access to certain events. A new fundraising policy was presented to the RHC’s Board of Commissioners in April 2021.

STRATEGIC REPORT

The Group received income of just over £4.6m during 2021-22. This was lower than the £6.4m received the previous year; however this included a one-off £3m donation. Income from smaller donations and legacies remained at the same level as the previous year. Donations from the Charitable Company’s trading subsidiary, Chelsea Pensioner (Royal Hospital) Ltd, increased as trading activity resumed after the pandemic. The subsidiary’s trading income has not yet returned to prepandemic levels but it is expected to rise back to the 2019 level in 2022/23.

Preparations are being made to launch a major fundraising appeal in the Autumn of 2022. This will include funding for refurbishment of the Margaret Thatcher Infirmary and the Soane Stable Block as well as for the RHC’s new outreach services.

The trading subsidiary, Chelsea Pensioner (RH) Limited, had revenues of £3.0m (2020 : £1.8m) and operating profits of £1.7m (2020 : £0.7m). This reflects increased levels of trading as pandemic restrictions eased. A further increase is expected in 2022-23.

4

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2022

FINANCIAL REVIEW

The Charitable Company receives income from donations and legacies as well as the profits of its wholly owned trading subsidiary Chelsea Pensioner (RH) Limited (CPRH). The company’s other subsidiary, Tricorne Traders Ltd, is dormant. During the year the Charity itself raised £1.5m (2021: £4.6m) in voluntary income. Of this amount £0.3m (2021: £0.7m) was generated through legacy income. Restricted income was £0.8m (2021: £3.6m). The prior year figure included a one-off £3m donation (see p4 above).

In terms of trading income earned by its subsidiary company, total earnings from Chelsea Pensioner (RH) Ltd increased with the company gift-aiding £1.7m (2021: £0.7m) to its parent company. The net assets of the Charitable Company Group, £6.9m (2021: £5.2m) represent the resources being held on behalf of the RHC which are to be used to help fund the day to day running costs of the RHC and its various development programmes.

RESERVES POLICY

As stated previously, the Group’s net assets represent the resources being held on behalf of the RHC to pay for its development programmes, to cover the gap between the Grant in Aid the RHC receives and the actual running costs and progressively to fund an endowment. The reserves are split between restricted and unrestricted funds. The restricted reserves represent funds which have been donated for a specific use. Group reserves at 31 March 2022 were £6.9m and cash balances amounted to £7.7m. £4m of this is held by the parent organisation so this it can be grouped with other reserves for investment purposes. At this time the Trustees consider that there is no need to hold additional reserves since it is more appropriate for strategic reserves to be held by the parent organisation.

PLANS FOR FUTURE PERIOD

The Charitable Company and its subsidiaries constantly review their strategy in line with that of its ultimate parent company the RHC. The RHC aims to position itself so that it is recognised by the British public as a unique national institution that must be preserved for future generations, both as a home that provides a vibrant community, comradeship and excellent standards of care for army veterans who have served the nation, and as an integral part of the country’s heritage and national identity.

The RHC’s Public Engagement department is focussed on delivering four key objectives:

A major fundraising appeal is in preparation and is expected to be launched publicly in Autumn 2022.

COVID 19 PANDEMIC

As noted above, the Covid 19 pandemic continued to affect the trading company’s revenue in 2021-22, though the impact was less than the previous year. Events resumed in the late Summer of 2021 but were again suspended during the winter. However in 2022-23 income is expected to be close to pre-pandemic levels.

5

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2022 (CONTINUED)

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing Document

Royal Hospital Chelsea Appeal Limited is a Charitable Company limited by guarantee governed by its Memorandum and Articles of Association dated 22 December 1998 and amended by special resolutions dated 5 February 2003, 14 November 2004 and 4 May 2022. It is registered as a Charity with the Charity Commission. A majority of the Trustees must be Commissioners of the Royal Hospital Chelsea (“RHC”). There is no limit to the number of members of the Charity and there are currently 3 members (3 in 2021), each of whom agree to contribute £1 in the event of the Charity winding up.

Appointment of Trustees

As set out in the Articles of Association a majority of the Trustees must be Commissioners of the RHC who appoint the Chairman, who is normally a Commissioner.

Trustee induction and training

On appointment new Trustees are made aware of their legal obligations under Charity and Company Law, the content of the Memorandum and Articles of Association, the committee and decision making processes, the business plan and recent financial performance of the Charity. It is not considered necessary to conduct any formal induction training as all Trustees are usually already Trustees and Directors of other companies.

Organisation

The Charitable Company forms part of the Royal Hospital Chelsea Group and is not managed separately from the rest of the Group. It has no employees of its own - all staff are employed by the RHC. Management is in the hands of the RHC Executive Board and strategic decisions are taken by the Board of Commissioners of the Hospital.

RISK MANAGEMENT

The main risks to the Charitable Company are centred around the handling of donations. All risks are subject to regular review as part of the Hospital's management procedures. The implementation of control procedures is designed to minimise any potential impact on the Charitable Company should those risks materialise.

TRUSTEES' RESPONSIBILITIES STATEMENT

The Trustees (who are also Directors of the Royal Hospital Chelsea Appeal Limited for the purposes of company law) are responsible for preparing the Report of the Trustees and Directors and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Group and Parent charitable company and of the incoming resources and application of resources, including the income and expenditure, of the Group and Parent charitable company for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

6

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2022 (CONTINUED)

In so far as the trustees are aware:

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In preparing this report the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the Board of Trustees on 26 July 2022 and signed on its behalf by

G Lashko

Trustee and Director

7

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF ROYAL HOSPITAL CHELSEA APPEAL LIMITED

Opinion

We have audited the financial statements of Royal Hospital Chelsea Appeal Limited (the ‘parent charitable company’) and its subsidiaries (the ‘group’) for the year ended 31 March 2022 which comprise the Consolidated and parent charitable company Statement of Financial Activities, the Balance Sheets, the Consolidated Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ 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 group’s or parent charitable company'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 trustees 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 report of the trustees and directors, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the report of the trustees and directors. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

8

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF ROYAL HOSPITAL CHELSEA APPEAL LIMITED

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included within the trustees’ annual report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Act 2011 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the group and parent charitable company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees 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 group and parent charitable company financial statements, the trustees are responsible for assessing the group and parent charitable company’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 trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed auditor under the Companies Act 2006 and section 151 of the Charities Act 2011 and report in accordance with those Acts 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.

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:

9

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND TRUSTEES OF ROYAL HOSPITAL CHELSEA APPEAL LIMITED

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and to the charitable company’s trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charitable company’s members and trustees 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 charitable company and the charitable company's members as a body and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Alastair Duke (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor

15 Westferry Circus Canary Wharf London E14 4HD

2022

10

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2022

(incorporating an Income and Expenditure Account)

Report of the Trustees and Directors
Note
Income from:
Voluntary income - donations and
legacies
2
Other trading activities
3
Bank Interest received
2,3
Total income
Expenditure on:
Raising funds
4
Other trading activities
4
Charitable activities
4
Support costs
4
Total expenditure
Net income/(expenditure)
Reconciliation of funds:
Total funds brought forward
Total funds carried forward		 Unrestricted
2022
£
693,966
2,961,575
540
3,656,081
228,614
1,274,982
750,619
184,035
2,438,250
1,217,831
1,058,670
2,276,501		 Restricted
2022
£
813,314
-
-
813,314
-
-
346,132
-
346,132
467,182
4,128,667
4,595,849		 Total
Total
2022
2021
£
£
1,507,280
4,628,850
2,961,575
1,820,064
540
710
4,469,395
6,449,624
228,614
248,479
1,274,982
1,072,336
1,096,751
3,024,967
184,035
85,484
2,784,382
4,431,266
1,685,013
2,018,358
5,187,337
3,168,979
6,872,350
5,187,337

The Accounting Policies and Notes on pages 15 to 27 form part of these Financial Statements

11

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

STATEMENT OF FINANCIAL ACTIVITIES - Company Only FOR THE YEAR ENDED 31 MARCH 2022 (incorporating an Income and Expenditure Account)

Note
Income from:
Voluntary income - donations and legacies
2
Trading subsidiary donation (Gift Aid)
3
Bank Interest received
2
Total income and endowments
Expenditure on:
Raising funds
4
Charitable activities
4
Support costs
4
Total expenditure
Net income
Reconciliation of funds:
Total funds brought forward
Total funds carried forward		 Unrestricted
2022
£
693,966
1,666,884
540
2,361,390
174,500
804,733
164,326
1,143,559
1,217,831
1,019,225
2,237,056		 Restricted
2022
£
813,314
-
-
813,314
-
346,132
-
346,132
467,182
4,128,667
4,595,849		 Total
Total
2022
2021
£
£
1,507,280
4,628,850
1,666,884
747,728
540
710
3,174,704
5,377,288
174,500
248,479
1,150,865
3,024,967
164,326
85,484
1,489,691
3,358,930
1,685,013
2,018,358
5,147,892
3,129,534
6,832,905
5,147,892

The Accounting Policies and Notes on pages 15 to 27 form part of these Financial Statements

12

ROYAL HOSPITAL CHELSEA APPEAL LIMITED COMPANY NO 03701005

BALANCE SHEETS
FOR THE YEAR ENDED 31 MARCH 2022
Note
NON CURRENT ASSETS
Tangible assets
6
Investment in subsidiary
7
CURRENT ASSETS
Stocks
8
Debtors
9
Cash at bank and in hand
CURRENT LIABILITIES
Creditors amounts falling due within one year
10
NET CURRENT ASSETS
NET ASSETS
RESERVES
Unrestricted Funds
12
Restricted Funds
12		 Group Group Group Company Company
2022
£
13,727
-		 2021
£
19,859
-		 2022
£
1,511
1,000		 2021
£
4,534
1,000
13,727
134,820
4,468,982
3,718,786
8,322,588
(1,463,965)
6,858,623
6,872,350
2,276,501
4,595,849
6,872,350		 19,859
147,502
3,492,847
2,882,678
6,523,027
(1,355,549)
5,167,478
5,187,337
1,058,670
4,128,667
5,187,337		 2,511
-
5,361,033
1,947,801
7,308,834
(478,440)
6,830,394
6,832,905
2,237,056
4,595,849
6,832,905		 5,534
-
3,362,069
2,212,251
5,574,320
(431,962)
5,142,358
5,147,892
1,019,225
4,128,667
5,147,892

The accounts have been prepared in accordance with the provisions applicable to companies subject to the Small Companies regime.

The financial statements were approved and authorised for issue by the Board of Trustees and were signed on its behalf on 26 July 2022 by

Caroline Trewhitt Gary Lashko Trustee and Director Trustee and Director

The Accounting Policies and Notes on pages 15 to 27 form part of these Financial Statements

13

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2022

Note
CASHFLOW FROM OPERATING ACTIVITES
14
Net cash inflow/(outflow) from operating activities
14
CASHFLOW FROM INVESTMENT ACTIVITES
DIVIDENDS, INTEREST INCOME RECEIVED
2
NET CASHFLOW FROM INVESTING ACTIVITIES
CHANGE IN CASH & CASH EQUIVALENTS IN THE YEAR
CASH & CASH EQUIVALENTS AT 1 APRIL
CASH & CASH EQUIVALENTS AT 31 MARCH
CASH & CASH EQUIVALENTS CONSISTS OF :
Cash at bank and in hand
CASH & CASH EQUIVALENTS AT 31 MARCH		 2022
£
835,568
835,568
540
540
836,108
2,882,678
3,718,786
3,718,786
3,718,786		 2021
£
636,263
636,263
710
710
636,973
2,245,705
2,882,678
2,882,678
2,882,678

The Accounting Policies and Notes on pages 15 to 27 form part of these Financial Statements

14

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

1 ACCOUNTING POLICIES

a. General Information and basis of preparation

The Royal Hospital Chelsea Appeal Limited is a registered charity and company limited by guarantee in the United Kingdom. The charity constitutes a public benefit entity as defined by FRS102. These Financial Statements are of the Charitable Company and its trading subsidiary company, Chelsea Pensioner (RH) Limited. The Charitable Company has another wholly owned subsidiary, Tricorne Traders Ltd which is dormant. The address of the company’s registered office is The Royal Hospital Chelsea, Royal Hospital Road, London SW3 4SR.

The financial statements are presented in sterling which is the functional currency of the company

b Summary of significant accounting policies

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

c Statement of Compliance

The Financial Statements have been prepared in accordance with 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), the Charities Act 2011, the Companies Act 2006 and UK generally Accepted Practice as it applies from 1 January 2019.

d Going Concern

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value. The Directors consider that the company remains a going concern despite the Covid 19 pandemic (see also p 5). The company’s income was seriously affected by the cancellation of Summer events in 2020 and because the RHC’s trading outlets were closed for several weeks. However, income improved in 2021 as restrictions were eased. A further improvement is expected in 2022-23. Therefore the Trustees consider that the company remains a going concern.

e Funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are those which are to be used in accordance with specific restrictions imposed by the donors or which have been raised by the charity for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

15

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

ACCOUNTING POLICIES

f Income

All incoming resources are included in the Statement of Financial Affairs (SoFA) when the charity is legally entitled to the income, after any performance conditions have been met, when the amount can be measured reliably and when it is probable that the income will be received.

Where income is received in advance of the related service being delivered to the customer, a liability is raised in the form of deferred income until the related service is delivered at which point the income is recognised. The Charitable Company's deferred income relates to trading activities in its trading subsidiaries.

Legacy income is recognised when the charity becomes aware that probate has been granted, there are sufficient assets in the estate to pay the legacy and that any conditions attached to the legacy are either in control of the charity or have already been met. In circumstances where legacies are notified but it is not possible to measure the amount expected to be distributed with sufficient reliability, or when it may be received, these items are disclosed as a contingent asset.

Income from trading activities relates to income earned from events and trading activities of the charity's subsidiary company, Chelsea Pensioners (RH) Limited to raise funds for the charity. Income is received in exchange for supplying goods and services in order to raise funds and is recognised when entitlement has occurred.

Investment income relates to bank interest received and recognised when it is receivable.

g Expenditure

All expenditure is accounted for on an accruals basis. Expenditure is recognised where there is a legal entitlement or constructive obligation to make payments to third parties, it is probable that that the settlement will be required and the amount of the obligation can be measured reliably. Expenditure is categorised under the following headings:

Details of governance costs are set out in Note 4 to the financial statements and comprise the legal, auditing and other professional costs associated with the running and management of the Charitable Company and its trading subsidiaries.

16

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

ACCOUNTING POLICIES (contd)

h Investments

The investments in the wholly owned subsidiary trading companies are shown at cost.

i Taxation

As a registered Charity the Company is generally exempt from Corporation Tax but not from Value Added Tax (VAT). The Charitable Company’s subsidiary trading companies are registered for VAT and are liable to corporation tax on trading profits not transferred under the Gift Aid arrangements.

j Tangible Fixed Assets and Depreciation

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Assets purchased with a value of less than £1,000 are not capitalised.

Depreciation is charged on tangible fixed assets at rates calculated to write off the cost of the asset, less any residual value, evenly over its expected useful life as follows:

Lands and Buildings Over periods of up to 50 years
Plant and machinery - 10 to 15 years
Fixtures and fittings - 7 to 15 years
Office equipment - 7 to 15 years
Motor Vehicles - 5 to 10 years
Computer equipment - 5 years
The lower limit for capitalisation of fixed assets is £1,000

k. Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, first-out formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate.

l. Significant judgments and estimates

There are no balances within the financial statements that are considered to have significant judgments or estimates.

17

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

2 INCOME

DONATIONS AND LEGACIES

Donations
Legacies
Friends: Events income
Friends: Membership income
BANK INTEREST

Bank interest received - company
Bank interest received – group		 Unrestricted
2022
£
248,948
289,654
6,535
148,829
693,966



 Restricted
2022
£
813,314
-
-
-
813,314



 Total
Total
2022
2021
£
£
1,062,262
3,746,896
289,654
721,896
6,535
13,029
148,829
147,029
1,507,280
4,628,850
2022 2021
££
540 710
540 710

Investment Income

Investment Income is earned through holding assets for investment purposes such as shares and property. It includes dividends, interest and rent. Interest income is recognised when receivable and dividend and rent income is recognised as the charity’s right to receive payment is established .

18

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

3 OTHER TRADING ACTIVITIES

i) Chelsea Pensioner (RH) Limited

The Charitable Company owns 100% of the issued ordinary share capital of Chelsea Pensioner (RH) Limited, a Company incorporated in England and Wales no 03853787. The principal activity of the Company is to undertake commercial activities on behalf of the RHC. The Company pays its taxable income to its parent company or to its ultimate parent undertaking (the RHC) under the Gift Aid arrangements. Its trading results extracted from its audited Financial Statements for the year to 31 March 2022 were:

COMPANY NUMBER: 03853787

Turnover
Cost of sales
Gross profit
Administrative expenses
Other operating expenses
Taxation
Profit on ordinary activities before taxation and
interest
Bank interest receivable
Profit on ordinary activities before
tax
Qualifying donation under Gift Aid
Profit/(Loss) for the year
Retained earnings brought forward
Retained earnings carried forward
RECONCILIATION OF MOVEMENT IN
SHAREHOLDERS' FUNDS
Opening shareholders' funds
Closing Shareholders’ Funds		 2022
2021
£
£
2,961,575
1,820,064
(213,172)
(111,749)
2,748,403
1,708,315
(1,049,865)
(921,592)
(31,654)
(38,995)
-
-
1,666,884
747,728
-
-
1,666,884
747,728
(1,666,884)
(747,728)
-
-
39,445
39,445
39,445
39,445
2022
2021
£
£
40,445
40,445
40,445
40,445

The company has a dormant subsidiary, Tricorne Traders Ltd, co reg no 07382655 which did not trade during the year.

19

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

4 ANALYSIS OF TOTAL RESOURCES EXPENDED (Consolidated)

Charitable Expenditure
Donations to parent organisation
In Pensioner Services
Total charitable expenditure
Expenditure of trading company
Fundraising costs
Staff
Friends of RHC & events
Total fundraising costs
Support costs
Staff training
Recruitment & selection
Insurance
Stationery
Postage
Printing
Maintenance of software
Subscriptions
Sundry admin charges
Travel & transport
Entertainment
Refreshments for volunteers
Advertising
Donor recognition
Depreciation
Bad debts
Website selling & promotion
Governance costs (see below)
Total support costs
Total expenditure		 2022
£
750,619
346,132
1,096,751
1,274,982
174,500
54,114
228,614
1,250
7,500
356
-
3,578
5,167
7,700
3,210
-
154
39
-
43,350
45,500
3,023
-
1,474
61,734
184,035
2,784,382		 2021
£
2,616,559
408,408
3,024,967
1,072,336
248,479
-
248,479
2,589
-
1,034
-
3,130
2,364
-
2,647
327
-
-
-
7,054
-
-
-
1,242
65,097
85,484
4,431,266

20

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

4 ANALYSIS OF TOTAL RESOURCES EXPENDED (CONTD)

Governance Costs

2022 2021
£ £

Legal and Professional fees 45,018 39,850 Auditors' remuneration - audit 16,076 24,854 Bank charges 639 397 Total 61,734 65,101

Audit Fees

**Audit Fees **
Group Company
2022 2021 2022 2021
Auditor's remuneration: £ £ £ £
Audit 15,106 14,715 4,845 4,845
Other services 970 1,115 -
 -

5 TRUSTEE EXPENSES AND EMPLOYMENT COSTS

No remuneration was paid or expenses reimbursed to Trustees (2021: NIL). Staff costs for an average of 26 employees during the year (2021: 32) of £947,300 were recharged from the RHC and are included in the costs of generating funds. Details of higher paid employees whose salaries are recharged to the charitable company group by its ultimate parent, the RHC, are disclosed in the financial statements of the RHC.

21

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCAIL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

6 TANGIBLE FIXED ASSETS – GROUP

Cost
At 1 April
2021
At 31 March
2022
Depreciation
At 1 April
2021
Charge for
the year
At 31 March
2022
Net book
value
At 31 March
2022
At 31 March
2021		 Plant &
Machinery
£
15,544
15,544
7,006
779
7,785
7,759
8,538		 Land &
Buildings
£
22,285
22,285
16,342
1,486
17,828
4,457
5,943		 Office
Equipment
£
26,366
26,366
26,366
-
26,366
-
-		 Fixtures
&
Fittings
£
48,218
48,218
47,374
844
48,218
-
844		 Computer
Equipment
Vehicle
Group
Total
£
£
£
56,069
15,114
180,596
56,069
15,114
180,596
56,069
10,580
160,737
-
3,023
6,132
56,069
13,603
166,869
-
1,511
13,727
-
4,534
19,859

22

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

6 TANGIBLE FIXED ASSETS – COMPANY

Cost
At 1 April 2021
At 31 March 2022
Depreciation
At 1 April 2021
Charge for the year
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
INVESTMENTS
Shares in subsidiary companies
Chelsea Pensioner (RH) Ltd		 Vehicle
Total
£
£
15,114
15,114
15,114
15,114
10,580
10,580
3,023
3,023
13,603
13,603
1,511
1,511
4,534
4,534
Company
2022
2021
£
£
1,000
1,000
1,000
1,000

7 INVESTMENTS

The investments represent 100% of the issued share capital of the company. The company also owns 100% of the share capital of Tricorne Traders Ltd, which is dormant.

23

ROYAL HOSPITAL CHELESA APPEAL LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

8 STOCKS

Goods for resale
9
DEBTORS
Trade debtors
Amounts due from subsidiary companies
Amounts due from the RHC
Other debtors and prepayments		 Group
2022
2021
£
£
134,820
147,502

Group
2022
2021
£
£
103,826
54,210
-
-
4,280,854
433,373
84,302
3,005,264
4,468,982
3,492,847		 Company
2022
2021
£
£
-
-
Company
2022
2021
£
£
-
-
1,276,731
359,301
4,000,000
-
84,302
3,002,768
5,361,033
3,362,069		 Company
2022
2021
£
£
-
-
Company
2022
2021
£
£
-
-
1,276,731
359,301
4,000,000
-
84,302
3,002,768
5,361,033
3,362,069
3,362,069

During the year £4m was transferred to the RHC so that it could be pooled for investment purposes.

10 CREDITORS: Amounts falling due within one year

10
CREDITORS: Amounts falling due within one year		 10
CREDITORS: Amounts falling due within one year
Group
Company
2022
2021
2022
£
£
£
Trade creditors
117,885
159,844
61,280
Amounts due to the RHC
360,123
422,996
360,123

Social security and other taxes
62,909
4,369
14,426

Deferred income
843,495
747,700
-

Accruals and other creditors
79,553
20,640
42,611
1,463,965
1,355,549
478,440
Movement on deferred income
Brought forward at the beginning of the year
Released to SOFA during the year
Deferred to future periods
Carried forward at the end of the year
Income has been deferred in respect of invoices raised for events occurring post year end.		 2021
£
5,166
422,996
-
-
3,800
431,962
2022
£
747,700
(747,700)
843,495
843,495

24

ROYAL HOSPITAL CHELSEA APPEAL LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

11 RELATED PARTY TRANSACTIONS

Exemption is taken under FRS 102 from disclosing transactions with wholly owned subsidiaries and the ultimate parent undertaking:

12 MOVEMENT OF FUNDS – Group

Restricted Funds
Restricted IP Welfare
MTI Sensory Room
MTI Other RF
Restricted Donations
Cadogan Donation
Scarlet Appeal
MTI Restricted Donations
Chaplain Restricted
Donation
Pendants Appeal
Dementia Appeal
Restricted Legacy
ABF Grant
Education Coordinator
Chaplain Music F.
National Lottery Heritage
Fund Grant
Restricted Income Activities
Centre
CBRE Cricket RI
RI Gardens Maintenance
RI RHC Outreach Work
RI Soane Stable Block Dev
Total Restricted Funds
Unrestricted Funds
General Fund
Total Unrestricted Funds
Total Funds		 Balance
1st April
2021
Income
Expenditure
£
£
£
1,699,727
-
32,870
72,908
-
-
80,000
-
-
44,218
54,800
-
172,249
150,000
137,460
324,503
-
89,160
29,140
11,546
194
1,728
500
1,262
-
-
-
109,498
-
-
10,400
-
-
95,000
-
-
21,904
-
-
-
48
-
7,075
69,876
72,726
1,458,117
94,779
10,868
2,200
-
1,592
-
400,000
-
-
4,008
-
-
27,757
-
4,128,667
813,314
346,132
1,058,670
3,656,081
2,438,250
1,058,670
3,656,081
2,438,250
5,187,337
4,469,395
2,784,382		 Balance
31st
March
2022
£
1,666,857
72,908
80,000
99,018
184,789
235,343
40,492
966
-
109,498
10,400
95,000
21,904
48
4,225
1,542,028
608
400,000
4,008
27,757
4,595,849
2,276,501
2,276,501
6,872,350

25

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

12 MOVEMENT OF FUNDS (CONTD)

Balance
1st April
2020
Income
Restricted Funds
£
£
Restricted IP Welfare
-
1,700,000
MTI Sensory Room
72,908
-
MTI Other RF
80,000
-
Restricted Donations
40,455
264,008
Cadogan Donation
87,840
150,000
Scarlet Appeal
349,969
-
MTI Restricted Donations
29,328
1,353
Chaplain Restricted Donation
-
1,920
Pendants Appeal
16,505
-
Dementia Appeal
102,871
8,000
Restricted Legacy
10,400
-
ABF Grant
55,000
40,000
Education Coordinator
22,248
-
Chaplain Music Fed
150
-
National Lottery Heritage Fund
Grant
5,796
25,000
Restricted Income Activities Centre
71,313
1,399,811
CBRE Cricket IR
2,200
-
Total Restricted Funds
946,983
3,590,092
Unrestricted Funds
General Fund
2,221,996
2,859,532
Total Unrestricted Funds
2.221,996
2,859,531
Total Funds
3,168,979
6,449,624
NET ASSETS
Restricted
Unrestricted
£
£
Tangible assets
-
13,727
Stock
- 134,820

Cash
4,595,849
2,986,937
Net current liabilities
-
(858,983)
Total net assets
4,595,849
2,276,501
NET ASSETS
Restricted
Unrestricted
£
£
Tangible assets
- 19,859
Stock
- 147,502
Cash
1,128,668
1,754,0101
Net current liabilities
3,000,000(862,702)
Total net assets
4,128,668
1,058,669		 Balance
1st April
2020
Income
£
£
-
1,700,000
72,908
-
80,000
-
40,455
264,008
87,840
150,000
349,969
-
29,328
1,353
-
1,920
16,505
-
102,871
8,000
10,400
-
55,000
40,000
22,248
-
150
-
5,796
25,000
71,313
1,399,811
2,200
-		 Expenditure
£

273

-

-
260,245
65,591
25,466
1,541
192
16,505
1,373
-
-
344
150
23,721
13,007
-
408,408
4,022,858
4,022,858
4,431,266
2022
£
13,727
134,820
7,718,786
(858,983)
6,872,350
2021
£
19,859
147,502
2,882,678
2,137,298
5,187,337		 Balance
31st March 2021
£
Restated
1,699,727
72,908
80,000
44,218
172,249
324,503
29,140
1,728
-
109,498
10,400
95,000
21,904
-
7,075
1,458,117
2,200
-
946,983
3,590,092
2,221,996
2,859,532		 4,128,667
1,058,670
2.221,996
2,859,531		 1,058,670
3,168,979
6,449,624		 5,187,337

26

ROYAL HOSPITAL CHELSEA APPEAL LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

12 MOVEMENT OF FUNDS (CONTD)

Restricted funds are available to spend but restricted as to their use by the wishes if the donor. All of the restricted funds received in the year and the balance remaining at the end of the year relate to funds raised for In-Pensioner care and welfare. The funds are transferred to the RHC for expenditure.

13 LIMITATION OF LIABILITY

The Charitable Company is limited by guarantee and has no share capital. Every member of the Charitable Company undertakes to contribute such amount as may be required (not exceeding £1) to the Charitable Company's assets if it should be wound up whilst he or she is a member or within one year of ceasing to be a member.

Any property remaining after the Charitable Company has satisfied its debts and liabilities on winding up or dissolution shall not be distributed to members but shall be given to some other charity or charities having similar objects to the Charitable Company.

14 RECONCONCILIATION OF NET INCOMING RESOURCES TO NET CASH INFLOW FROM OPERATING ACTIVITIES (GROUP)

2022 2021 £ £ Net incoming/(outgoing) resources 1,685,013 2,018,358 Depreciation charges (note 6) 6,132 6,451 Interest received (540) (710) Decrease/(increase) in stock 12,682 (12,734) (Increase)/decrease in debtors (976,135) (1,337,285) Increase/(Decrease) in creditors 108,416 (37,815) Net cash (outflow)/inflow from operating activities 835,568 636,263

15 ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY

16 POST BALANCE SHEET EVENTS

There are no post balance sheet events to report.

27