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2020-12-31-accounts

Hospitality Action

Annual Report and Consolidated Financial Statements

31 December 2020

Company Limited by Guarantee Registration Number 04914871 Charity Registration Number 1101083

Contents

Reports

Reference and administrative information 1
Trustees’ report 5
Statement of Trustees’
responsibilities 15
Independent auditor’s report 16
Accounts
Consolidated statement
of financial activities 20
Statement of financial activities
(charity only) 21
Balance sheets 22
Consolidated statement
of cash flows 23
Accounting Policies 24
Notes to the financial statements 27

Hospitality Action

Reference and administrative information

Board of Trustees William Baxter CBE (Chairman)
Jon Dee ACA (Treasurer)
Kevin Charity (appointed 9 June 2020)
Hazel Detsiny
Simon Dobson (Vice Chairman)
Simon Esner
Ringo Francis
Chris Garside
Andrew Guy MBE
Matt Johnson
Simon Jones
Tim Jones
Andrew Latham
Kate Nicholls
Jonathan Raggett
Ian Sarson
Andrew Selley
David Walker
Chief Executive Mark Lewis
Company secretary Greg Minter
Principal office 62 Britton Street
London
EC1M 5UY
Charity registration number 1101083
Auditor Buzzacott LLP
130 Wood Street
London
EC2V 6DL
Bankers Royal Bank of Scotland
Brooklands Close
Sunbury on Thames
TW16 7DX
Investment managers Cazenove Capital Management
1 London Wall Place
London
EC2Y 5AU

Hospitality Action 1

Reference and administrative information

Solicitors Trowers and Hamlin 3 Bunhill Row London EC1Y 8YZ

Hospitality Action 2

Reference and administrative information

The Board of Trustees thanks the Chairpersons and Committee members who gave so generously of their time during 2020:

Finance and Investment Jon Dee ACA (Chair) Simon Dobson Tim Doubleday Tim Jones

Grants and Advisory Andrew Latham (Chair) Valerie Barrow Flavia Gapper Dawn Jackson Jane Morris Ian Sarson

Hospitality Action 3

Reference and administrative information

The Board of Trustees thanks its Patrons, whose ongoing patronage brings credibility, authority and brand awareness to the charity. These are:

**Patrons ** Jason Atherton (Principal Patron)
Surinder Arora
Raymond Blanc OBE
Heston Blumenthal OBE
Michael Caines MBE
Patrick Dempsey OBE
George Goring OBE
Sir Garry Hawkes CBE
Nigel Haworth
Paul Heathcote MBE
Phil Hooper
Tom Kerridge
Donald Macdonald OBE
Sinead Mallozzi
Anton Mosimann OBE
Harry Murray MBE
Jamie Oliver MBE
Michel Roux Senior OBE
Phil Vickery MBE
The Viscount Lord Thurso
Brian Turner CBE
Robert Walton MBE

Hospitality Action 4

Trustees report Year ended 31 December 2020

The Trustees, who are also the directors, present the annual accounts for Hospitality Action for the year ended 31 December 2020 prepared in accordance with the Statement of Recommended Practice for Charities (SORP) 2015 and the Companies Act 2006. The reference and administrative information on pages 1-4 forms part of this report.

OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT

The Charity is a Benevolent Society whose objects are for the relief of persons who work or have worked in the hotel, catering and/or hospitality industries and the widows, widowers, partners, orphans and other dependants of such persons by the provision of monetary grants and/or advice, assistance and support and/or education and training.

Hospitality Action was founded in 1837 as unincorporated and for much of that time it was known as the Hotel and Catering Benevolent Association (HCBA). The charity was incorporated in 2003 as Hospitality Action having taken over the majority of the assets of the unincorporated charity.

The principal activities undertaken by the Charity in pursuance of its objects relate to the provision of:

The trustees confirm that they have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the Trust's aims and objectives and in planning future activities and setting the grant making policy for the forthcoming year.

Chief Executive

Mark Lewis had his third full year as Chief Executive.

Hospitality Action 5

Trustees report Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE

In terms of helping more people, we offered grants to 3,562 people in 2020 as opposed to 1,172 in 2019; awarded 4,698 grants compared to 923 in 2019; increased grants spend year on year from £732,752 to £1,328,708 and grew the number of client employees supported by our Employee Assistance Programme from 146,000 to 147,000.

Meanwhile, in terms of decreasing our ongoing deficit and stabilising the finances of the charity, we grew year on year revenue from £2,179,889 to £3,242,352, and improved our year on year position from an operating deficit of £217,326 to a surplus of £401,777.

The events programme was significantly curtailed due to the pandemic but the response to our appeal meant we had record annual revenue. Despite the situation we increased Employee Assistance Programme revenues year on year from £603,541 to £626,504.

We also recruited a cohort of 250 industry professionals to support an outreach programme to offer moral and practical support to over 2,000 hospitality industry retirees, our ‘Golden Friends’ and we created an online Wellbeing Hub offering advice and information to hospitality workers whose mental health was being affected by the pandemic.

Proud as we are of our response to the pandemic, we do not expect the peculiarly high levels of donations and external fundraising initiatives to be sustained, into the future. That said, we do expect the spike in brand awareness we experienced in 2020 to drive future fundraising beyond 2019 levels.

Review of achievements in 2020 2020 2019
Beneficiary grants £1,328,708 £732,752
Number of persons awarded grants 3,562 1,172
Number of companies subscribed to 345 292
EAP
Number of employees covered by the
EAP		 146,500 145,800

Hospitality Action 6

Trustees report Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Welfare, support and advice

Grants – (welfare)

It was decided to continue to focus more on one-off help and crisis assistance and continue the assistance given with long term top-up grants. This was achieved during 2020 as follows:

ollows:
2020 2019
Top up grants 45 beneficiaries Grants
£61,000		 43 beneficiaries Grants
£67,000
Crisis grants 49 beneficiaries Grants
£55,000		 62 beneficiaries Grants
£82,000
Essential needs grants 528 beneficiaries Grants
£266,000		 820 beneficiaries
Grants £462,000
Other grants 3,706 beneficiaries Grants
£947,000		 247 beneficiaries
Grants £122,000

Overall grant spend of £1,329,000.

Golden Friends Scheme – (welfare)

The objective was to increase the number of members and enhance the support offered via the volunteer visitor scheme.

Information and signposting – (support and advice)

Hospitality Action continues to offer a debt advice scheme, in conjunction with Step Change, a debt management charity. The counselling scheme, in conjunction with CiC, the service provider for our Employee Assistance Programme, has continued to be offered where applicable.

Hospitality Action 7

Trustees report Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Welfare, support and advice (continued)

Employee assistance programme

The programme is specific to the hospitality industry and provides a source of help, support and guidance for the employees of subscribing companies. A confidential assistance line. Live Chat service and web based help sheets via the Well Online portal are available to assist with the following:

Health and wellbeing

Working Life

Financial Matters

Personal advice

Support for alcohol, drugs, gambling and other addictive behaviours

Legal advice

The programme also allows for face-to-face, telephone or online counselling and parenting coaching support where needed. The EAP also provides access to a Whistleblowing hotline for subscribers.

This is a commercial programme which trades under a subsidiary company. Hospitality companies are charged a fixed amount per employee per year when they sign up to the programme. Profits are gifted to the charity. The programme had its official industry launch in January 2013 and as at December 2020 345 companies have signed up employing 146,500 employees.

In addition to the subscriber services provided by the EAP, HA operate a 24/7 helpline to provide ‘in the moment support’, advice and signposting to anyone working in or retired from the hospitality industry, it is utilised by non-EAP employees and members of our Golden Friends scheme.

Responding to the Covid-19 pandemic in 2020, we developed an online Wellbeing Advice Hub on our website providing access to help sheets and signposting on key topics such as Virus Anxiety, Home Schooling and Managing your Finances whilst on Furlough.

Hospitality Action 8

Trustees report Year ended 31 December 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Review of the year and future plans

Plans for 2021

We view 2021 as a transitional year from both a fundraising and services perspective. When we set our budget in Autumn 2020, we assumed next to no income from fundraising events. Instead, we focussed on cementing our transition to third party fundraising, by which we mean devolving fundraising to hospitality operators and their customers and guests through ‘pound in the bill’-style programmes. We aim to capitalise on the step-change in awareness of our brand around hospitality and the general public that we achieved in 2020. That said, we will remain alert to opportunities to create fundraising events that may arise, as social distancing restrictions ease and we will continue to innovate, for example through our Chefs at Home recipe book, our Invisible Chips initiative, and our ‘Hell and Back’ Virtual Challenge.

Similarly, in terms of grants disbursal, we plan to draw together our grant-giving streams, after running parallel Covid-19 emergency and ‘business as usual’ grant application processes throughout 2020. We will merge all Covid-related grants into our ongoing case management to reflect the need among applicants for longer-term support, rather than emergency payments.

We will look to backfill any EAP clients and headcounts through new client acquisition, supported by a marketing campaign stressing that there has never been a more important time to support your employees’ health and wellbeing. We will also conduct a strategic review of our EAP offer, to identify opportunities to grow its product set and footprint.

We do not anticipate running any ‘in person’ events for our Golden Friends industry retirees, for obvious reasons; but we aim to grow the reach of the Golden Friends programme and augment its benefits.

FINANCIAL REVIEW

Income for the year was £3,242,352 (2019: £2,179,889) and expenditure £2,840,575 (2019: £2,397,215) giving rise to an operating surplus of £401,777 (2019: deficit of £217,326).

Income was well ahead of 2019 with huge growth in donated income in response to the Covid-19 appeal, which compensated for drops in income from investments and fundraising events. Expenditure of £2,840,575 was up £443,360 on 2019. Expenditure on charitable activity associated with grants, advice and support was £2,191,187, an increase of £615,132, as the charity responded to the huge demand for assistance due to the pandemic.

After losses on investments of £142,968 the overall result for the year was a surplus of £258,809 resulting in a corresponding increase in the balance of funds which stood at £6,902,608 as at 31 December 2020.

Hospitality Action 9

Trustees report Year ended 31 December 2020

FINANCIAL REVIEW (continued) Reserves policy and financial position

The total funds held by the group at the end of the year were £6,902,608 (2019: £6,643,799).

Of the above total £108,723 (2019: £56,874) related to restricted funds not available for the general purposes of the Charity. As at 31 December 2020 £232,617 of funds were held within the subsidiary company (2019: £177,849). All of the remaining funds of the Charity totalling £6,561,268 (2019: £6,409,076) have been set aside in a designated fund by the trustees.

In order to ensure that the charity is able to sustain its capacity to provide support for its beneficiaries in perpetuity, the Trustees' policy is to seek to maintain the approximate current levels of reserves after allowing for fluctuations in the value of its investment portfolio.

The Charity’s investment portfolio is intended to generate returns to maintain or add to minimum reserve levels. Income generated from the portfolio is to be reinvested where possible or can be transferred to the current account of the Charity for working capital or charitable purposes.

The reserves are maintained to safeguard the Charity’s ability to operate and provide essential services to its beneficiaries in the case of unforeseeable reductions in fund raising income. The reserves are also available for investment in opportunities that may have an enduring benefit to the Charity.

The Charity aims to maintain or increase moderately its level of charitable activity in each financial year. It is intended to reinvest into the portfolio any funds in excess of the working capital and charitable requirements of the Charity to bolster the capital and ensure that the portfolio will be available well into the future.

From time to time the Charity may need to draw on the capital of the investment portfolio to meet working capital or charitable obligations where fundraising income has not been at expected levels. Such drawdowns require the approval of the Finance Committee. As a result, the Charity does not currently maintain any free reserves, as it is possible to meet any requirement for free reserves from the designated fund if required. The Charity is aiming to get to a position in the future where any such drawdown is not required and free reserves can be maintained separately from the designated fund.

The investment portfolio is monitored daily and reserve balances are reported to the Finance Committee each quarter.

The Trustees are required to review this reserves policy annually.

In the early months of 2020, we drew down £160k from the investment portfolio. In view of the uncertainty surrounding the charity’s revenue, Hospitality Action negotiated a £1m loan facility with Cazenove, as an alternative to withdrawing further capital from the investment portfolio. An initial drawdown of £500k was made in June, with the balance available for withdrawal until June 2021. The charity is unlikely to need to draw down the balance of the loan and will consider a repayment plan as 2021 progresses.

Hospitality Action 10

Trustees report Year ended 31 December 2020

FINANCIAL REVIEW (continued) Reserves policy and financial position

For approximately the last 10 years, the Trustees’ strategy has been to fund any operating losses through capital drawdowns from the investment portfolio. The impact of this upon the investment portfolio has been tracked closely and long-term financial forecasting undertaken to ensure that the level of retained reserves remains sufficient.

Each year, the Charity aims to reduce as much as practical, its reliance on capital drawdowns from the portfolio and to be self-sufficient from fundraising income. When circumstances allow, excess funds will be used to top up the portfolio to previous levels. Once this has been achieved, the Charity will review its charitable activities and may release excess funds for charitable purposes. At present we continue to use income from the portfolio for the purposes of the charity. The plan from the start of 2022 is to reinvest income from investments back into the portfolio.

Going Concern

The trustees are aware of the ongoing issues which surround the global Covid-19 pandemic. They are satisfied that the charity is well positioned to continue as a going concern for the next twelve months and beyond. Reasons for this confident outlook include:

Investment policy

Under the Constitution the Trustees have general powers to invest in any trust funds or in the purchase of land or buildings. The agreed investment objectives were to achieve an annual income of 3.5% with the preservation of capital in real terms over the long term. The investment objectives are supported by an agreed asset allocation that is socially, environmentally and ethically sound, and which is periodically reviewed by the Finance & Investment Committee. The Investment Managers meet regularly with the Charity's Finance & Investment Committee to review investment performance against agreed indices.

Grant Policy

The charity provides financial assistance, support and advice to serving, former and retired workers in the hospitality industry. Qualification for assistance is as follows:

Applicants or the supporting agent from a referring organisation (with the consent of the applicant) are required to complete a Hospitality Action application form. The majority of applications need to be supported by an appropriate independent organisation such as Social Services, Citizens Advice Bureau, Housing Association or charities such as Macmillan, Crisis etc. A copy of the grant rules is sent out on request by the Grants & Advisory Team.

Hospitality Action 11

Trustees report Year ended 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT

Legal status and governing document

Hospitality Action is a charitable company limited by guarantee, incorporated in England and registered with Companies House. It is also registered with the Charity Commission in England and Wales.

It is governed by its memorandum and articles of association which are publically available via www.companieshouse.co.uk

Structure

Hospitality Action has a wholly-owned subsidiary, Hospitality Action (Trading) Limited, (registered company 03332706 – England and Wales), which administers the Employee Assistance Programme. The results and net assets of the subsidiary are consolidated into these accounts.

Appointment and training of trustees

Trustees are elected at the annual general meeting and serve for two years when they may offer themselves for re-election for two further terms of office. Trustees are drawn from senior management across the industry, retired members of the industry and those with specialist skills pertinent to the aims and objectives of the Charity. All new trustees go through a formal induction process with the Chief Executive and are issued with an induction pack that includes the memorandum and articles of association of the charity, a Charity Commission summary of responsibilities of charity trustees, a copy of the annual accounts and a formalised outline of the role of a trustee. Trustees meet quarterly.

Chief executive and staff

The Chief Executive, Mark Lewis, is responsible for the day to day operations of the Charity. Staff remuneration including that of Key Management is set to be competitive for the role in the charity sector and based in London.

The trustees are responsible for keeping proper 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 Charities Act 2011, the relevant Charity (Accounts and Reports) Regulations and the provisions of the charity’s constitution. 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.

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

Risk management, and principal risks and uncertainties

The Trustees continue to review and identify the major risks faced by the Charity, and have implemented systems and controls to mitigate the risks wherever practicable.

The Charity's risk register is reviewed and updated annually and has policies in place to comply with whistleblowing, anti-fraud and anti-money laundering regulations.

Hospitality Action 12

Trustees report Year ended 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued) Risk management, and principal risks and uncertainties (continued)

Measures introduced by the Government to combat the spread of Covid-19 have disrupted our usual working practices, with the potential to compromise our ability to deliver our services. Our purchase, last Autumn, of laptops for all team members mitigated this concern. By working from home, our employees are avoiding public transport and public spaces and therefore minimising the probability of catching Covid-19. The recent roll-out of a new VPN system and imminent roll-out of a new cloud-based telephony set-up will further improve our homeworking capabilities.

The loss of all budgeted in-person fundraising initiatives (eg chef dinners, sports challenges) has put our ability to fundraise at risk. We have responded by fast-tracking our planned move to a fundraising model based on third-party, consumer-pays activity. Our Invisible Chips” campaign (0% fat, 100% charity) is the latest example of this kind of activity and has already been adopted by c250 hospitality venues. We have also held our first ever virtual fundraising event: our 20,000 Mile Challenge, which raised c.£80,000 this summer, and will explore this approach further.

The increasing numbers of hospitality business closures and redundancies puts the profitability of our Employee Assistance Programme at risk. Despite this, the programme was only -£13k versus budget at the end of 2020. We running a major awareness campaign in H1 2021, aimed at growing the client base to backfill client attrition and decreasing employee numbers. We have seen some new business during Lockdown; and we remain confident that we can convert more new business in future. NB EAP income was £8k ahead of budget by Q1 2021.

As the number of hospitality redundancies grows, so the risk grows that we will receive an unsustainable number of applications for support from around the industry. We are building financial resilience through the means outlined above. By the end of 2020, we had replaced lost revenue streams with new streams, ones that carry lower costs, and had delivered our highest ever revenue for a calendar year. By continuing our efforts to grow awareness of our work around the industry and among its customer base, we are taking positive steps towards futureproofing our income streams.

Equal Opportunities Statement For Employees

Hospitality Action is strongly committed to equal opportunities for all. Every possible step will be taken to ensure that individuals are treated equally and fairly and that decisions on recruitment, selection and training of employees are based on solely objective and role related criteria regardless of their age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Our policy is to respect both the spirit and the letter of the laws regarding equality of opportunity and non-discrimination in Hospitality Action’s activities and to value the diversity of individuals throughout the community. We consider this to be an integral part of our ethos when recruiting employees to Hospitality Action.

This commitment extends to all areas, both within the working environment, as well as in relation to social and recreational programmes.

No employee or potential employee will be disadvantaged by any conditions of employment or requirements that cannot be justified as necessary on operational grounds.

Hospitality Action 13

Trustees report Year ended 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued) Equal Opportunities Statement For Employees (continued)

Decisions about appointments, training, developments and promotion will be made on the basis of merit or ability.

All employees and volunteers are expected to support and co-operate in these efforts to ensure equal opportunity for all.

Any complaints of discrimination will be dealt with under Hospitality Action’s Complaints Procedure.

Any employee who conducts himself or herself in a discriminatory manner (whether on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation) towards another employee, beneficiary or member of the public will be guilty of gross misconduct and will be subject to disciplinary action.

Fundraising Statement

Due to Covid we were forced, in March, to cancel of all of our fundraising events and campaigns for 2020. As a result, we had to very quickly remodel our income streams to galvanise support in order to raise essential funds. We activated an emergency online donation appeal via our website; held a virtual challenge using the platform Umbali.org; encouraged other individual fundraising using both Justgiving and Virgin Money Giving; onboarded suppliers and operators with third party fundraising; activated our Invisible Chips Campaign; approached Trusts and Foundations for funding and via two key supporters held two large online auctions via Givergy. No moneys were raised by public, on street collections.

When collecting monies, we at all times adhere to GDPR best practice guidelines. We renew our PCI DSS Compliance annually. We adhere to the conditions that credit card details should not be stored or sent electronically, and are to be destroyed as soon as a payment is processed. We do not store credit card details in any form. And as soon as the fundraising team has processed a credit card payment, they destroy the card details. Our compliance requirements are relatively light since any receipts via our website are via PayPal and we are not an e-commerce provider.

We are members of the Association of Charitable Organisations (ACO) and the Fundraising Regulator and follow and track their fundraising due diligence recommendations and code. Hospitality Action has not received any complaints about its fundraising activities.

Hospitality Action 14

Trustees report Year ended 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees’ Responsibilities

The Trustees, who are also the directors for the purposes of Company Law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England & Wales 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 charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the trustees are required to:

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors also confirm that:-

Approved by order of the board of Trustees and signed on its behalf by

Chairman

Approved by the board of trustees on 8[th] June 2021

Hospitality Action 15

Independent auditor’s report Year ended 31 December 2020

Independent auditor’s report to the members of Hospitality Action

Opinion

We have audited the financial statements of Hospitality Action for the year ended 31 December 2020, which comprise the consolidated statement of financial activities, the charity-only statement of financial activities, the consolidated and charity-only balance sheets, the consolidated statement of cash flows and the notes to the financial statements, 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 financial statements section of our report. We are independent of the group 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 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 trustees with respect to going concern are described in the relevant sections of this report.

Hospitality Action 16

Independent auditor’s report Year ended 31 December 2020

Other information

The other information comprises the information included in the Trustee’s Annual Report Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, 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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Hospitality Action 17

Independent auditor’s report Year ended 31 December 2020

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 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 financial statements, the trustees are responsible for assessing the 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 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

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:

Hospitality Action 18

Independent auditor’s report Year ended 31 December 2020

We did not identify any irregularities, including fraud.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available 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. Our audit work has been undertaken so that we might state to the charitable 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

29.7.2021

Hugh Swainson (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

Hospitality Action 19

Consolidated statement of financial activities (including an income and expenditure account) Year ended 31 December 2020

Notes
Unrestricted
funds
£		 Restricted
funds
£		 Year ended
31
December
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Year ended
31
December
2019
£
Income and endowments from:
Donations and legacies
Donations
1
Donated services and facilities
1
Members donations
Grants receivable
2
Other trading activities
Fundraising events
Charitable activities
Employee assistance programme
Investments
3
Total
Expenditure on:
Raising funds
Cost of raising voluntary income
Fundraising events and activities
Investment management fees
Sub-total
Charitable activities
Welfare
4, 6
Employee assistance programme
4
Other support and advice
4
Sub-total
Total
4
Net income/(expenditure) before net
(losses)/gains on investments
Net (losses)/ gains on investments
11
Net income
Transfer between funds
14
Net movement in funds
Reconciliations on fund:
Fund balances brought forward
Fund balances carried forward		 2,097,640
61,250
13,297
18,430
166,700
626,504
136,616		 415
—
—
121,500
—
—
—		 2,098,055
61,250
13,297
139,930
166,700
626,504
136,616		 222,604
65,000
15,922
27,179
925,653
603,541
199,079		 13,411
—
—
107,500
—
—
—		 236,015
65,000
15,922
134,679
925,653
603,541
199,079
3,120,437 121,915 3,242,352 2,058,978 120,911 2,179,889
596,918
33,174
19,296		 —
—
—		 596,918
33,174
19,296		 252,907
547,428
20,825		 —
—
—		 252,907
547,428
20,825
649,388
1,727,234
393,887
—		 —
70,066
—
—		 649,388
1,797,300
393,887
-		 821,160
1,060,530
425,692
—		 —
71,580
—
18,253		 821,160
1,132,110
425,692
18,253
2,121,121 70,066 2,191,187 1,486,222 89,833 1,576,055
2,770,509 70,066 2,840,575 2,307,382 89,833 2,397,215
349,928
(142,968)		 51,849
—		 401,777
(142,968)		 (248,404)
571,274		 31,078
—		 (217,326)
571,274
206,960
—		 51,849
—		 258,809
-		 322,870
—		 31,078
—		 353,948
—
206,960
6,586,925		 51,849
56,874		 258,809
6,643,799		 322,870
6,264,055		 31,078
25,796		 353,948
6,289,851
6,793,885 108,723 6,902,608 6,586,925 56,874 6,643,799

The notes on pages 27 to 36 form part of these financial statements.

Hospitality Action 20

Statement of financial activities (charity only) Year ended 31 December 2020

Unrestricted
funds
£		 Restricted
funds
£		 Year ended
31
December
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Year ended
31
December
2019
£
Income and endowments from:
Donations and legacies
Donations
Gift Aid from subsidiary company
Donated services and facilities
Members donations
Grants receivable
Other trading activities
Fundraising events
Investments
Total
Expenditure on:
Raising funds
Cost of raising voluntary income
Fundraising events and activities
Investment management fees
Sub-total
Charitable activities
Welfare
Support and advice
Sub-total
Total
Net income/(expenditure) before net
(losses)/gains on investments
Net (losses)/gains on investments
Net income
Transfer between funds
Net movement in funds
Reconciliations on fund:
Fund balances brought forward
Fund balances carried forward		 2,097,640
177,849
61,250
13,297
18,430
166,700
136,616		 415
—
—
—
121,500
—
—		 2,098,055
177,849
61,250
13,297
139,930
166,700
136,616		 222,604
210,541
65,000
15,922
27,179
925,653
199,079		 13,411
—
—
—
107,500
—
—		 236,015
210,541
65,000
15,922
134,679
925,653
199,079
2,671,782 121,915 2,793,697 1,665,978 120,911 1,786,889
596,918
33,174
19,296		 —
—
—		 596,918
33,174
19,296		 252,907
547,428
20,825		 —
—
—		 252,907
547,428
20,825
649,388
1,727,234
-		 —
70,066
-		 649,388
1,797,300
-		 821,160
1,060,530
—		 —
71,580
18,253		 821,160
1,132,110
18,253
1,727,234 70,066 1,797,300 1,060,530 89,833 1,150,363
2,376,622 70,066 2,446,688 1,881,690 89,833 1,971,523
295,160
(142,968)		 51,849
-		 347,009
(142,968)		 (215,712)
571,274		 31,078
—		 (184,634)
571,274
152,192 51,849 204,041 355,562 31,078 386,640
-
152,192		 -
51,849		 -
204,041		 —
355,562		 —
31,078		 —
386,640
6,409,076 56,874 6,465,950 6,053,514 25,796 6,079,310
6,561,268 108,723 6,669,991 6,409,076 56,874 6,465,950

Hospitality Action 21

Balance sheet Year ended 31 December 2020

Notes 2020 2020 2019 2019

Group
£		 Charitable
Company
£		 Group
£		 Charitable
Company
£
Fixed assets
Tangible assets
9
Intangible assets
10
Investments
11
Current assets
Debtors
12
Cash at bank and in hand
Liabilities
Creditors: amounts falling due
within one year
13
Net current assets (liabilities)
Net assets
Funds:
Restricted funds
15
Unrestricted funds:
General funds
Subsidiary
Designated funds (fixed assets
and investments) including a
revaluation reserve of £565,306
(2019: £718,016)
923,437

73,211

5,579,410		 923,437
73,211
5,579,410		 886,819
58,219
5,925,613		 886,819
58,219
5,925,613
6,576,058 6,576,058 6,870,651 6,870,651

176,668
1,029,289		 76,914
906,121		 238,805
36,548		 102,713
21,104
1,205,957 983,035 275,353 123,817

(879,407)		 (889,102) (502,205) (528,518)
326,550 93,933 (226,852) (404,701)
6,902,608 6,669,991 6,643,799 6,465,950

108,723
—
232,617
6,561,268		 108,723
—
—
6,561,268		 56,874
—
177,849
6,409,076		 56,874
—
—
6,409,076
6,902,608 6,669,991 6,643,799 6,465,950

The notes on pages 27 to 36 form part of these financial statements.

The financial statements were approved and authorised for issue by the board of the Trustees and signed on their behalf by:

William Baxter

Jon Dee

Mark Lewis

Chairman

Treasurer

Chief Executive

Approved on 8[th] June 2021

Hospitality Action 22

Consolidated statement of cash flows Year ended 31 December 2020

Notes
2020
£

744,059
136,616
(91,169)
2,517,983
(2,314,748)
248,682
992,741
36,548

1,029,289		 2019
£
(448,350)
199,079

(105,662)
1,301,584
(1,110,865)
284,136
(164,214)
200,762
36,548
Net cash flows from operating activities:
Net cash used in operating activities
A
Cash flows from investing activities:
Investment income
Payment to acquire tangible and intangible fixed assets
Proceeds from sales of investments
Payments to acquire investments
Net cash provided by investing activities
Change in cash and cash equivalents for the year
Cash and cash equivalents at the start of the year
Cash and cash equivalents at the end of theyear
B

A Reconciliation of net income (expenditure) to net cash used in operating activities

2020
£		 2019
£
Net income (expenditure)
Depreciation and amortisation
Losses (Gains) on investments
Investment income
Decrease (increase) in debtors
Increase in creditors
Net cash used in operating activities		 266,964
39,559
142,968
(136,616)
62,137
369,047		 353,948
17,773
(571,274)
(199,079)
(103,443)
53,725
744,059 (448,350)

B Analysis of cash and cash equivalents

2019
£		 Cash flow
£		 2020
£
1,029,289
Cash at bank and in hand 36,548 992,741

C Analysis of changes in net debt

At At 31
1 January Cash flows December
£ £ £
Cash at bank and in hand 36,548 992,741 1,029,289
Total net debt 36,548 992,741 1,029,289

Hospitality Action 23

Accounting policies Year ended 31 December 2020

Basis of accounting

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) (effective 1 January 2015) - (Charities SORP (FRS 102)), and with the Financial Reporting Standard applicable in the UK and Republic of lreland (FRS 102).

The financial statements are presented in sterling and rounded to the nearest pound.

The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value. Investments are restated at fair value at the balance sheet date.

All transactions are derived from continuing activities. All recognised gains and losses are included in the Statement of Financial Activities. These accounts consolidate the results, assets and liabilities of Hospitality Action's subsidiary company on a line by line basis.

Critical accounting estimates and areas of judgement

There are no areas of material estimation uncertainty affecting the accounts and no significant areas of judgment affecting the figures, aside from the following:

Going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect of a period of one year from the date of approval of these financial statements. In making this decision, the trustees have taken into consideration the risks and uncertainties arising from the Coronavirus pandemic (as highlighted in the trustees’ report).

The trustees have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the Trust to continue as a going concern. The trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. With regard to the next accounting period, the year ending 31 December 2021, the most significant areas that affect the carrying value of the assets held by the Trust are the level of investment return and the performance of the investment markets (see the investment policy and the risk management sections of the trustees report for more information).

Hospitality Action 24

Accounting policies Year ended 31 December 2020

Fund accounting

Unrestricted funds comprise accumulated surpluses and deficits on general funds. They are available for use at the discretion of the Trustees in furtherance of the general charitable objectives.

Restricted funds comprise monies raised for, and their use restricted to, a specific purpose, or donations subject to donor imposed conditions.

Designated funds represent those funds which the trustees have earmarked for specific purposes and equate to the carrying value of the charity's fixed assets.

Income

Income is recognised on a receivable basis and principally comprises grants, events income, income from the delivery of services and donations receivable.

Donated services and facilities (gifts in kind) are included in the financial statements at the best estimate of the value to the charity.

Legacy income is recognised when the criteria of entitlement, probability and measurability have been met.

Expenditure recognition

Expenditure including irrecoverable VAT is charged to the Statement of Financial Activities on an accruals basis. Direct costs are allocated to the activity headings to which they relate. Support costs relate to indirect costs including the costs of governance. These are directly allocated where possible and otherwise apportioned on a consistent basis.

Grants

Grants expenditure is recognised when there is a constructive obligation to pay monies to a beneficiary, that is, when the charity has notified the beneficiary of the payment of the grant. It includes the payment of monetary grants to beneficiaries, expenditure made in providing beneficiaries with goods and services and the costs of distributing and administering such direct provision. The cost of such provision, and that in respect of monetary grants in particular, is recognised as it becomes payable according to the Charity's rules.

Tangible fixed assets

Tangible assets are shown at cost less provision for depreciation. Provision is made for depreciation on all tangible assets at rates calculated to write off the cost, less estimated residual value over their useful lives which are estimated to be:

Leasehold property over the length of the lease Furnishing 20% straight line Office refurbishment 10% straight line Computer equipment 33% straight line

Hospitality Action 25

Accounting policies Year ended 31 December 2020

Investments

Investments are restated at fair value as at the balance sheet date. Investment gains and losses are disclosed in the Statement of Financial Activities.

Debtors

Debtors are recognised at their settlement amount, less any provision for nonrecoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition.

Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

Pension costs

The Charity operates a stakeholder pension scheme. Contributions are charged to expenditure as they fall due.

Financial instruments

The charity only holds basic financial instruments as defined by FRS102. The financial assets and liabilities of the charity are as follows:

Financial assets – donations due and trade debtors are basic financial instruments and are debt instruments measured at amortised cost. Investments are basic financial instruments held at fair value. Accrued income and prepayments are not financial instruments.

Cash at bank and short term deposits are classified as basic financial instruments and measured at face value.

Financial liabilities – trade creditors, grants payable, and accruals are financial instruments and are measured at amortised cost. Social security and other taxes are not included in the financial instruments disclosure definition. Deferred income is not deemed to be a financial liability as the cash settlement has already taken place and there is no obligation to deliver services rather than cash or another financial instrument.

Hospitality Action 26

Notes to the financial statements Year ended 31 December 2020

1 Donations

Donations
2020
£		 2019
£
Unrestricted
Amanda Hyndman
Antonio Carluccio Foundation
Barclays Community Foundation
BeerHawk
Burger King UK
Bidfood
Bleecker Burgers
Compass
CVC Strategic Opportunities
Jagermeister
LVMH
Master Innholders Charitable Trust
Master of Malt
No15 Grand Pulteney
Olleco
Papa John’s
Park Plaza Westminster Bridge
Savoy Educational Trust
Scents of Normality
Sketch
StreetSmart
Tabasco
The Dorchester Collection
The Vintners Company
The Worshipful Company of Cooks
Unilever
Other donations
Total unrestricted donations
Restricted
Alcohol & Drug Awareness Programme
Total donations
Donated services and facilities
The Caterer
Design & creative
Staff Canteen
Mercieca
Other
Totalgifts in kind		 11,000
25,000
100,000
102,192
20,000
37,690
—
18,333
91,779
10,778
167,572
12,500
210,775
11,765
—
22,936
75,600
50,000
12,015
17,234
—
20,000
25,000
100,000
30,000
17,400
908,071		 —
—
—
—
—
32,456
13,055
1,667
—
—
—
—
—
—
25,604
—
—
—
—
41,753
11,000
—
—
—
—
—
97,069
2,097,640 222,604
415 13,411
2,098,055 236,015
37,000
11,250
13,000
—
—		 37,000
15,000
13,000
—
—
61,250 65,000

Hospitality Action 27

Notes to the financial statements Year ended 31 December 2020

2 Grants receivable

Grants receivable
2020
£		 2019
£
Unrestricted:
Worshipful Company of Innholders
Society of Golden Keys
Master Innholders
Others
Total unrestricted grants
Restricted fund:
Drug and Alcohol awareness programme/welfare
Savoy Educational Trust
Worshipful Company of Innholders
Excel Trust
Total restricted grants
Totalgrants		 10,000
6,185
2,245
—		 10,000
13,731
2,448
1,000
18,430 27,179
50,000
70,000
1,500		 42,000
64,000
1,500
121,500 107,500
139,930 134,679

3 Investment income

Investment income
2020
£		 2019
£
From listed investments
Interest on cash deposits		 136,546
70		 198,995
84
136,616 199,079

4 Expenditure

Analysis of 2020 expenditure
Notes
Grants		 Other direct
costs
£		 Support
costs
£		 Total
2020
£
Raising funds:
Cost of raising voluntary income
Fundraising events and activities
Investment management
Charitable activities:
Welfare
6
Employee assistance programme
Total		 —
—
—

1,328,708
—		 375,945
33,174
19,296
219,680
332,829		 220,973
—
—
248,912
61,058		 596,918
33,174
19,296
1,797,300
393,887
1,328,708 980,924 530,943 2,840,575

Analysis of 2020 support costs

Expenditure
on raising
funds
£		 Expenditure
on charitable
activities
£		 Total
2020
£
Staff costs
Office rent and shared office costs		 176,828
44,145		 250,318
59,652		 427,146
103,797
220,973 309,970 530,943

Hospitality Action 28

Notes to the financial statements Year ended 31 December 2020

4 Expenditure (continued)

Analysis of 2019 expenditure
Notes
Grants		 Other direct
costs
£		 Support
costs
£		 Total
2019
£
Raising funds:
Cost of raising voluntary income
Fundraising events and activities
Investment management
Charitable activities:
Welfare
6
Employee assistance programme
Other advice and support
Total		 —
—
—

732,752
—
—		 284,111
289,247
20,825
198,076
370,042
18,253		 74,902
152,075
—
201,282
55,650
—		 359,013
441,322
20,825
1,132,110
425,692
18,253
732,752 1,180,554 483,909 2,397,215
Analysis of 2019 support costs
Expenditure
on raising
funds
£		 Expenditure
on charitable
activities
£		 Total
2019
£
Staff costs
Office rent and shared office costs		 186,839
40,138		 213,193
43,739		 400,032
83,877
226,977 256,932 483,909

The allocation of support costs is on a per capita basis, having regard to time spent by staff on either fundraising or charitable activities.

5 Analysis of governance costs

Analysis of governance costs
2020
£		 2019
£
Audit fees
Legal and professional
Trustees expenses
Other		 13,094
1,026
24
9,795		 12,565
926
1,138
2,214
23,939 16,843

Hospitality Action 29

Notes to the financial statements Year ended 31 December 2020

6 Welfare expenditure

Welfare expenditure
2020
£		 2019
£
Top up grants
Essential needs grants
Short term crisis grants
Christmas grants
Winter fuel grants
Covid-19 grants
TV licence and phone grants
Golden Friends’ scheme
School uniform Grants
Other grants
Volunteers’ expenses
Grant management and other beneficiary support services
Total cost ofgrant makingand other beneficiarysupport services		 61,074
265,604
55,371
26,621
60,600
834,900
2,953
8,537
—
13,048
—		 67,132
462,191
82,203
20,579
59,400
—
3,966
10,813
13,140
12,944
384
1,328,708
468,592		 732,752
399,358
1,797,300 1,132,110

Hospitality Action 30

Notes to the financial statements Year ended 31 December 2020

7 Employees and staff costs

Employees and staff costs
2020
Number		 2019
Number
The average number of persons employed by the Charity during the
year		 15 15
Staff costs were as follows: 2020
£		 2019
£
Wages and salaries
Social security costs
Pension costs		 670,667
74,445
66,695		 644,067
70,232
64,681
811,807 778,980

1 employee received remuneration in the range of £70,000 - £80,000 (2019: one).

1 employee received remuneration in the range of £110,000 - £120,000 (2019: one).

No other employees received remuneration in excess of £60,000 (2019: none)

The charity considers that the Key Management Personnel for financial reporting purposes comprises the trustees and the Chief Executive. The total Key Management Remuneration, including employer’s national insurance and pension contributions, was £155,019 (2019: £138,401).

Trustees’ remuneration and reimbursed expenses

No Trustees received remuneration for their services in either 2019 or 2020. In 2020 £24 was spent relating to a trustee strategy day.

8 Net movement in funds

Net movement in funds
2020
£		 2019
£
5,213
12,560
9,000
1,500
1,500
This is stated after charging:
Depreciation
Amortisation
Auditors’ remuneration:
. Parent charitable company audit
. Subsidiary company audit
. Other(tax)		 15,596
23,963
9,500
1,700
1,500

Hospitality Action 31

Notes to the financial statements Year ended 31 December 2020

9 Tangible fixed assets – group and charitable company

Leasehold
property
£		 Office
refurbishments
£		 Furniture
and fittings
£		 Office and
other
equipment
£		 Total
£
Cost
At 31 December 2019
Additions
At 31 December 2020
Depreciation
At 31 December 2019
Charge for the year
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019		 863,339
-		 65,665
50,400		 31,470
512		 135,618
1,302		 1,096,092
52,214
863,339 116,065 31,982 136,920 1,148,306
11,440
880		 65,665
1,260		 31,316
140		 100,852
13,316		 209,273
15,596
12,320 66,925 31,456 114,168 224,869
851,019 49,140 526 22,752 923,437
851,899 — 154 34,766 886,819

The deepreciation charge on the long leasehold property reflects the length of the leasehold which is 978 years.

10 Intangible fixed assets – group and charitable company

Intangible fixed assets – group and charitable company
Cost Total
£
At 31 December 2019
Additions
At 31 December 2020
Amortisation
At 31 December 2019
Charge for the year
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019		 70,779
38,955
109,734
12,560
23,963
36,523
73,211
58,219

Hospitality Action 32

Notes to the financial statements Year ended 31 December 2020

11 Investments – group and charitable company

Investments – group and charitable company
2020
£		 2019
£
Market value
As at 1 January
Additions at cost
Disposals
Realised losses
Unrealised (losses) gains
As at 31 December
Analysed as follows:
United Kingdom investments
Non-United Kingdom investments
Cash and commodities held for investment
Historical cost		 5,925,613
2,314,748
(2,517,983)
(17,776)
(125,192)		 5,545,058
1,110,865
(1,301,584)

(8,576)
579,850
5,579,410 5,925,613
2,016,585
3,120,107
442,718		 3,892,201
1,948,660
84,752
5,579,410 5,925,613
5,014,104 5,207,597

The following holdings exceed 5% of portfolio value - Trojan Income Fund (6%), Charity Equity Income Fund (5%), Vanguard FTSE UK All Share Index Fund Fund (9%), and the Charities Property Fund (7%). The cash balances are not available for day to day transactions but are for the trading of investment assets.

12 Debtors

Debtors
Group
2020
£		 Charitable
company
2020
£		 Group
2019
£		 Charitable
company
2019
£
Fundraising debtors
Trade debtors
Prepayments and accrued income		 —
99,744
76,924		 —
—
76,914		 25,338
127,953
85,514		 25,338
—
77,375
176,668 76,914 238,805 102,713

13 Creditors: amounts falling due within one year

Group
2020
£		 Charitable
company
2020
£		 Group
2019
£		 Charitable
company
2019
£
Grants approved but unspent at year end
Trade creditors
Taxation and social security
Accruals and deferred income
Loan from Cazenove*
Amounts due to trading subsidiary
Amounts due to related charity (note 21)		 13,361
36,194
20,756
257,275
500,080
—
51,741		 13,361
18,205
20,756
103,034
500,080
181,925
51,741		 45,561
85,937
18,194
308,582
—
—
43,931		 45,561
15,570
18,194
95,411
—
309,851
43,931
879,407 889,102 502,205 528,518

Hospitality Action 33

Notes to the financial statements Year ended 31 December 2020

Deferred income comprises:

Balance at the beginning of the year
Amount released to income in the year
Amount deferred in the year
Balance at the end of theyear		 2019
£
223,338
(223,338)
179,975
179,975

Income is deferred until the charity has met any performance related conditions attached to the income.

14 Unrestricted funds

Unrestricted funds
Balance at
31
December
2019
£		 Income
£		 Expenditure
£		 Transfers
£		 Gains on
investments
£		 Balance at
31
December
2020
£
Charity
General
Designated
Subsidiary company
Total		 —
6,409,076
177,849		 2,493,933

—

626,504		 (2,337,063)
(39,559)
(393,887)		 (156,870)
334,719
(177,849)		 —
(142,968)
—		 —
6,561,268
232,617
6,586,925 3,120,437 (2,770,509) — (142,968) 6,793,885

Transfers from the subsidiary company fund to the general fund relate to the payment of the company’s profit to the parent charity via a gift-aided donation. Transfers from designated funds to general funds are made to cover the charity’s general day-to-day expenses.

Comparative information

Balance at
31
December
2018
£		 Income
£		 Expenditure
£		 Transfers
£		 Gains on
investments
£		 Balance at
31
December
2019
£
Charity
General
Designated
Subsidiary company
Total		 —
6,053,514
210,541		 1,455,437

—

603,541		 (1,863,917)
(17,773)
(425,692)		 408,480
(197,939)
(210,541)		 —
571,274
—		 —
6,409,076
177,849
6,264,055 2,058,978 (2,307,382) — 571,274 6,586,925

15 Restricted funds

Restricted funds
Balance at
31 December
2019
£
19,716
37,158
Income
£		 Expenditure
£
(70,066)
—		 General fund
Transfers
£		 Balance at
31 December
2020
Total
£
21,150
87,573
108,723
Welfare
Alcohol and drug awareness
71,500

50,415		 —
—
56,874
121,915		 (70,066) —

Hospitality Action 34

Notes to the financial statements Year ended 31 December 2020

Comparative information

Balance at
31 December
2018
£
25,796
—
Income
£

65,500

55,411

120,911		 Expenditure
£
(71,580)
(18,253)
(89,833)		 General fund
Transfers
£		 Balance at
31 December
2019
Total
£
Welfare
Alcohol and drug awareness		 —
—		 19,716
37,158
25,796 — 56,874

The Alcohol and Drug Awareness Programme represents a programme of seminars to students in the hospitality industry on the dangers of drug and alcohol abuse.

Welfare covers three specific programmes: the Golden Friends scheme, Winter Fuel grants and phone line rentals.

16 Pensions obligations

Stakeholder pensions

The Charity operates a stakeholder pension scheme. The assets of the scheme are held separately from those of the Charity, being invested with an insurance company.

2020
£		 2019
£
Total employer cost 66,695 64,681

17 Analysis of net assets between funds

General
funds
£		 Designated
funds
£		 Restricted
funds
£
—
—
108,723
108,723		 Total
2020
£
996,648
5,579,410
326,550
6,902,608		 Total
2019
£
Fund balances at 31
December 2020 are
represented by:
Tangible assets
Investments
Net current assets
Net assets		 —
—
—		 996,648
5,579,410
217,827		 945,038
5,925,613
(226,852)
— 6,793,885 6,643,799

Comparative information

General
funds
£		 Designated
funds
£
945,038
5,925,613
(283,726)
6,586,925		 Restricted
funds
£		 Total
2019
£
Fund balances at 31 December 2019 are
represented by:
Tangible assets
Investments
Net current assets
Net assets		 —
—
—		 —
—
56,874		 945,038
5,925,613
(226,852)
— 56,874 6,643,799

Hospitality Action 35

Notes to the financial statements Year ended 31 December 2020

18 Financial instruments

Group
2020
£		 Charitable
company
2020
£		 Group
2019
£		 Charitable
company
2019
£
Financial assets held at fair value
Financial assets held at amortised cost
Financial liabilities held at amortised cost		 5,579,410
99,744
(850,496)		 5,579,410
—
(868,346)		 5,925,613
153,291
(449,045)		 5,925,613
25,338
(510,324)

19 Taxation

Hospitality Action is a registered charity and therefore is not liable to income tax or corporation tax on income or gains derived from its charitable activities, as they fall within the various exemptions available to registered charities. Whilst the Charity's trading subsidiary company is not exempt from corporation tax on its taxable profits it is not expected that any taxation will arise as it is the intention of the company's directors to donate any such profits to the parent Charity.

20 Subsidiary undertaking

The subsidiary undertaking is Hospitality Action (Trading) Limited (registered company 03332706) which is incorporated in England and had net assets of £232,627 as at 31 December 2020 (31 December 2019: net assets of £177,859). In the year ended 31 December 2020 it had turnover of £626,504 (year ended 31 December 2019: £603,541) and expenditure of £393,887 (year ended 31 December 2019: £425,692). It will gift aid its taxable profit to the parent charity in 2021.

21 Related charity

The Charity was incorporated in 2003 and took over the majority of the assets of an unincorporated charity also known as Hospitality Action (Charity Number 208855). The unincorporated charity continues to own a leasehold flat which is occupied by an assured tenant.

22 Related party

The Charity holds 20% of the shares of 62 Britton Street Ltd, a company, which holds the Charity's interest in the freehold of its premises. There are no outstanding balances between the Charity and the company.

23 Other related party transactions

Owing to the nature of the charity’s operations and the composition of the Board of Trustees being drawn from the hospitality sector, it is inevitable that transactions will take place with organisations in which a member of the Board of Trustees may have an interest. All transactions involving such organisations are conducted at arm’s length and on normal business terms.

Hospitality Action 36