2022-12-31-accounts

Hospitality Action

Annual Report and Consolidated Financial Statements

31 December 2022

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	17
Independent auditor’s report	19
Accounts
Consolidated statement
of financial activities	23
Statement of financial activities
(charity only)	24
Balance sheets	25
Consolidated statement
of cash flows	26
Accounting Policies	27
Notes to the financial statements	31

Hospitality Action

Reference and administrative information

Board of Trustees	William Baxter CBE (Chairman)
	Jon Dee ACA (Treasurer)
	Kevin Charity
	Hazel Detsiny (resigned 5thJuly 2022)
	Simon Esner
	Ringo Francis
	Chris Garside
	Andrew Guy MBE
	Matt Johnson
	Simon Jones
	Tim Jones
	Andrew Latham
	Kate Nicholls
	Danny Pecorelli (appointed 6thDecember 2022)
	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

Hospitality Action 1

Reference and administrative information

Investment managers Cazenove Capital Management 1 London Wall Place London EC2Y 5AU Solicitors H3 Solicitors Ltd Suite 1, The Old Pig Styes, Brighthams Farm, Bines Road, Partridge Green, West Sussex, RH13 HEQ

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 2022:

Finance and Investment Jon Dee ACA (Chair) Lizi Hills (appointed January 2022) 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
	Jeremy Goring
	Sir Garry Hawkes CBE
	Angela Hartnett OBE
	Nigel Haworth
	Paul Heathcote MBE
	Phil Hooper
	Tom Kerridge
	Donald Macdonald OBE
	Sinead Mallozzi
	Anton Mosimann OBE
	Harry Murray MBE
	Jamie Oliver MBE
	Alain Roux
	Phil Vickery MBE
	The Viscount Lord Thurso
	Brian Turner CBE
	Robert Walton MBE

Hospitality Action 4

Trustees’ report Year ended 31 December 2022

The Trustees, who are also the directors, present the annual accounts for Hospitality Action for the year ended 31 December 2022 prepared in accordance with the Statement of Recommended Practice for Charities (SORP) 2019 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:

•  A grants programme to alleviate poverty and support beneficiaries in times of crisis

•  An outreach programme aiming to keep loneliness and isolation at bay for retired hospitality employees, called the Golden Friends scheme

•  Expert triaging, advice, guidance and signposting to other potential sources of support and, where appropriate, funded counselling.

•  An Employee Assistance Programme – commercial scheme offering specialist advice, support and assistance on a range of issues for hospitality employees

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 fifth full year as Chief Executive.

Hospitality Action 5

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE

Hospitality Action further consolidated the growth in awareness and reach it achieved through the Pandemic, in 2022. Through organic growth of fundraising and a growth spurt in the number of companies subscribing to our Employee Assistance Programme (EAP), we were able to deliver the second highest in-year income in the charity’s history, second only to the anomalous success of 2020. And our in-year grants disbursement spend took our total grants response to Covid-19 to over £3m.

Total income for the year reached £3,015,551, which was +£155k versus the previous year, and we delivered an operating surplus of £164,056. This enabled us to spend £824,589 on grants disbursement.

Our EAP grew materially, in terms of both income and scale. Income rose by £180k from £633k at year-end 2021 to £813k at the end of 2022. The number of clients rose from 399 to 478, and the number of lives served by the programme rose from 153,000 to 182,000.

After two years in which lockdowns made it largely impossible to host in-person events, 2022 saw a return to the chef- and hotelier-focussed events that have traditionally underpinned our fundraising efforts. In particular our biennial Back to the Floor event delivered income of £260,000 - comfortably the most successful single fundraising instance in the charity’s history. This enabled us to move to a blend of in-person and third-party fundraising streams, with ‘pound on the bill’ initiatives, ‘chosen charity’ status and our Invisible Chips activation complementing event-based income. We also continued to benefit from the generosity of hospitality operators and their value chain. Most notably, a major campaign launched by AB InBev in support of us, entitled Stella Please, drew income of £162,000.

We continued to add digital assets to the online Wellbeing Hub we launched in 2020 to offer information and advice to hospitality workers whose mental health was affected by Covid. To reflect the cost of living crisis emergency borne of Russia’s invasion of Ukraine, we added financial management and resilience assets to the existing mental health focussed content.

And we continued to provide moral and pastoral support to our Golden Friends community of some 2,500 industry retirees.

Thanks to our increased organic and paid social media activity and profile in the marketplace, awareness of the charity remained high in 2022. Our EAP inbound leads pipeline continued to build, and we enjoyed high levels of take-up for our events and other fundraising activities. We achieved a balance of fundraising & EAP ‘asks’ alongside increased wellbeing output to demonstrate the breadth of our offer and the credibility of the brand. By doing so, our communications helped us to deliver a surplus by year-end.

Hospitality Action 6

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE (continued)

	2022	2021
Review of achievements in 2022
Beneficiary grants	824,589	£902,290
Number of persons awarded grants	827	1,250
Number of companies subscribed to EAP	478	399
Number of employees covered by the EAP	181,822	153,166

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 2022 as follows:

	2022	2021
Top up grants	34 beneficiaries Grants £49,000	37 beneficiaries Grants £49,000
Crisis grants	21 beneficiaries Grants £39,000	27 beneficiaries Grants £28,000
Essential needs grants	270 beneficiaries Grants £145,000	490 beneficiaries Grants £267,000
Other grants	1,502 beneficiaries Grants £592,000	1,846 beneficiaries Grants £558,000

Overall grant spend of £824,589 NB figures above reflect the fact that many beneficiaries received more than one grant.

Golden Friends Scheme – (welfare)

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

•  The number of members increased to 1,526 in 2022 from 1,502 in 2021.

•  The charity had 31 volunteers spread nationally across the UK at the end of 2022, including phone friends, visitors and office volunteers. 64 Golden Friends were matched with volunteers.

•  There were no Golden Friends’ lunches or teas held during the year. These have been suspended since the onset of the pandemic (2021: nil).

•  Gift vouchers to a value of £15,105 were distributed to 901 beneficiaries (2021: £29,643 to 1,504).

Hospitality Action 7

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE (continued)

Welfare, support and advice (continued)

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.

Employee assistance programme

The programme is specific to the hospitality industry and provides a source of help, support and guidance for its employees. A confidential help line and web based fact sheets are available on the following topics:

Health and wellbeing

Working Life

Financial Matters

Personal advice

Alcohol and drugs support

Legal advice

The programme also allows for counselling and one to one support where needed.

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 2022 478 companies have signed up.

Review of the year and future plans

Plans for 2023

The UK hospitality sector’s ongoing challenges were compounded in 2022 by the price rises sparked by Russia’s invasion of Ukraine, and by growing staffing shortages that emerged as Brexit started to bite. As we head into 2023 and beyond, we expect the unprecedented levels of demand for financial support we’ve experienced to continue.

Fundraising

To enable us to service this demand, we’ll continue to work to a blended fundraising model that spans third party fundraising (devolving fundraising to hospitality operators, their customers, and guests, through ‘pound on the bill’-style programmes and other at-source activations), margin-rich supporter events and institutional funding from major donors.

Hospitality Action 8

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE (continued)

Review of the year and future plans (continued)

Plans for 2023 (continued)

Fundraising (continued)

Our current fundraising events product set is strong, having consolidated our events programme during the pandemic to focus on a smaller number of well-attended, high margin in-person and virtual events, all of which have a good degree of longevity.

We will maintain our focus on our ongoing strategic shift towards deriving a greater proportion of income from regular, multi-year or subscription-based income streams, which have the potential to deliver a more scalable revenue base. By simplifying and standardising workflows, we will look to improve our support of third-party fundraising initiatives and to standardise our offer. To this end, we will consolidate and scale fundraising programmes such as ‘charity of the year’ corporate partnerships and Invisible Chips sales.

In 2023, we will also sharpen our focus on developing our skillset in institutional fundraising, especially in the creation of bids and delivery of more complex donor reporting requirements. We will develop projects which allow us to apply for more restricted multi-year funds, so futureproofing the income base.

Services

As beneficiaries’ needs evolve, so will our support: we’ll continue to take the agile approach to grants and services product development that we’ve displayed since early 2020. In terms of grants disbursal, we will continue to evolve our grant streams to answer the changing needs of our beneficiaries, as we did in 2021 with the introduction of grants specifically aimed at people who had lost out from the £20 reduction of Universal Credit, and in winter 2022 with the introduction of our cost-of-living grants.

In the services area, operational and digital improvements will provide faster triage and routing of applications and improve applicants’ user experience.

Building on our use of open-banking software will allow us to automate the laborious process of financial verification and thereby reduce the potential for fraudulent or ineligible applications. These efficiencies will help us more effectively gear our grant-making efforts according to fluctuations in income, and to scale operations should another emergency or income surge emerge.

In response to the increased complexity of cases we will continue our move towards a more holistic offering by providing greater ‘aftercare’ support for grants recipients. This will be delivered by upskilling the team, building alliances with other organisations such as housing charities, and routing more cases into means-tested counselling, self-guided learning and other services.

Hospitality Action 9

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE (continued)

Review of the year and future plans (continued)

Plans for 2023 (continued)

Services (continued)

Our Golden Friends outreach scheme will continue to support hospitality retirees, and we will aim to grow membership through promoting the scheme to our EAP clients. In 2022, we did not recommence the in-person Golden Friends events a minority of GFs enjoyed, and in 2023 we will continue to focus on benefits that are available to all scheme members.

Ongoing work to position the charity as a trusted source of wellbeing content, products and thought leadership for hospitality operators will continue in 2023. We will develop more freeto-view wellbeing content for our online Wellbeing Hub.

Employee Assistance Programme (EAP)

While grant-giving remains at the core of the charity’s beneficiary provision, it is increasingly clear that a more scalable way to better improve the lives of many more hospitality workers is via the growth of our EAP provision.

In 2023 the charity is embarking on a period of development to consolidate its operational capacity and aggressively scale our EAP provision and reach, with the aspiration of balancing our income mix equally between fundraising and EAP services within three to five years.

We will look to maintain the exponential growth of the EAP (we added 79 clients and 29k lives in 2022, with income growth of £180k), and to broaden its product set, by migrating to a new partner and platform. While maintaining our reputation for clinical excellence and service, we will launch a web- and app-based digital wellbeing platform that will deliver a range of new clinical pathways, self-guided learning, new training streams, and a rewards and benefits platform in the second half of 2023.

This new product development will be guided by user research that will be in the field in Q2. These planned developments will help us to grow usage and product penetration amongst existing clients; and to increase market share assisted by content marketing, bought media acquisition, and business development support.

Brand

To sustain the surge in awareness of our work around the hospitality sector and the public that we’ve experienced since 2020, we will continue to grow paid-for social media advertising and look to develop more structured lead generation and customer acquisition programmes.

As we grow, it is important to maintain the balance in our messaging. We will continue to focus on how we meet beneficiaries’ needs, while also growing the share of voice given to more business-focused EAP messaging. And we will optimise the promotional potential of National Hospitality Day, a concept we launched in 2021.

Hospitality Action 10

Trustees’ report Year ended 31 December 2022

ACHIEVEMENTS AND PERFORMANCE (continued)

Review of the year and future plans (continued)

Plans for 2023 (continued)

Operational capacity building

The growth we experienced during the Pandemic clearly demonstrates the market potential for us to further scale our operations. To capitalise on this opportunity, in 2023 we are embarking on a period of transformation, to improve operational capacity across all functions of fundraising and service provision. We are reviewing, upgrading, and optimising systems, processes, and technology.

Governance

Hospitality Action is committed to demonstrating and encouraging equality, diversity, and inclusion among its workforce, in its day-to-day work and in its beneficiary support, and to eliminating unlawful discrimination of any kind. We have a duty to make a positive impact on our people, our beneficiaries and service users, our stakeholders, and the wider world.

We are fully committed to making a positive contribution to the world, one that goes in tandem with our charitable work. We will keep this commitment in sharp focus in 2023 and beyond.

We continue to work hard to ensure that our cohort of Trustees, patrons and ambassadors reflects and represents the ethnic diversity of the workforce we serve. Our ongoing aim is to continue our journey to embodying a truly diverse and inclusive charity.

We will continue to focus hard on identifying and eliminating fraudulent applications.

Longer term

We are committed to delivering structural improvement to the sector we serve in terms of the way it supports employee wellbeing. With the benefit of insight gained from increased usage data and from our EAP and free-to-market wellbeing content, our ambition is to develop a set of independently accredited educational qualifications and standards for physical and mental health management and empathetic leadership for managers across the sector.

FINANCIAL REVIEW

Income for the year was £3,015,551 (2021: £2,860,825) and expenditure £2,851,495 (2021: £2,667,207) giving rise to an operating surplus of £164,056 (2021: surplus of £193,618). The year witnessed the second highest income in the charity’s history, second only to 2020.

Third-party and institutional fundraising remained strong. And we saw growth from our virtual and in-person events, with October’s Walk for Wellbeing initiative raising £79k, and our biennial Back to the Floor dinner raised £260k, making it the charity’s single most successful fundraising instance ever. Our employee assistance programme saw an exponential growth in income, clients and number of lives covered.

Hospitality Action 11

Trustees’ report Year ended 31 December 2022

FINANCIAL REVIEW (continued)

Expenditure of £2,851,495 was up £184,288 on 2021. Expenditure on charitable activity associated with grants, advice and support was £1,929,895, an increase of £103,842.

After losses on investments of £356,006 the overall result for the year was a deficit of £191,950 resulting in a corresponding decrease in the balance of funds which stood at £7,466,658 as at 31 December 2022.

Reserves policy and financial position

The total funds held by the group at the end of the year were £7,466,658 (2021: £7,658,608).

Of the above total £47,490 (2021: £32,400) related to restricted funds not available for the general purposes of the Charity. As at 31 December 2022 £251,842 of funds were held within the subsidiary company (2021: £222,002). All of the remaining funds of the Charity totalling £7,167,326 (2021: £7,404,206) 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 and its beneficiaries.

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 and Investment 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 reach 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 and Investment Committee each quarter.

The Trustees are required to review this reserves policy annually.

Hospitality Action 12

Trustees’ report Year ended 31 December 2022

FINANCIAL REVIEW (continued)

Reserves policy and financial position (continued)

We have not drawn down cash from our investment portfolio since early 2020, and our intention remains to maintain sufficient cash reserves to avoid future drawdowns. Since the investment portfolio’s year-end valuation of £5.739m, we have seen its value fluctuate through the first half of 2023 between a high of £5.965m in February and a low of £5.674m in March, due to the ongoing conflict in Ukraine, the continuing impact of rising energy costs, and other global market forces. By the second half of May, the portfolio had rallied to a value of £5.777m. As at 19 May the portfolio stood at £5.777m.

For the moment, our policy continues to be to maintain the portfolio in its current state and direct any income it generates into the charity’s wider work. With the benefit of having seen the impact on our reserves of the past three extraordinary years, in Q3 we plan to launch a formal review of our reserves policy, involving representatives of the charity’s Board of Trustees and Finance Committee.

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 rely upon income from the investment portfolio to finance our charitable activity.

Going Concern

Hospitality Action serves an industry sector that continues to suffer the fallout of the unprecedented set of socio-economic factors that has defined the past three years.

Hospitality operators are negotiating a perfect storm of soaring energy and produce process, diminishing out-of-home spend, and staffing shortages. We expect to see a steady rise in hospitality business closures through 2023.

Counter-intuitively, against this backdrop, Hospitality Action has achieved record levels of income and expenditure and has seen a rapid scaling of its employee assistance programme, as operators have looked to build in their employee benefits to keep staff attrition rates in check. We have also grown awareness of our work, which has led to more widespread takeup of our various fundraising activations.

Our Trustees 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:

• The exponential growth of our Employee Assistance Programme and our plans to evolve and expand the programme’s benefits and therefore its appeal.

Hospitality Action 13

Trustees’ report Year ended 31 December 2022

FINANCIAL REVIEW (continued)

Going Concern (continued)

• The growth in third-party fundraising relationships.

• The fact that awareness and recognition of the charity’s existence and work has soared since 2020.

• The fact that the charity’s long-term asset base as represented by our investment portfolio has coped well with the challenges of the past three years.

• Our healthy cash reserves.

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 approved by the Finance and Investment Committee and Trustees. The Investment Managers meet periodically with the Charity's Finance and 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:

• currently working in the industry within the UK

• have worked 5 or more years in the industry in the UK

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.

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 publicly available via www.companieshouse.co.uk

Hospitality Action 14

Trustees’ report Year ended 31 December 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

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 Board of Trustees and Finance and Investment Committee periodically review the major risks to the charity and have implemented systems and controls to mitigate these risks wherever practicable. The charity’s risk register is being enhanced in 2023 to enable us to better monitor risks on an ongoing gross and net basis, and therefore track the impact of the steps being taken to mitigate them. The register keeps issues around financial fraud in sharp focus. And we continue to work with other charities to share best practice in this area.

Hospitality Action 15

Trustees’ report Year ended 31 December 2022

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

We continue to experience precedented demand for beneficiary support. Our policy of closing the grants application portal periodically to manage the volume of cases ensures that we are not overwhelmed by demand, and that we can limit spend on beneficiary services to what our cash reserves allow.

In response to the charity’s growth in scale over the past three years, we are undertaking a process, systems, and technology mapping review to futureproof our operational resilience and improve operational capacity.

Equal Opportunities Statement For Employees

Hospitality Action complies fully with all statutory requirements and has robust policies regarding what it expects of its staff and trustees. The charity has given consideration to the Charity Governance Code, in particular the latest updates to the Code surrounding equality, diversity and inclusion. This is of particular relevance in recruiting new trustees, new members of staff and ensuring all personnel are treated equally and fairly.

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.

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 subject to disciplinary action for gross misconduct.

Hospitality Action 16

Trustees’ report Year ended 31 December 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Fundraising Statement

We continue to receive donations, event bookings and Regular Giving payments via our website. We host an annual Summer Challenge and another in person 20k walk at hosted cities across the UK using a new platform, Enthuse. We also use Enthuse to receive funds raised by third parties alongside JustGiving and we use Givergy to host online auctions and raffles. Our guest-pays activation, Invisible Chips, is still live, with all participating operators instructed in how to pay in funds and manage any VAT implications. No moneys are raised via 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 through Stripe and GoCardless 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

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:

•  select suitable accounting policies and then apply them consistently;

•  observe the methods and principles in the Charities SORP;

•  make judgements and estimates that are reasonable and prudent;

•  state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

Hospitality Action 17

Trustees’ report Year ended 31 December 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees’ Responsibilities (continued)

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:-

•  So far as each director is aware, there is no relevant information of which the company's auditors are unaware; and

•  Each director has taken all steps that he/she ought to have taken to make himself/herself aware of any relevant matters and to ensure that the company's auditors are aware of such information.

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

Chairman

Approved by the board of trustees on: 6[th] June 2023

Hospitality Action 18

Independent auditor’s report Year ended 31 December 2022

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 2022, which comprise the consolidated statement of financial activities, the charityonly 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:

•  give a true and fair view of the state of the group’s and of the parent charitable company’s affairs as at 31 December 2022 and of the group’s income and expenditure for the year then ended;

•  have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

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 19

Independent auditor’s report Year ended 31 December 2022

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:

•  the information given in the trustees’ report, which is also the directors’ report for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•  the trustees’ report, which is also the directors’ report for the purposes of company law, has been prepared in accordance with applicable legal requirements.

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:

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

•  the financial statements are not in agreement with the accounting records and returns; or

•  certain disclosures of trustees’ remuneration specified by law are not made; or

•  we have not received all the information and explanations we require for our audit; or

•  the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the trustees’ report and from the requirement to prepare a strategic report.

Hospitality Action 20

Independent auditor’s report Year ended 31 December 2022

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:

• We obtained an understanding of the legal and regulatory frameworks applicable to the charity and the sector in which it operates. We determined that the following laws and regulations were most significant: 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 Companies Act 2006 and the Charities Act 2011.

• We understood how the charity is complying with those legal and regulatory frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of Board minutes and papers provided to the Finance and investment Committee.

• We assessed the susceptibility of the charity’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

• Identifying and assessing the design effectiveness of controls in place to prevent and detect fraud;

Hospitality Action 21

Independent auditor’s report Year ended 31 December 2022

Auditor’s responsibilities for the audit of the financial statements (continued)

• Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

• Challenging assumptions and judgements made by management in its significant accounting estimates;

• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and

• Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the relevant financial statement item to which they relate.

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.

21 July 2023

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

Hospitality Action 22

Consolidated statement of financial activities (including an income and expenditure account) Year ended 31 December 2022

Notes	Unrestricted funds £	Restricted funds £	Year ended 31 December 2022 £	Unrestricted funds £	Restricted funds £	Year ended 31 December 2021 £
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 before net (losses)/gains on investments Net (losses)/gains on investments 11 Net (expenditure) income Transfer between funds 14 Net movement in funds Reconciliations on fund: Fund balances brought forward Fund balances carried forward	932,535 85,350 11,012 51,500 908,014 812,861 119,279	— — — 95,000 — — —	932,535 85,350 11,012 146,500 908,014 812,861 119,279	1,179,127 92,000 12,037 226,000 536,832 633,111 113,218	— — — 68,500 — — —	1,179,127 92,000 12,037 294,500 536,832 633,111 113,218
	2,920,551	95,000	3,015,551	2,792,325	68,500	2,860,825
	727,388 173,090 21,122	— — —	727,388 173,090 21,122	654,688 166,332 20,134	— — —	654,688 166,332 20,134
	921,600 1,288,966 561,019 —	— 79,910 — —	921,600 1,368,876 561,019 —	841,154 1,358,178 410,625 —	— 57,250 — —	841,154 1,415,428 410,625 —
	1,849,985	79,910	1,929,895	1,768,803	57,250	1,826,053
	2,771,585	79,910	2,851,495	2,609,957	57,250	2,667,207
	148,966 (356,006)	15,090 —	164,056 **(356,006) **	182,368 562,382	11,250 —	193,618 562,382
	(207,040) —	15,090 —	(191,950) —	744,750 87,573	11,250 (87,573)	756,000 —
	(207,040) 7,626,208	15,090 32,400	(191,950) 7,658,608	832,323 6,793,885	(76,323) 108,723	756,000 6,902,608
	7,419,168	47,490	7,466,658	7,626,208	32,400	7,658,608

The notes on pages 31 to 40 form part of these financial statements.

Hospitality Action 23

Statement of financial activities (charity only) Year ended 31 December 2022

	Unrestricted funds £	Restricted funds £	Year ended 31 December 2022 £	Unrestricted funds £	Restricted funds £	Year ended 31 December 2021 £
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 before net (losses)/gains on investments Net (losses)/gains on investments Net (expenditure) income Transfer between funds Net movement in funds Reconciliations on fund: Fund balances brought forward Fund balances carried forward	932,535 222,002 85,350 11,012 51,500 908,014 119,279	— — — — 95,000 — —	932,535 222,002 85,350 11,012 146,500 908,014 119,279	1,179,127 233,101 92,000 12,037 226,000 536,832 113,218	— — — — 68,500 — —	1,179,127 233,101 92,000 12,037 294,500 536,832 113,218
	2,329,692	95,000	2,424,692	2,392,315	68,500	2,460,815
	727,388 173,090 21,122	— — —	727,388 173,090 21,122	654,688 166,332 20,134	— — —	654,688 166,332 20,134
	921,600 1,288,966 —	— 79,910 —	921,600 1,368,876 —	841,154 1,358,178 —	— 57,250 —	841,154 1,415,428 —
	1,288,966	79,910	1,368,876	1,358,178	57,250	1,415,428
	2,210,566	79,910	2,290,476	2,199,332	57,250	2,256,582
	119,126 (356,006)	15,090 —	134,216 **(356,006) **	192,983 562,382	11,250 —	204,233 562,382
	(236,880)	15,090	**(221,790) **	755,365	11,250	766,615
	—	—	—	87,573	(87,573)	—
	(236,880)	15,090	**(221,790) **	842,938	(76,323)	766,615
	7,404,206	32,400	7,436,606	6,561,268	108,723	6,669,991
	7,167,326	47,490	7,214,816	7,404,206	32,400	7,436,606

Hospitality Action 24

Balance sheet Year ended 31 December 2022

Notes	2022	2022	2021	2021
	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 Net assets Funds: Restricted funds 15 Unrestricted funds: General funds Subsidiary Designated funds (fixed assets and investments)	907,104 21,650 5,739,357	907,104 21,650 5,739,357	911,119 52,291 6,115,292	911,119 52,291 6,115,292
	6,668,111	6,668,111	7,078,702	7,078,702
	433,647 1,037,024	569,180 241,190	312,079 1,114,488	215,897 706,512
	1,470,671	810,370	1,426,567	922,409
	(672,124)	(263,665)	(846,661)	(564,505)
	798,547	546,705	579,906	357,904
	7,466,658	7,214,816	7,658,608	7,436,606
	47,490 — 251,842 7,167,326	47,490 — — 7,167,326	32,400 — 222,002 7,404,206	32,400 — — 7,404,206
	7,466,658	7,214,816	7,658,608	7,436,606

The notes on pages 31 to 40 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:

Chairman

Treasurer

Chief Executive

Approved on: 6[th] June 2023

Hospitality Action 25

Consolidated statement of cash flows Year ended 31 December 2022

Notes	2022 £	2021 £ (28,404) 113,218 (26,115) 1,571,795 (1,545,295) 113,603 85,199 1,029,289 1,114,488
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 for the year Cash at bank and in hand at the start of the year Cash at bank and in hand at the end of theyear B	(206,789) 124,279 (14,883) 1,895,002 **(1,875,073) **
	129,325
	(77,464) 1,114,488
	1,037,024

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

			2022 £	2021 £
Net (expenditure) income Depreciation and amortisation Losses (gains) on investments Investment income Increase in debtors Increase (decrease) in creditors Net cash used in operating activities			(191,950) 49,539 356,006 (124,279) (400,791) 104,686	756,000 59,353 (562,382) (113,218) (135,411) (32,746)
			(206,789)	(28,404)
Analysis of cash	2021 £		Cash flow £ (77,464)	2022 £
Cash at bank and in hand	1,114,488			1,037,024

B Analysis of cash

C Analysis of changes in net debt

	At 1 January £	Cash flows £	At 31 December £
Cash at bank and in hand Cash held by the investment manager Loan Total net debt	1,114,488 559,346 (300,227)	(77,464) 169,431 300,227	1,037,024 728,777 —
	1,373,607	392,194	1,765,801

Hospitality Action 26

Accounting policies Year ended 31 December 2022

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) - (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:

• The value attributed to the charity’s leasehold property included in tangible fixed assets.

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.

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 2023, 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).

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.

Hospitality Action 27

Accounting policies Year ended 31 December 2022

Income

Income is recognised on a receivable basis and principally comprises grants, events income, income from the delivery of services and donations receivable. Any income received which is not attributed to the year of receipt, is included within deferred income in creditors. 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. Expenditure is classified as either costs of raising funds (which includes fundraising and events costs as well as investment manager’s fees) or charitable activities costs being the costs the charity incurs in furthering its charitable objectives. 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 28

Accounting policies Year ended 31 December 2022

Intangible fixed assets

Intangible assets are shown at cost less provision for amortisation. Provision is made for amortisation on all intangible assets at rates calculated to write off the cost, less estimated residual value over their useful lives which is estimated to be four years.

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 non-recoverability. 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.

Hospitality Action 29

Accounting policies Year ended 31 December 2022

Financial instruments (continued)

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 30

Notes to the financial statements Year ended 31 December 2022

1 Donations

Donations
	2022 £	2021 £
Unrestricted Bidfood Country Range Corinthia Hotel D&D Group Farncombe Estate Fazenda Gleneagles Hotel GoodGood Hawksmoor Hilton Home Grown Hotels Iconic Hotels In-Bev Knight Frank Master of Malt Navarac No15 Grand Pulteney Provenance Inns Remy Cointreau Sir Richard Sutton Ltd Sketch Society of Golden Keys Super Skills Table Talk Foundation The Berkeley The Coaching Inn The Dorchester Collection The Fat Duck The Ned Uber Eats Whitbread Z Hotels Other donations Total unrestricted donations Restricted Total donations Donated services and facilities The Caterer Design & creative Staff Canteen, Dewberry, H2O Totalgifts in kind	36,307 25,000 5,282 16,728 941 112 12,500 5,003 — 16,262 6,804 11,320 162,000 5,000 — 12,719 — 10,311 — 5,500 44,016 5,235 5,000 — — 8,000 — 5,209 7,675 5,000 175,000 10,000 335,611	26,727 5,360 — — 12,800 10,177 1,268 — 25,259 4,231 30,000 13,835 — 65,874 36,510 13,566 2,145 — 35,000 — 20,603 — — 11,000 10,000 8,000 25,000 2,331 — — 50,000 — 769,441
	932,535	1,179,127
	932,535	1,179,127
	29,500 — 55,850	38,000 — 54,000
	85,350	92,000

Hospitality Action 31

Notes to the financial statements Year ended 31 December 2022

2 Grants receivable

Grants receivable
	2022 £	2021 £
Unrestricted: Worshipful Company of Innholders Savoy Educational Trust 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 — 25,000 16,500	10,000 150,000 12,500 53,500
	51,500	226,000
	5,500 88,000 1,500	— 67,000 1,500
	95,000	68,500
	146,500	294,500

3 Investment income

Investment income
	2022 £	2021 £
From listed investments Interest on cash deposits	118,574 705	113,186 32
	119,279	113,218

4 Expenditure

Expenditure
Analysis of 2022 expenditure Notes	Grants	Other direct costs £	Support costs £	Total 2022 £
Raising funds: Cost of raising voluntary income Fundraising events and activities Investment management Charitable activities: Welfare 6 Employee assistance programme Total	— — — 824,589 —	471,802 173,090 21,122 298,728 495,898	255,586 — — 245,559 65,121	727,388 173,090 21,122 1,368,876 561,019
	824,589	1,460,640	566,266	2,851,495

Analysis of 2022 support costs	Expenditure on raising funds £	Expenditure on charitable activities £	Total 2022 £
Staff costs Office rent and shared office costs	202,099 53,487	247,957 62,723	450,056 116,210
	255,586	310,680	566,266

Hospitality Action 32

Notes to the financial statements Year ended 31 December 2022

4 Expenditure (continued)

Expenditure(continued)
Analysis of 2021 expenditure Notes	Grants	Other direct costs £	Support costs £	Total 2021 £
Raising funds: Cost of raising voluntary income Fundraising events and activities Investment management Charitable activities: Welfare 6 Employee assistance programme Total	— — — 902,290 —	413,352 166,332 20,134 271,882 347,916	241,336 — — 241,256 62,709	654,688 166,332 20,134 1,415,428 410,625
	902,290	1,219,616	545,301	2,667,207

Analysis of 2021 support costs	Expenditure on raising funds £	Expenditure on charitable activities £	Total 2021 £
Staff costs Office rent and shared office costs	185,462 55,875	236,043 67,921	421,505 123,796
	241,337	303,964	545,301

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
	2022 £	2021 £
Audit fees Legal and professional Trustees’ expenses Other	14,096 1,326 1,029 19,436	13,664 1,026 279 10,137
	35,887	25,106

Hospitality Action 33

Notes to the financial statements Year ended 31 December 2022

6 Welfare expenditure

Welfare expenditure
	2022 £	2021 £
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 Other grants Volunteers’ expenses Grant management and other beneficiary support services Total cost ofgrant makingand other beneficiarysupport services	48,871 145,164 38,427 25,208 58,410 473,998 3,434 19,020 12,057 —	49,495 267,468 28,402 37,943 43,350 451,600 3,153 12,463 8,316 100
	824,589 544,287	902,290 513,138
	1,368,876	1,415,428

7 Employees and staff costs

Employees and staff costs
	2022 Number	2021 Number
The average number of persons employed by the Charity during the year	18	17
Staff costs were as follows:	2022 £	2021 £
Wages and salaries Social security costs Pension costs	758,859 87,395 78,404	685,026 75,763 71,917
	924,658	832,706

The number of employees who received remuneration in excess of £60,000 is analysed as follows:

	2022 No. 1 — 1	2021 No. 1 1 —
£70,001 - £80,000 £110,001 - £120,000 £120,001 - £130,000

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 £148,405 (2021: £143,287).

Trustees’ remuneration and reimbursed expenses

In 2022 £424 was spent on a gifts and awards to trustees (2021 - £45), £100 was spent on hosting a trustee meeting (2021 - £234) and £505 on a dinner for trustees.

Hospitality Action 34

Notes to the financial statements Year ended 31 December 2022

8 Net movement in funds

Net movement in funds
	2022 £	2021 £
This is stated after charging: Depreciation Amortisation Auditor’s remuneration: . Parent charitable company audit . Subsidiary company audit . Other(tax)	18,898 30,641 11,300 1,800 1,750	19,131 40,222 9,800 1,650 1,600

9 Tangible fixed assets – group and charitable company

	Leasehold property £	Office refurbishments £	Furniture and fittings £	Office and other equipment £	Total £
Cost At 31 December 2021 Additions Disposals At 31 December 2022 Depreciation At 31 December 2021 Charge for the year On disposals At 31 December 2022 Net book value At 31 December 2022 At 31 December 2021	863,339 — —	116,065 — —	31,982 6,972 —	58,873 7,911 —	1,070,259 14,883 —
	863,339	116,065	38,954	66,784	1,085,142
	13,200 880 —	71,965 5,040 —	31,590 385 —	42,385 12,593 —	159,140 18,898 —
	14,080	77,005	31,975	54,978	178,038
	849,259	39,060	6,979	11,806	907,104
	850,139	44,100	392	16,488	911,119

The depreciation 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 2021 Additions At 31 December 2022 Amortisation At 31 December 2021 Charge for the year At 31 December 2022 Net book value At 31 December 2022 At 31 December 2021	129,036 —
	129,036
	76,745 30,641
	107,386
	21,650
	52,291

Hospitality Action 35

Notes to the financial statements Year ended 31 December 2022

11 Investments – group and charitable company

Investments – group and charitable company
	2022 £	2021 £
Market value As at 1 January Additions at cost Disposals Realised gains (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	6,115,292 1,875,073 (1,895,002) 9,687 (365,693)	5,579,410 1,545,295 (1,571,795) (4,381) 566,763
	5,739,357	6,115,292
	1,832,052 3,178,528 728,777	1,949,869 3,606,077 559,346
	5,739,357	6,115,292
	5,324,743	5,147,049

The following holdings exceed 5% of portfolio value – Vanguard S&P 500 UCITS ETF (10%), JP Morgan Liquidity LVNAV 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 2022 £	Charitable company 2022 £	Group 2021 £	Charitable company 2021 £
Fundraising debtors Trade debtors Amounts due from trading subsidiary Prepayments and accrued income	16,800 141,280 — 275,567	16,800 — 279,223 273,157	— 96,460 — 215,619	5,175 — 31,268 179,454
	433,647	569,180	312,079	215,897

13 Creditors: amounts falling due within one year

	Group 2022 £	Charitable company 2022 £	Group 2021 £	Charitable company 2021 £
Grants approved but unspent at year end Trade creditors Taxation and social security Accruals and deferred income Loan from Cazenove* Amounts due to related charity (note 21)	21,919 94,867 27,333 479,705 — 48,300	21,919 32,149 27,333 133,964 — 48,300	13,566 47,412 19,184 406,092 300,227 60,180	13,566 23,757 19,184 147,591 300,227 60,180
	672,124	263,665	846,661	564,505

Hospitality Action 36

Notes to the financial statements Year ended 31 December 2022

13 Creditors: amounts falling due within one year (continued)

Deferred income comprises:

Creditors: amounts falling due within one year(continued) Deferred income comprises:
	2022 £
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	75,275 (74,415) 69,480
	70,340

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

• The loan was drawn down in June 2020 and was subject to 1.5% interest per annum. The loan was technically repayable on demand, however in reality it could be paid back in instalments over five years. The loan was secured over a portion of the charity’s investment portfolio. The full loan was paid off in the year.

14 Unrestricted funds

Unrestricted funds
	Balance at 31 December 2021 £	Income £	Expenditure £	Transfers £	Gains on investments £	Balance at 31 December 2022 £
Charity General Designated Subsidiary company Total	— 7,404,206 222,002	2,107,690 — 812,861	(2,161,027) (49,539) (561,019)	53,337 168,665 (222,002)	— (356,006) —	— 7,167,326 251,842
	7,626,208	2,920,551	(2,771,585)	—	(356,006)	7,419,168

Transfers from the subsidiary company fund to the general and designated funds 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 2020 £	Income £	Expenditure £	Transfers £	Gains on investments _£ _	Balance at 31 December 2021 £
Charity General Designated Subsidiary company Total	— 6,561,268 232,617	2,159,214 — 633,111	(2,139,979) (59,353) (410,625)	(19,235) 339,909 (233,101)	— 562,382 _— _	— 7,404,206 222,002
	6,793,885	2,792,325	(2,609,957	) 87,573	_562,382 _	7,626,208

Hospitality Action 37

Notes to the financial statements Year ended 31 December 2022

15 Restricted funds

Restricted funds
	Balance at 31 December 2021 £	Income £	Expenditure £	General fund Transfers £	Balance at 31 December 2022 Total £
Welfare	32,400	95,000	(79,910)	—	47,490
	32,400	95,000	(79,910)	—	47,490

Comparative information	Balance at 31 December 2020 £	Income £	Expenditure £	General fund Transfers £	Balance at 31 December 2021 Total £
Welfare Alcohol and drug awareness	21,150 87,573	68,500 —	(57,250) —	— (87,573)	32,400 —
	108,723	68,500	(57,250)	(87,573)	32,400

The longstanding Alcohol and Drug Awareness Programme for students in the hospitality industry was wound down in the early months of 2019. It was felt appropriate to release the surplus funds to the charity’s General Funds.

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.

17					2022 £ 90,533	2021 £
	Total employer cost					71,917
	Analysis of net assets between funds General funds £ Designated funds £ Fund balances at 31 December 2022 are represented by: Tangible assets — 928,754 Investments — 5,739,357 Net current assets — 751,057 Net assets — 7,419,168			Restricted funds £	Total 2022 £ 928,754 5,739,357 798,547 7,466,658	Total 2021 £ 963,410 6,115,292 579,906 7,658,608
	Fund balances at 31 December 2022 are represented by: Tangible assets Investments Net current assets Net assets	— — —	928,754 5,739,357 751,057	— — 47,490
		—	7,419,168	47,490

Hospitality Action 38

Notes to the financial statements Year ended 31 December 2022

17 Analysis of net assets between funds (continued)

Comparative information

Fund balances at 31 December 2021 are represented by: Tangible assets Investments Net current assets Net assets	General funds £ — — — —	Designated funds £	Restricted funds £ — — 32,400 32,400	Total 2021 £
		963,410 6,115,292 547,506		963,410 6,115,292 579,906
		7,626,208		7,658,608

18 Financial instruments

	Group 2022 £ 5,739,357 1,195,103 (174,124)	Charitable company 2022 £ 5,739,357 257,990 (80,311)	Group 2021 £ 6,115,292 96,171 (796,209)	Charitable company 2021 £ 6,115,292 — (545,322)
Financial assets held at fair value Financial assets held at amortised cost Financial liabilities held at amortised cost

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 £251,852 as at 31 December 2022 (2021: net assets of £222,012). In the year ended 31 December 2022 it had turnover of £812,861 (2021: £633,111) and expenditure of £561,019 (2021: £410,625). It will gift aid its taxable profit to the parent charity in 2022.

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 was vacated by the longstanding assured tenant in February 2022.

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.

Hospitality Action 39

Notes to the financial statements Year ended 31 December 2022

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 40