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2020-12-31-accounts

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT AND GROUP FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2020

Paul Jackson, HSF Group Chief Executive, presenting a grant cheque for €13,500 to Connemara Therapeutic Riding, County Galway, in January 2020

Registered Company Number: 6039284 Registered Charity Number: 1123381

THE HOSPITAL SATURDAY FUND

REPORT AND FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2020

CONTENTS Page
Officers and Advisers 1
Report of the Board of Trustees 2 - 12
Independent Auditors’ Report 13 - 19
Consolidated Income Statement 20
Consolidated Statement of Financial Activities 21
Group and Charity Balance Sheets 22
Group Statement of Cash Flows 23
Notes to the Financial Statements 24 - 40

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES

YEAR ENDED 31 DECEMBER 2020

OFFICERS AND ADVISERS
Chairman Mr. J Greenwood
Vice Chairman Mr. D Thomas
Other Trustees Mrs J L Dalton LLB (Hons)
Mr M Davies
Professor P W Palmer BA(Hons) PhD FCIS FIIA DChA FRSH
Mr J Randel
Mrs M Rogers
Chief Executive Mr P W Jackson MSc BA (Hons) DChA
Company Secretary Mrs Pauline Jones CertPFS
Patron Ms. L Garrett CBE FRAM
Principal Bankers HSBC Bank Plc,
London Commercial Banking Centre, Level 6,
71 Queen Victoria Street,
London,
WC2R 1DJ
Solicitors Armstrong Teasdale
200 Strand,
London,
EC2M 2AN
Auditors MHA MacIntyre Hudson
6thFloor,
2 London Wall Place
London
EC2Y 5AU
Investment Managers UBS AG
5 Broadgate
London
EC2M 2AN
Registered Office 24 Upper Ground
LONDON SE1 9PD
Telephone: 020 7202 1365
Fax: 020 7928 0446
Email:charity@hsf.eu.com

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THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES

YEAR ENDED 31 DECEMBER 2020

The Board of Trustees is pleased to present the 14[th] Annual Report comprised of the Report of the Board of Trustees and Strategic Report and the audited financial statements for the year ended 31 December 2020.

STRATEGIC REPORT

Summary

The Hospital Saturday Fund has been helping people in times of illness or medical need since 1873. In those days there was no NHS and very little government aid for those who needed it most. This led the Victorian social reformer, the Twelfth Earl of Meath, and others to establish The Hospital Saturday Fund to give working people an opportunity to contribute to the costs of running their local hospitals, so named because Saturday was the traditional pay-day when people were more likely have a few pennies to spare. Over the years leading to the formation of the NHS in 1948, HSF gradually became a health cash plan but maintained its charitable support for hospitals and medical charities.

The Hospital Saturday Fund is now a grant-making charity which donates to medically associated charities for care and research, and to some individuals with health problems throughout the UK and Ireland. The Hospital Saturday Fund is also the parent of two trading subsidiaries The HSF health plan Ltd & HSF Assist Ltd which generate the income from their trading activity to fund the grant-making. HSF health plan Ltd is a company limited by guarantee which provides a range of health cash plan schemes throughout the United Kingdom and the Republic of Ireland. HSF Assist Ltd provides an employee support telephone service to corporate clients.

Services Agreement

A Services Agreement between the Charitable Company and HSF health plan Limited has been entered into so that staff and resources will be provided to the Charitable Company by the Trading Company.

OBJECTIVES AND ACTIVITIES

Charitable Objects

The Charitable Company’s principal objects as set out in its Memorandum of Association are:

“the relief of sickness and suffering and giving of help to those who are aged, infirm unemployed or in need and who require Medical Relief as hereinafter defined or who are pregnant and for the promotion of medical research for the benefit of the public in the United Kingdom of Great Britain and Northern Ireland, Eire, the Channel Islands, the Isle of Man and Malta.”

Impact

The Trustees of the Charitable Company are aware of their duties under the Charities Act in regard to public benefit. Each Trustee is aware of the general public benefit guidance from the Charity Commission. They aim to discharge that trust by making grants to a great number of medical charities which benefit a wide section of the general public in both the United Kingdom and Ireland. The Board has set in place monitoring and evaluation procedures to review the impact of the work to ensure the aims of the Charitable Company are being met. The trading activities of the subsidiary companies enable The Hospital Saturday Fund to continue its charitable activities.

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR

The Grant Making Committee continued to operate with the knowledge that however ‘deserving’ some charities and individuals appeared in their applications, there was not enough money to respond to each one and careful, fair and responsible decisions had to be made. This care was demonstrated in the time taken to examine applications on behalf of individuals and the submissions from charities and by responding as fairly as possible.

Grants made in the year

During 2020, HSF processed 197 applications on behalf of individuals and, after careful assessment by the Grant Making Committee, 153 were awarded a grant making a total of £90,780 (2019: £105,752) for the year. A further total of £1,242,622 (2019: ££1,444,927) was awarded to 414 medical charities, hospices and hospitals including the special medical school grant. The following pages show a chart and table analysing the grants made in the year by type and by geographical spread. Following these charts are examples of the feedback received from recipients which emphasise the public benefit achieved by the grants.

2

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR (continued)

Annual Receptions

The Board endeavours to hold a Reception each year in order to present grants in person to representatives of medical charities, hospices and hospitals. The Trustees held a Reception on 20 February at the Mansion House in Dublin was hosted by Tom Brabazon, the Lord Mayor of Dublin, Vice-President of The Hospital Saturday Fund. A total of £104,000 was donated that evening to 26 different organisations.

The following pie chart shows grants awarded by type of charity for the year ended 31 December 2020

----- Start of picture text -----
Women's Health Addiction Arthritis Autism
Sight Skin
Surgery Behavioural
Rare Diseases
Bladder/Bowel
Pregnancy/Childbirth
Cancer
Physical Disability
Cardiovascular/Chest
Neurological/Brain/Head
Care/SocialCare
Children's
Disab/Diseases
Men's Health
Mental Health Eating
Disorders
Elderly
Medicine
Medical School Endocrine/Renal/Metab.
Learning Difficulties
First Aid/Emergency
Gastrointestinal
Hospital
Genetic/Congenital
Hospice HIV/AIDS Hearing/Speech
----- End of picture text -----

The vast majority of grants awarded were for £2,000 (or €3,000), with 49 lesser donations being made. During 2020, 64 higher grants ranging between £2,000 and £10,000 (or €3,000 and €13,500) were awarded to charities where a specific need was deemed by the Committee to warrant a larger award.

The Committee endeavours to ensure that not only is there a wide geographical spread within the grant making but, within the charities supported, there are many different types of illness, disability, care, research and age groups represented.

3

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR (continued)

Grants are made to both local and national institutions. The following pie chart shows grants awarded by region for the year ended 31 December 2020

----- Start of picture text -----
Yorkshire & Humberside,
East, 1%
3%
Wales, 2%
UK Wide, 22% Ireland, 31%
Isle of Man, 1%
SW & Channel Islands,
London, 4%
6%
Midlands East, 1%
Midlands West, 3%
South East, 10% North East, 1%
Scotland, 8% Northern Ireland, 3% North West, 4%
----- End of picture text -----

Organisations receiving grants ranged from Katie Piper Foundation, Down Syndrome Scotland, Brain Tumour Charity, British Red Cross, Orthopaedic Research, Blood Bikes Leinster, Moorfields Eye Charity, East Anglian Air Ambulance, Cancer Fund for Children, Alzheimer Society of Ireland, Irish Therapy Dogs, Anthony Nolan Trust, Parkinson’s Association of Ireland, Young Epilepsy, Cerebral Palsy Scotland, Ty Hafan Children’s Hospice, Cork Association for Autism, Leonard Cheshire Isle of Man, St Mark’s Hospital Foundation, Cure Leukaemia.

Grants to hospitals were for specific projects, equipment or designated charitable funds.

Covid-19

The Trustees with the support of the Charity’s senior management team had decided to change Grant-making activities during the period from April to June 2020 in order to meet challenges of Covid-19. During the spring and early summer, a skeleton staff (working from home) managed to administer 102 grants to charities across the UK and Ireland for such things as PPE and medical helplines. The charities we supported included Richard House Children’s Hospice London, the Martha Trust, the Princess Alice Hospice, Angel Eyes Northern Ireland, Laura Lynn Children’s Hospice Dublin and Heart Children Ireland. The Trustees are rightly proud that the Hospital Saturday Fund was able to help people during a time when they needed us most.

Fund Raising

The Group does not fundraise externally or use any professional fundraiser or any commercial participator in raising its funds.

Evaluation process

In meeting the Charities Act requirement to demonstrate public benefit through the grant making process, Trustees consider not only the recipient charities and their applications but also the impact the past awards have had. As such, the Trustees ensure that feedback from recipients is obtained where possible and reviewed for evidence of the grant being used for its correct purpose.

4

THE HOSPITAL SATURDAY FUND

(A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR (continued)

Condensed versions of updates received from grantees are available on our website: https://www.hospitalsaturdayfund.org/news-archive. Amongst others, updates on the website relating to work supported by the Hospital Saturday Fund in 2020 refer to:

In addition, the Hospital Saturday Fund receives many letters of appreciation from grantees. The following are quotations taken from letters sent to the Charity following grants being awarded to each:

Grant to London’s Air Ambulance

The Hospital Saturday Fund have made an invaluable contribution to the work of London's Air Ambulance Charity over the years. The most recent grant awarded is helping us pay for the additional travel and accommodation expenses of our advanced trauma team as they support nationwide efforts to manage the impact of Covid-19. We are extremely grateful for this continued support.

Grant to The Children’s Trust

Thank you so much for your lovely news of a grant towards the additional costs we have had to incur for Personal Protective Equipment. That’s extremely generous of The Hospital Saturday Fund and is truly appreciated, particularly at this difficult time during the global coronavirus pandemic.

Grant to Chronic Pain Ireland

Please accept our sincerest gratitude for your ongoing support of our charity and please convey our thanks and gratitude to all involved in the decision making process. We can now roll out our talks and meetings to those struggling at this time and we are so thankful to you all.

Grant to Heart Children Ireland

Our Family Psychology Support Service is now our busiest and most sought after service. When you add the COVID-19 Pandemic into an already stressful situation for parents and families, we can fully understand this increase for support. The most recent grant approved by HSF to Heart Children Ireland comes at a critical time for this service. Due to the increase in demand for this support and the huge drop in our fundraising income we had to, for the first time since its inception, consider a reduction in this vital service. However, the awarding of the grant from HSF has secured our Family Psychology Support service for many months. We are forever grateful to you all.

Grant to Thames Valley Air Ambulance

The Hospital Saturday Fund awarded a grant to Thames Valley Air Ambulance towards the cost of vital training for our doctors and paramedics. It’s hard to fully explain the impact this funding has had on the care we deliver but to quote a member of the team “This was the most valuable, and useful course I have attend in 18 years of service with TVAA, thank you!”

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THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR (continued)

Grant to Tommy’s

We are so grateful for your support. Without our wonderful supporters, we simply wouldn’t be able to make the progress that we have to improve care and make pregnancy safer for families.

Grant to Shine

I wanted to take this opportunity to say a very sincere thank you. Your donation will help us to continue to deliver specialist support and care throughout the lives of people with Spina Bifida and/or Hydrocephalus, and to make a positive difference to their lives. A very important privilege is having you as a supporter.

Grant to Good Shepherd Cork

That’s terrific news! Thank you very much indeed for your support and efforts on our behalf. The grant will really make a positive difference to children struggling with the double disadvantages of ASD and homelessness.

Grant to Cancer Fund for Children

With coronavirus having a major impact on all our lives and organisations, I wanted to let you know how grateful we are for your very kind donation. Cancer, and how it affects children and their families, will unfortunately not stop during this unprecedented crisis. Thank you for supporting children and young people who need our help now more than ever. We couldn't do it without you.

Grant to Irish Red Cross

We are currently facing costs related to PPE including PPE equipment, uniforms, single issue items, and the cost of equipping our staff with items that are now required for hygiene and personal protection e.g. helmets, gloves, visors/masks, etc so your grant is indeed very much appreciated and welcomed and will go a long way towards covering these costs for our unit and volunteers. Thank you again for your generous support, we really appreciate it more than you can know.

Individuals have also expressed their gratitude and there are extracts from letters below:

Grant for a Wheelchair

I am really happy as I had bad news yesterday for open heart surgery and you have just put a smile on my face, thank you, thank you. I’m crying with joy, for once someone was willing to help me, I can’t believe it, pinch me. Individual Grant Recipient

Grant for Speech Therapy

Just to keep you updated, Tay has had four sessions of the new therapy and already he can say A, B, S and say ‘mumma’, ‘more’, ‘me’ and best of all he can moo like a cow! Please could you let the Trustees know and thank you all so, so much for helping in Tay's communication journey. He is finally starting to find his voice. Parent of Individual Grant Recipient

Grant for Mobility Equipment

My grandson’s key worker with Sense NI approached yourselves for a grant, to enable Jackson to be more mobile by using a mustang walker and after being told he would never walk, this has given him some independence. I want to thank you so much for the grant you’ve given him, to see him improve weekly is such a glorious sight to see. This will change his life and give him more confidence in being a bit more independent. Again thank you so much, you’ve no idea how grateful we are, especially Jackson.

Family Member of Individual Grant Recipient

Grant for a Hoist

Thank you so much for the recent grant cheque that we received from the HSF. This money will go towards a hoist in our daughter's new bedroom. It makes the job of bathing her so much easier and safer for us as her parents and for the carers who come in to help us in the evenings. Again, thank you so much for this donation - we will be forever grateful to HSF. Parent of Individual Grant Recipient

Grant for Communication Equipment

I can definitely speak very highly of your charity. Your charity along with all the personalities there has helped me out so much over the years to the point that I would have been lost without you. You have given me so much independence and made it all worthwhile. Once again, thank you so much for this grant and the lovely generosity of your charity. Individual Grant Recipient

6

THE HOSPITAL SATURDAY FUND

(A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

PRINCIPAL ACTIVITIES AND ACHIEVEMENTS IN THE YEAR (continued)

Grant recipients at HSF’s Dublin charity reception at the Mansion House, on 20[th] February 2020 in the presence of Tom Brabazon, the Lord Mayor of Dublin, Vice-President of The Hospital Saturday Fund

FINANCIAL REVIEW

State of affairs

The Group Statement of Financial Activities for the year is set out on page 21 and shows net incoming resources before investment gains and losses for the year of £4,380,024, (2019: £196,001). Net movement in funds for the year amounted to £8,870,730, after investment gains of £3,976,356 resulted in a net asset position as at 31 December 2020 of £43,353,303 (2019: £34,996,923). Of these funds, £24,151,135 is represented by the net assets of the trading subsidiary.

The trading company HSF health plan Ltd’s total profit for the year was £7,252,628 (2019: £3,584,942). Total premiums (less Insurance Premium Tax) for the year were £31,008,019. Benefits payable (including Personal Accident premiums and helplines) for the year were £19,735,198 and represented 63.6% of premium income. The Directors consider the overall state of affairs to be satisfactory.

The trading company HSF Assist Ltd’s total profit for the year was £18,693 (2019: £9,760). Total income for the year was £31,515 (2019: £22,737). The Directors consider the overall state of affairs to be satisfactory

For the charity alone, total income for the year amounted to £5,876,155 (2019: £1,856,043) including gift aid from the subsidiary companies of £5,594,802 (2019: £1,469,690). Grants totalling £1,333,402 (2019: £1,550,679) were made during the year, which is considerably in excess of income available for charitable application. These grants were therefore made by utilising expendable endowment funds. After charging the grants and crediting the gift aid payment and realised and unrealised investment gains the endowment fund increased by £4,193,484 to £18,053,750

The Trustees are satisfied with the net asset position of the group at the year end and are confident that sufficient funds will be available to meet the future needs of the Charitable Company.

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THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

Reserves Policy

The Trustees have established a policy for retaining reserves both in light of the risks the charitable group faces and the Trustees’ strategic priorities for their grant making activities. In essence the principal purpose of the reserves are to provide a capital base from which income would be earned to finance the grant making activities. The Trustees’ reserve policy is to maintain an expendable endowment at a level of no less than £5m and no greater than £14m, this is to ensure a prudent approach to the risks faced by the Charity and also to ensure the continued level of the Charity’s grant-making. This approach has been put in place by the Trustees to avoid the situation where its annual grant-making is reduced or ceases, if the Charity fails to receive a Gift Aid donation from its Trading Subsidiary for a number of years. The Trustees have the powers to approve expenditure from the expendable endowment capital in certain circumstances; however these are likely to be limited to grant making activity where unrestricted reserves are known to be insufficient to meet the cost of particular grants specifically approved by the Trustees. The Trustees are expecting a large gift aid donation from 2020 which is due to the exceptional circumstances that have resulted from the Covid-19 pandemic. However, given we are forecasting that the long lasting effect of the pandemic will likely result in quite low gift-aid donations over the next three years, the Trustees are not expecting a large increase in the grant making as a result of the 2020 gift aid. Therefore, this will be used to fund the next three years’ grant making.

The charity plans carefully to ensure that it budgets in accordance with expected income flows but inevitably short-term fluctuations can occur. In light of this policy residual free reserves will be held at a level sufficient to cover the operational working capital needs of the charity and to provide for short term fluctuations in either falls in investment income year on year, and/or falls in profitability of the trading subsidiary. For clarity trading reserves have been separated from free charitable funds.

At the end of the year free reserves totalled £1,148,418. Although this is a small increase in the level compared with last year, the continued tough economic climate and its impact on the investment portfolio has meant that grant making activities were all financed from the endowment fund. The Trustees, having reviewed their strategy, are satisfied that the policy is appropriate and satisfied with the level of free reserves. Review had been carried out in 2019 by a CASS student, who found our current Reserves Policy is fit for purpose.

The trading subsidiary HSF health plan Ltd holds reserves of £24,130,194. The trading subsidiary requires reserves of this level to meet its Solvency II requirements as an insurance provider.

Principal Risks and Risk Assessment

The Board of The Hospital Saturday Fund regularly assesses the risks to which the Charity is exposed. It agrees how best these risks may be mitigated and the Charity makes the appropriate action to manage these risks. The risks and associated mitigations are all recorded on the organisation’s risk register.

The Charitable Company’s principal risks are the inability of the investment portfolio to generate income, the failure of its Trading Subsidiary to generate sufficient profits, which support the Charity’s annual grant-making and the withdrawal of the UK from the EU and the potential impact on the way the charity is able to operate in the Republic of Ireland. All of these principal risks along with others are monitored closely and where possible control and mitigating action plans are put in place and these are monitored quarterly by the Boards.

The Risk & Compliance Committee of the Charitable Company’s Trading Subsidiary monitor the Company’s risk exposure in all areas including investment, operational, financial, human resources, sale and business continuity, with the Committees also monitoring their own areas of risk as well. It advises the Board on risk management and policy, while it also keeps under review the effectiveness of these areas. The Chief Risk Officer (CRO) is the Executive Director accountable for enabling the efficient and effective governance of significant risks, and related opportunities, for the Trading Company and this role is the responsibility of the Managing Director. The Chief Risk Officer reports to the Risk & Compliance Committee quarterly to assist the committee with actively monitoring the risks and ensure the controls and appropriate monitoring systems are in place, the CRO is also accountable to the Board of Directors.

The Trading Company have produced various risk registers for the different parts of the business and these are kept under constant review by the various Committees and Board to manage and mitigate risks. Risk & Compliance Committee meet regularly to review and monitor these and reports to the Board. The Board are satisfied with the Risk management policies and procedures in place.

8

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

Principal Risks and Risk Assessment (continued)

To assure the Trading & Charitable Company’s compliance with the GDPR regulations an external assurance report from a third party was commissioned. This included a review of all the data protection related polices, privacy notices/statements, forms and guidance documents that had been issued. In addition, the report also included interviews with several members of the Senior Leadership Team. The overall conclusion reached was that the working practices and procedures for the company were satisfactory. The areas highlighted to support continuous improvement where covered in a report that was distributed to the Executive Directors, the Data Protection Officer, Compliance Manager and the ICT Manager for comment and action. It was also reviewed by the Company’s Audit & Finance Committee.

The main activity of the Trading Company is operator of a medical cash plan and with this business activity, comes the need to take risk. We monitor the profitability of schemes and the claims data regularly, taking action when required and deemed necessary. The scheme premiums are rated on detailed analysis of historic claims data. Under the insurers regulatory regime, we also consider and diligently monitor a wide range of other risk including market, liquidity, interest rate, insurance, operational, concentration among others, this is done by regular consideration of the ORSA (Own Risk and Solvency Assessment), further information on some of these risks can be found in Note 18 and Note 19 of this document.

Solvency II

The Solvency II regime, which came into effect on 1 January 2016, has continued throughout 2020. The most significant requirement under Solvency II is the submission to the Prudential Regulatory Authority (PRA) on a regular basis (usually annually) of the Own Risks and Solvency Assessment (ORSA), following approval of the Board. The ORSA was approved at the Board meeting in September 2020 and was subsequently submitted to the PRA. The Board will continue to monitor this activity and ensure the company continues to satisfy their solvency requirements

Investments & Investment Policy

Under the Memorandum and Articles of Association, the Trustees of the Charitable Company have the power to make any investments which the Trustees see fit. In September 2007 the Board appointed UBS AG as Investment Managers.

The Trading Company’s Investment Policy is linked to the Prudential Regulation Authority solvency requirements. Its Investment Policy reflects a low to medium risk profile, which is similar to that of the overall Charitable Group. The Charitable Company’s portfolio produced a net loss of £9,783 on the investments held. Both the Trading Company’s & Charitable Company’s Investment Policies are reviewed annually by the Charitable Company’s Investment Committee.

The Charitable Company follows a composite benchmark of a weighted index of the markets represented within the adopted asset allocation, i.e. the index relating to the specific asset class is multiplied by the percentage, which that particular asset class represents of the whole portfolio, and then these are added together to create the composite benchmark.

The Charitable Company’s ethical investment policy is that no investment may be made in any company that derives any of its income from tobacco manufacturing or earns more than 10% from tobacco related products. To further enhance the Charitable Company’s ethical investment policy all holdings in the portfolio held with UBS AG were switched to a Socially Responsible and Sustainable Strategy in April 2018, the strategy invests in companies that are exhibiting a highly sustainable approach to their business looking at environmental, social and governance criteria.

Remuneration policy

The Board of Trustees is satisfied that the Trading Subsidiary’s staff salaries are benchmarked against market levels, using salary surveys and job comparison searches obtained from reputable recruitment agencies. The Trading Subsidiary’s Human Resources Committee monitor and review on an annual basis.

FUTURE PLANS

The Trustees hold a Reception each year in order to present grants in person to representatives of medical charities, hospices and hospitals. The Trustees had hoped to hold one such event at the University of Exeter 18 February 2021. Unfortunately, this event has been postponed until 27 October 2021 due to the current Covid 19 crisis.

In 2021, it is expected that grants awarded to medical charities, hospitals and hospices will be in the region of £2,000,000 and recipients are already receiving funds. This will be even more appreciated as charities experience a decline in funding, generally, during these difficult times.

9

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

FUTURE PLANS (continued)

The Charity relies on the success of its Trading Subsidiary, HSF health plan, not only to maintain but potentially to increase the size of its expendable endowment and therefore to increase the amount of charitable grants. The Trustees look forward to extending their grant making in the long term resulting in a greater contribution to the work of the medical charity sector.

The Trustees are looking to expand the trading activities and have approved the investment in an additional trading subsidiary based in Malta. This subsidiary will be marketing health cash plans in Malta and received its insurance licence from the Maltese Financial Services Authority in February 2021.

Brexit

As 56.6% of the overall premium income for the trading company was generated in Ireland in 2020 (2019: 56.5%), the trading company’s Board of Directors and Senior Management Team, in consultation with their advisors, have conducted extensive research and contingency planning in advance of the UK’s departure from the EU on 31[st] January 2020, and the end to passporting from the UK to Ireland following the cessation of the transitional period on 31[st] December 2020. The research and planning have been useful to facilitate the most beneficially compliant trading arrangements for the Trading Company, post Brexit. On 4[th] January 2021, the Central Bank of Ireland granted HSF health plan a license for a Third Country Branch which allows our Insurance Company to continue trading in Ireland, post Brexit.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Association

The Association performs an important role in the overall governance of the Charitable Company and the governing document is Articles of Association dated 16[th] October 2019 and amended 7[th] November 2019. The Members of the Association are responsible for electing the Board and Honorary Officers of the Charitable Company.

The Association comprises up to 100 Members (excluding Honorary Officers) whose services will, in the opinion of the Board, be advantageous to The Hospital Saturday Fund. Appointment is for a period of three years, but renewable. From time to time the Board recommends to the Association that some Members should be elected for their lifetime, in recognition of particular service. The President, Vice Presidents and Life Members of the Association are listed below.

President The Right Honourable The Lord Mayor of London Vice-Presidents The Right Honourable The Earl of Meath The Right Honourable The Lord Mayor of Dublin The Right Honourable The Lord Provost of Glasgow The Right Honourable The Lord Mayor of Belfast Mr K R Bradley MCMI Life Members of the Association Mr. D C Barnes Mrs. P E Lee Mr. P Battams Miss. I Racher Mr. T A Botly Mr. A M Rees LLB BA FCIPD Mr. M J Boyle FCA Mr. E W Smith Miss. D O Denton JP Mr. W N Smith Mr. R Dool Mr. D T Young Mr. L I Fellman Mr. P P Groat Mr. K Lawrey JP LLB MA MSc (Econ) Barrister (Gray’s Inn) Mrs. L M C Warner RGN SCM ONHC (deceased 11 Jan 2021)

The Association held two General Meetings during the year, the first being the Annual General Meeting which was held on 14 May 2020 on zoom, due to Covid-19 restrictions. The President and Vice Presidents (listed above) were elected. Recognising that some civic offices change hands at times of the year not close to the Fund’s AGM, authority was given to the Board to invite the successors of those elected to serve in the appropriate Honorary Officer capacity.

At an Extraordinary General Meeting held on 15 October 2020, Mr John Greenwood was re-elected as Chairman of the Association and Board, also at this meeting Mr Mark Davies and Mr David Thomas were elected for a three year term as Trustees.

10

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

Board of Trustees (Continued)

The Board comprises the Chairman and six other Trustees. The Trustees are also Directors of the Charity for the purposes of the Companies Act. The Chief Executive and the Company Secretary attend Board Meetings.

At each Board Meeting, Trustees receive reports from the Board of HSF health plan Limited and annually they appoint two Members of the Association, who are not Trustees, to attend the Annual General Meeting of HSF health plan Limited with full voting rights.

The Trustees are covered by qualifying third party indemnity insurance, paid by HSF health plan Limited, which was in place throughout the year and remains in force at the date of this report.

At each Board Meeting, Trustees receive reports from the Board of HSF Assist Limited.

Following the introduction of the Charity Governance Code in July 2017, The Charity has adopted this and applied its principles throughout its Governance structure. The Board of trustee regularly review the Charity Governance Code using the apply and explain method which means should an item be decided not applicable to the charity by its Trustees an explanation for this decision is documented. The charity is currently compliant with all areas of the Charity Governance Code.

Appointment, Induction and Training of the Trustees

Trustees are appointed to the Charity Board through a nomination and election process by the Members of the Association. They are appointed for a term of office of three years. The Association Members, by virtue of the Articles of Association, decide who serves as Non-Executive Directors of HSF health plan Limited and who should serve the Grant Making Committee.

On appointment, all new Trustees receive thorough induction and training, which includes receiving detailed information about the Charity via a Trustee Manual, including its Memorandum and Articles, latest accounts, latest financial reports and minutes of recent Trustees’ meetings. In addition, new Trustees attend an induction process at head office, where they are briefed by the Chief Executive and key staff on all aspects of the Charity’s operations, staffing and organisation management. Trustees are encouraged to attend appropriate external training events where these will facilitate the undertaking of their role.

Trustee training is provided by the Charitable Company as required. Trustees are encouraged to attend appropriate external training courses / seminars to enhance their expertise and are required to undertake the Association of Financial Mutuals / Chartered Insurance Institute health cash plan training module which concludes with an examination. Those who serve the trading company are also encouraged to attend external training appropriate for Non-Executive Directors managing an insurance company regulated by the Prudential Regulation Authority.

Grant Making Committee, Policies and Procedures

The Committee usually meets every quarter and reports directly to the Board. In addition to the two Trustees elected as Chairman, Professor Paul Palmer and Vice Chairman, Mrs Margaret Rogers, the Committee includes appointed members Mrs Natalie Comber, Mr Paul Jackson, Mrs Pauline Jones, Mr Keith Lawrey, Mrs Carol Murphy, Mr Cathal Nolan, and Mr Glyn Tomlinson.

Grants are awarded to national and local medical charities, hospitals and hospices throughout the UK and Ireland. Grant making guidelines for both individuals and organisations (medical charities, hospices and hospitals) are drawn up and approved by the Board. For individuals this means that applications are only accepted through a third party who has some involvement in the care of the applicant, e.g. doctor, social worker or another charity, and the demonstrated need is required to have a strong medical connection. Hospitals are required to state a particular capital project or charity within their hospital to receive their grant. Detailed guidelines for our grant making policy are available on our website www.hospitalsaturdayfund.org.

The Grant Making Committee members and Trustees of The Hospital Saturday Fund take the opportunity to visit charities or attend their receptions in order to gain a greater overall knowledge.

11

THE HOSPITAL SATURDAY FUND (A Company Limited by Guarantee)

REPORT OF THE BOARD OF TRUSTEES (continued)

YEAR ENDED 31 DECEMBER 2020

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees are responsible for preparing the Trustees’ Report, Strategic Report, and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year. Under that law, the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The Trustees have also applied the basis of preparation FRS102 ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ and FRS103 Insurance Contracts. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the company and to 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.

So far as each of the Trustees is aware at the time the report is approved:

ON BEHALF OF THE BOARD ON 18 March 2021

JOHN GREENWOOD Chairman

DAVE THOMAS Vice-Chairman

12

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

1. Our Opinion

We have audited the financial statements of The Hospital Saturday Fund (the parent charitable company) and its subsidiaries (the group) for the year ended 31 December 2020.

The financial statements that we have audited comprise:

The financial reporting framework that has been applied in their preparation is applicable law, Financial Reporting Standard 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland, Financial Reporting Standard 103 - Insurance Contracts, United Kingdom Generally Accepted Accounting Practice.

In our opinion:

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 as applied to public benefit entities and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Overview

Materiality
Group £611,000
2% Gross Revenues
Key audit matters
Event driven
Impact of the UK exiting the European Union.
Recurring Group
Completeness of insurance premium income

Reasonableness of estimates of provisions for outstanding
claims liabilities

13

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

2. Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those matters which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team and, as required for public interest entities, our results from those procedures. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impact of the UK exiting the European Union. Impact of the UK exiting the European Union.
The Risk Our response
As noted in the Trustees’ Report,
the impact of the UK exiting the
European Union will potentially
have a significant impact on the
operations of the group.		 Our procedures included an assessment of the actions taken in response
to Brexit taking place on 31stDecember 2020 to ensure that it is able to
operate in both jurisdictions.
Result of our procedures
We have concluded that the uncertainties involved do not represent a going concern risk to the organisation as
a whole and that sufficient disclosure has been made regarding this uncertainty in the Trustees’ Report.

----- Start of picture text -----
Completeness of insurance premium income
The Risk Our response
As described in the accounting Our procedures included assessing the design and implementation of key
policy note 1b, premiums represent controls around the recording of premium income. This included key
income earned from policyholders. control testing on new joiners, ensuring that they are accurately and
There is a risk that premium promptly entered into the policyholder system. In addition to the control
income is not complete due to testing, we performed substantive analytical review procedures
inaccurate recording of reconciling expected premium income from the policyholder database, to
policyholders and the premiums that which had been recorded in the financial statements to ensure that
associated with each policyholder. income was complete.
Result of our procedures
We concluded that premium income was complete and had been accurately recorded in the financial statements.
----- End of picture text -----

14

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

Provision for outstanding claims Provision for outstanding claims Provision for outstanding claims
The Risk Our response
As described in accounting policy
1p, provisions are made at the year-
end for the estimated costs of
claims incurred, but not settled, at
the balance sheet date. As this
assessment requires judgements, it
is considered a key area of focus
for the audit due to the material
amount of the provision.		 Our procedures included an assessment of the methodology used in order
to calculate the claim provision at the year end. We then tested this
methodology by substantive analytical review which included the review
of historic provision against actual results, the expected provision based
on historical patterns, and the reasonableness of the methodology in light
of the Covid-19 pandemic and Brexit.
Result of our procedures
We concluded that the provision for outstanding claims is within an acceptable level and has been recorded
appropriately.

3. Our application of materiality

Our definition of materiality considers the value of error or omission on the financial statements that would change or influence the economic decision of a reasonably knowledgeable person. Materiality is used in planning the scope of our work, executing that work and evaluating the results.

Materiality in respect of the group and the parent charitable company was set at £611,000 which was determined on the basis of 2% of Gross Revenues.

4. An overview of the scope of our audit

In addition to the parent charitable company, the group consists of 2 reporting components.

All of these entities were considered to be significant components of the group. All significant group components were subjected to full scope audits for the purposes of our audit report on the group financial statements.

The group audit team performed the audit of all significant components of the group.

5. 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. Our evaluation of the Trustees’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included:

15

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

Our evaluation of the Trustees’ assessment included:

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and parent charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

We have nothing material to add or draw attention to in relation to the Trustees’ statement within the Trustees’ Report about whether the Trustees consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

It is our responsibility to obtain sufficient and appropriate evidence regarding and to conclude on:

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

6. Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Annual Report and Accounts, other than the financial statements and our auditor’s report thereon. Our opinion of 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

7. Opinions on other matters prescribed by the Companies Act 2006

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

16

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

8. Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the trustee’ report.

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

9. Responsibilities of Trustees

As explained more fully in the Trustees’ responsibilities statement, the Trustees 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 group’s and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

10. 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 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:

17

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

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

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

We communicate with the Trustees regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

18

HOSPITAL SATURDAY FUND YEAR END 31 DECEMBER 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOSPITAL SATURDAY FUND

11. Other requirements

We were appointed by the Trustees on 29 November 2019. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 2 years.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.

Our audit opinion is consistent with the additional report to the Trustees.

12. 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.

Sudhir Singh FCA

(Senior Statutory Auditor)

for and on behalf of MHA MacIntyre Hudson Chartered Accountants and Statutory Auditor 6[th] Floor 2 London Wall Place London EC2Y 5AU

Date: 1 April 2021

19

THE HOSPITAL SATURDAY FUND

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

2020 2019
Notes £ £ £
£
TECHNICAL ACCOUNT GENERAL BUSINESS
Earned premiums
Gross premiums written 31,177,756 31,117,259
Change in the gross provision for unearned premiums (169,737) 152,042
--------------------- ---------------------
Gross premiums earned 31,008,019 31,269,301
Less: reinsurance premiums (1,184,652) (1,141,276)
------------------------ ------------------------
Net premiums earned 29,823,367 30,128,025
Claims incurred
Gross claims paid (18,220,179) (21,417,069)
Change in the gross provision for claims outstanding (42,645) (79,150)
---------------------- ----------------------
(18,262,824) (21,496,218)
Net operating expenses (5,714,744) (6,895,673)
---------------------- ----------------------
Balance on the technical account for general business 5,845,799 1,736,134
NON-TECHNICAL ACCOUNT
Investment income
Income from other financial investments 2 611,399 741,766
Interest receivable 2 44,201 66,402
Realised gains - other financial investments 9 50,729 1,071,500
Unrealised gains/(loss) - other financial investments 9 1,280,626 2,317,183
Investment expenses and charges (249,838) (245,888)
---------------------- ----------------------
1,737,117 3,950,963
Other income
Coronavirus Job Retention Scheme grants 14 235,222 -
---------------------- ----------------------
235,222 -
Donations and legacies received 1,598 13,108
Net income from trading activities 18,693 9,760
Other charges – charitable activities (1,259,865) (1,752,187)
---------------------- ----------------------
(1,239,574) (1,729,319)
--------------------- ---------------------
Profit on ordinary activities before tax 6,578,564 3,957,778
--------------------- ---------------------
Taxation 13 (375,970) (373,094)
---------------------- ----------------------
Profit for the year after tax 6,202,594 3,584,684
=========== ===========

The profit on ordinary activities before tax is wholly attributable to continuing activities.

The notes on pages 24 to 40 form part of these financial statements.

20

THE HOSPITAL SATURDAY FUND

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 DECEMBER 2020

2020 2020 2020
Unrestricted Expendable 2020 2019
Charity Trading Endowment Total Total
Notes £ £ £ £ £
Income and endowments:
Donations and legacies 1,598 - - 1,598 13,108
Trading activities 6 - 31,039,533 - 31,039,533 31,292,038
Investment income 2 258,715 396,885 - 655,600 808,168
Coronavirus Job Retention Scheme 14 - 235,222 - 235,222 -
------------------- --------------------- ------------------ --------------------- ---------------------
Total incoming resources 260,313 31,671,640 - 31,931,953 32,113,314
------------------ --------------------- ----------------- --------------------- ---------------------
Expenditure on:
Raising funds – trading activities 4 (8,020) (26,200,688) (88,956) (26,297,664) (30,185,407)
------------------- ------------------- ------------------- ------------------- -------------------
Amounts available for charitable
application 252,293 5,470,952 (88,956) 5,634,289 1,927,907
Charitable activities 4 (1,254,265) - - (1,254,265) (1,731,906)
------------------- ------------------- ------------------- ------------------- -------------------
Net
incoming
resources
before
investment gains and losses (1,001,972) 5,470,952 (88,956) 4,380,024 196,001
Gift aid donation - (5,594,802) 5,594,802 - -
Gain on revaluation of tangible assets - 2,645,000 - 2,645,000 -
Realised investment gain 9 - 908 49,821 50,729 1,071,500
Unrealised investment (loss)/gain 9 - 1,309,408 (28,781) 1,280,627 2,317,183
Transfer between funds 1,333,402 - (1,333,402) - -
---------------------- --------------------- --------------------- --------------------- ---------------------
Net movement in funds for the year 331,430 3,831,466 4,193,484 8,356,380 3,584,684
Funds brought forward 816,988 20,319,669 13,860,266 34,996,923 31,412,239
--------------------- --------------------- --------------------- --------------------- ---------------------
Funds carried forward at
31 December 2020 1,148,418 24,151,135 18,053,750 43,353,303 34,996,923
========== ========== ========== ========== ==========

The notes on pages 24 to 40 form part of these financial statements

All transactions are derived from continuing activities.

The statement of financial activities includes the income and expenditure account.

All recognised gains and losses are included in the statement of financial activities.

21

COMPANY NUMBER: 06039284

THE HOSPITAL SATURDAY FUND

GROUP AND CHARITY BALANCE SHEETS

AT 31 DECEMBER 2020

2020 2020 2019
Group Charity Group Charity
Notes £ £ £ £
FIXED ASSETS
Tangible assets 8 5,216,738 - 2,762,607 -
Investments 9 30,557,478 27,164,030 28,452,991 27,173,813
---------------------- ---------------------- ---------------------- ----------------------
35,774,216 27,164,030 31,215,598 27,173,813
CURRENT ASSETS
Debtors 10 2,410,905 1,407 2,654,152 7,632
Bank balances and cash 11,022,798 7,924,279 5,952,851 3,459,706
---------------------- ---------------------- ---------------------- ----------------------
13,433,703 7,925,686 8,607,003 3,467,338
CREDITORS: amounts falling
due within one year 11 (4,487,062) (19,724) (4,325,309) (96,222)
--------------------- --------------------- --------------------- ---------------------
NET CURRENT ASSETS 8,946,641 7,905,962 4,281,694 3,371,116
TOTAL ASSETS LESS
CURRENT LIABILITIES 44,720,857 35,069,992 35,497,292 30,544,929
PROVISION FOR LIABILITIES
AND CHARGES 13 (1,367,554) - (500,369) -
---------------------- ---------------------- ---------------------- ----------------------
NET ASSETS 43,353,303 35,069,992 34,996,923 30,544,929
=========== =========== =========== ===========
Representing:
FUNDS
Unrestricted funds
- General funds 15 1,148,418 15,749,403 816,988 15,418,194
- Trading funds 15 24,151,135 - 20,319,669 -
Expendable endowment fund 15 18,053,750 19,320,589 13,860,266 15,126,735
---------------------- ----------------------- ---------------------- -----------------------
43,353,303 35,069,992 34,996,923 30,544,929
=========== ============ =========== ============

The financial statements were approved and authorised for issue by the Board of Trustees on 18 March 2021 and were signed below on its behalf by:

JOHN GREENWOOD Chairman

DAVE THOMAS Vice Chairman The notes on pages 24 to 40 form part of these financial statements.

22

THE HOSPITAL SATURDAY FUND

CONSOLIDATED STATEMENT OF CASH FLOWS & ANALYSIS OF CHANGES IN NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2020

CONSOLIDATED STATEMENT OF CASH FLOWA

2020 2019
£ £
Reconciliation of net movement in funds for the year
to net operating cash flows
Net movement in funds for the year 6,202,594 3,584,684
Taxation 375,970 373,094
Exchange (gains) / losses (518,861) 556,869
Gain on revaluation of tangible assets - -
Unrealised (gains) on other financial investments (1,280,626) (2,317,183)
Realised (gains) on other financial investments (50,729) (1,071,500)
Income from other financial investments and cash (655,600) (808,168)
Depreciation and amortisation 265,830 337,253
Decrease/(Increase) in debtors 243,247 (139,560)
Increase in creditors 161,753 77,233
------------------- -------------------
Net cashflow from operating activities 4,743,578 592,722
========== ==========
Cash flows from investment activities
Income received from other financial investments 611,399 741,766
Interest received 44,201 66,402
Exchange gains / (losses) 518,861 (556,869)
Purchases of tangible fixed assets (74,511) (252,860)
Purchases of other financial investments (8,349,813) (24,858,663)
Sales of other financial investments 7,576,232 24,663,314
------------------ ------------------
Net cashflow from investing activities 326,369 (196,910)
========== ==========
Increase/(decrease) in cash holdings 5,069,947 395,812
Cash and cash equivalents at 1 January 2020 5,952,851 5,557,039
---------------------- ----------------------
Cash and cash equivalents at 31 December 2020 11,022,798 5,952,851
=========== ===========
Analysis of cash and cash equivalents
Cash in hand 11,022,798 5,952,851
---------------------- ----------------------
Total cash and cash equivalents 11,022,798 5,952,851
=========== ===========
ANALYSIS OF CHANGES IN NET DEBT
At 1 January 2020 Cashflows New finance
leases		 At 31 December
2020
£ £ £ £
Cash
5,952,851		 5,069,947 - 11,022,798
Finance lease obligations
(186,113)		 130,455 (91,102) (146,760)
---------------------- ---------------------- ---------------------- ----------------------
Total
5,766,738		 5,200,402 (91,102) 10,876,038
=========== =========== =========== ===========

23

THE HOSPITAL SATURDAY FUND NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1. ACCOUNTING POLICIES

The Hospital Saturday Fund is a charitable company limited by guarantee and is incorporated in the England and Wales. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The address of the registered office is given in the charity information on page 1 of these financial statements. The nature of the charity’s operations and principal activities are that of a grant giving charity.

The charity constitutes a public benefit entity as defined by FRS 102. 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 Standards applicable in the UK and Republic of Ireland (FRS 102 & FRS103), the Charities Act 2011, the Companies Act 2006 and UK Generally Accepted Accounting Practice.

These accounts consolidate the accounts of the Charitable Company and its wholly owned non-charitable trading subsidiary companies HSF health plan Limited and HSF Assist Limited. As permitted by Section 408 of the Companies Act 2006 and in accordance with paragraph 397 of the Charities SORP 2015, no separate SOFA has been presented for the Charitable Company alone.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value. The financial statements are presented in sterling which is the functional currency of the charity and rounded to the nearest pound.

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

a) Gift of investment in HSF health plan Limited

The investment is carried at the Trustees’ estimate of valuation of the company at 1 April 2007, the date of gift from the company, less any provision for permanent diminution in value.

b) Incoming resources

All incoming resources are included within the Statement of Financial Activities (SOFA) where the charity has legal entitlement to the income, after any performance conditions have been met, the amount can be measured reliably and it is probable that the income will be received.

Incoming resources represents donations, income of the trading subsidiaries, investment income and Government grants in the form of the Coronavirus Job Retention Scheme grants received. All income is accounted for on a receivable basis.

Premiums

Earned premiums represent premium income from policyholders for the year, excluding insurance premium tax and including amounts due on 31 December and subsequently received.

Re-Insurance premiums are deducted from gross premiums earned for the Personal Accident as this is underwritten by a third party.

Provision is made for premiums received, but not earned at the balance sheet date.

All premiums arise in the United Kingdom and Ireland.

c) Tangible Fixed Assets

The group has adopted the revaluation method in relation to its freehold property. Land and buildings occupied by the Company for its own purposes are stated at valuation less depreciation. Depreciation in excess of historical costs is charged to the revaluation reserve.

Other Fixed Assets are stated at historical cost less accumulated depreciation. Costs include expenditure directly attributed in making the asset capable of operating as an asset.

Depreciation is provided on all tangible assets at rates calculated to write off the cost or valuation less estimated residual value of assets in equal instalments over their expected useful lives. Assets costing below £1,000 are fully depreciated in the year of acquisition. The rates used are as follows:-

Freehold property 2% Furniture and equipment 20% Computer equipment 25%

24

NOTES TO THE FINANCIAL STATEMENTS (continued)

THE HOSPITAL SATURDAY FUND

FOR THE YEAR ENDED 31 DECEMBER 2020

1. ACCOUNTING POLICIES (continued)

d) Investments

Investments are recognised initially at fair value which is normally the transactional price, in accordance with the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' subsequently they are reserved at fair value with unrealised gains and losses on the revaluation of listed investments are taken to the Statement of Financial Activities.

Realised gains and losses on investments are calculated as the difference between net sales proceeds and market value at the previous financial year end or cost if the investment was acquired subsequently.

e) Interest Receivable

Interest receivable is credited to the Statement of Financial Activities in the year in which it is receivable.

f) Pension Costs

The Group makes contributions to employees’ group personal pension plans. The pension cost charge charged to the Statement of Financial Activities in the year represents contributions payable by the group to the group personal pension plans in respect of the year.

g) Redundancy

Redundancy costs arising from periodic reviews of staff levels are charged against profit in the year in which employees leave the group.

h) Expenditure

Expenditure is accounted for on an accounts loss and classified under functional headings on a direct cost basis. Expenditure is recognised where there is a legal or contractual obligation to issue a payment to a 3[rd] party, it is probable trust settlement will be required and the amount of the obligation can be measured reliably. Support costs are those costs which do not relate directly to a single activity. These include some staff costs, costs of administration, internal and external audit costs and IT support. Support costs have been apportioned between fundraising costs and charitable activities on an appropriate basis. The analysis of support costs and the bases of apportionment applied are shown in note 4.

i) Claims Incurred

Claims incurred represent benefits payable to policyholders for the year and include a provision for claims in respect of the year to 31 December settled after that date.

j) Fund accounting

Unrestricted funds comprise accumulated surpluses on general and trading funds.

General funds comprise the accumulated surplus from the Statement of Financial Activities which are neither restricted nor designated funds. They are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charitable Company.

Trading funds are the accumulated trading surpluses and revaluation surplus of the trading subsidiary.

Expendable endowment funds arise where the terms of the gift aid donation stipulate that the funds are to be treated as capital but may be expended at the discretion of Trustees within the objects of the charity. Accordingly, the Trustees have the right but not the duty to expend the capital as they see fit.

k) Deferred Taxation

Full provision is made for deferred tax assets and liabilities within the trading subsidiary accounts in respect of all non-permanent timing differences that have originated but not reversed at the balance sheet date. A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be taxable profits from which the future reversal of the underlying timing differences can be deducted.

l) Operating Leases

Rentals costs payable under operating leases are charged to the Statement of Financial Activities over the period of each lease.

25

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

1. ACCOUNTING POLICIES (continued)

m) Translation of Foreign Currency

Transactions in foreign currencies are converted monthly at the average monthly rates of exchange. At the year-end assets and liabilities are converted at the exchange rates ruling at that date. Exchange differences are taken to the Statement of Financial Activities.

n) Grants

Grants are recognised in the accounts when awarded by the Grant Making Committee and committed to and the recipient has been notified of the award. The grants are awarded at the discretion of the Trustees within the objects of the Charitable Company.

o) Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like debtors arising out of direct insurance operations, trade payables, loans to related parties and investments in non-puttable ordinary shares. The financial assets and financial liabilities of the Company are as follows:

p) Provisions

Provision is also made at the year-end for the estimated unearned premium income at the balance sheet date. The Company takes all reasonable steps to ensure that it has appropriate information regarding its material unearned premium exposure. However, given the uncertainty in establishing unearned premiums provisions, it is likely the outcome will prove to be different from the original liability established.

q) Significant judgments and estimates

The group requires management to make significant judgements and estimates in the preparation of the financial statements. The items in the financial statements where these judgements and estimates have been made include the translation of foreign currency into the reporting currency and the technical provisions. The most significant judgement and estimate in the accounts is the technical provisions, as it can take up to six months after the year end before establishing the ultimate cost of claims incurred and premiums paid but not yet reported to the Company and the final outcome could be better or worse than the provisions. We use a calculation based on claims and premium trends from the previous two years to estimate the provisions required at the year end. The fair value of the freehold property has been based on the value provided by an independent chartered surveyor.

26

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

1. ACCOUNTING POLICIES (continued)

r) Employee Benefits

When employees have rendered service to the Charity, short-term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service. The Charity operates a defined contribution plan for the benefit of its employees. Contributions are expensed as they become payable.

s)

Tax

The Charity is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. The taxation charge arising in the year relates to the operation of the Trading Subsidiary’s.

t)

Going Concern

The Trustees have assessed the use of going concern and have considered possible events or conditions that might cast significant doubt on the ability of the charity to continue as a going concern including the impact of COVID-19. The Trustees have made this assessment for a period of at least one year from the date of the approval of these financial statements. The Trustees have concluded that there is a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future and there are no material uncertainties about the charities ability to continue as a going concern. The charity therefore continues to adopt the going concern basis in preparing these financial statements.

2. INVESTMENT INCOME 2020 2020 2019
Charity Group Group
£ £ £
Income from other financial investments 254,913 611,399 741,766
Interest receivable 3,802 44,201 66,402
------------------ ------------------ ------------------
258,715 655,600 808,168
========= ========= =========
3. NET INCOME FOR THE YEAR 2020 2019
£ £
The net income for the year is stated after charging:
Depreciation 265,380 337,253
Auditors’ remuneration:
Audit of the charity 6,840 6,600
Audit of the subsidiaries 32,220 31,200
Operating leases 130,455 137,045
========= =========
4. ANALYSIS OF TOTAL RESOURCES
Direct		 Grant Support 2020
EXPENDED costs funding costs Total
£ £ £ £
Raising funds
Charity 96,976 - - 96,976
Subsidiaries 18,262,824 - 7,937,864 26,200,688
Charitable activities - 1,333,402 (79,137) 1,254,265
---------------------- ---------------------- ---------------------- ----------------------
Group Total 18,359,800 1,333,402 7,858,727 27,551,929
=========== =========== =========== ===========

All grants in the year were funded from the expendable endowment. The charitable activities support costs for 2020 is a negative balance due to the effect of exchange variance gains made in the year which forms part of this.

27

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

4. ANALYSIS OF TOTAL RESOURCES Direct Grant Support 2019
EXPENDED (continued) costs funding costs Total
£ £ £ £
Raising funds
Charity 106,193 - - 106,193
Subsidiaries 21,496,218 400 8,582,596 30,079,214
Charitable activities - 1,550,679 180,827 1,731,506
---------------------- ---------------------- ---------------------- ----------------------
Group Total 21,602,411 1,551,079 8,763,423 31,916,913
=========== ========= ========== ===========
All grants in the year were funded from the expendable endowment.
ANALYSIS OF SUPPORT COSTS 2020 2019
Total Total
£ £
Policy Services 1,481,779 1,427,033
Staff Costs 3,984,428 3,952,109
Property Costs 163,878 232,410
Sales & Marketing Costs 219,771 386,714
Administration Costs 2,333,198 1,983,742
Governance Costs 194,534 224,546
Exchange Variance (518,861) 556,869
---------------------- ----------------------
Total 7,858,727 8,763,423
========== ===========
ANALYSIS OF GOVERNANCE COSTS 2020 2019
Total Total
£ £
Internal Audit - 2,040
External auditors’ remuneration
-
Audit services		 39,060 37,800
Governance and professional support 153,669 184,706
---------------------- ----------------------
Total 192,729 224,546
========== ===========

5. STAFF COSTS

Charity

The charity employs no staff, all staff are employed by the trading subsidiary – HSF health plan Limited.

Trading subsidiary – HSF health plan Limited
Trading subsidiary – HSF health plan Limited 2020 2019
£ £
Wages and salaries 3,163,829 3,184,320
Social security costs 337,329 353,732
Pension costs 483,270 414,057
-------------------- --------------------
3,984,428 3,952,109
========== ==========
The average number of persons employed during the year was:
Sales 22 20
Administration 52 54
------------- -------------
74 74
====== ======

28

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

5. STAFF COSTS (continued)

The number of employees whose annual emoluments exceeded £60,000 were:-
£60,001 - £70,000 7 5
£70,001 - £80,000 4 5
£80,001 - £90,000 1 1
£90,001 - £100,000 1 1
£110,001 - £120,000 1 1
£160,001 - £170,000 1 -
£170,001 - £180,000 - 1
£240,001 - £250,000 1 -
£250,001 - £260,000 - 1
====== ======

Contributions totalling £262,581 (2019: £169,541) were made to group personal pension plans in respect of the 16 (2019: 15) employees above.

None of the trustees were remunerated during the year for their services as trustees of the parent Charitable Company. Expenses totalling £5,295 (2019: £10,024) were reimbursed to five trustees (2019: five) of the parent Charitable Company.

As the charity does not employ any staff it has no direct key management personnel costs. Key management personnel within its trading subsidiary HSF health plan Limited are the Non-Executive Directors, Executive Directors and Head of Departments and total salary and benefits provided total £1,049,898 (2019: £1,027,258).

There were redundancy payments in the year totalling £122,337 (2019: £52,087). This includes statutory redundancy payments, payments in lieu of notice and non-contractual payments of £25,778 made to 5 members of staff (2019: £25,940 made to 4 members of staff). The non-contractual payments were made under the authority of the Directors when considered to be in HSF health plan Ltd best interest to avoid potential significant HR/legal costs.

Five Trustees received remuneration during the year for performance of their duties as Directors of the trading subsidiary. In accordance with the Charity Commission advice the two Trustees who are not remunerated, form the Remuneration Committee:

emuneration Committee:
2020 2019
£ £
Mrs J L Dalton 7,256 6,381
Mr M Davies 10,878 9,921
Mr J Greenwood 8,300 6,369
Mr J Randel 15,934 14,863
Mr D Thomas 8,600 7,980
---------------- ----------------
Total remuneration 50,968 45,514
======== ========

Contributions totalling £1,366 (2019: £1,367) were made to personal pension plan in respect of the 1 (2019: 1) Director above.

29

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

6. RESULTS OF SUBSIDIARIES

HSF health plan Limited is a wholly owned subsidiary of The Hospital Saturday Fund. HSF health plan Limited, incorporated in the UK (number 30869), is a health cash plan organisation and donates its surplus annual taxable profits to the Charity under Gift Aid. The results of HSF health plan Limited are detailed below:

2020 2019
PROFIT AND LOSS ACCOUNT £ £
Premium income 31,008,019 31,269,301
Claims paid and reinsurance (19,447,476) (22,637,494)
Net operating expenses (5,714,744) (6,895,673)
---------------------- ----------------------
Balance on the technical account for general business 5,845,799 1,736,134
---------------------- ----------------------
Investment income 1,547,577 2,222,302
Other income 235,222 -
---------------------- ----------------------
Profit before taxation 7,628,598 3,958,436
=========== ===========
Profit for the year after taxation 7,252,628 3,584,942
=========== ===========
BALANCE SHEET
Fixed assets 24,475,762 19,907,361
Net current assets 1,021,985 901,830
Deferred taxation (1,367,554) (500,369)
----------------------- -----------------------
NET ASSETS 24,130,193 20,308,822
=========== ===========
FUNDS
General reserve 24,130,193 20,308,822
---------------------- ----------------------
24,130,193 20,308,822
=========== ===========

HSF Assist Limited is a wholly owned subsidiary of The Hospital Saturday Fund. HSF Assist Limited, incorporated in the UK (number 8139547), is a helpline organisation and donates its surplus annual taxable profits to the Charity under Gift Aid. The results of HSF Assist Limited are detailed below:

2020 2019
PROFIT AND LOSS ACCOUNT £ £
Premium income 31,515 22,737
Helplines and counselling (9,405) (8,761)
Other admin costs inc gift aid donation (3,416) (4,216)
---------------------- ----------------------
Profit for the year after taxation 18,694 9,760
=========== ===========
BALANCE SHEET
Net current assets 18,694 9,760
----------------------- -----------------------
NET ASSETS 18,694 9,760
=========== ===========
CAPITAL AND RESERVES
Share capital 1 1
Profit and loss account 18,694 9,760
---------------------- ----------------------
18,695 9,761
=========== ===========

30

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

7. GRANTS Grants to Grants to Support 2020
Institutions Individuals Costs Total
During the year the following grants were made: £ £ £ £
Medical charities 847,830 - (50,318) 797,512
Hospitals and hospices 112,678 - (6,687) 105,991
Welfare grants to individuals - 90,780 (5,388) 85,392
Covid-19 fund grants 207,696 (12,326) 195,370
Other medical/welfare related organisations 74,418 - (4,418) 70,000
-------------------- -------------------- -------------------- -------------------
1,242,622 90,780 (79,137) 1,254,265
========== ========== ========== ==========
Grants to Grants to Support 2019
Institutions Individuals Costs Total
During 2019 the following grants were made: £ £ £ £
Medical charities 1,065,862 - 124,292 1,190,154
Hospitals and hospices 162,237 - 18,919 181,156
Welfare grants to individuals - 105,752 12,332 118,084
Other medical/welfare related organisations 216,828 - 25,284 242,112
-------------------- -------------------- -------------------- -------------------
1,444,927 105,752 180,827 1,731,506
========== ========== ========== ==========

A full list of grants to institutions is available on the Charity website (https://hospitalsaturdayfund.org/grant-updates/).

8. TANGIBLE FIXED ASSETS Charity Group
Furniture
Computer Freehold Fixtures and
Equipment Total property Fittings Total
COST OR VALUATION £ £ £ £ £
At 1 January 2020 12,000 12,000 2,500,000 1,779,774 4,291,774
Additions in year - - - 74,511 74,511
Disposals in the year - - - - -
Revaluation - - 2,495,000 - 2,495,000
------------------ ------------------ ---------------------- ---------------------- ----------------------
At 31 December 2020 12,000 12,000 4,995,000 1,854,285 6,861,285
------------------ ------------------ ---------------------- ---------------------- ----------------------
DEPRECIATION
At 1 January 2020 12,000 12,000 100,000 1,417,167 1,529,167
Charge for year - - 50,000 215,380 265,380
Disposals in the year - - - - -
Revaluation - - (150,000) - (150,000)
------------------ ------------------ ---------------------- ---------------------- ----------------------
At 31 December 2019 12,000 12,000 - 1,632,547 1,644,547
------------------ ------------------ ---------------------- ---------------------- ----------------------
NET BOOK VALUE
At 31 December 2020 - - 4,995,000 221,738 5,216,738
======== ======== ========== ========== ===========
At 31 December 2019 - - 2,400,000 362,607 2,762,607
======== ======== ========== ========== ===========

The Company owns a freehold property at 24 Upper Ground, London SE1 9PD which is used for the Company’s own activities. The property was valued on 18 February 2021, the fair value of the property was £4,995,000 on an open market basis by an independent valuer, Egerton chartered surveyors. At the date of the revaluation the directors believed the property had a useful economic life of at least 50 years.

31

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

9. INVESTMENTS 2020 2020 2019
Group Charity Group Charity
£ £ £ £
Market value at 1 January 2020 28,452,991 27,173,813 24,868,959 25,761,226
Additions 8,349,813 4,728,737 24,858,663 5,171,126
Disposals (7,525,952) (4,709,739) (23,591,814) (4,891,547)
Unrealised gains 1,280,626 (28,781) 2,317,183 1,133,008
---------------------- ---------------------- ---------------------- ----------------------
Market value at 31 December 2020 30,557,478 27,164,030 28,452,991 27,173,813
=========== =========== =========== ===========
Historical cost at 31 December 2020 27,947,778 26,653,156 27,069,715 26,532,615
=========== =========== =========== ===========
At market value
United Kingdom investments (listed) 7,390,199 5,109,112 7,528,400 5,215,208
Overseas investments (listed) 14,998,957 4,082,520 13,894,302 4,029,856
Bonds (listed) 5,160,518 1,401,350 5,104,667 1,355,562
Other (listed) 3,007,804 705,472 1,925,622 707,611
Investment in HSF health plan Limited (unlisted) - 15,865,576 - 15,865,576
---------------------- ---------------------- ---------------------- ----------------------
30,557,478 27,164,030 28,452,991 27,173,813
=========== ============ =========== ============

The investment in HSF health plan Limited represents the reserves of HSF health plan Limited at the point at which the ownership was donated to The Hospital Saturday Fund. The consolidated statement of financial activities includes unrealised gains of £1,280,626 and realised gains of £50,729

10. DEBTORS 2020 2019
Group Charity Group Charity
£ £ £ £
Insurance operation debtors 1,574,595 - 1,769,970 -
Other debtors 609,164 1,407 604,424 2,354
Prepayments and accrued income 227,147 - 279,758 5,278
--------------------- ------------------ --------------------- ------------------
2,410,906 1,407 2,654,152 7,632
=========== ========= =========== =========
11. CREDITORS: amounts falling 2020 2019
due within one year Group Charity Group Charity
£ £ £ £
Insurance operations creditors 3,564,733 - 3,352,351 -
Other creditors and accruals 839,443 19,724 1,036,538 96,222
Taxes and social security 82,886 - (63,580) -
-------------------- ----------------- -------------------- -----------------
4,487,062 19,724 4,325,309 96,222
========== ========= =========== =========
12. MOVEMENTS IN PRIOR YEAR’S PROVISIONS
2020 2019
Claims Provision £ £
Net claims provision brought forward (including IBNR) 2,505,701 2,426,551
Net payments during the year in respect of those provisions (2,578,508) (2,700,694)
Adjustment to prior year’s provision 72,807 274,143
Movement in provision during the year 2,548,346 2,505,701
------------------ ----------------
Net loss provision carried forward in respect of outstanding claims 2,548,346 2,505,701
========= ========

32

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

12. MOVEMENTS IN PRIOR YEAR’S PROVISIONS (continued) 2020 2019
Unearned Premium Provision £ £
Net claims provision brought forward 846,650 998,692
Net premiums during the year in respect of those provisions (846,650) (998,692)
Adjustment to prior year’s provision - -
Movement in provision during the year 1,016,387 846,650
------------------ ----------------
Net loss provision carried forward in respect of unearned premiums 1,016,387 846,650
========= ========

The provisions detailed above would be expected to be realised within six months of the year end due to the nature of our business and the terms and conditions of our policies.

our business and the terms and conditions of our policies.
13. PROVISION FOR DEFERRED Liability on Short term Fixed asset -
TAXATION Property Timing timing
revaluation difference differences Total
£ £ £ £
At 1 January 2020 (145,910) (361,990) 7,531 (500,369)
Profit and loss account - (389,832) 13,862 (375,970)
Other comprehensive income (491,215) - - (491,215)
------------------ ------------------ ------------------ ----------------
At 31 December 2020 (637,125) (751,822) 21,393 (1,367,554)
========= ======== ========= ========
Liability on Short term Fixed asset -
property timing timing
revaluation different differences Total
£ £ £ £
At 1 January 2019 (145,910) 5,138 13,496 (127,276)
Profit and loss account - (367,128) (5,965) (373,093)
------------------ ------------------ ------------------ ----------------
At 31 December 2019 (145,910) (361,990) 7,531 (500,369)
========= ======== ========= ========

Over the next 12 months it is expected that £751,822 of deferred tax liabilities in respect of short-term timing difference will reverse when the relevant gift aid donations are made to the parent charity. Reversal of deferred tax liabilities in respect of property revaluation is uncertain due to its dependency on prevailing market conditions.

14. GOVERNMENT GRANTS

GOVERNMENT GRANTS
2020 2019
£ £
Coronavirus Job Retention Scheme 235,222 -
---------------------- ----------------------
235,222 -
=========== ===========

There are no unfulfilled conditions or other contingencies attaching to the grants received from government sources.

15. MOVEMENT ON FUNDS

At 1 Movement in funds Movement in funds Gains on Balance at
January Incoming Resources Investments/ 31 December
Unrestricted 2020 resources expended Property Transfers 2020
funds £ £ £ £ £ £
General funds 816,988 260,313 (1,262,285) - 1,333,402 1,148,418
Trading funds 20,319,669 31,671,640 (26,200,688) 3,955,316 (5,594,802) 24,151,135
---------------------- ---------------------- ----------------------- ------------------- --------------------- ----------------------
21,136,657 31,931,953 (27,462,973) 3,955,316 (4,261,400) 25,299,553
=========== ========== =========== ========= ========== ===========
Expendable
Endowment 13,860,266 - (88,956) 21,040 4,261,400 18,053,750
========== ========= ========= ========= ========== ==========
Total funds 34,996,923 31,931,953 (27,551,929) 3,976,356 - 43,353,303
=========== ========== ========== ========== ========== ===========

33

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

15. MOVEMENT OF FUNDS (continued)

At 1 Movement in funds Movement in funds Gains on Balance at
January Incoming Resources Investments/ 31 December
Unrestricted 2019 resources expended Property Transfers 2019
funds £ £ £ £ £ £
General funds 631,743 386,353 (1,751,787) - 1,550,679 816,988
Trading funds 18,194,657 31,726,961 (30,079,614) 1,947,355 (1,469,690) 20,319,669
---------------------- ---------------------- ----------------------- ------------------- --------------------- ----------------------
18,826,400 32,113,314 (31,831,401) 1,947,355 80,989 21,136,657
=========== ========== =========== ========= ========== ===========
Expendable
Endowment 12,585,839 - (85,912) 1,441,328 (80,989) 13,860,266
========== ========= ========= ========= ========== ==========
Total funds 31,412,239 32,113,314 (31,917,313) 3,388,683 - 34,996,923
=========== ========== ========== ========== ========== ===========

Expendable endowment fund

The principal purpose of the expendable endowment fund is to provide a capital base from which income is earned to finance the grant making activities. The Trustees have the powers to approve expenditure from the expendable endowment capital in certain circumstances however these are likely to be limited to grant making activity where unrestricted reserves are known to be insufficient to meet the cost of particular grants specifically approved by the Trustees. Transfer of funds represents the gift aid donation from HSF health plan Limited to The Hospital Saturday Fund and the drawdown of expendable endowment to fund grants awarded in the year. The Reserves Policy is to maintain the Expendable Endowment at a level no less than £5m and no greater than £14m. The Trustees are expecting a large gift aid donation from 2020 which is due to the exceptional circumstances that have resulted from the Covid19 pandemic. However, given we are forecasting that the long lasting effect of the pandemic will likely result in quite low gift-aid donations over the next three years, the Trustees are not expecting a large increase in the grant making as a result of the 2020 gift aid. Therefore, this will be used to fund the next three years’ grant making.

Trading fund

The principal purpose of the trading fund is to generate and provide income to the charity through its trading subsidiaries activities. The fund represents the current balance sheet value of HSF health plan Limited and The Hospital Saturday Fund.

16. ANALYSIS OF GROUP NET ASSETS BETWEEN FUNDS

Unrestricted funds Unrestricted funds
Total General Trading Expendable
Fund balances at 31 December 2020 Funds Fund Fund Endowment
are represented by £ £ £ £
Tangible fixed assets 5,216,738 - 5,216,738 -
Investments 30,557,478 - 19,259,024 11,298,454
Cash at bank and in hand 11,022,798 1,166,735 3,100,767 6,755,296
Net assets (2,076,157) (18,317) (2,057,840) -
Deferred tax (1,367,554) - (1,367,554) -
--------------------- ---------------------- --------------------- ---------------------
Total Net Assets 43,353,303 1,148,418 24,151,135 18,053,750
=========== =========== ========== ==========
Unrestricted funds
Total General Trading Expendable
Fund balances at 31 December 2019 Funds Fund Fund Endowment
are represented by £ £ £ £
Tangible fixed assets 2,762,607 - 2,762,607 -
Investments 28,452,991 - 17,144,754 11,308,237
Cash at bank and in hand 5,952,851 907,677 2,493,145 2,552,029
Net assets (1,671,156) (90,689) (1,580,467) -
Deferred tax (500,369) - (500,369) -
--------------------- ---------------------- --------------------- ---------------------
Total Net Assets 34,996,924 816,988 20,319,670 13,860,266
=========== =========== ========== ==========

The Trading and Total Funds includes non-distributable reserves of £4,020,027 (2019: £2,172,990) due to inclusion of the revaluation reserve inclusion.

34

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

17. PENSION COSTS

The trading subsidiary, as the employer in the group, makes contributions to group personal pension plans. The assets of the schemes are held separately from those of the group in independently administered funds. The pension cost charge represents contributions payable for the year by the trading subsidiary to the personal pension plans and amounted to £483,270 (2019: £414,057).

At the balance sheet date, there were outstanding contributions of £63,069 (2019: £24,030)

18. OPERATING LEASE COMMITMENTS

At 31 December 2020, the Group had annual commitments under operating leases which expire as follows:

2020 2019
Land and Land and
Buildings Other Buildings Other
£ £ £ £
Within one year 4,141 81,206 24,097 93,661
In the second to fifth years inclusive - 61,413 4,016 64,339
---------------- ---------------- ---------------- ----------------
4,141 142,619 28,113 158,000
======== ======== ======== ========

19. CONTINGENT LIABILITIES

No provision has been made for any levy which the trading subsidiary may be called upon to pay under the provisions of the Policyholders Protection Act 1975. The maximum amount of any such levy in respect of the current financial year would be £311,778 (2019: £311,173).

20. NATURE AND EXTENT OF RISK ARISING FROM INSURANCE CONTRACTS

This section has been broken down in to the key natures of risk arising, these are Market, Underwriting, Counterparty Default, Operational and Insurance.

Market Risk

Key Risks

The key drivers of the charge are asset class spread and equity risks. HSF health plan’s asset portfolio contains a relatively conservative mix of bonds and equities.

Controls

To minimise risk and secure long term growth and inflation protection a diversified spread of assets in the form of property, equities, fixed interest securities, pooled funds and bank deposits are held currently using two fund managers, three banks, and HSF itself. No derivatives, options, or stock loans are underwritten or directly held, although some pooled/hedge funds will have some exposure

Risk Appetite

HSF health plan’s appetite for market risk is relatively medium to low. The tolerance limits for Market Risk are detailed in HSF health plan’s Risk Appetite document. As at the date of this report, there are no known breaches of market risk tolerances and the business is expected to remain within appetite over the life of the business plan.

Underwriting Risk

Key Risks

Controls

The short-tailed nature of its liabilities offer a predictable and stable book of reserves which render a risk profile commensurate with its risk appetite. The main driver of HSF health plan’s Underwriting risk is the exposure to catastrophe risk. HSF health plan has robust underwriting controls to mitigate its exposure under catastrophe risk and align it to its risk appetite and strategic business plan. Re-Insurance is used to remove all risks associated with the personal accident as a third party underwrites these risks.

35

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

20. NATURE AND EXTENT OF RISK ARISING FROM INSURANCE CONTRACTS (continued)

Risk Appetite

As at the date of this report, there are no known breaches of underwriting risk tolerances and the business is expected to remain within appetite over the life of the business plan.

Counterparty Default Risk

Risk Capital

HSF health plan’s Counterparty Default Risk (CDR) draws a capital charge of just under £0.5m, which equates to approximately 25% of its undiversified capital charge.

Key Risks

The main driver of the CDR is HSF health plan’s cash at HSBC and Ulster Bank, which is unrated.

Controls

Risk Appetite

HSF health plan’s tolerance thresholds for CDR is documented in greater detail in its Risk Appetite document. As at the date of this report, there are no known breaches of CDR risk tolerances and the business is expected to remain within appetite over the life of the business plan.

Operational Risk

HSF health plan’s policy is to maintain an acceptable balance between the risk of operational failures, and the need to operate efficiently and prudently to ensure that contributions represent good value for money to policyholders. Appropriate precautions are taken to manage/control risk here, and compliance/internal/business audits will be undertaken from time to time on material activities and areas of potential concern. This is deemed to be adequate given the nature, scale and complexity of HSF health plan’s business.

Sensitivity

Assumptions and sensitivities

The risks associated with the non-life insurance contracts are complex and subject to a number of variables, which complicate quantitative sensitivity analysis. The Company uses several statistical and actuarial techniques based on past claims development experience. This includes indications such as average claims cost, ultimate claims numbers and expected loss ratios. The key methods used by the Company for estimating liabilities are expected loss ratio and benchmarking.

HSF health plan’s management has considered a number of stress and scenario tests designed to provide a reasonableness check of the core-modelled results and more generally, the Risk Management Framework. A key test was performed to determine whether losses resulting from any of the extreme events scenarios (assumed to be equal to or greater than 1 in 200 year events) would require capital holding in excess of the Solvency II Standard Formula model output; and hence whether HSF health plan would need to either increase its capital buffer or alter its modelling methodology and assumptions.

These tests are intended to be pragmatic illustrations of the major impact of an extreme adverse event or events rather than an attempt to model every possible consequence.

Profit/Loss before tax Accumulated Fund Accumulated Fund
2020 2019 2020 2019
£ £ £ £
Before sensitivities 7,628,598 3,958,036 24,130,193 20,308,822
Reduction in business volumes by 15% 2,951,935 (709,553) 19,453,530 15,641,233
Reduction in investment market values by 25% 1,565,092 (928,153) 18,066,688 15,422,633

The conclusion from these tests was that HSF health plan currently holds adequate capital to absorb the shock from various extreme natural catastrophic events, which it is exposed to on a net basis from writing health insurance. In all the scenarios tested (which can be deemed to be extreme and fall under Reverse stress tests), HSF health plan remains solvent and fulfils obligations to its policyholders. However, if such events did occur HSF health plan would need to raise further capital, introduce reinsurance, or reduce operations.

36

NOTES TO THE FINANCIAL STATEMENTS (continued)

THE HOSPITAL SATURDAY FUND

FOR THE YEAR ENDED 31 DECEMBER 2020

20. NATURE AND EXTENT OF RISK ARISING FROM INSURANCE CONTRACTS (continued)

Insurance Risk

HSF’s policy is to offer no insurance policy or renewal options beyond a month or two, and to manage the benefit/contributions levels to achieve over the long term a small surplus of contributions over claims and business costs. The Company has a risk associated with the claims technical provision which is calculated based on the requirement for claims to be submitted within 6 months of the date of treatment, by using two previous year’s figures analysis to produce a trend and utilise this trend to calculate the current year’s provisions.

Concentration

The Company writes non-life insurance on a monthly renewable base. The Company’s primary insurance risk exposure is pandemic risk from widespread diseases. The concentration of non-life insurance by type of contract is summarised below by reference to liabilities:

Gross claims
2020 2019
£ £
Direct Insurance 18,220,179 21,417,068
18,220,179 21,417,068

21. FINANCIAL RISK MANAGEMENT

Liquidity Risk – HSF health plan Limited only

The objective of the Company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The Company expects to meet its financial obligations through operating cash flows.

The following table shows details of the expected maturity profile of the Company’s undiscounted obligations with respect to its financial liabilities and estimated cash flows of recognised insurance and participating investment contract liabilities. Unearned premiums are excluded from this analysis. This table includes both interest and principal cash flows.

Trade and other liabilities
Outstanding claims
Trade and other liabilities
Outstanding claims		 Less than 1
month 2020
£
-
1,318,552
1,318,552
Less than 1
month 2019
£
-
1,668,368
1,668,368		 1-3 months
2020
£
3 months to 1
year 2020
£
-
880,475
883,510
346,284
883,510
1,226,759
1-3 months
2019
£
3 months to 1
year 2019
£
-
856,920
627,218
210,115
627,218
1,067,035		 1-5 years
2020
£
5+ years
2020
£
-
-
-
-
-
-
1-5 years
2019
£
5+ years
2019
£
-
-
-
-
-
-		 Total 2020
£
880,475
2,548,346
3,428,821
Total 2019
£
856,920
2,505,701
3,362,621

37

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

21. FINANCIAL RISK MANAGEMENT (continued)

Credit Risk – HSF health plan Limited only

The objective of the Company is managing its credit risk exposure is to ensure risk is managed in line with the Company’s risk appetite. The Company has established policies and procedures in order to manage credit risk and methods to measure it. The Company’s maximum exposure to credit risk for insurance receivables would be 15% of net premiums earned, £4,417,423 (2019: £4,519,203).

The following table shows the carrying value of assets that are neither past due or impaired and the ageing of assets that are past due but not impaired. No assets have been impaired.

Credit Risk as at 31 December 2020
Insurance receivables
Credit Risk as at 31 December 2019
Insurance receivables		 Neither past
due nor
impaired
£
Past due less
than
30 Days
£
Past due 31
to 60 days
£
Past due 61
to
90 days
£
-
1,310,418
264,177
-
-
1,310,418
264,177
-
Neither past
due nor
impaired
£
Past due less
than
30 Days
£
Past due 31
to 60 days
£
Past due 61
to
90 days
£
-
1,586,920
181,611
1,439
-
1,586,920
181,611
1,439		 Past due
more than
90 days
£
-
-
Past due
more than
90 days
£
-
-

Market Risk – HSF health plan Limited only

The Company is exposed to price risk arising from fluctuations in the value of financial instruments because of changes in market prices and the risks inherent in all investments. The Company has no significant concentration of price risk. The Company maintaining an appropriate mix of investment instruments to manage the risk.

The Company’s sensitivity to a 0.5% increase and decrease in market prices is as follows:

2020 2019
£ £
0.5% increase
Movement in bonds 18,796 18,746
Movement in equities 65,988 60,888
---------------- ----------------
0.5% decrease
Movement in bonds (18,796) (18,746)
Movement in equities (65,988) (60,888)
------------------ ------------------

The Company’s method for sensitivity to interest rate fluctuations has not changed significantly over the year.

38

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

21. FINANCIAL RISK MANAGEMENT (continued)

Fair Value

The Company
Level 1 Level 2 Level 3 Total
£ £ £ £
Available-for-sale equity securities 30,557,478 - - 30,557,478
------------------- ------------------- ------------------- -------------------

The carrying amounts of the financial instruments carried at cost or amortised cost approximate to their fair value mainly because of the short maturity of those instruments.

22. CAPITAL MANAGEMENT

The objective of the Company in managing its capital requirements is to ensure that it will be able to continue as a going concern and comply with the regulators’ capital requirements of the markets in which the Company operates, while maximising the return to HSF health plan Ltd through the optimising of the capital. The capital structure of the Company consists of reserves.

The Company was in compliance with capital requirements imposed by the regulators throughout the financial year.

The capital requirement of the Company is determined by its exposure to risk and the solvency criteria established by management and statutory regulations. The table below sets out the statutory minimum capital requirement and the Company’s available capital.

he Company’s available capital.
2020 2019
£ £
Statutory minimum capital requirement 2,626,250 2,652,000
Total available capital resources 24,130,193 20,308,822
--------------- ---------------
Solvency Cover % 919% 766%
======= =========

23. RELATED PARTY TRANSACTIONS

No trustee or other person related to the charity had any personal interest in any contract or transaction entered by the charity during the year (2019: £Nil).

The charity received Gift Aid donations during the year from its trading subsidiaries totalling £5,594,802 (2019: £1,469,690).

39

THE HOSPITAL SATURDAY FUND

NOTES TO THE FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 31 DECEMBER 2020

24. GOVERNMENT GRANTS

The company received government grants totalling £235,222 in the year (2019: Nil) from the Coronavirus Job Retention Scheme. There are no unfulfilled conditions or other contingencies attaching to the grants received from government sources.

25. POST BALANCE SHEET EVENTS

In January 2021 the charity completed the setup of a Maltese subsidiary, HSF health plan (Malta) Ltd. The subsidiary has been established to expand the marketing of health cash plans in Malta and in February 2021 the new company received its insurance licence from the Maltese Financial Services Authority.

40