2022-03-31-accounts

The Household Cavalry Foundation

Annual Report and Financial statements

31 March 2022

Charity Registration Number 1151869

Company Registration Number: 08236363 (England and Wales)

Contents

Reports
Reference and administrative details	1
Trustees’ report	3
Independent auditor’s report	15
Financial statements
Statement of financial activities	20
Balance sheet	21
Statement of cash flows	22
Principal accounting policies	23
Notes to the financial statements	28

The Household Cavalry Foundation

Reference and administrative details

Trustees	Colonel C A Lockhart, MBE, ADC (Chairman)
	Lieutenant Colonel (Retired) J P Eyre (Deputy Chairman)
	Colonel (retired) J D A Gaselee (until 1 February 2022)
	Captain JR Dove (from 1 February 2022)
	E D J Goodchild, Esq.
	Lady J M Grosvenor
Director	Lieutenant Colonel (Retired) G G E Stibbe, OBE
Company Secretary and	Lieutenant Colonel (Retired) R R D Griffin
Secretary to the Trustees
Principal office	Headquarters Household Cavalry
	Horse Guards
	Whitehall
	London
	SW1A 2AX
Charity registration number	1151869
Company registration number	08236363 (England and Wales)
Auditor	Buzzacott LLP
	130 Wood Street
	London
	EC2V 6DL
Accountant	C P Harmsworth FCCA
	Wick Meadows
	Wickford
	Essex
	SS12 9RP
Bankers	Royal Bank of Scotland plc
	Holt’s Farnborough Branch
	Lawrie House
	Victoria Road
	Farnborough
	GU14 7NR

The Household Cavalry Foundation 1

Reference and administrative details

Investment managers Cazenove Capital Management Limited 1 London Wall Place London EC2Y 5AU Waverton Investment Management Limited 16 Babmaes Street London SW1Y 6AH Solicitors Stone King LLP Boundary House 91 Charterhouse Street London EC1M 6HR

The Household Cavalry Foundation 2

Trustees’ report 31 March 2022

The trustees present their statutory report together with the financial statements of the Household Cavalry Foundation (“the charity” or HCF) for the year ended 31 March 2022.

The financial statements have been prepared in accordance with the accounting policies set out on pages 23 to 27 and comply with the charity’s Articles of Association and applicable law. The requirements of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) have been followed in the preparation of this report and financial statements.

GOVERNANCE, STRUCTURE AND MANAGEMENT

Governing Documents

The charity is governed by its Articles of Association dated 2 October 2012 (amended by a special resolution dated 16 April 2013 and 3 November 2016) and by a Charity Commission Order dated 2 May 2013.

The Household Cavalry Serving Officers’ Trust was transferred to the Household Cavalry Foundation on 21 December 2016; and this transfer was confirmed by Deed of Amendment on 22 December 2016.

Objects

The Household Cavalry Foundation exists to provide charitable and pastoral support to all the members of the Household Cavalry family; whether they are serving Soldiers, Casualties, Veterans or their dependants.

The charity supports the protection and development of the Household Cavalry’s history and heritage, and the welfare of retired horses.

The objects for which the charity is established are:

• ♦ the promotion of the military efficiency of the Household Cavalry by any charitable means the trustees may decide, including without limitation by fostering and preserving the traditions of the Household Cavalry and of any component of predecessor regiment or unit;

• ♦ to promote and protect the health of those that have been wounded or injured, whether on active service or otherwise, whilst serving in the Household Cavalry, or at the trustees’ discretion;

• ♦ the relief of hardship or distress among members and former members of the Household Cavalry, members of their families and other dependants, including without limitation by providing financial support to families or other dependants of those who have lost their lives on active service;

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Trustees’ report 31 March 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Objects (continued)

• ♦ to advance the education of the public and of members and former members of the Household Cavalry in the history, heritage, traditions of the military accomplishments of the Household Cavalry including without limitation by supporting a museum or museums, archives and collections;

• ♦ to promote humane behaviour towards serving or retired Household Cavalry Horses by providing appropriate care, protection, treatment and security for horses in need of care and attention; and

• ♦ such other exclusively charitable purposes relating to the Household Cavalry as the trustees in their absolute discretion think fit.

The charity’s operational stakeholders include the following:

• ♦ Headquarters Household Cavalry;

• ♦ Headquarters Household Division;

• ♦ Unit Welfare Officers;

• ♦ Household Cavalry Museum Trust Limited; and

• ♦ The Life Guards’ Regimental Association; and

• ♦ The Blues & Royals’ Regimental Association.

Trustees

The following trustees were in office at the date the financial statements were approved, and served throughout the year, except where shown.

Trustees Colonel C A Lockhart, MBE, ADC (Chairman) Lieutenant Colonel (Retired) J P Eyre (Deputy Chairman) Colonel (retired) J D A Gaselee (to 1 February 2022) Captain J R Dove (from 1 February 2022) E D J Goodchild, Esq. Lady J M Grosvenor

No trustee received any remuneration for services as a trustee. No expenses were reimbursed to the trustees during the year.

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Trustees’ report 31 March 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustee recruitment and appointment

The charity regularly reviews the skills necessary at board level and identifies where there are gaps. Proposed trustees individually meet all existing trustees in advance and are invited to attend a trustees’ meeting prior to being appointed, so that they may be assessed by the trustees for suitability and, where appropriate, relevant professional qualifications, diversity and experience. New trustees also sign a declaration confirming that they are not ineligible to be charity trustees. The trustees each serve for at least three years and are deliberately chosen to represent all aspects of Household Cavalry life and provide relevant governance expertise.

The Foundation’s Articles of Association dated 3 November 2016 state:

• ♦ “No Trustee may serve for a period longer than six consecutive years without retiring for at least one complete year... Trustees shall always aspire to, but not be obliged to, achieve a majority of serving or retired officers of the Household Cavalry on the board of Trustees” and…

• ♦ “No Trustee may serve for a period longer than six consecutive years without retiring for at least one complete year. Where a majority of the other Trustees agree it would assist with the work of the charity, this rule may be disapplied in respect of a particular Trustee …”

Trustee induction and training

New trustees receive a comprehensive pack of information including a copy of the charity’s governing document. Board members attend training, where possible, to refresh knowledge of board governance matters and charity law.

Trustees’ responsibilities statement

The trustees (who are also directors of the Household Cavalry Foundation for the purposes of company law) are responsible for preparing the trustees’ report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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

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

• ♦ observe the methods and principles in Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland (FRS 102);

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

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Trustees’ report 31 March 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees’ responsibilities statement (continued)

• ♦ state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• ♦ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.

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

In so far as the trustees are aware:

• ♦ there is no relevant audit information of which the charitable company’s auditor is unaware; and

• ♦ the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.

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

Key management personnel

The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day to day basis are considered to be the trustees of the charity and the Director. All strategic and other key decisions are made by them. None of the trustees are remunerated for their role as trustees nor in their role as a member of the key management team. The Director’s salary is set by the trustees and is reviewed annually with consideration given to charity sector salaries and pay indices. Details of key management personnel’s pay are set out in note 7.

Organisational structure and management reporting

The trustees are ultimately responsible for the charity and meet at least twice a year, in spring and autumn.

Day-to-day functions are delegated to the Director. The appointment of the Director is undertaken by the trustees. The trustees are responsible for agreeing objectives for the Director and monitoring these on a regular basis. The Director reports to the trustees on a regular basis, both formally and informally.

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Trustees’ report 31 March 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Organisational structure and management reporting (continued)

The Director provides the operational delivery of transparent and accurate administration, implementation of procedures and controls, along with regular reporting. This enables the trustees to take reasonable and informed steps to detect or prevent any irregularities including misappropriation of funds or fraud.

Risk management

The charity, like any organisation, is exposed to a number of risks. Some of these are particular to the charity and its work; many are generic. It is the responsibility of the trustees to anticipate these risks and to ensure that procedures are in place to mitigate them.

The charity has implemented efficient systems, including operational and financial controls, to mitigate risk and enable the trustees, on a regular basis, to review any major risks with regard to operational areas, finances and reserve levels.

A generic risk continued throughout this financial year: The Coronavirus (Covid-19) pandemic. This has had an unprecedented social and economic effect across the world on a scale not seen for at least 75 years. Russia’s invasion of Ukraine on 24 February 2022 has exacerbated economic problems caused by this pandemic. For example, at the time of writing this Report, headline inflation is four times the Bank of England’s target. Increased inflation could mean a reduction in donation income for the Foundation. The Foundation continues to face three perennial challenges and risks:

• ♦ Latent Staff resilience. Inherent strength-in-depth is proved despite the fact that there is only one full-time employee, the Director, with a primary financial budgetary and fundraising role. The Chairman of the Trustees is the alternate director. Formal authorisation for invoice payment is electronic. The management accounts are formally checked on a monthly basis by representatives of the trustees. The transparency of these documents facilitates review and oversight of the Director’s role by any of the trustees.

• ♦ Lack of investment income. Last year, the charity undertook a periodic Review of Fund Managers. This resulted in 40% of the capital value of the charity’s portfolio with Cazenove Capital Management’s Charity Multi-Asset Fund being transferred in two 20% tranches to Waverton Investment Management’s Charity Growth and Income Fund. These two 20% transfers were in March 2021 and December 2021. The balance remains in Cazenove Capital Management’s Charity Multi-Asset Fund. The result of this Periodic Review of Fund Managers was considered a risk-reducing measure. Stakes held in both funds remain proportionate to original and subsequent investments. All Household Cavalry charitable investment portfolios are now divided equally between Cazenove Capital Management and Waverton Investment Management.

As a result of this Periodic Review the trustees are content that they have a resilient management strategy in respect to the charity’s investments, and that they monitor the performance of the current fund managers regularly especially in these unprecedented times which are inherently dynamic.

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Trustees’ report 31 March 2022

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Risk management (continued)

• ♦ Lack of income from donors. Possible donor fatigue, which is exacerbated by an unpredictable economy, is mitigated by the trustees’ focus on building enduring relationships with regular donors, who, so far, have proved to be less affected by the prevailing economic situation. State ceremonial duties keep the Household Cavalry in the “public eye” and organised visits to both our regiments (service and ceremonial) ensure that our donors can meet our soldiers. This is a proven and effective strategy because extant and potential donors meet soldiers who have deployed on war-fighting operations and ceremonial duties that demonstrate the scope of our work.

The trustees aim always to match demand for assistance from the charity with their ability to raise follow-on funding in order to meet other priority needs that arise. This prioritisation underpins the support for all members of the Household Cavalry “family” that the charity offers to our operational casualties, our serving soldiers, our veterans and their dependents but also, when applicable, to our heritage and the welfare of our retired horses.

Our risk management framework encourages smaller targeted fundraising events which do not involve significant up-front capital outlay. Our usual fundraising events’ programme was compromised by Covid-19 restrictions especially during the first Quarter of the Financial Year covered in this Report. For example, again there was no Trooping The Colour parade at Horse Guards to celebrate The Queen’s official birthday.

ACTIVITIES AND PUBLIC BENEFIT

The charity provides public benefit by the provision of welfare grants and donations which assist Regimental personnel both past and present, as well as their dependants, who are in need, hardship or distress.

In addition, the charity enables Regimental personnel to more effectively perform their roles within the Armed Forces of The Crown. It does this by supporting educational, sporting and adventure training activities.

This assistance enables Regimental personnel to develop and maintain teamwork, skills, fitness, confidence, character and morale. This is especially important after operational tours as they face the consequences of their military service, particularly Post-Traumatic Stress Disorder (PTSD).

The charity promotes the efficiency of the Armed Forces of The Crown by enhancing the British Army's capability to undertake the roles demanded of it, including the defence of the United Kingdom and its international interests.

The funds to support the above activities are generated in part from investments, encouraging donations to the charity, and also from events.

In formulating the aims of the charity and in planning its activities, the trustees have regard to the Charity Commission’s general guidance on public benefit, ensuring that the work undertaken by the charity is in line with its charitable objects and aims.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR

Direction

During this economically volatile financial year, affected by both global health and political factors, Trustees’ direction remained the established successful focus on selecting donors and targeted events that minimize any extra work for already busy serving soldiers.

Fundraising

This financial year was potentially complicated by continuing restrictions imposed by the pandemic. As stated within Risk Management, this was exacerbated by Russia’s invasion of Ukraine on 24 February 2022.

Household Cavalry tenacity remained reassuringly resilient. An example of All Ranks’ fundraising potential was proved by a spectacular Boxing match at the Leonardo Royal Hotel near St Paul’s in The City on 18 November 2021 that also featured our Band. Our audience contained many familiar faces including one family whose parents and their London Marathon running sons exemplify loyal support. This event was almost a sell-out and the guest appearance of Amir Khan added stardust to eight competitive bouts whose boxers literally included all ranks who were introduced by both Regimental Corporals Major.

This stalwart loyalty has also been shown in the “mission critical” financial support given by extant donors despite continuing challenges unprecedented for eight decades. The Foundation’s donation and legacy income this year was £274,152 (2021: £270,333).

One key result is this generosity has enabled a pledge to our globally unique “Jewel in our Crown” Household Cavalry Museum where visitor numbers have been reduced by the impact of the pandemic.

Welfare

As well as managing recurrent pandemic restrictions and maintaining our regional support, links via postcode-based volunteers as described in the Household Cavalry Welfare Guide, Regimental Welfare Offices and Home HQ have continued to prove user-friendly.

The camaraderie exemplified by our successful regional dinners’ initiative was also genuinely helpful.

Our two key welfare priorities remain:

1. To prepare for the gradual emergence of latent Post-Traumatic Stress Disorder (PTSD). Research by King’s College, London University claims 88/1,000 (9%) deployed will suffer future PTSD. PTSD cases did not increase after withdrawal from Afghanistan last August.

2. To ensure the continual quality of prosthetics for our wounded soldiers, injured and longterm sick (WIS) personnel.

Our Welfare Guide (two pages with a flow chart)is reviewed annually for our global Household Cavalry “Family” of about 10,000 All Ranks: 1,000 serving soldiers and 9,000 veterans, and their dependants.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR (continued)

Welfare (continued)

Moreover, our Welfare Guide has proved fit-for-purpose since the allied withdrawal from Afghanistan in August 2021. For example, a key result is emergency cases are resolved fast.

Another bonus is Household Cavalry family members who work in the Ministry of Defence’s Recovery Capability (DRC)’s nationwide network of Personnel Recovery Centres (PRC) that are funded by key partners: The Royal British Legion and Help for Heroes. There serving and veteran wounded, injured and longterm sick service personnel mentor each other and boost mutual morale as they face the challenges associated with the transition from military to civilian life, and charitable initiatives such as Head Up.

Serving soldiers and Operational Casualties

Both our Regiments and our Band again received annual funding on a per capita basis to enhance their soldiers and dependants’ quality of life, with positive results that aid recruiting and retention.

As well as collective Fundraising exemplified by the Boxing Match on 18 November 2021, individual fundraising has also continued relentlessly despite the pandemic’s challenges, an example being via the Household Cavalry Regiment’s Twisted Barbell project.

Ascot War Horse Memorial has again very kindly endowed a second scholarship for individual Operational Casualties. Our first scholar qualified as a both a fixed-wing and rotary pilot.

Our second Ascot War Horse Memorial scholar is a double-amputee, now a Wiltshire policeman, who featured on the cover of the February 2021 edition of The Royal British Legion’s Journal.

On 14 October 2021 our Ceremonial Regiment’s Warrant Officers’ & Non-Commissioned Officers’ Mess very kindly hosted the launch of his memoirs Black Ice – Don’t Exist, Live! Written with help from a former Life Guard, it also has contributions by Les Ferdinand MBE, Football Director at Queen’s Park Rangers; Sir Hugh Robertson KCMG, another former Life Guard who now chairs the British Olympic Association; and Barney Campbell, his Troop Leader in Afghanistan and author of Rain, the acclaimed novel about their operational tour.

The Foundation continues to help to The Guards’ Veterans’ Mountaineering Club, founded by Household Cavalrymen, by pledging to match support from the Foot Guards.

Moreover, established Household Cavalry links have confirmed their loyalty to other tri-service charities such as Haig Homes and Sailors, Soldiers, Airmen and Families Association (SSAFA), the single service Army Benevolent Fund, and specialist charities; for example, the British Limbless Ex-Service Men’s Association (BLESMA) and Blind Veterans UK.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR (continued)

Heritage

Our last Gate Guardian that was restored is the Falklands’ War trophy Panhard for the 40[th] anniversary celebrations of its capture. This restoration project for our historic Armoured Fighting Vehicles started with the restoration to running order of a World War 2 Dingo; its garage beside our Archives in Combermere Barracks. Windsor was kindly funded by a local charity.

This year also marks the 40[th] anniversary of the tragic Hyde Park Bombing. Its memorial and other Household Cavalry monuments are maintained by this Foundation and both Regimental Associations. The generosity of the Grosvenor family’s Westminster Foundation made a significant contribution to the recent restoration of our Zandwoorde monument.

World War 1’s unique Household (Cavalry) Battalion’s Standard and Book of Remembrance in Windsor’s Garrison Church was repaired during the year.

“Best of both Worlds: Operational and Ceremonial”, a photographic project by globally iconic Ripley neared completion; these photographs will be sold to support this Foundation.

We gratefully received contributions during the year to guarantee re-publication by Pen & Sword of The Household Cavalry at War, The Story of The Second Household Cavalry Regiment in World War 2 by Roden Orde. The funding is now nearly complete.

The Serving Officers’ Trust (part of this Foundation since 2016) has started to rationalise and preserve its pictures, silver and albums, and is most grateful for significant support from retired officers and their families. The HCF has offered similar conservation support to both Warrant Officers’ & Non-Commissioned Officers’ Messes.

Two of five annual £5,000 payments remain for The Guards’ Chapel Organ Restoration Fund. These annual payments match those made by each of the five Foot Guard regiments. Equal repayments to regiments will be made if this Restoration Fund exceeds its target.

Horses

This year’s budget was committed to stables’ repair at Horse Guards. Our key links remain with the Defence Animal Centre, World Horse Welfare, the Stirling Trust, the Horse Trust and Raystede Horse Sanctuary.

Finance and administration

• ♦ This charity’s two staff remain one full-time Director, and one part-time Finance Administrator

• ♦ Annual reviews ensure the Foundation’s audit, banking and insurance costs remain competitive.

• ♦ Gift Aid is applied whenever possible.

• ♦ The majority of The One Day’s Pay Scheme (paid voluntarily by serving officers and soldiers) is paid to The Life Guards’ and The Blues & Royals’ Regimental Associations.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR (continued)

Finance and administration (continued)

• ♦ The fundraising process for this Foundation and both Regimental Associations remains user-friendly and easy: entry fees and kit are subsidised.

• ♦ Serving soldiers apply via their Chain-of-Command, and Veterans either directly or via the Home HQ of their Regimental Associations.

• ♦ All retail activities remain coordinated by the Household Cavalry Museum’s shop. The only exceptions are some specific uniform items supplied by Quartermasters, and cards and diaries marketed by Home Headquarters Household Cavalry.

• ♦ Only The Life Guards’ Regimental Association remains outside the charity’s investment portfolio, but it is included in all relevant welfare case considerations.

• ♦ This Foundation and The Life Guards’ and The Blues & Royals’ Regimental Associations all pay similar annual amounts on welfare.

FINANCIAL REVIEW

Results for the year and financial position

Total income for the year amounted to £433,152 (2021 – £342,977). Investment income increased to £159,000 (2021 – £72,644) as markets stabilised post pandemic. Expenditure totalled £439,114 (2021 – £308,166), due to increased grants awarded during the year of £216,989 (2021 – £104,517). Of the total expenditure, £84,423 (2021 – £65,196) was spent on raising funds, £20,483 (2021 – £26,211) being in respect to investment manager’s fees and the balance generating donations of £190,591 (2021 – £193,949). Net realised and unrealised investment gains for the year totalled £190,815 (2021 –£609,835) following the recovery of the global stock markets from the crash after the initial impact of the Covid-19 pandemic.

Therefore, the net movement in funds for the year was an increase of £184,853 (2021 – £644,646).

Total funds at 31 March 2022 amounted to £4,434,785 (2021 – £4,249,932) of which £2,322,223 were restricted (2021 – £2,164,161) and £2,112,562 were unrestricted or general funds (2021 – £2,085,271). Included within unrestricted funds is a designated fund of £150,000 (2021 – £120,000) which has been set aside to help towards the cost of the next Standards Parade where the Monarch, as Colonel in Chief of the Household Cavalry, will present new Standards. The Parade is anticipated to take place in 2024. Free reserves at 31 March 2022 therefore amounted to £1,962,562 (2021 – £1,965,271).

Investment policy

The portfolio has benefited from the recovery of global stock markets following the onset of the pandemic. The charity’s investments are managed by professional investment managers who were reviewed formally during the year. There are no restrictions on the charity’s power to invest.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR (continued)

Investment policy (continued)

The investment strategy is set by the trustees with advice from their investment managers. The strategy takes into account the charity’s income requirements for the year, the appropriate risk profile and the investment managers’ view of the market prospects in the medium term.

The policy is to maximise total return through a diversified portfolio whilst providing a level of income as advised by the trustees from time to time. The performance of the portfolios and the charity’s investment strategy are reviewed by the trustees whose representatives meet with the investment managers every six months.

Included within investments are monies advanced to the charity by the Household Cavalry and its associated funds. Income and gains (or losses) accruing from these monies are added (or deducted) from these funds and the balances due are reflected within the creditor figures in the attached financial statements.

Reserves policy

It is the trustees’ intention to build up sufficient reserves within the charity, through fundraising initiatives and returns on investments, in order to meet liabilities as they fall due and to enable the continued development of the charity’s objectives to support the Household Cavalry.

The charity generates income largely through fundraising and investments and, therefore, it is subject to fluctuation from year to year. As a result, the trustees believe the charity should hold reserves of between 12 months and 36 months of operating expenditure to provide protection against such fluctuations and enable it to continue operating in all circumstances and following all eventualities, including any significant unexpected fall in income.

The reserves policy is, and will continue to be, reviewed annually by the Trustee. The total value of free reserves at 31 March 2022 of £1,962,562 (2021 – £1,965,271) is in excess of this policy at the current time. The trustees are conscious of the fact that income generation in the current climate is difficult, yet the need for the charity’s support remains as high as ever.

Therefore, for the time being the trustees consider the charity’s free reserves to be adequate but not excessive and at a level appropriate to cover the charity’s commitments and guard against any reasonably foreseeable downturn in income.

Fundraising policy

The charity is committed to following the Code of Fundraising Practice and the fundraising promise as administered by the Fundraising Regulator. HCF raises funds in three main ways:

• ♦ From its investment portfolio, as administered by professional investment managers;

• ♦ Donations from individuals;

• ♦ Holding occasional fundraising events; and

• ♦ Through applications to grant-giving trusts.

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Trustees’ report 31 March 2022

ACHIEVEMENTS FOR THE YEAR (continued)

Fundraising policy (continued)

The charity does not routinely make direct approaches to the general public for fundraising purposes. Contact with individual donors is usually at their instigation but occasionally the charity does approach those already engaged with the charity.

The charity occasionally engages third party fund raisers to approach individuals on its behalf. Where this occurs, contracts are drawn up with a clear and specific remit and the charity closely monitors any fundraising activity undertaken on its behalf.

From time-to-time, individuals may independently undertake to raise funds on our behalf, for example sponsored sports activities. Such activities are undertaken independently of the HCF. The charity has not received any complaints about its fundraising activity.

FUTURE PLANS

The charity is planning a period of consolidation and re-invigoration post-Pandemic and after withdrawal from Afghanistan, especially given the long-identified risk of a possible increase in latent PTSD. It will focus on adapting a proven fundraising process of carefully targeted events and new and extant donors. This will exploit suitably innovative opportunities such as more cooperation with similar mutually supporting charities as exemplified by annual support for our operational casualty and world para-bobsleigh champion Corie Mapp.

Signed on behalf of the trustees

Trustee Edward Goodchild Approved on: 18 November 2022

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Independent auditor’s report 31 March 2022

Independent auditor’s report to the members of the Household Cavalry Foundation

Opinion

We have audited the financial statements of the Household Cavalry Foundation (the ‘charitable company’) for the year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, and statement of cash flows, the principal accounting policies and the notes to the financial statements. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• ♦ give a true and fair view of the state of the charitable company’s affairs as at 31 March 2022 and of its income and expenditure for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report and financial statements.

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Independent auditor’s report 31 March 2022

Other information (continued)

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

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Independent auditor’s report 31 March 2022

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing risks the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• ♦ the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; and

• ♦ we obtained an understanding of the legal and regulatory frameworks that are applicable to the charity and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and the Companies Act 2006) and those that relate to the Code of Fundraising Practice issued by the Fundraising Regulator.

The Household Cavalry Foundation 17

Independent auditor’s report 31 March 2022

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

We assessed the susceptibility of the charity’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• ♦ making enquiries of management as to their knowledge of actual, suspected and alleged fraud; and

• ♦ considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• ♦ performed analytical procedures to identify any unusual or unexpected relationships;

• ♦ performed substantive testing of expenditure including the authorisation thereof;

• ♦ tested journals to identify unusual transactions; and

• ♦ assessed whether the judgements and the assumptions made in determining the probability of the receipt of legacy income and the value of the listed investments payable to other organisations on demand were indicative of potential bias

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• ♦ review of the minutes of meetings of those charged with governance; and

• ♦ enquiring of management as to actual and potential litigation and claims.

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

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

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

The Household Cavalry Foundation 18

Independent auditor’s report 31 March 2022

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.

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

Date: 18 November 2022

The Household Cavalry Foundation 19

Statement of financial activities Year to 31 March 2022

(Including an income and expenditure account)

Notes	Un- restricted funds 2022 £	Restricted funds 2022 £	Total funds 2022 £	Un- restricted funds 2021 £	Restricted funds 2021 £	Total funds 2021 £
Income and expenditure Income from: Donations and legacies 1 Investments and interest receivable 2 Total income Expenditure on: Raising funds 3 Charitable activities . Assisting service personnel and dependants 4 Total expenditure Net (expenditure) income before investment gains (losses) Net gains on investments Net income for the year Transfers between funds 14 Net movement in funds 5 Fund balances at 1 April Fund balances at 31 March	203,163 82,455	70,989 76,545	274,152 159,000	167,096 37,630	103,237 35,014	270,333 72,644
	285,618	147,534	433,152	204,726	138,251	342,977
	74,541 281,995	9,882 72,696	84,423 354,691	52,542 196,809	12,654 46,161	65,196 242,970
	356,536	82,578	439,114	249,351	58,815	308,166
	(70,918) 100,209	64,956 90,606	(5,962) 190,815	(44,625) 315,461	79,436 294,374	34,811 609,835
	29,291 (2,000)	155,562 2,000	184,853 —	270,836 (3,000)	373,810 3,000	644,646 —
	27,291 2,085,271	157,562 2,164,661	184,853 4,249,932	267,836 1,817,435	376,810 1,787,851	644,646 3,605,286
	2,112,562	2,322,223	4,434,785	2,085,271	2,164,661	4,249,932

The charity has no recognised gains or losses other than those shown above. All the above results were derived from continuing operations.

The Household Cavalry Foundation 20

Balance sheet 31 March 2022

	2022 £	2022 £	2021 £	2021 £
Fixed assets Investments 10 Current assets Debtors 11 Cash at bank and in hand Liabilities Creditors: amounts falling due within one year 12 Net current liabilities Total assets less current liabilities Creditors: amounts falling due in more than one year 13 Total net assets Represented by: The funds of the charity: Restricted funds 14 Unrestricted funds - General funds - Designated funds 15	54,883 467,223	7,060,899 (2,626,114)	60,488 410,964	6,726,893 (2,471,961)
	522,106 (3,148,220)		471,452 (2,943,413)
		4,434,785 —		4,254,932 (5,000)
		4,434,785		4,249,932
		2,322,223 1,962,562 150,000		2,164,661 1,965,271 120,000
		4,434,785		4,249,932

Approved by the trustees and signed on their behalf by:

Trustee Edward Goodchild

Approved on: 18 November 2022

The Household Cavalry Foundation:

Charity Registration Number 1151869, Company Registration Number 08236363 (England and Wales)

The Household Cavalry Foundation 21

Statement of cash flows Year to 31 March 2022

Notes	2022 £	2021 £
Cash flows from operating activities: Net cash (used in)provided by operating activities A Cash flows from investing activities: Investment income and interest received Proceeds from the disposal of investments Purchase of investments Net cash provided by investing activities Change in cash and cash equivalents in the year Cash and cash equivalents at 1 April B Cash and cash equivalents at 31 March B	(75,600)	104,566
	159,000 2,105,413 (1,971,074)	72,644 7,700,894 (7,743,812)
	293,339	29,726
	217,739 423,799	134,292 289,507
	641,538	423,799

Notes to the statement of cash flows for the year to 31 March

A Reconciliation of net movement in funds to net cash provided by (used in) operating activities

	2022 £	2021 £
Net movement in funds (as per the statement of financial activities) Adjustments for: (Gains) losses on investments Investment income and interest receivable Decrease in debtors Increase in creditors Net cash(used in) provided by operating activities	184,853 (306,865) (159,000) 5,605 199,807	644,646 (1,050,204) (72,644) 75,393 507,375
	(75,600)	104,566

B Analysis of changes in net debt

Analysis of changes in net debt
	2021 £	Cash flows £	2022 £
Cash at bank and in hand Cash held by investment managers Total cash and cash equivalents	410,964 12,835	56,259 161,480	467,223 174,315
	423,799	217,739	641,538

The Household Cavalry Foundation 22

Principal accounting policies 31 March 2022

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 31 March 2022 with comparative information provided in respect to the year to 31 March 2021.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The charity constitutes a public benefit entity as defined by FRS 102.

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

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the trustees to make significant judgements and estimates.

The principal areas in the financial statements where these judgements and estimates have been made relate to:

• ♦ the allocation of support costs between expenditure headings;

• ♦ determining the value of listed investments held on behalf of associated Household Cavalry organisations;

• ♦ assessing the probability of the receipt of legacy income; and

• ♦ estimating future income and expenditure flows for the purpose of assessing going concern.

As set out in these accounting policies under the going concern section, below, the trustees have considered the continuing impact of the Covid-19 pandemic on the charity and have concluded that although there may be some negative consequences, it is appropriate for the charity to continue to prepare its accounts on the going concern basis.

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Principal accounting policies 31 March 2022

Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of one year from the date of approval of these financial statements.

The trustees of the charity have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. The key areas of judgement that affect items in the financial statements are detailed above. With regard to the next accounting period, the year ending 31 March 2023, the most significant areas that affect the carrying value of the assets held by the charity are the level of investment return and the performance of the investment markets (please see the investment policy and the risk management sections of the trustees’ report for more information).

Income recognition

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received. Income comprises transfers from other registered charities, donations and legacies, income from fundraising events and investment income and interest receivable.

Donations and transfers from other registered charities amounting to donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

In accordance with the Charities SORP FRS 102 volunteer time is not recognised.

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Principal accounting policies 31 March 2022

Income recognition (continued)

Legacies are included in the statement of financial activities when the charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the charity.

Entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material. In the event that the gift is in the form of an asset other than cash or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonable accuracy and the title of the asset having being transferred to the charity.

Income from fundraising events is measured at fair value and accounted for on an accruals basis.

Investment income comprising dividends and similar income from listed investments is recognised once the dividend has been declared and notification has been received of the dividend due.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis and comprises:

• ♦ Expenditure on raising funds, including all expenditure associated with raising funds for the charity by way of donations or fundraising events together with investment management fees.

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Principal accounting policies 31 March 2022

Expenditure recognition (continued)

• ♦ Expenditure on charitable activities including all direct and indirect costs in relation to assisting service personnel and their dependants. Such expenditure includes the provision of donations and grants to service personnel and/or their dependants. These grants and donations are made where the trustees consider there is real need following a review of the details of each particular case and comprise single year payments rather than multi-year grants. Grants payable are included in the statement of financial activities when approved and when the intended recipient has either received the funds or been informed of the decision to make the grant and has satisfied all performance conditions. Grants approved but not paid at the end of the financial year are accrued. Grants where the beneficiary has not been informed or has to fulfil performance conditions before the grant is released are not accrued for but are disclosed as financial commitments in the notes to the financial statements.

All expenditure is stated inclusive of irrecoverable VAT.

Allocation of support and governance costs

Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the charity it is necessary to provide support in the form of financial procedures, provision of office services and equipment, and general administration.

Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice. Governance costs are included as a specific category within support costs.

Both support and governance costs are allocated to the cost of assisting service personnel and their dependants.

Heritage assets

Certain assets owned by the charity meet the definition of heritage assets in the Charities SORP FRS 102 and are not valued for the purposes of these financial statements. Further details are provided in note 9 to these financial statements.

Investments

Listed investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price.

The charity does not acquire put options, derivatives or other complex financial instruments.

As noted above the main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.

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Principal accounting policies 31 March 2022

Investments (continued)

Realised gains (or losses) on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value is acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value at that date.

Included within investments are monies advanced to the charity by the Household Cavalry and its associated funds which are repayable on demand. Income and gains (or losses) accruing from these monies are added (or deducted) from these funds and the balances due are reflected within the creditors figures in note 12 to these financial statements.

All other realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise.

Debtors

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

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits.

Creditors and provisions

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

Fund accounting

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

Designated funds comprise monies set aside out of unrestricted general funds for specific future purposes or projects.

General funds represent monies which are freely available for application towards achieving any charitable purpose that falls within the charity’s charitable objects.

The Household Cavalry Foundation 27

Notes to the financial statements 31 March 2022

1 Income from: Donations and legacies

	Unrestricted funds 2022 £	Restricted funds 2022 £	Total funds 2022 £	Unrestricted funds 2021 £	Restricted funds 2021 £	Total funds 2021 £
Donations Legacies Income from events The Day’s Pay Scheme Total funds	116,502 3,100 42,819 40,742	70,989 — — —	187,491 3,100 42,819 40,742	90,712 20,845 17,142 38,397	103,237 — — —	193,949 20,845 17,142 38,397
	203,163	70,989	274,152	167,096	103,237	270,333

The income from events represents donations received at events that were organised by third parties and held on behalf of the Household Cavalry Foundation.

The Day’s Pay Scheme is a voluntary payroll giving scheme where participating members of the Household Cavalry Regiments contribute one day’s pay per month to the charity.

2 Income from: Investment income and interest receivable

	Unrestricted funds 2022 £	Restricted funds 2022 £	Total funds 2022 £	Unrestricted funds 2021 £	Restricted funds 2021 £ 35,009 5 35,014	Total funds 2021 £
Investment income Interest receivable Total funds	82,413 42	76,543 2	158,956 44	37,509 121		72,518 126
	82,455	76,545	159,000	37,630		72,644

3 Expenditure on: Raising funds

	Unrestricted funds 2022 £	Restricted funds 2022 £	Total funds 2022 £	Unrestricted funds 2021 £	Restricted funds 2021 £	Total funds 2021 £ 24,105 13,221 948 26,211 711 65,196
Staff costs Events and fundraising costs Website costs Investment management fees UK entertainment Total funds	23,371 26,704 781 10,601 13,084	— — — 9,882 —	23,371 26,704 781 20,483 13,084	24,105 13,221 948 13,557 711	— — — 12,654 —
	74,541	9,882	84,423	52,542	12,654

The Household Cavalry Foundation 28

Notes to the financial statements 31 March 2022

4 Expenditure on: Assisting service personnel and their dependants

	Unrestricted funds 2022 £	Restricted funds 2022 £	Total funds 2022 £	Unrestricted funds 2021 £	Restricted funds 2021 £	Total funds 2021 £
Grants and donations Staff costs and honoraria Promotion of military efficiency Accountancy Publishing costs – Household Cavalry Journal (2021)a Publishing costs – Household Cavalry Journal (prior years)a Website development Professional fees Office and administration costs Insurance Governance costs: auditor’s remuneration Other costs Total funds	154,731 67,417 12,484 10,533 14,228 4,411 781 1,916 1,689 — 8,628 5,177	62,258 — — — — — — — — 10,438 — —	216,989 67,417 12,484 10,533 14,228 4,411 781 1,916 1,689 10,438 8,628 5,177	68,050 59,828 19,629 9,407 8,633 21,084 947 — 1,376 — 7,278 577	36,467 — — — — — — — — 9,694 — —	104,517 59,828 19,629 9,407 8,633 21,084 947 — 1,376 9,694 7,278 577
	281,995	72,696	354,691	196,809	46,161	242,970

.

5 Net movement in funds

This is stated after charging

Net movement in funds This is stated after charging
	2022 £	2021 £
Staff costs, excluding honoraria (note 6) Auditor’s remuneration . Current year . Non-audit services	70,113 7,092 1,536	72,314 6,690 588

6 Staff costs

Staff costs, excluding honoraria, are as follows:

	Total funds 2022 £	Total funds 2021 £
Wages and salaries Social security costs Employer’s pension contribution Contribution in respect to Regimental Adjutant	54,060 1,794 1,775	52,572 5,639 1,743
	57,629 12,484	59,954 12,360
	70,113	72,314

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Notes to the financial statements 31 March 2022

6 Staff costs (continued)

The average number of employees during the year was:

2022 No.	2021 No.
2	2

No employee earned more than £60,000 per annum during the year, including taxable benefits but excluding pension contributions (2021 – none).

7 Trustees' expenses and remuneration and transactions with trustees

The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day to day basis comprise the trustees and the Director. The total cost to the charity of employing key management was £53,290 (2021 – £52,205).

No trustee received any remuneration or reimbursement of expenses in connection with their duties as trustees or members of key management (2021 – none).

8 Taxation

Household Cavalry Foundation is a registered charity and, therefore, is not liable to income tax or corporation tax on income or gains derived from its charitable activities, as they fall within the various exemptions available to registered charities.

9 Heritage assets

The charity has title to a number of unique artefacts including silverware and paintings which form part of the heritage of the Household Cavalry and the nation generally and which the charity intends to preserve for the enjoyment of future generations.

One of the principal objectives of the charity is “ to advance the education of the public and of members and former members of the Household Cavalry in the history, heritage, traditions of the military accomplishments of the Household Cavalry including without limitation by supporting a museum or museums, archives and collections ”. As such, the assets meet the definition of heritage assets in the Charities SORP FRS 102 and are not valued for the purposes of these financial statements. It is not possible to place any meaningful valuation on the collection for the purposes of these financial statements and details of specific items are not given for security reasons.

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Notes to the financial statements 31 March 2022

10 Investments

Investments
	Total funds 2022 £	Total funds 2021 £
Listed investments Market value as at 1 April Additions at cost Disposals at opening market value (proceeds £2,105,413; gains £9,687) Net unrealised investment gains (losses) Market value as at 31 March Cash held for reinvestment Historical cost of listed investments as at 31 March	6,714,058 1,971,074 (2,095,726) 297,178	5,620,936 7,743,812 (7,720,782) 1,070,092
	6,886,584 174,315	6,714,058 12,835
	7,060,899	6,726,893
	6,582,055	6,585,455

At 31 March 2022 listed investments comprised the following:

	Total funds 2022 £	Total funds 2021 £
UK equities Overseas equities Diversified Investment funds Unitised funds Alternatives Total	— — 2,427,200 4,361,960 97,424	— — — 5,690,655 1,023,403
	6,886,584	6,714,058

All listed investments were dealt in on a recognised stock exchange.

At 31 March 2022, listed investments included investments with a market value of £3,018,323 (2021 – £2,855,035) representing amounts due to the Household Cavalry regiments and associated funds (note 12). Included within these investments are total net unrealised gains of £297,178 and realised gains of £9,687 which arose during the year ended 31 March 2022. Those losses and gains which relate to the investments which represent part of the amount due to the Household Cavalry regiments and associated funds are not reflected through the statement of financial activities.

The Household Cavalry Foundation 31

Notes to the financial statements 31 March 2022

10 Investments (continued)

The following individual investment holdings as at 31 March were deemed material in the context of the market value of the portfolio as at that date:

Holding	2022 Market Value £	2022 Percentage %
Cazenove Charity Multi-Asset Fund Waverton CharityGrowth and Income Fund	4,361,960 2,427,200	63.3% 35.2%

Holding	2021 Market Value £	2021 Percentage %
Cazenove Charity Multi-Asset Fund Waverton Charity Growth and Income Fund Savills Investment Management – Charities PropertyFund	4,336,750 1,343,903 763,690	64.6% 20.0% 11.4%

11 Debtors

	Total funds 2022 £	Total funds 2021 £
Other debtors Legacies receivable Accrued investment income Prepayments	4,850 — 49,422 611	4,854 30,000 24,174 1,460
	54,883	60,488

12 Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
	Total funds 2022 £	Total funds 2021 £
Amounts due to the Household Cavalry Regiments and associated funds (see below) . Listed investments . Investment income payable Grants payable Accruals Deferred income	3,018,323 47,858 5,000 58,516 18,523	2,855,035 29,823 10,000 31,555 17,000
	3,148,220	2,943,413

The Household Cavalry Foundation 32

Notes to the financial statements 31 March 2022

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

Included above are monies advanced to the charity by the Household Cavalry Regiments and associated funds. Income and gains (or losses) accruing from these monies are added (or deducted) from these funds and the balances due are reflected in the creditors figures above. At 31 March, the amounts owed were as follows:

Listed investments	2022 £	2021 £
The Blues and Royals Association Oliver Montague Fund Household Cavalry Regiment (Bulford Camp, Salisbury Plain) Household Cavalry Mounted Regiment (Knightsbridge)	1,413,377 1,309,741 153,047 142,058	1,335,668 1,237,729 146,013 135,625
	3,018,323	2,855,035
Investment incomepayable	2022 £	2021 £
The Blues and Royals Association Oliver Montague Fund Household Cavalry Regiment (Bulford Camp, Salisbury Plain) Household Cavalry Mounted Regiment (Knightsbridge)	24,840 23,018 — —	12,060 11,175 3,416 3,173
	47,858	29,823

Deferred income primarily relates to monies received in advance of an event taking place following the year end:

	2022 £	2021 £
At 1 April Amount released to income from charitable activities Amount deferred in year At 31 March	17,000 (17,000) 18,523	17,000 (17,000) 17,000
	18,523	17,000
Creditors: amounts falling due in more than one year	Total funds 2022 £	Total funds 2021 £
Grantspayable	—	5,000

13 Creditors: amounts falling due in more than one year

The Household Cavalry Foundation 33

Notes to the financial statements 31 March 2022

14 Restricted funds

The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trusts to be applied for specific purpose.

Year ended 31 March 2022	Operational Casualties Fund 2022 £	Children’s Fund 2022 £	Serving Officers Trust Fund 2022 £	Total 2022 £
At 1 April 2021 Income Expenditure Net investment gains Transfer from unrestricted funds At 31 March 2022	1,634,876 105,035 (49,278) 74,950 —	114,138 4,190 (282) 2,577 2,000	415,647 38,309 (33,018) 13,079 —	2,164,661 147,534 (82,578) 90,606 2,000
	1,765,583	122,623	434,017	2,322,223

Year ended 31 March 2021	Operational Casualties Fund 2021 £	Children’s Fund 2021 £	Serving Officers Trust Fund 2021 £	Total 2021 £
At 1 April 2020 Income Expenditure Net investment gains Transfer from unrestricted funds At 31 March 2021	1,384,211 29,058 (22,726) 244,333 —	99,100 3,999 (361) 8,400 3,000	304,540 105,194 (35,728) 42,316 —	1,787,851 138,251 (58,815) 294,374 3,000
	1,634,876	114,138	415,647	2,164,661

Operational Casualties Fund

The Operational Casualties Fund is used to alleviate hardship of injured Household Cavalry service personnel and their families.

Children’s Fund

The Children’s Fund is used to provide money to orphans of deceased Household Calvary personnel who have died during conflict. Donations are made each year by each of the Regimental Associations and an amount equal to those donations is transferred from unrestricted to restricted funds by the charity.

Serving Officers Trust Fund

The Serving Officers Trust Fund is used to promote the efficiency of the Household Cavalry by fostering and preserving traditions and increasing the efficiency of its serving officers by making provision for participation in a wide range of sports, purchasing learned periodicals, paying educational fees, assisting with purchase of items of uniform and paying for refurbishment, acquisition and insurance of regimental property.

The Household Cavalry Foundation 34

Notes to the financial statements 31 March 2022

15 Designated funds

The trustees have set aside or designated certain monies for specific purposes as follows.

	1 April 2021 £ 120,000	New design- ations £	Utilised £	31 March 2022 £
Standards Parade Fund		30,000	—	150,000
	1 April 2020 £ 90,000	New design- ations £	Utilised £	31 March 2021 £
Standards Parade Fund		30,000	—	120,000

The Standards Parade Fund comprises monies set aside to help towards the cost of the next Standards Parade where the Monarch, as Colonel in Chief of the Household Cavalry, will present new Standards. The Parade is anticipated to take place in 2024.

16 Analysis of net assets between funds

Fund balances at 31 March 2022 are represented by: Investments Net current (liabilities) assets Creditors: amounts falling due in more than one year Total net assets	Unrestricted funds 2022 £	Restricted funds 2022 £	Total Funds 2022 £	Unrestricted funds 2021 £	Unrestricted funds 2021 £	Restricted funds 2021 £	Restricted funds 2021 £	Total Funds 2021 £
	5,111,175 (2,998,613) —	1,949,724 372,499 —	7,060,899 (2,626,114) —	4,852,773 (2,762,502) (5,000)		1,874,120 290,541 —		6,726,893 (2,471,961) (5,000)
	2,112,562	2,322,223	4,434,785	2,085,271		2,164,661		4,249,932
						Total 2022 £		Total 2021 £
Unrealised gains included above On investment assets Reconciliation of movements in unrealised gains: Total unrealised gains at 1 April 2021 Movement in respect of disposals in the year Net gains (losses) arising on revaluations in the year Total unrealised gains at 31 March 2022					304,531			128,603
					128,603 (121,250) 297,178		368,258 (1,309,747) 1,070,092
					304,531		128,603

The total unrealised gains as at 31 March 2022 constitute movements on the revaluation of listed investments.

The Household Cavalry Foundation 35

Notes to the financial statements 31 March 2022

17 Related parties

One trustee is a serving Household Cavalryman (2021 – one trustees was a serving member) and so may have benefitted indirectly from grants made during both 2022 and 2021. No trustees received grants directly as individual beneficiaries (2021 – no trustees).

During the year ended 31 March 2022, a total of £11,550 was paid to the Household Cavalry Museum to help to fund Information Technology improvements. Colonel J. D. A. Gaselee, a trustee of the Household Cavalry Foundation to 1 February 2022, is a director of Household Cavalry Museum Enterprises Limited.

The trustees who are serving members of the Household Cavalry contributed to the Day’s Pay Scheme, which made payments to the charity during the year.

Donations amounting to £50 were received from trustees during the year (2021 – £1,000). The trustee who is a serving member of the Household Cavalry contributed to the Day’s Pay Scheme, which made payments to the charity during the year.

The Household Cavalry Foundation 36