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2021-09-30-accounts

Charity number: 1158457

The Innholders' Charitable Foundation Trustee's Report and Financial Statements For the Year Ended 30 September 2021

The Innholders' Charitable Foundation

Contents
Page
Reference and Administrative Details of the Charity, its Trustee and Advisers 1 - 2
Trustee's Report 3 - 9
Independent Auditor's Report on the Financial Statements 10 - 13
Statement of Financial Activities 14
Balance Sheet 16
Statement of Cash Flows 17
Notes to the Financial Statements 18 - 28

The Innholders' Charitable Foundation

Reference and Administrative Details of the Charity, its Trustee and Advisers For the Year Ended 30 September 2021

Trustee

The Worshipful Company of Innholders

Charity registered number 1158457 Principal office Innholders' Hall 30 College Street London EC4R 2RH

The members of the Court of Assistants are:

Master The Rt Hon The Viscount Thurso PC FIH MI Upper Warden Mr DC Brann Middle Warden Mr I Mullins Renter Warden Mr TS Richardson

Court Assistants Mr K Harrison Mr FP Denley Mr IJ White Mr T J Mellery-Pratt Mr AJ Brighton Mr AFG Groom FRCS Mrs JL Sibley MBE Mr CH Attlee Mr NW Rettie FIH MI The Rev'd Cannon WJ Christianson FNI Sir JGM Wates CBE Mr AG McKenzie FIH MI Dr RJ Wylde FREng Mr C Chaplin Mr D Morgan-Hewitt FIH MI Mr S Molony Mr NH Fox Mrs Beth Aarons (from 5 October 2021) Mr ERA Brandt Mr JP Essenhigh Mrs AS Jeffs

Page 1

The Innholders' Charitable Foundation

Reference and Administrative Details of the Charity, its Trustee and Advisers For the Year Ended 30 September 2021

Independent auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Bankers Lloyds Banking Group Plc 2nd Floor 39 Threadneedle Street London EC2R 8AU C. Hoare & Co 37 Fleet Street London EC4Y 1BT Solicitors Cripps LLP 12 Mount Ephraim Tunbridge Wells TN4 8AS Investment Manager Cazenove Capital 1 London Wall Place London EC2Y 5AU

Page 2

The Innholders' Charitable Foundation

Trustee's Report For the Year Ended 30 September 2021

The Worshipful Company of lnnholders (“the Company”) is a City Livery Company founded under Royal Charter in 1514 and is represented by its Court of Assistants. The Court of Assistants (‘the Court”) acts on behalf of the Company, which is the sole Corporate Trustee ("the Trustee") of the lnnholders' Charitable Foundation ("the Foundation").

The Trustee presents its annual report together with the audited financial statements of the Foundation for the year 1 October 2020 to 30 September 2021.

A. Objectives and Activities

Objects

The objects of the Foundation reflect those of the seven unincorporated charities which were amalgamated into the Foundation when it was established.

The objects of the Foundation are:

i) The Young and Furtherance of Education

To advance the education for the public benefit, in such ways as the Trustee sees fit including awarding scholarships, bursaries or similar awards to young people, particularly but not exclusively those from the Greater London area, and pupils attending schools owned and operated by the Licensed Trade Charity, and such other schools and educational establishments as the Trustee may, from time to time, see fit to support.

ii) The Elderly and their Welfare

To relieve financial hardship, sickness and poor health amongst elderly persons, particularly but not exclusively, those formerly employed within the hospitality industry by the provision of grants and helping in the development of nursing staff employed in the care and nursing of such persons.

iii) General Charitable Purposes

Such other charitable purposes for the public benefit as are exclusively charitable according to the laws of England and Wales as the Trustee may from time to time determine.

The Foundation also supports the advancement of the hospitality industry in recognition of the Company’s historic links with the sector.

Meeting the Charitable Objectives

The Trustee is satisfied that its procedures ensure that recipients of its grants are identified, and awards are allocated and distributed, in a fair way. While traditional links between a particular charity and the recipients of charitable support are, wherever possible, maintained, care is exercised to ensure that a recipient is not able to claim a right to charitable support.

Activities during the Year under Review:

i) The Young and Furtherance of Education

In a 50/50 partnership with the City of London Corporation, the Foundation continues to fund places at each of the City of London Schools for exceptional candidates nominated and means-tested by the schools. In the year under review this funding was £57,820. The Foundation also continued as a Donation Governor of Christ's Hospital. This year the Foundation's funding of £8,000 continued to support a scholarship for the BTEC Subsidiary Diploma in Hospitality at the Licensed Victuallers' School, to encourage students wishing to develop a career in the hospitality industry to join the course.

The Foundation made a further grant of £25,000 to Teach-First to support the ‘Leadership Pathways’ programme, which provides leadership development for middle management teachers. The Foundation also made a grant of £7,500 to the London Academy of Excellence to provide extra-curricular and enrichment activities to students in the school's sixth form in support of their career development and university applications.

Page 3

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

The Foundation has continued to fund two bursaries of £5,000 each at the Guildhall School of Music and Drama the only conservatoire in the City of London. It also renewed its support to the London Music Fund, sponsoring the music tuition of a 9-year-old child for four years at a cost of £1,000 per year. £5,000 was awarded to The Royal School for the Deaf in Derby, for the purchase of vibrotactile equipment which allows deaf students to make music. The Royal College of Music was awarded £10,000 towards the Sparks project, an established musical outreach programme which is targeted at hard-to-reach families, children and young people from disadvantaged backgrounds in London.

The Foundation continued to support Jamie’s Farm with the second tranche of a three-year grant of £25,000 pa towards the rental costs of a fourth farm in Lewes. Jamie’s Farm, by a combination of ‘farming, family and therapy’ through residential and follow-up programmes, aims to re-engage children with education, in order that they can fulfil their potential both in school and the wider social setting.

ii) The Elderly and their Welfare

In continuation of its support to the elderly and the wider hospitality community, the Foundation made awards of £10,000 each to Hospitality Action and to the Licensed Trade Charity for relief-in-need grants to former employees of the hospitality industry. A grant of £7,500 was also made to The Drinks Trust (formerly The Benevolent) to assist with making small monthly grants to former employees of the drinks trade who find themselves in hardship.

The Foundation continues to fund projects in support of the elderly. Further grants were made to Hospitality Action in the year; the first of £37,000 provides supplementary winter fuel grants to the elderly, the second of £15,000 was used to fund a newsletter to their ‘Golden Friends’ members to help alleviate social isolation among the elderly. In addition, a grant of £18,000 was made towards Hospitality Action’s Family Support Grants, which are small awards to alleviate food poverty, back to school costs and / or school holiday costs in working age hospitality families across the UK.

Silverline Connect, a charity which provides a free helpline for vulnerable and isolated older people , was awarded a third and final grant of £21,251 to support the cost of an administrator.

iii) Hospitality Industry

The lnnholder Scholarship Programme is usually the biggest of all the projects within the Foundation's support to the hospitality industry. Due to the ongoing pandemic the decision was taken not to award any scholarships during the year under review. The programme recommenced during the latter part of 2021 with the selected scholars due to attend their programmes during 2022.

The Foundation made a further grant of £5,000 to assist The Springboard Charity with its goal of reaching more young people through the 'KickStart' programme. This involves working with young people leaving full-time education who are unclear as to their immediate career paths, or who are keen to enter hospitality but are not sure in what field. The programme provides young people with supported entry onto their first step on the career ladder. The Foundation also gave £6,000 in support of two new Springboard Hospitality Showcase events which were due to be held in London during the year. £5,000 was awarded to the Royal Academy of Culinary Arts for the Adopt A School programme for the next 3 years. The application set out how the organisation had adapted to the pandemic and its positive approach to post-pandemic work on nutrition, sustainability and careers in the profession.

Where proposed events and courses planned for spring and summer 2020 were cancelled or postponed under the COVID-19 control measures, the Foundation remained in close contact with the affected beneficiaries and has incorporated their revised plans into its consideration of the effect of the pandemic and its financial projections for the post balance sheet period.

Page 4

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

iv) General

In the broader education field, the Foundation made an award of £5,000 to the Beyond Food Foundation. This established charity runs a social enterprise kitchen and restaurant at Tooley Street which trains the homeless, or those at risk of homelessness, for careers in hospitality. The application was for funding to help support the Apprenticeship Program, to be used towards the costs associated with training and support, specifically for the employment costs of the Chef Trainer.

The Foundation contributed £5,000 to the Livery Kitchens Initiative, led by the Drapers’ Company in partnership with City Harvest, which delivered meals and refreshment packs to the four Barts Health NHS Trust hospitals, and to thirteen communities in East London, during the Covid-19 pandemic.

A further award of £10,000 was made to The Big Issue Foundation during the year towards the salary costs of a London Frontline Team Leader responsible for managing a team of six frontline staff and ensuring their own caseload of 60-70 Big Issue vendors continue to receive expert information, advice and guidance relating to any health, housing, financial and/or other support needs they are encountering as a result of the Covid-19 pandemic.

No Going Back (NGB) is a new project funded by a range of Livery Companies under the aegis of a small PanLivery working group and delivered by the charity and social enterprise Bounce Back. NGB provides “through-thegate” support to people in London prisons preparing them for resettlement and helping them access and maintain good quality jobs and accommodation on release. The employment is mainly in the construction industry and it complements, rather than competes with, the activities of The Clink Charity, which ICF already supports. £4,700 was offered to support the second year of the project.

In addition to the awards made by the Patronage Committee detailed above, smaller grants of between £1,000 and £5,000 were made by the Charity Committee to small charities mainly based in London. The small balance of the Innholders’ Emergency Appeal funds brought forward into this year was also distributed. The Master donated his £10,000 exceptional ‘Master’s List’ allocation to the Snowdrop Children’s Hospice (£5,000) and Samaritans UK (£5,000).

B. Structure, governance and management

The Foundation is a Charitable Incorporated Organisation (CIO), which is registered with the Charity Commission as Charity Number 1158457.

The CIO was established by amalgamating seven existing Innholders’ charities which were: The Rydon Trust, The Violet Halliwell Charitable Trust, the Worshipful Company of Innholders General Charity Fund, The Wates Charitable Fund, The William Austin and Florence Balls Scholarship, SH Bishop Will Trust and the Innholders’ Company Welfare (Pension) Fund.

Management

As laid down in the original Charter of lnspeximus of 1664 (as subsequently amended) the Court meets formally eight times per year to transact the Company's business, with additional meetings convened from time to time in the intervening months. During each meeting, as part of its formal agenda, the Court acts on behalf of the Trustee in order to transact business on Foundation-related matters. Details of decisions made by the Court acting on behalf of the Trustee are recorded separately within the minutes of the Court meetings.

Administration

Day-to-day administration of the Foundation is exercised by the Clerk to the Company, Mr Charles Henty and the Assistant Clerk, Dr Rebecca Tomlin. The registered office, and details of advisors, investment managers, solicitors and bankers of the Foundation are given on page 1 of this report. The investments of the Foundation are managed on a discretionary basis by Cazenove Capital Management and are subject to scrutiny by a committee made up of members of the Company, who have specialised expertise within the financial sector.

Page 5

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

Grant Allocation

The consideration of potential grant recipients is delegated to two dedicated Committees of the Company, Patronage and Charity, which make formal recommendations of grant awards to the Trustee for approval.

The Patronage Committee identifies major long-term projects, normally over £2,000 and generally for periods of up to 3 years, for recommendation to the Trustee. The majority of grants recommended by the Patronage Committee are made on a discrete basis, although longer-term grants may be agreed from time to time for a maximum period of seven years, particularly in respect of bursary funding. Recipients of these grants are required to report annually to the Committee for review. This Committee meets formally three times per year to consider reports and applications, and more frequently by circulation of emails and by telephone calls, when necessary.

The Trustee also allocates an annual sum, currently £35,000, for general charitable donations, particularly to smaller charities, for which the Charity Committee is responsible. This Committee identifies small requests for funding, usually between £1,000 and £5,000 each, for recommendation to the Trustee. These grants are typically made to charities that are local to the City of London and the surrounding boroughs; charities in which individual members of the Company are active participants; or to areas and organisations with which the Company has historical links. The Charity Committee meet formally twice per year to make their recommendations to the Trustee.

Each year a sum of up to £1,000 is made available to the Master of the Company to support individual charities of his/her choice. For the year under review, the Trustee made an exceptional sum of £10,000 available to the Master in recognition of his dedicated service in leading the Company through the pandemic. Whilst the chosen charities are selected by the Master, the Patronage Committee ensures that they conform to the overall charitable objectives of the Foundation.

Whenever possible, members of the Patronage and Charity Committees visit the projects/charities that have received financial support from the Foundation. This activity has not been able to take place in the year under review due to Covid-19 restrictions but will start again when government guidelines permit.

Public Benefit

The Trustee considers that, as a grant-making foundation, providing public benefit is at the core of the Foundation’s activities, as demonstrated in this report. The Trustee considers that it has due regard for the guidance of the Charity Commission on public benefit when reviewing the Foundation’s aims and objectives and in planning future activities and setting grant making policy. In assessing public benefit, the Trustee has had due regard to the Charity Commission's Guidance for Charity Trustees and is satisfied that all grants have been made to beneficiaries who fall within the objectives of the Foundation.

No geographical restrictions are made on potential beneficiaries except in the case of grants made by the Charity Committee, which may make grants where there is a specific restriction such as "from within the London Borough of..." within the aims and objectives of a recipient organisation. The Trustee is satisfied that this is not an unreasonable restriction since in such cases, all applicants from within that borough who met the criteria could benefit. The Trustee is satisfied that grants for relief-in-need by their very nature meet the requirement to have a purpose which is beneficial to the community.

Where awards are made for educational purposes, the school or college nominates candidates for bursaries and the Trustee requires that means testing is carried out before the award is made. Such bursaries are paid directly to the school/college bursary trust and not to the individual. Innholder Scholarships are made to members of the hospitality industry which is a significant employer in the UK and are therefore available to a wide sector of the population.

Page 6

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

C. Financial Review and Investment Policy

The total income of the Foundation was £290,419 (2020: £501,406). This included a donation made by the Company of £52,108 (2020: £87,486). The income from the Foundation’s investments amounted to £216,959 (2020: £285,915) which included rent of £12,000 (2020: £12,000). In 2020, donations of £83,000 were also received for the Innholder Scholarship Programme. The balance of £21,352 (2020: £45,005) was made up of donations from members of the Company.

Total expenditure for the year was £435,511 (2020: £646,182) resulting in net expenditure before investment gains and losses of £145,092 (2020: £144,776).

Reserves Policy

All of the Foundation’s funds at 30 September 2021 are unrestricted. At that date, the value of the Foundation’s funds totalled £13,904,373. The Trustee has reviewed its reserves subsequent to the year end and considers that they will be more than sufficient to meet all future commitments.

Investment Policy and Objectives

The Trustee has directed that the investment portfolio should be managed on a discretionary basis by Cazenove Capital Management. The Trustee has opted for a medium risk approach to the charitable investments and the assets are managed with the objective of maintaining real capital values while generating a sustainable level of investment income to support current charitable grant making. The investment portfolio is managed on a total return basis and the overall investment objective set for the year was a total return of CPI plus 3.5% per annum net of expenses. The portfolio has a spread of investments in all the major asset classes.

As reported last year, the anticipated drop in income combined with the repositioning of the portfolio to a more global one, meant that the portfolio continues to grow but the income component of the total return is reduced while the capital growth component is higher. As a result the Investment Committee recommended that the Foundation moved to transferring a fixed percentage of the total value of the charitable portfolio each quarter. The Trustee’s policy is that the Foundation should retain the real value of its core capital of approximately £10.5m to fund charitable grants from the total return achieved. In line with this policy, the Trustee operates a total return distribution policy such that grants awarded do not exceed an agreed percentage of a three-year moving average of the Foundation’s net invested assets (regardless of income flows). This was approved by the Trustee and the policy has been adopted from 1 October 2020 for the foreseeable future. The effect of this policy is that grants awarded are likely to exceed investment income received, with the deficit being made up out of distributable reserves. The amount to be transferred each quarter is determined on an annual basis by the Investment Committee in conjunction with Cazenove Capital Management.

Going concern

The Court of Assistants, acting on behalf of the Trustee of the Foundation, has considered whether it is appropriate to prepare the Foundation’s financial statements on a going concern basis. In doing so it has considered:

The Court of Assistants, acting on behalf of the Trustee of the Foundation, has a reasonable expectation that the Foundation will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

In the opinion of the Trustee, it is appropriate to prepare the Foundation’s accounts for the year ended 30[th] September 2021 on a going concern basis. It has identified no material uncertainties to the Foundation’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements.

Page 7

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

Risks to which the Charity is exposed

The Trustee has analysed potential risks under three main headings: financial, operational and reputational. It is satisfied that sufficient safeguards are in place to guard against foreseeable risks or to mitigate the effects of such risks.

The Foundation relies on its investment income and capital growth to fund its grant making. Most grants are for projects which have time horizons of two to three years. Grants for school scholarships are, by their nature, sixyear commitments. The Trustee maintains a three-year rolling investment plan to ensure that its grant making is fully sustainable. The key risks to the long-term sustainability of the Foundation's ability to maintain its grant making expenditure are inflation and the long-term lower returns from investments experienced over recent years. The Trustee has addressed this by moving to a total-return based distribution as described above.

The Foundation's assets are invested widely according to the general power of investment and are diversified by asset class and security.

As part of an overall review of Risk Management within the Worshipful Company, the Finance and General Purposes Committee oversees an on-going full Risk Management assessment for both the Worshipful Company and for the Foundation. The Risk Management Assessment for the Foundation was endorsed by the Patronage Committee, agreed by the Finance and General Purposes Committee and adopted by the Trustee, and is subject to regular review.

The Foundation's risk management policy has ensured that it is well placed to mitigate the risks presented by COVID-19. It has sufficient reserves to sustain a conservative total returns distribution policy and it can manage its grant commitments to ensure that it does not incur a long-term deficit of expenditure over distributable total returns either by deferring awards for projects that have been postponed or by not renewing previous grants beyond the original commitment.

Plans for the future

The Foundation plans to continue to meet its charitable objectives of supporting the elderly, the young and the hospitality industry, and at the time of reporting no major changes are anticipated.

Page 8

The Innholders' Charitable Foundation

Trustee's Report (continued) For the Year Ended 30 September 2021

Statement of Trustee's responsibilities

The Trustee is responsible for preparing the Trustee's Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Charity law requires the Trustee to prepare financial statements for each financial year. Under charity law, the Trustee must not approve the financial statements unless it is satisfied that they give a true and fair view of the state of affairs of the Foundation and of the income and expenditure, of the Foundation for that period.

In preparing these financial statements, the Trustee is required to:

The Trustee is responsible for keeping adequate accounting records that are sufficient to show and explain the Foundation's transactions and disclose with reasonable accuracy at any time the financial position of the Foundation and enable them to ensure that the financial statements comply with the Charities Act 2011, applicable Charity Regulations and the provisions of the Trust deed. They are also responsible for safeguarding the assets of the Foundation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Auditor

The auditor, Buzzacott LLP, will be proposed for reappointment in accordance with the Charities Act 2011.

Approved by the Trustee on and signed on its behalf by:

Dr Richard Wylde FREng Treasurer

Charles Henty Esq Clerk to the Trustee

Page 9

The Innholders' Charitable Foundation

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE INNHOLDERS' CHARITABLE FOUNDATION

Opinion

We have audited the financial statements of The Innholders’ Charitable Foundation (the ‘Charity’) for the year ended 30 September 2021 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the financial statements including the principal accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Charity 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 Trustee’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Page 10

The Innholders' Charitable Foundation

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE INNHOLDERS' CHARITABLE FOUNDATION (continued)

Other information

The Trustee is responsible for the other information. The other information comprises the information included in the Trustee’s Report and Financial Statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and 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.

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

Responsibilities of the Trustee

As explained more fully in the statement of Trustee’s responsibilities, the Trustee is 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 Trustee determines 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 Trustee is responsible for assessing the Charity’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 Trustee either intends to liquidate the Charity or to cease operations, or has no realistic alternative but to do so.

Page 11

The Innholders' Charitable Foundation

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE INNHOLDERS' CHARITABLE FOUNDATION (continued)

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

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

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

Page 12

The Innholders' Charitable Foundation

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE INNHOLDERS' CHARITABLE FOUNDATION (continued)

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

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

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

Use of our report

This report is made solely to the Charity’s Trustee, as a body, in accordance with section 144 of the Charities Act 2011 and with regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the Charity’s Trustee those matters we are required to state to it 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 Charity and the Charity’s Trustee as a body, for our audit work, for this report, or for the opinions we have formed.

Buzzacott LLP Statutory Auditor 130 Wood Street, London EC2V 6DL

Date: 24 June 2022

Buzzacott LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

Page 13

The Innholders' Charitable Foundation

STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING THE INCOME AND EXPENDITURE ACCOUNT)

For the Year Ended 30 September 2021

Notes Restricted
funds
£		 Unrestricted
funds
£		 2021
Total
funds
£		 2020
Total
funds
£
215,491
285,915
501,406
76,037
570,145
646,182
(144,776)
(191,823)

(336,599)
12,563,566
12,226,967
Income from:
Donations and legacies
3
Investments
4
Total income
Expenditure on:
Raising funds
5
Charitable activities
6
Total expenditure
Net expenditure before investment gains and losses
Investment gains (losses)
9
Net (expenditure) income and net movement in funds
Reconciliation of funds
Balances brought forward at 1 October 2020
Balances carried forward at 30 September 2021		 125
—		 73,335
216,959		 73,460
216,959
125 290,294 290,419
—
3,048		 59,935
372,528

59,935
375,576
3,048 432,463 435,511
(2,923)
—		 (142,169)
1,822,498
(145,092)

1,822,498
(2,923)
2,923		 1,680,329
12,224,044		 1,677,406


12,226,967
— 13,904,373 13,904,373

The Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 18 to 28 form part of these financial statements.

Page 14

The Innholders' Charitable Foundation

COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING THE INCOME AND EXPENDITURE ACCOUNT) For the Year Ended 30 September 2020

Notes Restricted
funds
£		 Unrestricted
funds
£		 2020
Total
funds
£
Income from:
Donations and legacies
3
Investments
4
Total income
Expenditure on:
Raising funds
5
Charitable activities
Total expenditure
Net expenditure before losses on investments
Net losses on investments
Net expenditure and net movement in funds
Total funds brought forward at 1 October 2019
Total funds carried forward at 30 September 2020		 92,039
—		 123,452
285,915
215,491

285,915
92,039 409,367
501,406
—
92,039		 76,037
478,106
76,037

570,145
92,039 554,143
646,182
—
—
—
2,923		 (144,776)
(191,823)
(336,599)
12,560,643
(144,776)

(191,823)

(336,599)
12,563,566
2,923 12,224,044 12,226,967

Page 15

The Innholders' Charitable Foundation

BALANCE SHEET

For the Year Ended 30 September 2021

Notes
2021
£		 2021
£		 2020
£		 2020
£
Fixed assets
Listed investments
8
Investment property
9
Current assets
Debtors
10
Cash at bank and in hand
Creditors: amounts falling due within one year
11
Net current assets
Total net assets
14
Charity funds
Restricted funds
13
Unrestricted funds:
Designated funds
13
General funds
13
Total unrestricted funds
Total funds




37,136
145,368		 13,259,875
500,000		 72,466
100,066		 11,567,816
500,000
13,759,875
144,498		 12,067,816



159,151
182,504

**(38,006) **		 172,532
(13,381)





11,292,437

2,611,936		 11,003,612
1,220,432
13,904,373 12,226,967
—
13,904,373		 2,923


12,224,044
13,904,373 12,226,967

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

Dr Richard Wylde FREng Treasurer

Charles Henty Esq Clerk to the Trustee

Page 16

The Innholders' Charitable Foundation

STATEMENT OF CASH FLOWS For the Year Ended 30 September 2021

Notes
2021
£		 2020
£
Cash flows from operating activities:
Net cash used in operating activities
A
Cash flows from investing activities:
Dividends, interests and rents from investments
Movement in cash held as part of investment portfolio
Proceeds from sale of investments
Purchase of investments

Interest income on bank accounts
Net cash provided by investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of theyear
B

**(302,096) **		 (535,317)


216,959
(372,341)
4,294,349
(3,791,569)
—		 285,803
394,372
5,400,949
(5,738,307)
112
**347,398 ** 342,929

45,302

100,066
 (192,388)
292,454

145,368		 100,066

A. Reconciliation of net movement in funds to net cash flow from operating activities

2021
£		 2020
£
Net income (expenditure) for the period (as per the statement of financial activities)
Adjustments for:
(Gains) losses on investments

Income from investments
Decrease (increase) in debtors
Increase (decrease) in creditors
Net cash used in operating activities		 1,677,406

(1,822,498)
(216,959)
35,330
24,625
(336,599)
199,735
(285,915)
(28,216)
(84,322)
**(302,096) ** (535,317)

B. Analysis of cash and cash equivalents

B. Analysis of cash and cash equivalents
2021
£		 2020
£
Cash at bank and in hand 145,368 100,066

No separate statement of changes in net debt has been prepared as there is no difference between the movements in cash and cash equivalents and movement in net cash (debt).

Page 17

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

1. Accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP 2nd Edition (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The Innholders' Charitable Foundation meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The functional currency of the Foundation is pounds sterling because that is the currency of the primary economic environment in which the Foundation operates. All figures are rounded to the nearest £1.

The following principal accounting policies have been applied:

1.2 Going concern

The Trustee has carried out a detailed review of its assumption that the Foundation will carry on as a going concern in light of the Covid-19 pandemic.

The Foundation’s income is mainly derived from its investment portfolio. The value of the investment portfolio at 30 September 2021 was £13.26m (2020: £11.57m).

While the Foundation usually distributes only the income from its investments, it may be noted that the Foundation’s entire assets are available for distribution if necessary. The Foundation has no financial commitments other than making awards.

While recognising that the impact of Covid-19 on its income and capital reserves may be severe, the Trustee considers that there is no material uncertainty relating to going concern and the Foundation will continue as a going concern, and that this is therefore the appropriate basis on which to prepare its financial statements.

Page 18

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

1. Accounting policies (continued)

1.3 Income

Voluntary income including donations, donated services, legacies and grants that provide core funding or are of a general nature is recognised where there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability.

Investment income is recognised on a receivable basis.

Rental income is recognised on a receivable basis. The ground rent charged under the terms of a long lease is based on 4% of the market rental value of the property. Rent reviews are at 20-year intervals, the next review being in September 2030.

Donated professional services and facilities are recognised on receipt, on the basis that the value of the gift to the Foundation is the amount it would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

1.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit 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. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Foundation's objectives, as well as any associated support costs. Support costs of the Foundation represent the audit and accountancy fees, administration costs and bank charges.

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

All expenditure is inclusive of irrecoverable VAT.

1.5 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Foundation; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.

1.6 Listed investments

Listed investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Statement of Financial Activities.

Page 19

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

1. Accounting policies (continued)

1.7 Investment property

Investment property is carried at fair value determined annually by management, taking into account any external valuations, and is derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any differences in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Statement of Financial Activities.

1.8 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

1.9 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

1.10 Liabilities and provisions

Liabilities 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.

Liabilities are recognised at the amount that the Foundation anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

1.11 Financial instruments

The Foundation only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Apart from listed investments held at fair value as noted above, basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

1.12 Fund accounting

The general fund comprises unrestricted funds which are available for use at the discretion of the Trustee in furtherance of the general objectives of the Charity and which have not been designated for other purposes.

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

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

Investment income, gains and losses are allocated to the appropriate fund.

Page 20

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

2. Critical accounting estimates and areas of judgement

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions:

The Foundation makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Critical areas of judgement:

The most significant area of judgement and key assumptions that affect items in the financial statements is as follows:

Investment property valuation

The valuation is estimated by management, see note 10.

Page 21

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

3. Income from donations and legacies

Restricted
funds
£		 Unrestricted
funds
£		 Total funds
2021
£
Donation from Worshipful Company of Innholders
General donations including gift aid
Covid-19 appeal		 —
—
125
52,108

21,227

—		 52,108
21,227
125
125
73,335		 73,460
Restricted
funds
£		 Unrestricted
funds
£		 Total funds
2020
£
Donation from Worshipful Company of Innholders
General donations
Legacies
Covid-19 appeal
Innholder Scholarship Programme		 —
—
—
9,039
83,000
87,486

30,966

5,000

—

—		 87,486
30,966
5,000
9,039
83,000
92,039
123,452		 215,491

Donations to the Innholder Scholarship Programme are made up as follows:

2021
£		 2020
£
Master Innholders Charitable Trust
Savoy Educational Trust
Lord Forte Foundation		 —
—
—		 25,000
48,000
10,000
— 83,000

The Programme was suspended during 2021 as a result of Covid-19.

4. Investment income

2021
£		 2020
£
Interest and dividends from investments
Interest income
Rental income		 204,959
—
12,000		 273,803
112
12,000
216,959 285,915

Page 22

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

5. Expenditure on raising funds

Costs of raising investment income

2021
£		 2020
£
Investment manager fees
Investment property costs		 59,935
—		 57,013
19,024
59,935 76,037

6. Analysis of expenditure on charitable activities

Grant
funding of
activities
£		 Support
Costs
£		 Total
2021
£
Expenditure on charitable activities 357,535
18,041		 375,576
Grant
funding of
activities
£		 Support
Costs
£		 Total
2020
£
Expenditure on charitable activities 548,824
21,321		 570,145

Analysis of grants by charitable activity:

2021
£		 2020
£
Young & Education
Hospitality Industry
The Elderly
General
Charity Committee List
Covid-19 emergency appeal		 146,320
19,000
118,751
37,339
35,000
1,125		 131,250
197,598
133,151
40,175
35,000
11,650
357,535 548,824

Grants awarded totalled £357,535 (2020: £548,824) of which £3,048 (2020: £92,039) were from restricted funds and £354,487 (2020: £456,785) were from unrestricted funds.

Further information on grants is included in the Trustee's report.

Page 23

The Innholders' Charitable Foundation

Notes to the Financial Statements For the Year Ended 30 September 2021

6. Analysis of expenditure on charitable activities (continued)

Analysis of support costs, which are all unrestricted:

Donated services from the Worshipful Company of Innholders
Bank charges		 2021
£		 2020
£
17,320
721		 21,163
158
18,041 21,321

Governance costs comprise the auditor’s remuneration of £8,000 (2020: £7,800).

7. Trustee's remuneration and expenses

During the year, the Trustee did not receive any remuneration or other benefits (2020: £nil).

Transactions with the Trustee have been disclosed in note 15.

8. Listed investments

2021
£		 2020
£
Market value at 1 October

Additions at cost
Disposals proceeds

Realised gains (losses)
Unrealised gains (losses)
Market value at 30 September (excluding cash)

Cash held as part of the investment portfolio
Market value at 30 September
 11,530,060
3,791,569
(4,294,349)
168,299
1,654,199		 11,392,437
5,730,395
(5,400,949)
(186,090)
(5,733)
12,849,778
410,097		 11,530,060
37,756
13,259,875 11,567,816

The historical cost of investments was £9,440,348 (2020: £9,764,316).

2021
£		 2020
£
Investment analysis
UK equities
Overseas equities
Bonds
Multi-asset funds
Alternatives
Cash
 2,217,353
7,002,653
1,090,170
152,534
2,387,068
410,097		 1,997,346
6,123,344
1,143,977
319,821
1,945,572
37,756
13,259,875 11,567,816

Page 24

The Innholders' Charitable Foundation

Notes to the Financial Statements For the Year Ended 30 September 2021

9. Investment property

2021
Valuation £
At 1 October 2020 and 30 September 2021 500,000

The whole of the freehold interest in the Halliwell Nursing Home was previously owned by the Violet Halliwell Charitable Trust before it was transferred to the Innholders’ Charitable Foundation as part of its incorporation.

The Charity commissioned external valuer Mr B Nickelson at Eddisons Taylors Commercial Valuers to carry out a valuation of the Charity’s freehold property interest in March 2019 that resulted in a valuation of £500,000 being recognised from incorporation in 2017.

In the opinion of the Trustee £500,000 remains appropriate as the fair value as at 30 September 2021.

10. Debtors

Due within oneyear 2021
£		 2020
£
Amounts owed by The Worshipful Company of Innholders
Prepayments and accrued income		 30,788
6,348		 44,850
27,616
37,136 72,466

11. Creditors: Amounts falling due within one year

Due within oneyear 2021
£		 2020
£
Grant creditors 38,006 13,381
38,006 13,381

12. Financial instruments

2021
£		 2020
£
Financial assets measured at fair value through income and expenditure
 13,259,875 11,567,816

Financial assets measured at fair value through income and expenditure represent the listed investments held by the Foundation.

Page 25

The Innholders' Charitable Foundation

Notes to the Financial Statements For the Year Ended 30 September 2021

13. Statement of funds

Statement of funds - current year

At 1
October
2020
£		 Income
£		 Expenditure
£		 Transfers
in/out
£		 Investment
losses
£		 At 30
September
2021
£
Unrestricted funds:
Designated funds
Designated capital fund
General funds
General unrestricted fund
Total unrestricted funds
Restricted funds:
Sponsored event
Covid-19 Emergency Appeal
Total restricted funds
Total of funds		 11,003,612
—
—		 288,825 — 11,292,437
1,220,432
290,294
(432,463)		 (288,825) 1,822,498 2,611,936
12,224,044
290,294
(432,463)		 — 1,822,498 13,904,373
2,923
—
—

125
(2,923)

(125)		 —
—		 —
—		 —
—
2,923 125
(3,048)		 — — —
12,226,967
290,419
(435,511)		 — 1,822,498 13,904,373

Statement of funds - prior year

At 1
October
2019
£		 Income
£		 Expenditure
£		 Transfers
in/out
£		 Investment
losses
£		 At 30
September
2020
£
Unrestricted funds:
Designated funds
Designated capital fund
General funds
General unrestricted fund
Total unrestricted funds
Restricted funds:
Innholders Scholarship
Sponsored event
Covid-19 Emergency Appeal
Total restricted funds
Total of funds		 10,936,220
—
—		 67,392 — 11,003,612
1,624,423
409,367
(554,143)		 (67,392) (191,823) 1,220,432
12,560,643
409,367
(554,143)		 — (191,823) 12,224,044
—
2,923
—
83,000

—

9,039
(83,000)

—

(9,039)		 —
—
—		 —
—
—		 —
2,923
—
2,923
92,039
(92,039)		 — — 2,923
12,563,566
501,406
(646,182)		 — (191,823) 12,226,967

Page 26

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

13. Statement of funds (continued)

Designated Capital Fund

While the Trustee is legally able to distribute any of the Foundation’s funds, it has designated funds ('the designated fund') that it regards as being capital in nature, being the capital amounts transferred to the Foundation by its amalgamated predecessor charities, plus a gift from the Worshipful Company of Innholders of £1m, all indexed by CPI from the date they were received into the Foundation. The value of these funds at 30 September 2021 was £10,792,437 (2020: £10,503,612). The investment property at Halliwell is also considered to be capital in nature and so its value of £500,000 is also included in the designated fund.

Restricted funds

Innholders Scholarship fund relates to monies received for the Innholder Scholarship Programme.

The monies received from the sponsored event were payable to Hospices UK.

Innholders Covid-19 Emergency Appeal related to monies entirely distributable to Covid related causes.

Unrestricted general funds

These are unrestricted funds which are available for use at the discretion of the Trustee in furtherance of the general objectives of the Foundation and which have not been designated for other purposes.

Page 27

The Innholders' Charitable Foundation

Notes to the Financial Statements

For the Year Ended 30 September 2021

14. Analysis of net assets between funds

Analysis of net assets between funds - current period

Analysis of net assets between funds - current period
Restricted
funds
£		 Unrestricted
funds
£		 Total
funds
2021
£
Investments
Investment property
Current assets
Creditors due within one year
Total		 —
—
—
—		 13,259,875

500,000

182,504

(38,006)		 13,259,875
500,000
182,504
(38,006)
— 13,904,373 13,904,373

Analysis of net assets between funds - prior year

Restricted
funds
£		 Unrestricted
funds
£		 Total
funds
2020
£
Investments
Investment property
Current assets
Creditors due within one year
Total		 —
—
2,923
—		 11,567,816

500,000

169,609

(13,381)		 11,567,816
500,000
172,532
(13,381)
2,923 12,224,044 12,226,967

15. Related party transactions

During the year donations from the Worshipful Company of Innholders, the sole Trustee of the Innholders' Charitable Foundation were £52,108 (2020: £87,486).

Cash donations for the year were £34,788 (2020: £46,850). Donations also included costs incurred by the sole Trustee on behalf of the Foundation for the year comprising administration and professional services of £17,320 (2020: £21,613), and costs of £nil (2020: £19,024) in relation to the Halliwell property.

As at 30 September 2021 £30,788 (2020: £44,850) was owed from the Worshipful Company of Innholders.

Court Assistant Mrs J L Sibley MBE is Chief Executive of the Savoy Educational Trust. The Savoy Educational Trust made no donation (2020: £48,000) to the Innholder Scholarship Programme in the year (see note 3).

Page 28