**Charity Commission No. 1174691 (England and Wales) Office of the Scottish Regulator No. SC048007(Scotland) Company Registration No. 10596645 (England and Wales)** ## **THE SCOTS GUARDS CHARITY** **ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021** **THE SCOTS GUARDS CHARITY** ## **LEGAL AND ADMINISTRATIVE INFORMATION** **Trustees** Brigadier (retired) G H F S Nickerson Lt Col J D L Leask MBE The Rt Hon Sir Iain Duncan Smith PC MP Major N A McClelland Mrs L Hobbs Captain (retired) M Joynson Captain (retired) P D Vail **Regimental Adjutant** Major (retired) J R Kelly **Regimental Welfare and Finance Officer** Major (retired) M A Cape (Company Secretary) **Charity number (England and Wales)** 1174691 **Charity number (Scotland)** SC048007 **Company number** 10596645 **Registered office** Regimental Headquarters Scots Guards Wellington Barracks Birdcage Walk London SW1E 6HQ **Auditor** Alliotts LLP Imperial House 15 Kingsway London WC2B 6UN **Bankers** Lloyds TSB Bank Plc Cox's and King's PO Box 1190 7 Pall Mall London SW1Y 5NA **Investment advisors** Ruffer LLP 80 Victoria Street London SW1E 5JL AUBREY Capital Management 10 Coates Crescent Edinburgh EH3 7AL Asset Risk Consultants (UK) Ltd (ARCUK) 46 Chancery Lane London WC2A 1JE ## **THE SCOTS GUARDS CHARITY** ## **SUPPORTING THE REGIMENT** ||**Page**| |---|---| |Supporting the regiment|1 - 3| |Trustees' report|4 -6| |Statement of trustees' responsibilities|7| |Independent auditor's report|8 - 11| |Statement of financial activities|12| |Balance sheet|13| |Notes to the financial statements|14 - 25| **Scots Guards Start Another Tour in Iraq, Erbil Airbase, 15[th] December 2020.** 1 ## **THE SCOTS GUARDS CHARITY** ## **SUPPORTING THE REGIMENT** For over 379 years we have had an enviable reputation of looking after our own – on the battlefield and off. The guardsmen have always known that they and their families will be properly cared for under all circumstances. It is critical that future generations of guardsmen continue to have total confidence in the regiment’s ability to do this. With this critical and ambitious aim, we need to put our Charitable Fund at the core of regimental family and our supporters’ charitable giving. We are encouraging them to fund our vital work by increasing donations, ensuring legacies are clear in Wills, persuading others to donate or raising money through personal endeavours. The charity’s purpose is to improve the quality of life for Scots Guardsmen and their families, help to overcome injury or hardship and to speed rehabilitation. These needs have increased with the number of tours of duty and the very fact that the weapons used today, such as improvised explosive devices, can be devastating. Our annual budget is divided into 4 main areas: Improving Soldiers & Veterans Quality of life (44%), Relieving Hardship (41%), Administration overheads (10%) and preserving our heritage dating back to 1642 (5%). For relief of hardship, we provide a service for detecting and assessing welfare cases, aided by SSAFA. When we find someone in need, we provide the first tier of benevolence grants while we seek more substantial assistance from the larger service charities or indeed the relevant local authority. In rare cases, where we fail to find external financial assistance, we will consider using our own funds as the charity of last resort. We are therefore proud that nearly all our budget is spent on our charitable aims and our administrative overheads are relatively low. **----- Start of picture text -----**
Scots Guards Charity Budget for 2020/21
Donations to related Admin
Military Charities Overheads
6% 10%
Ind Benevolence
Grants
Preserving
12%
Heritage
5%
Benevolence
Improving
& Welfare Sp Soldiers &
Service
Veterans
23%
Quality of Life
44%
**----- End of picture text -----**
Our charity gives out financial support based on income generated from investments. Having reviewed our needs, we have been working to raise the profile and add £4M to this investment pot in order to secure the legacy for future generations of the Scots Guards family. A few examples of our work are as follows: **Severely wounded veteran regains his mobility – wounded in action.** Grants of several thousand pounds have been provided to assist with home and car modifications for a Scots Guards Lance Sergeant who lost both legs and an arm to a bomb in Afghanistan. Working with other military charities which specialise in this area, we have given several grants to assist him with mobility and to support his wife and three children. For example, he received a modified fitness suite to help him develop his muscles in order to walk on prosthetic limbs. **Widow gets boiler in time for winter – housing and homelessness.** A grant of £875 was provided towards the cost of a new boiler for the 73-year-old widow of a Scots Guardsman whose 12 years’ service included a tour in Malaya. The lady’s old boiler had become so dangerous that she could not use it or the gas fire to which it was linked. The provision of the new boiler gave the lady hot water and heating before the onset of winter. **I was able to say goodbye to my wife with dignity – support to families.** A grant towards funeral costs of a wife was made to a 70-year-old former Sergeant in the Scots Guards with 13 years’ service. The veteran served in Cyprus, Malaya, Hong Kong and Northern Ireland. The sudden death of his wife and a lack of savings resulted in the former soldier being unable to meet the cost of his wife’s funeral. 2 ## **THE SCOTS GUARDS CHARITY** ## **SUPPORTING THE REGIMENT** **Wheelchair bound couple gain access to their garden – mobility, wellbeing and elderly care.** A grant of £2,500 was made to make the garden of the 39-year-old wife of a veteran wheelchair accessible. The former soldier served for 23 years with the Scots Guards and three years with another regiment. The veteran’s wife is confined to a wheelchair and is now able to enjoy the outdoors with her husband and children. **Vulnerable child receives grant for critical education – employment and training.** A grant of £3,450 was made towards the education of a child with special needs, who had been declined support by the local education authorities. The child’s father had served for 17 years with the Scots Guards. The need to home tutor their child had prevented the parents from gaining paid work. The educational grant helped the family afford the cost of the specialist school and allowed them time to work. The charity operates primarily by managing its investments and using the annual income to support beneficiaries. This income is augmented by subscriptions from serving members of the regiment and some charitable donations. When a benevolence case occurs, the charity always provides the first tier of funding before seeking assistance, if necessary, from the larger specialist military charities, such as the Soldier’s Charity and last year they provided with other charities £84,863.14 to Seventy-Eight members of the Scots Guards family in need. We aim to raise £4M over the next 5 years for the Scots Guards Charity. Why? The Fund is concerned that given the current and ongoing military commitments, the Regiment won’t have enough income to continue to support serving and former Scots Guardsmen and their families which, in our view, is of paramount importance. In the last year we made 78 individual welfare grants. Our trustees tightly control allocation of available funds according to priority and even though we conserve resources by seeking external sources of aide, there is normally a shortfall. While the Covid pandemic has resulted in reduced expenditure this year, due to lower demand and constraints on social worker visits, the backlog of cases will probably cause an upsurge of expenditure when the constraints are eased. As it stands today, we remain reliant upon the generosity of individuals through annual donations to avoid the Regiment having to cut its welfare or welfare-related spending of over £300k annually. At the same time, demand for funds is continually increasing, driven by recent heightened military activity, higher survival rates after serious injury, a general increase in life expectancy and inflation. Unexpected costs, like providing legal defence to guardsmen facing investigations arising from their operational service, stretch the funds available even further and can deplete the investment capital, exacerbating the underlying problem. As such, we are trying to boost the funds under management to a level that is selfsupporting; a working party is considering what needs to be done, to achieve this goal. 3 **THE SCOTS GUARDS CHARITY** **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ The trustees present their report and financial statements for the year ended 31 March 2021. The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's articles of association, the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and “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)” (as amended for accounting periods commencing from 1 January 2019) ## **Objectives and activities** The charities objectives are to assist and provide relief to any serving or former serving officer, warrant officer, noncommissioned officer or guardsmen, whether male or female, of the Regiment of the Scots Guards, or in exceptional circumstances any person associated with the Regiment of the Scots Guards, and their dependants, including but not exclusively, their spouses, partners, widows, widowers and parents (whether or not married) and children, parents or carers or similar persons who are in hardship or distress or need, whether such need is financial or otherwise. The trustees confirm that they have referred to the guidance contained in the Charity Commission General Guidance on Public Benefit when reviewing the funds' aims and objectives and to planning future activities and setting grant making policies. ## **Financial review** At the year-end there was a total of funds of £8,312,252 with cash funds of £288,243 carried forward. During the year, it has received donations and charitable income of £263,940 and other income of £26,048, with a restricted donation of £12,000, totalling £301,988. We are grateful for some substantial donations this year, such as a bequest from the estate of Michael Day, grants from the Clothworkers Foundation and a personal donation from Major-General Naylor. After charitable donations and support costs the net unrestricted expenditure amounted to £306,034 and expenditure out of restricted funds £9,986, total expenditure therefore is £316,020. The net movement in funds was £1,698,379 in unrestricted funds and £2,014 of restricted funds, the total movement £1,714,425. The charities investments are managed by Ruffer LLP and Aubrey Capital Management. The investments strategy is to protect the investment assets whilst providing a growing income stream for the charity over the medium term. During the year the market value of the investments held increased by £1,531,725 and a gain on sale of investments of £182,700 was made. ## **Reserve Policy** The charity aims to hold net current assets, or cash reserves, equivalent to at least 6 months operating costs plus £100k legal and conflict reserve, reflecting the uncertainties inherent to the regiment and the Armed Forces, which is approximately £253,000. At the year end the ‘free reserves’ stood at £286,229. Fixed asset investments default as designated funds to generate an income return in the longer term and are actively managed by the trustees at each board meeting in response to the demands on the charity. ## **Structure, governance, and management** The charity is a company limited by guarantee. It is affiliated to the Confederation of Service Charities which requires a bi-annual report on compliance with governance best practice, tested against their comprehensive review template. The overarching body responsible for efficient management of the charity are the trustees. New trustees are recruited from serving or retired members of the regiment or from supporters with relevant qualifications. Candidates are chosen because they are seen to have skills and experience which complement or reinforce those of existing trustees. Aspiring trustees should serve on one of the sub-committees before joining the main board. The Trustees meet twice a year when policy concerning the charity is discussed and decisions made. 4 **THE SCOTS GUARDS CHARITY** **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ The trustees, who are also the directors for the purpose of company law, and who served during the period and up to the date of signature of the financial statements were: Brigadier (retired) G H F S Nickerson Major General C J Bell CBE (Appointed 11 July 2020 – Resigned 3 January 2021) Lt Col J D L Leask MBE (Appointed 25 January 2021) The Rt Hon Sir Iain Duncan Smith PC MP Major N A McClelland (Appointed 10 May 2021) Mrs L Hobbs Lord Fellowes GCB GCVO QSO PC (Resigned 2 May 2020) Captain (retired) M Joynson Major L Kerr MBE (Resigned 10 May 2021) Major (retired) A R Wilson (Resigned 22 June 2020) Captain (retired) P D Vail (Appointed 27 May 2020) The trustees are supported by the office holders (the Regimental Adjutant and the Regimental Welfare and Finance Officer) from the registered office in London and from the office at the Castle in Edinburgh. ## **Review of activities** The results of the funds’ activities are shown on page 12. The activities of the charity’s investments are shown within these financial statements. Charitable spending during the year was lower than normal due to the Covid pandemic restricting our ability to deliver welfare assistance, but the pendulum is expected to swing the other way as the backlog of needy cases is cleared. During the year funds of £11,605 were raised under the initiative known as The Colonel’s Fund. This fund will enable the regiment to provide: - Support to the families of those killed in action by promptly responding to problems of bereavement and hardship, - Support those wounded or injured on operations, particularly those who have had to leave the Army; to assist in finding them new employment and to help them become active family and community members, - Support the families of those seriously wounded or injured in prolonged recovery situations. The activities of the charity during the year are detailed in the Supporting the Regiment section of these accounts. ## **Preserving Regimental Heritage** The charity owns and preserves a collection of regimental heritage accumulated since the Regiment’s formation in 1642, which is managed by a committee of volunteers. This includes the historical archive which is regulated and inspected by the National Archive. An arrangement with FindMyPast has enabled the public to access many of the regimental records online and many other items of historical interest are displayed in the Guards Museum. 5 **THE SCOTS GUARDS CHARITY** **TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **Plans for Future Periods** The demands on the charity are increasing due to the large number of operational tours in recent decades. Sadly, these have resulted in some grievous physical injuries causing immediately visible needs. Psychological injuries may take longer to materialise and since operations are continuing, the pressure on our funds is steadily increasing. The charity has strengthened its structure with a fund-raising committee working alongside the investment committee to attract donations to augment the investment income. A campaign to improve the culture of charitable giving among our potential beneficiaries is showing strong results with a significant increase in self-motivated fund-raising activities including an expedition to attempt an ascent of Mount Denali, the highest peak in North America and the coldest mountain on earth and to enter a team to row the Atlantic. Those wishing to follow and support these expeditions can find details on the Scots Guards Website www.scotguards.org which will have links to the expedition websites. To support these activities, the charity is in the process of modernising its information technology to enhance outreach, harness support and manage donations. It is anticipated that this will be complete by the end of 2022, but the review of investment policy and the initiative to raise funds by charitable donations will continue beyond then. The recent pandemic has reduced our ability to fundraise effectively, including impacting on expedition planning, and a broad swathe of activities are on hold until restrictions have been lifted. The recent upgrade of IT has enabled minimum disruption to the charity business end, especially delivering benevolence grants to those in need. It is anticipated that there will be an increase in welfare requests once the reality of the damage caused by the pandemic unfolds which has been factored into next year’s budget. ## **Risk Management** The trustees have regard for the principal areas of the Charity’s operations and the major risks which may arise in these areas. In their opinion, the charity has established resources and review systems which, under normal conditions, should allow the risks identified by them to be mitigated to an acceptable level in its day-to-day operations. The trustees have assessed the major risks to which the charity is exposed, those related to the operations and finances of the Charity and are satisfied those systems are in place to mitigate our exposure to the major risks. The charity relies partly on its investment returns to meet its financial commitments, therefore one of the principal risks lies in the performance of its investments. The trustees have mitigated this by the appointment of professional investment managers to advise them, by having a balanced investment strategy, having a diversified portfolio and by ensuring that the portfolio is sufficiently liquid to meet obligations in the event of a down-turn in financial markets and/or default. The trustees' report was approved by the Board of Trustees. Brigadier (retired) G H F S Nickerson Trustee Dated: 15 November 2021 6 ## **THE SCOTS GUARDS CHARITY** ## **STATEMENT OF TRUSTEES' RESPONSIBILITIES** ## _**FOR THE YEAR ENDED 31 MARCH 2021**_ The trustees, who are also the directors of The Scots Guards Charity for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 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 charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year. In preparing these financial statements, the trustees are required to: - select suitable accounting policies and then apply them consistently; - observe the methods and principles in the Charities SORP; - make judgements and estimates that are reasonable and prudent; - state whether applicable UK 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 charity will continue in operation. The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. - 7 - ## **THE SCOTS GUARDS CHARITY** ## **INDEPENDENT AUDITOR'S REPORT** ## **TO THE TRUSTEES OF THE SCOTS GUARDS CHARITY** ## **Opinion** We have audited the financial statements of The Scots Guards Charity (the ‘charity’) for the year ended 31 March 2021 which comprise the statement of financial activities, the balance sheet and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice). ## In our opinion, the financial statements: - give a true and fair view of the state of the charitable company's affairs as at 31 March 2021 and of its incoming resources and application of resources, 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, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). ## **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 trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report. ## **Other information** The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and 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. - 8 - ## **THE SCOTS GUARDS CHARITY** ## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE SCOTS GUARDS CHARITY** ## **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 (Accounts and Reports) Regulations 2008 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion: - the information given in the financial statements is inconsistent in any material respect with the trustees' report; or - sufficient and proper accounting records have not been kept; or - the financial statements are not in agreement with the accounting records; or - we have not received all the information and explanations we require for our audit. ## **Responsibilities of trustees** As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose 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 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 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** We have been appointed as auditor under section 144 of the Charities Act 2011 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Acts and relevant regulations made or having effect thereunder. 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. - 9 - ## **THE SCOTS GUARDS CHARITY** ## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE SCOTS GUARDS CHARITY** Extent to which the audit was considered capable of detecting irregularities, including fraud 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: - 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; - we identified the laws and regulations applicable to the charitable company through discussions with Trustees and other management, and from our knowledge and experience of the sector; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the charitable company, including the Companies Act 2006, the Charities Act 2011, the Charities SORP, the Charities and Trustee Investment (Scotland) Act 2005 and 8 of the Charities Accounts (Scotland) Regulations 2006 taxation legislation, data protection, anti- bribery, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, 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. Audit response to risks identified To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - reviewed all transactions listed; - assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; 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: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. - 10 - ## **THE SCOTS GUARDS CHARITY** ## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE SCOTS GUARDS CHARITY** ## **Use of our report** This report is made solely to the charity’s trustees, as a body, in accordance with part 4 of the Charities (Accounts and Reports) Regulations 2008 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditors' 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 trustees as a body, for our audit work, for this report, or for the opinions we have formed. ## 16 November 2021 ## **Alliotts LLP** ......................... ## **Chartered Accountants Statutory Auditor** Imperial House 8 Kean Street London WC2B 4AS Alliotts LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under of section 1212 of the Companies Act 2006. - 11 - ## **THE SCOTS GUARDS CHARITY** ## **STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT** ## _**FOR THE YEAR ENDED 31 MARCH 2021**_ |**Unrestricted**
**funds**
**Restricted**
**funds**
**2021**
**Notes**
**£**
**2021**
**£**
**Income from:**
Donations and legacies
**3**
216,165
12,000
Charitable activities
**4**
42,852
-
Other trading activities
**5**
4,923
-
Investments
**6**
26,048
-
**Total income**
289,988
12,000
**Expenditure on:**
Charitable activities
**7**
306,034
9,986
Net gains/(losses) on investments
**12**
1,714,425
-
**Net movement in funds**
1,698,379
2,014
Fund balances at 1 April 2020
6,611,859
-
**Fund balances at 31 March 2021**
8,310,238
2,014|**Total**
**Year to**
Unrestricted
funds
As restated
**2021**
**£**
2020
**£**
228,165
302,727
42,852
89,404
4,923
10,054
26,048
30,898
301,988
433,083
316,020
390,979
1,714,425
266,225
1,700,393
308,329
6,611,859
6,303,530
8,312,252
6,611,859|**Total**
**Year to**
Unrestricted
funds
As restated
**2021**
**£**
2020
**£**
228,165
302,727
42,852
89,404
4,923
10,054
26,048
30,898
301,988
433,083
316,020
390,979
1,714,425
266,225
1,700,393
308,329
6,611,859
6,303,530
8,312,252
6,611,859| |---|---|---| |||433,083
390,979| |||266,225| |||308,329
6,303,530| |||6,611,859| The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities. The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006. - 12 - ## **THE SCOTS GUARDS CHARITY** ## **BALANCE SHEET** ## _**AS AT 31 MARCH 2021**_ |**Notes**
**Fixed assets**
Intangible assets
**13**
Tangible assets
**14**
Investments
**15**
**Current assets**
Stocks
**16**
Debtors
**17**
Cash at bank and in hand
**Creditors: amounts falling due within**
**one year**
**18**
Net current assets
**Total assets less current liabilities**
**Income funds**
Restricted funds
**19**
Unrestricted funds
Designated funds
**21**
General unrestricted funds|**2021**
**£**
**£**
4,560
112,423
7,790,044
7,907,027
13,392
-
400,538
413,930
(8,705)
405,225
8,312,252
2,014
7,790,044
520,194
8,310,238
8,312,252|**2020**
**As restated**
**£**
**£**
-
115,680
6,049,597
6,165,277
15,603
50
439,634
455,287
(8,705)
446,582
6,611,859
-
6,049,597
562,262
6,611,859
6,611,859|**2020**
**As restated**
**£**
**£**
-
115,680
6,049,597
6,165,277
15,603
50
439,634
455,287
(8,705)
446,582
6,611,859
-
6,049,597
562,262
6,611,859
6,611,859| |---|---|---|---| ||||6,165,277
446,582| ||||6,611,859| ||||-
6,611,859
6,611,859| The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 March 2021, although an audit has been carried out under section 144 of the Charities Act 2011. The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements. The members have not required the company to obtain an audit of its financial statements under the requirements of the Companies Act 2006, for the year in question in accordance with section 476. These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime. The financial statements were approved by the Trustees on the 15[th] November 2021 .............................. Brigadier (retired) G H F S Nickerson ## **Trustee** **Company Registration No. 10596645** - 13 - ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **1 Accounting policies** ## **Charity information** The Scots Guards Charity is a private company limited by guarantee incorporated in England and Wales. The registered office is Regimental Headquarters Scots Guards, Wellington Barracks, Birdcage Walk, London, SW1E 6HQ. ## **1.1 Accounting convention** The financial statements have been prepared in accordance with the charity's [governing document], the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)". The charity is a Public Benefit Entity as defined by FRS 102. The charity has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows. The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £. The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below. ## **1.2 Going concern** At the time of approving the financial statements, the trustees have have considered their position following the covid 19 pandemic and have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements. ## **1.3 Charitable funds** Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives. ## **1.4 Incoming resources** Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received. Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation. Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset. - 14 - ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **1 Accounting policies** **(Continued)** ## **1.5 Intangible fixed assets other than goodwill** Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity. Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases: Information system ## **1.6 Tangible fixed assets** Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases: Fixtures and fittings over 4 years Chattels not depreciated Atlantic Guardsmen over 10 years The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in net income/(expenditure) for the year. ## **1.7 Fixed asset investments** Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred. ## **1.8 Impairment of fixed assets** At each reporting end date, the charity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). ## **1.9 Stocks** Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost. Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **1 Accounting policies** ## **(Continued)** ## **1.10 Cash and cash equivalents** Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. ## **1.11 Financial instruments** The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. ## _**Basic financial assets**_ Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. ## _**Basic financial liabilities**_ Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. ## _**Derecognition of financial liabilities**_ Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled. ## **1.12 Employee benefits** The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits. ## **1.13 Retirement benefits** Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **2 Critical accounting estimates and judgements** In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. ## **3 Donations and legacies** |**Unrestricted**
**Restricted**
**funds**
**funds**
**2021**
**2021**
**£**
**£**
Donations and gifts
169,348
-
Grants
46,817
12,000
216,165
12,000|**Total**Unrestricted
funds
**2021**
2020
**£**
£
169,348 275,587
58,817
27,140
228,165
302,727| |---|---| ## **4 Charitable activities** Charitable income **2021** 2020 **£** £ 42,852 89,404 ## **5 Other trading activities** **Unrestricted** Unrestricted **funds** funds **2021** 2020 **£** £ Shop income 4,923 10,054 ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **6 Investments** ||**Unrestricted**|Unrestricted| |---|---|---| ||**funds**|funds| ||**2021**|2020| ||**£**|£| |Investment income|25,299|29,834| |Interest receivable|749|1,064| ||26,048|30,898| ## **7 Charitable activities** |Depreciation and impairment
Charitable expenditure
Grant funding of activities (see note 8)
Share of support costs (see note 9)
Share of governance costs (see note 9)
**Analysis by fund**
Unrestricted funds
Restricted funds
**For the year ended 31 March 2020**
Unrestricted funds|**Grants**
**payable**
**2021**
As
**£**
3,497
102,942
106,439
75,496
123,701
10,384
316,020
306,034
9,986
316,020
390,979|**Grants**
**payable**
2020
restated
£
-
123,641| |---|---|---| |||123,641
108,762
140,121
18,455| |||390,979| |||390,979
-| |||390,979| |||| ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **8 Grants payable** |Grants to institutions:
1st Batallion Scots Guards
Grants to individuals|**2021**
**£**
18,117
57,379
75,496|2020
£
23,000
85,762| |---|---|---| |||108,762| ## **9 Support costs** |Staff costs
Archives
Magazine, Diary and
Christmas cards
Postage
Flowers and wreaths
Fees and insurance
Events and Gifts
Travel costs
Regimental stock
Regional Headquarters
costs
Audit/accountancy fees -
current year
Audit/accountancy fees -
prior year
Auditors- Other services
Previous auditors - other
services
Analysed between
Charitable activities|**Support**
**Governance**
**costs**
**costs**
**£**
**£**
56,868
-
440
-
17,381
-
8,797
-
783
-
12,172
-
3,490
-
107
-
3,861
-
19,802
-
-
8,450
-
-
-
1,934
-
-
123,701
10,384
123,701
10,384|**2021**
**£**
56,868
440
17,381
8,797
783
12,172
3,490
107
3,861
19,802
8,450
-
1,934
-
134,085
134,085|Support
Governance
costs
costs
As
£
£
56,207
-
7,759
-
19,835
-
10,439
-
805
-
8,805
-
14,512
-
2,468
-
4,028
-
15,263
-
-
8,705
-
8,400
-
390
-
960
140,121
18,455
140,121
18,455|2020
restated
£
56,207
7,759
19,835
10,439
805
8,805
14,512
2,468
4,028
15,263
8,705
8,400
390
960
158,576| |---|---|---|---|---| |||||158,576| Governance costs includes payments to the auditors of £8,450 (2020 - £8,705) for audit fees. ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **10 Trustees** None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year. ## **11 Honoraria** There were 2 individuals in receipt of honoraria payments. |**Honoraria costs**
Honoraria Payments
Other pension costs|**2021**
**Number**
2
**2021**
**£**
54,689
2,179
56,868|2019
Number
2| |---|---|---| |||2019
£
54,236
1,971| |||56,207| No one individual received annual remuneration of £60,000 or more. ## **12 Net gains/(losses) on investments** ||**Unrestricted**|Unrestricted| |---|---|---| ||**funds**|funds| ||**2021**|2020| ||**£**|£| |Revaluation of investments|1,531,725|93,538| |Gain/(loss) on sale of investments|182,700|172,687| ||1,714,425|266,225| ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ |**13**
**Intangible fixed assets**
**Cost**
At 1 April 2020
Additions - separately acquired
At 31 March 2021
**Amortisation and impairment**
At 1 April 2020
Amortisation charged for the year
At 31 March 2021
**Carrying amount**
At 31 March 2021
At 31 March 2020
**14**
**Tangible fixed assets**
**Fixtures and**
**fittings**
**£**
**Cost or valuation**
At 1 April 2020
21,587
At 31 March 2021
21,587
**Depreciation and impairment**
At 1 April 2020
21,587
Depreciation charged in the year
-
At 31 March 2021
21,587
**Carrying amount**
At 31 March 2021
-
At 31 March 2020
-|**Information system**
**£**
-
4,800
4,800
-
240
240
4,560
-
**Chattels**
**Atlantic**
**Guardsmen**
**Total**
**£**
**£**
**£**
52,423
63,257
137,267
52,423
63,257
137,267
-
-
21,587
-
3,257
3,257
-
3,257
24,844
52,423
60,000
112,423
52,423
63,257
115,680| |---|---| The boat, the Atlantic Guardsmen has a value of £60,000 at 31 March 2021 based on a Trustees' valuation. The valuation is based on an estimate of current market value of similar craft. At 31 March 2021, had the revalued assets been carried at historic cost less accumulated depreciation and accumulated impairment losses, their carrying amount would have been approximately £60,000 (2020 - £-). ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **15 Fixed asset investments** |**Listed**
**investments**
**£**
**Cost or valuation**
At 1 April 2020
5,714,442
Additions
1,523,118
Valuation changes
1,654,156
Disposals
(1,557,108)
At 31 March 2021
7,334,608
**Carrying amount**
At 31 March 2021
7,334,608
At 31 March 2020
5,714,442
**16**
**Stocks**
Raw materials and consumables
**17**
**Debtors**
**Amounts falling due within one year:**
Other debtors
**18**
**Creditors: amounts falling due within one year**
Accruals and deferred income|**Cash in**
**portfolio**
335,155
120,281
-
-
455,436
455,436
335,155
**2021**
**£**
13,392
**2021**
**£**
-
**2021**
**£**
8,705|**Total**
**£**
6,049,597
1,643,399
1,654,156
(1,557,108)| |---|---|---| |||7,790,044| |||7,790,044
6,049,597
**2020**
**£**
15,603
**2020**
**£**
50
**2020**
**£**
8,705| ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **19 Restricted funds** The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes: ||**Movement**|||**Movement**|**in funds**|| |---|---|---|---|---|---|---| ||**in funds**|||||| ||**Incoming**||**Balance at**|**Incoming**|**Resources**|**Balance at**| ||**resources**||**1 April 2020**|**resources**|**expended 31 March 2021**|| |||**£**|**£**|**£**|**£**|**£**| |Clothworkers Grant fund||-|-|12,000|(9,986)|
2,014| |During the year the Charity received £12,000 from||The Clothworkers' Company|||for use in improving the|| |information systems.||||||| |**Analysis of net assets between funds**||||||| |||**Unrestricted**||**Restricted**|**Total**|Unrestricted| ||||**funds**|**funds**||funds| ||||**2021**|**2021**|**2021**|2020| ||||**£**|**£**|**£**|£| |Fund balances at 31 March 2021 are||||||| |represented by:||||||| |Intangible fixed assets|||4,560|-|4,560|-| |Tangible assets|||112,423|-|112,423|115,680| |Investments|||7,790,044|-|7,790,044|6,049,597| |Current assets/(liabilities)|||403,211|2,014|~~405,226~~|446,582| ||||8,310,238|2,014|8,312,253|6,611,859| ## **20 Analysis of net assets between funds** ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **21 Designated funds** The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes: |Investment Fund|**Balance at**
**Movement**
**in funds**
**Revaluations,**
**1 April 2019**
**gains and**
**losses**
**£**
**£**
5,833,538
216,059
5,833,538
216,059|**Balance at**
**Revaluations,**
**1 April 2020**
**gains and 31**
**losses**
**£**
**£**
6,049,597
1,740,447
6,049,597
1,740,447|**Balance at**
**March 2021**
**£**
7,790,044
7,790,044| |---|---|---|---| The Investment Fund represents the fixed asset investments of the charity which are managed with the aim to generate an income return to support the charity in the longer term, whilst at the same time protecting the underlying investment base. ## **22 Related party transactions** There were no disclosable related party transactions during the year, other than the grants to the Regiment, which are disclosed in these accounts. ## **THE SCOTS GUARDS CHARITY** ## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 31 MARCH 2021**_ ## **23 Prior period adjustment** ## **Changes to the balance sheet** |Balances as restated
**Fixed assets**
**As**
Tangible assets
Investments
Capital funds
Income funds
Designated funds
Unrestricted funds
**Total equity**
**Changes to the SOFA**
Net movement in funds as restated
**As**
Charitable activities
Net movement in funds|**At 31 March 2020**
**previously**
**reported**
**£**
**Adjustment**
**£**
**As restated**
**£**
52,423
63,257
115,680
6,049,597
-
6,049,597
6,102,020
63,257
6,165,277
6,049,597
-
6,049,597
499,005
63,257
562,262
6,548,602
63,257
6,611,859
**Period ended 31 March 2020**
**previously**
**reported**
**Adjustment**
**Asrestated**
**£**
**£**
**£**
454,236
(63,257)
390,979
245,072
63,257
308,329|**At 31 March 2020**
**previously**
**reported**
**£**
**Adjustment**
**£**
**As restated**
**£**
52,423
63,257
115,680
6,049,597
-
6,049,597
6,102,020
63,257
6,165,277
6,049,597
-
6,049,597
499,005
63,257
562,262
6,548,602
63,257
6,611,859
**Period ended 31 March 2020**
**previously**
**reported**
**Adjustment**
**Asrestated**
**£**
**£**
**£**
454,236
(63,257)
390,979
245,072
63,257
308,329| |---|---|---| |||390,979| |||| |||308,329| In 2019 an amount of £63,257 was spent on the construction of a boat called the Atlantic Guardsmen, which was then used to raise funds in by rowing across the Atlantic in December 2019. At the time these monies were categorised as unrestricted expenditure and written off. As the Trustees now consider that the boat has value for future activities, it has been capitalised and a prior year adjustment made; the impact of which is shown above.