Charity registration number 1042541
Company registration number 02967916 (England and Wales)
WORLD ORT TRUST
(A COMPANY LIMITED BY GUARANTEE)
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) LEGAL AND ADMINISTRATIVE INFORMATION
Trustees Mr R M Hatter Mr S L Bernstein Mr S J Alberga Secretary Mrs R Weston Charity number 1042541 Company number 02967916 Principal address ORT House 147 Arlington Road London England NW1 7ET Registered office ORT House 147 Arlington Road London England NW1 7ET Auditor RDP Newmans LLP Lynwood House 373-375 Station Road Harrow Middlesex HA1 2AW
(Appointed 10 August 2022) (Appointed 10 August 2022)
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) CONTENTS
| Page | |
|---|---|
| Trustees' report | 1 - 7 |
| Statement of trustees' responsibilities | 8 |
| Independent auditor's report | 9 - 11 |
| Statement of financial activities | 12 |
| Balance sheet | 13 |
| Statement of cash flows | 14 |
| Notes to the financial statements | 15 - 31 |
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) FOR THE YEAR ENDED 31 DECEMBER 2022
The Trustees present their annual report and financial statements for the year ended 31 December 2022.
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 Memorandum and Articles of Association, the Companies Act 2006 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 2022).
Principal aims and objectives
The charitable objects of World Ort Trust are given below and are taken from the Memorandum and Articles of Association, as follows:
(1) to promote the advancement of education and vocational training for the public benefit, in particular but not exclusively amongst persons practising or adhering to the Jewish religion.
(2) to promote the advancement of education for the public benefit concerning Jewish culture, history, traditions, religion and language in particular but not exclusively amongst persons practising or adhering to the Jewish religion. (3) to relieve poverty and sickness and to preserve and protect health through the provision of mother and childcare facilities and health education.
To meet these objectives, World Ort Trust makes grants to World ORT, so that it can carry out education and training projects worldwide.
Activities for raising funds: World Ort Trust owns and part occupies the freehold of 147 Arlington Road London NW1 7ET. The Trustees have invested in this freehold land and building which is part-occupied by World ORT, the Charity's head office. World Ort Trust lets out office space which is surplus to operational requirements. The rental stream from tenants covers the overheads on those elements of the building not occupied by World ORT. During 2022, the charity carried out major refurbishment works rendering the building out of use for the public. The charity expects the building to re open and new tenants to move in during the latter half of 2023.
Management agrees with the Trustees the excess space available for renting. Individual tenant contracts are sought by Metrus, the managing agents, to be authorised by the Trustees prior to letting.
Funds raised by World ORT Trust not required for the running of the charity are donated to World ORT. The nature of grants, whether restricted or unrestricted, is determined by the donors.
The Charity also accepts donations from UK donors in co-operation with and also from ORT UK. There has been no change in these activities during the year.
To assess whether these objectives have been achieved, the Trustees review the amount of monies received for charitable purposes and amount of monies remitted to World ORT.
In this context the Trustees have complied with their duty in section 17 of the Charities Act 2011 to have due regard to the guidance published by the Charity Commission in relation to the activities being for the public benefit, as well as, the Equalities Act 2010 when reviewing the Charity's aims and objectives and in planning future activities.
Social investments
The Charity has a policy of not making social investments either in individuals or in schools.
Grant making policy
The Charity grants surplus funds to World ORT so that it can carry out education and training projects worldwide.
Strategic report
The description under the headings "Achievements and performance" and "Financial review" meet the company law requirements for the Trustees to present a strategic report.
- 1 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Achievements and performance
The results for the year are set out in the Statement of Financial Activities on page 12.
During the year the total income of the Charity was $375,308 (2021: $9,647,667).
Income from donations was $346,959 (2021: $384,538) of which $139,474 (2021: $120,983) was for restricted purposes. From the total donations received, $158,156 (2021: $272,949) was donated by ORT UK. From these donations the Charity was able to make restricted charitable grants totalling $137,067 (2021: $120,983) to World ORT.
Income from letting activity was $914 (2021: $206,928). A part of the freehold property was disposed of during 2021. The Charity carried out major refurbishment works, hence income from letting activity ceased during 2022. The Charity is expecting the building to be opened and tenants to move in during the latter half of 2023.
Investment income was $27,435 (2021: $8,165), of which $27,258 was in relation to interest on the deferred consideration (£250,000) related to the sale of 126 Albert Road in 2021.
All restricted funds received were granted to World ORT in the year. As an illustration, the following were the restricted funds received and granted. The activities change from year to year, therefore direct comparison is not always possible.
In the past year, beneficiary charities achieved the following:
| 2022 | 2021 | ||
|---|---|---|---|
| Activity | Region | $ | $ |
| Gunzberg Book Project | Germany | 5,676 | |
| Ukraine Emergency Campaign | Ukraine | 61,644 | |
| Kfar Silver Infrastructure | Israel | 72,154 | 34,722 |
| Wingate Seminar Students Worldwide | Worldwide | 23,333 | |
| Maker Space and Project Base | Russia | 62,928 | |
| 139,474 | 120,983 |
World ORT combines the funds raised in the United Kingdom with funds raised elsewhere in the world. Where possible World ORT involves the local state authorities and also local individuals.
Much of 2022 has been spent responding to the Ukraine/Russia conflicts. The ORT community in Ukraine is considerable, with 6 schools, 3,500 students and 400 teachers. A worldwide emergency campaign raised around $2.5m in 2022 to support our beneficiaries deal with the hardship at home that the war had brought on as well as supporting those who chose to leave their homes for safer parts of the country or indeed abroad. Additional support was provided to ORT schools around Europe who have taken in Ukrainian refugees, providing them with funding to house and educate those displaced by the war. Due to the uncertainty in the region it is generally accepted that prioritising needs in the region will continue to be a factor for many months, if not years to come.
Funding priorities continue in Israel, notably in the Kfar Silver Youth Village which continues its extensive renovation project to the general infrastructure of the campus.
Funding in 2022 has been largely driven by contributions from ORT America’s donor base, as well as from ORT UK, ORT Switzerland and ORT Canada.
- 2 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Financial review
World Ort Trust has maintained its healthy financial position, with closing fund balances before actuarial gains amounting to $13,124,935 (2021: $18,943,674) of which $200 (2021: $200) relate to restricted funds for this financial year.
The Charity made a deficit of $6,384,869 (2021: $9,136,812 gain). This is due to a grant of $4,659,391 to World ORT parent charity to be used for their charitable activities. Furthermore, there have been foreign exchange losses totalling $1,183,360 relating to the translation of the bank balance, as well as the balances owed to suppliers at the year end.
The valuation of the defined benefit pension scheme at 31 December 2022 has a gain of $34,979 (2021: deficit of $392,589).
The Charity has two types of reserves, restricted and unrestricted.
Restricted funds: the Charity transfers the restricted funds received to World ORT according to the instructions from the donor. Restricted reserves comprise revenue and expenditure relating to specific donations made by individuals which are then transferred to World ORT to fulfil programmes.
Unrestricted funds: the Charity grants these funds to World ORT in line with the grants policy. Unrestricted reserves comprise net income generated from letting of the Charity’s building and donations made for general charitable purposes.
World ORT Trust owns the freehold to its head office, New ORT House. Movements on fixed assets are set out in note 14 to the financial statements. The Trustees are of the opinion that the market value of freehold land and buildings at the year end was at least equal to the value shown in these financial statements. A revaluation of the freehold land and buildings dated 31 March 2022 had resulted in a revaluation reserve of $6,771,471. The value of the land and buildings as at 31 December 2022 stands at $11,202,419 and this proportion of the fund can only be realised by disposing of the freehold land and buildings.
Subsequent to the year end, property values have decreased because of the increases in interest rates resulting in lower sales values and lower rents being achieved. The Charity’s external property valuers estimate that the fair value of the building would have reduced by approximately 17.5% as of the date of this report, as set out in note 22.
The year’s reserves have reduced by $5,818,739 and the unrestricted funds have reduced to $13,124,735. It is the policy of the Charity to donate the net surplus generated from the letting activity to World ORT to fund its projects worldwide. The plans for the funds are to reinvest part of the proceeds into the newly refurbished modern office building, 147 Arlington Road, part for its own occupation and part to generate an annuity income for the Charity. The surplus proceeds realised, over and above the cost of the refurbishment of the retained 147 Arlington Road building, were planned to be used first to the settlement of the outstanding pension liabilities of the Charity and then assist World ORT with its finances, towards their aligned aims and objectives.
Reserves policy and going concern
It is the policy of the Charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between six and twelve month’s expenditure. The Trustees consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charity’s current activities while consideration is given to ways in which additional funds may be raised. This level of reserves has been maintained throughout the year.
The financial statements for the year ended 31 December 2022 show general unrestricted reserves of $13,124,735. The lower level of reserves is due to the unrestricted grants totalling $4,659,391 paid out to World ORT parent charity.
- 3 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE)
TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Risk management
The Trustees examine the major risks that the Charity faces each financial year when preparing and updating the strategic plan. The major risks identified are (1) Not being able to let the excess space in ORT House, (2) risks surrounding the major construction works during the year, (3) the reliance on ORT UK for a large proportion of the voluntary income and (4) the defined benefit pension scheme.
(1) The risk of not letting space in ORT House is managed by:
• Maintaining the building to a commercially attractive standard.
- Dividing the rest of the excess space into smaller units to achieve a diversity of tenants.
Rental and licence fee revenue:
2022 2021 Number of tenants Under $50,000 per annum - 11 Over $100,000 per annum - 1
(2) During the years 2022 and 2023, major construction and refurbishment work was undertaken at ORT House, with the major risk being delays in the project and cost overruns. The construction risk is being managed as follows:
• Project plans are used to help clarify deadlines and expectations as well as updates given on various stages in the project. Continuous monitoring and reporting against this plan is integral.
• Contingency plans are also in place in case the work does not go as expected.
• Professional advisers have been used to manage the project budgets, timetables and performance of the main contractor.
(3) ORT UK contributed 46% of donations in 2022 and the Trustees expect it to remain a significant donor in 2023 and 2024.
The risk posed by having a concentration of voluntary income from ORT UK is managed as follows
- World ORT Trust has direct access to certain UK donors in agreement with ORT UK.
• ORT UK has a diverse fundraising base from major individuals and family trusts to many individual small donors.
(4) The defined benefit pension scheme has a funding gain of $34,979. The Trustees have passed a resolution to settle any deficit from the proceeds of the property sale.
The Trustees closed the scheme to new members in 1999. It had no active members at the end of 2021. The last member is due to retire in 2028.
- 4 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE)
TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Plans for future periods
Delays in the redevelopment project of ORT House has meant that the building was not completed in 2022. It is now planned for opening in the latter half of 2023 and discussions have already begun with prospective new tenants to ensure rental income is received as quickly as possible. Notwithstanding timetable delays, the project has remained within budget.
The focus on maximising funds for designated and undesignated purposes from ORT UK will continue, as ORT UK is the main provider of funds from individual donors and philanthropic foundations to World Ort Trust in the UK. The close working relationship between World ORT staff and ORT UK staff mean they are provided with all necessary resources to carry out their fundraising endeavours.
Regarding the liability of the pension scheme, there have been negotiations of a buy-out with Aviva, which should be completed within 2023.
Structure, governance and management
The Charity is constituted under a Memorandum And Articles Of Association incorporated on 14 September 1994 as amended by Special Resolution on 17 October 1994 and 30 October 2000 and is a registered charity (number 1042541). The Charity is a charitable company limited by guarantee and registered in England and Wales with company number 2967916.
History
The Trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Mr R M Hatter Lady I Hatter (Resigned 4 August 2022) Mr S L Bernstein (Appointed 10 August 2022) Mr S J Alberga (Appointed 10 August 2022)
The directors of the charitable company are its Trustees for the purpose of charity law, and throughout this report are collectively referred to as the Trustees.
Lady I Hatter and Mr R M Hatter are related by marriage.
Mr S J Alberga is also a Trustee of World ORT and ORT UK.
Recruitment, appointment and terms of office of Trustees
The Memorandum and Articles of Association states that the number of Trustees shall not be less than three but shall not be subject to any maximum.
Additional or replacement Trustees can be appointed by the existing Trustees. New Trustees are given an induction by other Trustees, an outline of their responsibilities and a list of the information they will receive in order to fulfil those responsibilities.
The methods used to appoint Trustees are mainly utilising the contacts of existing Trustees and, occasionally by advertising in UK Jewish media. A third party indemnity provision is in force for the benefit of each of the Trustees and the officers.
None of the Trustees has any beneficial interest in the company. All of the Trustees are members of the company and guarantee to contribute £10 in the event of a winding up.
- 5 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The day-to-day decisions of the Charity are taken by the management of the charity, with financial decisions being made by the Chief Financial Officer, Mrs H Grumet. Strategic decisions are taken by the Trustees, which involves maintenance of ORT House and matters in connection with the Defined Benefit Pension Scheme.
Arrangements for setting the pay and remuneration for the key management personnel
The Chief Financial Officer of World ORT Trust is also the Chief Financial Officer of World ORT and does not receive any remuneration for her duties in relation to World ORT Trust.
The one employee referred to in note 11 is primarily concerned with the general administrative activities of the Charity. Staff pay is reviewed per staff contracts . In view of the nature of the Charity, the Trustees will normally benchmark against pay levels in other charities of similar size.
Affiliate organisations and related parties
The ultimate parent undertaking and controlling party is World ORT which is a charity registered in Switzerland and its registration number is CH-6600148971-1. The financial statements for World ORT are in US Dollar and accordingly the Trustees believe that presenting its accounts in US Dollar is beneficial in accounting for the Charity’s finances and obligations, given the global nature of World ORT’s activities, the Charity’s contributions to these activities, and the Charity’s position within the World ORT’s group of charities.
The charity is linked to ORT UK and World ORT through common aims and objectives. ORT UK is an autonomous charity registered in England and Wales. ORT UK raises funds from a variety of sources. ORT UK's office staff are based in ORT House for which it pays rent to World ORT Trust. World ORT Trust is also a major beneficiary of ORT UK's fundraising.
Trustees of World ORT Trust may also be Trustees of ORT UK. Where this is the case, this is noted on the list of Trustees on page 5. No trustee receives any remuneration for their duties in either organisation. There is no shared management between the two charities.
Further details of the work of World ORT can be obtained by going to the World ORT website: http://www.ort.org.
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the Charity during the year.
During the year, no amounts (2021: $145,000) were charged to World ORT parent charity in relation to rental income from the letting of ORT House. As at 31 December 2022, $496,294 was due to World ORT (2021: $213,810). World Ort Trust is a wholly owned subsidiary of World ORT.
During the year, $36,815 (2021: $165,746) was paid to Epsilon Real Estate Partners Limited, a company that is related by virtue of the Trustee Mr R M Hatter also being one of directors and a shareholder. This is for project management in relation to the development and refurbishment of the new Ort House. As at 31 December 2022, no amounts (2021: $7,392) were due to Epsilon Real Estate Partners Limited.
Auditor
In accordance with the company's articles, a resolution proposing that RDP Newmans LLP be reappointed as auditor of the company will be put at a General Meeting.
- 6 -
WORLD ORT TRUST
(A COMPANY LIMITED BY GUARANTEE) TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT AND STRATEGIC REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Disclosure of information to auditor
Each of the Trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.
The trustees' report, including the strategic report, was approved by the Board of Trustees.
Mr R M Hatter
Trustee
28 September 2023
- 7 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) STATEMENT OF TRUSTEES' RESPONSIBILITIES
FOR THE YEAR ENDED 31 DECEMBER 2022
The Trustees, who are also the directors of World Ort Trust 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. Under that law the Trustees must prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company 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. 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.
- 8 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WORLD ORT TRUST
Opinion
We have audited the financial statements of World Ort Trust (the ‘charity’) for the year ended 31 December 2022 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including 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 December 2022 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
-
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report and the strategic report prepared for the purposes of company law, is consistent with the financial statements; and
-
the strategic report and the directors' report included within the trustees' report have been prepared in accordance with applicable legal requirements.
-
9 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF WORLD ORT TRUST
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of trustees' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
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
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.
The 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 company through discussions with the Trustees, who are also the directors and other management, and from our commercial 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, Charity Commission Regulations, Charities Act 2011, Statement of recommended practice (SORP FRS102), taxation legislation and data protection, anti-bribery 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.
-
10 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF WORLD ORT TRUST
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.
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 and tested journal entries to identify unusual transactions and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
-
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 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:
-
reviewing and agreeing financial statement disclosures and testing to underlying supporting documentation;
-
enquiring of management as to actual and potential litigation and claims; and
-
reviewing correspondence with HMRC and bankers.
-
reviewing minutes of board meetings.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. 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 directors 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.
Use of our report
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Paresh Radia FCA (Senior Statutory Auditor) for and on behalf of RDP Newmans LLP
28 September 2023
Chartered Accountants
Statutory Auditor
Lynwood House 373-375 Station Road Harrow Middlesex HA1 2AW
- 11 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
| Unrestricted funds 2022 Notes $ Income and endowments from: Donations and legacies 3 207,485 Charitable activities Income from letting activity 4 914 Investments 5 27,435 Other income 6 - Total income 235,834 Expenditure on: Charitable activities 7 6,623,110 Other 12 - Total expenditure 6,623,110 Net (outgoing)/incoming resources before transfers (6,387,276) Gross transfers between funds 13 2,407 Net (outgoing)/incoming resources (6,384,869) Other recognised gains and losses Revaluation of tangible fixed assets - Actuarial gain on defined benefit pension schemes 566,130 Net movement in funds (5,818,739) Fund balances at 1 January 2022 18,943,474 Fund balances at 31 December 2022 13,124,735 |
Restricted funds 2022 $ 139,474 - - - 139,474 137,067 - 137,067 2,407 (2,407) - - - - 200 200 |
Total Unrestricted funds 2022 2021 $ $ 346,959 263,555 914 206,928 27,435 8,165 - 9,048,036 375,308 9,526,684 6,760,177 384,992 - 4,880 6,760,177 389,872 (6,384,869) 9,136,812 - - (6,384,869) 9,136,812 - (7,376,959) 566,130 238,890 (5,818,739) 1,998,743 18,943,674 16,944,731 13,124,935 18,943,474 |
Restricted funds 2021 $ 120,983 - - - 120,983 120,983 - 120,983 - - - - - - 200 200 |
Total 2021 $ 384,538 206,928 8,165 9,048,036 9,647,667 505,975 4,880 510,855 9,136,812 - 9,136,812 (7,376,959) 238,890 1,998,743 16,944,931 18,943,674 |
|---|---|---|---|---|
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 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) BALANCE SHEET
AS AT 31 DECEMBER 2022
| Notes Fixed assets Tangible assets 14 Current assets Debtors 16 Cash at bank and in hand Creditors: amounts falling due within one year 17 Net current assets Total assets less current liabilities Net assets excluding pension surplus/(deficit) Defined benefit pension surplus/(deficit) 18 Net assets Income funds Restricted funds 19 Unrestricted funds General unrestricted funds 20 Revaluation reserve |
2022 $ $ 11,246,594 376,923 2,450,453 2,827,376 (984,014) 1,843,362 13,089,956 13,089,956 34,979 13,124,935 200 6,353,264 6,771,471 13,124,735 13,124,935 |
2021 $ $ 9,106,731 428,771 10,599,447 11,028,218 (798,686) 10,229,532 19,336,263 19,336,263 (392,589) 18,943,674 200 12,172,003 6,771,471 18,943,474 18,943,674 |
|---|---|---|
The financial statements were approved by the Trustees on 28 September 2023
Mr R M Hatter Trustee
Company registration number 02967916
- 13 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
| Notes Cash flows from operating activities Cash absorbed by operations 25 Investing activities Purchase of tangible fixed assets Proceeds from disposal of tangible fixed assets Investment income received Net cash (used in)/generated from investing activities Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year |
2022 $ $ (5,818,451) (2,357,978) - 27,435 (2,330,543) - (8,148,994) 10,599,447 2,450,453 |
2021 $ $ (681,179) (1,296,095) 11,630,909 8,165 10,342,979 - 9,661,800 937,647 10,599,447 |
|---|---|---|
- 14 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
1 Accounting policies
Charity information
World Ort Trust is a private company limited by guarantee incorporated in England and Wales. The registered office is ORT House, 147 Arlington Road, London, NW1 7ET, England.
1.1 Accounting convention
The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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 2022). The charity is a Public Benefit Entity as defined by FRS 102.
The functional currency of the Charity is sterling. The financial statements are prepared in US Dollars, which is the presentation currency of the charity because this is the operating currency of World ORT group. 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. The principal accounting policies adopted are set out below.
1.2 Going concern
At the time of approving the financial statements, the trustees 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.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
1.4 Income
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.
Grants are included in the statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the balance sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.
- 15 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
1 Accounting policies
(Continued)
Revenue includes rental income, service charges and other recoveries from tenants of the charity's property. Rental income is recognised on an accruals basis in the period in which it is earned, in accordance with the terms of the lease.
Investment income, which is bank interest, is recognised on an accruals basis.
1.5 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. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
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:
Freehold land and buildings 2% per annum on cost Building improvements 10% per annum on cost Fixtures, fittings and equipment 20% per annum on cost
Freehold land is not depreciated.
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 the statement of financial activities.
1.7 Impairment of fixed assets
At each reporting end date, the charity reviews the carrying amounts of its tangible 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).
1.8 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.
- 16 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
1 Accounting policies
(Continued)
1.9 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.
1.10 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of fixed assets.
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.
- 17 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
1 Accounting policies
(Continued)
1.11 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in income/(expenditure) for the year.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other recognised gains and losses in the period in which they occur and are not reclassified to income/ (expenditure) in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.12 Foreign exchange
Transactions in currencies other than US Dollar are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the Statement of Financial Activities.
1.13 Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred.
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.
- 18 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 Critical accounting estimates and judgements
(Continued)
Key sources of estimation uncertainty
Retirement benefit schemes
Accounting for a defined benefit pension scheme and the value of liabilities is dependent on significant assumptions, including an assessment of the discount rate, price inflation and key demographic figures including life expectancy and mortality rates.
These accounting judgements are inherently complex and require a high level of management judgement and specialist input by an actuary in the calculation of the value of the liabilities.
The key assumptions are detailed in Note 18.
Freehold property valuations
The fair value of the freehold property recognised in freehold land and buildings is appraised regularly by management.
These accounting judgements are inherently complex and require a high level of management judgement and specialist input by external surveyors of the value of the property.
The underlying assumptions are explained in more detail in the accounting policies on tangible fixed assets and in note 14.
3 Donations and legacies
| Unrestricted Restricted funds funds 2022 2022 $ $ Donations and gifts 207,485 139,474 Coronavirus Job Retention Scheme grant - - 207,485 139,474 |
Total Unrestricted Restricted funds funds 2022 2021 2021 $ $ $ 346,959 238,808 120,983 - 24,747 - 346,959 263,555 120,983 |
Total 2021 $ 359,791 24,747 |
|---|---|---|
| 384,538 |
4 Charitable activities
| Income from | Income from |
|
|---|---|---|
| letting | letting |
|
| activity | activity | |
| 2022 | 2021 | |
| $ | $ | |
| Charitable rental income | 914 | 206,928 |
- 19 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
5 Investments
| Unrestricted | Unrestricted | ||
|---|---|---|---|
| funds | funds | ||
| 2022 | 2021 | ||
| $ | $ | ||
| Interest receivable | 27,435 | 8,165 | |
| 6 | Other income | ||
| Total | Unrestricted | ||
| funds | |||
| 2022 | 2021 | ||
| $ | $ | ||
| Net gain on disposal of tangible fixed assets | - | 9,048,036 |
- 20 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
7 Charitable activities
| Unrestricted Charitable Expenditure Restricted Charitable Expenditure Unrestricted Letting activities 2022 2022 2022 $ $ $ Staff costs 386,138 - 29,989 Depreciation and impairment - - 218,115 Building maintenance - - (14,251) Foreign exchange gain - - (32,003) Governance audit fees 44,367 - - Legal and professional 116,496 - - Sundry 157 - - Office and travel 31,351 - - Foreign exchange loss - - 1,183,360 Bad debts - - - 578,509 - 1,385,210 Grant funding of activities (see note 8) 4,659,391 137,067 - 5,237,900 137,067 1,385,210 Analysis by fund Unrestricted funds 5,237,900 - 1,385,210 Restricted funds - 137,067 - 5,237,900 137,067 1,385,210 |
Total 2022 Unrestricted Charitable Expenditure Restricted Charitable Expenditure Unrestricted Letting activities 2021 2021 2021 $ $ $ $ 416,127 35,067 - 88,029 218,115 - - 41,042 (14,251) - - 259,644 (32,003) - - (175,810) 44,367 32,161 - - 116,496 71,167 - - 157 194 - - 31,351 27,260 - - 1,183,360 - - 2,029 - - - 4,209 1,963,719 165,849 - 219,143 4,796,458 - 120,983 - 6,760,177 165,849 120,983 219,143 6,623,110 165,849 - 219,143 137,067 - 120,983 - 6,760,177 165,849 120,983 219,143 |
Total 2021 $ 123,096 41,042 259,644 (175,810) 32,161 71,167 194 27,260 2,029 4,209 384,992 120,983 505,975 384,992 120,983 505,975 |
|---|---|---|
- 21 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
8 Grants payable
| Unrestricted Charitable Expenditure Restricted Charitable Expenditure 2022 2022 $ $ Grants to institutions (1 grant): World ORT 4,659,391 137,067 Auditor's remuneration Fees payable to the charity's auditor and associates: Audit of the charity's annual accounts |
Total 2022 Restricted Charitable Expenditure 2021 $ $ 4,796,458 120,983 2022 $ 21,534 |
Total 2021 $ 120,983 |
|---|---|---|
| 2021 $ 22,666 |
9 Auditor's remuneration
10 Trustees
None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year, nor were any expenses reimbursed to them (2021: $nil).
11 Employees
The average monthly number of employees during the year was:
| Administration Tenant and building support Total Employment costs Wages and salaries Social security costs Other pension costs |
2022 Number 1 - 1 2022 $ 27,519 2,470 386,138 416,127 |
2021 Number 1 1 |
|---|---|---|
| 2 | ||
| 2021 $ 80,752 7,277 35,067 |
||
| 123,096 |
There were no employees whose annual remuneration was more than £60,000.
- 22 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
12 Other
| Total | Unrestricted | |
|---|---|---|
| funds | ||
| $ | $ | |
| 2022 | 2021 | |
| Net loss on disposal of tangible fixed assets | - | 4,880 |
13 Transfers
During the year, restricted funds amounting to $2,407 were transferred to unrestricted funds. This was a foreign exchange gain after all objectives of the restricted funding had been satisfied. As there was to be no clawback of this surplus, this was transferred to Unrestricted Funds.
The underlying transfer is explained in more detail in notes 19 and 20.
14 Tangible fixed assets
| Tangible fixed assets | ||
|---|---|---|
| Freehold land and buildings $ Cost or valuation At 1 January 2022 9,159,248 Additions 2,310,614 At 31 December 2022 11,469,862 Depreciation and impairment At 1 January 2022 52,517 Depreciation charged in the year 214,926 At 31 December 2022 267,443 Carrying amount At 31 December 2022 11,202,419 At 31 December 2021 9,106,731 |
Fixtures, fittings and equipment $ - 47,364 47,364 - 3,189 3,189 44,175 - |
Total $ 9,159,248 2,357,978 |
| 11,517,226 | ||
| 52,517 218,115 |
||
| 270,632 | ||
| 11,246,594 | ||
| 9,106,731 |
Land and buildings were revalued at 31 March 2022 by Colliers International Valuation UK LLP, independent valuers not connected with the charity on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. This valuation was included in the accounts for the year end 31 December 2022.
Discussions were held between the Trustees and external property valuers and it was deemed that there was impairment of the property value post year end. The underlying note is explained in more detail in note 22.
- 23 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
| 15 Financial instruments Carrying amount of financial assets Debt instruments measured at amortised cost Carrying amount of financial liabilities Measured at amortised cost 16 Debtors Amounts falling due within one year: Trade debtors Amounts owed by associate undertakings Other debtors Prepayments and accrued income Amounts falling due after more than one year: Other debtors Total debtors 17 Creditors: amounts falling due within one year Other taxation and social security Trade creditors Amounts owed to fellow group undertakings Other creditors Accruals and deferred income |
2022 $ 335,821 932,193 2022 $ - 25,792 337,287 13,844 376,923 2022 $ - 376,923 2022 $ 51,821 334,938 496,294 44,279 56,682 984,014 |
2021 $ 396,338 |
|---|---|---|
| 741,589 | ||
| 2021 $ 6,913 52,139 168,643 32,433 |
||
| 260,128 | ||
| 2021 $ 168,643 |
||
| 428,771 | ||
| 2021 $ 57,097 392,050 213,810 45,280 90,449 |
||
| 798,686 |
18 Retirement benefit schemes
Defined contribution schemes
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The charge to profit or loss in respect of defined contribution schemes was $3,613 (2021 - $831).
- 24 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
18 Retirement benefit schemes
(Continued)
Defined benefit schemes
World Ort Trust operate a defined benefit scheme known as the ORT Retirement Benefit Plan which is administered by a third party. The scheme was established on 14 February 1974 and was closed to new members with effect from 1 November 1999. The assets of the scheme are held separately to those of the Charity.
In the current accounting year there were no active members. The valuation used has been based on the most recent actuarial valuation at 1 January 2018 and was updated by the actuary, ISIO Group Limited, to take account of the requirements of FRS102 in order to assess the liabilities of the scheme at December 2020, December 2021 and December 2022. Scheme assets are stated as their Market value at the respective balance sheet dates and overall expected rates of return are established by applying published brokers' forecasts to each category of scheme assets.
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages).
Key assumptions
| Discount rate Inflation assumption CPI pension escalation Allowance for commutation for cash at retirement Mortality assumptions The assumed life expectations on retirement at age 65 are: Retiring today - Males - Females Retiring in 20 years - Males - Females Amounts recognised in the Statement of Financial Activities Net interest on defined benefit liability/(asset) The effect of any curtailment or settlement Other costs and income Total costs |
2022 % 3.35 3.40 3.00 10 2022 Years 21.3 23.9 22.5 25.3 2022 $ 2,474 378,580 - 381,054 |
2021 % 1.8 3.25 2.75 10 |
|---|---|---|
| 2021 Years 21.6 24.1 |
||
| 22.9 25.5 |
||
| 2021 $ 9,627 - 19,254 |
||
| 28,881 |
- 25 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
| 18 Retirement benefit schemes Amounts taken to other comprehensive income: Actual return on scheme assets Less: calculated interest element Return on scheme assets excluding interest income Actuarial changes related to obligations Exchange differences Total costs/(income) The amounts included in the balance sheet arising from the charity's obligations in respect of defined benefit plans are as follows: Present value of defined benefit obligations Fair value of plan assets (Surplus)/deficit in scheme Movements in the present value of defined benefit obligations: Liabilities at 1 January 2022 Plan introductions, changes, curtailments and settlements Actuarial gains and losses Interest cost Exchange differences At 31 December 2022 |
(Continued) 2022 2021 $ $ (95,263) 55,012 12,372 23,380 (82,891) 78,392 (461,471) (357,578) (21,768) 40,296 (566,130) (238,890) 2022 2021 $ $ - 2,124,833 (34,979) (1,732,244) (34,979) 392,589 2022 $ 2,124,833 (1,501,946) (461,471) 14,846 (176,262) - |
|---|---|
- 26 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
| 18 | Retirement benefit schemes | (Continued) |
|---|---|---|
| Movements in the fair value of plan assets: | ||
| 2022 | ||
| $ | ||
| Fair value of assets at 1 January 2022 | 1,732,244 | |
| Interest income | 12,372 | |
| Return on plan assets (excluding amounts included in net interest) | 82,891 | |
| Plan introductions, changes, curtailments and settlements | (1,880,526) | |
| Contributions by the employer | 242,492 | |
| Exchange differences | (154,494) | |
| At 31 December 2022 | 34,979 |
The fair value of plan assets at the reporting period end was as follows:
| The fair value of plan assets at the reporting period end was as follows: | ||
|---|---|---|
| Aviva - Deferred Allocation Funding With-Profits policy Cash and Cash equivalents Aviva - Value for Guaranteed Annuity Options |
2022 $ 4,825 30,154 - 34,979 |
2021 $ 1,462,424 12,142 257,678 |
| 1,732,244 |
- 27 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
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 in funds | Movement in funds | Movement in funds | Movement in funds | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at | Incoming | Resources | Balance at | Incoming | Resources | Transfers | Balance at | |||
| 1 | January 2021 | resources | expended | 1 | January 2022 | resources | expended | 31 December | ||
| 2022 | ||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||
| Restricted funds | 200 | 120,983 | (120,983) | 200 | 139,474 | (137,067) | (2,407) | 200 |
During the year, restricted funds amounting to $2,407 were transferred to unrestricted funds. This was a foreign exchange gain after all objectives of the restricted funding had been satisfied. As there was to be no clawback of this surplus, this was transferred to Unrestricted Funds.
- 28 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20 Unrestricted funds
The income funds of the charity include unrestricted funds:
| Balance at 1 January 2021 $ General unrestricted funds 2,796,301 Revaluation reserve 14,148,430 16,944,731 |
Incoming resources $ 9,765,574 - 9,765,574 |
Movement in funds Resources expended Transfers Revaluations, gains and losses Balance at 1 January 2022 $ $ $ $ (389,872) - - 12,172,003 - (8,907,829) 1,530,870 6,771,471 (389,872) (8,907,829) 1,530,870 18,943,474 |
Incoming resources $ 235,834 - 235,834 |
Movement in funds Resources expended Transfers Revaluations, gains and losses Balance at 31 December 2022 $ $ $ $ (6,623,110) 2,407 566,130 6,353,264 - - - 6,771,471 (6,623,110) 2,407 566,130 13,124,735 |
Movement in funds Resources expended Transfers Revaluations, gains and losses Balance at 31 December 2022 $ $ $ $ (6,623,110) 2,407 566,130 6,353,264 - - - 6,771,471 (6,623,110) 2,407 566,130 13,124,735 |
|---|---|---|---|---|---|
| 13,124,735 |
- 29 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
| 21 Analysis of net assets between funds Unrestricted funds 2022 $ Fund balances at 31 December 2022 are represented by: Tangible assets 11,246,594 Net current assets/(liabilities) 1,843,162 Provisionsand pensions 34,979 13,124,735 |
Restricted funds 2022 $ - 200 - 200 |
Total Unrestricted funds 2022 2021 $ $ 11,246,594 9,106,731 1,843,362 10,229,332 34,979 (392,589) 13,124,935 18,943,474 |
Restricted funds 2021 $ - 200 - 200 |
Total 2021 $ 9,106,731 10,229,532 (392,589) 18,943,674 |
|---|---|---|---|---|
22 Events after the reporting date
Subsequent to the year end, property values have decreased because of the increases in interest rates resulting in lower sales values and lower rents being achieved. The Charity’s external property valuers estimate that the fair value of the building would have reduced by approximately 17.5%.
23 Related party transactions
The Trustees of the Charity are considered to be key management personnel. Total remuneration in respect of these individuals is given in note 10.
During the year, $Nil (2021: $145,000) was charged to World ORT parent charity in relation to rental income from the letting of ORT House. As at 31 December 2022, $496,294 (2021: $213,810) was due to World ORT. World Ort Trust is a wholly owned subsidiary of World ORT.
During the year, $36,815 (2021: $165,746) was paid to Epsilon Real Estate Partners Limited, a company that is related by virtue of the Trustee Mr R M Hatter also being one of directors and shareholder. This is for project management in relation to the development and refurbishment of the new Ort House. As at 31 December 2022, $Nil (2021: $7,392) was due to Epsilon Real Estate Partners Limited.
24 Ultimate parent undertaking
The ultimate parent undertaking and controlling party is World ORT which is a charity registered in Switzerland and its registration number is CH-6600148971-1.
The consolidated financial statements of World ORT, which include the results of World ORT Trust, are available to the public on website www.ort.org.
- 30 -
WORLD ORT TRUST (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022
| 25 | Cash generated from operations | 2022 | 2021 |
|---|---|---|---|
| $ | $ | ||
| (Deficit)/surpus for the year | (6,384,869) | 9,136,812 | |
| Adjustments for: | |||
| Investment income recognised in statement of financial activities | (27,435) | (8,165) | |
| Gain on disposal of tangible fixed assets | - | (9,043,156) | |
| Depreciation and impairment of tangible fixed assets | 218,115 | 41,042 | |
| Difference between pension charge and cash contributions | 138,562 | (93,521) | |
| Movements in working capital: | |||
| Decrease/(increase) in debtors | 51,848 | (325,911) | |
| Increase/(decrease) in creditors | 185,328 | (388,280) | |
| Cash absorbed by operations | (5,818,451) | (681,179) | |
| 26 | Analysis of changes in net funds | ||
| The charity had no debt during the year. |
- 31 -