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## **The Hope Charity**
(A Charitable Company Limited by Guarantee)
**Trustees’ Annual Report and Financial Statements For the year ended 31 March 2023**
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **CONTENTS**
||**Page**|
|---|---|
|Charity Information ………………………………………………………………….…………..…………………………|3|
|Trustees’ Annual Report ….…………………….………….……….………….………….……….………….………..|4-6|
|Independent Auditor’s Report …………………………………,.…………….,…..……………………….…………|7-10|
|Statement of Financial Activities …………………………………,.…………….,…..……………………….………|11|
|Balance Sheet …………………………………………………………….…………………….………….......................|12|
|Notes to the Financial Statements ……………………………………………………….……………….……………|13-19|
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **CHARITY INFORMATION**
The directors of a charitable company are its trustees for the purpose of charity **Trustees and Directors** law. The trustees that served during the financial year and since the year end are:
**Trustees and Directors** Norwood Ravenswood Neville Kahn Tim Isaacs Ben Freeman
## **Senior Management Team**
Naomi Dickson (from 16.1.23) Chief Executive Officer Beverley Jacobson (to 11.11.22) Chief Executive Officer Patrick Murphy Director of Finance and Corporate Services
**Company Secretary** Patrick Murphy **Auditors** Grant Thornton UK LLP, 30 Finsbury Square, London EC2A 1AG **Bankers** Barclays Bank plc, 126 Station Road, Edgware, HA8 7RY **Principal and Registered Office** Broadway House 80-82 The Broadway Stanmore HA7 4HB
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **Trustees’ Annual Report**
## **THE CHARITY**
The trustees are pleased to present their annual report and audited financial statements for the year ended 31 March 2023. The financial statements have been prepared to meet the requirements of the directors’ report and accounts as per the Companies Act 2006. These statements also comply with the Charities Act 2011 and the Charities (Protection and Social Investment) Act 2016; the Memorandum and Articles of Association and the 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 - FRS102 (effective 1 January 2022).
The Hope Charity ("Hope") is a wholly owned subsidiary of Norwood Ravenswood (“Norwood”), the largest Jewish charity in the UK supporting vulnerable children and families, children with special educational needs and people with learning disabilities.
Hope previously provided educational support services to children and young people aged between 3 and 19. In 2017, the charity underwent a corporate restructure that saw the cessation of its specialist educational support service (Hope) and the transfer of its Binoh educational support service to Norwood Schools Limited (“Norwood Schools”), another wholly owned subsidiary of Norwood.
Since the transfer, the charity has undertaken very limited activities as reflected in the financial statements. The only activity undertaken during the year was the maintaining of its investment property. The charity continues to ensure the wider public benefit is being served by the space being made available for use by an organisation providing education in line with the charities charitable objectives. The trustees will keep options under review as to the future use of the underlying property.
## **THE GOVERNANCE STRUCTURE**
The charity is a charity registered in England and Wales with charity number 1056674 and, a company limited by guarantee, registered in England and Wales with company number 03171884. It is controlled by Norwood. The Board of the charity is made up of the parent charity and other trustees. The Board of trustees delegate the day-today operations of the charity to the Chief Executive Officer, who within her delegated authority has assigned operational matters, including finance, service provisions and employment to the Senior Management Team.
## **STATEMENT OF PUBLIC BENEFIT**
The trustees confirm that they have complied with their duty in Section 17 of the Charities Act 2011; to have regard to the Charity Commission’s general guidance on public benefit, “Charities and Public Benefit”. The charity’s detailed charitable objects are contained within its memorandum and articles and as such the trustees ensure that the charity’s activities are carried out for the public benefit through its strategic priorities, primarily through Norwood Schools. Norwood Schools continues to deliver services to those with learning difficulties, children and families in need, primarily for but not restricted to the Jewish Community.
## **FINANCIAL REVIEW**
During the year, The Hope Charity entered into a new 35-year lease on 28 November 2022 with a new tenant. This lease includes a six-month rent-free period, and income was £62,000 (2022: £35,000). The tenant will be operating a school providing education for children with autism and individual additional needs.
Total expenditure in the year was £104,000 (2022: £68,000). This relates to attributable management and governance costs and costs associated with leasing the property. After accounting for the unrealised revaluation loss of £200,000, the charity incurred a deficit of £242,000 (2022: Surplus £1,792,000).
The net assets of the charity as at 31 March 2023 was £2,035,000 (2022: £2,277,000).
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **RESERVES POLICY**
Consistent with the approach adopted in previous years, the trustees of the charity adopted the reserves policy for the Norwood group. However, the free reserves of each entity have been separately evaluated. An important role for trustees is to independently manage the long-term sustainability of each entity. The Hope Charity holds free reserves to:
- ensure, as a landlord, it can meet its maintenance and refurbishment obligations under the lease agreement;
- demonstrate to the beneficiaries of the charity its resilience to manage unforeseen financial difficulties;
- give assurance to its creditor (Norwood Schools) that it can meet its financial commitments;
- give confidence to the readers of the accounts by demonstrating good stewardship and active financial
- management; and
- manage risks to the charity’s reputation from holding substantial unspent funds at the year-end without an
- explanation.
The trustees calculate the free reserves as that part of the charity’s unrestricted income funds that is freely available to expend after taking account of the restricted funds which have been earmarked for specific projects and unrestricted fixed assets and investment property.
As at 31 March 2023, the total reserves of the charity were £2,035,000 (2022: £2,277,000) which were represented by :
The asset relates to an investment property which is not readily convertible into liquid funds. Hope Charity would be supported by its parent Norwood Ravenswood in the event of a cash call. The Charity had no free reserves. The trustees have set a target range of 3 months or more of its annual expenditure being £26,000. The Trustees are implementing ways in which to build free reserves to a level that is within the target range.
## **PRINCIPAL RISKS AND UNCERTAINTIES**
Risk is inherent in the charity’s operations and the decisions made in pursuit of its charitable goals. The Board is responsible for the nature and extent of the principal risks it is willing to take but delegates the detailed review of the corporate risk register to the Norwood Audit and Risk Committee. The Board, through the Norwood Audit and Risk Committee, is also responsible for ensuring that risks are effectively managed.
The main risk to the charity is liquidity risk. All the charity’s income is derived from rental income. Whilst the property has been re-let, this has been done so with a six-month rent-free period. The impact of this means the charity funds the running costs of the building through increasing the intercompany loan due to Norwood Schools. Norwood Schools has confirmed to the Charity that it will not seek repayment of the outstanding loan for at least 12 months from the signing of the accounts.
## **GOING CONCERN**
These accounts have been prepared on a going concern basis. The assessment of the charity’s ability to continue as a going concern has been made taking into consideration the charity’s overall financial position and the support of the parent charity. The charity has total reserves at the end of the financial year of £2,035,000 and support from the parent charity to pay for anticipated day-to-day expenditure in the charity and liabilities as they fall due in the foreseeable future. 'Stress-testing' assumptions have been formed around going concern such as, if no income was received for 12 months following the signing of the accounts. Given the support from the parent charity this would have not impact on Hope's going concern.
The Hope Charity entered into a 35-year lease with a new tenant on 28 November 2022 with a six-month rent-free period. The charity’s only liabilities are to Norwood Schools. Norwood Ravenswood intends to support The Hope Charity for at least 12 months from the date of approval of the statutory financial statements for the year ended 31 March 2023 to enable it to meet its liabilities amounting to £1,072,000 as they fall due.
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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Accordingly, the trustees are satisfied it is appropriate to prepare these accounts on a going concern basis.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
Our Board of Trustees delegates the day-to-day management of Norwood’s operations to the Chief Executive Officer and the Senior Management Team. To support the crucial role of Norwood’s board, sub-committees and service review, panels were set up with specific terms of reference and delegated authorities. Trustees are appointed for a four-year term and may serve a second consecutive term.
## **TRUSTEES' RESPONSIBILITIES STATEMENT**
The trustees (who are also directors of the Charity for the purposes of Company Law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.
Company Law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland. 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 period. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP (FRS 102);
- make judgments and accounting estimates that are reasonable and prudent
The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the company 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees confirm that:
• So far as each trustee is aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and
• the trustees have taken all the steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Hope Charity is a qualifying entity and thus has taken disclosure exemption for producing a strategic report.
_________________________________ _________________________________ **Neville Kahn Ben Freeman** Director/Trustee Director/Trustee **04-August-23**
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE HOPE CHARITY**
## **Opinion**
We have audited the financial statements of The Hope Charity (the ‘charitable company’) for the year ended 31 March 2023, which comprise the Statement of Financial Activities, the Balance Sheet and 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 2023 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 have been appointed as auditor under the Companies Act 2006 and report in accordance with regulations made under that Act. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements section’ of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
We are responsible for concluding on the appropriateness of the trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the charitable company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the trustees’ conclusions, we considered the inherent risks associated with the charitable company’s business model including effects arising from macro-economic uncertainties such as Brexit, Covid-19 and the cost of living, we assessed and challenged the reasonableness of estimates made by the trustees and the related disclosures and analysed how those risks might affect the charitable company’s financial resources or ability to continue operations over the going concern period.
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The Hope Charity – for the year ended 31 March 2023
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## **Other information**
The other information comprises the information included in the Trustees’ Annual Report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Trustees’ 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements 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.
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Directors’ Report, prepared for the purposes of company law, included in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
- the Directors’ Report included in the Trustees' Annual Report have been prepared in accordance with applicable legal requirements.
## **Matter on which we are required to report under the Companies Act 2006**
In the light of the knowledge and understanding of the charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ Report included in the Trustees' Annual Report.
## **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 Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption from the requirement to prepare a strategic report.
## **Responsibilities of trustees for the financial statements**
As explained more fully in the Trustees' Responsibilities Statement set out on page 6, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
· We understood how The Hope Charity is complying with those legal and regulatory frameworks by making enquiries of management, those responsible for legal and compliance procedures and the audit committee. We corroborated our enquiries through our review of board minutes, papers provided to the Audit Committee and correspondence received from regulatory bodies.
· The company is subject to many laws and regula�ons where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. We identified the following laws and regulations as the most likely to have a material effect if non-compliance were to occur; the 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 (effective 1 January 2019) ('Charities SORP (FRS 102)), Financial Reporting Standard 102; The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice), Charities Act 2011, Companies Act 2006 and tax legislation.
· We understood how the company is complying with these legal and regulatory frameworks by making inquiries of management and those charged with governance. We enquired of management and those charged with governance whether there were any instances of non-compliance with laws and regulations, or whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through our review of board minutes, and through our legal and professional expenses review.
· We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur and the risk of material override of controls. Audit procedures performed by the engagement team included:
- Identifying and assessing the design effectiveness of certain controls management has in place to prevent and detect fraud
- Challenging assumptions and judgments made by management in its significant accounting policies
- Identifying and testing journal entries
- Identifying and testing related party transactions
- Inspecting the board minutes
- Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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· These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
· The assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
- Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation
- Knowledge of the industry in which the company operates, and
- Understanding of the legal and regulatory requirements specific to the entity including the provisions of the applicable legislation.
· The team communications in respect of potential non-compliance with laws and regulations and fraud included the potential for fraud in revenue recognition through manipulation of rental income.
· We did not identify any matters relating to non-compliance with laws and regulation and fraud.
· In assessing the potential risks of material misstatement, we obtained an understanding of:
- The company’s operations, including the nature of its revenue sources, to understand the classes of transactions, accounts balances, expected financial statement disclosures and business risks that may result in risks of material misstatement, and
- The company’s control environment, including
o Management’s knowledge of relevant laws and regulations and how the company is complying with those laws and regulations
o The adequacy of procedures for authorisation of transactions and review of management accounts, and
o Procedures to ensure that possible breaches of laws and regulations are appropriately resolved.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
## **Use of our report**
This report is made solely to the 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.
## **Stephen Dean**
Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants
## **London**
**04-August-23**
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## Statement of Financial Activities
For the year ended 31 March 2023
(incorporating the income and expenditure account)
**----- Start of picture text -----**
Unrestricted Total Funds Total Funds
Funds 2023 2022
Note £'000 £'000 £'000
Income from:
Charitable activities 2 62 62 35
Total income 62 62 35
Expenditure on:
Charitable activities 3 104 104 68
Total cost 104 104 68
Operating (deficit) (42) (42) (33)
Net (loss)/gain on revaluation of fixed asset 4 (200) (200) 1,825
Net income (242) (242) 1,792
Reconciliation of funds:
Total funds brought forward 6 2,277 2,277 485
Total funds carried forward 2,035 2,035 2,277
**----- End of picture text -----**
All income and expenditure is derived from continuing activities. The comparative figures for each fund are shown in the notes to the financial statements (Note 9). The accompanying notes on pages 13 to 19 of this report form an integral part of these accounts.
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **Balance sheet**
## **as at 31 March 2023**
**----- Start of picture text -----**
2023 2022
Fixed Assets Note £'000 £'000
Investment: directly managed property 4 3,000 3,200
Total fixed assets 3,000 3,200
Current Assets
Debtors - Lease incentive 62 -
Cash at bank and in hand 45 -
Total current assets 107 -
Creditors: amounts falling due within one year 5 (1,072) (923)
Net current (liabilities) (965) (923)
Total net assets 2,035 2,277
Funds
Including cumulative revaluation gains of £3.08m (2022: £3.28m)
Unrestricted funds 6 2,035 2,277
Total Fund 2,035 2,277
**----- End of picture text -----**
These accounts are prepared in accordance with the special provisions of Part 15 of the Companies Act relating to small companies and constitute the annual accounts required by the Companies Act 2006.
The accompanying notes on pages 13-19 of this report form an integral part of these accounts. Approved by the Board of Trustees on 04-August-2023.
_________________________________
**Neville Kahn**
Director/Trustee
__________________
**Ben Freeman** Director/Trustee
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **1. Accounting Policies**
The principal accounting policies adopted, judgments and key sources of estimation uncertainty in the preparation of the financial statements are as follows:
## **a) Basis of preparation**
The Financial Statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) - Charities SORP (FRS 102) and the Companies Act 2006. The charity is incorporated in the United Kingdom and the Financial Statements are presented in Sterling (£).
The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). The charity is a qualifying entity and thus has taken disclosure exemption for strategic report, statement of cash flows and the requirement to disclose key management personnel compensation.
## **Going Concern**
The primary debt owed by the charity is owed to Norwood Schools which has confirmed that the repayment of the intercompany loan will not be requested until such time that the charity is in a position to repay it. The charity’s continuing activities is utilising its investment property to generate rental income. The trustees have considered the liquidity position of the charity and the trustees are satisfied it is appropriate to prepare these accounts on a going concern basis with the parent charity will provide support for at least 12 months from the signing of the accounts. 'Stress-testing' assumptions have been formed around going concern such as, if no income was received for 12 months following the signing of the accounts. Given the support from the parent charity this would have no impact on Hope's going concern. Having reviewed the financial position, the Trustees have a reasonable expectation that the charitable company has adequate resources to continue its activities for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing the financial statements.
## **b) Estimates & Judgments**
The preparation of financial statements requires management to make estimates, judgments and assumptions that affect reported assets and liabilities as at the balance sheet date and, the amounts reported for expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
## **Lease Accounting**
Management have used their judgment in the classification of the lease of the investment property entered into during the financial year. This lease has been treated as an operating lease reflecting the underlying nature of the transaction. The lessor will be operating from the site for a period of 35 years which is substantially less than the remaining life of the head lease. As such it follows that this is not a financing transaction to acquire the remaining useful life of the site.
## **Fair value of properties:**
Significant estimates and assumptions require the exercise of judgment and are used for the valuation of the charity’s directly managed investment property. In 2020, the directors used an independent expert’s report to determine the fair value of investment property and in the current year, a desktop review has been performed to update the value based on market data and commentary provided by the independent expert. Details of the charity’s directly managed investment property are set out in Note 4.
## **c) Income: charitable activities**
Income is recognised when the charity has entitlement to the funds and met any performance conditions attached. All income is accounted for when the charity has entitlement, there is probability of receipt and the amount is measurable.
If income relates to a future period or event and the purpose of that income is to support the costs and activities in the future, the income is deferred and recognised in the appropriate period.
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## **d) Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured. Expenditure comprises costs associated with charitable expenditure and governance costs include both direct and indirect costs relating to governance of the charity (Note 3b), including external audit costs and cost relating to filing corporation returns.
Irrecoverable VAT is charged as a cost to the Statement of Financial Activities, being allocated on the same basis as the underlying expenditure to which it relates.
## **e) Investment property**
Directly managed investment properties have been valued on a fair value basis. Gains and losses on revaluation of fixed assets are recognised in the Statement of Financial Activities account for the period.
## **f) Debtors**
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
## **g) Cash at bank and in hand**
Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **h) Creditors and provisions**
Creditors and provisions are recognised when the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. Most amounts provided for are expected to be settled within 12 months and are therefore recognised at the estimated settlement amount.
## **i) Tax Accounting policy**
The entity is exempt from corporation tax as the net income is for charitable purposes
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
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## 2. Incoming resources from charitable activities
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Unrestricted Total Total
Funds 2023 2022
£'000 £'000 £'000
Rental income from investment property 62 62 35
Total 62 62 35
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## Note 3a: Resources expended
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||||||
|---|---|---|---|---|
|Other Costs|Governance|Total|Total|
|Cost|2023|2022|
|£'000|£'000|£'000|£'000|
|Investment property maintenance|94|10|104|68|
|Total resources expended|94|10|104|68|
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## 3b: Analysis of governance cost
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||||
|---|---|---|
|Total|Total|
|2023|2022|
|£'000|£'000|
|External audit and related costs:|
|Statutory audit|10|6|
|Other|-|1|
|Total governance cost|10|7|
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The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
15
DocuSign Envelope ID: 18E225A4-A43E-4650-BE5B-62E6FEDDDE23
## 4: Investment - Directly Managed Property
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Market Value 2023 2022
£'000 £'000
Valuation at 1 April 3,200 1,375
Net (loss)/gain on revaluation of fixed asset (200) 1,825
Carrying values at 31 March 3,000 3,200
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The investment property relates to the charity's long leasehold interest in 228 Walm Lane, London. The freeholder is the London Borough of Brent and a long leasehold has been granted to the charity for a term of 125 years from 24 June 1997.
In 2020, an independent valuer, Cluttons LLP, undertook a valuation of the investment property. In the current year, that valuation has been updated with a desktop valuation.
## 4b: Net (losses)/gains on investment
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||||
|---|---|---|
|Market Value|2023|2022|
|£'000|£'000|
|Net (loss)/gain on fixed asset: property revaluation|(200)|1,825|
|Net (losses)/gains on fixed asset revaluation|(200)|1,825|
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The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
16
DocuSign Envelope ID: 18E225A4-A43E-4650-BE5B-62E6FEDDDE23
## 5: Creditors: amount falling due within one year
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2023 2022
£'000 £'000
Accruals and deferred income 23 19
Refundable deposit 48 -
Amount due to group undertakings 1,001 904
Total creditors due in less than one year 1,072 923
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If income relates to a future period or event and the purpose of that income is to support the costs and activities in the future, the income is deferred and recognised in the appropriate period
## 6.Analysis of net assets between funds
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Unrestricted Restricted Total
Funds Income Funds Funds
£'000 £'000 £'000
2023
-
Investment : directly managed property 3,000 3,000
-
Net current (liabilities) (965) (965)
Total net assets carried forward 2,035 - 2,035
2022
-
Investment : directly managed property 3,200 3,200
-
Net current (liabilities) (923) (923)
-
Total net liabilities brought forward 2,277 2,277
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7. The future minimum payments receivable under non-cancellable operating leases are:
||Leased
Properties
2023
Leased
Properties
2022|
|---|---|
|Within one year
Between one and five years
Over five years|£'000
£'000
158
-
760
-
5,700
-
6,618
-|
Future minimum lease payments relating to the letting of 228 Walm Lane entered into during the year.
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
17
DocuSign Envelope ID: 18E225A4-A43E-4650-BE5B-62E6FEDDDE23
## 8: Related Parties
Group companies:
Norwood Schools paid expenditure of £99,262 (2022: £56,700) which it subsequently recharged to Hope. Hope paid over funds totalling £Nil (2022: £11,300) to Norwood Schools. The balance owing to Norwood Schools was £1,001,000 at 31 March 2023.
Trustees received no remuneration and were not reimbursed any expenses in either year.
The charity’s accounts are consolidated into Norwood Ravenswood, the parent company. Norwood Ravenswood is a registered charity limited by guarantee, registered in England and Wales with charity registration number 1059050 and company registration number 03263519. The principal and registered office for Norwood Ravenswood is:
Broadway House 80-82 The Broadway Stanmore HA7 4HB
The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
18
DocuSign Envelope ID: 18E225A4-A43E-4650-BE5B-62E6FEDDDE23
## 9: Comparative Statement of Financial Activities
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Unrestricted
Restricted Funds Total Funds 2022
Funds
£'000 £'000 £'000
Income from:
Charitable activities 35 - 35
Total income 35 - 35
Expenditure on:
Charitable activities 68 68
Total cost 68 - 68
Net income (33) - (33)
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The Hope Charity – for the year ended 31 March 2023 Company Reg. No.: 03171884 Charity Reg. No.: 1056674
19