Luther King House Educational Trust (A company limlted by guarantea) Report and Flnancial Statements 31 August 2021 Charlty number: 1082375 Company number: 04065581 LUTHER KING HOUSE EDUCATIONAL TRUST FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 CONTENTS PAGE ReFlOrt of the directors Ind8pendenl Auditors, Report to the Members 15 Group statement of financial activitles 18 Balanoe Shegts 19 Cash flow 51alemgnt 20 Notes lo the Finan¢lal Slatemenls 21 LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 Luther Klng House Educational Trust Report ofthe trustees for the year ending 31 August 2021 The directors. who are 81s0 tnjslees for the purposes of the Charities Act, present their report together wrth the audited flnanclal slalemenls for Ihe year endlng 31 August 2021. Chalr'8 report Let me start on a very positive note. This July we eelebraled the 10th anniversary of the appoinlmenl of th6 Revd Graham Sparkes as our Presrdenl. We rejoice in the service Graham has render8d Luther King House Educatlonal Trust. and the Board gathered, albeit virtually, and Celebrated Ihls ann￿ersary vAlh Graham al our July meeting. Thls has been a year of ¢hallenge in the midst of a global pandemic when Government reslrlcllons Ilockdowns), challenges of operallon and drfficullles in delivering learning lo our students have been faced, ané by supreme har(1 work from our dedicalad staff team, and wlh th8 SUPPOrt of our stakeholders. has enabled us lo survive. albeit with struggles and disruptions. The autumn 2020 lockdowns and re$lri¢llons on face-lo-face meeting with people outside of your own "bubble" meant Ihal our academlc team look the decision lo undertake all leaching on line for the academic year. Th18 early decision proved lo be a ￿se move. Soon, we were all developing skills in the use of varkjus on- Ilne platforms and the creation of Innovative support mechanisms lo give our sludenls the best learning eXper￿nCeS p0881ble wilhln the regional and national restrictions. Thls move lo on-llne leachlng and leamiDg was ronducled whil$l working through tha final ¢ohorls engaged In sludylng for University of Manchester awards and enrolling students for awards of the Universlly of Durham Common Awards. Inevilably. wilh the pandemi¢ reslriclions, we faced some delays and struggles, not least In oblainlng approval from Durham for our procedures and policies, but we are pleased lo nolc that our Bachelor and Masters programmes with the University of Durham have been valldaled and our policles approved. We are also delighted that our new MA in Chaplaincy Sludles has been agreed wrth Durham and with Common Awards and our first cohort of students ¢ommenc85 the programme In September 2021. All of this enlalled much extra work for our slafl team, ably led by our President and vAlh the support of the academi¢ staff of the consliluenl Colleges and OUT own reglslrar and library staff teams. We are very grateful lo our librarian, Katie Paton, who did an Immense amount of work during lockdown to support our students in Iheir learnin9, ensuring access lo books and artic4es. In all this we sought lo continue lo fulfil our core educational objectives with the help and 8UPPOrt of our dedicated staff and In cooperallon with our founder members. partner Colle9es and thè wider Christian community in the north of England. We have continued lo encounter demands bèing made on LJS by the oifice for Students, though some of the requiremenls madg of us, particularly in providing slalislical information. have caused us challenges as the parameters used by thè Office for Students have been more appropri81e to large public-seclor Unlversilies than lo small speclalisl higher education inslilulions such as ourselves. In educational terms, despite the challenges and restrict￿nS created by Ihe pandemlc. we have continued lo work within the parameters of our 2018 Vision documenl and lo offer a range of courses from informal 8ducalion through lo doctoral studies. ulilising our currenl posilion in relationship lo the University of Manchester for our higher degree provision. We remain delighted thal our academic team al Luther King House are highly regarded in the field of delivering quality educational experiences in the discipline of theology. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 In terms of our use of preffllses and the business operation to support our primary objective of theological education, for much of the year, in common wth the whole hospitality 8eclor, we have been unable lo function. We were able lo take advantage of the Government furlough scheme for our domeslSc, catering and suppori staff, but il was only possible lo re-open our accommodation servlc8S towards the end of this financial year as restrictions on hospitality provision were lifted in the summer. This proved immensely challenging lo us in terms of financing our educational activities and mainlalnlng our suite of buildings al Luther King House. We are grateful lo two of our princlpal stakeholders, Northern College and Northern Baptist Cdlege for providing loan asslslance and not requiring interest payment on earlier loans, as Ihls enabled us lo gel through the finan¢ial year 85 a funcllonlng inslilulion. The boards of the consts'tuenl Colleges of Luther King House have shown Ihelr 801idarily wllh u8 in these trying tlmes. Al all 1Smes we hav8 been cognlsant ol advic8 from the Charity Commlsslon and the Office for Students. We have continued our reglme of weekly review of cash flow, and the Board, through the Chair of the Flnance and Monilorlng Committee. has been in weekly contact with our Company Secretary lo monllor the situation and consult with our principal stakeholders. 11 Is our belSef. as we have observed the recovery of Income through our trading subsldl8ry In the months of September. October and Novemtor 2021. that Luther King House is a vlable concern and though we cannot predict any future restr￿110￿ lo our trading aclivilies, we have no reason. al the presonl Ilm8, lo belleve there Is an immediate challenge to our viabilily. However, wa ar8 very conscious of the recent decllne In the number of students slgnlng up for our 8A degree In theology. Accordlngly. we have dis¢u8sed wlh our principal stakeholders, the imporlar)ce of having slgnificanlly more students engaged in this level of sludy in the coming years and. In full C operallon with them, we are conslrucling a re￿￿lIment campaign lo develop sludenl numbers In Ihls core educalional group lo furthei ensure tha long lerm viability of th8 instllullon and we conllnue lo engage in dialogue wlh our prlncipal stakeholders as we work together in emerglng out of the dlfflcull operallng conditions of the last two years lo continue lo seek a sustainable long-lerm fijlure for our mporlanl work In the north and midlands of England. Durlng the year a re-brandlng exerclse took place focused on our core odu¢allon81 ac￿vItIes and we now markol ourselves as Ihe Luther King Centre for Theology and Ministry. We have introduced a new logo and upgraded our websile as we look lo the lulure, wognising our aclivilips need lo appeal lo a wider rango of people across the norih and midlands and that our educallonal activities, though based In Luther King House, have a delivery beyond the physical slruclure. In 811 this uncerlaln lime we have valued the leadership of Ihe President, Company Secretary, College PdncSpals, Ihp Principal of Open College and their supporting slaff, who have worked lo the ullermo81 lo enable us lo fulfil our core objectlves In a lime of drama and uncertainly never previously experlenced by the Luther King House Educational Tnjst. The Board has conllnued lo meet regularly although, throughoul the year under review, meetings of the Board and the Flnance and Managemenl Commitiee havo Gontinued to be held by Zoom. There have been changes lo the Board during Ihis period with Jenny Mills joining the Board as a represenlalive of the United Reformed ChurGh ir) Oclober 2020, and Theo Akano joining the Board as an independent member in July 2021. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 The Board has been vigilant irb overseeing all the activities of Luther Klng House and congralulales all the staff and our key education81 partners in their continued endeavours lo mainlaln our vision and hold fast lo our values and standards in a fasl-moving and challenging environment.11 remains a pleasure for me lo chair a hard-worklng Board supporting the President and a quality staff team as we seek lo serve the Chrlslian community of the North and Midlands. Kellh G Jones Chalr LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 Aims and oblectlves The objeGts of the Trusl are.. The advancem6nl of education In areas of C￿lsI￿n fallh, practice and dialogue and In particular bul without limltalion.. The provSslon of learnlng opportunities for members of thurches and other interested partios,. The sharing of Iheologlcal resources with and among local Ghurches andcommunilies., The preparation ol persons for accredited forms of ministry., The provision of opportunities for posl graduate research., The provlsion of an educational eslablishmenl together wilh anclllary servlces,. and To advance education g&norally The vlslon of the Trust may be summarised as lo provide a learnlng Tesource and a flexible resid6nllal facillly to enable the Partnèrship lo: Be concerned w￿h theological educatlon lo help all live responsibly and creatively in plural society., Encourage people lo shape Ih8lr personal and communal futures Ihrough respon55ble citizenship,. Be a centre ol excellence at all levels of its work., Have a particular concern for Chrislian mission In an urban sodoly, by bulldlng an ecumenlcal network of support and shared resources,. Create cornmunilles of learning. worship. justice and liberatlon., Express beliel in one God. one world and on8 people,. Be open lo learnlng with poople from a wlde range of underslandlngs. In81ghls and commitments.. Develop inlernallonal1Snks for mutual learning wlh Ihe world church,- Integrate learning from different disci￿lneS, faiths. personal and feporled experi8nce in church and pollliGal111@', and Engage wllh scriptures, past and present Chrisli8n Iradilions, the world church. other faSlh communities and contemporary oxpcrienGts and Ihinking. The facilllies al Luther Klng House include.. Study and offic& facilities for the academic and administrative staff of those Member Bodles based al Luther King Centre., Resldenlial accommodation and study facililles for students of Member Bodles as requlred., A dining room providing breakfasls. lunches atld evening meals., Soclal provision Including sludenl kitchen & laundry facllllles and a larg6 lounge., A learning resources facility including books, periodicals and Inlemel access,. and A chapel for community worship on an e¢>Jmenical basis. When the facilllies of the House are not belNJ fully ulilised in pursuit of the Trusl's core aclivllles, spare capacity is marketed lo olher persons and 1)crfl￿s. Any surpluses arising from this 2clivity are re-lnvesled in the Trust's core aclivilies. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 Public 88nafit Statement The Trust provides university validated courses of theological education for the benefit of any who are academically qualified, not only for those training for accredited mlnislrles in the church. Fees are chargad, though these do not cover the full cost of providing the 5ervic8. Steps are taken lo onsur8 the fees do not exclude the poor- bursaries afe available. and the Tnjst works within a general environm8nt of govemmenl provision designed lo support poorer slud8nls and widen access. Brllish residents of foreign nalionalily are charged only al the domestic rate. The Trusl has, in fact, a signlflcanl number of non-tradilional learners amongst ils studenls, and 8 growing number from mlnorily ethnic groups. Through the development of flexibl8 and distrlbuted learning, the Trust is also $8eking lo overcome further barriers lo learning. The Trust's academic staff also contribute to th8 delivery of simllar courses by olhei associated theological in$lilulion5. The Trust works wlh churches in equipping them and their leadership for their roles in the communlty. Among those il trains, for Instance, are church related community workers. ￿0$e whole purpose Is communlly d8velopment. Those tralning for accredited min181fies are seldom able lo use Ihelr educallon lo advance Iheir own material inleresls.. thei( sole reason for entering trainlng is to 56rve the n6eds of local congregallons and communitbes. Many do 80 in training placements throughout Ihelr Course of educallon. The Trust's fa¢illlie$ are of benefll lo a wlde range of the pubtic. Membershlp of Ihe Ilbrary Ss available lo all for an easily affordable annual charge. When Government r651ricllons permit, a wide variety of gfOUPS use the leachlng room8 for learning and Iralning events,. the Trust makes a point of making ils educationally equipped meeting rooms vAdely available when not needed for Ils own courses and does so for charllles and churches al reduced rates. We have complied with the duly under the Charilles Act lo have regard lo the publlc benefit guidance publi8hed by the Charity Commiss￿n. Achlevement8 and performance The Trust's Gharilablo objective is the advancement of education in areas of Christian faith, practice and dlalogue and the challenge lo this objecllve from factors outside the organisalion continues. Both full and part lime courses of study are offered al undergraduate afKI poslgraduale levels alongslde a Diploma of Higher Education 3nd Certificate of Higher Education. Despite the ongoing challenges and disruption of Covid. sludenl numbers have remained generally stable bul there has been a slow decline in the number of BA sludenl. Our sludenl body continues lo reflect a broad ethical and cultural diversity, and many do nol have English a5 their first language. Sludenls are supported by our academic staff and through the learning and resource cenlre. This laller offers support through study skills and proof-reading. Since March 2020 much of the leaching and18aming has been achieved through e-learnlng. Evènts were hold lo equip our academic siaff for on-line teaching and lo improve their skill base. 11 ha5 been the focus of our academic team lo ensure that all students have b8on able lo lake full advantage of the resources provided and extra support has been offered. where necessary. This approach has had lo continue with the enduring ifflpacl of Covid and has created new challenges and opporlunilies in supporting and encouraging individual students. The use of online learning has also provided opportunities lo explore new ways of engaging wilh our students and valuable learning opporlunilies for 311 staff. The Pre8ldenl and staff have worked hard to achievo, as best as possible, a sense of community and lo promote collaborative working amongst the sludenl community. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 LKC is registered in the 'Approved Ifee cap), category of the Office for Students. LKC holds the Bronze award from TEF. The Trust has, perforce of th8 Covid-19 pandemic, been focused on supporting slud8nls through on- Ilne learning and maintaining financial viability unlil such time as we are able lo re•open our facilities, resume face lo face leaching and learning and On￿ again provide sludenl and publlc acc888 to our Ilbrary resource. For a second year our operalion has been challenged and adversely affected by the Government reslriclions. This in turn has created unique financi81 pressure with the loss of slgniflcant revenue from Bed, Breakfast and Conference facililies. In awordance wilh the decision of the Board, LKC has oblain8d validation with Durham Unlverslly and Common Awards. We continuo lo èxplore an appropdale partner for our Research programmg. The ¢ontlnulng requlrements of GDPR are recognised and 8mbod￿d with our processes, polbie8 and procedur&s. The slgnlflcant drop in our income ha$ nol allowed us lo conllnue with the upgrading of our bedroom stock and all bul essential capital projects have b8en shelved unlil our revenue stream has re¢overed from Governmanl restrlctsons. The lollowing key eduGalDnal obje¢Uve8 were eSta￿l$hed for 2020-21, together with Indl¢8lors of how these have been mel.. Ob Broaden and deèpen Ihe expertence and pracilce of e.leamlng Indlcalors of Achievement All academic staff have been developing their skllls in designin9 and offering e-learning packages for Ihoir academic discipline. Student leedback has been ver sillve. Work on Ihls18 on-wing and wll bo conclud8d In 2022 This Is al an early slago, bul Ils purpose wlll enable us to p18n for future growth and fln8ncial Stabilily. Plans for now inllialives in BA recruilmenl are bein develo We are continuing ID look al ways In which we night allract a broader sludenl base bulldlng on the experience of e-learning and further devo10 resence our online learning￿._..- Find a partner for the LKC Research ramme To work wllh our partner colleges In predicling student numbers for the future. To broaden our sludenl base. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 Financial revl•w The Covld reslriclions affecting our Bed, Breakfast and Conference business has resltlted in a signrficant fall in the Group's income. Our focus has been on managing cash flow on an almost day lo day basis. This approach has lyprfi&d our financial monitoring over the past year and has only begun lo be eased by the relum lo our Bed and Breakfast bus1r￿S from July. Tho Statement of Flnancld Acllvitles for the Group The focus of concern Ihrou9houl the year has been lo enable Luther Klng House Educational Trusl lo oonlinue as a wing concern during lockdown and lo this end we hav8 been in regular discussions with our principal stakeholders, Northern Baptist College, and the Northern Collegg Iunilod Reformed Church, Congregational Fedèration and Moravian Church) lo provide sUPPOrt lo ensure we could continue operating until wa are abl& lo r6-Start accommodation. ca181ir)g and conference services. The initial support has included the two Colleges facililaling d8ferr81 of interest paymonls on loans and loan capital on funds pr&viously advanced for improvements lo Ihe premises al Brighton Grove. A further line of support has been agreed with Ihe iwo Colleges for a line of credll which has b8en accessed due lo the continuing loss of our Bed, Broakfasl and ConferenGe business. Thls provl8lon Is regularly monitored and specific ma¢ling5 be￿een officers of the two College govornlng bodles and the Chair and President of Lulher King House Educational Trust ensures that Gash flow and the operation of Luther King house continues in a sustained ￿dy. Both Colleges have Issued le116rs of support for the Tru51 exlending until 2028. Thè Government lockdown prohibiting the Luther lQng Cenlre from offerlng accommodation and calerlng Services severely reduced income from that provision. Th8 Trust was able to recover 23010 of staffing costs through the Government's furlough scheme. At the end of the year the losses b6fore lax incurred were-. Charity Subsldiary £140,830 £ 23,410 Resulllng In an over811105s of £164,240. In the Ilghl of Ihls year end position, we hav8 experlenced a negative worklng capital posillon In the Balance Sheel, and as the Trustees anliupaled when lockdown was in place. the bank balanoe was £161,745 al the end ol the year. Reserves pollcy and going concem The lo121 level of reserv8s al yoar-end amounted lo £778,852 (2020 £937.239). The Trus19es are responsible for ensuring that tho charity mainlains an appropriate level of reserves lo moel assessed risk and lo manage cash flow. In Ihe currenl uncertain climate. the priority has been regularly ensuring that Ihe Trust has sufficionl cash flow lo meel obligations. Although the Trust seeks lo maintain sufficient reserves lo meet 3 months, worth of njnning expenditure, currenuy approx. £217.5k, the current level of free reserves is calculated lo be £15.920 (2020 - £16.5541. Howev8r. the Trust will continue lo work each year lo increase the level of free reserves. The Trustees continue lo review areas, particularly within the accommodalion area of the group, where incre8sed efficicncies can allow free reserves lo inorease lo the largel level and this will be particulady pertinent In tha ¢omirvJ year as we rewver from the pandemic. LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 The Trust finances ils operations through a mKiure of retalned profits and college loans. The management's objectives are lo relain sufficient liqui¢J funds to enable the company to meet ils day lo ay obllgations as they fall due. This policy has been challenged during the year because of th8 Covid- 19 global pandemic and the Trust has had to recourse to the governing bodies of the two major consllluenl colleges for relief provision on loan repayTnent an¢J a commilmenl to fvrther loan support. The Trust makes liltle use of financial instwmenls other than an operallonal sterling bank account and so Ils exposure lo price rlsk, credit risk, liquidity risk and cash flow risk is not material for the assgssmènt of the assets, Ilabilities, financial posillon and nel Incomin￿0￿(goIng resources. The Iru$tees are Tesponslble f(* ensurlng that the charity maintains an appropriate level of reserves lo moel assessed risk and lo manage cash flow. In the currenl uncertain climate, the priority has beon regularly ensuring Ihal Ihe Trust has SLrfficienl cash flow lo meet obligations. The easing of reslricllons from July allowed th8 Trust lo r￿￿MmenCe offering accommodation, eonferer)c6, and food servl¢e8. However, Ir2dlng wlll be challenging as public confidence starts lo re-build and people feel confldenl enough to travel agaln. Nevortheless, the lasl two months of thls finanGial year gave ￿oUndS for optimism ￿th an overall revenue of £94.496. Becauso 8 8lgnMcanl Income sour¢e for the Trust Is through the bed and breakfast bu51ness of Ils subsidiary "Luther Klng Centre Conferenco and Accommodation SeNices Ltd.. The Covid -19 restr￿140nS signilicanlly reducgd the Income fr(xn Ihe subsidiary and during the country wide lock-down tho subsidiary had no Income stream. To support the business during this Ilme the Trust look the following acllons.. Made full use of the Government furtough s¢hem8 On the existing loans wlh Ihe existing slakeh)Idercollege8 th8 Trust negollated a twelve month pause Sn repayments All non*¥senlial capital expenditure was slopped An even slriclor monitoring of cash flow Slafflng hours were reviewed and where necessary reduced Conversallons taken place with the Tnjslees of the Northern College and Baptlsl Collego about the provSslon of108ns as requlred and vllhln agreed and cleady defined parameters. In addillon lo these aclions the Trustees assessed several slralegic options and concluded that the currenl model dependlng upon the subsldiary lo return lo profitabllily vras slill the Inosl viable opllon for the future despite the current uncertainly. We note Ihe followlng regarding the operatlon ol the LKHAS subsldiary. Only a relatively small percentage of tsur bu$lneg8 18 drawn from loudsm and hence less affeG19d by the lockdown. Manchester is a growing city wlh a range of enlertainmenls and Iwo Premier football clubs which means that once the pandemic is conlalned the polenlial for n&w bookings is high We havo a gond strong cadre of loyal customers and are well plac¢d lo access the city The current model has shown a slgnificanl revenue growth over the years Vve have been a succosslul venue for small conferences and again, historically. wo have shown that we have a slTong presence in Ihis field We regular review slaffing arKI accommodation prices lo bo the most cost effective. Based on this assessment the Truslee5 believe that the Trust Is a going concern and that, with the gradual recovery of the accommodation services. we can (x)ntinue for the foreseeable future la 10 LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 mlnimum twelve months fr(Im the date of the signing of these aixounls). In addilk)n, we are not aware of anything beyond that dale which might rause an internjplion. Plans for future yèars We have reviawed the staff lo minimise costs whilst continuing to KKovide a good standard of servlca lo all our current and future dienls. Once we return lo profitability our inlenlion is to conllnue our bedroom upgrades. We continue 2 slr8legy for the marketing of LKC Open College that admits sludenls dlrecl to LKC rather than through one of ils consliluenl colloges. This indudas work on the w8bsit6. on publicity. and on ways of promoting the LKC brand. Reference and admlnlstrative dota118 Charity number.. Company number.. 1082375 04065581 Secretary and Reglstergd Offlce: Mrs Clalro McEwen, Luther Klng House, Brighton Grove, Rusholme. Manchester, M14 5JP Our advl8er8'. Audltor$ Crowe UK LLP, 3rf Floor. The Lexi¢on, Mount Street, Man¢hesler, M2 SNT Bankèrs CAF Bank, 25 Kings Hill Avenue. Kings Hill. Wesl Malling. Kent, ME19 4JQ Dlrectors and tru8tee8 The dlreclors ol the charllable company {Ihe charSlyl are its trustees for th& purposes of charity law. The Iruslees and officers serving durfng th8 year and since the year end wero as follows: Revd Dr Kellh G Jones Revd Dr Andrew J Lunn {F} Revd Dr Clara N Rushbrook (F) Revd Charles J Nevin Revd Dr Simon J Oxley IF) Revd Dr Rosalind M Selby IF) Dr Jacqueline G Hirst Ms Erica M Dunmow Revd Anthony Flowe Revd Jenny Mills lappoinled 8 October 20201 Bishop Theo Oluwasegun Akano {appoinled 8 July 2021) IF) = Directors appointed by a Founder Member according lo its rights defined in the companvs LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 Artlcles of AssoGiaUon. Key managemont Porsonnel President Finance Managarl Company Secretary Operations Managgr AcademSc Regislmr Llbrarlan Open College Princlpal Revd Graham Sparkes Mrs Claire McEwen Mr Martin Cloves Miss Clare Richardson Miss Kalle Paton Revd Dr Kim Wasey struoture, Governance and Managemont Governlng Documenl The Trust 1$ 8 charitable company Ilmlled by guarantee and was sel up on 1 September 2DOO. 11 Is governed by a Memorandum and Artides of Association. The charily was created lo Garry on and lurlher develop the work of Ils two predec£ssor charilies, the Manchester Christian Inslilule Icharily number 5153581 and the Northern Foderalion for Training in Ministry Icharlly number 5174961. Both these charllies transferred Ihelr nel assets as a131 Augusl 2000 to the Trust and wore then dlssolved. The Memorandum and Artlcles of Associatlon were updated in April 2015. Every member FKomises, if the Chadly is wound up whlle helshe is a member or within 12 months after ceasing lo be a member.. lo pay such amounls as is requlred up lo £1 towards the costs of dlssolulion and the liabilitles incurred by the Charily while the conlrlbulor was a member. The concept of the Partner5hlp forTheologlcal Educallon was bom in 1997. under the umbrella of tho Manchester Chrlsli8n Inslilule. In September 2000. the member bodies of Ihe Partnerslilp became Ihe meinber bodies of the Trust. The Partnership for Theological Education continues lo be the operational narne under whlch the Trvsl Carries out some of ils educational aclivi1Ses. The financlal basls of the Trusl was the agreement of the four Fwnder members lo provlde lo the Trust the land and bulldings of Luther KSng House vaSued al £700,(X)O and cash lotalling£500,000. The origlnal land and buildings were transferred from Northern Bapllsl College lo a charlly called the Luther King House Property Trust under a Charity Commission Scheme (case number 1802211 daled 27 June 2002. Luther King House Property Trust is a geparato charily from tho Trust, bul Ilio TrLJsI is Ils only Iruslee. The Charity Commission has given permlssion for the two char51195 to be accounted for as if they were a Single entity. Appolntment of trustees Where a vacancy arises for a direct￿ apFM)inted by 8 Founder Member organi8alion, the organisalion concerned makes the appointment in accord8nce wlh Ils own internal processes. When a vaGanGy arises for an independent director. the Board considers any gaps In Its Gurrenl expertis& and experience and in the various consliluencies ropresenled.lt also has concern for ils gender and ethnic balanco.11 then identifies a person or persons who could fill some ol Ihose gaps. An invitation is issued. Training of new directors includes the provision ol a comprehensivo induclio pack. The Board encourages and supports directors who wish lo pursue oppgrlunilies ihal wll help them fulfil their responsibilities as Iruslees. A new proloGoI has been developed lo cover the appointment and re-appointment for all members 12 LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 of the Board. Changes to the tmstee body During the year we appointed Iwo new members of the Board. Bishop Theophilus Akano lo develop our work and relalionshlp ￿th the blaek led churches. Also. the Rev. J8nny Mills representing the URC following the resignation of the Rev. Fiona Thomas. Trustee Inductlon and tralnlng Induction is lallored for new Truslees due lo the very dtfferenl needs of Independent and Foundation Trustees. Organlsatlon The Board of Trustees admlnlslers the chartty. The Board meets on al least four occaslons each year. Responsibillly for governance remain5 with the Board of Dirèctors and its Finance and Monilorlng commlllee. whlch meets quarterly and includes an inl8rn81 audit function lo check on not only flnancial and elhlcal mallers, but also policles relating lo equal opportunities, child protection and staff terms and condiliong. There Is a separate Health and Safely commiitee which focuses on compliance and care of staff. Responsibility for day lo day management is entrusted lo the Operations commlllee, led by the President la full lime salaried officer}. The committee indudes Ihe Principals of the three College5 that participale In the Trust's educallonal activity and provide most of ils leaching staff. Operalions focuses on implemenlalion. C￿￿dInatiOn, staff management, staff development and deployment of resources. There are two academlc commillees lo manage th8 BA. MA and Research programmes, chalred by a member of the acadomic staff, and allerKled by tho staff who leach on the programmes, sludenl represenlalives and represenlalives of the University of Manchester and the Unlversily of Durham and Common Awards as appfopriale. Related partles and cooperatlon wlth other organisations The Iruslee5 do not receive remuneration in relation to Ihoir role on the board, howev8r the Board inrlude5 members who are employed by member organisalions and who are members of the leaLhing learn delivering educational serv￿eS for Ihg Charity. This aspect of their work is remunerated. A new company, Luther Klng House Conf6renGe and Accommodallon SeNicgs Llmiled, was sel up on 27 July 2009. This company is a wholly controlled subsidiary of the Tnjsl, Ils purpose Is lo carry on the conference and accommodalion business al Luther King House and il operates under a licence granlod by the Trust. 11 began trading on 1 Seplembor 2009. The dlreclors of the main Trust are also directors of the subsidiary. The directors, report and the accompanyiiig financial slatemenls concern the combined rosulls of Ihe Group for the year lo 31 August 2020. Balance sheets for th& Group and for the Charity are shown on page 17. Charlty Governance In July 2018 the Board agreed lo adopl the 'Charity GOVernar￿ Code. with additional principles relating lo Higher Education. Whilst this had been discussed in the past and generally reflected current 13 LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 praGlice, the Board recognlsed that il would be 8ppropriale lo formally adopt the code and pul In place procedures for Ils implemenlauon and regular monitoring. This latter activity would be achleved by an annual review in the Autumn al the sarne lime as all other policies were reviewed. The Board agreed the following affirmations relating lo ils academic slaff.. That LKC affirms that ils academic staff have freedom within the law.. lo question and lesl rec8ived wisdom., and lo pul forward new ideas and controversial Of untx)pular opinions wthoul placing themselves In Jeopardy of losing the lobs or privileges they may have at LKC. That LKC afflmis ils commitment freedom of $￿ach and th8 6ncouragemenl of debate of all kinds as long as this lakes place within the law 2nd will lake such $18ps as may be necèssary to secure such freedom. Pay policy for senlor staff Staff pay is agreed by the Board on recommendalK)n of the Financo Commlllee. Remuneration for senior staff is based on role, experience and pertormance.11 is reviewed annually and nomially Increased in accordance with average earnlngs. Rlsk Management The directors rnalnlaln a register of the malor rlsks whlch the Tru81 faces, and they revlew this reglsler regularly. Each rlsk Is assessed for Ils sev6rily and ils Ilkellhood and for the effectiveness of the slep$ taken lo manage the risk. The Register is regularly revlewed by the Finance and Monilorlng Committee and risk management is now a standing item on the agenda of the LKHET Board meellngs. In reviewing the Register, the dlreGlors consldered Ihe most serfous risks facing Ihe Trust, and the actions taken to mlligate them are: Fallure lo malnlaln Income lo suslaln core aclivilios Annual budgets are prepared by key management personnel and comparlsons to aelu81 are carefully monitored Ihrouglioul the year. Since Ihe panéomlc cash flow is monitored on a daily basis and 3-year forecasts are now part of the annual budgoling process. There ar regular rev￿WS of ¥tralegic polKie$. Lack ol sludenl numbors Sludenl recruilmenl is monllored closely, and publlclty 2nd markeling Inllialivès are carr oul. The Trust ensures that academic programmes are meeting the reouiremenls of th8 respect￿8 Colleg85 and denomlnation5. Change in or lermlnalion of validation arrangements The Trust maintains slrong inslilulional links and ensures Ihal high quality programmes are mainlainod. Th& arrangements thal are in place are reviewed on a regular basis. Fallure lo adequalely maintain and improve tho property Regular malnlenance and improvement work are budgeted for and carrled out. The property is rpgularly inspe¢led. and ne¢essary work is carelully priorilised. Trustees. responslbllltlos In relatlort to the flnanclal statements The directors aTe responsible for preparing the Directors, Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards Iuniled Kingdom Generally Accepted Acc¢)unling PraC1￿e). Company law requSres Ihe directors to prepare financial slalemenls for each financial year which give a true and fair vlew of the stale of affairs of the charitable company and group of the incoming resources and appllcalion of resources Including the income and expenditure, of the group for that 14 LUTHER KING HOUSE EDUCATIONAL TRUST DIRECTORS, REPORT YEAR ENDED 31 AUGUST 2021 podod. In preparing these flnancial slalemenls the directors are requlred to.. SeleGI suitable accounting pol￿1e9 arKI then ap￿Y them consistently- Observe the methods and principles in the Charities SORP- Make Judgments and eslimales that are reasonable and prudent., Slate whether appllcable UK Accounting Standards have been fdlowed, subject lo any material departures disclosed and explained in the financial sl8temenls,' and Prepare the financial slalemenls on the going concern basis unless il is inappropriate lo presurne that the charllable company and group will continue In business. The directors are responslble for keeping proper accounting records that dlsclose with reasonable accuracy al any lime the financial position ol the charitable company and group and enable them lo ensure that the financi81 statements comply wlh the Companies Act 2006, They are also responsible lor safeguarding the assets of the charitable company and group and hence for taklng reasonable steps for the prevention and detection of fraud and other irr6gularilies Statem•nt as to dlsclosurè to our audltor8 In so far as the Iruslees ar& aware al the lime of approvlng our trustees, annual report.. there18 no relevant InfoThnalion, b8lng Snfonnallon needed by the auditor In conn8cllon wllh preparlng their report, of which the group's auditor is unaware, and the Iruslees, having made enqulrios of fellow dlrectors and the group's auéllor that they ought lo have Indivldually taken, have each taken all steps Ihal helshe is obliged lo lake as a director In order lo make Ihem5elv8s aware of any relevant audit Information and lo eslablSsh that the auditor 18 aware of Ihal informath)n. Small company provl8lon8 This report has been prepared in acC￿da￿ with Ilie specL91 prov181on8 relallng 10 small comp8nle¥ within Parl 1 S of th8 Companies Act 2006. 8y order of tho Iruslee8 Charle8 Nevin Director 6th January 2022 15 LUTHER KING HOUSE EDUCATIONAL TRUST INDEPENDENT AUDITOR'S REPORT YEAR ENDED 31 AUGUST 2021 Opinion We have audited the consolidated financial slatemenls of Luther King House Educational Trust lor the year ended 31 August 2021 which compris8 the Consolldaled Slalemenl of Financial Aclivilies, Consolidated and Charity Balance Sheet. ConsolKlalod Cash Flow Slalomenl and notes lo the financial slalemenls, induding signlficanl accounting policies. The financial reporting framework that has been applied in thelr preparation is applicable law and United Kingdom Accounllng Standards, Including Financlal ReFK)rting Standard 102 The Flnancial Reporting Standard applicable in the UK arKI Republic of Ireland {United Kingdom Generally Accopled AG¢ounllng Practice). In our opinlon, the fInar￿la1 statements.. glve a true and fair vlew of Ihe slate of the gr(yJp and chadlabl8 company's affairs as al 31 August 2021 and of the group's in(x)mlng resourcos and applIcal￿n of resourGe$, Including ils ncome and expenditure for the year Ihen ended.. have been properly prepared In accordarjce wllh Uniled Kingdom Generally Accepted Accounting Praclice., have b68n prepared in accordance with the requlremenls of the Companies Act 2006. Bas18 for oplnlon We conducted our audll In accordance with Inlemalional Standards on Audlllng (UK) IISA8 IUKII and applicable law. Our responsibilities under those standards aTr further descrlbed In the Auditor's responsibS1ilies for Ilie Eudil of the financial slalemenls section of our report. We are Independent of tho group in accordance with the olhical requirements Ihal are rel8v8nl lo our audit of the flnancial 8lalemenls in the UK, including the FRC'S Elhlcal Standard, and we have fulfilled our other ethical responsibilities in accordance wlh these requirements. W6 believe that the 2udll evldence we have oblalned is sufflclenl and appropriate lo provide a basls for our oplnlon. Conclu8lons rglatlng to golng concgrn In auditing tho financial slalemenls, we have conduded Ihal the director's uso of the going concern basis ol accounting in the preparation of the financl8181alemer)Is is approprialo. 8ased on the work we have performed. we have not Idenirf￿ any material uncerlalnlies relating lo events or conditions that, individually or colleclivdy. may cast significant doubl on Ihe charitat￿e company's ability lo continue as a going conGem for a perlod of al leasl twelve months from when the linanclal slalemenls are aulhorised for Issue. Our responsibilities and the responsibilllies of the dire¢lors wilh respect to going concern are described in the relevant sections of this report. Other Informatlon The Iruslees are responsible for the other informalion contained withln the annual report. The other informallon comprises the infom)alion included in the annual report, other than the financlal slal6menls ar)d our auditor's report Ihereon. Our opinion on the financi81 statements does not cover the other information and. except lo the exlenl olherwso explicitly 51aled in our report, we do not expr88s any form of assurance condusion Ihereon. 16 LUTHER KING HOUSE EDUCATIONAL TRUST INDEPENDENT AUDITOR'S REPORT YEAR ENDED 31 AUGUST 2021 Our responsibility is to read th& other information and. in doing so, consider whelhor the other Information is materially inconsislenl with the financial slal&ments or our knowledge oblalned in the audit, or otherwise appears lo be materially misslaled. If we identrfy such material inconsistencies or apparent material misslalements. we are required to determine whether Ihls give5 rise lo a material mlsslalemenl in the financial slalemenls themselves. If, based on the work we have perfom)8d. we conclude that there Is a material misstatement of this other informalk)n. we are required lo raport Ihal fact. We have nolhlng to report In this regard. Oplnlon on other matter pre8crlbed by tho Companle8 Act 2006 In our oplnlon based on the work undertaken In th8 course of our audll the Information glven In the trustegs, ￿port for th8 financial year for wh￿h the consolidated flnancl818ts18menls are prepared is ¢onsistenl with the financi81 slalemenlg,. and the Iruslees, report ha$ been prepared in accordance with applicable legal requirements. Mattgr8 on whlch we are requlrod to report by exceptlon In Ihe Ilghl of the knowl8dge and underslandlng of the group and the charitable company and its envlronment obtalned in the course of the audit, we have not klenllfied material mi8slalements in Iruslees, reporl. We have nolhlng lo report In fespect of the following matters In relallon lo whlch Ihe Companies Act 2006 requlres us to reporl lo you rf, In our oplnlon.. adequate accounllng records have not been kept by the charllable company, or relums adequate for our audll have not been received from branches not vlsiled by us., or the financlal 81alemenls are not in agreement wilh the accounting records and returns., or cerldin disclosures of truslees, remuneraiion specified by law are not made; or we have not reeeived all the information and explanations we reoulre for our audll., or the Iruslees were nol entitled lo prepa￿ the financial slalemenls in accordan￿ with the small companies reglme and lake advantage of the small Companies exempllon in preparing the Iruslees report and from th6 requirement to prepare a siralegic report. Responslbllltles of trustees As explained more lully In the tru8lee$' responsibilities stslemenl sel out on page 14, the Iruslees are responsible for the Pfep3rallon of the finanGial slalemenls and for belng satisfied that they yNe a true and fair view. and for such inlemal control as Ihe Iruslees determine is necessary lo enable the preparation ol financi81 slalemenls that a￿ free from material misstatement, whether due lo fraud or orror. In preparing the financlal slalemenls, the trustees are responsible for assessing the charitable company's ability lo continue as a going concern. disclosing, as applicable, mallers related lo going concern and using Ihe going concein basis of accounting unless the Iruslees either intend lo INuidale the charitable company or lo ce8se operations. or have no realistic alternative lo do so. 17 LUTHER KING HOUSE EDUCATIONAL TRUST INDEPENDENT AUDITOR'S REPORT YEAR ENDED 31 AUGUST 2021 Audltor's responsibililios for the audit of the financial statements Our objectives are lo obtain reasonable assurance aL￿ut whelher the financial slalemenls as a whole are free from material misslalemenl, whether due to fraud or error, and to issue an auditor's retx)rt that includes our opinion. Reasonable assuran￿ is a high level of assurance. bul is r)ot a guarantee that an audil conducted in accordance wilh ISAS {UK) will al￿ays delecl a material misslalemenl when il exisls. Mis51alemenls can arise from fraud or error and are considered material rf. individually or in the aggregate, they could reasonably be expected lo influence the economic decisions of users taken on the basi$ of these financial stalemenls. Exlgnt to whlch the audit was consldered capabl& of detecting irrggularities, includlng fraud Irregularities, In¢luding fraud. are inslances of non-compliance with laws and regulations. We identified and assessed the risks of material misslalemenl of the financial slalemenls from irregularities, whether due lo fraud or error. and discussed Ihese between our audil team members. We then designed and performed audit procedures iesponsive to those risks, including obtaining audit evidence sufficient and appropriate lo provide a basis for our opinion. We obtained an understanding of the legal and regulatory frameworks wlhin which the group and charitable company operates. focusing on Ihose18ws and regula110ns that have a direct eflecl on tha delerminalion of material amounts and disclosures in the financial slalemenls. The laws an regulations we considered in this conlexl were the Companies Acl 2006, Charities Act 2011 and employment legislation. Auditing standards limit the required audil procedures to identify non-compliance with these laws and regulations lo enquiry of Ihe tnjslees and other man8gemenl and inspeclion ol regulatory and legal correspondence. if any. We Klenlified the 9realesl risk of material Impact on the financial stalemenls from irregularities. including fraud, lo be the override of controls by managernenl and completenes5 of income. Our audit proLedures lo respond lo these risks ineluded enquiries of managemenl abovl their own identification and assessmenl of the risks of irregiilarilies. sample lesling on the posting of journals. reviewing accounting eslimales for biases, sample leslino from sludenl record documer)talion and sample IEisling of accommodalion records lo the consolidaled financial slalemenls. Owing lo Ilie inherent limitations ol an audit, there is an unavoidable risk that we may iioi have detected some rlldlerial mis51alemenls in Ilic Itnancial slalemenls, even though we have property p13nned and performed our audit in accordan￿ will., iudiling standards. We are not responsible for prevenlirig non-compliance and cannot be expected lo delecl non-compliance with all laws and Tegulalions. A further ¢Jescriplion of our responsibililies for the audit of the financial slalemenls is located on the Financial Reporting Council's website al.. www.frc.o .U￿aUditorsreS nsibilities. This descripllon forms part of our auditor's repori. 18 LUTHER KING HOUSE EDUCATIONAL TRUST INDEPENDENT AUDITOR'S REPORT YEAR ENDED 31 AUGUST 2021 U80 of our report Thls ￿port Is made solely lo the group and charitable companWs members, as a body, in accordance wflh Chapter 3 of Part 18 of the Compan6es Act 2006. Our audtt work has been undertaken so that we mlghl slate to th8 group and charltabl8 companls members those matters we are required lo st21e to them In an auditoffs report and for no other purpose. To the fullest exlenl permilled by law, we do not accept or assume responslbllily lo anyone other than the group and charitable company and the group and charitable compan1$ members a8 a body, for our audll for Ihls report, or for the oplnlons we have formed. VScky Szullsl S8nlor Stalulory Auditor For and on behalf of Crowe U.K. LLP Slatulory Auditor The Lexicon Mount Street Manchester M2 5NT I Ith February 2022 19 LUTHER KING HOUSE EDUCATIONAL TRUST CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (including Incorne and Expèndlture account) YEAR ENDED 31 AUGUST 2021 Unr08trictod R¢strlcted Total Fund8 Total Funds lte Funds Funds 2021 2020 In¢omo: Income from charllable gctivities." Acadamlc 8nd houslng a¢llvllles 497.843 497,643 512,917 InGome from other tradlng &¢llvlll8s.' Commerclal Iradlng op8rallon8 208.686 208,686 493,110 Investment income Total In¢oma 706 329 706 329 1006 028 Expondlture Costs of r8islng funds Commer¢lal trading operations 212.596 212,596 345.441 ExpendAture on charltable gctwitles: Academlc and houslng aC1￿ll1eS 520.086 137,888 667,972 844,838 Total expendlture 137 886 1190 079 Nat Incomellgxpondlturel bofore tax and nel mov•menl In funds for th6 year 9 (26,3531 1137,886) 1164,239} 1184,0511 Tax expense 11 5,852 5,852 Net Incomg11gxp8ndlturel (20,5011 1137,886) 1158,387} 1184,0511 ReconclllatSon of funds Total funds brought forward 99,353 837.886 937,239 1,121,290 Total funds carrl8d fop•vard 700 000 778 852 937 239 The slalamenl of financial aclivilles Includes all gains and losses recognBed In the year. All Income and expenditure derive from continuing actlvities. 20 LUTHER KING HOUSE EDUCATIONAL TRUST GROUP AND CHARITY BALANCE SHEETS Company No: 04065581 YEAR ENDED 31 AUGUST 2021 Gmup Charlty 2021 2020 2021 2020 Note Non-current assets Deferred Tax asset Tanglble assets 11 12 1.340.432 1398 185 1340 432 1,398.185 Total Nonrl-lerm Instrument conslilule a financing Iran8aGlion, like the payment of a trade debl deferred beyond normal business terms or flnanced al a rale of Interest that 58 not a market rale or In case of an oul-dghi short-lerm loan nol al market rate, the financial asset or liabllily Is measured, iriilially, al the pr&senl value of Ihe fulure cash flow di8counled at a market rale of interest for a simi5ar debt instrument and subsequenuy al amortised cost. Financlal assets that are measured al cost and amortised cost are assessed al the end of eaGh rgporting period for objective evidence of impairment. If objective evidence of impaimienl is found, an Impairment 108s 58 recognised in the Slalemenl of Financial ACt￿llY. For financial assels measured al amortlsed cost. the impalrmenl loss Is measured as the difference between an asset'5 carwng amoulll and Ihe pffjsenl value of eslimaled cash flows discounted al the asset's original effective inleresl rate. If a financial asset has a variable interest rate. the discount rale for measuring any impairment loss is the current effective interest rale delemiined under the conlraGI. 25 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 For financial asgels measured al cost less impalmienl. th@ impairmenl loss Is measured as the dffference between an ass81'$ carrying amount and best esllrnale. which is an approximation of the amount that the company would re¢elve for the asset rf il were lo b8 sold al th6 balance sheet dale. Flnancial assets and Ilabilllles are offset, arKI the nel 8mounl reported in the Balance Sheet when there Is an enforceable right to $81 off the recognised amounts and there is an intention lo settle on a nel basis or lo realise the asset and setue the Ilability simultaneously. Penslons The company operates a defined contribution penslon 8chem6 for employees. The assets of th8 scheme are held separal6ly from those of the company. The annual cy)ntrlbullons payablo are charged lo the slalfjment of flnanclal aclivilies. pl Capilalisalion Polky The company prepares the finanGlal slalemenls in accor(lance wilh the concept of malerialily. Thereforo, the Company will capilallse costs that arè grealer than the following limlls.. Indivldually have a cost of more Ih8n £1,000, or Golleclively have a cost of least £1,000 where the assets are funcllonally Inlerdependenl. have simultaneous purchase dal&s and are anticipated lo have slmullaneous disposal dales, and are under single managerfal control. Judggmènts In applylng accountlng pollcle8 and key 80urce8 of èstlmatlon uncartalnty The charity makès eslimales and assumptions conc6rning the future. The Finance Commlllee revlowed the worsl-ca5e scenarfo and, combSned wllh the College l&tiers of financial support, concluded that ther818 no malorl81 uncertainly around the Trust's ability lo continue as a golng concern and as such the disGlosures in this area are appropriate. The resulting a¢￿u￿ting e51imales wlll. by definllion, seldom equal Ihe r8laled actual resulls. Tho eslimales and assumptions Ihal have a 8lgnMcant rlsk of causing a malerlal adju51m8nt lo Ihe carrwng amounts of a5sel8 and liabilltles wllhln the next flnanclal year are addressed below. li} Useful economlc lives of larsglble assels The annual depreclallon ¢h8rge lof tongible asseis Is sensitive lo changes In tho eslimaled useful eoonomlc Ilv88 and resldual values of the assets. The us8￿1 economic lives and resldual values are re- ssessed annually. They are amended when necessary to reflect currenl eslim8les, basod on technological advancemènt, future investments, economic ulilisalion and the physical condition of the assets. See note 12 for the Carwng amounl of the property plant and equipment and note 1 i for the useful economic lives for each class of assets. 1111 Impairment of debtors The company makes an estimate of the recoverable value of trad8 and other doblors. When assesslng impairment of trade and other d8blors, managemènt considers factors including the current credit rating of the debtor. Iho ageing profile of debtors and historical experience. See note 14 for the nel carrying amounl of the debtors and associated impawmenl provision. Legal slatus of the Trust The Trust Is a company limited by guarantee and has no share capital. In the event of the charity being wound up, the liability in respect of the guarantee is limited lo £1 per membèr of the charlty. The enlily is a private charitable company, Charity r)umbef 1082375. The registered offico Is Luther King House, Brighton Grove, Rusholme. Manchester M14 &JP. 26 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Incomlng rèsources from charltablè activities 2021 2020 House Income Rent Sundry Income 16,119 135,889 19,269 103,776 152008 123 045 Academlc actlvltle8 College fees College block charges Sundry Income 248,433 72,000 278,908 72,000 38,966 389,872 Total 512 917 Tradlng operatlons and Investment In tradlng company The consolid81ed slalemenl of financial aclNilie8 includes the resulls of Ihe Chadlls whdly controlled subsidiary. The Charity is the sole member of Luther King House Confer8nce and Accommodation Services Ltd, (company number 6973866), a sUppl￿r of bed and breakfast and confarence faGililles.11 pays almost all of ils profits lo the charity by grfi aid. Summaries of the Irading result and balance sheet are as follows: Tradlng re8ult for the year ended 31 August 2021 2021 2020 Turnover 208,686 493,110 Investment income Cost of sales and adminislralive expenses Includlng internal rent of £180,000 232 096 450.441 Prolil (Lossl before lax Tax 8xpense Profil Ilossl for tho year {23,4101 5.852 17.558) 42,670 Amount grfled lo the Charity Retained in Ihe subsidiary Balance Sheet at 31 August 2021 Non-currenl assels Currenl assets Credilors18mounls falling due Mlhln one year) 5,852 33,128 56,167 48,977 48.606 Total nel assets Iliabililies) 17,187 371 Aggregate reserves {17,187) 371 27 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Investrnent incomè Unrestrlcted Total Funds funds 2021 Total funds 2020 Bank interest receivable Analysls of expgnditurè of charltable activitl¢s 2021 2020 Atademlc and house activitles Staff costs Teachlng fees Unlversily reglslrallon Bursarles Books and perthicals Bad debts Rates and water Light and heal Cleaning Insuranco Repairs and maintenance Telephone Office supplles and poslage Photocopying rental Photocopying Gharges Trav&1 Meetings & sundry xps Depreclalion of lixed a8s8Is Support costs Isee note 71 Governan¢e costs (see note 8) 346,147 8,559 31,797 1,265 5,171 (1,5981 30,395 43,167 383,266 11,865 37,800 2,650 17,482 7,805 44,453 39,984 4.837 9,264 21,182 1,157 10,675 1,520 824 638 81,429 66,182 88,884 12,740 7,950 8,739 1,109 9,949 1,033 492 638 29,758 57.754 67.789 9,858 Total acadèmlc and house aGtlvities costs 657 972 844,638 Support Gosts Unrestricted funds Total funds 2021 Total fund8 2020 Loan interest 8aiik charges Irrecoverable VAT President employment costs Finance general cos15 {3,1151 787 15,418 53,935 765 {3,1151 787 15.418 53.935 765 15,749 1,005 17,042 53,951 1,137 Total 67,789 67.789 88,884 28 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Governance c08t8 Unrestrlcted funds Total funds 2021 Total funds 2020 Audit fees Professional fees Trust meetings and expen8e8 7,000 1,395 7,000 1,800 1.39S Total 9,858 12,740 Nèt Incomèl{èxp•ndSturo} for thg year Th1$ Is slated after ¢harglng 2021 2020 Op&rallng1888e - pholocopler afl penslon ¢onlrlbulion$ preciallon Auditor'8 f8es 1.032 56,066 57,754 1,520 61,046 66,182 000 Total 121852 135748 10. Staff co8t8 and emolumènts 2021 2020 Total staff c0818 were as follows W8gos and salados Soclal securlly costs Other pen8lon costs 449,028 34,008 536,501 39,290 539 102 636,837 None of the Trust's employees received remuneration in exces5 of £60,000 in Ihe year12020.' £nil). Penslon ¢osls are allocal&d lo aclivilles in proportlon lo the related skffing cos18 Incurred and are wholly charged lo unreslricled funds. The key rnanagemenl p8rsonn&l of the parent charity, Ihe Trusl, comprise the Trustees, the President. Academic Registrar, Librarian. Finance Manager and Open College Principal. Thg lolal employee benefits of the key managemenl personnel of the Trust were £192,735 {2020: £192,735). The employee ben8fils of the Prgsidenl were salary £44,548 and pension contrlbulions £4,455, lolalling £49.003. The key management personnel of the group comprise those of the Trust and the key management personnel of ils wholly owned subsidiary Luther King House Conference and Accommodation Services Ltd. The key management personnel of LKHCAS Ltd is the Operations Manager whose employee benefits lolal £ 48,161 12020.. £4g8,1611. The employee benefits of kay management personnel for the group was therefore £240.896 (2020: £240,896). Directors received no remuneralion12020.'nil) and woro reimbursed expenses as follows.. 2021 2020 Reimbursement of expenses Keith Jones (travel expenses) 170 29 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Particulars of employeos: 2021 AdminlHouse 2020 AdmlnlHouse Acadomlc No. Academic No. Full lime equlvalenl Average 13 15 18 28 Most of the leaching on the Trust's various courses is provided by employees of olhor bodies. 11. Taxation Deferred lax assets In relation lo conlinuirKJ operations have be6n re¢ogn19ed In re8pecl of the following ilem because11 Is probable that future taxable profits wlll be avallable which the Company can ulilise. The provlsion for deferred taxation, which arose In the year. Is made up 88 follow5: 2021 2020 Tlmlng dWferen¢es In respect of the year.. {5,8521 In the current year the trading subsidiary made a profil Ilossl before tax ol £{23,410} (202D'. £42,670) 12. Tanglble flxed a8¥9t$ Flxtureg Flttlng8 Plant & Equlpment Land and Long Leasehold Property Offlee and Computer Equlpment Bulldlng Improvem9nts Group and charlty Total Cost Al 1 Spplernber 2020 Addillons Dlsposals 169,452 297,846 1.312,393 700,000 2,479,691 Al 31 August 2021 164,740 1312393 700,000 2,468 463 Depreclatlon Al I September 2020 Charge lor the year On disposals 156.048 7.354 4,712 262.979 15.822 6,516 662,480 34,576 1,081,507 57,752 11,228 Al 31 August 2021 158,6go 272.285 697 056 1,128,031 Net Book Value Al 31 Augusl 2021 6.050 19.045 615,337 700 000 1,340,432 Al 31 August 2020 13,404 34.870 649,913 700,000 1,3g8,185 30 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 13. Stock Group Charlty 2021 2020 2021 2020 Stock 1,302 2.619 14. Debtors Group Charity 2021 2020 2021 2020 Trade Debtors Arnounls owed by subsidiary Prepayments 42.210 3,627 1,878 3,627 38,761 42.670 28.694 Of the group trade debtors £ nll {2020'. £nlll was due in over a year. 15. Credltor8: Amount8 falllng duè wlthln a year Group Charlty 2021 2020 2021 2020 Tf8de CredrtOTS PAYE & 50clal security VAT Other creditors Accruals and deferred Income College loans 62,708 8,812 15,161 18,977 19,943 8.840 26,641 18,707 18,431 8,812 15,161 17,578 18,537 8,840 26,641 17,676 119.816 42.619 109,325 39,119 225 473 128,000 169 306 122,063 31 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Credltors.. Amounts falling due aftor more than one ygar Group Charfty 2021 2020 2021 2020 College loans {{} College loans {lil College loans {liil AccruaSs and deferred Income 410.000 67,500 1C(I,CrfJO 410,000 56,250 410,000 67,500 100,000 410,000 56,250 577,500 466.250 577,500 466,250 Colle e loans Included in creditors falling due after more Ihan one year are loans of- £60,00012020'. £60,0001 and £230,00012020.. £230.0001 from Northern Baptist Golleg8. Thls organisalion is a founder member of th6 Trust. The loans are repayable when the Trust hag funds available, or on tho dissolullon of the Trusl. Interest is payable al 1Vo below base rale on the £60,000 loan. An agreement was reached duriftg the year lo reduce the interest rate for the £230,000 loan lo 10/0 above base rate. Previously the ratè used had been based on the Charltie8 Ald Foundation for ils COIF unlls, collared al 49/0 for the £230,000 loan. £70,00012020.. £70,000> and £67,500 {2020.. £56.2501 from Northem College. Thls organlsallon Is a foundor member of the Trust. The £70,000 loan is repayable when the Trust has funds available or on the dissolulion of the Twsl. An agreement was reached during the year lo reduce the interest rale for the £70,000 loan lo 10/0 above base rale. Previously tho rale used had been based on the Charities Ald Foundation for ils COIF unt18, collared al 4% for the £70,000 loan. £50,00012020.. £50,0001 from Unitarian College. This organisallon is a member of tho Trust. Tha loan is rapayable when the Trusl has funds available or on the dl$solulion of the Trust. Inleresl ig payablp a110/o above base rate. 11 Wds previously Ihe daily rale sel by the Charilics Aid FoundalSon for ils COIF units, collared al 4%. Tolal interest paid was £918 (2020: £668). The Charity Commission has conlim)ed that il will be willing lo aulhorise these loans lo be repald out of the proceeds of sale of Luther lthng House property rf such a sale ever lakes place and il Ihe loans remain oulslanding when il does. Colle Included in creditors falling due after more than one year is a loan of.. £67,50012020.' £58,250) from Northem College. The ou151anding loan was repayable by 2023 bul 8 deferral lo 2026 was agreed in order lo assist cash flow during the Covid-19 crisis. Inleresllg payable al 2.50/0. The original £60,000 loan was taken lo convert offices Into bedrooms. A further loan of £90,000 was taken lo convert additional ollices lo bedrooms. The loans will be repald as follows.. 2023.. 11,250 2024.. £22.500 2025.. £22,500 2026: £11.250 32 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Coll8 e loans Included in creditors falling due after more than one year are loans that were granted during the year as emergency relief lo a cashflow crisls al the height of the pandemi¢. £75,00012020'.£nill from Northem College. Interest is payable al 1 % over base rate. Total interest paid lo Northem College was £1.631 {2020'.£2.006) £25,00012020'.£nll) from Northern Baptist College. Inlerest is payable al 1 % over base ral8 Total Interest paid lo Northem Baplisl Colleg8 was £4.33712020-£3,075) The College loan8 could be deemed concesslonary k)ans 17. Pen8lon8 Al the year end the oulstandlng penslon commllment W28 £4.132 {2020: £4,655) 18. Commltm8ntg under operatlng leases Al 31 August 2021 the company had minlmum lease pa￿rtent$ of £nll. A880ts other than land And bulldlngs 2021 2020 Operating leases whlch w511 be paid.. <1y8ar 740 19, AnalyB18 of charltable funds Analys18 of movgment In unrgstrlcted funds Balance Incomlng R080urc08 Transfers Funds 1 September 2020 resources expended 31 August 2021 General lund 99,353 706,329 (726,8301 78,852 Yotal 706,329 726,830 (Prior Year) Balan 1 September 2019 Incomlng resource5 Resources xpended Transfers Funds 31 Auousl 2020 General fund Dèsignat￿$ b8droom Improvernenl lurKJ 231.088 1.006.026 {1.178,136) 38.375 38,375 (38,3751 99,353 Total 269,481 1.006,026 1.176.136 Nama of unrestricted fund Dascription, nature and purpose of tho fund General fund The 'freo reserves. after allowing for designated funds. Designated fund Designated fund for the continuing refurbishmenl of bedroom stock and marketing. 33 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Analysls of movement In restrlcted fund Balance Incomlng Resources Transfers Funds 1 Septembgr 2020 resources expendgd 31 August 2021 Property 700,000 700,000 Property improvement 137,888 {137.8861 Total 837 886 137,886 700,000 {Pdor Year) Balanc6 1 September 2019 Incoming Resour¢es resources exp8nded Transfers Funds 31 August 2020 Properly 700,000 700,000 Prop6rly Improvement 151,829 (13,9431 137,886 Tol81 851.829 13,943 Reslrlclod funds represersl the value of assets acquired with money given for this speciflc purpose Including the original gill ol land and buildings lo the Trust. In 2008, subslanlial improvements were made lo the buildings. The value of these have been reduced each yèar by depreciation. However, the Board decidcd lo allocate the remainlng balance on the improvements from reslricled to unrestricted reserves during the current year. 20. Analy818 of group ngt assets between funds General Fund De8ignat6d Fund Re81rlctod Fund Total 2021 Tanglble fixed assets Other non-currenl assels Cash al bank and in hand Other nel current asselsl(liabllilies) Cr8ditors of more than one year 640,432 5,852 181,745 1151,6771 {577,5￿) 700,000 1,340,432 5,852 161,745 {151,6771 {57Y,5001 700,000 778 852 (Prior Year) Gen8ral Fund Design21ed Fund Restricted Fund Total 2020 Tangible fixed assets Cash al bank and in hand Other nel current asselsl{Ilabililies) Creditors of more than one ye8r 560.299 101.990 (96.6861 {466.250) 837,886 1,398.185 101,990 196,6861 (466,250) 99 353 837,886 937.239 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 21. Rglatgd party transactions Transactions belween the parent and the wholly controlled trading subsldiary have not been dlsclosed due lo the fact that the subsidiary is wholly owned. Advantage has been taken of th8 available exempllon under Section 33 of FRS 102. Luther King House Conference & Accommodation Services Lid is exempl from audll by virtue of 5477 of the Companies AGI. The IhTee Colleges below are member bodies of the Trust. and have rlghls and r&sponslbilllies as sel out In Ihe Memorandum of Association. The Trust made sales of £101,88512020.' £79,875) lo Northern Bapllst Collegè and al year end was owed £14312020.. nil) by the College. Total interest paid on loans was £4.337 12020.. £9,225}. The Trusl made sales of £171,76312020'. £116,408} lo Northem College and al year end was owed £nil12020..£nill by the College. Total interest paid on loans was £1.63112020'. £4.5191. Tho Trust made sales of £nil12020- nll) lo Unitarian College aThJ al year end was owed £nll {2020'. £nlll by the College. Total interest paid on a loan was £91812020.. £668)- 22. FlnanGI?I Instruments Flnan¢lal asset¥ that arg measured at amortlsfjd cost: 2021 2020 Trade deblors Casli 47,280 161,745 209 025 13,157 101.990 115,147 2021 2020 FlnanGial liabllitlgs that aro measured at amortlsed cost: Trade creditors Olher payables Loans 62.708 49.130 577 500 689,338 19,943 57,236 477,500 554,679 23. Reconclllatlon of net loutgolnglllncomlng r•sources to not cash outtlow from operatlng actlvltles 2021 2020 Nel Incominglloutgoing) resources (184,2401 {184.0511 Depreclalion Investment income Interest payable Decrease in stock Decreaselllncrease) in debtors IDecrea5elllncrease in creditors 57,754 66,182 {3,1151 1,316 143,8001 108,725 15.749 1.488 18,329 36,361 Net cash outflow from operating activities 43.360 118,665 35 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 Reconclllatlon of net cash flow to movement in ngt dobt 2021 2020 IncreasellOecrease} in oash In Iho year Cash outflow from other loans 59,755 100,000 (162,8131 Change in nel debt r95ultlng from cssh flows 40,245 144.063 Movement in nel debt In the perfod 40,245 144.063 Nel debt brought forward 375 510 231447 Nel debt ¢arried forward 415755 375,510 24. Analy818 of roconGlllatlon of net debt Brought FO￿ard Cash flow Carrled Forward Nel cash Cash al bank and in hand Dtsbl due after 1 year Debt due wllhln 1 year 101,990 {477,5001 59,755 (100,000} 161,745 {577,5001 {477.500} 375,510 1100,000} 40.245} 1577,5001 (415.755 NÈI debt 36 LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2021 25. Prlor Year Consolldated Statemant of Flnanclal Actlvltles Unregtrlcted Restricted Total Funds Total Funds Note Funds Funds 2020 2019 In¢omg: InGomo from chantable aclivities.. Academ￿ and houslng activities 512,917 512,917 442,586 Income from other Irading activit￿5.. Commercial Iradlng operations 493.110 493,110 895,398 Investment income Total Income 1006,028 1006 028 1337 984 Expèndltur• Costs of raising fvnds Commercial Iradlng operallons 345,441 345,441 600,445 Expenditure on ch8ri18ble aclivilies.. Academic and houslng a¢livilies 830,695 13.943 844.638 740,859 Total expondlture 1176 136 13,943 1190 079 1,341304 Not Incomellexpendlturo) and nèt movement In fund8 for thfr year (170,108) 113,943) 1184,0511 13,320) Roconclllatlon of funds Total funds L)roughl forward 269,461 851.829 1,121,29Q 1,124,610 Total funds Garrled fo￿ard 837,886 937 239 1,121,290 37