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← Luther King House Educational Trust

2024-08-31-accounts

Luther King House Educational Trust

(A company limited by guarantee)

Report and Financial Statements

31 August 2024

Charity number: 1082375

Company number: 04065581

LUTHER KING HOUSE EDUCATIONAL TRUST

FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

CONTENTS PAGE
Report ofthe directors 3
Independent Auditors’ Report to the Members 16
Group statement of financial activities 20
Statement ofchanges in reserves 21
Balance Sheets 22
Cash flow statement 23
NotestotheFinancialStatements 24

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LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT YEAR ENDED 31 AUGUST 2024

Luther King House Educational Trust

Report of the trustees for the year ending 31 August 2024

The directors, who are also trustees for the purposes of the Charities Act, present their report together with the audited financial statements for the year ending 31 August 2024.

Chair’s report

This has been a momentous year for the Luther King House Educational Trust.

In the summer of 2024 our President, the Revd Canon Graham Sparkes, retired from this post. Graham has given exemplary leadership to the Trust and our constituent parts for more than a decade. He came to the work in Manchester after service within the Baptist Union of Great Britain and soon took hold of the whole range of our activities in succession to Dr David R. Goodbourn. In his time at the Luther King Centre, he has had to grapple with changes in validation (twice) and with a myriad of fresh demands made by the Government Office for Students. Alongside this Graham has led our staff team and enabled us to develop the work of the Open College. Nothing appears to have daunted him and he has honed these skills whilst maintaining a substantial input to the teaching and learning of the institution. Here, we thank him most sincerely for his devotion to the work and his commitment to the vision of our ecumenical task in the north, the midlands and beyond.

Graham has been succeeded by the Revd Dr Kim Wasey, the Principal of the LKHET Open College. Kim has taken on this role at a time of transition, not only in staffing, but in the very identity and shape of our inclusive ecumenical partnership. Through the last months of this reporting year, Kim has proven her worth in a whole variety of ways and we are so grateful to her for the leadership she is offering as we move through a season of change.

We have been pleased that our course on Chaplaincy has attracted students and is proving to be an important enhancement to the educational provision on offer. We have also addressed the advisability of continuing our offer of doctoral studies and have been delighted to enter into a team supervision arrangement with the University of York St John.

As we noted last year, the continuing effects of the Covid-19 Global Pandemic provide a backwash to our life and being. Our principal stakeholders, Northern College (URC) and Northern Baptist College began to discuss with us part way through the year, whether the moment had come for a review of our whole mode of operation and whether the creation of one single body was the point we had reached on our ecumenical journey which began in the 1970's. At a meeting of the three Boards in early summer we received a report from consultants, appointed earlier in the year, suggesting that the way ahead consisted of seeking to amalgamate into one body so as to deliver theological education and education in related disciplines to our constituency of Baptists, United Reformed, Congregationalists, Moravians, Unitarians, Open College, UTU and our other partners.

Our external consultants proposed that the “new College” should utilise our Brighton Grove site, but re-configure to address the needs of the churches of the north and midlands in a fresh and dynamic way. The outcome for the year has demonstrated the fact that in our current structure we do not anticipate being a going concern. However, with the decisions taken by the principal stakeholders and ourselves in early summer to develop a “new College”, we anticipate a new structure and future which is viable. We, therefore, do not anticipate another full year of financial activity in our current format and with the encouragement of our partners and the support of our auditors we dare to believe the new body, which will emerge before the next financial year, will be in a viable position to continue free church educational and theological formation from our Manchester base. In all of this we have felt able to go forward with the assurance of support from the governing bodies of the Northern Baptist College and Northern College (URC/Congregational), whose Chairs have assured us of their support

21st January 2025

LUTHER KING HOUSE EDUCATIONAL TRUST

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DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

Aims and objectives.

The objects of the Trust are:

The advancement of education in areas of Christian faith, practice, and dialogue and in particular but without limitation:

The vision of the Trust may be summarised as to provide a learning resource anda flexible residential facility to enable the Partnership to:

When the facilities of the House are not being fully utilised in pursuit of the Trust’s core activities, spare capacity is marketed to other persons and bodies. Any surpluses arising from this activity are re-invested in the Trust’s core activities.

The educational activities of the Trust continue to be delivered under the branding Luther King Centre for Theology and Ministry (LKC)and this terminology will be used in the appropriate sections of this report.

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LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

Public Benefit 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 ministries in the church. Fees are charged, though these do not cover the full cost of providing the service. Steps are taken to ensure the fees do not exclude the poor; bursaries are available, and the Trust works within a general environment of government provision designed to support poorer students and widen access. British residents of foreign nationality are charged only at the domestic rate. The Trust has, in fact, a significant number of non-traditional learners amongst its students, and a growing number from minority ethnic groups. Through the development of flexible and distributed learning, the Trust is also seeking to overcome further barriers to learning. The Trust's academic staff also contribute to the delivery of similar courses by other associated theological institutions.

The Trust works with churches in equipping them and their leadership for their roles in the community. Among those it trains, for instance, are church related community workers, whose whole purpose is community development. Those training for accredited ministries are seldom able to use their education to advance their own material interests; their sole reason for entering training is to serve the needs of local congregations and communities. Many do so in training placements throughout their course of education. The Trust's facilities are of benefit to a wide range of the public. Membership of the library is available to all for an easily affordable annual charge. A wide variety of groups use the teaching rooms for learning and training events; the Trust makes a point of making its educationally equipped meeting rooms widely available when not needed for its own courses and does so for charities and churches at reduced rates. We have complied with the duty under the Charities Act to have regard to the public benefit guidance published by the Charity Commission.

Achievements and performance

The Trust’s charitable objective is the advancement of education in areas of Christian faith, practice and dialogue and the challenge to this objective from factors outside the organisation continues. Both full and part time courses of study are offered at undergraduate and postgraduate levels alongside a Diploma of Higher Education and Certificate of Higher Education.

Despite the ongoing challenges, student numbers have remained generally stable with early signs of positive impacts on student number at both undergraduate and postgraduate level. Our student body continues to reflect a broad ethical and cultural diversity, and many do not have English as their first language. Students are supported by our academic staff and through the learning and resource centre. This latter offers support through study skills and proof-reading.

We have been able to offer much face-to-face teaching through the past year, though some elements continue to be offered through e-learning. The experience gained in the use of online learning during the height of the pandemic has provided opportunities to explore new ways of engaging with our students, and so continues for certain sessions and programmes, and it has been the focus of our academic team to ensure that all students are able to take full advantage of the resources provided.

The President and staff have worked hard to achieve, as best as possible, a sense of community and to promote collaborative working amongst the student community.

Luther King Centre for Theology and Ministry (LKC) is registered in the ‘Approved (fee cap)’ category of the Office for Students.

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LUTHER KING HOUSE EDUCATIONAL TRUST

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DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

The continuing requirements of GDPR are recognised and embodied with our processes, policies, and procedures.

Lower student numbers and economic challenges have, once again, allowed only limited upgrading of our bedroom stock and all but essential capital projects have been shelved until our revenue stream has consolidated.

The following key educational objectives were established for 2023-24, together with indicators of how these have been met:

Increase student numbers Significantly increased enquiries and
applications were seen over the full academic
year, in bothTMM and Chaplaincy studies. New
recruitment monitoring process instituted as a
standing item throughout the year at Operations
Committee. Anticipated conversion to new year
intake was well above previous five year
average and retention will continue to be
monitored through the next academic
year
Make better use of our combined resources A merger project scoping exercisewas
within the three partner colleges, reducing undertaken and brought to the proposal stage
duplication and ensuringwe offer streamlined where itwas presented to all three Boards in
single offer to maximise our educational July 2024. Agreement for a full merger into a
opportunities and the commercial offers which single institutionwas reached and has now
support these. moved into the implementation stage.
Engage with rapid development of Al and Field work of nationwide HEI responses was
impact on educational field in away that undertaken and an initial policy drafted,
facilitates and supports students reviewed and adopted. We anticipate this being
a rapidly developing area which we will continue
to review and develop to support student’s
understanding and practice in collaboration with
ourpartnervalidatinginstitutions.

Financial review

The group has faced a challenging financial year with continued cost management and income maximisation challenges. However, our Bed, Breakfast and Conference business was able to meet our expectations over the full year. Our focus continues to be managing cash flow on an almost day to day basis. This approach has typified our financial monitoring over the past year.

The Statement of Financial Activities for the Group

The focus of concern throughout the year has been to enable Luther King House Educational Trust to continue as a going concern and to this end we have continued regular discussions with our principal stakeholders, Northern Baptist College, and the Northern College (United Reformed Church, Congregational Federation and Moravian Church) to provide support to ensure we could continue operating and as we developed supporting income from accommodation, catering and conference services.

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LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

At the end of the year the profit (loss) before tax incurred were: Charity (£151,916) Subsidiary Enil

Resulting in an overall loss before tax of (£151,916)

The bank balance at the end of the year was £145,868.

Reserves policy and going concern.

The total level of reserves at year-end amounted to £666,141 (2023 - £818,057). The Trustees are responsible for ensuring that the charity maintains an appropriate level of reserves to meet assessed risk and to manage cash flow. In the current uncertain climate, the priority has been regularly ensuring that the Trust has sufficient cash flow to meet obligations. Although the Trust seeks to maintain sufficient reserves to meet 3 months’ worth of running expenditure, currently approx.£200k, the current level of free reserves is calculated to be £nil (2023 £120,289). However, the Trust will continue to work each year to increase the level of free reserves. The Trustees continue to review areas, particularly within the accommodation area of the group, where increased efficiencies can allow free reserves to increase to the target level. The Colleges have expressed their support for our current business model and their conviction that we should continue to operate with our current model, whilst engaging in tripartite conversations to develop a strategy for ensuring viable operations in the medium term. Whilst the development of that strategy is refined and clarified, the two stakeholders have indicated their willingness to assist us through any temporary financial challenges on the journey to a medium term viable operation.

The assistance includes facilitating deferral of interest payments on loans and loan capital on funds previously advanced for improvements to the premises at Brighton Grove. This provision is regularly monitored and specific meetings between officers of the two College governing bodies and the Chair and President of Luther King House Educational Trust ensures that cash flow and the operation of Luther King house continues in a sustained way. Both Colleges have issued letters of support for the Trust extending until the end of August 2025.

The tripartite conversations have resulted in an agreement in principle for the three organisations to move forward with a plan to merge into a single new business. Thus, starting the journey of all three organisations towards medium / long term operating viability.

The Trust finances its operations through a mixture of retained profits and college loans. The management's objectives are to retain sufficient liquid funds to enable the company to meet its day to day obligations as they fall due. This policy has continued to be challenged during the year because of the global impact of regional conflicts and their impacts on the world economy and resource costs, the Trust has had to recourse to the governing bodies of the two major constituent colleges for relief provision on loan repayment and a commitment to potential further loan support.

The Trust makes little use of financial instruments other than an operational sterling bank account and so its exposure to price risk, credit risk, liquidity risk and cash flow risk is not material for the assessment of the assets, liabilities, financial position, and net incoming/outgoing resources.

The trustees are responsible for ensuring that the charity maintains an appropriate level of reserves to meet assessed risk and to manage cash flow. In the continuing climate of economic recovery, the continuing regional conflicts and the impact on resource availability and pricing, the priority has continued to be regularly ensuring that the Trust has sufficient cash flow to meet obligations. With all these factors trading remains challenging though we work hard to maximise our room occupancy.

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LUTHER KING HOUSE EDUCATIONAL TRUST

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DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

A significant income source for the Trust is through the bed and breakfast business of its subsidiary “Luther King Centre Conference and Accommodation Services Ltd’. This business continues to recover, but the climate is still challenging with the on-going regional conflicts, resource availability and cost challenges. The opening of the new major event arena locally gives hope to have a positive impact on commercial ventures. The action taken in the last financial year has been necessary for a further year in the very challenging market:

Plans for future years

As noted earlier the Trustees have agreed to work with Northern Baptist College and Northern College to transfer the Trust and all staff to a new entity from 1st September 2025. All assets, liabilities and operations of the Trust will be transferred to the new entity for £nil consideration. From the date of transfer Luther King House Educational Trust will cease operating. Following the completion of the transfer the Trustees of Luther King House Educational Trust intend to dissolve the company.

We have reviewed the staff to minimise costs whilst continuing to provide a good standard of service to all our current and future clients. Once we have fully stabilised our income stream our current intention is to continue our bedroom upgrades.

We continue a strategy for the marketing of LKC Open College that admits students direct to LKC rather than through one of its constituent colleges. This includes continuing review of our website, our publicity, and on ways of promoting the LKC brand, particularly on social media.

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LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

Referenceandadministrativedetals#3 # | | | ©. Charity number: 1082375 Company number: 04065581

Registered Office:

Luther King House, Brighton Grove, Rusholme, Manchester, M14 5JP

Secretary:

The Revd Graham R Sparkes — resigned 11 January 2024 Mr David T Rudman — appointed 11 January 2024

Our advisers:

Auditors

Crowe UK LLP, 3% Floor, St George’s House, 56 Peter Street, Manchester, M2 3NQ.

Bankers

CAF Bank, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ

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LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

Directors and trustees

The directors of the charitable company (the charity) are its trustees for the purposes of charity law. The trustees and officers serving during the year and since the year end were as follows:

The Revd Dr Keith G Jones The Revd Dr Andrew J Lunn (F) resigned 5 October 2023 The Revd Dr Clara N Rushbrook (F) The Revd Dr Simon J Oxley (F) Dr Jacqueline Suthren Hirst Ms. Erica M Dunmow The Revd Jenny Mills (F) Bishop Theo Oluwasegun Akano The Revd Dr Adam J Scott (F) Mrs. Helen Mason (F) The Revd Graham M Edwards (F) appointed 5 October 2023

(F) = Directors appointed by a Founder Member according to its rights defined in the company’s Articles of Association.

Key management personnel

President The Revd Canon Graham RSparkes term ceased 30 June2024
President The Revd Dr Kim Waseyterm commenced 1 July 2024
Company Secretary The Revd Canon Graham R Sparkes resigned 11 January 2024
Company Secretary Mr. David Rudman appointed 11 January 2024
Finance Manager: Mr. David Rudman appointed 1 September 2023
Operations Manager Miss Beverley Bartram
Academic Registrar Miss Clare Richardson
Librarian Mrs. Katie Glover
OpenCollegePrincipal TheRevdDrKimWasey

Structure, Governance and Management

Governing Document

The Trust is a charitable company limited by guarantee and was set up on 1 September 2000. It is governed by a Memorandum and Articles of Association. The charity was created to carry on and further develop the work of its two predecessor charities, the Manchester Christian Institute (charity number 515358) and the Northern Federation for Training in Ministry (charity number 517496). Both these charities transferred their net assets as at 31 August 2000 to the Trust and were thendissolved.

The Memorandum and Articles of Association were updated in April 2015.

Every member promises, if the Charity is wound up while he/she is a member or within 12 months after ceasing to be a member; to pay such amounts as is required up to £1 towards the costs of dissolution and the liabilities incurred by the Charity while the contributor was a member.

The concept of the Partnership for Theological Education was born in 1997, under the umbrella of the Manchester Christian Institute. In September 2000, the member bodies of the Partnership became the member bodies of the Trust. The Partnership for Theological Education continues to be the operational name under which the Trust carries out some of its educational activities.

LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

The financial basis of the Trust was the agreement of the four Founder members to provide to the Trust the land and buildings of Luther King House valued at £700,000 and cash totalling£500,000.

The original land and buildings were transferred from Northern Baptist College to a charity called the Luther King House Property Trust under a Charity Commission Scheme (case number 180221) dated 27 June 2002. Luther King House Property Trust is a separate charity from the Trust, but the Trust is its only trustee. The Charity Commission has given permission for the two charities to be accounted for as if they were a single entity.

Appointment of trustees

Where a vacancy arises for a director appointed by a Founder Member organisation, the organisation concerned makes the appointment in accordance with its own internal processes.

When a vacancy arises for an independent director, the Board considers any gaps in its current expertise and experience and in the various constituencies represented. It also has concern for its gender and ethnic balance. It then identifies a person or persons who could fill some of those gaps. An invitation is issued. Training of new directors includes the provision of a comprehensive induction pack. The Board encourages and supports directors who wish to pursue opportunities that will help them fulfil their responsibilities as trustees.

A new protocol has been developed to cover the appointment and re-appointment for all members of the Board.

Changes to the trustee body

During the year we appointed one new member of the board and had one member resign during the year. The Revd Graham Edwards replaced The Revd Dr Andrew Lunn and is a Foundation Trustee.

Trustee induction and training

Induction is tailored for new Trustees due to the very different needs of Independent and Foundation Trustees.

Organisation

The Board of Trustees administers the charity. The Board meets on at least four occasions each year. Responsibility for governance remains with the Board of Directors and its Finance and Monitoring Committee, which meets quarterly and includes an internal audit function to check on not only financial and ethical matters, but also policies relating to equal opportunities, child protection and staff terms and conditions.

Responsibility for day to day management is entrusted to the Operations Committee, led by the President (a full time salaried officer). The committee includes the Principals, or their representative, of the three Colleges that participate in the Trust’s educational activity and provide most of its teaching staff. Operations focuses on implementation, co-ordination, staff management, staff development and deployment ofresources as well as monitoring health and safety.

LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

There are two academic committees to manage the undergraduate, postgraduate, and Research programmes, chaired by a member of the academic staff, and attended by the staff who teach on the programmes, student representatives and representatives of the University of Manchester and the University of Durham and Common Awards as appropriate. The Luther King Centre has an agreement with York St John University to co-supervise candidates on the doctoral programme of the University.

Related parties and cooperation with other organisations

The trustees do not receive remuneration in relation to their role on the board, however the Board includes members who are employed by member organisations and who are members of the teaching team delivering educational services for the Charity. This aspect of their work is remunerated.

A new company, Luther King House Conference and Accommodation Services Limited, was set up on 27 July 2009. This company is a wholly controlled subsidiary of the Trust. Its purpose is to carry on the conference and accommodation business at Luther King House and it operates under a licence granted by the Trust. It began trading on 1 September 2009. The directors of the main Trust are also directors of the subsidiary.

The directors’ report and the accompanying financial statements concern the combined results of the Group for the year to 31 August 2024. Balance sheets for the Group and for the Charity are shown on page 22.

Charity Governance

In July 2018 the Board agreed to adopt the ‘Charity Governance Code’ with additional principles relating to Higher Education. Whilst this had been discussed in the past and generally reflected current practice, the Board recognised that it would be appropriate to formally adopt the code and put in place procedures for its implementation and regular monitoring. This latter activity would be achieved by an annual review in the Autumn at the same time as all other policies were reviewed. The Board agreed the following affirmations relating to its academic staff:

Fundraising

The Charity had no fundraising activities requiring disclosure under provision of the Charities (Protection and Social Investment) Act 2016.

Pay policy for senior staff.

Staff pay is agreed by the Board on recommendation of the Finance and Monitoring Committee. Remuneration for senior staff is based on role, experience, and performance. It is reviewed annually and normally increased in accordance with average earnings.

Risk Management

The directors maintain a register of the major risks which the Trust faces, and they review this register regularly. Each risk is assessed for its severity and its likelihood and for the effectiveness of the steps

LUTHER KING HOUSE EDUCATIONAL TRUST

DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

taken to manage the risk. The Register is regularly reviewed by the Finance and Monitoring Committee and risk management is now an annual standing item on the agenda of the LKHET Board meetings. In reviewing the Register, the directors considered the most serious risks facing the Trust, and the actions taken to mitigate them are:

Trustees’ responsibilities in relation to the financial statements

The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and group of the incoming resources and application of resources including the income and expenditure, of the group for that period. In preparing these financial statements the directors are required to:

The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and group 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 group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

LUTHER KING HOUSE EDUCATIONAL TRUST

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DIRECTORS’ REPORT

YEAR ENDED 31 AUGUST 2024

Statement as to disclosure to our auditors

In so far as the trustees are aware at the time of approving our trustees’ annual report:

Small company provisions

This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

By order of the trustees

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Keith G Jones 51\:1|25
Director
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Our opinion is not modified in this respect

LUTHER KING HOUSE EDUCATIONAL TRUST INDEPENDENT AUDITOR’S REPORT

YEAR ENDED 31 AUGUST 2024

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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion based on the work undertaken in the course of our audit

Matters on which we are required to report by exception.

In the light of the knowledge and understanding of the group and the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 14, the trustees 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.

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LUTHER KING HOUSE EDUCATIONAL TRUST

INDEPENDENT AUDITOR’S REPORT

YEAR ENDED 31 AUGUST 2024

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

We obtained an understanding of the legal and regulatory frameworks within which the group and charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, Charities Act 2011 and employment legislation.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the trustees and other management and inspection of regulatory and legal correspondence, if any.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management and completeness of income. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, sample testing from student record documentation and sample testing of accommodation records to the consolidated financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. 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.

31st January 2025

LUTHER KING HOUSE EDUCATIONAL TRUST

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CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (including Income and Expenditure account)

YEAR ENDED 31 AUGUST 2024

Unrestricted Restricted TotalFunds Total Funds
Note Funds Funds 2024 2023
Income: £ £ £ £
Income from charitable activities:
Academic and housing activities 3 331,235 331,235 348,437
Income from other trading activities:
Commercial trading operations 4 950,458 950,458 941,093
Investment income 5 633 633 540
Total income 1,282,326 1,282,326 1,290,070
Expenditure
Costs ofraising funds
Commercial trading operations 667,027 667,027 607,512
Expenditure on charitable activities:
Academic and housing activities 6 767,215 767,215 638,540
Total expenditure 1,434,242 1,434,242 1,246,052
Net income/(expenditure) before tax
and netmovement in funds fortheyear 9 (151,916) (151,916) 44,018
Tax expense 11 - - -
Net income/(expenditure) (151,916) (151,916) 44,018
Reconciliation offunds
Total funds brought forward 818,057 818,057 774,039
Totalfundscarriedforward 666,141 666,141 818,057

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities. The deficit in the year for the Charity was £151,916.

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LUTHER KING HOUSE EDUCATIONAL TRUST

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STATEMENT OF CHANGES IN RESERVES

YEAR ENDED 31 AUGUST 2024

Unrestricted Restricted Total Funds
Funds Funds 2024
Income: £ £ £
Balance at
1 September 2020		 99,353 837,886 937,239
Net Income for the year ended 31 August 2021 (20,501) (137,886) (158,387)
Other comprehensive income/(expense) - - -
Total comprehensive income/(expense) forthe year (20,501) (137,886) (158,387)
ended 31 August 2021
Balance at 31 August 2021 78,852 700,000 778,852
Net Income for the year ended 31 August 2022 (4,813) - (4,813)
Othercomprehensive income/(expense) - - -
Total comprehensive income/(expense) forthe year (4,813) - (4,813)
ended 31 August 2022
Balance at 31 August 2022 74,039 700,000 774,039
Net Income for the year ended 31 August 2023 44,018 - 44,018
Other comprehensive income/(expense) - - -
Total comprehensive income/(expense) for the year 44,018 - 44,018
ended 31 August 2023
Transfer - - -
Balance at 31 August 2023 118,057 700,000 818,057
Net Income for the year ended 31 August 2024 (151,916) - (151,916)
Othercomprehensive income/(expense) - - -
Total comprehensive income/(expense) for the year (151,916) - (151,916)
ended 31 August 2024
Transfer - - -
Balanceat31August2024 (33,859) 700,000 666,141

LUTHER KING HOUSE EDUCATIONAL TRUST

GROUP AND CHARITY BALANCE SHEETS Company No; 04065581

YEAR ENDED 31 AUGUST 2024

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||||||||||| |---|---|---|---|---|---|---|---|---|---| |Group|Charity| |2024|2023|2024|2023| |Note|£|£|£|£| |Non-current|assets| |Deferred|Tax|asset|11|-|-|-|-| |Tangible|assets|12|1,257,853|1,275,269|1,257,853|1,275,269| |Total|Non-current|Assets|1,257,853|1,275,269|1,257,853|1,275,269| |Current|assets| |Stock|13|1,494|1,556|-|-| |Debtors|14|46,815|37,493|159,402|178,316| |Cash|at|bank|and|in|hand|145,868|291,225|29,748|73,979| |Total|Current|Assets|194,177|330,274|189,151|252,295| |Liabilities| |Creditors|falling|due|within|one|15|(208,390)|(209,986)|(203,734)|(132,379)| |year| |Net|Current assets|(14,213)|120,288|(14,583)|119,916| |Total|assets|less|current|1,243,641|1,395,557|1,243,270|1,395,185| |liabilities| |Creditors|falling|due|after|more|16|(577,500)|(577,500)|(577,500)|(577,500)| |than|1|year| |Net|assets|666,141|818,057|665,770|817,685| |The funds|of the|charity:| |Unrestricted|income|funds|19|(33,859)|118,057|(34,230)|117,685| |Restricted|income|funds|19|700,000|700,000|700,000|700,000| |Total|charity funds|666,141|818,057|665,770|817,685|

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The trustees have prepared group accounts in accordance with section 398 of the Companies Act 2006 and section 138 of the Charities Act 2011. 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 and are for circulation to members of the company.

The company has not delivered a copy of the profit and loss account to Companies House. Signed KidKeith Grant Op<-> de,Helen Mason Nur Trustee Trustee Approved by the trusteeson 2! /\ /202s The notes at pages 24 to 40 form part of these accounts.

LUTHER KING HOUSE EDUCATIONAL TRUST

CASH FLOW STATEMENT

YEAR ENDED 31 AUGUST 2024

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|||||||||| |---|---|---|---|---|---|---|---|---| |Group| |Note|2024|2023| |£|£| |Cash|generated|in|operating|activities|23|(93,379)|160,836| |Cash|flows|from|investing|activities| |Interest|income|633|540| |Purchase|of|tangible|fixed|assets|(24,260)|(22,263)| |Cash|provided|by|(used|in)|investing|activities|(23,627)|(21,723)| |Cash|flows|from|financing|activities| |Repayment|of|borrowing|-|-| |Interest|paid|(28,351)|(18,793)| |Loan|taken|out|in|the|year|-|-| |Cash|used|in|financing|activities|(28,351)|(18,793)| |(Decrease)|increase|in|cash|and|cash| |Equivalents|in|the|year|(145,357)|120,320| |Cash|and|cash|equivalents|at|the| |beginning|of the|year|291,225|170,905| |Total|cash|and|cash|equivalents|at|the|end| |of the|year|145,868|291,225|

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The charity has taken advantage of the exemption available to a qualifying entity in FRS 102 from the requirement to present a charity only cash flow statement with the consolidated accounts.

The notes at pages 24 to 40 form part of these accounts.

sn

The colleges have confirmed that none of the loans will be repayable within a year

LUTHER KING HOUSE EDUCATIONAL TRUST

| | |

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

College block charges are agreed in advance each year with the colleges. The total charges for the financial year are invoiced in September and received in instalments through the year.

Other income is recognised on a receivable basis.

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category.

Allocation of expenditure

Governance costs are those incurred in connection with public accountability and the strategic planning process of the Trust. Governance costs represent the time spent by employees on these matters.

e) Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity; this is normally upon notification of the interest paid or payable by the Bank.

f) Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the directors in furtherance of the general objects of the Trust and which have not been designated for other purposes.

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

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

g) VAT

Irrecoverable VAT is written off in the year except for where it relates to capital items, in which case it is added to the cost of additions of fixed assets.

h) Operating leases

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against income ona straight-line basis over the period of the lease.

i) Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation.

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: Office and computer equipment 33% straight line Furniture, fixtures, and fittings 20% straight line

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LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

Building improvements 5% straight line Library development 2% straight line

As the residual value of land and long leasehold buildings is believed to be at least the carrying value of the asset no depreciation is provided.

j) Stock

Stocks consist of purchased goods for resale. Stocks are valued at the lower of cost and net realisable value.

k) Debtors

Trade debtors are recognised at the settlement amount after any trade discounts offered.

Prepayments are valued at the amount prepaid net of any trade discounts due.

l) 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.

m) Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

n) Financial instruments

The Charity only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Financial Activity.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the

LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS

| | |

YEAR ENDED 31 AUGUST 2024

asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset, and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

0) Pensions

The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the statement of financial activities.

Pp) Capitalisation Policy The company prepares the financial statements in accordance with the concept of materiality. Therefore, the company will capitalise costs that are greater than the following limits: individually have a cost of more than £1,000, or collectively have a cost of least £1,000 where the assets are functionally interdependent, have simultaneous purchase dates and are anticipated to have simultaneous disposal dates, and are under single managerial control.

Judgements in applying accounting policies and key sources of estimation uncertainty.

The charity makes estimates and assumptions concerning the future. The Finance Committee reviewed the worst-case scenario and combined with the College letters of financial support, concluded that there is no material uncertainty around the Trust’s ability to continue as a going concern and as such the disclosures in this area are appropriate. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation, and the physical condition of the assets. See note 12 for the carrying amount of the property plant and equipment and note 1i for the useful economic lives for each class of assets.

(ii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors.

When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 14 for the net carrying amount of the debtors and associated impairment provision.

2 Legal status of the Trust

The Trust is a company limited by guarantee and has no share capital. In the event of the charity being

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The entity is a private charitable company, Charity number 1082375. The registered office is Luther King House, Brighton Grove, Rusholme, Manchester M14 5JP.

3.
Incoming resources from charitable activities
2024 2023
House income £ £
Rent
Sundry income		 24,330
22,282		 21,519
-
46,612 21,519
Academic activities
College fees 199,861 187,091
College block charges 71,500 121,500
Sundry income (including grants) 13,262 18,327
284,623 326,918
Total 331,235 348,437
3a
Disclosure on Grant and Fee income
2024 2023
£ £
Grant income
Grant income from OfS 6,566 8,276
Grant income from other Bodies - -
Total Grant income 6,566 8,276
Fee income
Fee incomefrom taught awards 170,997 163,085
Fee income from research awards 9,694 14,816
Fee income from non-qualifying courses 19,170 9,190
Totalfeeincome 199,861 187,091

LUTHER KING HOUSE EDUCATIONAL TRUST

|

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

4 Trading operations and investment in trading company

The consolidated statement of financial activities includes the results of the Charity’s wholly controlled subsidiary. The Charity is the sole member of Luther King House Conference and Accommodation Services Ltd, (company number 6973866, registered office same as the parent Charity), a supplier of bed and breakfast and conference facilities. It pays almost all of its profits to the charity by gift aid. Summaries of the trading result and balance sheet are as follows:

Trading result for the year ended 31 August 2024

Trading result for thethe year endedended 31 August 2024
2024 2023
Turnover
Investment income		 £
950,458
513		 £
941,093
287
Cost ofsales and administrative expenses
Including internal rent of£180,000 (847,027) (787,512)
Profit (Loss) before tax 103,944 153,868
Tax expense - -
Profit (loss) for the year 103,944 153,868
Amount gifted to the Charity 103,944 153,868
Retained in the subsidiary - -
Balance Sheet at 31 August 2024
Non-Current assets - -
Current assets 215,410 231,847
Creditors (amounts falling due within one year) (215,039) (231,476)
Total net assets (liabilities) 371 371
Aggregatereserves 371 371
5 Investment income Unrestricted Total Total funds
Funds funds
2024 2023
£ £ £
Bank interestreceivable 633 633 540

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

6 Analysis ofexpenditure ofcharitable activities
2024 2023
£ £
Academic and house activities
Staff costs 302,009 253,843
Teaching fees 5,020 22,269
University registration 15,245 19,523
Bursaries 560 1,589
Books and periodicals 6,120 6,870
Bad debts (920) (2,231)
Rates and water 32,910 24,682
Light and heat 110,927 65,510
Cleaning 1,650 1,250
Insurance 8,260 7,886
Repairs and maintenance 34,263 27,321
Telephone 417 1,139
Office supplies and postage 9,830 7,032
Photocopying rental 744 385
Photocopying charges 1,434 1,205
Travel 1,475 1,091
Meetings & sundry xps 61,813 49,345
Depreciation offixed assets 41,676 43,960
Support costs (see note 7) 100,405 92,508
Governance costs (see note 8) 33,377 13,363
Totalacademicandhouseactivitiescosts 767,215 638,540
7. Support costs Unrestricted Total Total
funds funds funds
2024 2023
£ £ £
Loan interest 28,350 28,350 18,793
Bank charges 1,847 1,847 1,895
Irrecoverable VAT 10,684 10,684 14,495
President employment costs 59,141 59,141 56,179
Finance general costs 383 383 1,146
Total 100,405 100,405 92,508

LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS

| |

YEAR ENDED 31 AUGUST 2024

8.
Governance costs
Unrestricted Total Total
funds funds funds
2024 2023
£ £ £
Audit fees 11,635 11,635 9,515
Professional fees
Trust meetings and expenses		 20,071
1,671		 20,071
1,671		 2,566
1,282
Total 33,377 33,377 13,363
9.
Net income/(expenditure) for the year
Total Total
funds funds
2024 2023
This is stated after charging £ £
Operating lease - photocopier 744 385
Staff pension contributions 56,965 47,374
Depreciation 41,676 43,960
Auditor’s fees 11,635 9,515
Total 111,020 101,234
10.
Staffcosts and emoluments
2024 2023
£ £
Total staff costs were as follows
Wages and salaries 565,514 510,022
Social security costs 44,839 38,746
Other pension costs 56,965 47,374
667,318 596,142

None of the Trust’s employees received remuneration in excess of £60,000 in the year (2023: £nil).

Pension costs are allocated to activities in proportion to the related staffing costs incurred and are wholly charged to unrestricted funds.

The key management personnel of the parent charity, the Trust, comprise the Trustees, the President, Academic Registrar, Librarian, Finance Manager and Open College Principal. The total employee benefits of the key management personnel of the Trust were £211,719 (2023: £193,472).

The key management personnel of the group comprise those of the Trust and the key management personnel of its wholly owned subsidiary Luther King House Conference and Accommodation Services Ltd. The key management personnel of LKHCAS Ltd is the Operations Manager. Employee benefits in the role total £ 38,046 (2023: £34,650). The employee benefits of key management personnel for the group was therefore £249,765 (2023: £228,122).

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LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

2024 2023
£ £
Salary ofPresident Salary 52,436 46,330
Pension of President Pension 5,243 4,633
Totals 57,679 50,963

i The President's basic salary is 2.4 times the median pay of staff, where the median pay is calculated on a full-time equivalent basis for the salaries paid by the provider for its staff. ii The President’s total remuneration is 2.6 times the median total remuneration of staff where the median total remuneration is calculated on a full-time equivalent basis for the total remuneration of its staff.

Directors received no remuneration (2023: nil) and were reimbursed expenses as follows: Directors received no remuneration (2023: nil) and were reimbursed expenses as follows: Directors received no remuneration (2023: nil) and were reimbursed expenses as follows:
2023 2023
£ £
Reimbursement ofexpenses
KeithJones(travelexpenses) 195 84

Particulars of employees:

2024 2023
Academic
No.		 Admin/House
No.		 Academic
No.		 Admin/House
No.
Full time equivalent 5 17 5 16
Average 5 23 7 17

Most of the teaching on the Trust’s various courses is provided by employees of other bodies.

11. Taxation

In respect of the year 2024 2023
£ £
Taxationbasedonfortheyearat20%(202320%): - -

In the current year the trading subsidiary madea profit (loss) before tax of £103,944 (2023: £153,581)

= 32 «=

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

12. Tangible fixed assets

Fixtures Land and
Office and Fittings Long
Group and charity Computer
Equipment		 Plant&
Equipment		 Building
Improvements		 Leasehold
Property		 Total
£ £ £ £ £
Cost
At1September 2023
Additions
Disposals		 174,367
3,399
-		 296,079
676
-		 1,320,475
20,185
-		 700,000
-
-		 2,490,921
24,260
-
At 31 August 2024 177,766 296,755 1,340,660 700,000 =2,515,181
Depreciation
At 1 September 2023 161,954 287,489 766,209 - 1,215,652
Charge for the year 4,654 3,832 33,190 - 41,676
On disposals - - - - -
At 31 August 2024 166,608 291,321 799,399 - 1,257,328
Net Book Value
At 31 August 2024 11,159 5,434 541,260 700,000 1,257,853
At31August2023 12,413 8,590 554,266 700,000 1,275,269

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

13. Stock
Group Charity
2024 2023 2024 2023
£ £ £ £
Stock 1,494 1,556 - -
14. Debtors
Group Charity
2024 2023 2024 2023
£ £ £ £
Trade Debtors 9,949 6,257 7,609 1,741
Amounts owed by
Subsidiary
Prepayments		 -
36,866		 -
31,236		 129,161
22,632		 153,868
22,707
46,815 37,493 159,402 178,316

Of the group trade debtors £ nil (2023: £nil) was due in over a year.

15. Creditors: Amounts falling due within a year

Group Charity
2024 2023 2024 2023
£ £ £ £
Trade Creditors 24,717 34,965 7,657 26,349
PAYE & social security 14,101 12,676 14,101 12,676
VAT 13,696 35,633 13,696 35,633
Other creditors 59,399 59,996 91,454 11,462
Accruals and deferred
Income 96,477 66,716 76,826 46,259
College loans - - - -
208,390 209,986 203,734 132,379

15a Deferred income movement.

PpAmount b/f 2023 ee Group Charity19,094 Resources released inthe year |—_—| (26,178 19,094 Resources deferred inthe year | —__—| 38,105 31,496 Amount c/f 2024 fs 38,105 31,496

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LUTHER KING HOUSE EDUCATIONAL TRUST NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2024

16. Creditors: Amounts falling due after more than one year

Group Charity
2024 2023 2024 2023
£ £ £ £
College loans (i)
410,000		 410,000 410,000 410,000
College loans (ii)
67,500		 67,500 67,500 67,500
College loans (iii)
100,000		 100,000 100,000 100,000
Accruals and deferred
Income
-		 - - -
577,500 577,500 577,500 577,500
College loans (i)
Included in creditors falling due after more than one year are loans of:
£60,000 (2023: £60,000) and £230,000 (2023: £230,000) from Northern Baptist College. This
organisation is a founder member ofthe Trust. The loans are repayable when the Trust has funds
available, or on the dissolution ofthe Trust. Interest is payable at 1% below base rate on the £60,000
loan. An agreement was reached in 2021 to reduce the interest rate for the £230,000 loan to 1%
above base rate. Previously the rate used had been based on the Charities Aid Foundation for its
COIFunits,collaredat4%forthe£230,000loan.

£70,000 (2023: £70,000) and £67,500 (2023: £67,500) from Northern College. This organisation is a founder member of the Trust. The £70,000 loan is repayable when the Trust has funds available or on the dissolution of the Trust. An agreement was reached in 2021 to reduce the interest rate for the £70,000 loan to 1% above base rate. Previously the rate used had been based on the Charities Aid Foundation for its COIF units, collared at 4% for the £70,000 loan.

£50,000 (2023: £50,000) from Unitarian College. This organisation is a member of the Trust. The loan is repayable when the Trust has funds available or on the dissolution of the Trust. Interest is payable at 1% above base rate. It was previously the daily rate set by the Charities Aid Foundation for its COIF units, collared at 4%. Total interest paid was £2,614 (2023: £2,000).

The Charity Commission has confirmed that it will be willing to authorise these loans to be repaid out of the proceeds of sale of Luther King House property if such a sale ever takes place and if the loans remain outstanding when it does.

College loans (ii)

Included in creditors falling due after more than one year is a loan of: £67,500 (2023: £67,500) from Northern College. The outstanding loan was repayable by 2023 but a deferral to 2027 was agreed in order to assist cash flow during the Covid-19 crisis. Interest is payable at 2.5%. The original £60,000 loan was taken to convert offices into bedrooms. A further loan of £90,000 was taken to convert additional offices to bedrooms. The loans will be repaid as follows:

2025: £22,500 2026: £22,500 2027: £11,250

|

i 35 -

The colleges have confirmed that none of the loans will be required

to be repaid within a year.

LUTHER KING HOUSE EDUCATIONAL TRUST

|

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

Analysis ofmovement movement in restricted fund
Balance Incoming Resources’ Transfers Funds
1 September 2023 resources expended 31 August 2024
£ £ £ £ £
Property 700,000 - - - 700,000
Total 700,000 - - - 700,000
(Prior Year)
Balance Incoming Resources’ Transfers Funds
1 September 2022 resources expended 31 August 2023
£ £ Pa £ £
Property 700,000 - - - 700,000
Total 700,000 - - - 700,000

Restricted funds represent the value of assets acquired with money given for this specific purpose including the original gift of land and buildings to the Trust.

In 2008, substantial improvements were made to the buildings. The value of these have been reduced each year by depreciation. However, the Board decided to allocate the remaining balance on the improvements from restricted to unrestricted reserves during 2021.

20. Analysis of group net assets between funds

20.
Analysis of groupgroup net assets		 between fundsfunds
General Designated Restricted Total
Fund Fund Fund 2023
£ £ £ £
Tangible fixed assets 557,853 - 700,000 1,257,853
Other non-current assets - - - -
Cash at bank and in hand 145,868 - - 145,868
Other net current assets/(liabilities) (160,080) - - (160,080)
Creditors of more than one year (577,500) - - (577,500)
(33,859) - 700,000 666,141
(PriorYear) General Designated Restricted Total
Fund Fund Fund 2022
£ £ £ £
Tangible fixed assets 575,269 - 700,000 = 1,275,269
Other non-current assets - - - -
Cash at bank and in hand 291,225 - 291,225
Other net current assets/(liabilities) (170,937) - (170,937)
Creditors of more than one year (577,500) (577,500)
118,057 - 700,000 818,057

= 37 =

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

21. Related party transactions

Transactions between the parent and the wholly controlled trading subsidiary have not been disclosed due to the fact that the subsidiary is wholly owned. Advantage has been taken of the available exemption under Section 33 of FRS 102.

Luther King House Conference & Accommodation Services Ltd is exempt from audit by virtue of s477 of the Companies Act.

The three Colleges below are member bodies of the Trust, and have rights and responsibilities as set out in the Memorandum of Association.

The Trust made sales of £81,023 (2023: £72,055) to Northern Baptist College and at year end was owed £42 (2023: £Enil) by the College. Total interest paid on loans was £16,121 (2023: £10,398).

The Trust made sales of £163,791 (2023: £130,902) to Northern College and at year end was owed Enil (2023: £nil) by the College. Total interest paid on loans was £9,616 (2023: £6,394).

The Trust made sales of £13,204 (2023: £6,340) to Unitarian College and at year end was owed £318 (2023: £nil) by the College. Total interest paid on a loan was £2,614 (2023: £2,000).

22. Financial Instruments

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||||||||||| |---|---|---|---|---|---|---|---|---|---| |Financial|assets|that|are|measured|at|amortised|cost:|2024|2023| |£|£| |Trade|debtors|10,159|7,587| |Cash|145,868|291,225| |156,027|298,812| |2024|2023| |Financial|liabilities|that|are|measured|at|amortised|cost:|£|£| |Trade|creditors|24,717|34,965| |Other|payables|117,771|100,536| |Loans|77,500577,500 _| |719,988|713,001| |23.|Reconciliation|of|net|(outgoing)/incoming|resources|to|net cash cash|outflow from from| |operating|activities| |2024|2023| |£|£| |Net|incoming/(outgoing)|resources|(151,916)|44,018| |Depreciation|41,676|43,960| |Investment|income|(633)|(540)| |Interest|payable|28,350|18,792| |Decrease|in|stock|62|(69)| |Decrease/(Increase)|in|debtors|(9,322)|(2,752)| |(Decrease)/Increase|in|creditors|(1,596)|57,427| |Net|cash|outflow from|operating|activities|(93,379)|160,836|

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23. Reconciliation of net (outgoing)/incoming resources to net cash cash outflow from from operating activities

LUTHER KING HOUSE EDUCATIONAL TRUST

| | |

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

Reconciliation of net cash flow to movement in net debt

2024
£		 2023
£
Increase/(Decrease) in cash in the year (145,357) 120,320
Cash outflow from other loans - -
Change in net debt resulting from cash flows (145,357) 120,320
Movement in net debt in the period (145,357) 120,320
Net debt brought forward (286,275) (406,595)
Net debt carried forward (431,632) (286,275)
24.
Analysis of reconciliation of net debt
Brought Cash flow Carried
Forward Forward
£ £ £
Net cash
Cash at bank and in hand 291,225 (145,357) 145,868
Debt due after 1 year (577,500) - (577,500)
Debt due within 1 year - - -
Netdebt (286,275) (145,357) (431,632)

25. Post Balance Sheet Event

The trustees have been working with Northern Baptist College and Northern College to ensure the longevity of all three organisations. The decision has been made to transfer the Trust and all staff to a new entity on 1st September 2025. All assets, liabilities and operations will transfer to the new entity for nil consideration. From the date of transfer Luther King Educational Trust will cease operating. Following the completion of the transfer, the trustees of Luther King House intend to dissolve the company.

LUTHER KING HOUSE EDUCATIONAL TRUST

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 AUGUST 2024

26. Prior Year Consolidated Statement of Financial Activities

Unrestricted Restricted Total Funds’ Total Funds
Note Funds Funds 2023 2022
Income: £ £ £ £
Income from charitable activities:
Academic and housing activities 3 348,437 - 348,437 308,595
Income from othertrading activities:
Commercial trading operations 4 941,093 - 941,093 859,800
Investment income 5 540 - 540 16
Total income 1,290,070 - 1,290,070 1,168,411
Expenditure
Costs ofraising funds
Commercial trading operations 607,512 - 607,512 523,198
Expenditure on charitable activities:
Academic and housing activities 6 638,540 - 638,540 644,174
Total expenditure 1,246,052 - 1,246,052 1,167,372
Net income/(expenditure) before tax
and net movement in funds forthe year 9 44,018 - 44,018 1,039
Tax expense 11 - - - (5,852)
Net income/(expenditure) 44,018 - 44,018 (4,813)
Reconciliation offunds
Total funds brought forward 74,039 700,000 774,039 778,852
Totalfundscarriedforward 118,057 700,000 818,057 774,039