THE DOLPHIN SQUARE CHARITABLE FOUNDATION (Registered Charity Number: 1110090) REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2024
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2024 CONTENTS REFERENCE AND ADMINISTRATIVE DETAILS......... REPORT OF THE CHAIR................................................................................................................... REPORT OF THE TRUSTEE............................................................................................................. STATEMENT OF TRUSTEE'S RESPONSIBILITIES...................................................................19 INDEPENDENT AUDITOR'S REPORT........................................... .20 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES...................................................24 CONSOLIDATED BALANCE SHEET................................................................................... .26 BALANCE SHEET............................ .27 CONSOLIDATED CASHFLOW STATEMENT..............................................................................28 NOTES TO THE ACCOUNTS.,......................... .29
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REFERENCE AND AbMINISTRATIVE DETAILS (continued) Banker Barclays Bank plc Level 25 1 Churchill Pla London E14 5HP Solicltors CMS Cameron McKenna Nabarro Olswang LLP Cannon Place 78 Cannon Street London EC4N 6AF Devonshires Solicitors 30 Finsbury Circus London EC2M 7DT Auditor Crowe U.K. LLP 55 Ludgate Hill London EC4M 7JW Investment Managers Cazenove Capital Management 1 London Wall Place London EC2Y SAU
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REFERENCE AND ADMINISTRATIVE DETAILS Corporate Trustee: Dolphin Square Charitable Trustee Limited Brand name: Dolphin Living Governors of Corporate Trustee Andrew Giblin (Chair) Deirdra Armsby Bruce Clitherow Paul Disley-Tindell Jason Green Jo Moran Julia Moulder Sarah Philbrick Sarah Smith Anna Strongman Acquisition, Flnance and Development Committee Julia Moulder (Chair) Andrew Giblin Jason Green Katherine Russell Anna Strongman Audit and Risk Committee Sarah Smith (Chair) Deidra Armsby Ben Laryea Sarah Philbrick Operations Committee Jo Moran (Chair) Bruce Clitherow Paul Disley-Tindell Ben Laryea Sarah Philbrick Janice White Remuneratlon and Nomlnatlons Commlttoe Andrew Giblin (Chair) Jo Moran Julia Moulder Sarah Smith Key management personnel Olivia Harris (Chief Executive) Jacqueline England Matthew Lamb Gary Preston Octavia Williams
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE CHAIR FOR THE YEAR ENDED 31 MARCH 2024 Introduction Dolphin's Living's unique offer is providing homes at below market rent specifically for working Londoners on modest incomes. In its early years Dolphin Living was primarily a developer of new homes. Now with a substantial portfolio, the charity and its strategy have matured to encompass the stewardship of those homes and the services we provide to our residents, with residents being a focal point in all we do. Delivery of a truly customer centric approach requires a culture whereby all Dolphin suppliers and colleagues acknowledge they are accountable for the experience residents have because of the decisions they make. strategy The Board formulated a new strategy in May 2024 which will take the Group through to 2027. It is based around three core pillars: Residents., Homes,. and Growth. These are discussed in more detail later in this report. To deliver this strategy we have expanded the Dolphin Living team, bringing in expertise in customer service and asset management, whilst maintaining strong development and finance teams. We are also investing in technology and resources to improve the data and understanding we have of our homes and the services we offer our residents. Strong financial position The Group's underlying financial performance during the year has been strong. As a result of full year's income from the prior year acquisitions, and the current year acquisition, rental income increased by £0.7m to £13.3m. Excluding the impairment at Parkhouse Street, which is discussed later, we achieved an operating surplus of £0.8m. Our rent collection remains strong and we have seen only a relatively small increase in arrears. The cost of living crisis and increased property maintenance costs continues to present the Group and its residents with a challenging environment during the 2023124 financial year. Against this background, our team have maintained our proactive and collaborative approach and increased our focus on long term cyclical maintenance whilst continuing to provide high quality and affordable homes to working Londoners. Our balance sheet remains strong with net assets of £166.9m.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE CHAIR FOR THE YEAR ENDED 31 MARCH 2024 (continued) Properties and pipeline Following the acquisition of one property comprising 25 homes and the disposal of six homes during the year, the Group's portfolio totalled 838 homes at the year end. At which time occupancy was 980/0. Our plans for the redevelopment of the New Era estate have been delayed as a result of the recent requirement by the London Borough of Hackney (LBH) and emerging Building Regulations for a second staircase. However, earlier this year we selected a development partner and we are working with them and LBH to produce a scheme which meets the new requirements and submit an updated planning application later in the year. During the year, we explored actions required to achieve the fuel poverty strategy of EPC C for all homes by 2030. This exercise included analysing data for our properties such as heating type, construction age, property type, wall type, roof insulation levels and glazing type, as well as energy efficiency data from the EPC assessment, Supporting our residents As part of our annual Board strategy meeting each Board member and Direclor met with resident in their home. This was an opportunity to hear directly from residents and reflect their views in our new strategic plan. Surveying our residents is an important tool to understand our residents experience and ensure we take action to improve the areas that matter most to them. Our annual customer survey resulted in a Net Promoter Score (NPS) of 31 and across Tenant Satisfaction Measures (TSMS) we consistently scored an average of 690h. Positive feedback from our residents includes common themes on affordability, value for money, good locations for work and transport, as well as community. These all align with the charitable benefit the Charity seeks to deliver. The challenges faced by our residents caused by the cost of living crisis are ongoing. We have continued our open dialogue with all residents and have encouraged those in need to approach us for assistance, particularly those in financial hardship. The response has been positive and we have provided assistance through rent deferrals, waivers and payment plans, supporting our residents to maintain their tenancies where possible.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE CHAIR FOR THE YEAR ENDED 31 MARCH 2024 (continued) Environmental, social and governance (ESG) Like all organisations, particularly those within real estate, we have both a responsibility and financial imperative to measure and improve our sustainability performance. Our primary charitable objective is to 'provide reasonable assistance to those who cannot afford to rent orbuy neartheirplace of work,. Delivering on this social purpose, with a particular focus on affordability of our homes, both in terms of rent and utilities, is therefore a priority. As a property owner and developer, we contribute to the reduction of carbon emissions through location, design, use and retrofit of our properties. We work with residents to resolve the root causes of any damp and mould found in their homes and enable them to live safely and comfortably in their homes. The Group was an early adopter of The Good Economy ESG reporting standard and our third report was published in October 2023. The second year of a three-year term of our SHIFT accreditation by Suss Housing was completed last summer and we attained a silver standard. Health and safety Achieving full compliance with health and safety regulations remains firmly at the core of our operations. We regularly review our portfolio and take appropriate action to keep our homes safe and compliant with all existing and emerging legislation. Looking forward Following the appointment of a dedicated Customer Services Director last year, we have reviewed all aspects of our residents, customer experience and have introduced improvements to our customer service offer in collaboration with our managing agent. This work is ongoing and following a review of our repairs process during the year includes focusing on delivering a more customer centric approach to repairs. The organisation is well placed to continue to make significant progress and growth over the next decade, providing homes for the many people who keep London going and who help to make it such a successful, vibrant and multicultural city. I would like to thank the capable and dedicated team of governors, executives and staff for helping to make this happen. Andrew Giblin (C Ir of Governors)
DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 The Trustee presents the annual report and audited financial statements for the year ended 31 March 2024. These financial statements reflect the results of the Charity and its subsidiaries (the 'Group'). ESTABLISHMENT The Dolphin Square Charitable Foundation (the 'Charity') was first registered as a charity on 17 June 2005 under registered Charity Number 1110090. Its governing document is a Trust Deed dated 11 May 2005. TRUSTEE Dolphin Square Charitable Trustee Limited is the corporate trustee of the Charity. Its Govemors are as follows: Andrew Giblin (Chair) Deirdra Armsby Bruce Clitherow Paul Disley-Tindell Jason Green Jo Moran Julia Moulder appointed 1 January 2024 appointed 1 January 2024 Sarah Philbrick Sarah Smith Anna Strongman The company secretary is Olivia Harris. There are four classes of membership: The Dolphin Square Trust (represented by Bruce Clitherow) Westminster City Council (represented by Deirdra Armsby) Citywest Homes other Governors The rights of the various classes of members are set out in. the Memorandum and Articles but in summary are: The right to nominate a governor and to veto a governorfs removal. The right to nominate a governor and to veto certain amendments to articles. The right to nominate a governor. No special rights.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) STRUCTURE, GOVERNANCE AND MANAGEMENT Dolphin Square Charitable Trustee Limited (the 'Trustee') is a company limited by guarantee (number 5442737, incorporated 4 May 2005) and was formed to declare the trust and to act as trustee of the Charity. The Charity was originally funded by a total of £125m received in accordance with the Deed of Gift between Dolphin Square Trust Limited and the Trustee as trustee of the Charity. These monies were realised from the sale of leasehold interests held by Westminster City Council and the Dolphin Square Trust (Industrial & Provident Society: 16737R) in the Dolphin Square mansion block in Pimlico. The Trustee holds the assets to apply the income and, at its discretion, the capital in furtherance of the objectives. The Governors meet quarterly to set the strategy and policies of the Charity and monitor operational activity and financial performance. Day-to-day management of the work of the Charity is delegated to the Chief Executive and her team. The Charity has committees covering areas of specialised interest: Acquisition, Finance and Development., Audit and Risk., Operations; and Remuneration and Nominations. These committees meet regularly and he5p to implement the Board's decisions and report to the main board. Training opportunities are regularly identified and Governors are encouraged to participate in those that they feel to be of use. The Governors of the Dolphin Square Charitable Foundation received no remuneration during the year. Details of Governors, expenses and related party transactions are disclosed in notes 17 and 19 to the accounts. Governors are required to disclose all relevant interests and register them with the Chief Executive and in accordance with the Charity's policy withdraw from decisions where a conflict of interest arises. Several Governors are active in the affordable housing sector. The Charity's trust deed recognises the potential for conflicts of interest to oGGur and regulates how they are managed at Board meetings. The Charity has three subsidiaries, Dolphin Housing Limited (Community benefit society number 32446R, regulated by the Regulator of Social Housing), Hoxton Regeneration Limited and DSF Developments Limited. A number of Governors and staff of the Charity are directors of the subsidiaries. Dolphin Housing Limited also has one independent director. The subsidiaries hold regular Board meetings and directors are invited to attend committee meetings as necessary. In accordance with normal industry practice the independent director of Dolphin Housing Limited reiVeS remuneration. From January 2024, the Board has operated as a joint Board of the Charity and Dolphin Housing Limited. This change was put in place to support a more streamlined approach in Board meetings. Provisions are in pla to manage any conflicts of interest that may arise as a result of this structure.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) STRUCTURE, GOVERNANCE AND MANAGEMENT (continued) During 2023, one Governor of the Charity and two independent directors of Dolphin Housing Limited, who are also members of the Board sub-committees, completed the recommended maximum term and so retired from the Board. The method of recruitment, induction and appraisal of Governors is decided upon by the Board in accordance with the articles and in light of best practice within the sector. Following an assessment of the Charity's business arid skills requirements, two Governors were appointed to the joint Board. Additionally, one independent committee member wqs appointed to both the Acquisition, Finance and Development Committee and the Operations Committee during the year. All staff are jointly employed by the Charity and its subsidiaries. Each entity is responsible for its own direct costs. The Charity has entered into a cost sharing agreement for central costs with its subsidiaries based upon staff allocations. The Charity enters into other arms-length transactions with its subsidiaries, OBJECTIVES AND ACTIVITIES The Objectives of the Charity are to: 'Provide reasonable assistance in securing accommodation within the City of Westminster for individuals (and any dependants living with them) who are in need of accommodation as a result of.. their employment in the public or voluntary sectors or in relevant employment in the City of Westminster and the surrounding area, having regard to the fact that such individuals could not afford to secure such accommodation on normal commercial terms., or financial hardship, social or economic need, age, ill health, disability or any other need. The objectives define the interpretation of the terms 'public sector, voluntary sector,, and 'relevant employment. They also describe the consultation required between the Charity and Westminster City Council regarding the determination of the needs of people living in the area and the activities of the Charity, which will meet those needs. With the consent of Westminster City Council, the Charity may secure accommodation outside of the City of Westminster.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) STRATEGY In May 2024, the Board and the executive team formulated a new thre&year strategy to take the Group through to 2027. The strategy is broken down into three areas of focus.. customers. homes. and growth. The key issues in the housing sector; affordability, safety, sustainability. emerging legislation and inclusivity, are embedded within our strategy across the three core areas of residents, homes and growth. These three pillars are not independent of each other and to deliver this strategy the links between them are acknowledged. Residents Our residents are central to what we do and why we do it. They should all be treated equally irrespective of housing tenure. We will continuously improve our offer to our residents through: establishing a customer experience management system., delivering improvements in customer experien where it matters most to our residents. and growing a customer centric culture across all of Dolphin Living. Homes We provide homes that meet our residents, needs and that they can afford near to their place of work. We will: keep our homes and customer safe by delivering 100 % health & safety compliance., evolve the repairs service to be customer centric., reduce our customers, energy costs by making our homes more energy efficient. and provide quality homes to all of our residents by ensuring all homes are decent, safe and energy efficient through effective planned maintenance and management. Growth Dolphin will deliver a sustainable level of growth within a 30-minute commute of Westminster by: improving existing homes and rebuilding our older estates; acquiring affordable housing delivered by other developers; and identifying land-led opportunities to deliver new homes. We will deliver our strategic aims whilst being mindful of financial and resource capacity constraints, data management, external changes to law, regulation and policy, as well as embedding our approach within our culture. Strong governance, financial resilience and responsible management underpin the delivery of the strategy.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) ACHIEVEMENTS AND PERFORMANCE Homes available to rent During the year, we acquired one property at Marylebone Square which added 25 homes to our portfolio. We also disposed of six homes from our portFolio which now comprises 838 homes for rent and 13 commercial units. Of the total portfolio 720k (2023: 720/0) is intermediate rent, providing homes at an average discount of 390k (2023: 340k) to market rent whilst delivering a financial return that ensures the continued financial viability and growth of the Charity. Number of homes Soclall affordable Intermediate Market TOTAL Commercial unlts TOTAL Portfollo at 31 March 2023 601 49 169 819 13 832 Disposals Marylebone Square Portfollo at 31 March 2024 16) 25 16) 25 (6) 25 620 49 169 838 13 851 % ofportfolio Planning.. New Era Existing units demolished for redevelopment Forecast to 31 March 2029 72% 20% 98% 100% 97 49 97 98 {96) (96) {12) 1108 621 49 169 839 841 We continue to meet our charitable objectives with the majority of our affordable housing being intermediate rental homes. These homes provide stable tenancies at a range of rents affordable to households eaming less than the affordable housing incomes limits set annually by the Mayor of London. Priority is given to those who can afford the rent yet earn the least and those who will most fully occupy each home. In following our charitable objects, we aim to prioritise those with Westminster connection, Alongside our intermediate rental homes we provide a smaller number of homes at affordable and social rent that are subject to nominations by the local authority. We also own and let a portfolio of homes for those with a more acute housing need. Our intermediate, affordable and social rent homes are cross-subsidised by the 169 market rent homes. Throughout the year we achieved 100 % compliance (2023.. 1000/0) with our Health and Safety KPI targets. These KPIS include.. ensuring homes have current fire and general risk assessments, and valid gas and electrical certificates., and that they have been inspected in the current year. 10
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) ACHIEVEMENTS AND PERFORMANCE (continued) Financial review 2024 2023 2022 2021 2020 Net a55ets £166.9m £168.5m £168.4m £166.7m £166.Om Turnover £15.2m £12.7m £12.5m £12.Im £9.2m Operatln8 surplus Operatlng margin Gearln8 Interest cover £4.7m £4.3m £5.6m £4.3m £3.7m 32% 71% 34% 45% 63% 36Y. 40% 71% 64% 64% Homes In portfolio Homes completed in year 838 819 791 798 660 25 31 141 33 1 Tumover includes all income except for profil on sale of land and buildings. 2 Operating surplus excludes finance costs, restri¢led and investment income and goodwill amortisation. 3 Operating surplus as a proportion of in¢ome from charitable and other trading activities. Loans as a proportion of total funds. S Income from charltable and oth8r trading activities divided by finance costs. Turnover, which Gomprises rental income, investment income and other income, during 2023124 increased from last year due to.. a full year of the three acquisitions, comprising a total of 31 homes, which completed during last year; an increase in investment income due to the increases in deposit rates. and other income received during the year, and was offset by the decrease in income resulting from the disposal of six homes that did not deliver our strategic objectives (2023.. three). Rental income is received from two types of property; purpose-built developments., and existing properties that the Charity has acquired, and from three sources; intermediate rent leases; market rent leases (residential and commercial). and leases under its objective to assist those in acute housing need. Other income relates to amounts received from third parties in relation to reimbursement of costs incurred by the Group. Expenditure in the year was considerably higher than during the previous year due to an increased level of investment at our properties as these properties age and the high levels of inflation experienced during the year. In addition, higher property management and depreciation costs reflect the increased portfolio size.
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) Financial review (continued) Finance costs are higher than last year due to the increases in base rates during the year, although our exposure to such increases is limited as 94.4 % of our loans are at fixed interest rates. Excluding the impairment at Parkhouse Street of £2.5m, net income for the Group for the year was £0.8m (2023.. £0.1 m) and reserves of £166.9m (2023: £168.5m) were carried forward. Funding In 2017, we issued a £25m charity bond and we have a further £20m of bonds available for future issue if required. Last year, we completed two new facilities of £10.Om and £2.9m with Legal and General and Unity Trust Bank, respectively. No additional funding was obtained during the year. We continue to investigate the requirement for new funding facilities over the short and medium-term as we look to implement our development and acquisition strategies. The financial strength of the Group remains strong with cash or near cash being £23.Om (2023: £21.6m) and a net asset position of £166.9m (2023: £168.5m). Development properties and pipeline During the year, we completed the acquisition of 25 homes for intermediate rent at Marylebone Square, Westminster. In July 2020, the London Borough of Hackney ('LBH') resolved to grant planning consent for the New Era estate where 199 new homes will be built. However, the requirement for a second slaircase in new developments above 18m has delayed our plans. Earlier this year we selected a development partner and we are working with them and LBH to redesign our plans to incorporate the second staircase and to ensure financial viability of the scheme. A revised application will be submitted in early 2025. We are updating the planning application for our proposed development at Parkhouse Street, Camberwell, where we have a resolulion to grant planning for 85 homes. The updated plans take into consideration new Fire Safety regulations by incorporating second staircase access as well as the financial viability and deliverability of the scheme. The Board have defined Growth within our strategy as improvements to existing homes as well as the acquisition and development of new homes. During the year, we commenced a review of two existing estates owned by the Charity, being Mount Close, Ealing and Havelock House & The Hermitage, Lewisham. The work includes a review of the opportunities within each estate to improve the existing homes, both from a design and sustainability perspective. We continue to be active in the market looking for opportunities to acquire site5, completed properties and existing homes. We remain committed to our Westminster beneficiaries, albeit acknowledging that in balancing costs against number of beneficiaries, we will continue to seek opportunities in areas that provide a sustainable commute to Westminster as well as making acquisitions within Westminster. 12
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) ACHIEVEMENTS AND PERFORMANCE (continued) Customer 5erviGe Following on from our review last year of our residents. experience we have" increased our resident engagement with at least one in person meeting at each property during the year and more as required, in addition to an increase in 1..1 home visits. The outcomes of these meetings have, and will continue to. inform our approach and help us improve the service that we offer" carried out a review of our repairs service with a focus on making it resident centric. Key actions have been identified and will be rolled out over the coming year. improved our arrears management, increasing engagement at an early stage and offering support to residents through deferral, waiver and rent payment plans., and made improvements to the onboarding process for new residents, which are underway and ongoing. Surveying our residents is an important tool to understand their experience and ensure we take action to improve the areas that matter most to them. Our annual customer survey resulted in a Net Promoter Score (NPS) of 31 and Tenant Satisfaction Measures (TSMS) identified that 740/0 of residents are satisfied with our services. Across the TSMS we scored an average of 69 % . Our lowest scoring TSM was in response to complaint handling where we will seek to deliver improvement next year, in particular as we roll out improvements to our repairs service which was the main source of customer complaints. We continue to improve our response to reports of damp and mould in our homes and have plans to carry out extensive capital works at some of our older properties. Our regimen of regular property inspections will also identify any cases which our residents do nol report. Our customer service colleagues, along with team members from our managing agents, Touchstone CPS, have undertaken training in the identification of domestic abuse within our homes and how to respond to suspected abuse, as well as further training on improving customer service specifically in written communications and complaints handling. We will be using the learning from this training to improve our services and support our residents. 13
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) Environmental, social and governance (ESG) monitoring and reporting Our stakeholders include our residents, local communities, investors, local government, our staff and Board. It is extremely important to us to continually improve our sustainability credentials. In order to assist measurement and reporting, the Group signed up as an early adopter of The Good Economy ESG reporting standard and our third report was published during the year. This standard sets out a number of baseline sustainability measures against which adopters must report and evidences our commitment to achieving high performance in all areas of ESG. We are measured as an organisation on our environmental and social impacts and risks, and the quality of our governance. The objectives of ESG reporting closely align to the Group's charitable objectives, our culture and the future legislative requirements WÉ expect to emerge in coming years. In both our homes and our office, and through development and our supply chain we will.. minimise our carbon footprint through reducing electricity and gas usage, and prioritising carbon reduction measures in our homes, developments and refurbishments. monitor our construction projects to reduce the environmental impact of activities on site., risk assess all our construction, development and refurbishment projects against the predicted local impacts of climate change. develop sustainable procurement processes for our goods and services., assess and improve carbon emissions across our housing stock. deliver net gain biodiversity at our developments, creating great places for both people and nature to thrive., work with residents so they can make greener chols,. and encourage our residents to put the environment first and to integrate good environmental practices into their everyday lives. Following a review of the available industry benchmarks undertaken last year, SHIFT by Suss Housing was selected as a sustainability measurelbenchmark. The second year of a three-year term of our SHIFT accreditation was completed last summer and we attained a silver standard. A sustainability group comprising the CEO and other senior members of staff, established last year, monitors and reviews our progress against the Group's targets. 14
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) ACHIEVEMENTS AND PERFORMANCE (continued) The team Our executive team, led by Olivia Harris as Chief Executive, comprises 17 employees across property acquisition & development, property letting & management, and finance. Remuneration is reviewed annually with reference to current salaries, wage inflation and market rates. Management sets the remuneration for all staff except for senior management whose remuneration is set by the Remuneration and Nominations Committee, which also approves the overall salary expenditure. Key management personnel are Olivia Harris (Chief Executive), Gary Preston (Finance Director), Jacqueline England (Customer Services Director), Matthew Lamb (Development Director) and Octavia Williams (Asset Management and Governance Director). PLANS FOR FUTURE PERIODS We will continue to build our portfolio of intermediate rental properties through direct development, working with developers to acquire the affordable housing element of larger schemes and through the acquisition of existing homes. We continue to be open to joint venture opportunities with other charitable or benevolent landowners who wish to develop their sites and lack either capital or development expertise. Our planning consent at the New Era estate will further enhance our growing portfolio of intermediate rental homes. We have progressed this scheme during the year and look fonNard to delivering this development in the near future. We are also exploring other development opportunities within our portfolio, such as those discussed earlier, in terms of both the resource reqUId and the financial capacity to deliver them, We aim to provide an exemplary customer experience, as well as ensuring that our homes are regularly upgraded and the portfolio delivers its potential. We are increasingly focused on long-term cyclical works. Throughout all the Charity does, from design, through construction and delivery, to management, there is a strong commrtment embedded throughout the organisalion to meet our customers, needs and in doing so fulfilling our charitable objectives. We will continue to champion the provision of intermediate rental housing for working Londoners. We are monitoring the impact of rent reform proposals on our tenancies and our ability to continue to deliver charitable benefit to those who need it. To fund future growth we will raise additional finance as required but will always be mindful of maintaining the strong financial stability that currently exists. 15
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) PUBLIC BENEFIT The Charity has had regard to the guidance issued by the Charity Commission in respect of public benefit under the Charities Act 2011. The Board of Governors is keen to ensure there is an effective and appropriate balance of activity addressing the objectives of the Charity, both of which generate public benefit. Every development scheme the Charity undertakes will have a proportion of the development providing accommodation at rents lower than those available in an open market. This benefits those working in the City of Westminster and Greater London by reducing travel time and expense as well as providing a stable tenancy with limited rental increases in a property that is managed for the benefit of the tenants. These factors improve quality of life for those working in the City of Westminster and Greater London who are not able to afford market rents. The Charity provides accommodation to those in more acute financial hardship such as the homeless in the City of Westminster. The beneficiaries are housed in accommodation in the City of Westminster which is appropriate to their needs and family composition. The Charity also invests in projects that support the homeless to obtain work and provides accommodation to the beneficiaries of the projects. The provision of accommodation is another key stability factor supporting those entering the workplace. CHARITY CODE OF GOVERNANCE The Charity has adopted the Charity Code of Governance as set out by the Charities Commission. The Charity substantively complies with the Code of Governance and aspires to adopt all of the Code. FUTURE LEGISLATION We actively track emerging legislation which, at present, includes the Fairer Private Rented Sector White Paper. Currently, it is too early to understand the impact on our organisation as much of the detail will only be decided following consultation with the sector. RESERVES POLICY The reserves policy of the Charity is lo hold sufficient liquid assets and undrawn loan facilities to meet all commitments and at least 12 months of operating costs. The reserves of the Charity invested in liquid assets are held to provide certainty of amount, at maturity, to match the Charity's utilisation of these funds in its property development activities. The Charity has reserves of £166.9m invested in properties, working capital and liquid assets. The life cycle costs for our properties are reviewed annually and a long-term plan is in place to incur these costs at the end of their expected lives which are incorporated into our forecast cash flows. Free reserves, excluding fixed assets, long-term debt and committed funds, are £17.7m. This is in excess of our target of 12 months of operating costs as funds are held for acquisition opportunities. 16
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) INVESTMENT POLICY The Charity's treasury policy, including its investment strategy for non-property assets, is regularly under review by the Acquisition, Finance and Development Committee. In accordan with the reserves policy the Committee ensures that the projected investment in properties and operating costs can be covered by readily available funds, whilst ensuring that the risks inherent in the investment portfolio are mitigated and returns are maintained. During the year investment performance has been in line with the investment strategy. GOING CONCERN The continuing cost of living crisis and high inflation environment has impacted both the UK economy and to a lesser extent the charity's operations and finances. These have had a impact on the core operations of the Charity and Group with increased costs reflecting the ongoing high inflation levels. Nhilst we have seen a small increase in the rent arrears position, our collection rates of our residential income have remained high and the impact has been modest. Where tenants have approached the Charity for assistance, we have addressed each case individually and on its merits. We are providing as much assistance as we can where appropriate to tenants and want to work with them to overcome any financial hardship they may sustain. The Charity, as disclosed in this report, has substantial cash reserves. Having forecasted the Group's cashflow out to 2029130, and stress tested the rental receipts and costs impacted by interest rate and inflationary increases, over that same period, the Governors consider that the Group has sufficient cash reserves to meet any potential falls in rental income as well as any interest rate and inflationary Gost increases. Staff work a minimum of two days in the office with the remainder remotely. The IT platform supporting remote working continues to work well and following the introduction of a new accounting system in April 2024, our systems are now completely 'cloud' based strengthening our strategy of working anywhere at any time. We have experienced no down time in systems during the year with no disruption to the service levels expected of the Group. In 2021122, we respecified and retendered our property management services and as a result reappointed Touchstone CPS for a term of three years and we have agreed to extend their contract for a further year. We have a continuous dialogue with them and they are key to delivering the Group's service model. They are part of a larger housing group of companies and are financially secure. The executive team continue to monitor the financial position and performance of the Charity closely with updates on key metrics provided to Governors on a quarterly basis. The Governors, although acknowledging the potential impact of the cost of living crisis and increasing property management costs, are satisfied that the financial strength that underpins the Charrty provides sufficient confidence that the Charity and its subsidiaries have the ability to continue to operate as a going COnrn. 17
THE DOLPHIN SQUARE CHARITABLE FOUNDATION REPORT OF THE TRUSTEE FOR THE YEAR ENDED 31 MARCH 2024 (continued) BUSINESS RISK MITIGATION POLICY The Governors are responsible for safeguarding the assets of the Charity and for ensuring that it is fully compliant with relevant regulations and best practice. They review the key risks to which the Charity is exposed at least once a year, together with the operating and financial compliance controls that have been implemented to mitigate Ihose risks. The detailed risk register is mainlained by the executive team and a strategic risk register is prepared for regular review by the Audit & Risk Committee, and annually by the Board. The Board are of the view that the formal ongoing process for identifying, evaluating and managing the Charity's significant risks that has been in place for the year ending 31 March 2024 continues to be appropriate for the Charity. The key risks identified in the most recent review by the Board, including factors that are likely to affect the financial performanGe or position going forward are.. external market risks including supply chain, cost inflation and labour shortages that would impact on the Charity's ability to deliver services and manage costs., regulatory changes, in particular around sustainability, fire safety and housing delivery policy, which increase costs and potentially absorb significant amounts of management resources. the delivery of new homes for intermediate rent which is impacted by external market pressures and regulatory changes as described above., insufficient business continuity capacity in the event of a critical or emergency event, which could result in cessation or delay of delivery of strategic objectives, and in the most extreme case organisational failure., and dependency on key suppliers whereby Dolphin has significant exposure to the performance and financial stability of a small number of key suppliers. The controls and assurance in place for mitigating those risks are set out in the risk register and include.. oversight by the Board and sub-committees of those risks and assurance on performance measures and reporting intended to mitigate the likelihood of occurrence or impact upon occurrence of those risks crystallising; setting and reporting of key performance indicators; sensitising and stress testing budgets and business plans., implementing service standards which can be flexed as required; recruiting and retaining suitably qualified and experienced staff and professional advisors to oversee, advise and manage properties., providing staff and Board members with training and information to keep abreasl of regulatory changes., regular testing of the business continuity plan; robust procurement process including financial checks., and monthly monitoring of key supplier health and safety compliance. The Board continue to identify any skills gaps and the recruitment of new Governors is focused on acquiring the needed skills. 18
THE DOLPHIN SQUARE CHARITABLE FOUNDATION STATEMENT OF TRUSTEE'S RESPONSIBILITIES The Trustee is responsible for preparing the annual report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. Law applicable to charities in England and Wales requires the Trustee to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and the Group and of the Group's incoming resources and application of resources of the year. In preparing financial statements giving a true and fair view the Trustee should follow best practice and.. select suitable accounting policies and apply them consistently., observe the methods and principles in the Charities SORP., make judgements and estimates that are reasonable and prudent., state whether applicable accounting standards and statements of recommended practice have been followed, subject to any departures disclosed and explained in the financial statements. and prepare the financial stalements on the going concern basis unless it is inappropriate to presume that the Group will continue in operation. The Trustee is responsible for keeping accounting records that disclose with reasonable accuracy the financial position of the Charity and the Group and enable the trustee to ensure that the financial statements comply with the Charities Act 2011 and regulations made thereunder. The Trustee is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Crowe U.K. LLP has indicated its willingness to be reappointed as statutory auditor. Approved and authorised for issue by the Trustee on 9 July 2024 and signed on its behalf. Andrew Gibll (Chair of Governors) Julla Moulder (Governor) 19
INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE DOLPHIN SQUARE CHARITABLE FOUNDATION FOR THE YEAR ENDED 31 MARCH 2024 Opinion We have audited the financial statements of The Dolphin Square Charitable Foundation for the year ended 31 March 2024 which comprise consolidated statement of financial activities, consolidated balance sheet, balance sheet, consolidated cashflow statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: give a true and fair view of the state of the Group's and of the parent charity's affairs as at 31 March 2024 and of the Group's incoming resources and application of resources, for the year then ended., have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,, and have been prepared in accordance with the requirements of the Charities Act 2011. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAS (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Elhical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to golng concern In auditing the financial statements, we have concluded that the Trustee's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's or the Group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibililies of the Trustee with respect to going concern are described in the relevant sections of this report. Other information The Trustee is responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 20
INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE DOLPHIN SQUARE CHARITABLE FOUNDATION FOR THE YEAR ENDED 31 MARCH 2024 (continued) Other information (continued) 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 othenNise 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. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion.. the information given in the financial statements is inconsistent in any material respect with the Trustee's report; or sufficient accounting records have not been kept by the parent Charity., or the financial statements are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. Responsibilities of the Trustee As explained more fully in the Trustee's responsibilities statement set out on page 19, the Trustee is 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 Trustee 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 Trustee is responsible for assessing the Group's and the parent Charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the charity or to cease operations, or have no realistic alternative but to do so, Audltor's responsibilities for the audlt of the financial statements We have been appointed as Auditor under section 151 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conduGted 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. 21
INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE DOLPHIN SQUARE CHARITABLE FOUNDATION FOR THE YEAR ENDED 31 MARCH 2024 (continued) Auditor's responsibilities for the audit of the financial statements {continued) Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at.. vNM.frc.org.uklauditorsresponsibilities. This description forms part of our Auditor's report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are InStanS 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 detennination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Charities Act 2011 and together with the Charities SORP {FRS102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the Group's and charitable company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the Group and charitable company for fraud. The only other laws and regulations we considered in this context are taxation and employment legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Governors 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 within the timing of recognition of income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, and the Audit and Risk Committee about their own identification and assessment of the. risks of irregularities, sample testing on the posting of journals, analytical procedures and sample testing of income, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, and reading minutes of meetings of those charged with governance. 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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited prOdureS required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non- detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations. or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-complian with all laws and regulations. 22
INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF THE DOLPHIN SQUARE CHARITABLE FOUNDATION FOR THE YEAR ENDED 31 MARCH 2024 (continued) Use of our report This report is made solely to the charity's Trustee, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's Trustee those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity's Trustee as a body, for our audit work, for this report, or for the opinions we have formed. Crowe U.K. LLP Statutory Auditor 55 Ludgate Hill London EC4M 7JW 5 July 2024 23
THE DOLPHIN SQUARE CHARITABLE FOUNDATION CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2024 Restricted 2024 Unrestricted 2024 Total 2024 Note Income and endowments from: Restricted income- grants receivable Charitable activities Other trading activities Investment income Profit on sale of land and buildings Other income Total 10,242,721 3,090,159 1,051,346 426,064 841,700 15,651,990 10,242,721 3,090,159 1,051,346 426,064 841,700 15,651,990 Expenditure on: Raising funds Investment management fees Charitable activities Housing support Strategic development Finance costs Total resource8 expended 9,653,919 281,159 4,880,566 14,815.644 9,653,919 281,159 4,880,566 14,815,644 Net income 836,346 836,346 Impairment 12,500,000) (2,500,000) Net movement for the year 11.663.654) (1,663,654) Balance brought foNard at 1 April 2023 28,412,800 140,120,273 168,533,073 Balance carried forward at 31 March 2024 15 28,412,800 138,456,619 166,869,419 All amounts relate to continuing operations. All gains and losses recognised in the year are included in the statement of financial activities. The notes on pages 29 to 46 form part of the financial statements 24
THE DOLPHIN SQUARE CHARITABLE FOUNDATION CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2024 Restricted 2023 Unrestricted 2023 Total 2023 Note Income and endowments from: Restricted income- grants receivable Charitable activities Other trading activities Investment income Profit on sale of land and buildings Total 9,857,919 2,778,548 113,530 344.436 13,094,433 9,857,919 2,778,548 113,530 344,436 13.094.433 Expendlture on: Raising funds Investment management fees Charitable activities Housing support Strategic development Finance costs Totsl resources expended 8,352,486 284,853 4,325,371 12,962,710 8,352,486 284,853 4,325,371 12,962,710 Net Incomelmovement for the year 131,723 131,723 Balance brought forward at 1 April 2022 28,412,800 139,988,550 168,401,350 Balance carried forward at 31 March 2023 15 28,412,800 140,120,273 168,533,073 All amounts relate to continuing operations. All gains and losses recognised in the year are included in the statement of financial activities. The notes on pages 29 to 46 form part of the financial statements 25
THE DOLPHIN SQUARE CHARITABLE FOUNDATION CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2024 Nots 2024 2023 FIXED ASSETS Freehold buildings Leasehold buildings Land and buildings under development Tangible fixed assets Investments 94,870,369 158,288,748 94,925,886 156,918,128 10,759,607 108,317 12,000,000 15,618,419 97,376 276,027,041 267,559,809 CURRENT ASSETS Debtors and prepayments Cash at bank 10 11 2,498,330 10,991,930 1,656,203 21,711,801 13,490,260 23,368,004 LIABILITIES Creditors.. amounts falling due within one year 12 (3,582,026) (3,355,422) NET CURRENT ASSETS 9,908,234 20,012,582 TOTAL ASSETS LESS CURRENT LIABILITIES 285,935,275 287,572,391 Creditors: amounts falling due after more than one year 13 (119,065,856) (119,039,318) NET ASSETS 166,869,419 168,533,073 Unrestricted funds Designated funds 134,901,830 3,554,789 133,296,640 6,823,633 Total unrestricted funds Restricted funds 138,456,619 28,412,800 140,120,273 28,412,800 TOTAL FUNOS 15 166.869,419 168,533,073 Approved and authorised for issue by the Trustee on 9 July 2024 and signed on its behalf Andrew Gibli (Chair of Governors) Julia Moulder (Governor) The notes on pages 29 to 46 form part of the financial statements 26
THE DOLPHIN SQUARE CHARITABLE FOUNDATION BALANCE SHEET AS AT 31 MARCH 2024 Note 2024 2023 FIXED ASSETS Freehold buildings Leasehold buildings Land and buildings under development Tangible fixed assets Investments 69,860,966 146,074,602 69,911.134 148,726,652 7,280.067 108,317 38,059,666 9,157,636 97,376 26,059,666 261,383,618 253,952,464 CURRENT ASSETS Debtors and prepayments Cash at bank 10 11 13.741,331 10,687,544 11,498,964 21,558,645 24,428,875 33,057,609 LIABILITIES Creditors.. amounts falling due within one year 12 12,625,423) (2,330,725) NET CURRENT ASSETS 21,803,452 30,726,884 TOTAL ASSETS LESS CURRENT LIABILITIES 283,187,070 284,679,348 Creditors.. amounts falling due after more than one year 13 (116,234,881 (116,212,686) NET ASSETS 166,952,189 168,466,662 Unrestricted funds Designated funds 134,984,600 3,554.789 133,230,229 6,823,633 Total unrestricted funds Restricted funds 138,539,389 28.412,800 140,053,862 28,412,800 TOTAL FUNDS 15 166,952,189 168,466,662 The Charity had gross income of £13,094,072 (2023.. £11,063,713) in the year and a net negative movement on reserves of £1,514,47312023.' £2,804,059 negative). Approved and authorised for issue by the Trustee on 9 July 2024 and signed on its behalf: Andrew Giblin (Chair of Govemors) Julia Moulder (Governor) The notes on pages 29 to 46 form part of the financial statements 27
THE DOLPHIN SQUARE CHARITABLE FOUNDATION CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2024 Note 2023 2022 Cash flows from operating actlvltles: Net cash used in operating activities 500,574 994,202 Cash flows from investing activities: Interest from investments Proceeds from the sale of propety, plant and equipment Purchase of property, plant and equipment Amounts invested PrOedS of sales of investments 1,051,346 2,440,413 (2,561,600 112,000,000 113,350 1,273,979 111,259,492) 7,887,904 Net cash used in investing activities 111,069,841) (1,984,259) Cash flows from flnanclng actlvltles: Repayments of borrowing New financing net of fees 1150,604) 1132,130) 12,489,007 Net cash provided by financing activities 1150,604) 12,356,877 Cash and cash equivalents: Change in the reporting period Balance brought forward at 1 April {10,719,871) 21,711,801 11,366,820 10,344,981 Cash and cash equlvalents at the end of the reportlng period 10,991,930 21,711,801 Note a. Raconciliation of cash flows from operating activlties Net income for the reporting period Adjustments for.. Depreciats'on charges Impairment Amortisation of costs of raising finance Interest from investments Profit on the sale of fixed assets Increase in debtors Increase in creditors (1,663,654) 142,460 1,580,019 2,500,000 177,142 11,051,346) (426.0641 (842,1271 226,604 1,517,479 70,905 (113,350) (344,436) (367,415) 88,559 Not cash used in operating activitlOS 500,574 994,202 The notes on pages 29 to 46 form part of the financial statements 28
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 CHARITY INFORMATION The Charity is registered with the Charity Commission, registration number 1110090. The registered address of the Charity is 1 Castle Lane, London, SW1 E 6DR. ACCOUNTING POLICIES (a) Going concern Although the impact of the continuing cost of living crisis and high inflation environment to the economy has been significant the Charity and the Group are in a strong position to operate through the economic upheaval and be well placed for when the recovery comes. In addition, the Charity has substantial cash reserves to call upon if needed. Having forecasted the Group's cashflow out to 2025126 and having stress tested the rental receipts, and costs that could be impacted by interest rate and inflationary increases over that same period, the Governors feel that the Group has sufficient cash reserves to meet an any fall in rental income or increase in costs. In addition, the rent collection rates throughout 2023124 rna1ned high providing further confidence of the Group's cashflow and stability. These accounts are therefore prepared on a going concern basis. There are no material uncertainties over the Group's ability to continue as a going concern. (b) Basls of accounting The accounts have been prepared in accordance with the Charities SORP (FRS102) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland, the Charities Act 2011 and UK Generally Accepted Practice. The accounts have been prepared to give a true and fair view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities". Statement of Recommended Practice effective from 1 April 2005, which has since been withdrawn. The Charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes. The financial statements of the Charity and its three subsidiaries, DSF Developments Limited, Dolphin Housing Limited and Hoxton Regeneration Limited are consolidated, on a line-by-line basis, to produce Group financial statements. The Gonsolidated entity is referred to as 'the Group.. Only the financial activity of the Group is shown in the consolidated statement of financial activities. 29
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) ACCOUNTING POLICIES (continued) (c) Critical accounting judgements and key sources of estimation uncertainty In the application of the Charity's accounting policies, which are described in this note, judgements, estimates, and assumptions are made about the carrying values of assets and liabilities that are not readily apparent from other SoUrs. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods. The are no assumptions concerning the future or estimation uncertainty affecting assets and liabilities at the balance sheet date that are likely to result in a material adjustment to their carying amounts in the next financial year. In preparing these financial statements, key judgements have been made in respect of whether there are indicators of impairment of the Group's tangible fixed assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset. The Board have considered the measurement basis to determine the recoverable amount of assets where there are indicators of impairment based on EUV-SH or appropriate development appraisal. Development expenditure Development expenditure is capitalised in accordance with the accounting policy given below. Initial capitalisation of costs is based on management's judgement that technical and economic feasibility is confirmed, usually when a development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. Fixed asset depreciation Tangible fixed assets are depreciated overtheir expected useful economic lives. The expected lives of the assets are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. (d) Grants and donations Grants and donations are recognised when the Charity is entitled to the income, the receipt is probable and the amount can be quantified with reasonable accuracy. (e) Rental income Rental income is recognised as it falls due. Rental income charged at sub-market rates is recognised as income from charitable activities. All other rental income is recognised as income from other trading activities. 30
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) ACCOUNTING POLICIES (continued) In Investment income Interest inGome is included in incoming resources on a receivable basis. (g) Resources expended Expenditure is included on an accruals basis. Costs of charitable activities comprise all the resources applied by the Charity in undertaking its work to meet its charitable objectives. Housing support costs comprise staff and overhead costs and grants payable in support of housing projects. Grants payable are accounted for in the Statement of Financial Activities in the year in which they are authorised. Any amounts which have been authorised but which remain unpaid at the year-end are included within the current liabilities in the balance sheet. Strategic development costs comprise staff costs, overheads and fees payable to advisers in conjunction with the development of the Charity's objects. (h) Tangible flxed assets All tangible assets are shown at cost less depreciation. Additions to tangible fixed assets comprise costs of a capital nature and include Gapitalised interest and certain staff costs directly attributable to the management of a development. Capitalised interest is calculated at the rate on associated borrowings applied to direct expenditure between the date of gaining planning consent and the date of practical completion. Depreciation on tangible assets is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives. Depreciation will be calculated on the following basis., Office and computer equipment Office improvements Furniture in tenanted property Freehold buildings Leasehold properties 330k straight line 200/0 Straight line 33 % straight line Over 100 to 150 years Over the lower of their lease term and 150 years Land is not depreciated. (l) Buildings in development Developments are shown at cost of acquisition and spend to date after taking into account any impairment in value. No depreciation is charged on developments until such time as they are completed. 31
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) ACCOUNTING POLICIES (continued) ti> Investments Fixed asset investments include cash on long-tenm deposit and are shown at cost. (k) Pension costs The Group contributed to a defined contribution scheme pension scheme administered by an independent company and to employees, personal pension schemes. The pension costs represent the contributions payable by the Group to the schemes for the year. (l) Lease commitments Rental income paid under operating leases is charged to income on a straight-line basis over the lease term. (m) Business combinations The consolidated financial statements incorporate the financial statements of the Charity and all subsidiaries. These are adjusted, where appropriate, to confomi to Group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off over five years from the year of acquisition. The results of entities acquired or disposed of are included in the income and expenditure account after or up to the date that control passes respectively. (n) Financial instruments Financial assets and liabilities are measured at fair value which is the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at arnortised cost using the effective interest method. Loan transaction costs are amortised over the term of the loan. 32
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 {continued) RESOURCES EXPENDED Group 2024 Charity 2024 2023 2023 Charitable activities Housing support costs Staff costs Grants and donations Direct costs Property management costs Office costs Legal and professional fees Support costs Audit and accountancy fees Depreciation.. buildings 1,078,341 199,481 5,437,406 1,090,924 52,276 65,894 64,014 49,248 1,616,335 1,050,102 197,133 4,270,122 1,037,697 110,981 81,535 13,929 60,551 1,530,436 556,367 300,000 4,142,884 839,906 53,522 58,192 63,828 30,638 1,525,602 506,109 3,302,353 3,289,142 799,863 100,889 138,086 32,727 43,407 1,455,477 9,653,919 8,352,486 7,570,939 9,668,053 Strategic development costs Staff costs Direct costs Office costs Legal and professional fees Support costs Audit and accountancy fees Other 25,846 526 72,191 90,996 88,400 3,200 26,043 13,335 12,953 123,778 112,597 73,911 80,360 88,143 112,522 3,200 19,235 281,159 284,853 255,749 125,475 Support costs are either directly allocated to the activity, e,g. salaries, or shared pro-rata between the activities e.g. premises costs, During the year salary'costs capitalised to developments amounted to £239,639 (2023: £264,702). Legal and professional fees include costs relating to Crowe U.K. LLP for accountancy and tax services which totalled £13,540 for the Group (2023: £29,030). Grants and donations comprise: Group Charity 2024 2023 2024 2023 Paid in the year 199,481 197,133 300,000 3,288,096 33
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) STAFF COSTS 2024 2023 Gross salaries Employer's Nl contributions Employer's pension contributions 1,008,748 102,565 168,838 998,626 97,466 153,476 1,280,151 1,249,568 Key management benefits 559,698 598,365 The average number of employees in the year was 16 (2023.. 15). Employees are divided between housing support and strategic development, 8.8 (2022.. 7.8), respectively. The number of employees whose emoluments, excluding pensions, exceeded £60,000 was: 2024 2023 £60,000 - £69,999 £70,000 - £79,999 £80,000 - £89,999 £90,000 - £99,999 £100,000- £109,999 11 £110,000- £119,999 £120,000- £129,999 £130,000- £139,999 £140,000- £149,999 £150,000- £159,999 £160,000- £169,999 Pension payments of £168,838 (2023: £153,476) were made during the year in respect of 14 employees (2023.. 14). The Governors received no remuneration during the year (2023.. £nil). 34
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) FREEHOLD LAND AND BUILDINGS: Group Land Buildings Total COST At 1 April 2023 Additions Disposals 42,344,016 56,835,628 755,272 (101,687) 99,179,644 755,272 (415,972) (314,285) At 31 March 2024 42,029,731 57,489,213 99.518,944 DEPRECIATION At 1 April 2023 Charge in the year Disposals 4,253,758 403,484 (8,667) 4,253,758 403,484 (8,667) At 31 March 2024 4,648,575 4,648,575 NET BOOK VALUE At 31 March 2024 42,029,731 52,840,638 94,870,369 At 31 March 2023 42,344,016 52,581,870 94,925,886 Charity COST At 1 April 2023 Additions Disposals 21,435,768 52,144,098 734,942 (101.687) 73,579,866 734,942 (415,972) (314,285) At 31 March 2024 21,121,483 52,777,353 73,898,836 DEPRECIATION At 1 April 2023 Charge in the year Disposals 3,668,732 377,805 (8,667) 3,668,732 377,805 (8,667) At 31 March 2024 4,037,870 4,037,870 NET BOOK VALUE At 31 March 2024 21,121,483 48,739,483 69,860,966 At 31 March 2023 21,435,768 48,475,386 69,911,134 35
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) LEASEHOLD BUILDINGS Group Total COST At 1 April 2023 Additions Disposals Transfers from land and buildings under development 162,761,948 691,085 (1,678,234) 3,453,411 At 31 March 2024 165,228,210 DEPRECIATION At 1 Aprll 2023 Charge in the year Disposals 5,843,820 1,166,832 (71,190) At 31 March 2024 6,939,462 NET BOOK VALUE At 31 March 2024 158,288,748 At 31 March 2023 156,918,128 Charity Total COST At 1 April 2023 Additions Disposals 154,527,577 271,651 (1,893,115) At 31 March 2024 152,906,113 DEPRECIATION At 1 April 2023 Charge in the year Disposals 5,800,925 1,101,776 (71,190) At 31 March 2024 6,831,511 NET BOOKVALUE At 31 March 2024 146,074,602 At 31 March 2023 148,726,652 36
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) LAND AND BUILDINGS UNDER DEVELOPMENT Buildings under development Group Land Total At 1 April 2023 Additions Transfer to leasehold buildings Impairment 7,041,749 8,576,670 1,094,599 (3,453,411) (2,500,000) 15,618,419 1,094,599 (3,453,411) (2,500,000) At 31 March 2024 7,041,749 3,717.858 10,759,607 Charity At 1 April 2023 Additions Impairment 7,041,749 2,115,887 622,431 (2,500,000) 9,157,636 622,431 (2,500,000) At 31 March 2024 7,041,749 238,318 7,280,067 The impairment of £2.5m relates to our property at Parkhouse Street, Camberwell. We have a resolution to grant planning for 85 homes. However, in order to comply with new Fire Safety regulations and incorporate second staircase access and to ensure financial viability of the scheme, we are updating the planning application for our proposed development. At the year end, we have reassessed the value of the site and as a result have recognised an impairment of £2.5m. 37
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) TANGIBLE FIXED ASSETS Office improvements Computer and office equipment Total Group and Charity COST At 1 April 2023 Additions 87,886 9,200 117,783 11,444 205,669 20,644 At 31 March 2024 97,086 129,227 226,313 DEPRECIATION At 1 April 2023 Charge in the year 18,004 8,643 90,289 1,060 108,293 9,703 At 31 March 2024 26,647 91,349 117,996 NET BOOKVALUE At 31 March 2024 70,439 37,878 108,317 At 31 March 2023 69,882 27,494 97,376 FIXED ASSET INVESTMENTS: 2024 2023 Group Cash held as an investment 12,000,000 Historical cost 12,000,000 2024 2023 Charity Investments in subsidiaries Cash held as an investment 26,059,666 12,000,000 26,059,666 38,059,666 26,059,666 Historical cost 38,059,666 26,059,666 Investments in cash are primarily held to preserve the capital to meet existing capital commitments and for appropriate property investment opportunities as they arise. 38
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) FIXED ASSET INVESTMENTS (continued) The investment in subsidiaries figures above represent investments in the following subsidiaries.. Subsidiaries DSF Developments Limited 8327131 England Dolphin Housing Limited 32446R England Hoxton Regeneration Limited 597445 England Company number Incorporation Shareholding 2024 2024 2024 Assets Liabilities Fundlnet assets 913,406 919,011 (5,605) 13,276,666 9,985,411 3,291,255 22,844,134 5,192,782 17,651,352 Income Expenditure (Loss)Iprofit 160,259 163,106 (2,847) 2,368,908 2,486,424 (117,516) 1,000,029 913,762 86,267 10. DEBTORS Group Charity 2024 287,926 1,693,439 178,110 338,855 2023 299,571 1,162,253 194,379 2024 173,831 1,670,642 175,393 338,855 2023 178,603 1,127,224 191,717 Trade debtors Other debtors Prepayments Accrued income Amounts owed by subsidiaries 11,382,610 10,001,420 2,498,330 1,656,203 13,741,331 11,498,964 39
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 10. DEBTORS (continued) During the year the Charity provided funds to wholly owned subsidiaries under loan agreements and an agreement to provide support. At the year end, the amounts owed to the Charity by DSF Developments Limited were £238,014 (2023.. £154,818) under the development agreement. During the year, shared costs of £186,656 were recharged by the Charity to DSF Developments Limited (2023: £132,351). At the year end, the amounts owed to the Charity by Hoxton Regeneration Limited were £4,253,078 (2023. £4,764,925) including two loan agreements for £865,074 (2023. £865,074) and £2,491,190 (2023.. £1,198,202). Both loan agreements have a ten-year term and are repayable in three and four years respectively. During the year, a gift of £106,594 (2023: £449,441) was donated by Hoxton Regeneration Limited to the Charity. Additionally, finance costs were recharged by the Charity to Hoxton Regeneration Limited £225,998 (2023: £nil) and shared costs of £287,085 were recharged by the Charity to Hoxton Regeneration Limited (2023.. £297,972). At the year end, the amounts owed to the Charity by Dolphin Housing Limited were £6,897,003 (2023: £5,946,851) for shared costs and expenses including three loan agreements for £1,885,000 (2023: £1,885,000), £1,500,000 (2023. £1,500,000) and £2,285,000 (2023: £2,285,000> which are secured against certain assets owned by Dolphin Housing Limited. During the year, finance costs of £163,561 were charged by the Charity to Dolphin Housing Limited (2023.. £161,251) and shared costs of £283,751 were recharged by the Charity to Dolphin Housing Limited <2023.. £296,478). 11. CASH AT BANK An amount of £250,000 (2023.. £250,000) is currently held in reserve for specifiG development costs. 12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group 2024 Charity 2024 2023 2023 Trade creditors Social security & other taxes VAT Accruals Development retentions Loans Deferred income Other creditors 2,691 23,905 6,153 1,836,866 819,221 111,748 88,767 34,566 14,228 1,456,426 819,221 106,185 27,834 808,195 2,791 23,905 26,739 34,566 14,228 1,423,903 1,705,459 111,748 106,185 27,834 697,270 781,442 781,520 3,582,026 3,355,422 2,625,423 2,330,725 Deferred income relates to rental income received in advance from tenants which is then released after the year end in the period to which it relates. 40
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Group 2024 2023 Loans maturing.. Within one year In one to two years In two to five years In more than five years 123,771 132,520 25,455,807 95,518,236 118,208 126,439 25,434,634 95,668,636 121,230,334 {2,052,730 121,347,917 (2,202,414) Unamortised issue costs 119.177,604 (111,748) 119,145,503 (106,185) Due within one year Due in more than one year 119,065.856 119,039,318 Charity 2024 2023 Loans maturing.. Within one year In one to two years In two to five years In more than five years 123,771 132,520 25,455,807 92,593,236 118,208 126,439 25,434,634 92,743,636 118,305,334 {1,958,705) 118,422,917 (2,104,046) Unamortised issue costs 116,346,629 (111,748) 116,318,871 (106,185) Due within one year Due in more than one year 116,234,881 116,212,686 41
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (continued) 2024 2023 Interest rate Maturity Year Fixed rate Loan Loan Loan Loan Charity bond 53,493,438 26,000,000 5,000,000 5,000,000 25,000,000 53,493,438 26,000,000 5,000,000 5,000,000 25,000,000 2046 2046 2042 2053 2026 5.35¢ 4.25. 114,493.438 114,493,438 Floating rate Loan 3,811,896 3,929,479 1.60 % above base rate 2,925,000 1.35 % above base rate 2041 Loan 2,925,000 2032 121,230,334 121,347,917 At the balance sheet date, the Group held financial assets at amortised cost of £13,312,150 (2023: £23,173,616), financial assets at fair value through income and expenditure of £12,000,000 (2023.. £nil) and financial liabilities at amortised cost of £122,671,787 (2023.. £122,289,399). 14. MOVEMENTS IN NET DEBT Group At Al 31 March 2024 Non-cash changes 2023 Cashflows Transfers Cash Cash held as investments Loans due within one year Loans due in more than one year (21,711,801> (1,280,129) 12,000,000 (10.991,930) (12,000,000) (12.000,000) 106,185 5,563 111,748 119,039,318 (49,804) 76,342 119,065,856 97,433,702 (1,329,933) 81,905 96,185,674 Charity Cash Cash held as investments Loans due within one year Loans due in more than one year (21,558,645) (1,128,899) 12,000,000 (10,687,544) (12.000,000) (12.000,000) 106,185 5,563 111,748 116,212,686 {44,242) 66,437 116,234,881 94,760,226 (1,173,141) 72,000 93,659,085 42
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 15. MOVEMENTS IN RESERVES At 1 April 2023 Al 31 March 2024 Group Surplusl (deficit) Transfer Unrestricted funds Designated funds IWHOA fund Sinking fund 133,296,640 (1,810,096) 3,415,286 134,901,830 3,744,270 3,079,363 (189,481) 335,923 3,554,789 (3,415,286) Total unrestricted funds Restricted funds 140,120,273 28,412,800 (1,663,654) 138,456,619 28,412,800 168,533,073 (1,663,654) 166,869,419 At 1 April 2022 Al 31 March 2023 Surplusl (deficit) Transfer Unrestricted funds Designated funds WHOA fund Sinking fund 133,427,070 (130,430) 133,296,640 3,930,013 2,631,467 (185,743) 447,896 3,744,270 3,079,363 Total unrestricted funds Restricted funds 139,988,550 28,412,800 131,723 140,120,273 28,412,800 168,401,350 131,723 168,533,073 Charity At 1 April 2023 At 31 March 2024 Surplusl Ideficit) Transfer Unrestricted funds Designated funds WHOA fund Sinking fund . 133,230,229 {1,660,915) 3,415,286 134.984,600 3,744,270 3,079,363 (189,481) 335,923 3,554,789 (3,415,286) Total unrestricted funds Restricted funds 140,053,862 28,412,800 (1,514,473) 138,539,389 28,412,800 168,466,662 (1,514,473) 166.952.189 43
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 15. MOVEMENTS IN RESERVES (continued) At 1 April 2022 At 31 March 2023 Charity Surplusl (deficit) Transfer Unrestricted funds Designated funds WHOA fund Sinking fund 136,296,441 (3,066,212) 133,230,229 3,930,013 2,631,467 (185,743) 447,896 3,744,270 3,079,363 Total unrestricted funds Restricted funds 142,857,921 28,412,800 {2,804,059) 140,053,862 28,412,800 171,270,721 (2,804,059) 168,466,662 Restricted funds and the related transfer relates to the purchase or development of homes for use in the VVHOA scheme and reflects expenditure over and above the restricted grant received. The homes, and funds, are restricted for the duration of the scheme (15 years). The designated WHOA fund and the related transfer reflects the contingent liability for the payment of enhanced deposits to the participants of the scheme. The expenditure of VVHOA funds in the year relates to the successful payment of grants under the scheme. 44
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 16. NET ASSETS ACROSS FUNDS Restricted funds Designated funds Unrestricted funds Group At 31 March 2024 Fixed assets Current assets Liabilities 28,412,800 247,614,241 9,935,471 (122,647,882) 3,554,789 Total funds 28,412,800 3,554,789 134,901,830 At 31 March 2023 Fixed assets Current assets Liabilities 28,412,800 239,147,009 16,544,371 (122,394.740) 6,823,633 Total funds 28,412,800 6,823,633 133,296,640 Charity At 31 March 2024 Fixed assets Current assets Liabilities 28,412,800 233,170,818 20,874,087 (118,860,306) 3,554,789 Total funds 28,412,800 3,554,789 135,184,599 At 31 March 2023 Fixed assets Current assets Liabilities 28,412,800 225,539,664 26,233,976 (118,543,411) 6,823,633 Total funds 28,412,800 6,823,633 133,230,229 45
THE DOLPHIN SQUARE CHARITABLE FOUNDATION NOTES TO THE ACCOUNTS YEAR ENDED 31 MARCH 2024 (continued) 17. TRUSTEES, EXPENSES The Governors of Dolphin Square Charitable Foundation received no remuneration during the year. Expenses of £569 (2023: £429) were reimbursed to three (2023: three) Governors for travel, entertaining and subsistence .expenses incurred for business purposes. 18. CONTROLLING PARTY The ultimate controlling party is the Dolphin Square Charitable Trustee Limited, which is the trustee for the Charity. 19. RELATED PARTY TRANSACTIONS The Group operates a cost sharing agreement whereby support costs are shared between the entities within the Group. The employees are jointly employed by all Group operating entities. The details of these and other related party transactions can be found in notes 4 and 10. There were no other related party transactions in the current or prior year. 20. COMMITMENTS The Charity and the Group has the following commitments payable within the year to 31 March 2024: OPERATING LEASE: Group and Charity 2024 2023 Lease payments within one year Lease payments later than one year not later than five years 74,834 65,480 68,338 68,338 Amounts payable under operating leases during the year ended 31 March 2024 amounted to £28,072 (2023: £110,534). At the year end, the corporate trustee had authorised the following capital commitments forthe Charity and the Group: 2024 Authorised 2024 Contracted 2023 Authorised 2023 Contracted Capital commitments 4,583.914 942.221 3.150,934 2.300,934 46