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2022-12-31-accounts

Registered number: 05853180 Charity number: 1124661

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

CONTENTS

Page
Reference and Administrative Details of the Charity, its Trustees and Advisers 1
Trustees' Report 2 - 12
Independent Auditor's Report on the Financial Statements 13 - 16
Consolidated Statement of Financial Activities 17
Consolidated Balance Sheet 18
Charity Balance Sheet 19
Consolidated Statement of Cash Flows 20
Notes to the Financial Statements 21 - 42

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2022

Trustees UJ Revelins
Mrs I Grickus
Ms K I Zobens East
M Vizbulis
Mrs E Brauele (resigned 11 September 2023)
B Freimane
A Namsone Hatone (resigned 20 March 2022)
E Osa
J Voitkevics
G Lerhs (appointed 20 March 2022)
Company registered
number
05853180
Charity registered
number
1124661
Registered office
Catthorpe Manor
Lilbourne Road
Catthorpe
Leicestershire
LE17 6DF
Company secretary
UJ Revelins
Independent auditor
Crowe U.K. LLP
Black Country House
Rounds Green Road
Oldbury
West Midlands
B69 2DG
Solicitors
Brethertons LLP
Montague House
2 Clifton Road
Rugby
Warwickshire
CV21 3PX

Page 1

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

The Trustees present their annual report together with the audited financial statements of the Charity for the 1 January 2022 to 31 December 2022. The Annual Report serves the purposes of both a Trustees' report and a directors' report under company law. The Trustees confirm that the Annual Report and financial statements of the charitable company comply with the current statutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019).

Objectives and activities

a. Objectives and Aims

The Latvian Welfare Trust’s public benefit, charitable activities have significantly increased in scale in recent years, because of the huge increase in numbers of Latvians living in the UK. However, these activities build on what was put in place when the charity was formed focusing on:

The maintenance of the London and Catthorpe centres is of great psychological and practical significance to the Latvian community in Britain. The centres contain not only facilities but also works of art and important historical books and documents. It is fundamental to and makes possible our charitable activities. Hence, making a success of the trading activities that support the continued existence of the two centres takes a significant effort and focus.

All of the above, of course, was severely impacted by the Covid pandemic from March 2020 onwards and well into 2021. Latvian community schools, summer camps, church services, folk dancing groups, choirs, and folklore ensembles, which are the mainstay of our public benefit activity were effectively closed down and only gradually restarted their activities in the latter part of 2021. The annual midsummer festival, usually attended by 3-4,000 people, was cancelled for a second year running. We are pleased that we managed to keep our old people in the Catthorpe sheltered accommodation facility secure and cared for throughout the period. Trading activities to support our centres were also severely impacted, but thanks to Central and Local Government support, in particular the furlough scheme in 2020 – 2021 as well as a range of grants, we were able to reduce the financial impact.

With hindsight, we were very fortunate to have disposed of our hotel in Riga, Latvia, in 2019. It would have been almost impossible for the board to have dealt with the effects of the pandemic there at the same time as dealing with it in the UK.

We were able to continue building works and physical improvements to our two centres, because the Covid crisis had less impact on building activities and the lack of business activities meant work could be completed more quickly.

Our staff in particular, and our volunteers deserve our sincere thanks for the huge additional effort they put in to get us through the crisis.

Overview of our cultural centres

Catthorpe Manor is the registered office for the Trust, has a 20-room hotel, a restaurant and several function rooms and outbuildings, most of which are leased out to it subsidiary trading company, LWT Trading UK Ltd. The centre:

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Objectives and activities (continued)

The London centre operates as a guest house, but also performs the important role of providing a Central London venue for Latvians to meet for traditional and social activities. Its location is particularly attractive to visitors from Latvia and other countries. The centre:

Charitable activities run or supported by the Trust

In setting objectives and planning for activities, the trustees have given due consideration to general guidance published by the Charity Commission relating to public benefit, including the guidance 'Public benefit: running a charity (PB2)'.

Page 3

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Objectives and activities (continued)

Page 4

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Objectives and activities (continued)

social or economic circumstances with the object of improving their conditions of life.

Achievements and performance

a. Achievement and Performance

While both UK centres employ paid staff through its subsidiary company to carry out the normal day to day operational functions, most of the background work of the Trust is carried out by the trustees and other volunteers from the Latvian community.

The role of volunteers is important and over the years their input has been invaluable, not least because of the cost savings. Apart from the trustees, there are up to 100 other volunteers in any one year who contribute a wide range of expertise, to advice about savings on utilities to practical help in clearing up the estate. It has, however, become increasingly difficult to find suitable trustees as this does require a time commitment. To reduce the pressure on the trustees, the Board employs a full-time administrator, who takes on most of the administrative functions, and increases our presence on social media, supports the residents of the sheltered housing and increases the involvement of the diaspora in Trust activities. People who have moved from Latvia to the UK in more recent years now form a key component of the membership and the various committees, which is a positive sign for the future.

The Trust works closely with other Latvian organisations such as the Latvian National Council in Great Britain (LNC) and the Latvian Lutheran Church as well as with the Embassy of Latvia to the UK. The Trust also supports the Latvian Educational Foundation, a joint charity established with the LNC, which helps to provide financial assistance to the growing number of weekend schools for Latvian children in the UK and supports various other educational and cultural activities.

Following the pandemic some cultural activities have not returned, but in others there was an increase in activity mainly in preparation for the much-awaited Song and Dance Festival in Latvia at the end of June 2023 for which participation is highly competitive. The wedding business at Catthorpe improved during the year as couples were finally permitted to be joined by friends and family, but the size of the events reduced. Much work was done to build relationships with local companies to increase the use of conference facilities and hotel accommodation. In London the return of tourists did much to accelerate the overall improvement in the guest house.

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THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Achievements and performance (continued)

Close attention was paid to income generation at both UK centres, as our trading activities there are required not only to generate profit, but to maintain and improve the centres, which are regarded as key to our charitable activities. At Catthorpe, over the years, we have invested in four bungalows to increase the rental income. These, together with a number of flats on the estate are all generating income.

b. Key performance indicators

Just prior to the pandemic it was decided to outsource much of the financial processing and as the pandemic developed, the opportunity was then taken to change the way in which financial information was presented in order to monitor better the performance of the various cost centres. However, during 2022 it became apparent that neither the outsourcing project nor the changes in the presentation of the accounting information were as helpful as expected and it was decided to bring the control of accounts for both the Trust and the subsidiary company back in house. This was achieved at the end of 2022 with the appointment of a Financial Controller whose responsibilities include not only the trading subsidiary accounts in Catthorpe and London but also those of the Trust. The first three months of 2023 showed this to be a positive move with both greater engagement by the Financial Controller in all aspects of the business as well as greater clarity of the group’s finances.

The financial statements show accumulated funds of £11,428,362, (2021: £11,808,776) of which deficits exist for the funds retained within non-charitable subsidiaries of £1,926,937 (2021: £1,988,967).

Financial review

a. Going concern

Budgets for the London house and Catthorpe Manor were initially set by their respective General Managers in conjunction with one of the trading company directors. Budgets were then discussed at trading company Board meetings where all directors, both general managers, the Company Secretary and the Trust Chairman are present. As required, other trustees may be invited to attend. Budgets are monitored monthly and may be adjusted if necessary. Budgets are shared with the trustees and the trustees are kept informed at their monthly meetings of the financial situation of the business. Cash flow is monitored daily by the Company Secretary in conjunction with the accounts administrator employed by LWT Trading UK Ltd. Cash flow problems are discussed initially with the trading company’s directors and, if necessary, referred to the trustees. This has been particularly relevant as the trading company sought to recover from the effects of the pandemic as the trustees had to consider to what extent they could help to support the trading company financially in a challenging environment. The hospitality industry has been particularly adversely affected.

All properties purchased by the Trust were leased to the trading company. Together with the trustees, the trading company directors continued to develop a wide-ranging strategic review of the properties held within the lease. The purpose was to ensure that both the trustees and the trading company obtained the best possible outcomes from the use of its properties and that the needs of the Latvian community were met in line with the charitable objectives of the Trust. Any significant changes recommended would need to be approved by the members of the Trust.

The London property relies very much on the tourist industry which has returned to pre-pandemic levels, whilst Catthorpe is an events venue, suitable for conferences and weddings, with the hotel and restaurant supporting these events. 2022 was looking positive at Catthorpe with a strong growth in the wedding and conference markets, but demand reduced during the closing months of the year and 2023 became increasingly uncertain. With the overseas tourist market open again, the London guest house saw a strong demand for rooms which has continued into 2023. During the summer months, the London guest house returned to 90% occupancy rate,

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THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

but longer-term predictions are a little difficult as bookings are normally made weeks rather than months in advance. Nevertheless, there is much positivity.

Towards the end of 2022 the General Manager of the Catthorpe Estate gave notice of his departure and a new General Manager was appointed with effect from 1 February 2023. He identified areas of the business which could be developed to generate additional revenue. A new business plan for Catthorpe Manor was developed and this, together with the accounts function returning in-house, provided both the trading company directors and the trustees a greater level of confidence in the trading company becoming profitable by 2024.

Individually, the business in the London centre continued to thrive, but the Catthorpe centre had, for a number of reasons failed to make a profit. Nevertheless, it has continued to be strategically important to the UK Latvian community. The trustees and the members of the Trust were sufficiently encouraged by the new plans for Catthorpe Manor to be more optimistic that it could finally return to profit. However, it required some further investment in order for the new business plan to be realised. Following a series of EGMs which allowed the members of the Trust to express their views and give full support to the trustees to agree to provide additional investment in the new business plan for Catthorpe Manor with the view that this part of the business would return to profit and thus allow for the outstanding debt by the trading company to start to be reduced.

However, at the end of May 2023, the Charity Commission provided a report in which it expressed its concerns about various aspects of the Trust’s management processes together with an action plan, which included a requirement to provide “LWT Trading UK Ltd with no additional funds without good reason”. In these circumstances, the Trustees agreed to pause any plans to provide any additional investment funds the trading company had requested in order to fully understand the Charity Commission’s position and in order to take legal advice.

This situation significantly affected the newly developed business plans at Catthorpe Manor and was a considerable disappointment to the directors of the trading company, who had been optimistic about the future of the Catthorpe Manor business. By August 2023 the directors of the trading company were signalling that cash flow was becoming a problem and in September they took legal advice about the future of the company, which on 20th September resulted in the closure of the Catthorpe Manor business and the subsequent formal liquidation (Creditors’ Voluntary Liquidation) of LWT Trading UK Ltd on 12th October. Although the London centre was a part of the trading company, it was self-sufficient financially, and the appointed Insolvency Practitioner advised that it could continue to trade until other arrangements could be made. Before the formal liquidation of the trading company, the Trust was able to seize all the assets of the trading company and the leases for the London centre and Catthorpe Manor were surrendered voluntarily. The leases had no commercial value as a clause within the agreement prevented them from being sold on. Whilst this did not compensate for the debt which had accumulated to the Trust over many years, the Trust’s independent Insolvency Practitioner believed that the trustees had no other option and had acted in the best interests of the charity in very difficult circumstances.

The trustees had the responsibility of deciding how best to move forward and maintain the integrity of both venues. Numerous meetings were held, over 15 in total, to discuss the options available. The trustees agreed that the London centre should run independently of Catthorpe as it had been profitable for many years, but its profits had been supporting the Catthorpe centre. For this reason, DVF London Ltd was formed with a director from the trustee board appointed temporarily. At Catthorpe the trustees agreed to form another new company, DVF Estate Ltd, to manage the rental properties and to plan a strategy for the hotel. Although the Trust itself could manage the rental properties as these were effectively investment properties, the trustees felt that it was important to protect the charity and its assets. Most of the rented properties are old and require frequent maintenance. Once all the requirements to set up the new companies have been met, the trustees plan to develop a process for the election of the directors of these companies, which will include a trustee as recommended by the Charities Commission. Until such time, the trustees have formed a small management team to work with the director of each company.

Since it became known publicly that the hotel at Catthorpe Manor had closed, there have been a number of

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

expressions of interest in leasing or buying the hotel and restaurant, which are currently being explored. At the same time, the trustees are considering other possible options but no conclusions or decisions have yet been reached as very careful consideration needs to be given to all potential options. In the meantime, the local Latvian community and the trustees are working in a voluntary capacity to maintain the estate to ensure that it is kept in the best possible condition whilst all the options are being carefully considered.

Financially, the Latvian Welfare Fund (DVF), a non-incorporated membership organisation, has agreed to donate up to £200,000 to the Trust to help it through the transition period. By that time, not only will the London house continue to be self-sufficient and be generating a profit, but the Catthorpe Estate should also be, at the very least, in a break-even position and, in time, generating a profit.

b. Reserves policy

The trustees consider it prudent to maintain reserves in the general fund at six months of the current annual operating costs. The trustees believe that this should normally be sufficient to ensure that any unbudgeted or emergency expenditure will be sufficiently covered.

However, since the pandemic it has not been possible to sustain the requisite level of reserves and it could be another year before finances have stabilised.

At the year end the consolidated total reserves were £11,428,362 (2021: £11,808,776). All reserves were unrestricted. Reserves held relating to fixed assets that could only be realised by their disposal totalled £11,341,687 (2021: £11,350,715). Free reserves at the year end, after making allowance for fixed assets were £86,675 (2021: £458,061).

c. Principal Risks and Uncertainties

The charity's activities expose it to a number of financial risks including price risk, credit risk and liquidity risk. The impact of the virus restrictions on all activities, has by its very nature raised questions about the viability of the trading business. A review of different scenarios led to the conclusion that the future plans are sustainable. The management changes that have been implemented are regarded as positive for the future viability of the new businesses.

d. Price Risk

The charity is exposed to price risk in the hotel and events industry, however the directors of its subsidiaries, reporting to the trustees and in conjunction with the trustees, regularly review and adjust the pricing structure to take account of competition and general market conditions to attract new customers.

e. Credit Risk

The charity has no significant concentration of credit risk, with exposure spread over a wide number of customers.

f. Liquidity Risk

There is currently one loan outstanding with a substantial balance in the reserves. The trustees continue to seek improvements in the trade of its subsidiary undertakings to finance ongoing activities. A steady improvement in turnover is expected with the restructuring of the business at Catthorpe Manor and the demand for rooms in London guest house increasing.

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

g. Principal funding

The principal funding sources are the trading activities from its subsidiary companies and rentals from the flats and houses on the Catthorpe estate. Income is also generated from the Garden Annex at Catthorpe Manor, which runs the sheltered housing accommodation and has several rooms to let.

h. Future Plans

Following the refurbishment of Catthorpe Manor, with the associated costs, it is not anticipated that any further major developments will be considered for some years, apart from upgrading the territory, allowing finances to stabilise. The guest house in London also continues to require regular maintenance.

We do not plan to invest further in the purchase of properties on the Catthorpe Estate at this time.

Structure, governance and management

a. Constitution

The Latvian Welfare Trust is registered as a charitable company limited by guarantee and was set up by a Memorandum of Association.

b. Governing Document

The charity is governed by its Memorandum and Articles of Association and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

c. Recruitment and Appointment of New Trustees

New trustees are appointed from suitable candidates who have the necessary language skills and experience in the specific cultural requirements of the trust. New trustees undergo a briefing session to outline their legal obligations under charity and company law, the Charity Commission guidance on public benefit, the Memorandum and Articles of Association, the business plans and recent financial summaries. The training needs of each trustee are assessed on an individual basis and any courses are arranged where appropriate.

d. Organisational Structure

The board of trustees, comprising of no more than nine members, is elected from members and delegates of the Latvian Welfare Fund (also known as the DVF) branches and groups at the AGM held in March each year. Election is on a rotation basis for a period of 3 years and trustees are open to re-election at the end of that period. A General Meeting is also held September each year. There have been reductions in the number of branches over previous years, in part due to changes in the rules governing branches and groups. A Branch is required to have at least 20 members, whereas a Group can be formed with at least 10 members.

None of the trustees receive any remuneration or any other benefit from their work with the Charity, nor are there any contractual relations between any trustees and suppliers or contractors to any of the centres. The board of trustees meets monthly to discuss general business and specific issues relating to the running of the centres in London and Catthorpe.

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THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Structure, governance and management (continued)

e. Wider Network

The Trust works closely with the Latvian Educational Foundation 1990 (charity no.1004578) by appointing two trustees who, together with other Foundation trustees, provide scholarships and support to Latvian weekend schools in the UK and grants to other educational and cultural programmes. In 2022 the Trust was represented by:

f. Related party relationships

The Latvian Welfare Fund is considered to be a related party as the board of trustees is selected from its membership in accordance with the Trust’s Memorandum and Articles as amended in November 2014. Furthermore, The Latvian Welfare Trust had one trading subsidiary: LWT Trading UK Limited in the UK, which on 12th October 2023 went into liquidation. It subsequently formed two new subsidiaries, namely, DVF London Ltd and DVF Estate Ltd.

Mr Miks Vizbulis became a trustee on 12.03.2017 and has since 1 April 2017 rented property on the Catthorpe estate which is owned by The Latvian Welfare Trust but was leased to LWT Trading UK Ltd. He pays a commercial rent and receives no privileges. Under a new lease to be signed before the end of November 2023, this property will be leased to DVF Estate Ltd. As the Trust owns and rents out several properties on the estate, occasionally using a letting agency, guidance on rents has been made available.

Mr Girts Lehrs was appointed a trustee on 20 March 2022 and is also a member of the team organising the Midsummer Festival at Catthorpe Manor. He receives no payment from the fees charged to attendees and he has not been involved in any financial negotiations concerning the use of the land rented for the Festival.

g. Risk management

The Trustees have a risk management strategy which comprises:

The Trustees are aware that financial sustainability is the main risk for the charity. Key elements in the management of financial risk are budgets to highlight expected business trends, together with assessment of monthly financial summaries against budget and close attention to cash flow. Additional attention has also been focussed on the more general non-financial risks arising from fire, health and safety, and food hygiene. Particular attention is given to the operation of the sheltered accommodation at Catthorpe for the well-being of its residents.

Trustees are committed to the standards outlined in the Charity Commission’s Charity Governance Code.

h. Fundraising

The Charity has no fundraising activities requiring disclosure under Section 162 of Charities Act 2011.

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Structure, governance and management (continued)

i. Remuneration policy

Our approach to remuneration ensures that we can attract and retain talented and motivated people who can achieve our mission and deliver our objectives. Our aim is to pay competitively in the not-for-profit sector within the context of affordability.

Statement of Trustees' responsibilities

The Trustees (who are also the directors of the Charity for the purposes of company law) are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial . Under company law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditor

Each of the persons who are Trustees at the time when this Trustees' Report is approved has confirmed that:

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Disclosure of information to auditor (continued)

Auditor

The auditor, Crowe U.K. LLP, has indicated his willingness to continue in office. The designated Trustees will propose a motion reappointing the auditor at a meeting of the Trustees.

Approved by order of the members of the board of Trustees and signed on their behalf by:

Mrs I Grickus

Date:

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(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE LATVIAN WELFARE TRUST

Opinion

We have audited the financial statements of The Latvian Welfare Trust (the 'parent charitable company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Charity Balance Sheet, the Consolidated Statement of Cash Flows and the related notes, 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:

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 United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 2.2 in the financial statements, which indicates the conditions identified that may cast significant doubt on the Charity's ability to continue as a going concern. As stated in note 2.2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Charity's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

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(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE LATVIAN WELFARE TRUST (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The Trustees are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of 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 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, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the Group's and the parent 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 Group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Page 14

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE LATVIAN WELFARE TRUST (CONTINUED)

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks within which the 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. 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 Company’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the Company for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulation (GDPR), Charity Commission legislation, Health and safety legislation, Taxation legislation and Employment legislation.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors 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 in the following areas: recognition of weddings, events and room income; the override of controls by management, including posting of unusual journals; inappropriate treatment of non-routine transactions and areas of estimation uncertainty; and going concern.

Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, review of Charity Commission correspondence, review and discussion of non-routine transactions, sample testing on the posting of journals and income transactions and review of accounting estimates for biases.

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.

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THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE LATVIAN WELFARE TRUST (CONTINUED)

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Kerry Brown (Senior Statutory Auditor) for and on behalf of Crowe U.K. LLP Statutory Auditor Black Country House Rounds Green Road Oldbury West Midlands B69 2DG

Date: 23 January 2024

Page 16

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2022

Note
Income from:
Grants and donations
3
Other trading activities
3
Investments
4
Other income
5
Total income
Expenditure on:
Raising funds - trading activities
6
Charitable activities
7
Total expenditure
Net movement in funds before other recognised
losses
Other recognised gains/(losses):
(Losses)/gains on revaluation of fixed assets
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2022
£
12,667
1,175,636
213,977
16,261
1,418,541
1,493,123
299,855
1,792,978
(374,437)
(5,977)
(380,414)
11,808,776
(380,414)
11,428,362		 Total
funds
2022
£
12,667
1,175,636
213,977
16,261
1,418,541
1,493,123
299,855
1,792,978
(374,437)
(5,977)
(380,414)
11,808,776
(380,414)
11,428,362		 Total
funds
2021
£
91,970
447,562
234,188
147,533
921,253
1,168,759
92,568
1,261,327
(340,074)
196,017
(144,057)
11,952,833
(144,057)
11,808,776

The Consolidated Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 21 to 42 form part of these financial statements.

Page 17

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee) REGISTERED NUMBER: 05853180

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Tangible assets
12
Investment property
13
Current assets
Stocks
15
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current assets
Total assets less current liabilities
Total net assets
Charity funds
Unrestricted funds
18
Total funds		 4,000
53,821
385,519
443,340
(356,665)		 2022
£
10,458,731
882,956
11,341,687
86,675
11,428,362
11,428,362
11,428,362
11,428,362		 7,500
43,310
738,430
789,240
(331,179)		 2021
£
10,467,759
882,956
11,350,715
458,061
11,808,776
11,808,776
11,808,776
11,808,776

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:

Mrs I Grickus

Date:

The notes on pages 21 to 42 form part of these financial statements.

Page 18

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee) REGISTERED NUMBER: 05853180

CHARITY BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Tangible assets
12
Investments
14
Investment property
13
Current assets
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current liabilities / assets
Total assets less current liabilities
Total net assets
Charity funds
Unrestricted funds
18
Total funds		 -
337,263
337,263
(341,315)		 2022
£
484
100
11,332,956
11,333,540
(4,052)
11,329,488
11,329,488
11,329,488
11,329,488		 152
711,712
711,864
(159,563)		 2021
£
3,823
100
11,332,956
11,336,879
552,301
11,889,180
11,889,180
11,889,180
11,889,180

The Charity's net movement in funds for the year was £(559,692) (2021 - £(3,428,072)).

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees on _______ and signed on their behalf by:

Mrs I Grickus

The notes on pages 21 to 42 form part of these financial statements.

Page 19

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022

Note
Cash flows from operating activities
Net cash used in operating activities
21
Cash flows from investing activities
Purchase of tangible fixed assets and investment property
Net cash used in investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
22
The notes on pages 21 to 42 form part of these financial statements		 2022
£
(345,384)
(7,527)
(7,527)
(352,911)
738,430
385,519		 2021
£
(293,428)
(449,593)
(449,593)
(743,021)
1,481,451
738,430

Page 20

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1. General information

The Trust is a company limited by guarantee (registered number: 05853180) which is registered in England and Wales. It registered as a charity on 21st June 2008 and its charity registration number is 1124661. The registered office and principal place of business is Catthorpe Manor, Lilbourne Road, Catthorpe, Leicestershire, LE17 6DF.

The principal activity is to relieve financial hardship, sickness and poor health amongst Latvian people, to advance the education of the public about the country of Latvia and its people, as well as the education of Latvian people in Latvia and in the UK, and to conserve, for the benefit of all peoples everywhere, ancient and modern buildings, monuments, archives and works of art which are of historical and cultural importance to Latvia and the Latvian people. The Charity also organise and promote social events and recreational activities for the benefit of Latvian people.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Latvian Welfare Trust 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.

The Consolidated Statement of Financial Activities (SOFA) and Consolidated Balance Sheet consolidate the financial statements of the Group and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis.

The Group has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Financial Activities in these financial statements.

Page 21

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

2. Accounting policies (continued)

2.2 Going concern

The Charity and its subsidiary LWT Trading UK Limited has continued to make losses for the year ended 31 December 2022 and subsequently. As a result of the losses, LWT Trading UK Limited is reliant on financial support from the Charity. During August 2023, the Trustees ceased this support since they decided it was not longer in the best interests of the Charity to continue with it. The directors of LWT Trading UK Limited took legal advice about the future of the company, which on 20 September 2023 resulted in the closure of the Catthorpe Manor business and the subsequent formal liquidation (Creditors’ Voluntary Liquidation) of LWT Trading UK Limited. The Trustees completed a restructuring of the operations which resulted in two new subsidiaries being formed, one to manage the London business and the other to manage the Catthorpe estate. Currently, the London hotel business remains operational but the Catthorpe hotel remains closed and the Trustees are considering options for the commercial application of this property. The London hotel business is profitable but the costs of maintaining the Catthorpe Estate until options for the use of this property has been determined is resulting in continued losses. The Latvian Welfare Fund (DVF), a nonunincorporated membership organisation, has agreed to donate up to £200,000 to the Trust to help it through the transition period, of which approximately £30,000 has been received to date.

The trustees consider it appropriate to prepare the financial statements on a going concern basis. They do, however, acknowledge that the restructuring of the Catthorpe estate may not be successful and that the donation from the DVF may not be sufficient to fund the cash flow requirements during the transition period. The Trustees accept that this constitutes material uncertainty over the Trust’s ability to continue as a going concern.

2.3 Income

All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Included within the incoming resources are the trading income from its trading subsidiary, LWT Trading UK Limited.

Grants are included in the Consolidated Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the Balance Sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.

Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.

During the year, the Trust had approximately 100 individuals volunteer at the Charity. Their donated time has not been accounted for.

Page 22

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

2. Accounting policies (continued)

2.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Group's objectives, as well as any associated support costs.

All expenditure is inclusive of irrecoverable VAT.

2.5 Tangible fixed assets and depreciation

Tangible fixed assets are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

Motor vehicles - 25% on reducing balance
Fixtures and fittings - 20% on cost
Plant and machinery - 25% on cost
Computer equipment - 33% on cost

The freehold property Catthorpe Manor & 72 Queensborough Terrace has not been depreciated during the year under review, this is because the freehold property is leased to its trading subsidiary LWT Trading UK Limited from The Latvian Welfare Trust on a long term lease and, as permitted by the Charities SORP (FRS 102) is treated as an investment property.

The Trust owns various historical works of art and sculptures. These assets were gifted to the Trust and are fully depreciated. They have therefore not been split out as Heritage Assets in the financial statements.

Page 23

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

2. Accounting policies (continued)

2.6 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Consolidated Statement of Financial Activities.

Investments in subsidiaries are valued at cost less provision for impairment.

2.7 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

2.8 Financial instruments

The Group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

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.

2.9 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated Statement of Financial Activities as a finance cost.

Page 24

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

2. Accounting policies (continued)

2.10 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.

Investment income, gains and losses are allocated to the appropriate fund.

Page 25

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

3. Income from donations and legacies

Unrestricted
funds
2022
£
Grants
12,667
Unrestricted
funds
2021
£
Donations
542
Grants
91,428
91,970
Income from non charitable trading activities
Unrestricted
funds
2022
£
Hotel, events and conference income
1,175,636
Unrestricted
funds
2021
£
Hotel, events and conference income
447,562		 Total
funds
2022
£
12,667
Total
funds
2021
£
542
91,428
91,970
Total
funds
2022
£
1,175,636
Total
funds
2021
£
447,562

Page 26

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

4. Investment income

Unrestricted
funds
2022
£
Rents receivable
213,977
Unrestricted
funds
2021
£
Rents receivable
234,188		 Total
funds
2022
£
213,977
Total
funds
2021
£
234,188

5. Other incoming resources

CJRS income
Other income
CJRS income
Other income
Insurance claims receivable		 Unrestricted
funds
2022
£
335
15,926
16,261
Unrestricted
funds
2021
£
122,632
11
24,890
147,533		 Total
funds
2022
£
335
15,926
16,261
Total
funds
2021
£
122,632
11
24,890
147,533

Page 27

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

6. Expenditure on raising funds

LWT Trading activities

Unrestricted
funds
2022
£
Cost of sales
107,236
Administration expenses
574,124
Interest payable
267
Administration staff costs
783,080
Depreciation
28,416
1,493,123
Unrestricted
funds
2021
£
Cost of sales
83,969
Administration expenses
396,331
Interest payable
228
Administration staff costs
644,129
Depreciation
44,102
1,168,759		 Total
funds
2022
£
107,236
574,124
267
783,080
28,416
1,493,123
Total
funds
2021
£
83,969
396,331
228
644,129
44,102
1,168,759

Page 28

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

7. Analysis of expenditure on charitable activities

Summary by fund type

Unrestricted
funds
2022
£
Catthorpe Manor charitable activities
299,855
Unrestricted
funds
2021
£
Catthorpe Manor charitable activities
92,568		 Total
2022
£
299,855
Total
2021
£
92,568

8. Analysis of expenditure by activities

Catthorpe Manor activities
Catthorpe Manor activities		 Activities
undertaken
directly
2022
£
204,910
Activities
undertaken
directly
2021
£
73,055		 Support
costs
2022
£
94,945
Support
costs
2021
£
19,513		 Total
funds
2022
£
299,855
Total
funds
2021
£
92,568

Page 29

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

8. Analysis of expenditure by activities (continued)

Analysis of support costs

Governance costs
Finance
Other
Governance costs
Finance
Other		 Catthorpe
Manor
2022
£
30,775
336
63,834
94,945
Catthorpe
Manor
2021
£
9,816
320
9,377
19,513		 Total
funds
2022
£
30,775
336
63,834
94,945
Total
funds
2021
£
9,816
320
9,377
19,513

9. Auditor's remuneration

The auditor's remuneration amounts to an auditor fee of £25,350 ( 2021 - £18,500 ).

Page 30

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

10. Staff costs

Wages and salaries
Social security costs
Contribution to defined contribution pension
schemes		 Group
2022
£
772,811
54,557
15,125
842,493		 Group
2021
£
605,515
41,592
9,961
657,068		 Company
2022
£
60,241
2,441
3,931
66,613		 Company
2021
£
18,414
1,352
373
20,139

During the year, no (2021: £Nil) termination payments have been made to any employees (2021: Nil).

The average number of persons employed by the Charity during the year was as follows:

Management
Hotel, events and conference		 Group
2022
No.
1
46
47		 Group
2021
No.
1
43
44		 Company
2022
No.
1
-
1		 Company
2021
No.
1
-
1

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2022 2021
No. No.
In the band £60,001 - £70,000 1 1

The employee benefits of Key Management Personnel amounted to £81,052 ( 202 1 - £66,552).

11. Trustees' remuneration and expenses

During the year, no Trustees received any remuneration or other benefits (2021 - £NIL) .

During the year ended 31 December 2022, expenses totalling £ 698 were reimbursed or paid directly to 1 Trustee (2021 - £ 768, 4 Trustees). The expenses reimbursed in the prior year related to postage and travel expenses.

Page 31

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

12. Tangible fixed assets

Group

Cost or valuation
At 1 January 2022
Additions
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021		 Freehold
property
£
10,450,000
-
10,450,000
-
-
-
10,450,000
10,450,000		 Plant and
machinery
and motor
vehicles
£
10,726
1,550
12,276
10,483
229
10,712
1,564
243		 Fixtures and
fittings
£
248,830
-
248,830
231,899
10,232
242,131
6,699
16,931		 Computer
equipment
£
8,192
-
8,192
7,607
117
7,724
468
585		 Total
£
10,717,748
1,550
10,719,298
249,989
10,578
260,567
10,458,731
10,467,759

Page 32

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

12. Tangible fixed assets (continued)

Company

Cost or valuation
At 1 January 2022
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021		 Fixtures and
fittings
£
325,127
325,127
321,304
3,339
324,643
484
3,823		 Computer
equipment
£
1,600
1,600
1,600
-
1,600
-
-		 Total
£
326,727
326,727
322,904
3,339
326,243
484
3,823

Page 33

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

13. Investment property

Group

Valuation
At 1 January 2022
At 31 December 2022
Charity
Valuation
At 1 January 2022
At 31 December 2022		 Freehold
investment
property
£
882,956
882,956
Freehold
investment
property
£
11,332,956
11,332,956

72 Queensborough Terrace was valued on a fair market basis on 3rd March 2022 by Savills, with a valuation of £6,000,000 being provided retrospectively as at 31 December 2021.

Catthorpe Manor was valued at £4,450,000 by Holt Commercial at market value on 28 August 2020. The valuation includes a special consideration regarding the uncertainty of the current market as a result of the Covid-19 pandemic and reliance was therefore placed on transactions which took place prior to lock down.

Included in the net book value of property displayed above are the following amounts ascribable to land:

Group Group Company Company
2022 2021 2022 2021
£ £ £ £
Historic cost 4,700,000 4,700,000 4,700,000 4,700,000

Page 34

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

14. Fixed asset investments

Charity
Cost or valuation
At 1 January 2022
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021		 Investments
in
subsidiary
companies
£
100
100
100
100

Principal subsidiaries

The following was a subsidiary undertaking of the Charity:

Name Company Registered office or principal Principal activity
number place of business
LWT Trading UK Limited 08798565 Catthorpe Manor Operation of a hot
Lilbourne Road and weddings ven
Catthorpe
Leicestershire
LE17 6DF

Operation of a hotel and weddings venue

Class of Holding Included in shares consolidation Ordinary 100% Yes

Page 35

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

14. Fixed asset investments (continued)

The financial results of the subsidiary for the year were:

Name Income Expenditure Profit/(Loss) Net assets /
£ £ / Surplus/ (liabilities)
(Deficit) for £
the year
£
LWT Trading UK Limited 1,369,078 (1,745,922) (376,844) (2,365,811)
15. Stocks
Group Group
2022 2021
£ £
Stocks 4,000 7,500
16. Debtors
Due within one year
Trade debtors
Other debtors
Prepayments and accrued income		 Group
2022
£
14,267
21,613
17,941
53,821		 Group
2021
£
23,023
3,438
16,849
43,310		 Company
2022
£
-
-
-
-		 Company
2021
£
-
152
-
152

Page 36

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

17. Creditors: Amounts falling due within one year

Other loans
Deposits received in advance
Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Other creditors
Accruals and deferred income		 Group
2022
£
175,000
59,409
68,934
-
28,314
3,285
21,723
356,665		 Group
2021
£
117,942
79,883
81,497
-
15,210
5,155
31,492
331,179		 Company
2022
£
175,000
-
1,800
149,635
402
178
14,300
341,315		 Company
2021
£
117,942
-
-
27,919
338
614
12,750
159,563

Included in other loans are the following balances outstanding with The Latvian Welfare Fund: Leeds branch £175,000 (2021: £175,000) Debtor balance £Nil (2021: £57,058).

Page 37

THE LATVIAN WELFARE TRUST (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

18. Statement of funds

Statement of funds - current year

As restated Balance at
Balance at 1 31
January Gains/ December
2022 Income Expenditure (Losses) 2022
£ £ £ £ £
Unrestricted funds
General fund 9,758,884 49,463 (299,855) - 9,508,492
Revaluation reserve 3,852,784 - - (5,977) 3,846,807
Funds retained within non-
charitable subsidiaries (1,802,892) 1,369,078 (1,493,123) - (1,926,937)
11,808,776 1,418,541 (1,792,978) (5,977) 11,428,362
Statement of funds - prior year
Balance at
Balance at 31
1 January Gains/ December
2021 Income Expenditure (Losses) 2021
£ £ £ £ £
Unrestricted funds
General fund 9,850,899 553 (92,568) - 9,758,884
Revaluation reserve 3,656,767 - - 196,017 3,852,784
Funds retained within non-
charitable subsidiaries (1,554,833) 920,700 (1,168,759) - (1,802,892)
11,952,833 921,253 (1,261,327) 196,017 11,808,776

Page 38

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

19. Summary of funds

Summary of funds - current year

General funds Balance at 1
January
2022
£
11,808,776
Balance at
1 January
2021
£
11,952,833		 Income
£
1,418,541
Income
£
921,253		 Expenditure
£
(1,792,978)
Expenditure
£
(1,261,327)		 Gains/
(Losses)
£
(5,977)
Gains/
(Losses)
£
196,017		 Balance at
31
December
2022
£
11,428,362
Balance at
31
December
2021
£
11,808,776
Summary of funds - prior year
General funds

20. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted
funds
2022
£
Tangible fixed assets
10,458,731
Investment property
882,956
Current assets
443,340
Creditors due within one year
(356,665)
Total
11,428,362		 Total
funds
2022
£
10,458,731
882,956
443,340
(356,665
11,428,362

Page 39

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

20. Analysis of net assets between funds (continued)

Analysis of net assets between funds - prior year

Tangible fixed assets
Investment property
Current assets
Creditors due within one year
Total		 Unrestricted
funds
2021
£
10,467,759
882,956
789,240
(331,179)
11,808,776		 Total
funds
2021
£
10,467,759
882,956
789,240
(331,179)
11,808,776

21. Reconciliation of net movement in funds to net cash flow from operating activities

22.

Net expenditure for the year (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Decrease in stocks
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Increase/(decrease) in other loans
Net cash used in operating activities
Analysis of cash and cash equivalents
Cash in hand
Total cash and cash equivalents		 Group
2022
£
(374,437)
10,578
3,500
(10,511)
(31,572)
57,058
(345,384)
Group
2022
£
385,519
385,519		 Group
2021
£
(340,074)
29,413
-
45,437
6,796
(35,000)
(293,428)
Group
2021
£
738,430
738,430

Page 40

(A Company Limited by Guarantee)

THE LATVIAN WELFARE TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

23. Analysis of changes in net debt

Cash at bank and in hand
Debt due within 1 year		 At 1
January
2022
£
738,430
(117,942)
620,488		 Cash flows
£
(352,911)
-
(352,911)		 Other non-
cash
changes
£
-
(57,058)
(57,058)		 At 31
December
2022
£
385,519
(175,000)
210,519

24. Related party transactions

Transactions with the subsidiary company are set out below.

The loan balance outstanding at the year end owed from LWT Trading UK Limited was £4,384,330 (2021: £3,822,232). An additional provision of £562,099 has been recognised against this balance at the year end in the Charity (2021: £3,822,232).

The trading balance outstanding at the year end owed to LWT Trading UK Limited was £149,636 (2021: £27,919).

Rents receivable from LWT Trading UK Limited
Interest receivable from LWT Trading UK Limited		 2022
£
100,000
152,799
252,799		 2021
£
100,000
86,175
186,175

During the year, M Vizbulis, who is a Trustee, resided in one of the properties owned by the Trust and paid rent totalling £13,920 (2021: £13,200). There were no outstanding balances as at the year end (2021: NIL).

During the year, the Trust made purchases totalling £1,403 (2021: £Nil) from Amber Food and Catering Ltd, a company of which M Vizbulis is also a director. There were no outstanding balances as at the year end (2021: NIL).

During the prior year, the Trust has purchased a bungalow for £332,961 from a close family member of a Trustee. No such purchases were made with related parties in 2022.

During the year, the Trust received £13,690 from Berzes Strazdi, an entity of which G Lehrs is also a director, in relaton to the Midsummer Festival. At the year end, a balance of £13,050 was owed from Berzes Strazdi to the Trust.

Page 41

THE LATVIAN WELFARE TRUST

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

Related party transactions (continued)

The Latvian Welfare Fund is considered to be a related party as the board of trustees is selected from its membership in accordance with the Trust’s Memorandum and Articles as amended in November 2014.

Transactions with The Latvian Welfare Fund are listed below along with the outstanding balances at the year end.

2022 2021
£ £
Leeds branch loan outstanding creditor balance 175,000 175,000
Leeds branch loan interest paid 5,658 4,548
Outstanding debtor balance - 57,058

In addition, The Latvian Welfare Trust receives rental income from two properties which are owned by The Latvian Welfare Fund. Total rental income received during the year is £19,500 (2021:£16,600). There were no outstanding balances as at the year end (2021: Nil).

A provision of £42,058 has been made against amounts due from The Latvian Welfare Fund.

There were no other related party transactions during the year.

25. Post balance sheet events

Since November 2022, the Trust has been in correspondence with the Charity Commission regarding their enquiries. This correspondence has been ongoing since the year end.

On 20th September 2023, the Catthorpe Manor business was closed and LWT Trading UK Ltd entered formal liquidation (Creditors’ Voluntary Liquidation) on 12th October 2023.

The London centre operations and the Catthorpe Manor estate operations have been transfered to two new subsidiaries, DVF London Ltd (company number 15165756) and DVF Estate Ltd (company number 15169795).

Given the closure of Catthorpe Manor, impairment of the estate has been considered and is a nonadjusting event. As such, an adjustment to recognise any impairment has not been included in the accounts as at 31 December 2022.

Page 42