Registered number: 07535303 Charity number: 1143110 THE KNIGHTLAND FOUNDATION (A company limited by guarantee Trustees, report and financial statements For the Year Ended 31 January 2021
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Contents Page Roference and administrative details of the Companyj its Trustees and advlsers Trustees. report Independent auditors, report on the finanelal statements Statement of flnanclal actlvitles 10 BalanGe sheet 11 statement of cash flows 12 Notes to the financial statements 13-24
THE KNIGHTLAND FOUNDATION {A company limited by guarantee) Reference and admlnlstratlve details of the Company¥ its Trustees and advlsers For the Year Ended 31 January 2021 Trustees J Friedman U S Kaplan SLew B S Ehrenfeld (appointed 30 December 20201 Company reglatered number 07535303 Charity registered number 1143110 Registored office 5 North End Row London NW117RJ Princlpal operating oflice 16 Urban Hive Londo E5 9BQ Indopendent auditors Moore Kingston Smith Chartered Accountants Devonshire House 60 Goswell Road London EC1M 7AD Bankers Barclays Bank PLC Leicester LE87 2BB Lloyds bank PLC PO Box 10000 BX1 1LT Interlm Managers Joseph Colley and John Dickinson Carter Backerwinler LLP 66 Prescot Street London E18NN Page 1
THE KNIGHTLAND FOUNDATION {A company limited by guarantee} Trustees. report Forthe Year Ended 31 January 2021 The Charity Commission {"the Commission) has engaged with the Knighlland Foundation since 2016, when its proactive review of the charity's accounts revealed a number of concerns, including around insufficiently documented loan agreements and transactions lo connected companies. In March 2017, the Commission issued the charity's Iruslees with an action plan lo address Ihese matters. The Commission continued to monitor the charity and due to unresolved concerns, il escalated Ils engagement to a stalutory inquiry on 24 February 2021. An inquiry gives the regulator access lo the full range of ils legal and enforcement powers. The inquiry will examine whether potential conflicts of interest and connected party transactions have been properly managed and whether there has been any unaulhorised Ifuslee benefit. It will also look al widei concerns around the charity's financial and resource management and the Iruslees, compliance with their legal obligations. The Commission has also exeicised its powers under the Charities Act 2011 to appoint joint interim managers. John Dickinson and Joseph Colley, of Carler Backer Winter LLP, on 7 April 202110 help address the concerns at the charity. By virtue of their appointment, the interim manager are required to lake over the management, administration and operation of the charity and its properly and to discharge the functions of the trustees to the exclusion of the current trustees. The Trustees present their annual report together with the audited financial slalements of the Company for the year 1 February 2020 to 31 January 2021. 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 slalements of the charitable company comply with the current slalutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Pr8Ctice ISORP) 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). Since the Company qualifies as small under section 382 of the Companies Acl 2006, the Strategic report required of medium and large companies under the Companies Act 2006 Islralegic Report and Directors, Report) Regulations 2013 has been omilled. Objectives and activitie5 Policies and objectlves The objectives of the chaiily are lo support the aclivities of religious Jewish organisations both in the UK and abroad, especially those that promote Orthodox Jewish religion, education, relief of poverty and other welfare aclivilies. In selling 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 {PB21'. Grant-making policies In making grants and donations, the Trustees use their personal knowledge of the inslilulion, its represenlalives. operational efficiency and reputation. The Trustees monitor the application of the grants and donations by meeting with represenlalives of the inslilulions and obtain information as to the ulilisalion of funds. Achlevements and performance * Main achlevements of the Charity During the year, the charity distributed grants of £704,58112020.' £181,566). Page 2
THE KNIGHTLAND FOUNDATION {A company limited by guarantee) Trustees. report Icontinuedl For the Year Ended 31 January 2021 * Investment policy and performance Under the Memorandum and Articles of Association, the charity has Ihe power lo make 2ny investment which the trustees see fil. The Iruslees continue to assess the charity's investment portfolio and seek new investment opportunities to ensure that the charity's asset base is maintained and SLtiiable profits are generate(J. The Iruslees are satisfied with the return on inveslments achieved during the year and are confident that the charity has adequate reserves to fulfil its charitable obligations. Flnancial review és Going concern The Trustees recognise the economic and trading uncerlainlies resulting from the evolving coronavirus pandemic, in particular the potential impact on rental collection and property values. The Trustees have therefore prepared revised cash flow forecasls and stress tests taking these factors into account. These forecasts show that the charity will be able lo continue lo meel ils obligations as they fall due without breaching covenants associated with existing bank loans. After making appropriate enquiries, the Trustees therefore have a reasonable expectation that the Company has adeouale resources lo continue in operational existence for the foreseeable future. For this reason. they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can tso found in tho accounting policias. * Reserves pollcy The Charity is required lo maintain reserves in order lo ensure that il is in a position lo continue ils grant making aclivilies. Consequently, the Trustees consider il appropriate to maintain unrestricted funds at a level which will not impinge on its ability lo support charitable instilulions. Al the year end, the Charity had total reserves of£5.692,03812020- £3,811,566), most ofwhich represents funds invested in property, less secured borrowings. The Charity meets ils key objectives of grant giving through the income generated in the year. The aim is lo distribLfle funds as and when they are available. 4> Financial revlew During the year the charity received donations of £1.064,500, which includes £792,500 from ils subsidiaries, of which £778.500 related lo profits generated by the sale of investment property in Bellview Land Ltd. Tlie IIubl¢¥b ¢iie ple¢lbed Ili¢lt they weie able lo collect 90Yo of contracted rents desplte the economlc dlsrupllons caused by Covid-19. The trustees have recognised rental income of £661,430, which includes bad debts of £37,934, and covid concessions of £33,125. The trustees wish lo acknowledge the public interest benefit arising from rent concessions, which have assisted tenants in the Iiavel and louiist industries who were badly impacted by Covid. The Iruslees were able to use incoming funds lo achieve a substantial increase in the level of grant-making al £704,58112020.' £181.566}. which enabled them to provide extra financial assistance 2nd support to families and communities affected by Covid. Page 3
THE KNIGHTLAND FOUNDATION {A company limited by guarantee} Trustees. report Icontlnuedl For the Year Ended 31 January 2021 structure, governance and management Constitution The Knighlland Foundation is registered as a charitable company limited by guarantee and was set up by a Memorandum and Articles of Association on 18 February 2011. Pursuant to the dulles as set out in the Interim Managerfs appointment Order, they are to review the future governance of the charity- delerrlline whether the charity has a viable tuture and either undertake the restructure ot the charity {Including appointment ot independent Irusleesl or undertake the winding up of the charity in accordance with its Governing Documents and apply the remaining funds to a charity with the same or similar charilable objects. The constitution of the charity remains under review. • Methods of appointment or electlon of Trustees On 7 April 2021 the Charity Commission appointed John Dickinson and Joseph Colley of Carter Backer Winter LLP as interim managers of the charity. The methods of appointment or election of Trustees is being reviewed by the interim managers. * Future developments The Iruslees will continue to manage the charity's investments in order lo generate profits that will enable the trustees lo respond lo the charity beneficiaries. evolving needs. Following the year end, the chalily expects lo re1ve proceeds of at least £1.2m from its subsidiary Rowe Lane Estates Ltd which the Iruslees will consider for the following purposes.. To achieve ils charitable objectives To reduce the borrowing secured against its investment assets • Rlsk managemènt The Tr(Jstees have assessed the major risks lo which the Company is exposed, in particular those related to the operations and finances of the Company. and are satisfied that systems and procedures are in place to miligale exposure lo the major iisks. The trustees have considered the risks associated with the values and returns generated by ils investment property, as economic uncertainties continue. They are confident that investment values and returns will continue al the levels staled in the accounts. The Iruslees are continuing to work in association with their professional advisors lo strengthen the skills, performance and effectiveness of the trustee board. Statement of Trustees. responsibilities Subject lo the above paragraphs within this report, the Trustees (who ale also the directors of the Company for the purposes of company lawl are responsible for preparing the Trustees, report and the financial statements in accordance with applioablc law and Unitcd Kingdom A¢Gounling Standard- Iunilcd Kingdom Gcncrally A¢ccplcd A¢counling Praclicel. Company law requires the Trustees to prepare financial statements for each financial year. Under eompany 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 Company and of its incoming resources and application of resources, including ils income 2nd expenditure, for that period. In preparing these financial statements, the Trustees are required to: Page 4
THE KNIGHTLAND FOUNDATION IA company Ilmited by guarantee) Trustees, report Icontinuedl Forthe Year Ended 31 January 2021 select suitable accounting policies and then apply them consistenlty., observe the methods and principles of the Charities SORP IFRS 102}-, make judgments and accounting estimates that are reasonable and prudent,. slate whether applicable UK Accounting Standards IFRS 1021 have been followed, subject to any material departures disclosed and explained in the financial stalemenls., prepare the financial statements on the going concern basis unless il is inappropriate to presume that the Company will continue in business. The Trusrees are responslble for keeplng adequate accouniing records ihat are sufflclent to show and explaln the Company's transactions and disclose with Teasonable accuracy al any lime the financial position of the Company and enable them to ensure that the financial slalements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of information to auditors Each of the persons who are Trustees al the lime when this Trustees, report is approved has confirmed IhaL so far as that Tiustee is aware, there is no relevant audit information of which the charity's auditors are unaware, and that Trustee has taken 211 the steps that ought to have been taken as a Trustee in order lo be aware of any relevant audit information and lo establish that the charity's auditors are aware of that information. Auditors The auditors, Moore Kingston Smith, have indi¢ated their willingne$s lo continue in office. The designated Trustee5 will propose a motion reappointing the auditors at a meeting of the Trustees. Approved by order of the members of the board of Trustees and signed on their behalf by.. Joseph Colley Interim Manager Date.. 981 Iiz Page 5
THE KNIGHTLAND FOUNDATION IA company Ilmlted by guarantee} Independent audltors. report to the of The Knightland Foundation Opinion We have audited the financial statements of The Knighlland Foundation {'Ihe company,) for the year ended 31 January 2021 which comprise the Slalemenl of Financial Activities, the Balance Sheet, the Cash Flow Slalement and notes lo the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kinodom A¢¢ounling Standards, including FRS 102 'The Financial Reporting Standard Applicable in the UK and Ireland, (United Kingdom Generally Accepted Accounting Praclicel. In our opinion the financial statements.. give a true and fair view of the slate of Ihe charitable company's affairs as al 31 January 2021 and of ils incoming resouices and application of resources. including ils income and expenditure, for the year then have been properly prepared in accofdance with United Kingdom Generally Accepted Arcounling Practice., and have been prepared in accordance with the requirements of the Companies Act 2006. Ba$ls for opinion We conducted our audit in accordance wilh International Standards on Auditing (UK) IISAs{UKI) and applicable law. Our responsibilities under those standards are further described in the Audiloi's Responsibilities for the audit of financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant lo our audit of the financial slalemenls in the UK, including the FRC'S Ethical Standard, and we have fuSfilled our olhgr ethical rosponsibilitios in accordance with these rgquirement8. We believe that the audit evidence we have obtained is sufficient and appropriate to provide 8 basis forour opinion. Conclusions relating to golng concern In auditing the financial stalemenls, we have concluded that the trustees, use of the going concern basis of accounting in the pieparalion of the financial slatements Is appropiiate. Based on the work we have peTformed. we have not identified any material uncertainties relating to events or conditions that. individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a peiiod of at least iwelve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the trustees wilh respect to going wncern are described in the relevant sections of this report. Other infomiation The other information comprises the information included in the annual report, other than the financial statements and our auditor's report Ihereon. The Iruslees are responsible for the other information. Our opinion on the linancial statements does not cover the other information and, except lo the extent otherwise explicitly staled in our rèport, we do not express any form of assurance conclusion Ihereon. In connection with our audit of the financial slatemenls. our responsibility is to read the other information and, in doing so. consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears lo be materially misslaled. If we identify such material inconsistencies or apparent rnalerial misstatements, we are Tequired lo determine whether there is a material Page 6
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Independent audltors. report to the of The Knightland Foundation misslalement in the financial statements or a material misslatemenl of the other information. If, based on the work we have performed, we conclude that there is a maleiial misstalemenl of this other information, we are required to report that fact. We have nothing to report in this iegard. Oplnlons on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit.. the information given in the trustees, annual report ft)r the linancial year for which the financial statements are Prepared is consislenl with the financial slalements,. and the trustees. annual report has been prepared in accordance with applicable legal requirements. Matters on which we are requlred to report by exception In the light of the knowledge and understanding of the company and ils environment obtained in Ihe course of the audit, we have not identified material misstatements in the trustees, annual report. We have nothing lo report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion.. adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us,. or the financial statements are not In agreement wllh the accountlng records ano returns.. or certain disclosures of trustees, iemuneralion specified by law are not made., or we have not received all the information and explanations we require for audit. or the Iruslees were not enlilled lo prepare the financial statements in accord2nce with Ihe small companies regime and lake advantage of the small companies exemption in preparing the Trustees, Annual Report and from preparing a Strategic Report. Responsibilities of Trustees As explained more fully in the trustees, responsibilities statement set out on page 23, the trustees (who are also the directors of the charitable company for the purposes of company lawl are responsible for the preparation of the financial slalemenls and for being satisfied that they give a true and fair view, and foT such internal control as the Iruslees determine is necessary lo enable the preparation of financial slalemenls that are free from material misstalemenl, whelhei due to fraud or error. In preparing the financial slalemenls. the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing. as applicable, mallers related to going concern and using the going concern basis of accounting unless the Iruslees either intend lo liquidate the charitable company or lo cease operations, or have no realistic alteinalive bul lo do so. Auditor's responsibilities for the audit of the financlal statements Our objectives are lo obtain reasonable assurance about whether the financial Statements as a whole are free from material misslalemenl, whether due lo fraud or error, and lo issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, bul is not a guarantee that an audit conducted in accordance with ISAS {UKI will always delecl a maleiial misstalemenl when it exists. Misslalemenls can arise from fraud or error and are Gollsidered material if, individually or in aggregate, they could reasonably be Page 7
THE KNIGHTLAND FOUNDATION IA company limlted by guarantee) Independent audltors. report to the of The Knightland Foundation expected to inftuence the economic decisions of users taken on the basis of these financial statements. Ifregularilies, including fraud, are instances of non-compliance with laws and regulations. We design procedLJres in line with our responsibilities, outlined above. lo delecl material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregula¥ities, including fraud is detailed below. Explanatlon as to what extent the audit was considered capable of detecting Irregularltles, Includlng fraud The objectives of our audit in respect of fraud. are,. to identify and assess the risks of material misstatement of the financial statements due to fraud,. to obtain sufficient appropriate audit evidence regarding the assessed risks of material misslalement due lo fraud, Ihiough designing and implementing appropriate responses lo those assessed risks,. and to respond 8pproprialely to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charttable company. Our approach was as follows.. We obtained an understanding of the legal and regulatory requirements applicable to the charitable company and considered that the most significant are Ithe Companies Act 2006, the Charities Acl 2011, the Charity SORP, and UK financial reporting slandards as issued by the Financial Reporting Councill We obtained an understanding of how the charitable company complSes with these requirements by discussions with management and those charged with goveTnance. We assessed the risk of material miss18temenl of the financial statements. including the risk of material misslalemenl due to fraud and how it might occur, by holding discussions with management and those charged with governance. We inquired of management and those charged with governance as to any known instances of non- compliance or suspected non4ompliance with laws and regulations. Based on this understanding, we designed specific appropriate audit procedures to identify instances of non- compliance with laws and regulations. This included making enquiries of management ar¢d those charged with governance and obtaining additional corroborative evidence as required. As parl of an audit in accordance with ISAS {UKI we exercise professional judgement and maintain professional sceplicism throughout the audit. We also.. Identify and assess the risks of material misstatement of the financial stalemenls, whether due lo fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropTiale lo provide a basis for our opinion. The risk of not detecting a material misslalement regulling from fraud is higher than ft>r ong resulting from error, as fraud may involve Gollu10n, forgcry, inlentional omissions, misrepresenlalions, or the override of internal control. Obtain an understanding of internal control relevant lo the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the charitable company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Iruslees. Page 8
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Independent auditors, report to the of The Knlghtland Foundation Conclude on the appropriateness of the Iruslees, use of the going concern basis of accounting and, based on Ihe audit evidence obtained, whether a material uncertainty exists ielaled lo events or conditions that may cast significant doubl on the charitable company's ability lo continue as a going concern. If we conclude that a material uncertainty exists. we are required to draw allenlion in our auditor's report to the related disclosures in the financial statements or, if such disclosuros ar8 inadequate, to modify our opinion. Our Conclusions are based on the audit evidence obtained up to the dale of our auditor's report. However, fltlure events or conditions may cause the charitable company to cease to continue as 2 going concern. Evaluate the overall presentation, structure and content of the financial slalemenls, including the disclosures, and whether the financial ststements represent the undeTlying transactions and events in a manner that 2¢hieves fair presentation. We communicate with those charged with governance regarding, among other mallers, the planned scope and liming of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 slate to the company's members those matters we are required lo slate lo them in an audilorfs report and for no other puipose. To the fullest extent permitted by law. we do not a¢p1 or assume responsibility lo any party other than the charitable company and charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. Date: 2810112022 ShSvani Kothari (Senior slatulory audilorl for and on behalf of Moore Kingston Smith LLP, Statutory Auditor Devonshire House 60 Goswell Road London EC1M 7AD Page 9
THE KNIGHTLAND FOUNDATION {A company Ilmited by guarantee) Statement of financial activities (incorporating income and expendlture accounti For the Year Ended 31 January 2021 Total funds 2021 Total funds 2020 Unrestricted funds 2021 £ Note InGome from.. Donations and legacies Investments 1.127,331 664,143 1,127,331 664,143 283,882 455.832 Total income Expenditure on: Investment management costs Charitable activities 1,791,474 1,791.474 739.714 253,551 804,291 253,551 804,291 481,850 254.329 Total expenditure 1,057,842 1,057,842 736, 179 Net gains on investments 12 1,104,107 1,104,107 530,000 Net movement in funds 1,837,739 1,837,739 533,535 Reconciliation of funds: Total funds brought fotward Nel movement in funds 3,811,566 1,837,739 3,811,566 1,837,739 3,278,031 533,535 Total funds carrled forward 5,649,305 5,649,305 3,811,566 The Statement of financial activities includes all gains and losses re¢ognised in the year. The notes on pages 13 to 24 foTm part of these financial stalemenls. Page 10
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Registered number: 07535303 Balance sheet As at 31 January 2021 2021 2020 Note Flxed assets Investments Investment property 13 12 201 9,060,000 201 7,955,893 9,060,201 7,956.094 Current assets Debtors Cash al bank and in hand 14 1,709,519 3,432 1,832,203 2,673 1.712,951 1,834,876 Creditors.. amounts falling due within one year 15 1355,7861 (t, 132.000) Net current assets 1,357.165 702,876 Total assets less current Ilabilities 10,417,366 8,658,970 Credilors.. smounts falling duè aftèr more than one year 16 14,768,061) (4,847,404) Total not assets 5,649,305 3.811.566 Charitv funds Unrestricted funds 17 5,649,305 3.811,566 Total funds 5,649,305 3.811.566 The financial statements have been prepared in accordance with the provisions applicable lo entities subject lo the small companies regime. I he Iinancial statements were approved ancl authorised tor issue by the Trustees and signed on their behalf by.. Joseph Collèy Interim manager Dale.. 2810112022 The notes on pages 13 to 24 form parl of these financial slalements. Page11
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Statement of cash flows For the Year Ended 31 January 2021 2021 2020 Note Cash flows from operating activities Nel cash used in operating activities 18 258.760 1,433,989 Cash flows from investing activities Purchase of investment property (2,509,072) Net cash provided byllused Inl Investlng actlvltles {2,509,0721 Cash flows from financing activities Cash inflows from new borrowing Repayments of borrowing Interest payable 5.972,731 170,880) (4,529,809J 1187,1211 (385,701) Net cash {used inllprovided by financlng actlvltles {258,0011 1,057.221 Change In cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year 759 (17,8621 20.535 2,673 Cash and cash equivalents at the end of the year 19 3,432 2,673 The notes on paqes 13 10 24 form parl of these financial statements Page 12
THE KNIGHTLAND FOUNDATION (A company limited by guarantee) Notes to the financial statements Forthe Year Ended 31 January 2021 General information The Knightland Foundation is a charilable company registered in England and Wales under the Charities Act. The address of the registered office is given on the Information page. Accounting pollcles 2.1 Basis of preparation of flnanclal statements The financia5 statements have been prepared in accordance with the Charities SORP (FRS 1021 Accounting and Reporting by Charities.. Slalemenl of Recommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffective l January 2019}, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2006. The Knighlland Foundation meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value. Investment properly is carried al fair value as slated in the relevant accounting policy. 2.2 Golng concern The Twstees recognise the economic and llading uncertainties resulting from the evolving coronavirus pandemic, in particular the potential impact on rental collection and property values. The Tiuslees have therefore piepared revised cash ffow forecasts and stress tests taking these factors into account. These forecasts show that the charity will bè ablp tts r.t)ntiniip tts mè.gt its c)bligatinn8 they fall due without breaching covenants associated with existing bank loans. After making appropriate enquiries, the Trustees therefore have a reasorTrable expectation that the Company has adequate resources to continue in operational existen for the foreseeable future. For this reason. they continue to adopt the going concern basis in preparing the financial slalements. The Trustees are therefore Confident of beirsg able lo Ifade for a period of al least 12 months from the approval of the financial slalemenls and the Trustees have therefore concluded Ih8t il is appropriate for the financial statements lo be prepared on the going concern basis. These financial slalemenls do not include any adjuslmenls should the going concern basis preparation be inappropiiale. 2.3 Income All income is recognised once the Charity has enlillement to the income, il is probable that the income will be received and the amount of income receivable can be measured reliably. Dontions in kind received as property management selv1$, are included at valuation and recognised as income when they are received. Income tax recoveTable in relation to investment income is recognised at the time the investment income is receivable. Page 13
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Notes to the financial statements Forthe Year Ended 31 January 2021 Accountlng pollcles leontinued} 2.4 Expenditure Expenditure is recognised once there is a legal or conslruclive obligation lo transfer economic benefit In a third p2rly. il iq prohahlE.b Ihxl a Ir8nsf•.r nf ep.onomic. hp_nelilg will bp. rp.qiiirerl in *p.Illp.me.nl 2nd the amount of the obligation can be measured reliab5y. Expenditure is classified by activity. The costs of each activity are made up of the lolal of direct costs and shared costs, including support costs involved in undertaking each aclivily. Direct costs atlribulable lo a single activity are allocated directly to that aclivily. Shared costs which contribute to more than one activity and support costs which are not allribulable to a single activity are apportioned beiween 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 raising funds includes all expenditure incurred by the Company to raise funds for its harilable purposes and includes costs of all fundmising activities events and non-charilable trading. Expenditure on charitable activities is incurred on directly undertaking the activities which further the Company's objectives. as well as any associated support costs. 2.5 Investments Fixed asset investments are a form of ftnanc121 instrument and are initially recognised at their transaction cost and subsequently measured at fair value al the Balance sheet date, unless the value cannot be measured reliably in which case il is measured at Cost less impairment. Investment gains and 1055e5, whether reali5ed or unreali5ed, are Goinbined and presented as 'QainsllL055esl on investments, in the Statement of financial activities. Investments in subsidiaries are valued at cost less provision for impairment. 2.6 Investment Property Investment property is carried at fair value determined annually by the directors, with the use of external valuations, the current market rents and investment property yields for comparable real estate. adjusted if necessary forany difference in the nature, location or condition of the specific asset. No depieciation is provided. Changes in fair value are recognised in the SOFA. 2.7 Liabilltles and provlslons Liabilities are recognised when there is an obligation al the Balance sheet dale as a result of a past event, it is probable that a transfer of economic benefit will be required in selllemenl, and the amount of the settlement can be eslimaled reliably. Liabilities are recognised at the amount that the Company anticipates il will pay to sellle the debt or the amount il has received as advanced payments for the goods or services il must provide. Provisions are measured al the best estimate of Ihe 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 al the pre-tax discount rale that reflects the risks specific lo the liability. The unwinding of the discount is recognised in the Slalemenl of financial activities as a finance cost. Page 14
THE KNIGHTLAND FOUNDATION (A company Ilmited by guarantee) Notes to the financial statements For tho Year Ended 31 January 2021 Accountlng pollcles (contlnuedl 2.8 Taxatlon The charity is exempt fmm coiporation tax on ils charitable aclivilies. 2.9 Financlal Instruments The Company only has financial assets and financial liabilities of a kind that qualify as basic financial inslrumenls. Basic financial instruments are initially recognised al transaction value and subsequently measured al their settlement value with the exception of bank loans which are subsequently measured al amortised cost using the effective interest method. 2.10 Fund accountlng General funds are unreslricled funds which are available for use at the discretion of the Trustees in furtherance of the geneial objectives of the Company and which have not been designated for other purposes. Investment income, gains and losses are allocated lo the appTopriale fund. Crlllcal accountlng estlmates and areas of Judgment Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectation5 offuture event& that are believed to be reasonable under the circumstances. Critical ac¢ountlng eslimales and assumptions.. In preparing these financial slalemenls the Iruslees have made judgements lo determine the fair value of the company's investment properly. F8¢lors taken into consideration include the cuirenl market rents and investment properly yields for comparable real eslale, adjusted if necessary for any difference in the nature, location or condition of the specific asset, and taking into account the impact of COVID-19. Income from donation5 and legacies Unrestricted funds 2021 Total funds 2021 Tolal funds 2020 Donations Donations in kind 1,064,500 62.831 1,064,500 62,831 283,882 Total 2021 1,127,331 1,127,331 283,882 Page15
THE KNIGHTLAND FOUNDATION {A company limited by guarantee) Notes to the financial statements For the Year Ended 31 January 2021 Income from donations and legacles Icontlnued) Donations include £1.064,500 (2020- £283,882) fiom related corporate entities. See related party transactions note for more details. Donations in kind comprise propeily management services received. Similar service were recieved last year, but these were not quanlllled In ihe accounts. The Iruslees have cseclded io recognlse the value of these services this year. See related party Iiansaclions note for more details. Investment income Unrestricted funds 2021 Total funds 2021 Tot81 funds 2020 Investment income - rental income Investment income - rent concessions Investment income - interest 661,430 133,1251 35.838 661,430 {33,1251 35,838 455,830 664.143 664,143 455,832 Investment management costs Unrestricted funds 2021 Total funds 2021 Tolal funds 2020 Property expenses Insurance recharges Repairs and maintenance Interest payable and similar charges Property management- donation in kind Agenls fees Legal and professional fees 12,677 150,890} 5,975 222,958 62,831 12,677 (50,8901 5,975 222,958 62,831 68,829 (49,547) 60.827 385, 701 24,000 (7,960) 253,551 253,551 48t,850 Page 16
THE KNIGHTLAND FOUNDATION IA company Ilmited by guarantee) Notes to the financial statements For the Year Ended 31 January 2021 Analysis of grants Grants to Institutions 2021 Total funds 2021 Total funds 2020 Granl Payable 704,581 704,581 181,566 The Company has made the following material grants to institutions during the year.. 2021 Name of Institutlon United Talmudical Associates Ltd 225,000 43,500 38,000 Chasdei Aharon Chevras Maoz Ladol 306,500 398,081 Other grants lo institutions 704,581 Analysis of expenditure by activities Grant funding of actlvltles 2021 Support costs 2021 Total funds 2021 Total funds 2020 Grants payable 704,581 99,710 804,291 254,329 Page 17
THE KNIGHTLAND FOUNDATION {A company limited by guarantee) Notes to the financial statements Forthe Year Ended 31 January 2021 Analysls of expendlture by activities {continuedl Analysls of support eosts Total fund5 2021 Total ruridb 2020 Actlv5tlos 2021 Bad debt Bank charges Accountancy fees Legal and professional fees Governance costs 37,934 195 37,934 195 147 300 17,757 43,824 17,757 43,824 70.316 2,000 99.710 99,710 72, T63 Included within governance costs are auditors remuneration and legal and professional fees. Audltors. remuneratlon 2021 2020 Fees payable lo the Company's auditor for the audit of the Company's annual accounts 15,000 2,000 Fees payable lo the Company's auditor in respect of.. All non-audil services not included above 300 10. Trustees. remuneratlon and expense5 During the year, no Trustees fe¢eived any remuneiation or other benefits (2020- £NIL). During the year ended 31 January 2021, no Trustee expenses have been incurred (2020- £MIL). 11. Employees The average monthly number of employees was NIL12020 - NIL). Page18
THE KNIGHTLAND FOUNDATION IA company Ilmited by guarantee) Notes to the financial statements For the Year Ended 31 January 2021 12. Investment property Freehold Investment properly £ Valuatlon At 1 February 2020 Surplus on revaluation 7,955,893 1,104,107 Al 31 January 2021 9,060,000 The 2021 valuations were made by the trustees, based whefe applicable on discussions with valuation professionals and on valuation reports on certain of the group's properties prepared for lending purposes. on an open market value for existing use basis. The Tiustees commissioned an indicative valuation of the charity's commercial property portfolio as al 2 July 2021 from Lambelh Smith Hampton. The purpose of that valuation was lo inform the Trustees of the existing value within the estate. The Trustees accept that there is no evidence lo support a material difference beeen a valuation at 31 January 2021 and the one conducted on 2nd July 2021, and have adopted the valuation in full this year. In the previous year the Trustees adopted a more cautious approach due to the uncertainty of the impact of Covid 19. 13. Fixed assot investments Investments in subsidiary companies Cost or valuatlon Al 1 February 2020 201 At 31 January 2021 201 Net book value At 31 January 2021 201 At 31 January 2020 201 Page19
THE KNIGHTLAND FOUNDATION IA company limlted by guarantee) Notes to the financlal statements For the Year Ended 31 January 2021 Prlnclpal subsldlarles The following were subsidiary undertakings of the Company.. 13. Fixed asset Investments {contlnued) Names Principal activity Cla$s of shares Holding Bellview Management Ltd Bellview Land Ltd Canvey Housing Ltd Rowe Lane Estates Ltd Properly investment Ordinary Properly investment Ordinary Property investment Ordinary Property investment Ordinary 100Yo 50Yo 1000 50¥0 The financial results of the subsidiaries for the year were= Names ProflUILossl Net assetsl I Surplusl Illabilitiesl (Deficit) for the year £ Bellview Management Ltd Bellview Land Ltd Canvey Housing Ltd Rowe Lane Eslales Ltd 202,048 {2.045,3601 2,527 962,303 229,721 20,834 18,045} 185,163 14. Debtors 2021 2020 Due withln one year Trade debtors Amounts owed by group undertakings 23,61 S 1,685,904 10,795 1,821,408 1.709.519 1.832.203 Amounts owed by group undertakings are repayable on demand. Page 20
THE KNIGHTLAND FOUNDATION IA company Ilmited by guarantee) Notes to the financial statements For the Year Ended 31 January 2021 15. Creditors.. Amounts falllng due within one year 2021 2020 Bank loan5 Trade creditors Loans from UK charities Other laxalion and SOGial security Other creditors Accruals and deferred income 138,563 23,675 130, 100 64,544 4t5,000 11.252 417.961 93.143 39,505 52.789 101,254 355.786 1.132,000 Other creditors include £3,220 (2020 - £359,732) that Was owed to related parties. 2021 2020 Deferred income Balance brought forward Amounts ieleased during the period AiiiuuiiLb Llel¥i led dui iiiy Lliv yeiiud 90,143 190.1431 89,456 90.143 Balance carrled forward 89.456 90.143 16. Creditors: Amounts falling due after More than one year 2021 2020 Bank loans 4,768,061 4,847,404 The bank loans are secured by fixed charges over the investment properties. The rates payable on the loans are fixed partly al 3.940A until expiry in May 2025 and partly at 3.1 OA until expiry in November 2024. Loan amortisalion of £150,000 per annum is due until expiry. Included within the above are amounts falling due as follows.. 2021 2020 Between one and two years Bank loans 147,495 130, 100 Page 21
THE KNIGHTLAND FOUNDATION (A company limited by guarantee) Notes to the financial statements Forthe Year Ended 31 January 2021 16. Creditors: Amounts falling due after more than one year (continued) 2021 2020 Between two and five years Bank loans 4,620,566 4,032.313 Over five years Bank loans 684,991 17. Statement of funds Statement of funds - current year Balance at 1 February 2020 Balance at Gainsl 31 January (Losses) 2021 Income Expenditure Unrestrlcted funds General Funds - all funds 3,811,566 1,824,599 11,090,967> 1,104,107 5,649,305 Statement of funds - prior year B818nce at 1 February 2019 In¢ome Balance al Gains/ 31 January (Losses) 2020 Expendilure Unrestricted funds General Funds 3,278,031 739, 714 (736,179) 530,000 3,811.566 Page 22
THE KNIGHTLAND FOUNDATION IA company limited by guarantee) Notes to the financial statements For the Year Ended 31 January 2021 18. Reconclllation of net movement In funds to net cash flow from operating actlvltles 2021 2020 Np.t inrnmp. fnr Ihp. period18s per Statement of Financial Aclivilies) 1,837,739 533.535 Adjustments for: Revaluation of property Interest paid Decrease in debtors Increasel{decreasel in creditors 11,104,107) (s30,0() 187.121 385,701 122,684 527.881 1784,677) 516.872 Net cash provided by operating actlvltles 258,760 1.433.989 19. Analysls of cash and cash equivalents 2021 2020 Cash in hand 3,432 2,673 Total cash and cash equivalents 3,432 2,673 20. Analysls of chanoes In net debt At1 February 2020 Cash flows At31 January 2021 £ Cash at bank and in hand Debt due within 1 year Debt due after 1 year 2,673 1130.1001 {4,847,4041 759 3,432 18,4631 {138,5631 79,343 14,768,061) (4.974,831) 71,639 {4,903.192) Page 23
THE KNIGHTLAND FOUNDATION IA company Ilmited by guarantee) Notes to the flnanclal statemenls For the Year Ended 31 January 2021 21. Related party transactions The following amounts were owed {loll from related parties, in which the ITuslees have a controlling interest. All changes in the balances relate lo cashflows in the year. 2021 2020 Bellview Management Limited {subsidiary) Bellview Land Limited {subsidiaryl Canvey Housing Limited Isubsidiaryl Rowe Lane Esales Ltd Isubsidiaryl Bellview Eslales Ltd {common controll Bellview Management IUKI Limited {¢ommon controll 341,808 335,808 201.503 132,045 1, 152.051 (359. 732) 132,045 1,212,051 13,220) 4,702 1,687,386 1.461,675 A trustee, J Friedman. also has a 50¥0 share in a subsidiary of the charity Rowe Lane Estates Ltd. During the year the charity recelved donations of £1,064,500 {2020 - £283,882) from companies under the control of J Friedman. During the year Bellview Housing Limited. one of the charity subsidi2ries, loaned the charity £37,500 which was repaid by the year end. Amounts owed (to)Ifrom companies under common control are interest free and repayable on demand. Property management services for the value of £62,831 were provided by Bellview Management (UK) Limited, a company under the control of one of the Iruslees. These services were provided al no charge, and have been shown in the accounts as a donation-in-kind. 22. Post balance sheet events Following the year end, the charity expects to receive proceeds of al least £1.2m from ils subsidiary Rowe Lane Estates Ltd which the Iruslees will consider for the following purposes.. To achieve its charitable objectives To reduce the borrowing secured against its investment assets On 7 April 2021, the Charity Commission exercised ils powers under the Charities Act 2011 to appointjoinl interim managers, John Dickinson and Joseph Colley, of Carter Backer Wnter LLP, on 7 April 2021 to help address thè. r.nnr.p.rn8 at thp. rhxrity Page 24