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2021-12-31-accounts

REGISTERED COMPANY NUMBER: 07715471 (England and Wales) REGISTERED CHARITY NUMBER: 1145084

HUMAN CAPABILITY FOUNDATION

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2021

Berringers LLP Chartered Accountants and Statutory Auditors Lygon House 50 London Road Bromley Kent BR1 3RA

HUMAN CAPABILITY FOUNDATION

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2021

Page
Report of the trustees 1 to 5
Report of the independent auditors 6 to 8
Consolidated statement of financial activities 9
Consolidated and charity balance sheet 10
Consolidated cash flow statement 11
Notes to the consolidated cash flow statement 12
Notes to the consolidated financial statements 13 to 25

HUMAN CAPABILITY FOUNDATION

REPORT OF THE TRUSTEES for the year ended 31 December 2021

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the audited consolidated financial statements of the charity for the year ended 31 December 2021. The trustees have adopted the provisions of 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 2019).

OBJECTIVES AND ACTIVITIES

The Human Capability Foundation (HCF) is a grant-making foundation with the objective of promoting such purposes as are exclusively charitable in accordance with the laws of England and Wales as the trustees may from time to time determine. The Foundation's primary focus is in India and on the issues of:

The HCF seeks to build long-term funding relationships with non-governmental organisations (NGOs) and community-based organisations (CBOs) which share these values. Support of NGOs and CBOs will enhance the capability of individuals and communities to manifest self-sustaining and rewarding lives for themselves, their communities and future generations. It will foster local knowledge and expertise so that communities themselves are better able in the long-term to demand their rights.

The HCF uses a number of different measures to assess success. The HCF should:

The short-term aims of the HCF are to continue supporting organisations and identify new organisations who are working at the grassroots level in the most marginalised communities. The HCF wishes to remain an agile organisation that can respond quickly to emerging needs and requirements. Our medium-term aim is to ensure that we provide space for our grantees to innovate within their work, trying new initiatives and ideas. A long-term goal is to significantly increase our annual level of funding. We class this as a long-term goal because we want to increase our funding at a pace that means we continue to find exemplar organisations to fund.

Public benefit

The trustees have had regard to Charity Commission guidance on public benefit and consider that the objectives, aims and achievements of the charity described in the report enable it to meet its duty to the Charity Commission as per section 17 of the Charities Act 2011, and to the benefit of the public.

Page 1

HUMAN CAPABILITY FOUNDATION

REPORT OF THE TRUSTEES for the year ended 31 December 2021

STRATEGIC REPORT Achievement and performance Charitable activities

This year HCF have continued to support a significant number of NGO's, with grants approved during the year totalling £601,873 (2020: £1,104,567). The grants have been distributed in accordance with the charitable objectives as below:

- Women and girls' rights and empowerment
- Sexual and reproductive health rights
- Gender equality
- Rights of economically and socially marginalised groups
- Mental health and disability rights
- Labour & migration rights
- Environmental protection and climate change mitigation
- Covid emergency
- Youth education
- Arts & cultural expression		 2021
£
21,051
82,343
109,500
4,909
99,321
78,896
136,291
28,272
24,390
16,900
601,873		 2020
£
198,134
244,085
161,373
158,056
74,821
121,195
101,946
44,956
-
-
1,104,567

HCF continued its support to the majority of the organisations we had supported in the previous year. HCF's grantees were substantially affected by the COVID-19 crisis. In April 2021 there was a huge surge in cases which required the majority of the face-to-face work to be delayed. HCF took the decision to send specific funds to organisations for them to provide emergency relief to their communities. HCF had to acknowledge that some of the work that had been planned and agreed with grantees would be delayed. HCF continued support to these organisations so that they could pay staff salaries and make plans to adapt their work rather than being weakened organisationally by the pandemic. HCF wanted our grantees to survive the pandemic, and flourish beyond it.

Towards the end of 2020, the Indian government brought in changes to the laws concerning foreign funding. The effects of this were being felt in 2021 whereby all FCRA-approved Indian NGOs were required to get their FCRA reassessed by the government and reapproved. This is the reason that our level of funding decreased in 2021, as the re-approval process took a long time and HCF did not want to send funds until their FCRA had been granted by the government.

Despite the year's challenges there have been numerous achievements by our organisations, for example:

Page 2

HUMAN CAPABILITY FOUNDATION

REPORT OF THE TRUSTEES for the year ended 31 December 2021

STRATEGIC REPORT Achievement and performance

Financial Review

Total grants approved by the foundation in 2021 were £601,873 (2020: £1,104,567). Total donations received by the Charity in 2021 amounted to £6,960,553 (2020: £4,399,770).

The trustees believe that the valuation of the investment properties as at 31 December 2021 are not materially different to their market values. The trustees are not qualified surveyors but believe that this valuation method represents a sufficiently accurate estimation without the need to spend any of the charity's funds on professional valuations.

During the year rental income received from the properties owned by HCF amounted to £1,235,579 (2020: 1,248,792). These properties provide on-going monthly sources of income from the rent.

The HCF seeks to maintain low costs, and using two forex foreign exchange specialists is a key way in which we minimise the exchange rate costs of sending funds to India.

The HCF holds reserves because we plan to be a long-term funder in India providing small-medium-sized grants to organisations. At the year end total charity reserves held were £41,733,587 (2020: £34,040,242). We hold reserves to ensure that we can commit to multi-year funding for grantees. In 2020 an additional £1,545,346 was invested in a renewable energy investment bond. We assessed that it was a low-risk investment but one that would provide a satisfactory return and put our cash reserves to good use, while retaining the necessary funds in order to meet our grants-making commitments. We have judged that a renewable energy portfolio is in line with our charity's ethics as the funds are used to create green energy resources. At the end of the year, this investment was performing as we had intended and no issues had arisen.

Our long-term financial plans are to significantly increase the level of funds we have in order to be able to make grants to a larger number of organisations. HCF will continue to provide long-term, core grants of unrestricted funds to NGOs as this allows the organisations to have stability and do the work that they truly feel is important.

Future plans

In 2022 we will be continuing our increased attention on climate change funding. This is a high priority for HCF and we will be engaging with individuals and organisations throughout 2022 in order to find effective and innovative ways to fund environmental work in India.

STRUCTURE, GOVERNANCE AND MANAGEMENT Governing document

The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.

Page 3

HUMAN CAPABILITY FOUNDATION

REPORT OF THE TRUSTEES for the year ended 31 December 2021

STRUCTURE, GOVERNANCE AND MANAGEMENT Organisational structure

The Human Capability Foundation is a charitable company limited by guarantee, incorporated in December 2011. The three trustees are:

Luke Pagarani Davinder Pagarani Natasha Pagarani

The trustees are also company directors. Under the requirements of the Memorandum and Articles of Association, the directors retire on an annual basis and, being eligible, offer themselves for re-election.

Natasha Pagarani is the Foundation's Secretary and the three trustees jointly manage the foundation, meeting informally on a regular basis to discuss grants, funding and other activities.

In 2021, the HCF received a total of £2,901,813 (2020: £200,000) from NATCO Foods Ltd and £nil (2020: £399,770) from Giant Exports Services Ltd. The HCF also received a donation of £4,071,298 relating to a loan donated as an asset from the Choithram International Foundation, an entity based in Jersey.

T.Choithram & Sons (London) Ltd is the parent company of Natco Foods Limited, of which Luke Pagarani is Managing Director, Natasha Pagarani is also employed and Davinder Pagarani is engaged as a consultant. Natco Foods Limited is a company based in the UK whose core business is the sourcing, processing and selling of foods from around the world to consumers primarily in the UK. It is the intention of T.Choithram & Sons (London) Ltd and its subsidiaries to continue financial support of the HCF indefinitely.

REFERENCE AND ADMINISTRATIVE DETAILS Registered Company number 07715471 (England and Wales)

Registered Charity number 1145084

Registered office

c/o Natco Cash & Carry Silverdale Industrial Estate Silverdale Road Hayes London UB3 3BL

Trustees

N Pagarani L Pagarani D Pagarani

Company Secretary

N Pagarani

Auditors

Berringers LLP Chartered Accountants and Statutory Auditors Lygon House 50 London Road Bromley Kent BR1 3RA

Page 4

HUMAN CAPABILITY FOUNDATION

REPORT OF THE TRUSTEES for the year ended 31 December 2021

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Human Capability Foundation for the purposes of company law) are responsible for preparing the Report of the trustees 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 year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

AUDITORS

The auditors, Berringers LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

Report of the trustees, incorporating a Strategic report, approved by order of the board of trustees, as the company directors, on ………………….. and signed on the board's behalf by:

N Pagarani - Trustee

Page 5

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HUMAN CAPABILITY FOUNDATION

Opinion

We have audited the consolidated financial statements of Human Capability Foundation (the 'parent charitable company') and its subsidiary (the ‘group’) for the year ended 31 December 2021 which comprise the Consolidated statement of financial activities, the group and parent charitable company balance sheet, the Consolidated cash flow statement and consolidated notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual report, other than the financial statements and our Report of the independent auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Page 6

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HUMAN CAPABILITY FOUNDATION

Matters on which we are required to report by exception

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

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

Responsibilities of trustees

As explained more fully in the Statement of trustees' responsibilities, the trustees (who are also the directors of the parent 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.

Our 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 a Report of the independent auditors 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:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and error, we considered the following:

Our procedures to respond to risk include the following:

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 Report of the Independent Auditors.

Page 7

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF HUMAN CAPABILITY FOUNDATION

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 auditors' 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 the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Allan BSocSc FCA (Senior Statutory Auditor) for and on behalf of Berringers LLP Chartered Accountants and Statutory Auditors Lygon House 50 London Road Bromley Kent BR1 3RA

Date: ………………………………..

Page 8

HUMAN CAPABILITY FOUNDATION

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) for the year ended 31 December 2021

Notes
INCOME AND ENDOWMENTS FROM
Donations and legacies
3
Other trading activities
Sales of donated products
4
Commercial trading operations
4
Investment income
5
Share of profit/(loss) in associate (net of tax)
15
Total
EXPENDITURE ON
Costs of raising funds
Commercial trading operations
14
Charitable activities
Grants
6
Other
Total
Net gains on investments
14
NET INCOME
OTHER RECOGNISED GAINS/(LOSSES)
Other income arising on consolidation
15
NET MOVEMENT IN FUNDS
RECONCILIATION OF FUNDS
Total funds brought forward
23
TOTAL FUNDS CARRIED FORWARD		 2021
2020
Unrestricted
Total
fund
funds
£
£
6,973,640
599,770
2,010
11,422
21,484,029
-
1,321,709
1,399,203
-
2,212
29,781,388
2,012,607
21,222,415
-
601,873
1,104,567
155,326
136,213
21,979,614
1,240,780
13,459
-
7,815,233
771,827
-
2,471,764
7,815,233
3,243,591
32,746,065
29,502,474
40,561,298
32,746,065

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure has arisen from continuing activities of the group. The notes to the accounts are shown on pages 13 to 25.

The notes form part of these financial statements

Page 9

HUMAN CAPABILITY FOUNDATION

CONSOLIDATED AND CHARITY BALANCE SHEET

31 December 2021

Notes
FIXED ASSETS
Tangible assets
13
Investments
Investments
14
Investment property
16
CURRENT ASSETS
Debtors: amounts falling due within one
year
17
Debtors: amounts falling due after more
than one year
18
Stocks
19
Investments
20
Cash at bank
CREDITORS
Amounts falling due within one year
21
NET CURRENT ASSETS
Provision for liabilities
22
NET ASSETS
FUNDS
23
Unrestricted funds
TOTAL FUNDS
TOTAL ASSETS LESS CURRENT
LIABILITIES		 2021
2020
Unrestricted
Unrestricted
fund
fund
£
£
2,325,117
2,427,517
398,884
230,000
22,680,000
22,680,000
25,404,001
25,337,517
3,916,670
3,867,330
4,134,927
-
3,001,422
2,639,281
4,245,346
4,845,346
6,571,026
2,129,179
21,869,391
13,481,136
(6,635,445)
(5,996,270)
15,233,946
7,484,866
40,637,947
32,822,383
(76,649)
(76,318)
40,561,298
32,746,065
40,561,298
32,746,065
40,561,298
32,746,065
Group		 2021
2020
Unrestricted
Unrestricted
fund
fund
£
£
2,325,117
2,427,517
398,884
230,000
22,680,000
22,680,000
25,404,001
25,337,517
3,916,670
3,867,330
4,134,927
-
3,001,422
2,639,281
4,245,346
4,845,346
6,571,026
2,129,179
21,869,391
13,481,136
(6,635,445)
(5,996,270)
15,233,946
7,484,866
40,637,947
32,822,383
(76,649)
(76,318)
40,561,298
32,746,065
40,561,298
32,746,065
40,561,298
32,746,065
Group		 2021
2020
Unrestricted
Unrestricted
fund
fund
£
£
359,193
400,149
4,439,465
4,270,581
22,680,000
22,680,000
27,478,658
27,350,730
465,354
117,184
4,134,927
-
-
-
4,245,346
4,845,346
5,602,628
1,810,505
14,448,255
6,773,035
(116,610)
(83,523)
14,331,645
6,689,512
41,810,303
34,040,242
-
-
41,810,303
34,040,242
41,810,303
34,040,242
41,810,303
34,040,242
Charity
25,404,001
3,916,670
4,134,927
3,001,422
4,245,346
6,571,026		 25,337,517
3,867,330
-
2,639,281
4,845,346
2,129,179
21,869,391
(6,635,445)		 13,481,136
(5,996,270)
15,233,946 7,484,866
40,637,947
(76,649)		 32,822,383
(76,318)
40,561,298 32,746,065
40,561,298 32,746,065
40,561,298 32,746,065

The consolidated financial statements were approved by the Board of Trustees and authorised for issue on ………….. and were signed on its behalf by:

N Pagarani - Trustee

The notes form part of these financial statements

Page 10

HUMAN CAPABILITY FOUNDATION

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2021

Notes
Cash flows from operating activities
Cash generated from operations
1
Interest paid
Net cash (used in)/provided by operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Purchase of fixed asset investments
Purchase of current asset investments
Rents from investments
Sale of current asset investments
Cash acquired from donation of subsidiary
Interest received
Dividends received
Net cash used in investing activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at the beginning of the
reporting period
Cash and cash equivalents at the end of the
reporting period		 2021
2020
£
£
2,783,352
(350,550)
(15,053)
-
2,768,299
(350,550)
(274,956)
-
(155,425)
(230,000)
-
(1,545,346)
1,235,579
1,248,792
600,000
-
-
318,674
261,625
107,793
6,725
-
1,673,548
(100,087)
4,441,847
(450,637)
2,129,179
2,579,816
6,571,026
2,129,179

The notes form part of these financial statements

Page 11

HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2021

1.
RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM
Adjustments for:
Depreciation charges
Finance costs
Interest received
Dividends received
Rent from investments
Donated asset
Gains on investments
Share of (profit)/loss in associated companies
(Increase)/decrease in stocks
Decrease/(increase) in debtors
Increase in creditors
Net cash (used in)/provided by operations
Net income for the reporting period (as per the Statement of
financial activities)		 OPERATING ACTIVITIES
2021
2020
£
£
7,815,233
771,827
377,356
40,956
15,053
-
(261,625)
(107,793)
(6,725)
-
(1,235,579)
(1,248,792)
(4,058,211)
-
(13,459)
-
-
(2,212)
(362,141)
-
(126,056)
178,594
639,506
16,870
2,783,352
(350,550)

2. ANALYSIS OF CHANGES IN NET FUNDS

Net cash
Cash at bank
Liquid resources
Current assets investments		 At 1.1.21
£
2,129,179
2,129,179
4,845,346
6,974,525		 Cash flow
At 31.12.21
£
£
4,441,847
6,571,026
4,441,847
6,571,026
(600,000)
4,245,346
3,841,847
10,816,372

The notes form part of these financial statements

Page 12

HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2021

1. STATUTORY INFORMATION

The Charity is a private limited by guarantee, registered in England and Wales and a registered charity in England and Wales. The address of the registered office is Natco Cash & Carry, Silverdale Industrial Estate, Silverdale Road, Hayes, London UB3 3BL.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, 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 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value.

Preparation of the accounts on a going concern basis

After reviewing the company's forecasts and projections, the trustees have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Consolidated financial statements

The financial statements consolidate the results of the charity and its wholly owned subsidiary Trigon Snacks Trading Ltd on a line-by-line basis. Subsidiaries are fully consolidated from the date on which control is transferred to the group. Prior to this, Trigon Snacks Trading Ltd was accounted for as an associate. Associates are all entities over which the group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method of accounting.

A separate Statement of Financial Activities and Income and Expenditure Account for the charity has not been presented because the charity has taken advantage of the exemption afforded by Companies Act 2006, s. 408.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates.

The trustees and directors have made assumptions regarding the recoverability of trade debtors and have provided accordingly in the subsidiary financial statements.

Stock valuation is reviewed at the end of the year, and key assumptions are made in relation to net realisable values and obsolete or slow-moving stocks. Where necessary the directors include a provision against the stock value for Trigon Snacks Trading Ltd.

The trustees consider the useful economic life of fixed assets and estimate depreciation accordingly. Depreciation rates are noted in the accounting policies and the depreciation totals for the year are included in note 13.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably. The following specific policies are applied to particular categories of income:

Page 13

continued…

HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

2. ACCOUNTING POLICIES - continued

Commercial trading income is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover is derived from the sale of goods and is recognised when the significant risks and rewards of ownership of the goods are transferred to the buyer, the price is determinable and the collection of the amount due is reasonably assured.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, 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 includes any VAT which can not be fully recovered and is accounted for on an accruals basis. Expenditure has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Grants

Grants offered subject to conditions which have not been met at the year end date are noted as a commitment but not accrued as expenditure.

Other Expenditure

Solar panel fixed assets used to generate electricity income is depreciated over the 15 year anticipated life on a straight line basis.

Leased out fixed assets used to generate rental income is depreciated over the 10 year anticipated life on a straight line basis.

Within the subsidiary company depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life. Plant and machinery - 15 - 25% on net book value Fixtures and fittings - 15 - 25% on net book value Office equipment - 25% of the net book value

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

The trustees and directors have reviewed the carrying value of the tangible fixed assets and no impairment is deemed necessary.

Bank Charges

Foreign exchange specialists are used to minimise the cost of transfers to India. Transfer costs are not disclosed to the charity; however better rates, which include the transfer costs, are offered to alternative transfer options.

Allocation and apportionment of costs

All income and expenditure is unrestricted. Support costs have been wholly allocated to the main charitable activity and relate to legal and professional, consultancy, accounting and audit fees.

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

2. ACCOUNTING POLICIES - continued

Investment property

Investment properties include donated properties at fair value and are shown are shown at most recent valuation. Any aggregate surplus or deficit arising from changes in valuation is recognised in the Statement of financial activities.

Taxation

The charity is exempt from corporation tax on its charitable activities.

In the subsidiary company current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated. Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. If and when all conditions for retaining tax allowances for the cost of a fixed asset have been met, the deferred tax is reversed.

Deferred tax is recognised when income or expenses from a subsidiary or associate have been recognised, and will be assessed for tax in a future period, except where:

A deferred tax liability or asset is recognised for the additional tax that will be paid or avoided in respect of assets and liabilities that are recognised in a business combination. The amount attributed to goodwill is adjusted by the amount of deferred tax recognised. Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. With the exception of changes arising on the initial recognition of a business combination, the tax expense (income) is presented either in profit or loss, other comprehensive income or equity depending on the transaction that resulted in the tax expense (income).

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. Deferred tax assets and deferred tax liabilities are offset only if:

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Current asset investments

Current asset investments are investments that are easy to access when required and have a maturity of within 12 months of the year end.

In 2019 and 2020, HCF invested in a renewable energy bond, that is in line with the charities ethics and objective of supporting worthy causes.

In 2020 and 2021, HCF invested in Downing Renewables & Infrastructure Trust PLC (DORE) which is in line with the charities ethics as it is designed to deliver stable and sustainable returns by investing in a diversified portfolio of hydro, solar, wind and other infrastructure assets.

Stocks

Stocks are valued at the lower of cost and net realisable value. Cost is calculated as follows:Raw materials - Cost of purchase on first in, first out basis.

Work in progress and finished goods - Cost of raw materials and labour together with attributable overheads.

Net realisable value is based on estimated selling price less further costs to completion and disposal.

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

2. ACCOUNTING POLICIES - continued

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Creditors

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

The company provides for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence.

Derivative financial instruments

Derivative financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in profit or loss. Outstanding derivatives at reporting date are included under the appropriate format heading depending on the nature of the derivative.

3. DONATIONS AND LEGACIES

Donations
4.
OTHER TRADING ACTIVITIES
Sales of donated products
Wholesale sales (Trigon Snacks Trading
Ltd - see note 14)
5.
INVESTMENT INCOME
Rents received
Solar electricity income
Other fixed asset invest - FII
Deposit account interest
Loan interest
Bond interest		 2021
£
6,973,640
2021
£
2,010
21,484,029
21,486,039
2021
£
1,030,579
29,855
6,725

2,682
75,143

176,725
1,321,709		 2020
£
599,770
2020
£
11,422
-
11,422
2020
£
1,248,792
42,618
-
9,252
-
98,541
1,399,203

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

6. CHARITABLE ACTIVITIES COSTS

Grants
7.
GRANTS PAYABLE
2021
£
Grants
601,873
The total grants paid to institutions during the year was as follows:
2021
£
601,873
8.
SUPPORT COSTS
Finance
Other
£
£
Other resources expended
26,353
88,017
The breakdown of support costs is shown in the table below:
Cost type
2021
£
Finance
Foreign exchange losses
26,353
Other
Rates & water
15,780
Insurance
4,099
Audit and accountancy
8,450
Legal and professional fees
30,655
Bank charges
1,421
Consultancy fees
26,732
Repairs & renewals
880
88,017
9.
NET INCOME/(EXPENDITURE)
Net income/(expenditure) is stated after charging/(crediting):
2021
£
377,356
Depreciation - owned assets		 Grant funding
of activities
(see note 7)
£
601,873
2020
£
1,104,567
2020
£
1,104,567
Totals
£
114,370
2020
£
27,335
-
-
8,350
31,725
2,107
25,740
-
67,922
2020
£
40,956

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

10. AUDITORS’ REMUNERATION

2021
£
4,000
Fees payable to the Charity's auditors for the audit
of the financial statements		 2020
£
2,200

11. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 December 2021 nor for the year ended 31 December 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 December 2021 nor for the year ended 31 December 2020.

12. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

INCOME AND ENDOWMENTS FROM
Donations and legacies
Other trading activities
Investment income
Share of profit/(loss) in associate (net of tax)
Total
EXPENDITURE ON
Charitable activities
Grants
Other
Total
NET INCOME
OTHER RECOGNISED GAINS/(LOSSES)
Other income arising on consolidation
NET MOVEMENT IN FUNDS
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
fund
£
599,770
11,422
1,399,203
2,212
2,012,607
1,104,567
136,213
1,240,780
771,827
2,471,764
3,243,591
29,502,474
32,746,065

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

13. TANGIBLE FIXED ASSETS

GROUP

COST
At 1 January 2021
Additions
At 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
CHARITY
COST
At 1 January 2021 and 31 December 2021
DEPRECIATION
At 1 January 2021
Charge for year
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020		 Plant and
Machinery
£
3,710,222
255,901		 Fixtures
and Fittings
£
341,080
782		 Motor
Vehicles
£
16,495
-		 Office
Equipment
£
102,510
18,273		 Totals
£
4,170,307
274,956
3,966,123 341,862 16,495 120,783 4,445,263
1,518,033
337,532		 139,370
30,116		 9,971
1,631		 75,416
8,077		 1,742,790
377,356
1,855,565 169,486 11,602 83,493 2,120,146
2,110,558 172,376 4,893 37,290 2,325,117
2,192,189 201,710 6,524 27,094 2,427,517
Plant and
Machinery
£
530,395
130,246
40,956
171,202
359,193
400,149

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

14. FIXED ASSET INVESTMENTS

GROUP
MARKET VALUE
At 1 January 2021
Additions
Revaluations
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
CHARITY
MARKET VALUE
At 1 January 2021
Additions
Revaluations
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020		 Listed
investments
£
230,000
155,425
13,459
398,884
398,884
230,000
Listed
investments
£
230,000
155,425
13,459
398,884
398,884
230,000		 Unlisted
investments
£
-
-
-
-
-
-
Unlisted
investments
£
4,040,581
-
-
4,040,581
4,040,581
4,040,581		 Totals
£
230,000
155,425
13,459
**398,884 **
**398,884 **
230,000
Totals
£
4,270,581
155,425
13,459
4,439,465
4,439,465
4,270,581

There were no investment assets outside the UK.

The charity's investments at the balance sheet date in the share capital of companies include the following:

Trigon Snacks Trading Limited Registered Number: 08711597 Registered office: Atherton Road, Aintree, Liverpool, L9 7AQ. Nature of business: Retail

%
Class of share: holding
Ordinary 100

The investment held at the year-end is a 100% holding in Trigon Snacks Trading Limited; 10% of the shares were transferred as a gift at the calculated market value as at the 30th November 2018, with the remaining shares transferred at the calculated market value as at 31st December 2020. (see note 15)

Page 20

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

At the 31[st] December 2021, the results for Trigon Snacks Trading Ltd were as follows:

Turnover
Cost of sales
Distribution and Administration costs
Operating profit/(loss)
Interest payable and similar expenses
Tax on profit/(loss)
Total comprehensive income for the year
Aggregate capital and reserves		 2021
£
21,484,029
19,843,689
1,579,784
60,556
15,053
331
45,172
2,791,576		 2020
£
20,805,342
19,305,307
1,387,901
156,213
13,691
76,318
22,125
2,746,404

The consolidated results have been adjusted for any inter-group transactions.

15. ACQUSITIONS

Acquisition of associate

In 2018 10% of the shares in Trigon Snacks Trading Ltd was donated to the Human Capability Foundation. Due to the mutual trustee/director, the charity was deemed to have significant influence by the trustees and therefore this has been accounted for as an investment in an associated company. The share of Trigon Snacks Trading Ltd’s results that have been included in the consolidated accounts are as follows:

Profit/(loss) before taxation
Tax on profit/(loss)
Total comprehensive income for the year
10% share recognised on consolidation		 2021
2020
£
£
-
98,443
-
76,318
-
22,125
-
2,212

Acquisition of subsidiary

The acquisition of Trigon Snacks Trading Ltd as a subsidiary occurred on 31st December 2020, when T.Choithram & Sons (London) Ltd donated the remaining 90% of the shares to the Human Capability Foundation.

As the acquisition was a donation of share capital, there was no consideration paid, and no goodwill arising on consolidation. The gain made by the charity on acquisition in 2020 is shown below:

Consideration paid:
Fair value of net assets on acquisition:
10% previously recognised as associate
Gain on consolidation		 -
2,746,404
(274,640)
2,471,764

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

16. INVESTMENT PROPERTY

£

FAIR VALUE

At 1 January 2021 and 31 December 2021

22,680,000

NET BOOK VALUE At 31 December 2021

22,680,000

At 31 December 2020

22,680,000

The valuations for all properties have not, in the Trustee’s opinion, changed in value materially since the last valuations were carried out.

17. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade debtors
Prepayments
Other debtors		 2021
2020
2021
2020
£
£
£
£
3,359,316
3,665,498
-
-
107,495
115,653
15,495
31,005
449,859
86,179
449,859
86,179
3,916,670
3,867,330
465,354
117,184
Group
Charity

18. DEBTORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Other debtors 2021
2020
£
£
4,134,927
-
4,134,927
-
Group		 2021
2020
£
£
4,134,927
-
4,134,927
-
Charity		 2021
2020
£
£
4,134,927
-
4,134,927
-
Charity
-

On 1 January 2021 a deed of novation was signed, transferring a loan owed by Crown Network Ltd, to Choithram International Foundation, to the Human Capability Foundation, a charity with trustees/directors in common. At the balance sheet date, Crown Network Ltd owed AED 20.5million (£4million), repayable in more than one year, with interest accruing at 1.75% over the Bank of England base rate. During the year interest accruing was £75,143.

19. STOCKS

Raw materials
Finished goods		 2021
2020
£
£
2,302,783
1,925,939
698,639
713,342
3,001,422
2,639,281
Group		 2021
2020
£
£
-
-
-
-
-
-
Charity

Page 22

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

20. CURRENT ASSET INVESTMENTS

Unlisted Investments 2021
2020
£
£
4,245,346
4,845,346
4,245,346
4,845,346
Group		 2021
2020
£
£
4,245,346
4,845,346
4,245,346
4,845,346
Charity

In 2021, HCF had investments of £4,245,346 (2020: £4,845,346) in a regular access renewable energy investment bond, after reinvesting the matured bonds from 2019.

21. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade creditors
Social security and other taxes
VAT
Other creditors
Accrued expenses		 2021
2020
£
£
465,741
470,759
55,872
64,112
665,722
1,030,443
5,312,367
4,301,907
135,743
129,049
6,635,445
5,996,270
Group		 2021
2020
£
£
-
-
-
-
91,660
60,573
16,500
16,500
8,450
6,450
116,610
83,523
Charity		 2021
2020
£
£
-
-
-
-
91,660
60,573
16,500
16,500
8,450
6,450
116,610
83,523
Charity
83,523

22. PROVISIONS FOR LIABILITIES

Deferred taxation
Balance at 1 January 2021
Accelerated capital allowances
Tax losses carried forward
Balance at 31 December 2021		 2021
2020
£
£
76,649
76,318
Group		 2021
2020
£
£
-
-
Charity
Deferred
tax
£
76,318
1,077
(746)
76,649

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

23. MOVEMENT IN FUNDS

At 1.1.21
£
Unrestricted funds
General fund
32,746,065
Revaluation Reserve
-
TOTAL FUNDS
32,746,065
Net movement in funds, included in the above are as follows:
Incoming
Resources
resources
expended
£
£
Unrestricted funds
General fund
29,781,388
(21,979,614)
Revaluation Reserve
-
-
TOTAL FUNDS
29,781,388
(21,979,614)
Comparatives for movement in funds
At 1.1.20
£
Unrestricted funds
General fund
29,502,474
TOTAL FUNDS
29,502,474
Net movement in funds, included in the above are as follows:
Incoming
Resources
resources
expended
£
£
Unrestricted funds
General fund
2,012,607
(1,240,780)
TOTAL FUNDS
2,012,607
(1,240,780)		 At 1.1.21
£
Unrestricted funds
General fund
32,746,065
Revaluation Reserve
-
TOTAL FUNDS
32,746,065
Net movement in funds, included in the above are as follows:
Incoming
Resources
resources
expended
£
£
Unrestricted funds
General fund
29,781,388
(21,979,614)
Revaluation Reserve
-
-
TOTAL FUNDS
29,781,388
(21,979,614)
Comparatives for movement in funds
At 1.1.20
£
Unrestricted funds
General fund
29,502,474
TOTAL FUNDS
29,502,474
Net movement in funds, included in the above are as follows:
Incoming
Resources
resources
expended
£
£
Unrestricted funds
General fund
2,012,607
(1,240,780)
TOTAL FUNDS
2,012,607
(1,240,780)		 Net movement
in funds
At 31.12.21
£
£
7,801,774
40,547,839
13,459
13,459
7,815,233
40,561,298
Other
recognised
Movement
gains/(losses)
in funds
£
£
-
7,801,774
13,459
13,459
13,459
7,815,233
Net movement
in funds
At 31.12.20
£
£
3,243,591
32,746,065
3,243,591
32,746,065
Other
recognised
Movement
gains/(losses)
in funds
£
£
2,471,764
3,243,591
2,471,764
3,243,591
(1,240,780)

Page 24

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HUMAN CAPABILITY FOUNDATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued for the year ended 31 December 2021

24. RELATED PARTY DISCLOSURES

Income investment properties
Solar electricity
Sales of donated products
Interest
Donations
Donation of asset
Gifts of shares
Donations
Loans owed to related parties
Sales
Purchases
Trade balance owed by related parties
Entities with trustees/directors in commo
The following amounts are included in the
The following amounts are included in the
Entities with trustees/directors in commo
Entities with key management in common		 2021
2020
2021
2020
£
£
£
£
1,005,000
1,005,000
1,005,000
1,005,000
29,855
42,618
29,855
42,618
2,010
8,700
6,377
8,700
-
-
7,075
-
2,901,813
200,000
2,901,813
200,000
4,134,927
-
4,134,927
-
-
-
-
3,800,000
(8,073,605)
(1,256,318)
(8,085,047)
(5,056,318)
-
399,770
-
399,770
-
(399,770)
-
(399,770)
5,295,867
4,285,407
-
-
383,166
438,422
-
-
20,313
72,418
-
-
26,636
69,071
-
-
5,725,982
4,865,318
-
-
n
consolidated and charity balance sheet:
consolidated statement of financial activities:
Group
Charity
n

25. GRANTS

Total grants in 2021 approved by the Foundation were £601,873 (2020: £1,104,567). These were made up as follows:

Institution £
Vishaka 69,981
Aajeevika Bureau Trust 40,699
Anjali 35,866
LAYA 33,697
Thoughtshop Foundation 27,834
Sappho for Equality 24,600
Vatsalya 24,391
Shishu Sarothi 22,965
Kolkata Sanved 22,818
Kotra Adivasi Sansthan 22,663
Tribal Health Initiative 19,818
SANGRAM 18,660
Iswar Sankalpa 17,671
Centre for Workers Management 17,348
Reframe Institute of Art & Expression 16,900
iPartner India 11,685
Kislay 11,126
Commutiny Youth Collective 9,752
Jeevika Development Society 7,776
Payana NGO 5,378
Crafts Council India 5,363
Other UK Grantees 75,000
Other International Grantees 59,882

A full list of grantees can be made available upon request from the charity.

Page 25

continued…