REGISTERED COMPANY NUMBER: 08154119 (England and Wales) REGISTERED CHARITY NUMBER: 1148431
Group Strategic Report, Report of the Trustees and Audited Consolidated Financial Statements
For the year ended 31[st] December 2020
for
NILKANTH ESTATES
Nilkanth Estates
Contents of the Consolidated Financial Statements For the year ended 31[st] December 2020
| Pages | |
|---|---|
| Trustees’ Report (including Group Strategic Report) | 1 |
| Independent Auditor’s Report | 10 |
| Consolidated and Charity Statement of Financial Activities | 14 |
| Consolidated and Charity Balance Sheet | 15 |
| Consolidated and Charity Cash Flow Statement | 16 |
| Notes to the Consolidated Accounts | 17 – 27 |
Nilkanth Estates
Report of the Trustees (including Group Strategic Report) For the year ended 31[st] December 2020
The Trustees (who are also directors of the Charity for the purposes of the Companies Act) present their Annual Report, Strategic Report and the audited financial statements of Nilkanth Estates (the 'Charity' or 'Company') and the group for the year ended 31st December 2020
Nilkanth Estates (company number 08154119, incorporated in England on 24 July 2012) and its wholly-owned subsidiary, Brandon House Limited (company number 10612051, incorporated in England on 9 February 2017), are both charitable organisations established as companies limited by guarantee. The Charity is based in the UK and has its head office in Neasden, London.
OBJECTIVES AND ACTIVITIES
The group’s purposes, as set out in the Objects clause contained in the Charity’s an its subsidiary’s Memorandum of Association are:
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to advance the Akshar Purushottam Swaminarayan denomination of the Hindu religion based upon the teachings and principles of Bhagwan Swaminarayan; and to foster the practice and worship of the Akshar Purushottam Swaminarayan denomination of the Hindu religion as revealed by Bhagwan Swaminarayan;
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preserve and safeguard the health of all persons and in particular of young persons who are in danger of becoming addicted to or dependent upon illegal drugs of any description, alcohol, solvents or other addictive substances; advance education for the public benefit;
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promote community participation in healthy recreation so as to develop participants' physical, mental and spiritual capacities; and
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for those purposes without prejudice to the generality of the foregoing, to allow other charities having similar objects to occupy any of its premises at nil or nominal rent.
Our aims fully reflect the purposes that the group was set up to further.
Ensuring our work delivers our aims
The trustees review the aims, objectives and activities of the Charity each year. This review looks at what the Charity has achieved and the outcomes of its work in the previous 12 months. The review looks at the success of each key activity and the benefits they have brought to those groups of people we are set up to help. The review also helps us ensure our aim, objectives and activities remain focused on our stated purposes. We have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing our aim and objectives and in planning our future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives they have set.
Volunteers
The Charity is run by its trustees and other volunteers who give their time freely in the day-to-day management of the Charity.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
GROUP STRATEGIC REPORT
Achievement and performance
Nilkanth Estates own and manage a debt-free diverse property portfolio with a carrying value of £81.38 million, of which properties with a net book value of £45.98 million are used for charitable purposes specifically for use by Bochasanwasi Shri Akshar Purshottam Sanstha 'BAPS' in the advancement of our common objectives. Properties valued at £35.39 million are held for investment purposes. Our expenditure objective is two-fold:
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increase investment income by increasing our property portfolio in order to support the operating costs where required by BAPS and other charities which share the common objective of advancement of the Akshar Purushottam Swaminarayan denomination of the Hindu faith;
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to fund the acquisition and development of properties for use by BAPS and other charities which share the common objective of advancement of the Akshar Purushottam Swaminarayan denomination of the Hindu faith.
The properties held for investment purposes are predominantly residential properties and a property used as a private Hindu faith-based school which has recently ceased its activities and which the Trustees are considering alternative uses.
The properties held as tangible fixed assets are those provided by the Charity to BAPS for use across the country as temples, assembly halls and ancillary purposes. In addition, there are a number of residential properties which are held to provide accommodation for full-time volunteers, priests and overseas visitors.
Charitable activities
During the year, the Group achieved its aims and objectives by providing properties with a carrying value of £47.02 million rent-free to BAPS and The Sarjudas Foundation (and its wholly-owned subsidiaries and group undertakings). Both these charities have the same aims and objectives as Nilkanth Estates.
The properties provided by the Group to BAPS include Mandirs situated in:
| Neasden, London | Coventry | Chigwell, London | Havant |
|---|---|---|---|
| Leeds | Leicester | Loughborough | Luton |
| Manchester | Nottingham | Preston | Southend-On-Sea |
| South London | Wellingborough |
The activities undertaken at the above properties further the Charity’s common aims and objectives for the public benefit and include a variety of weekly activities, spiritual forums for children and adults, courses in ethnic language, music, and dance, and events which cultivate personal talents and interpersonal skills and promote the strengthening of relationships within communities and families.
The holding of congregations was prohibited during the Covid-19 pandemic as a result of which the properties provided to BAPS were used on a restricted basis. These restrictions are now being eased and it is expected that normal use will resume soon.
Financial review
The Group is funded by the following main activities:
(i) Rental income (ii) Donations received (iii) Treasury management.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
The Group funds its expenditure from rental income derived from its investment property portfolio and has the freedom to spend both income and capital, provided the core endowment of the fund is maintained. The Group holds cash balances to manage fluctuations in cash flow.
In 2020, the Group received donations of £1m from Sarjudas Foundation, a registered Charity with similar aims and objectives as the Charity (2019 - £Nil) and after net investment income of £1.113m (2019 - £1.287m), depreciation costs on its fixed asset properties and governance costs of £1.038m (2019 - £1.0354m), and net gains on the revaluation of fixed assets of £6.199m (2019 - £Nil), the Group’s retained net income for year was £7.002m (2019 – £25,000 deficit) and accumulated reserves at the year-end were £86.970m (2019 - £79.968m).
During 2020, the Group spent a total of approximately £1.234m (2019 - £1.448m) on operating costs and donations made from unrestricted funds, of which charitable donations amounted to £Nil (2019 - £Nil). No properties were acquired during the year.
Fundraising activities
The Group nor the Charity undertake any public fundraising activities.
Investment performance
In 2020, the Group’s property investment portfolio valued at £23.716m (cost - £26.316m) generated a total return of c.3% on value which the trustees consider is reasonable for its property portfolio and broadly around market expectations.
Liability Insurance
The Group purchases trustee liability insurance on behalf of the trustees to protect them against claims that may arise from the performance of their charitable duties.
Reserve Policy
The Trustees review reserves annually. Their policy is to hold enough cash reserves to meet the operating costs of the Group for at least one year. Surplus funds from donations and rental income are accumulated and used to build new temples or maintain existing ones.
In establishing this policy, the Board of Trustees conducts an annual review of the level of unrestricted reserves in the general fund by considering risks associated with the various income streams, expenditure plans and balance sheet items. This enables an estimate to be made of the level of reserves that are sufficient:
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to allow time for re-organisation in the event of a downturn in income or asset values;
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• to protect on-going work programme; and
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to allow the Group to meet its objectives
Risks and issues considered by the Board of Trustees in making this judgement on the level of unrestricted reserves include:
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likelihood of a downturn in income streams;
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period of time required to re-establish income streams;
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period of time required to downsize the Group operations;
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whether there is adequate control over budgets
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potential decrease in the value of the investment portfolio; and
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requirements for a reasonable level of working capital.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
The Group’s operating expenditure does not normally exceed £400,000 per annum. The Trustees are of the view that maintaining free reserves, which are considered total unrestricted funds less those funds represented by operational and investment fixed assets, of at least three times this amount, i.e. £1.2m, will provide sufficient resources in the event of adverse conditions. As at 31 December 2020, the Group’s free reserves amounted to £2.9m. The Charity holds surplus reserves to fund the future purchase of additional properties for use in furtherance of its charitable objectives.
The Trustees have confirmed that, after careful review of the reserves policy, as at 31 December 2020, the Group’s free reserves were in excess of its reserves policy. In considering the adequacy of the reserves, the Trustees have taken into account the largely discretionary nature of its expenditure and the amount of cash held and investment income derived.
Principal risks and uncertainties
The main risks for the Group are:
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generation of rental income from its investment properties to fund its own operating costs and support the operations of other charities with common objects and activities. Income from letting its investment properties is dependent on the economic cycles, including their impact on tenant covenant quality, interest rates, inflation, property values and environmental and health and safety measures and its compliance. The Group typically acquires properties in areas which its trustees believe can be readily let at reasonable income levels and with little risk of void periods. The trustees regularly carry out maintenance of its properties to comply with health and safety obligations and to ensure that its properties do not fall into a state of disrepair.
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The Group relies on donations from Sarjudas Foundation to supplement its rental income surpluses in order to be able to finance the acquisition of both investment properties and properties acquired by the Charity and made available for use by BAPS and other charities with similar aims and objectives. Sarjudas Foundation is an established Charity and the trustees see no reason why donations from that Charity may cease, however, the Group has an unencumbered investment property portfolio with a value of £31m and could easily gear up with debt to finance further property acquisitions should donations from Sarjudas Foundation ease.
Financial and risk management objectives and policies
The Trustees are responsible for ensuring effective risk management, and that internal controls are in place to appropriately manage the risk exposure of the Group. In doing so, the Board has considered the major risks to which the Group is exposed, the potential impact and probability associated with each risk, and the mitigating actions needed to reduce each risk to a level that the Trustees considers to be acceptable.
The major financial risks are each subject to ongoing monitoring and management. Income and cost control are subject to ongoing review on at least a quarterly basis with prior approval of the Board needed for significant cost activities.
The following sections provide details regarding the Group's exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. Such credit risk would arise primarily from trade and other receivables. The Group’s trade debtors are minimal and other debtors relate to payments on account of construction work on certain of its existing properties. Consequently, the Group considers its credit risk to be minimal. For cash and bank balances, the Group minimises credit risk by dealing exclusively with high credit rating financial institutions.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
(b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group has no debt or other significant financial obligations and maintains sufficient liquid cash resources to meet its operating cash flows.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group's financial instruments will fluctuate because of changes in market interest rates. The Group has no interest-bearing borrowings and as such has no exposure to interest rate risk. As the Group has no significant interest-bearing financial assets, its income and operating cash flows are substantially independent of changes in market interest rates. The Group 's interest bearing financial assets are mainly short term in nature.
Internal Control
The Trustees have overall responsibility for ensuring that the Group has appropriate systems of internal controls across the entire organisation.
The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. Internal control processes implemented by the Trustees include:
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Production of monthly management accounts and review of financial results and performance indicators by the Trustees at monthly meetings.
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Delegation of authority and segregation of duties.
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• Identification and management of risk.
Future plans
Nilkanth Estates continue to seek suitable investment properties to develop its portfolio.
With the support of donations from Sarjudas Foundation and surplus rental income from its investment properties, the Group intends to acquire further investment properties and support the activities of BAPS who share common aims and objectives.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
STRUCTURE, MANAGEMENT AND GOVERNANCE
Governing document
Nilkanth Estates is a registered Charity (number 1148431) under the Charities Act 2011 and is a charitable organisation incorporated in England on 24 July 2012 as a company limited by guarantee under Company number 08154119. The Charity is controlled by its governing document, Memorandum and Articles of Association.
Trustees
There were 7 trustees during the year, four resigned and at 31 December 2020, the Charity had three trustees. The trustees have responsibility for meeting the Group’s charitable obligations and objectives. Changes in Trustees during the year are provided below.
Under the requirements of the Memorandum and Articles of Association of the Charity, trustees are elected to serve for a period of three years after which they must be re-elected. Subject to article 20A, the trustees may appoint new and additional trustees by a resolution of the Trustees passed at a Trustee meeting. These individuals work alongside existing Trustees for a period of three years before being considered for appointment. Ongoing training is received by the trustees through attendance at courses and being provided with relevant information from various resources, as required.
All trustees give their time voluntarily and receive no remuneration or benefits from the Charity. As the trustees are the key management personnel of the Charity and are not remunerated, there is no remuneration policy for key management personnel.
Operation
The Board of Trustees, which can have up to 7 members, administers the Group. There is one full time trustee (Mr S G Patel) who is supported by two full-time administrators appointed by the trustees to manage the day- to-day operations of the Group. To facilitate effective operations, the administrators have delegated authority, within terms of the delegation approved by the trustees, for operational matters such as finance.
Most trustees are already familiar with the practical work of the Group having been involved in various activities themselves as volunteers. Additionally, new trustees are invited and encouraged to attend a series of training sessions to familiarise themselves with the Group and the context within which it operates. These are jointly led by the Chair of the Board of Trustees.
All trustees give their time voluntarily and receive no remuneration or benefits from the Group.
Attendance at board meetings
The board meets when necessary but seeks to meet fortnightly at least. During the year, all trustees attended 100% of all meetings.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
Statement of Trustees’ Responsibilities
The Trustees are responsible for preparing the Trustees’ Report, the Group Strategic Report and the consolidated financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England & Wales 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 Charity and the Group, and of the incoming resources and application of resources of the Charity and the Group for that period. In preparing these financial statements, the Trustees are required to:
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charities Statement of Recommended Practice on Accounting and Reporting;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue to operate.
The Trustees are responsible for maintaining adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and the Group and enable them to ensure the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Charity and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement as to Disclosure of Information to Auditors
The Trustees who were in office on the date of approval of these financial statements have confirmed, as far as they are aware, that there is no relevant audit information of which the auditors are unaware. Each of the Trustees have confirmed that they have taken all the steps that they ought to have taken as Trustees in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.
Public benefit
The trustees are mindful of the Charity Commission's guidance on public benefit 'Charities and Public Benefit' and, in particular the supplementary guidance for charities whose aims include advancing religion 'The Advancement of Religion for the Public Benefit' and have regard to that guidance when reviewing the Group 's aims and objectives and in planning future activities.
We are confident that, by providing financial resources to support the work of BAPS and other similar charities which share the common objective of advancement of the Akshar Purushottam Swaminarayan denomination of the Hindu faith, we help to promote the faith more effectively, at a national level, and in individual centres, and that in doing so provide a benefit to the public by:
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providing facilities for public worship, spiritual, moral and intellectual development both those who wish to benefit from what the what the Group offers; and
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through its support of BAPS, promoting Hindu values and service by members of BAPS in and to their communities, to the benefit of individuals and society as a whole.
Events since the end of the year
Information relating to events since the end of the year is given in the notes to the financial statements.
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
Related parties and relationships with other organisations
Nilkanth Estates is related to both Sarjudas Foundation and BAPS Swaminarayan Sanstha, and there are a number of trustees in common, and all three charities share the same objectives. In 2020, the Charity received a donation of £1m (2019 - £Nil) from Sarjudas Foundation and continued to provide BAPS with premises from which to hold congregations etc in the advancement of their objectives.
BAPS occupies a number of properties owned by Nilkanth Estates for which no rent is payable.
Reference and administrative details
Registered Company number:
Registered Company number: 08154119 (England and Wales) Registered Charity number: 1148431 Trustees: Mr. G.P Patel - Accountant (appointed on 01/12/2020) Mr. S J Kara - Director of Strategic Alliances – IT Services (appointed on 01/12/2020) Mr K Bhattessa - Hotelier Mr J M Patel - Property investment, food manufacturing and distribution (resigned on 30/11/2020) Mr A P Patel - Accountant (resigned on 30/11/2020) Dr M Shah - Doctor (resigned on 30/11/2020) Mr S G Patel - Monk (resigned on 30/11/2020) Country of registration: England Auditors: MHA MacIntyre Hudson Sixth floor 2 London Wall Place London EC2Y 5AU Principal Bankers: The Royal Bank of Scotland plc 354 Station Road Harrow HA1 3XZ Punjab National Bank (International) Limited 188 Ealing Road Wembley HA0 4QD
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Nilkanth Estates
Report of the Trustees For the year ended 31[st] December 2020
____________
Solicitors:
Hugh Cartwright & Amin 12 John Street London WC1N 2EB
AUDITORS
The auditors, MHA MacIntyre Hudson, will be proposed for re-appointment at the forthcoming Annual General Meeting following their appointment during the year.
Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 30 September 2021 and signed on the board's behalf by:
............................................. S. J. Kara - Trustee
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Nilkanth Estates
Report of the Independent Auditors For the year ended 31[st] December 2020
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Opinion
We have audited the financial statements of Nilkanth Estates (the ‘parent charitable company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2020 which comprise the Consolidated and Charity Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated and Charity Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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give a true and fair view of the state of the group’s and parent charitable company’s affairs as at 31 December 2020, and of their incoming resources and application of resources, including their income and expenditure, for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial statements section of our report.
We are independent of the group and parent charitable company 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. Our evaluation of the Trustees’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included critical reviews of their future investment strategy and expected investment income.
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 charitable company'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 auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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Nilkanth Estates
Report of the Independent Auditors For the year ended 31[st] December 2020
____________
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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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:
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the information given in the Trustees’ report (incorporating the Directors’ report and Strategic Report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Trustees’ report (incorporating the Directors’ report and Strategic Report) has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or
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the parent charitable company’s financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of Directors’ remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit; or
Responsibilities of Trustees
As explained more fully in the Trustees’ responsibilities statement included in the Trustees’ Annual Report, the Trustees (who are also the Directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Trustees are responsible for assessing the group’s and 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.
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Nilkanth Estates
Report of the Independent Auditors For the year ended 31[st] December 2020
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Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
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Obtaining an understanding of the legal and regulatory frameworks that the entity operates in, focusing on those laws and regulations that had a direct effect on the financial statements;
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Enquiry of those charged with governance around any instances of known or suspected instances of fraud;
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Enquiry of those charged with governance around actual and potential litigation and claims;
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Enquiry of those charged with governance around any instances of non-compliance with laws and regulations;
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Reviewing the design and implementation of control systems in place;
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Testing the operational effectiveness of the controls;
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Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
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Reviewing minutes of meetings of those charged with governance;
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Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-andguidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditorsresponsibilities-for-audit.aspx. This description forms part of our auditor’s report.
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Nilkanth Estates
Report of the Independent Auditors For the year ended 31[st] December 2020
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Use of this report
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Sudhir Singh FCA (Senior Statutory Auditor) For and behalf of
MHA MacIntyre Hudson Statutory Auditor London, United Kingdom
Dat e: 30 September 2021
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Nilkanth Estates
Consolidated and Charity Statement of Financial Activities (incorporating an income and expenditure account) For the year ended 31st December 2020
_________________
| Notes Income from: Donations and legacies 3 Investment income Other 4 5 Total income Expenditure on: Raising funds 6 Charitable activities: - Provision of facilities 7 Total expenditure Net income/(expenditure) before net losses on investments 8 Gains on revaluation of fixed assets 13/14 Impairment provision Net movement in funds Unrestricted funds brought forward Unrestricted funds carried forward 18 |
The Group – unrestricted funds 2020 2019 £ £ 1,004,389 67,152 1,113,378 - 1,286,852 68,427 2,117,767 1,422,431 176,075 393,315 1,058,412 1,054,251 1,234,487 1,447,566 883,280 (25,135) 6,118,669 - - - 7,001,949 (25,135) 79,968,420 79,993,555 86,970,369 79,968,420 |
The Charity - unrestricted funds 2020 2019 £ £ 1,000,000 - 1,115,057 - 1,235,899 68,427 2,115,057 1,304,326 175,221 283,392 1,054,212 1,051,500 1,229,433 1,334,892 885,624 (30,566) 2,600,000 - - 5,000 3,485,624 (25,566) 79,968,056 79,993,622 83,453,680 79,968,056 |
The Charity - unrestricted funds 2020 2019 £ £ 1,000,000 - 1,115,057 - 1,235,899 68,427 2,115,057 1,304,326 175,221 283,392 1,054,212 1,051,500 1,229,433 1,334,892 885,624 (30,566) 2,600,000 - - 5,000 3,485,624 (25,566) 79,968,056 79,993,622 83,453,680 79,968,056 |
|
|---|---|---|---|---|
| 1,304,326 | ||||
| 283,392 1,051,500 |
||||
| 1,334,892 |
||||
| (30,566) - 5,000 |
||||
| (25,566) 79,993,622 |
||||
| 79,968,056 |
The total funds of the Company were unrestricted. There were no restricted or designated funds during the year or for the previous year.
All of the above results are derived from continuing activities. There were no recognised gains or losses other than those stated above.
The appended notes for part of these accounts.
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Company number 08154119
Nilkanth Estates
Consolidated and Charity Balance Sheets as at 31 December 2020
| Notes Fixed assets: Tangible assets 12 Investment properties 13 Mixed use assets 14 Current assets: Debtors 16 Cash at bank and in hand Liabilities: Creditors: amounts falling due within one year 17 Net current assets Total assets less current liabilities Total net assets Funds: Unrestricted income funds 18 Total funds |
The Group The Charity 2020 2019 2020 2019 £ £ £ £ 47,706,116 47,024,728 45,986,116 47,024,728 26,316,262 31,456,717 26,316,262 23,255,386 10,000,000 - - - 84,022,378 78,481,445 72,302,378 70,280,114 422,298 367,952 9,168,522 8,820,730 2,676,271 1,253,513 2,051,825 929,716 3,098,569 1,621,465 11,220,347 9,750,446 (150,578) (134,490) (69,045) (62,504) 2,947,991 1,486,975 11,151,302 9,687,942 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 |
The Group The Charity 2020 2019 2020 2019 £ £ £ £ 47,706,116 47,024,728 45,986,116 47,024,728 26,316,262 31,456,717 26,316,262 23,255,386 10,000,000 - - - 84,022,378 78,481,445 72,302,378 70,280,114 422,298 367,952 9,168,522 8,820,730 2,676,271 1,253,513 2,051,825 929,716 3,098,569 1,621,465 11,220,347 9,750,446 (150,578) (134,490) (69,045) (62,504) 2,947,991 1,486,975 11,151,302 9,687,942 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 86,970,369 79,968,420 83,453,680 79,968,056 |
|---|---|---|
| 70,280,114 | ||
| 8,820,730 929,716 |
||
| 9,750,446 (62,504) |
||
| 9,687,942 | ||
| 79,968,056 | ||
| 79,968,056 | ||
| 79,968,056 | ||
| 79,968,056 |
The Group’s financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The appended notes form part of these accounts.
The financial statements were approved by the Board of Trustees on 30 September 2021 and were signed on its behalf by:
S. J. Kara Trustee
K.G. Bhattessa Trustee
Page 15
Nilkanth Estates
Consolidated and Charity Statement of Cash Flows For the year ended 31 December 2020
| Notes Net cash provided by/ (used in) operating activities 19 Cash flows from investing activities: Dividends, interest, and rents received from investments Purchase of tangible fixed assets Purchase of investment property Proceeds from sale of F/H Property Net cash provided by/(used in) investing activities Change in cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year |
The Group 2020 2019 £ £ 1,883,634 860,014 - - - (357,883) (460,876) (983,733) 275,000 (460,876) (1,066,616) 1,422,758 (206,602) 1,253,513 1,460,115 2,676,271 1,253,513 ___ |
The Charity 2020 2019 £ £ 1,314,638 694,655 268,347 - - (357,883) (460,876) (983,733) - 275,000 (192,532) (1,066,616) 1,122,106 (371,961) 929,716 1,301,677 2,051,825 929,716 |
The Charity 2020 2019 £ £ 1,314,638 694,655 268,347 - - (357,883) (460,876) (983,733) - 275,000 (192,532) (1,066,616) 1,122,106 (371,961) 929,716 1,301,677 2,051,825 929,716 |
|---|---|---|---|
| (371,961) 1,301,677 |
|||
| 929,716 |
ANALYSIS OF CHANGES IN NET DEBT
| Group Cash at bank and in hand Charity Cash at bank and in hand |
As at 01 January 2020 £ 1,253,513 1,253,513 929,716 929,716 |
Cash flows £ 1,422,758 1,422,758 1,122,109 1,122,109 |
As at 31 December 2020 £ 2,676,271 |
|---|---|---|---|
| 2,676,271 | |||
| 2,051,825 | |||
| 2,051,825 |
Page 16
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
1. Accounting policies
(a) Basis of preparation
The financial statements of the charitable company, 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) (issued in October 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, as modified by the revaluation of certain assets.
The functional and presentation currency is UK Pound Sterling (£).
These financial statements consolidate the results of the Charity and its wholly-owned subsidiary on a line by line basis. Transactions and balances between the Charity and its subsidiary have been eliminated from the consolidated financial statements. Balances between the entities are disclosed in the notes of the Charity’s balance sheet.
(b) Public benefit entity
The Charity and its wholly-owned subsidiary meet the definition of a public benefit entity under Charities SORP (FRS 102).
(c) Going concern
The majority of the income received from by the Group is investment income from its investment property portfolio which are let to social housing providers. The Group has continued to receive this income despite disruptions to the economy caused by Covid 19 and has not changed its strategic and business plans. The Charity has minimal on-going legal or constructive commitments. There are no uncertainties, material or otherwise, regarding the Group's going concern.
The trustees therefore have reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future which exceeds 12 months from the date of signing of the financial statements and therefore continue to adopt the going concern basis of accounting in preparing the annual consolidated financial statements.
(d) Income
All income is recognised in the Statement of Financial Activities once the Group has entitlement to the funds, it is probable that the income will be received and that the amount can be measured reliably.
Voluntary income comprises revenues generated from various forms of donations.
Investment income includes income generated from property investment and interest received on cash deposits.
(e) Donations of gifts, services and facilities
Donated professional services and donated facilities are recognised as income when the group has control over the item or received the service, any conditions associated with the donation have been met, the receipt of economic benefit from the use by the group of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), volunteer time is not recognised so refer to the trustees’ annual report for more information about their contribution.
On receipt, donated gifts, professional services and donated facilities are recognised on the basis of the value of the gift to the group which is the amount the group would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
Page 17
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
1. Accounting policies (continued)
(f) Expenditure and irrecoverable VAT
-
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:
-
Costs of raising funds relate to the investment management costs.
-
Expenditure on charitable activities includes the costs of activities undertaken to further the purposes of the Charity and their associated support costs including governance costs and depreciation of tangible fixed assets.
Expenditure is accounted for on an accruals basis and 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.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
(g)
Allocation of support costs
All support costs are allocated to the expenditure on charitable activities as none of these costs are allocable to the costs of raising funds, which are the investment management costs.
Support costs include governance costs, which are the costs associated with the governance arrangements of the Charity. These costs are associated with constitutional and statutory requirements and include any costs associated with the strategic management of the group’s activities.
(h)
Taxation
The group is exempt from corporation tax on its charitable activities.
(i)
Tangible fixed assets
Items of equipment are capitalised where the purchase price exceeds £500. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use.
Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:
- Freehold buildings 2% on cost
Freehold land is not depreciated.
(j) Investment properties
Investment properties are measured at fair value at each reporting date and are not depreciated.
Cash investments
Cash held in fixed term deposit accounts exceeding one year are classified as fixed asset investments as they are generally held with the overall intention of long term retention for the continuing benefit of the group in the form of income and capital appreciation.
(k) Debtors
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
Page 18
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
1. Accounting policies (continued)
Loans which have been provided with an interest rate below the market rate and for charitable purposes are deemed concessionary loans.
(l) Cash at bank and in hand
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Cash balances exclude any funds held on behalf of service users.
(m) Creditors and provisions
Creditors and provisions are recognised where the group has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
The group only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
(n) Fund accounting
Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.
Restricted funds can only be used for particular restricted purposes within the objects of the Charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.
2. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Investment Properties
Investment properties whose fair value can be measured reliably without undue cost or effort should be measured at fair value at the year end with any changes in fair value recognised in the statement of financial activities.
The investment properties have been valued by the trustees at the period-end based on their knowledge of the properties and their location and having conducted informal market research considering comparable properties. Following their assessment, they have concluded that there has been no material change in the fair value since the previous valuation, with the exception of one investment property whose fair value is considered to have increased by £2.6m since the previous year-end, following an independent valuation by RICS-accredited chartered surveyor. A change in the assumptions used by the trustees may result in a change in the value of investment properties.
Page 19
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
2. Critical accounting estimates and judgements, continued
Freehold Property
The Group and the Charity hold freehold land and buildings. The freehold buildings are depreciated over a period of 50 years whilst land is not depreciated as its value is not likely to diminish over time.
The Group carries out regular maintenance of its freehold properties and therefore it is likely that the useful lives of the property may exceed 50 years.
The trustees have been required, in the absence of a split of purchase cost, to estimate the allocation of the cost of these properties between the relative elements attributable to land, which is not depreciated, and buildings. Having consulted with property professionals, considered statutory provisions, and researched market factors, the trustees consider 30% of the acquisition cost of each tangible fixed asset to represent land and 70% to represent buildings. As such, 30% of the cost of each tangible fixed asset property is not depreciated.
Covid-19 has had no impact on any accounting estimates and judgements.
3. Income from donations and legacies
| Donations Donated services 4. Income from investments Rental income – operating leases Interest receivable 5. Other Income Profit on disposal of fixed assets |
Group 2020 2019 £ £ 1,004,389 64,400 - 2,751 ___ _ 1,004,389 67,151 _ ___ Group 2020 2019 £ £ 1,113,378 1,286,852 - - ___ _ 1,113,378 1,286,852 _ _ Group 2020 2019 £ £ - 68,427 ___ _ - 68,427 **_ _ ** |
Charity 2020 2019 £ £ 1,000,000 - - - ___ _ 1,000,000 - _ ___ Charity 2020 2019 £ £ 846,710 975,368 268,347 260,531 ___ _ 1,115,057 1,235,899 _ ___ Charity 2020 2019 £ £ - 68,427 ___ _ - 68,427 _ ___ |
|---|---|---|
_____ |
||
| _____ |
Page 20
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
6. Cost of raising funds – investment management costs
| Rates Gas and electricity Repairs and maintenance Insurance Consultancy fees Bank charges Sundries 7. Expenditure on charitable activities Provision of facilities Governance costs |
Group 2020 2019 £ £ (8,473) 132,205 8,235 21,521 93,960 180,933 58,085 58,085 23,863 - 392 445 13 126 ___ _ 176,075 393,315 _ ___ Group 2020 2019 £ £ 1,038,612 1,035,843 19,800 18,408 ___ _ 1,058,412 1,054,251 _ ___ |
Charity 2020 2019 £ £ 1,879 112 - 6,517 93,685 220,933 55,435 55,435 23,863 - 359 382 - 13 ___ _ 175,221 283,392 _ ___ Charity 2020 2019 £ £ 1,038,612 1,035,843 15,600 ___ _ 1,054,212 1,051,500 _ ___ |
|---|---|---|
All the above costs are support costs.
Governance costs represent auditors’ remuneration only.
8. Net income/(expenditure) for the year
Net income/(expenditure) for the year is stated after charging:
| Group 2020 2019 £ £ Depreciation of fixed assets - owned 1,038,612 1,035,843 Auditors’ remuneration (including VAT): 19,800 18,408 Impairment provision - - ___ ___ |
Charity 2020 2019 £ £ 1,038,612 1,035,843 15,600 15,657 - 5,000 ___ ___ |
|---|---|
In the year ended 31 December 2019, the Group’s auditors provided their services on an honorary basis. The value of their donated services has been recognised as donations received in that year.
9. Staff costs
The Group does not have any employees. Its trustees are responsible for the governance of the Group and give their time freely. Volunteers, including employees of The Sarjudas Foundation and BAPS Charities, manage the day-to-day operations of the Group. Whilst the nature of the volunteers' time is not considered general, the monetary value of their time is not considered material and thus not recognised in the accounts.
Page 21
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
10. Trustees’ remuneration and expenses
Neither the Charity trustees nor the directors of the subsidiary were paid any remuneration, nor did they receive any other benefits from employment with the Group in the year (2019: £nil). No Charity trustee received payment for professional or other services supplied to the Charity (2019: £nil).
No trustee expenses were incurred in the year (2019: £nil).
11. Taxation
The group is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.
12. Tangible fixed assets
| Group Cost At start of the year Reclassification At end of the year Depreciation At start of the year Charge for the year At end of the year Net Book Values: At end of the year At start of the year |
Freehold Property £ 62,822,332 1,720,000 _ 64,542,332 _________ 15,797,604 1,038,612 16,836,216 _____ 47,706,116 _ _ 47,024,728 ___ _ __ |
Assets under construction £ - - _ - _ - - _ - _ - __ _____ - __ |
Total £ 62,822,332 1,720,000 _ 64,542,332 ___ 15,797,604 1,038,612 ________ 16,836,216 _________ 47,706,116 _ _ 47,024,728 _ |
|
|---|---|---|---|---|
The trustees reviewed the classification of their Brandon House Property at the year-end. They reassessed the presentation to better describe the use of this property as a mixed-use asset used for both operational and investment purposes as set out in Charity SORP para 10.47 (see Notes 13 and 14 below). The element which is used for charitable purposes, being 20% of the total floor space of the property, has been reclassified as a tangible fixed asset and recognised at cost, in line with the SORP. As the change in presentation occurred at the year-end, this element of the property will not begin to be depreciated until 1 January 2021.
Included in cost or valuation of land and buildings is freehold land of £959,173 (2019 - £959,173) which is not depreciated.
All of the above assets are used for charitable purposes.
Page 22
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
12. Tangible fixed assets (Cont’d)
| 13. | Charity Freehold Property £ Cost At start of the year 62,822,332 _ At end of the year 62,822,332 ___ Depreciation At start of the year 15,797,604 Charge for the year 1,038,612 At end of the year 16,836,216 _____ Net Book Values: At end of the year 45,986,116 _ _ At start of the year 47,024,728 _ _ Investment properties The Group 2020 2019 £ £ Market value At start of the year 31,456,717 30,472,984 Additions 460,876 983,733 Disposals - Revaluation 2,600,000 - Reclassification (8,201,331) - ___ _ At end of the year 26,316,262 31,456,717 ___ ___ |
Assets under construction Total £ £ - 62,822,332 _ _ - 62,822,332 _______ ___ - 15,797,604 - 1,038,612 _______ ________ - 16,836,216 _______ _________ - 45,986,116 _ _ ___ - 47,024,728 __ _ The Charity 2020 2019 £ £ 23,255,386 22,271,653 460,876 983,733 - - 2,600,000 - - - ___ ___ 26,316,26223,255,386 ___ ___ |
|---|---|---|
Investment properties with an original cost of £23.716m have been valued at £26.316m by the trustees.
The trustees of the Group performed an assessment of the market value of its investment properties at the yearend. Following an independent valuation by a RICS-accredited chartered surveyor, one investment property’s fair value was deemed to have increased by £2.6m since the previous year-end.
The trustees reviewed the presentation of the Brandon House property at the year-end. They reassessed the presentation and now consider it a mixed use asset, the investment part of which is recognised at year-end fair value (see Note 14 below).
Page 23
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
14. Mixed-use assets
| Fair value At start of the year Reclassification Revaluation At end of the year |
The 2020 £ - 6,481,331 3,518,669 ___ 10,000,000 ___ |
Group 2019 £ - - - _ - ___ |
The Charity 2020 2019 £ £ - - - - - ___ ___ - - ___ ___ |
The Charity 2020 2019 £ £ - - - - - ___ ___ - - ___ ___ |
|---|---|---|---|---|
| ____ | - ___ |
The trustees of the group reviewed the classification of their Brandon House property at the year-end. They reassessed the presentation to better describe the use of this property as a mixed use asset used for both operational (see Note 12 above) and investment purposes as set out in Charity SORP para 10.47.
The trustees of the group also reviewed the fair value of the element of the asset which is used for investment purposes at the year-end, in line with SORP requirements. Following an informal valuation from a RICSaccredited property advisor, the fair value of the proportion of the building let commercially had increased to £10m. This gain in value has been recognised in the SOFA.
15. Investments in subsidiaries
Nilkanth Estates owns 100% of a charitable company, Brandon House Limited (Reg. Charity no. 1172517 and Company no. 10612051), which was incorporated in England and Wales on 9 February 2017. Brandon House Limited is a company limited by guarantee. It owns three light industrial units and Beddington Conference Centre (‘BCC’). The industrial units have been rented out to a single tenant on a 10-year lease at an initial rent of £200,000 for the first year rising to £400,000 from the second year with rent review after 5 years.
A summary of the financial statements of the Charity’s subsidiary, Brandon House Limited is shown below:
| Statement of financial activities Income and Endowments from: Donations and legacies Investment income Total income Expenditure: - on raising funds - provision of facilities Total expenditure Gains on Revaluation of fixed assets Net income/(expenditure) |
_ | 2020 £ 4,389 266,668 _ 271,057 _ (5,053) (268,347) _ (273,400) _ 3,518,636 __ 3,516,293 __ |
2019 £ 67,151 311,484 _ 378,635 _ (109,923) (263,282) _ (373,205) _ - ___ 5,430 ___ |
|
|---|---|---|---|---|
| _ | ||||
| _ | ||||
| _ | ||||
| _ | ||||
Page 24
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
| Balance sheet Tangible assets Mixed use assets Current assets Creditors due within one year Creditors due after more than one year Net assets/(liabilities) |
2020 £ 1,720,000 10,000,000 812,474 (81,533) (9,213,251) ___ 3,237,690 ___ |
2019 £ - 8,201,331 536,923 (71,986) (8,944,904) ___ (278,636) ___ |
|
|---|---|---|---|
16. Debtors
| Amounts falling due within one year: Trade Debtors Other debtors Prepayments & accrued income Amounts falling due after more than one year: Concessionary loan Aggregate amounts |
Group 2020 2019 £ £ 21,726 46,825 389,072 321,127 11,500 - ____ 422,298 367,952 _____ __ -- ____ 422,298 367,952 ____ |
Charity 2020 2019 £ £ - - 222,771 154,826 11,500 - ____ 234,271 154,826 ____ 8,934,251 8,665,904 ___ _ 9,168,5228,820,730 ____ |
|---|---|---|
Nilkanth Estates provided a loan to its subsidiary, Brandon House Limited, of £8,201,331 in 2017 for the purchase of the subsidiary’s property and to further both entities’ charitable objectives. The loan: incurs interest at 3% per annum, which is considered below market rate; is secured against the property; is repayable on demand, though the parent Charity has provided assurances that it will not be repayable until at least one year from 31 December 2020.
17. Creditors: Amounts falling due within one year
| Trade creditors Other creditors Accruals |
Group 2020 2019 £ £ 41,105 40,080 89,673 66,845 19,800 27,565 ___ ___ 150,578 134,490 ___ ___ |
Charity 2020 2019 £ £ 30,676 - 22,769 40,080 15,600 22,424 ___ ___ 69,045 62,504 ___ ___ |
|---|---|---|
Page 25
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
18. Funds
| Unrestricted funds At start of the year Incoming resources Resources expended Impairment provision Gain on revaluation of fixed assets At end of the year |
The Group 2020 2019 £ £ 79,968,420 79,993,555 2,117,767 1,422,431 (1,234,487) (1,447,566) - - 6,118,669 - ___ _ 86,970,369 79,968,420 ___ ___ |
The Charity 2020 2019 £ £ 79,968,056 79,993,622 2,115,057 1,304,326 (1,229,433) (1,334,892) - 5,000 2,600,000 - ___ ___ 83,453,68079,968,056 ___ ___ |
|---|---|---|
19. Reconciliation of net income/(expenditure) to net cash flow from operating activities
| Group 2020 2019 £ £ Net income for the reporting period 7,001,949 (25,134) as per statement of financial activities) Depreciation 1,038,612 1,035,843 Gain on investments (6,118,669) - Impairment provision - - Profit on disposal of tangible fixed assets - (68,427) Interest receivable - - (Increase)/decrease in debtors (54,346) (2,601) (Decrease)/increase in creditors 16,088 (79,665) ___ ___ Net cash provided by/(used in) operating activities 1,883,634 860,014 ___ ___ |
Charity 2020 2019 £ £ 3,485,624 (25,566) 1,038,612 1,035,843 (2,600,000) - - (5,000) - (68,427) (268,347) (260,531) (347,792) 13,779 6,541 4,557 ___ ___ 1,314,638 694,655 ___ ___ |
|---|---|
20. Related party transactions
The Company has provided operational and investment properties with a carrying value of £45.98m to The Sarjudas Foundation (and its wholly owned subsidiaries and group undertakings) and BAPS Charities rentfree, for a nominal rent amount, or on an arm’s length basis. The Sarjudas Foundation and BAPS Charities have the same aims and objectives and the same beneficiaries as Nilkanth Estates. There are also common trustees/directors among the three entities.
Nilkanth Estates also received unrestricted donations amounting to £1,000,000 (2019: £Nil) from The Sarjudas Foundation during the year.
Page 26
Nilkanth Estates
Notes to the Consolidated financial statements For the year ended 31 December 2020
20. Related party transactions (continued)
In 2017, Nilkanth Estates provided a concessionary loan of £8,271,331 to Brandon House Limited, its whollyowned subsidiary. Of this loan, £8,201,331 was used to fund the purchase of the investment property held by this company. Interest on the loan is 3% per annum and the loan is repayable on an indeterminate period. Interest received during the period amounted to £268,347 (2019: £260,531).
Nilkanth Estates has also provided financial support to Brandon House Limited so that the latter remains a going concern.
| Balance receivable from Brandon House Ltd Impairment provision |
2020 £ 9,213,251 (279,000) 8,934,251 |
2019 £ 8,944,904 (279,000) 8,665,904 |
|---|---|---|
Brandon House Limited received unrestricted donations of £4,389 during the year (2019: £35,000 of rental income) from Beddington Conference Centre Limited. Mr V H Patel, a former trustee of Brandon House Limited, is also a director of Beddington Conference Centre Limited.
21. Subsequent Events
The following properties were acquired by the charity post year-end:
-
On 28[th] January 2021, Nilkanth Estates completed the purchase of 3 Hawthorne Avenue for £601,323.
-
On 24[th] September 2021, Nilkanth Estates completed the purchase of 1 Hawthorne Avenue for £865,958.
22. Legal status of the Charity and its Subsidiary
The Charity is a company limited by guarantee and has no share capital. Its registered office address is 105-119 Brentfield Road, London NW0 8LD. In the event of a winding up of the company, the liability of the trustees who are also the members of the company is limited to £1.
Its subsidiary, Brandon House Limited, is also a company limited by guarantee, has no share capital and is also a registered Charity. Nilkanth Estates is the sole member of Brandon House Limited and the former’s liability in the event of a winding up is limited to £1. The registered office address of the Subsidiary is 104 College Road, Harrow HA1 1BQ.
Page 27