HACKNEY JOINT ESTATE CHARITY Charlty Registration No. 219875 HACKNEY JOINT ESTATE CHARITY REPORT AND FINANCIAL STATEMENTS 31 MARCH 2021
HACKNEY JOINT ESTATE CHARITY Page Legal and administrative inforrnation Report of the Trustee Independent auditor's report Statement of financial activities Balance 5heel 10 Statement of cashflows Notes to the financial statements 12
HACKNEY JOINT ESTATE CHARITY LECAL AND ADMINISTRATIVE INFORMATION Governlng Instrument Charity Commission Scheme dated l March 1898 as amended by Scheme d&led 24 August 2004 and Scheme dated 23 July 2010. Trustee Hackney Endowed Trustee Limited Directors of the Trustee Hackney Paroehial Charities Ms M Cannon Councillor C Kennedy Mr A Hilton Councillor R Chapman Mr D Paul-worika Mrs J Andrews Mr l Malik (Chair) Ms K Johnson Reverend Justin Gau South Hackney Parocbial CharSty West Hackney Parocbial Charities Charity registered number 219875 Clerk to the Trustee Kellie Carson The Trusi Partnership 6 Trull Fami Buildings Tetbury Glou¢estershire GL8 8SQ Auditor Buwcott LLP 130 Wood Street London EC2V 6DL Property Agents Sirettons Ltd Centrdl House 189 - 203 Hoe Stre¢l London E173SZ Ikgal advisors Charles Russell Speechly LLP 5 Fl¢et Place Londo EC4M 7RD Page I
HACKNEY JOtNr ESTATE CHARITY REPORT OF THE TRUSTEE The financial statements have been prepared in aecordance with th¢ accounting policies set out on pages 12 10 14 of the attached accounts and cotnply with the charity's trust deed, the Charities Act 2011, regulations applicable to that Act, and Accounting and Reporting by Charities- Statement of Recommended Practice applicable to charities preparing their accounts tn a¢¢ordance with the Financial Reporting Standard appli¢abl¢ in the UK and Republi¢ of Ireland (FRS 102). The year These accounts record the 409Eh year of our stewardship of the gifts of Hackney people to their fellow parishioners. In 1898 the management of these assets was united in this single body. In lin¢ with the 1898 Scheme, the income from these assets is used to repair and insure the property with the remaining income being distributed to thr¢¢ parochial charities in the Borough of Hackney. These bodies appoint the Directors of the Corporate Trustee known as Hackney Endowed Trusl¢e Ltd. Strllctur¢y governance and mattagement Role The Trustee's role. as defined by section 17 of the 1898 Scheme, is to manage the endowed Estate. This consists of historic properties in Ha¢kn¢y comprising long and short residential leaseholds. shops and officelcommercial units. The Trustee regards itself as accountable to the th¢ beneficiary grant-rnaking charities: Hackney Parochial Charily, West Hackney Parochial Charity and South Hackney Paroehial Charity- In turn the Parochial Chariiies, who are individually gIstered with the Charity Commission, mak¢ grants to local cause5 in need such as youth groups, parenting groups and individuals in need as well as providing so¢ial housing through almshouses. Direetor appolntment There were no resignations or appointments during Ihe year. The constitution and governance is kept under review and no major change hos been seen &s necessary. Directors are appointed to the Corporate Trustee, Hackney Endowed Trustee Limited and are put forward by three local Parochial Chariii¢S in a¢cordance with the governing documents. Opcratlons The Directors of the Trust¢e meet quarterly wiih standing arrangements aj delegations perniilfing effective decision making between meetings. Sub-committees and Working Parties are established as required. The Clerk does not have direct operational control of the Estate, bul insread facilitat the decision making of the directors and executes those decisions. The committee consists of three or more board Directors, each also represenling their cotItUet ¢haTily (West Hackney Parochial Charity, Hackney Parochial Charities and the South Hackney Parochial Charity), to facilitate broad consent and decision making. Key management personnel The Directors of the Trust¢¢ considerthat ihey Comprise the key management ofthechariiy in ¢harge of directing and controllingy running and operating the ch2rity on a day to day basi& The Directors re¢¢iv¢ no remuneration. Risk management The Charity regularly reviews its risk polici¢s and procedures. Directors maintain a risk register which is regularly updated and considered at quarterly meeiings by the Board of Directors. The impact of the Covid-19 pandemic on operations, activities and future plans is ¢onsidered below. In lerms of the impact of the pandemic on risL Directors consider the main impact to be a redu¢ed rental income particularly from commercial units and the potential for a loss of fixed asset value. In summary, the main risks to the Charity are considered lo be.. Financial Risk Properties remaining vacant awaiting redevelopment. Reduction in income from rents from market fluctuations especially during and after the Covid pandemi¢. Reduced asset valuation in real term5. Additional cost to the current refurbishment programme from shutdown during th¢ pandemi¢ when building supplies were unavailable and an incre&se in the Contract Sum for the works to 204-210 Well Street a result of essential unforeseen works. Page 2
HACKNEY JOINT ESTATE CHARITY REPORT OF THE TRusfEE Mitigation- Regular Board meetings with commercial agents. Sirettons, to review empty properties and ensure rent reviews and collections are condu¢led on time. Strategi¢ review of asset management planned. Additional Director meetings with project managers and advisors during the pandemic and the refurbishm¢nt. Statement of Trustee's responsibilitie5 The Trustee is responsible for Preparing the Trust¢, report and accounts in accordanc¢ with applicable law and United Kingdom Accounting Standards (United Kingdom Generally A¢cepted Accounting Practice). The law applicable to charities in England and Wales requires ihe Trust¢e to prepare accounis for each financial year which give a Irue and fair view of the state of affairs of the charity and of the income and expenditure of the ¢harity for that period. In preparing these accounts, the trustees are required 10: select suitable accounting policies and th¢n apply them consistently- observe the methods and principles in Accounting and Reporting by Charities.. Statement of Recommended Practice applicable to charilies preparing their a¢¢ounts in accordanee with the Financial Reporting Standard applicable in the UK and Republic of Ireland {FRS 102). rnake judgements and estimates that are reasonable and prudent- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclos¢d and explained in the accounts,. and prepare th¢ accounts on the going concern basis unless it is inappropriate to presume that the charity will continue operation. The Trustee is responsible for keeping proper accounting records that disclos¢ with reasonable aUraCY at any time ihe financial position of the charity and enable thetn to ensure that the accounts comply with the Charities Act 2011. applicable Charity (Accounts and Reports) R¢8ulations and th¢ provisions of the charity's constilulion. They are also responsible for safeguarding the assets of the charity and hen¢e for taking reasonable steps for the prevention and detection of fraud and other irregularities. Objectives and activities The objeet of the Charity is to manage its endowed propety Portfolio to M]Mise the net rental in¢ome (aft¢r costs) for distribution to three benefi¢iaries-. Hackney Parochial Charities, South Hackney Parochial Charities and West Hackney Parochial Charities. The Trustee continues to impl¢meTrt its ten-year strat¢gy and to reaffirni its mission statement to arhieve the Charity's objective whilst to contributing to the local comtnunity in Hackney and maintaining a reputation for honest, ethical and responsible operating. The main activity throughout the year has been to maintain the property portfolio in order to prolect its va]ue for the long term. Individual va¢ant properties are refurbished as nec¢ssary and re-let as soon as possible to minimise loss of income through voids. Public benefit In carrying out the Charity's objectives, the Trustee has had regard to the Charity C0MIsSIon,S guidance on public benefit. The purpos¢ of the Charity is to distribute surplus income to three individual parochial charities each charity with separate identifiable objectives to relieve hardship and need to the publi¢ within the lo¢al cornmunity. A distribution of £260,000 was made in the year. (2020- £260,OQO). Page 3
HACKNEY JOINT ESTATE CHAIUTY REPORT OF THE TRUSTEE Acbievements? perfoTJnxnee and financial review During ihe year gro55 property revenues reduced by 6.85Q/o from £1,619,682 for the year ended 31 March 2020 to £1,508,660 for the year ended 31 March 2021 primarily due to loss of income from eommercial rents during the pandemic. Expenditure for the year reduced by 2.560/0 from £1,065,516 for the year ended 31 March 2020 to £1,038,233 for the year ended 31 March 2021. Before expenditure on property redeveloprnent, expenses reduced by 3.390/0 from £805,516 for the year ended 31 March 2020 to £778,233 for the year ended 31 Mar¢h 2021. The Charity maintained the di5tribuiion to the three Parochial Charities this year. Investment properties are included in the a¢¢ounts at 31 March 2021 are based on a desktop valuation perfomied by Stretton5 Ltd, on behalf of the charity. This $vIted in a1055 on revaluation of £584,657 for ihe year ended 31 March 2021, there was no revaluation during the year ended 31 Mar¢h 2020. The Trustee has resolved to redevelop a block of mixed-us¢ historic properties known as 184- 214 Well Street through refurbishment and extension. A contract to provide refurbished retail and residential units and a mansard roof extension to create a total of four shops and eight flats at 204- 210 Well Street began En April 2019. The contra¢t sum of £1.4m h&s risen lo £1.97m as a result of unforeseen essential work5. The contract is due to be substantially ¢ornpleted by the end of 2021. Throughout the year the Trustee has closely monitored the costs and a qualified Project Manager was appointed IN 2020 to oversee the contract and budget. The Project Manager and Director5 attend monthly progress site meetings with the contractor and conlraGt adtninistrator. In addition to respO1ve repairs, Vyner Court refurbishments have been completed using the budget of £60,000 and part of the contingency fund. The planned refurbishment of 212 Well Street (£150,000 in the capital budget) did not take place in the year ended March 2021 due to time and budget commitments on the 204-210 Well Street contract. A decision was taken to review and reduce the scope of refurbishment and the funding was re-allo¢ated to the 204-210 Well Sireet contract. Reserves policy The adopted approach to reserves is explained in notes 14 and 15 to these awounts. Commitments and liabilities due within one year total £296.469 al 31 March 2021. The Trusiee believes that the anticipated income for the year ending 31 March 2022, together with the cash balance of £133,967 as at 31 March 2021 is sufficient to cover these comrnitrnents and liabilities. At 31 March 2021 the Charity had Endowment funds of £21,903.004 (2020 £22.347.629), and designated funds of £400,000 (2020 - £400.000). This left the Charity with general unrestricied funds, of £768,827 (2020- £438,430). Despite ihe additional challeng¢s of the pandemic in 2021, the Trustee is of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. Future plans In 2020. the Trustee established a Working Paty to consider the options for redeveloping a block of properties known as"The Triangle" adjacent to Well Street market. The initial proposals comprise 19 residential flats and associated ground floor ¢ommercial/retail properties. During the year Trustees reassessed the financial commitment required for the redevelopment and has decided not to proceed for the time being. Professional asset management advice is being ¢onsidered regarding future possibilities. Approved by the Trustee and signed on its behalf on 29.11.21 DiTe¢tor o the Trustee Page 4
HACKNEY JOINT ESTATE CHARITY REPORT OF THE TRUSTEE INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITY Opinion We haye audited the ac¢ounis of Ha¢kney Joint Estate Charzty (the'charity.) fortheyearended 31 March 2021 which ¢ompri5¢ the statem¢nt of financial activities, the balance sheet, th¢ statements of cash flows principal a¢¢ounting policies and the note5 to the ac¢ounts. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Stsndard 102 'The Ftnancial Reporting Standard appli¢able in the UK and Republic oflr¢lartd' (United Kingdom Gen¢rally Ac¢¢pted Accounting Practice). In our opinion. the a¢countS'. • giv¢ a true and fair view of the State of the Charity's affair5 at 31 March 2021 and of its income and expenditure for the year thencnded,. • hav¢ been pJDperly prepared in accordancK with United Kingdom Generally Ac¢¢pted Accountin8 Pr2¢ti¢e; and have been prepared in accordance with the requijrments of th¢ Charities Act 2011. Basis for opinion We conducted our audit in ac¢ordance with International Stsndards on Auditing {UK) (ISAS (UK)) and applicable law. Our responsibilities under those standards are rther described in the auditor'5 responsibilities forthe audit of theacwunts section of our report. We or¢ indepcndent of the charity in a¢¢ordanc¢ with the ethical requirements that are relevant to our audit of the accounts in th¢ LtK, ittcluding the FRC'S Ethical Standard, and we have fjjlfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion. CoD¢Iusions relatirtg to going eoncern In auditing the accounts, we have eoncluded that the ttusEee5' use of the going concern basis of accounting in the preparation of the accounts is appropriate. Based on the work we have perfomied, we have not identified any tnateriol uncertainties relating to events or conditions tha¢ individually or wlleGtively, may ¢a5t signifi¢ant doubt on the charity's ability to contioue as a going ¢on¢ern for a period of at least twelve months from when the a¢¢ounts are allthtsrised for issue. Our responsibilities and the re5poThsibilitie$ of the trustees with re5peet to going concern are describ¢d in the relevant sections of thi5 report. Other information The trustee5 responsible for the other information. The other infomiation comprises the infomjatitsn in¢luded in the annu81 report and ac¢ounts, other than the a¢counts and our auditor's report ihereon. Our opinion on the accounis does not cov¢r the oiher infomjation and we do not express any form of assurance conclusion thereon. In¢onnectionwtthourauditoftheaccounts.ourresponsibility isto read the othertnformation and. in doing so, consider whether the other infoTrnatlOn Is materially inconsistent with th¢ accounts or our knowledge obtained in the audit or otherwise appears to b¢ materially misstat¢d. If we identify such Enaterial ineonsistencies or apparent material misstatements. we are requiTed to deterttsine whetherthere is a material missiatement in th¢ accounts or a material misstatementoftheother informaiion. If, based on the work we have performed. weconclud¢ thai there j5 a material misstatement of this other infomiation, we are required io report that tact. We have nothin8 to report in thts r¢gard. Page 5
HACKNEY JOINT EsfATE CHARITY REPORT OF THE TRUSTEE INDEPENDENT AUDITORYS REPORT TO THE TRUSTEE OF HACKJYEY JOINT ESTATE CHARITY Matters on which we are required to report by exception We hav¢ nothing to rew)rt in respect of the followitlg matters in relation to which the Charities Act 2011 require5 US to rerK)rt to you if, in our opinion.. the information given in the ¢Mstees' annual report is inconsistent in any material respectwith the accounts. tsr sufficient accounting records have not been k¢pt' or • the accounts are not in agr¢ement with the accounting records and retUrn5- or w¢ have not received all the information and explanations we require for our audit. Responsibilities of trustees As explained more fully in the trustees, responsibilities statement, the tn]stees are re5ponsibl¢ for the preparation of the accounts and for being satisfied that they give a te and fair view. amd for such intemal control as the trustees detemine is De¢e5sary to enable the pparatIOn of accounts that are fr¢¢ from material misStatemenL whether due io fraud or tr[. In preparing the accounts. the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosin& as applicable, mattcrs related to going concern and using the going concem basis of accounting unless the iruste¢s ¢ither intend to liquidate the charity or ¢0 cease operaiion& or have no r¢alistic alternative but to do so. Auditor's re5ponsibilitie5 for the audit of the accounts Our objectives are to obtain re&sonable assurance about whether the accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an audÈior's re]y)rt that includes ouropinion. Reasonable &ssurance is ahigh level of assurance. butis notaguaranteethatan audiiconducted inaccordancewithlSAs(UKlwill alwaysdetectamateriolmisstatement when it¢xists. Misst2tements can arise from fraud or error and are considered material if. individually or in the aggregate, they ¢ould reasonably be expected to influ¢D¢¢ the economic decisions of users tsken on the basis of these accounts. Irregularities, including fraud, are instances of no.Mpliance with laws and regulations. We design procedures in line with our responsibili¢ies, outliDed al)ove, to detect rnaterial missiatements in respect of ieSUlarltieS, including fraud. The extent to which our procedure5 are capable of detecting irregularities. including fraud is detailed b¢low'. Our approach to identifying and assessing the risks of materÉal tni5Statement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows.. the engagement partner ensured that the engagement tearn collectively had the approprJat¢ ¢ompetenc< capabilLties and ski115 to identify or recognise non-compliance with applicable laws atld regulations. and we obtained an und¢rstanditLg of the legal and regulatory frameworks that are applicable to the charity and deterniined that the most Sl8nifJcant frameworks which are directly relevant to specific assertions in the financial statements are those ¢hat relate to the reporting framework IStat¢meni of Recommended Practice.. Aceounling and Rekk)rting by Charities preparing th¢ir accounts in accordance wilh the Finan¢ial Rep(Trrting Standard applicable in the United Kingdom and Republic of Ireland (FRS 1021 and the Charities A¢t 201 I} and those that relate to data protection (G¢neral Data Protection Regulaiion)- We understood how the charity is complying with those legal and regulatory frameworks by making enquiries of managemeni and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of the minutes of tn]stees' meetings and repotts from regulatory boNJies. We assessed the susceptibility of the charity's financial statements to material misstatement. in¢luding obtaining an understanding of how froud might occur. Audit pro¢edures performed by the engagement team included.. Page 6
HACKNEY JOINT ESTATE CHARITY REPORT OF THE TRUSTEE INDEPENDENT AUDITOR>S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITY Auditor's responslbilit1¢5 for the gudlt Of the Accounts (continucdl Jdentifying and &8se$sing the dc5i8n effliVenesS of¢oRlrols in plac¢ to pr¢vent and detect fraud. Understanding how thos¢ charged with govcrnanee considered and addrcssed the wtential foroverride of cortrols or other inappropriate influence over the Fin2n¢ial reporting process.. Challengtng assumptions aThJ judgements Tnade by managcrneni in its 5ignifJcant 4ccounttDg estimale$- Identifying end testing jOuM entries. Asse$5ing the extentof Compliance with the relevant laws and tegulatLOILS as partofour procedures onthe relevant accounts item to which they rtlate. To 8ddress th¢ risk of fraud through man8gemeJ)t bia5 and overridc of controls, we-. perfornicd ana]ytical procedures to identify any unusual or expected relation5hips,' performed substantive testrng on expenditure., and tested journal ¢nlries to identify unusual transactions. In response to the risk of irregularities Th)n.¢4)mplianc¢ with laws and Tegulalions, w¢ d¢si8ned procedtJr¢s which included, but were ]t litnit¢d to.. reading the minutes of meetings of those chargcd with govemance. and enquiring of mznag¢ment to actu and potential litigation and claims. As a result of our prothJure5 we did not identify any kcy audit matters relatlng to iryegulariiies. Ther¢arc inherent lirllitatioThs inour auditprocedures described above. The more removed that laws andregulation$ are from financial trartsaction5. the less likely it Ts that we would kcome awart of non-compliance. Auditing 5tandard5 also limit the audit procedures r¢quir¢d to identify non-compliance with laws and tegulations lo enquiry of the ttil$¢s and oiher tnanaEem¢nt and the inspection of regulatory and l¢gal corresponden¢e, if any. Material rni55tatements that 4rise du¢ to fraud can be hardeT to detect ihao those that arise from error as Ihcy may involve delThi eraie ¢onc¢almentor collusion. A further description of our responsibilities for the audit of the a¢counts is located on the Financial Reporting Council's website at www.frc.org.uk1auditor5sP0nS1bll1t1cs. This description fortns part of our auditor's report. Use of owr report This rert 15 made solely the charity's trusffj &8 a btyjy, in accordan with section 144 of the chltieS Act 2011 and with regulations made under stttion l 54 of that Act. Our audit work has been undenaken $0 that we might slate to thc charity's trust¢es those matters we are Tequired to state ¢0 them in an auditor's rerA)rt tnd for no other purpose. To the fijllest extent permitted by law. we do not accept or asstjme responsibility io anyone other than the charity and the eharity's trglee$ 45 a body, for our audit worK for this r¢rx)rt. or for the opinions we have fomie41. Buzzacott LLP Statutory Auditor. 130 Wood Sired, London, EC2V 6DL Dal¢ 1010112022 Buzzacott LLP is eligible to ad a5 2n aUdir in temis ofs¢¢tion 1212 of the Companies AGt 2006 Page 7
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HACKNEY JOINT ESTATE CHARITY BALANCE SHEET 31 MARCH 2021 Notes 2021 2020 Fixed assets InvestmeDt property 25,715,000 25,118,871 Current assets Debtors Cash at bank and in hand 275,990 207,875 325 499 533.374 409,957 Current liabiliti Creditors: amounts falling due within one year Net current assets 113,488 117,862 Creditors: amounts falling due after mor¢ than one year 10 2 756 657 2 050 674 Net assets 23,071,831 23,186,059 Represented by: Endowment funds 14 21,903,004 22,347,629 UDre5trlcted funds Designated funds General funds 15 15 400,000 400.0(10 15 768 827 23,071,831 438 430 23,186,059 Approved by the Trustee on 29 November 2021 signed on its behalf by.. Coun¢illor R Chapman Mr l Malik Directors The notes on pages 12 to 22 forni part of these accounts. Page 10
HACKNEY JOINT ESTATE CHARITY STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2021 2021 2020 Iyote C8sb flows from operating aetivities: Net h provided by operating activities 12 191.534 211881 Cash tlows from Investing aetlvities: Interest received 833 Iyet casb provided by investing activities: 833 Change in ¢a5h and cash equivalents in the year (191,532) (211,048) Cash equivalents at the beginning of the year 325 499 536,547 Cash and cash equivatents at the end of the year 133 967 325 499 The notes on pages 12 to 22 form part of these accounts. Page 11
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNrs FOR THE YEAR ENDED 31 MARCH 2021 l. Accounting policies The principal accounting poli¢i¢s adoptedi judgetnents and key sources of estimation un¢ertainty in the preparaiion of the finan¢ial statements are laid out below. 1.1. Basi5 ofa¢couDting The financial statements have been prepared for the year lo 31 March 2021. The financial statements have been prepared under ihe historic cost convenlion with itetns recognised at ¢ost or transaction value unle55 OtheNiise stated in the relevant ac¢ounting policies below or the notes to these financial statements. The financial statements have been prepared in accordance with Accounting and Reporting by Charities.. Ststetnent of Recommended Practice applicable io charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (Charities SORP FRS 102), the Financial Reporting Siandard applicable in the UK and Republic of Ireland (FRS 102) and Ihe Companies Act 2006. The charity constitutes a public benefit entity as defined by FRS 102. The financial statements are presented in sterling and are rounded to the nearest pound. 1.2. Critieal accounting estimates and areas of judgement Preparation of the financial statements requires the Trustee and managernent to make significant judgements and estimates. The items in the a¢¢ounts where these judgements and estimates have been made in¢lude: assessing the appropriateness of the assumptions and methodology in detennining the fair value of investment propertie5- and eslimating future incotne and expenditure flows for the purpose of &5sessing gtsing concem. 1.3. Assessment of going Concern The Trustee has assessed whether the use of the going concern assumption is appropriate in preparing these fingn¢ial statements. The Trustee has made this assessment in respect to a period of one year from the date of approval of these financial statements. The Trustee of the Charity has concluded that there are no material uncertainties related to events or conditions ihal may cast significant doubt on the ability of the Charity to continue as a going concern. Despite the additional challenges of Coronavirus and Covid-19 in 2020 and 2021, the Trustee 15 of the opinion that the charity will have suffici¢nt resources to meet its liabilities as they fall due. PaRe 12
HACKNEY JOINT LSTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ETrIDED 31 MARCH 2021 1.4. Income recognition Income is recognised in the period in which the ctwily has entitlement to the income, the amount of income can be m¢asuTed reliably and it is probable that the income will be received. Income is deferred only when the charity has to fulfil conditioTrs before becoming entitled to it OT where the donor has specified that the incom¢ is to be expended in a future accounting period. Income comprises rentaI income from investment property and interest receivable. Rental income from investment property is recognised when il becomes contractually due utKier th¢ relevant l¢ase or tenancy agreement and receipt is onsidered probable. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity- this is nortnally upon notification of the interest paid or payable by the batth. Expenditure reeognition Liabilities are recognised as expenditure as sn as there is a legal or constructive obligation ¢ornmitting the charity to tnake a paym¢nt to a third paty. it is probable that a transfer of economi¢ benefits will be required in settlement and the amount of the obligation can be measured reliably. All expenditure is accounted for on an ac¢ruals basis and includes attributable VAT which cannot be recovered. Expenditure comprises direct ¢osts and support costs. All expenses, including support eosts, are allocated to the applieable expenditure heading. Expenditure cornpris¢s the following-. Expenditure on raising funds comprises expenditure incurred on investment properties. Expenditure on charitsble activities comprises grants payable in the fom) of distributions to connected charities. Grants payable are included in the statement of financial activities when approved and wheu the intended recipient has ¢iiher received the funds or been infornied of the decision to make the grant and h&s satisfied all related conditions. Allocation of support and governance costs Support ¢osls represent indirect charitable expenditure. In order to carry out the primary purposes of ihe charity it is necessary to provide 5UPPOrt in the forni of financial and governan¢e procedures, provision of office services and equipment and a suitable working environment. oveTn8nce costs comprise the ¢OSis involving the public accountability of the charity (including audit costs) and costs in respeci io its compliance with regulation and good pra¢li¢e. Support costs and governance costs allocated directly to expenditure on raising funds. Paxe 13
HACKNEY JOINT ESTATE CHARrrY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 NIARCH 2021 1.7. Investment properties Investment properties are included in the awounts at 31 March 2021 are based on a desktop valuation perfomed by Stiettons Ltd, on behalf of the charity. At 31 March 2020, investment properties were in¢luded in the a¢counts at a Trustee estimate of the open market value. Prior to that the property valuation had been informed by a desktop valuation performed by Strettons Ltd, on behalf of the charity in 2019 and histori¢ valuations undertaken in 2009 and 2010 and internal valvations as ai 311t March 2015. Development rosts are written off as expenditure in the year in which ihey are incurred. Trustees also consider the impact of capital works performed within the properties Since the last full revaluation when detern)ining the year end valuation. Gains and losses on the revaluation of investment properties are included in the Statement of financial activities. 1.8. Debtors Debtors are reeognis¢d at the settlement amounl, less any provision for non-recoverability. Prepaytnents are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material. 1.9. Cash at bank and in hand Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. 1.10. Creditors and provi5lOnS Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement Can be estimated reliably. Creditors and provisions are rec4)gnised al the amount the Charity anticipates il will pay to settle the debt. They have been discounted to the present valu¢ of the future cash payrnent where such discounting is material. 1.11. Fund accounting Endowment funds ¢omprise the value of the freehold prop¢rty settled on the Charity at market valuation. Designated funds are monies set aside of unrestri¢led general funds and designated for specific purposes by the trustee. General funds represent thos¢ monies that are freely available for application towards achieving any charitable purpose that fall within the charity's ¢haTitable objects. Further details on the nature and purpose of each fund is set out in notes 14 and 15 to the financial staternents. 2 Taxatlon The Charity is exempt from taxation on its income and gains where they are applied for charitable purposes. PaRe 14
HACKNEY JOINT ESTATE CHARITY r40TES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2021 3 Rental income General funds 2021 Source of rental income: 2020 Residenti 604,302 697.287 Commercial 904,358 1,508,660 922,395 1,619.682 PaEe 15
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HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2021 (continued) Net income for the year This is stated after charging: 2021 2020 Auditor's rernuneration (prior year) 3.010 620 Auditor's remuneration (current year) 7,220 6.050 Investment PToperty Balance l Aprll 2020 Property Revaluation Additions BalaDee 31 March 2021 25.118,871 1.180,786 (584,657) 25,715,000 All freehold investment properties are vested in Hackney Endowed Trustee Limited. th¢ 'trust corpordtion, that is now ihe Trust¢e. The propertie5 are currently included on the balance sheet based on a desktop valuation performed by Stretton5 Ltd on behalf of the charity at 31 March 2021. Certain properties have been used a5 security for bank loa and further details provid¢d in note 10 to these accounts. Debtors and prepayments 2021 2020 Due fTOrn ag¢nt Rent receivable, less sp¢¢ific provision Prepayments Other debtors 138,765 89,778 30,666 16,781 275,990 66,150 88,605 36,339 16,781 207,875 Credltors: amounts falling due within one year 2021 2020 Bank loan {note 10) Deferred income Other creditors 88,540 141.431 103,464 144,861 296,469 415,512 Deferred income comprises rents. s¢ryice charge5 and insurance refunds received in advance. 2021 2020 Balanc¢ as at l April Amounted released to income Amount deferred in year Balance &s at 31 March 144,861 (144,861) 141,431 141,431 146.238 (146,238) 144.861 144.861 Page 17
HACKNEY JOtNT ESTATE CHARITY NOTES TO THE ACCOUNrs FOR THE YEAR ENDED 31 MARCH 2021 (continu¢d} io Creditors: amounts falling due after more than one year 2021 2020 Bank108ns 2,756.657 2,050,674 The above liability is payable as follow5.. Within on¢ year (note 9) Between one and two years Between two and five years After rnore than five years 88,540 91,919 293,481 2,371.257 103,464 64,811 207,920 1,777,943 2 845 197 2 154 138 A loan with CAF Bank was entered into by the end of March 2014 and the first draw down of funds was made in August 2014. Th¢ CAF Bank loan totalling £700,000 will be repaid over the next 18 years, with interest being payable monthly at a rate of 4.5 /0 over the Bank of England Base Rate. The10on is secured on properties at 184-186 Well Street and Celia Fiennes House. During 2019120 the two loans from Charity Bank £700,000 and £338,005 which were in place as at 31 March 2019 w¢re consolidated inio a new loan with a facility totalling £3,165,467, which provides an additional £2,200,000 funding for a projects in Well Street. The loan. of which £2,243,017 was uÉilised, as at 31 March 2021 will be repaid over th¢ next 24 years, with interest being payable monihly at a rat¢ of 2.650/0 over the Bank of England Base Rat¢. The loan is secured on properties at 184-186 Well Sireet. Celia Fiennes House and 204, 206. 208, 210 and 226 Well Street. li Capital Commitments As at 31 March 2021, the Truste¢ had entered into capital commitmettts totalling £848,441, subject to planning p¢mission, in respect of the redevelopmeni of the freehold investJnent properties at 204~210 Well Street Hackney. The funding for this project was Secured via bank a loan from ChaTity Bank. As at 31 March 2021. £1,300.000 of the £2.200,000 had been drawn down.
HACKNEY JOINT ESTATE CHARtTY NOTES TO THE Accouf4TS FOR THE YEAR ENDED 31 MARCH 2021 Page 18 12 Re¢oneiliatlOD of net movement in funds to net eash flow from operating aetlvities 2021 2020 Net movement In funds 85 per the $tsteJnent of finaneial Activitles AdJtMeftts for.. (114.228) 554.999 Additions to property portfolio (1,180,786) (1,311,871) Revaluatiot) of property portfolio 584.657 Int¢rest receivable (2) {833) (In¢reaSe)IDr¢8se in debtors (68,115) 148,772 Increase in credttors 586 940 397 052 Net cash used in operating Activlties 191534 211.881 13 Key managejnent personnel The Charity considers its key management personnel comprise the Directors of the TTUSte¢. The total employment benefits, including employer pension costs of key management personnel were £nil (2020 - £nil}. There were no employees in this charity in 2021 (2020- £nil). Page 19
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2021 {contillued) 14 EDdoivment (unds The endowment fund5 comprise the freehold property settled on the Charity at market valuation. Net movement in funds reflects any change in the market value of the properties and the value of the loans se¢ured against thern in the year. GeneTal expenditure related to the properties is treated as an expense of the general unrestricted fund which ha5 the benefit of the related rental in¢om¢. Balance 31 Mareh 2020 Net movement Balan¢¢ in fund 31 March 2021 Trgnsfer 22.347,629 140,032 (584,657) 21,903,004 Balance 31 Marcb 2019 Net movement in fund Balanee 31 March 2020 Transfer 22,000,246 347.383 22 J47,629 The transfer to ¢ndowment funds 15 to bring the value of the fund in line with the mark¢t value of the endowed property, less the loans secured against them. Is Unrestricted funds- current year 2020121 The Gerheral Fund has accumulated over a number of years, due to the Parochial Charities waiving their rIt to a full distribution. This ensures that the Charity can me¢t its financial commitments into the future. The Trustee acknowl¢dges that it is prudent to set aside part of the Charity's unrestri¢led funds for the purpose of rnaintaining the freehold properties and distribution to its constituent charities. As such, these are included in the a¢¢ounts as designated funds 2$ follows-. Balance l Aprll 2020 Balance 31 March 2021 Net incomel Transfer {expenditure) General fund Estate Repairs Reserve Future D¢velopments Fund 438,430 100,000 670,285 {199,856) (339,888) 199,856 768,827 i 00,0 838,430 470,429 (140.032} 1,168,827 Unrestricted funds- prior year 2019120 Balance l April 2019 Balance 31 March 2020 Net illcomel Transfer (expenditure) General fund Estate Repairs Reserve Future Developments Fund 230.814 100,000 790,491 (235,492) {582,875) 235,492 438.430 i 00,000 300 000 838,430 630,814 554,999 (347,383) Page 20
HACKNEY Joif4T ESTATE CHARITY IYOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2021 (continued) Design¥ted funds The Estete Repairs Reserve is dedicated for repairs of the Properties. £1 00,000 is maintained in reserve to meet the immediate requirements of the Estat¢ during the new financial y¢aT. The Future D¢velopmenls Fund is dedicated to meet extraordinary and planned future repairs on properties. Th¢ balance of net current assets (after transfer to the Estate Repairs Reserve of £IOO,000) is held in reserve at the year end. The Trustees mairttained this reserve at £300,000 at the year-end to allow for pla[ed repairs in 2021122. The Directors of the Tru51ee agreed to consider thes¢ funds and take sto¢k of their requirements in future years. 16 ADalysis of net assets between fllnd5- current year 2020121 Endoivment Genergl Funds Funds Designated Funds Total Funds Jnvestments Current assets Current liabiliti¢s Long tertn liabilities 24.748,201 966,799 9.957 (207,929) 25,715,0110 409,957 (296,469) (2,756,657) 400,000 (88,540) (2,756,657) Total 21903 004 768 827 400 000 23 071831 Analysis of net assets betsveen funds- prlor year 2019120 Endowment General Funds Funds Designated Funds Total Funds Investments Current assets Current liabilities Long term liabilities 24,501.767 617,104 133,374 (312.048) 25,118,871 S33J74 (415,512) (2,050,674) 400,000 (103,464) (2,050,674) Total 22 347 629 438 430 23 186 059 Pa£¢21
HACKNEY JOINT ESTATE CHARrrY NOTES TO THE Accouf+rrs FOR THE YEAR ENDED 31 MARCH 2021 (continued) 17 Connected eharities During the year ended 31 March 2021 Hackney Joint Estates Charity rnade di5tribulitsns to the ¢onnected Charities of £260,000. Addresses, purw)ses and charitable data of the connected paro¢hial charities are a5 follows: The Ha¢kney Parochial Charili¢s Charity No.: 219876 Address: 6 TNII Farni Buildings Tetbury Gloucestershire GL8 8SQ Area of benefit.. Fonner ecclesiastical parish of St John Hackney Purpose.. Relief of poverty Distribution received: one half £130,000 (Grants Awarded by the Charity - £236,634) South Hackney Par4xhia] Charity Charity No.: 212336 Addre5S'. 6 Trull Farni Buildings Tetbury Gloucestershire £65,000 (Grants Awarded by the Charity - £164,326) GL8 8SQ Area of benefit.. Ecclesiasti¢al parish of South Hackney Purposes.. Almshouses, education, relief of need Distribution received- one quarter West Hackney Parochial Charities Charity No.: 208941 Address.. 6 Trull Fann Buildings Tetbury Gloucestershire GL8 8SQ Area of benefit.. Ecclesiastical parish of West Hackney Purposes.. Education and youth advancement, relief of need, local benefit Distribution received.. one quarter £65.000 (Grants Awarded by the Charity- £117.147) The following pages are for MANAGEMENT PURPOSES ONLY; the information does not form part of the Financial Statements on which the Independent Auditor has reported. Page 22
HACKNEY JOINT ESTATE CHARITY REVENUE ACCOUNT YEAR ENDED 31 MARCH 2021 31 March 2021 31 M8r¢h 2020 Net Income from properties Rent and service charges receivable 1.508.660 1,619.682 Deduc¢ direct expenditur¢ General rates Repairs Vyner Court- lighting and caretaking Kenton Road- lighting and caretaking T¢rrac¢ Road- lighting and caretaking Valentine Road Well Street- phone, lighting and Caretaking Commission on collection of rents Insurance premiums Estate agent's f¢es Bad debts and provision for rent in arrears 61,355 199.856 3,241 1.477 270 2,101 81,420 235.492 8,538 1.393 822 2,438 48,369 85,130 32,339 16.267 51,076 93,536 30.310 44,065 117534 57 940.721 574 01 1,045,381 Miseellaneous revenue Other income Deposit and bank interest Cross surplus 940,723 1,046.214 Indirect expenditure Remuneration of the Clerk- The Trust Partnership Trust administration- The Trust Partnership Legal and professional charges Bookkeeping and accountancy Audit and accountancy Miscellaneous Mortgage interest Mortgage legal and arrangement fee 40.282 68.052 17.484 22,268 13,967 10,230 1.822 77,825 14.995 36,230 21,388 6,670 6.306 71,799 210 294 730,429 231215 814,999 Net income for the year Distributions The Hackney Parochial Charities South Hackney Parochial Charities Wesi Hackney Parochial Charities 130,000 65,000 130,000 65,000 000 260 000 554,999 Net surplus for the year 470,429 Page 23