HACKNEY JOINT ESTATE CHARITY Cbarity Registration No. 219875 HACKNEY JOINT ESTATE CHARITY REPORT AND FINANCIAL STATEMENTS 31 MARCH 2022
HACKNEY JOINT ESTATE CHARfTY Page Legal atid administrative information RepoTt of the Trustee Independent auditor's report Statement of financial activities Balance sheet 10 Siatement of cashflows Notes to the financial 5tat¢rn¢nt5 12
HACKNEY JOINT ESTATE CHARITY LEGAL AND ADMINISTRATIVE INFORMATION GoverDing IDStrumeDt Charity Commission Scheme dated l March 1898 as amended by Scheme dated 24 August 2004 and Scheme dated 23 July 2010. Trustee Hackney Endowed Trustee Limited Directors of the Trustee Haekney Paroehial Charities Ms M Cannon Councillor C Kennedy Mr A Hilton Coun¢illoi R Chapman Councillor S Patri¢k (appoinied 7 June '21) Mr D P&ul-Worika Mrs J ARdrews Mr l Malik (Chair) Ms K Johnson Reverend Justin Gau South H#ckDey Parochial Charity West HackDey Paroebial Charities Charity registered number 219875 Clerk to tbe Trustee Kellie Carson The Trust Partnership 6 Trull Farm Buildings Tetbury Glou¢estershire GL8 8SQ Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Property Agents Strettons Ltd Central Hous¢ 189 - 203 Hoe Street London E17 3SZ Legal advisors Charles Russell Speechiy LLP 5 Fleet Place London EC4M 7RD Page I
HACKNEY JOINT ESTATE CHARtTY REPORT OF THE TRUSTEE The financial 5tatement5 have been PTcpar¢d in a¢oordan¢e with the ac¢ounting policies set out on pages 12 to 14 of the attached accounts and coinply with the charity's trust deed. the Charities Act 2011. regulations applicable lo that Acl, and A¢¢ounting and Reporting by Charities.. Statement of Recommended Practi¢e applicable to charilies preparing their a¢¢ounts in accordance with th¢ Financial Reporting Standard applicable in ihe UK and Republic of Ireland {FRS 102). The year These accounts record the 416th year of our stewardship of the gifts of Hackney people to their fellow parishioners. In 1898 ilie management of these assets united in this single body. In line with the 1898 Scheme, the income from these assets is used to repair and insure the property with the reinaining income being distributed lo three parochial charities in the Borough of Hackney. These bodies appoint the Direciors of the Corporate Trustee known as Ha¢kney Endowed Trustee Ltd. Structurei governance and managernent Rol¢ 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 Hackney comprising long and short residential leaseholds, shops, and officelcomTnercial units. The Trusiee regards itself as accountable to the three beneficiary grant-making eharities.. Hackney Paro¢hial Charity, West Hackney Parochial Charity, and South Ha¢kney Parochial Charity. In tum the Parochial Charities, who are individually registered with the Charity Commission, make grants to Ii)cal causes in need such as youth groups, parenting groups and individuals in need as well as providing social housing through almshouses. Direetor appointment Th¢rc were no resignations or appointments during the year. The constitution and governaiice is kept under review and no major change has been seen, necessary. Directors are appointed to the Corporate Trustee, Ha¢kncy Endowed Trustee Limited and are put forward by three local Parochial Charities in accordance with the goveming documents. Operations The Directors of the Trustee m¢¢t quarterly with standing arrangements and delegations pern)itting effective decision tnaking between meetings. Sub-committees and Working Partie5 ar¢ established as required. The Clerk does not have direct operational ¢onlrol of the Estate, but instead facilitate5 the decision tnaking of the directors and executes those decisions. Th¢ ¢ommittee consists of three or toor¢ board Directors, each also representing their constituent charity (West Harknej. Parochial Charity, Hackney Parochial Charities, and the South Hackney Parochial Charity). to facilitate broad consrnt and d¢¢isiQll tnaking. Key management personnel The Dire¢tors of the Trusiee consider that they comprise the key management of the charity in charge of directing and controlling, running, and operating the charity on a day to day basi5. The Director5 receive no remuneration. Risk management The Charity r¢gularly reviews its risk policies and piocedures. Directors maintain a risk register wliich is Tegularly updated and considered at quarterly meetings by the Board of Directors. The impact of the Covid- 19 pandemi¢ on operations, a¢tivilies and future plans is considered below. In terms of the irnpact of the pandemic on risk, Directors Consider the main impact to b¢ a reduced r¢ntal income particularly from cointnercial uniis and ihe potential for a loss of fix¢d ass¢1 value. In summary, th¢ main risks to the Charity are considered lo be.. Financial Risk - Properties remaining vacani awaiting redevelopment. Reduction in income from Tents from market fluctuations especially during and after the Covid pandemic. Reduced asset valuation in Teal terms. Additional cost to the current refurbishment programme from shutdown during the pandemic when building supplies were unavailable and an increase in the Contract Sum for the works to 204-210 Well Street as a result of essential unforeseen works. Page 2
HACKNEY JOINT ESTATE CHARITY REPORT OF THE TRUSTEE Risk managemellt (continued) Mitigation - Regular Board meetings with ¢ommer¢ial agents, Strettons, to review empty properties and ensure rent r¢vi¢ws and collections are conducted on time. Srrategic review of asset manag¢ment plann¢d. Additional Director meetings with project managers and advisors during the pandemic and the refurbishment. S¢atemeDt of Trustee's Tesponsibilities The Trustee is responsible for preparing the Trustees, report and accounts in accordance with applicable law and United Kingdom Accounting Stsndards (United Kingdom Generally Accepted Accoutiting Practice}. The law applicabl¢ to charities in England aJ)d Wales require5 Ihc Trusl¢e to pr¢par¢ 2¢¢ounls ftsr each financial year which give a true and fair view of the state of affairs of the charity and of the income and expenditure of the charity for that period. In preparing these accounts, the trustees are required to= 5elecl 5Uitable accounting p)licies and then apply them consistently> observe ihe method5 and principles in Accounting and Reporting by Charities.. Statement of Recommended Practice applicable to charilies preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)- make judgements and estimates that are reasonable and prudent- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the a¢count5' and prepare the arxounts on the going concern basis unless it is inappropriaie to presume that the charity will continue in operation. The Trust¢¢ is r¢swnsible for keeping prOr a¢¢ounting r¢¢ords that disclose with reasonable accuracy at any lime the financial position of the Charity and enable ihem to ensure thai the ac¢ounts comply with the Charities Act 2011, applicable Charity (Accounts and Reports) Regulations and the provisions of the charity's constitution. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Objectives Xnd activities The object of the Charity is to manage its endowed property portfolio to m&xirnise the net rental incoine (after 05ts) for distribution to three beneficiaries.. Hackney Parochial Charities, South Hackney P3Tochial Charities and West Hackney Parochial Charities. The Trusiee continues 10 implement ils len-year strategy and to reaffirm its mission statement to achieve the Charity's objective whilst to Contributing to ihe local Community in Hackney. The main activity throughout the year has been to maintain the propety Portfolio in order to protect its value for the long terni. Individual vacant properties are refurbished as necessary 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 Commission's guidance on public benefit. The purpose of the Charity is to distributc surplus income to three individual parochial charitics each charity with separate identifiable objectives to relieve hardship and need io the public within th¢ local community. A distribution of £300,000 was made in the year. (2021- £260,000). Page 3
HACKNEY JOINT ESTATE CHARITY REPORT OF THE TRUSTEE Aehlevementsy performanee and r)nan¢ial review During the year gross property revenues reduced by 1.5fj/0 from £1,508,660 for the year ¢ndcd 31 Marcli 2021 to £1,485,768 for the y¢ar ended 31 Marcli 2022 primarily due to1055 of income from commercial rents during the pandemic. Expenditure for the year reduced by 6.50/0 from £1,038,233 for the year ended 31 March 2021 10 £971,143 for the year ended 31 March 2022. Before expenditure on propety redevelopment, expenses reduced by 13.760/0 froin £778,233 for the year ended 3 1 March 2021 to £671,143 for the year ended 31 MarGI) 2022. The Charity increased the distribution to the three parochial chaiiti¢s from £260,OOQ in 2020-21 to £300,000 in 2021-22. Investment properties are included in the accounts at 31 March 2022 based on a desktop valuation performed by Strettons Ltd, on behalf of the charity. This resulted in a gain on revaluation of £424.849 for the year ended 31 March 2022 {2021= loss of £584,657). The Tn)stee has resolved to redevelop a block of mixed-use historic properties known as 184 - 214 Well Street through refurbishment and exiension. A contract to PTovidc Tefurbished retail and residcntial units and a mansard roof extension to create a total of four Shops and eiglit flats at 204- 210 Well Street began in April 2019. The coiitract sum of £1.4m has risen to £1.97m as a result of unforeseen e55ential works. The contract was substantially completed 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 DirectOTS attended monthly progress site meetings with the contractor and contract administrator. Four r¢5idential units have been completed, with a paqsing rent of £70,200 per anJ)um. Two commercial units are being marketed. In addition to responsive repairs, Vyner Court refurbishments have been completed using the budget of £60,000 and part of the contingen¢y fund. The planned refurbishment of 212 Well Streei (£150,000 in the capital budget) did not take pla¢¢ in th¢ year ended Mar¢h 2022 due to time and budgei ¢ommitmenrs the 204-210 Well Street contract. A decision was taken to review and reduce the scop¢ of refurbishment and the funding was re-allocated to the 204-210 Well Streei contract. Reserves policy The adopted approach to reserves is explained in notes 14 and 15 to these accounts. Commitments and liabilities due within one year total £294,71 l at 31 March 2022. The Trustee believes that the anticipated income for the year ending 31 March 2023, together With the c&sh balance of £374,797 as at 31 March 2022 is sufficient to cover these commitments and liabilities. At 31 March 2022 the Charity had Endowment funds of £22,221,693 (2021 £21,903,004), and designated funds of £400.000 (2021 £400,000). This lefi the Charity with general unrestricted funds of £1.389,612 (2021 £768,827). Despite the additional challenges of the pandemic in 2022, the Trustee is of the opinion that the charity will hav¢ sufficient r¢50ur¢¢s lo meet its liabiliti¢s &8 they fall du¢. Future plAns In 2021. the Trustee established a Working Party to consider the options for redeveloping a block of properties known as "The Triangle" adjacent to Well Street markel. The initial proposals comprise 19 residential flats and associated ground floor coinmerciallretail 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 has been obtained and rhe WoTking Party will further consider future p05sibilities. Approved by e Trustee and signed on its behalf on 04.01.2023 Director e Trystee Page 4
HACKNEY JOINT ESTATE CHARITY INDEPEI¥DENT AUDITOR'S REPORT TO THE TRUSTEE OF HACKNEY JOINf ESTATE CHARITY Opinion We have audited the accounts of Hackney Joint Estate Charity {the'charity'l forthe year ended 31 March 2022 which comprise the statement of financial activities, the balance sheet, the statements of cash flows principal accounting policies and the notes to the accounts. The financial reporting framework that ha5 been applied in their piepardtion is applicabl¢ law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standd applieable in th¢ UK and Republic of Ireland. (United Kingdom GenerlY A¢cepted Accounting Practic¢). In our opinion, the ac¢ounlS'. • give a true and fair view of the state of the charity'5 affairs as at 31 March 2022 and of its income and expenditure for the year then ended. + have been properly prepared in a¢cordaLce with United KiTLgdom Generally Accepted A¢¢ounting Pra¢ti¢e,' and • have been prepared iTh accordance with the rcquirements of the Charities Act 2011. Basis for opinion We conducied oui audit in a¢cordatL¢e with International Standards on Auditing (UK) (ISAS {UKII and applicable law. Our responsibilities under those Standards ar¢ fi2rther described iti the auditor'5 responsibilities for the audit of the account5 Section of ollt report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts in lh¢ UK, including the FRC'S Eihical Siandard, and we have fulfJll¢d our other ethical responsibilities in ac¢ordan¢¢ with these requirements. We believe that the audit evidence we have obtained is suffLGient and appropriat¢ to proyide a ba515 forour OPiDlOn. Conclusions reliting to going concern In auditing the accounts, we hav¢ concludcd that the tru5t¢¢s' use of th¢ going ronrem basis of a¢¢oiinting in the preparatio ofthe accounts is appropriate. Based on the work we have perfomied. we have not identified atty maierial uncertainties relating to events or conditions that, individually or collectively, may cast $18nifJcant doubt on the charity'5 ability to continue a5 a going concern for a period of at least twelve rrJonth5 from when the accounts are authoris¢d for issue. Our responsibilities and the responsibilitses of the trustees with re5ctIO going concern are described in the relevant sections of this report. Otlher information The trustees are responsible for the othcr inforrnation. The other infomiation Comprises the information included in the annual report and accounts. other Than the accounts and our auditor's report thereon. Our opinion on the a¢¢ounts does noi cover the other tnformation and we do not express any fomi of assurance conclusion thereoTh. Inconnectionwith ourauditofthe accounts, oufTesp)tLsibility isto read the other informatton and. in doing 50, constderwherher the other infomiation is materially inconsistent with the accounts or our knowledge obtained ID th¢ audit or otherwise appears to b¢ mal¢riaily misstated. If we identify such material inconsisieneies or apparent material misstatemetLt& wc are required to d¢terJnine whetherther¢ i5 a material misstatement in the &cGountsor a material misstatementoftheotherinformation. If, based on the workwe have performed. we cotlclude thatthere is a material tnisstaiement of this oiher infonnaiion, w¢ Ore required to report fa¢t. We ha¥e nothing to report in this regard. Matters on which we ar¢ required to report by exception We havc nothing to report itl respect of the following tnattets in relation to which the Charities Act 201 I requires us to report to you if, in our opinion.. the inforn]ation given in the Irustee5' atlnual report is inconsisteni in any materiai r¢sp¢¢t with the accounts., or suffjcient accounting records have not been kept. or Page 5
HACKNEY JOINT ESTATE CHARITY INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITV • the accounts ar¢ not in agre¢m¢nt with the accounting records and relurns. or we have not received all the information and explanions we require for our audiL Responsibilities of trustees As explained more fullj irt the rtustees, responsibilities statemenr, Ihe trustees are responsible for th¢ preparaiion of the a¢¢ounis and for bein8 satisfied that they give a true and fair view. and for such internal Colltrol a5 the trustees determine is necessary to enable the preparation of accounts that are free from material misstatcment, whether due to fraud or error. In preparing the accounts, the trustees are responsible for assessing the charity's ability to Contirhue as a going concern. disclosing. as applicable, matters related to goin8 concern and using the going concern basis of accounting unless the irllse$ either intend io liquidate the charity or to cease operations, or have no realistic alternative but to do 50. Auditor's responsibilities for the Audit of the gccounts Our objectives are (o obtain Teasonable assuranc¢ about whether the 0¢¢0unts as a whole are free from materiai missratemettt, whether due to fraud or error, and to issue an auditor'5 report that includes ouropinion. Rea50nabl¢ a5suranc¢ is a high level of assuTance, but is notaguaranieethatan auditconducted in accordance with ISAS IUKI will alwaysdeiectamaterial misstatement when itexists. m[tateMents catt arise from fraud or errol and ate considered maierial if, iftdividually or in ihe aggiegate, they could reasonably be expected to influence the economtc decisions of users taken on the basis of these accounts. IrregulaTities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our re5ponsibiliti¢s. outlined above, to dekrt material fftisstat¢ments in respe¢¢ of irr¢gulariries, including fraud. The extenl to whi¢h our procedures are capable of detectin8 irregularitie5. including fraud is detailed below.. Our approa¢h to identtfying and a$3essing the risks of material misstatement in respect of irregularities. including fraud and non-Mmplsan¢e with laws and tEgulationi was as follows.. the engagement partner ensured that the engagement team collectivcly had the appmpTiate competence. capabilitie5 and skills to identify or recognise non-cotETrpliance with applicable law5 and regulations., and we obtained an und¢rstandingof the legal and regulatory frameworks thai are applicable to the chaTity and deteTmined that the most significant frameworks which are directly relevant to specifjc assertions in the financial staternents are those ihat relate to the reporting framework {Statement of Recommended Practice.. Accouniing and Reporting by Charities preparing their a¢¢ounis in a¢¢ordan¢e with ihe Financial ReportlDg Standard applicable in the Uniied Kingdom and R¢publi¢ of Ireland IFRS 102) and the Charitie$ Act 2011 l and those that r¢late io data proiection (General Data Protectiott Regulatioti). We undeTStood how th¢ chaTity is wmplying with those legal and iegulatory frameworks by making enquiries of managetnent and those re5ponsrble for legal and wmpliance proceduies. We ¢orttsborated our enquiries through our review of the minutes of Iruste¢s' meetiiigs and reports froTll rcgulatory bodie5. We assessed the susceptibility of the charity's financial statements io material misstatement. including obtaining an understanding of how fraud might occtsr. Audit procedures perfortned by the engagement team included.. Auditor's responsibilities for the audit of the accowryts {rontinu¢dl Identifying and assessing the design effectivene of control$ in place io pievent and detect fiwd- Understanding how those charged with govemancc considered and addresscd the P)tentI for override of contro15 or other iniiPPTopriate influLnce over the financial rcportinE process., Challenging assumptions and judgements made by management in its significani accounting estimates.. Identifying and testing joumal en¢ries', Assessirt8 the extent of compliance with the Televant laws and regulations LS part of our procedures on the relevant accounts il¢m to which they relaie. Page 6
HACKNEY JOINT ESTATE CHARITY INDEPENDENf AUDITOR'S REPORT TO THE TRUSTKE OF HACKNEY JOINT ESTATE CHARITY To address the risk of fraud through management bias artd override of controls, we.. perfomied analyti¢aJ pr¢¢edur¢s to identify any unusual or unoxpected relationships; performed substantive testin8 on expendiluTe,' atLd t¢st¢d joumal ¢ntri¢5 to idetLtify unusual transactions. Jn response to thc risk of intgularities artd non-tompliantt with laws and re8ulations, we designed procedures which includd. weTe not limited to.. reading the minutes of merfings of thosc charged with govcmance.. and ertquiring gfmanagetnent as to &tual and polential litigation and Glaitrjs. A5 a 5vIt of our FYo¢¢dures w¢ did [t identify any key audit matt¢r5 rclating to ITrcgularitie5. There aye inhcrent limitations inouT audit procedures descTibed abovc. Themote removed that laws and regulations arc from financial transactions, Ihe less likely it is thai we would beeottte aware of non-compliance. Audiiin8 siandards also limit the audit PTQL¢durts requir¢d lo idcntify non.cofflplianc¢ with law5 and Tegulatiorss It> cnquiry of th¢ trustec5 and oih¢T maaent and the in5p¢clion of r¢gulaiory and legal corresp)nd¢nce, if any. Material misstatements arise due to fraud Can Ix harder than Ihose that arise from error &$ th¢y may involve deliberate Concealment or collu51Qti. A fvnher description of our responsibilities for ihe audit of ihe accounrs is located on the FinaJLcial ReAIng Council's w¢bsiie www.frc.org.uklaudilorsresnSlbllitles. This dtscripiion form5 part of our aUdir'S report. Use of our report Thi5 report is mad¢ sol¢ly to th¢ ¢harity'5 trustees, as a body, in accordance with section 144 of the chl(leS A¢1 2011 and with r¢gulalions made under section 154 of thai Act. Our audit work has been underlaken 50 that we tllight stale to the cliarity'5 Irusiees those matters wc arc required to 51atc to them in an auditor's rep)rt and tor no other purpos¢. To the fullest extfflt permitted by law, we do no¢ a¢¢ept OT assume resTknn5ibility to anyone other thon the ¢harity And th¢ charity's trustees as a Lx)dy. for our audit work, for this report. or for the opinions we have formed. Buzza¢ott LLP Stsiutory Auditor, 130 Wood Street. London, EC2V 6DL Date 20 January 2023 Buzza¢ott LLP is eligible to a¢t as auditor in tertn$ of se¢tion 1212 of the Companies Act 2006 Page 7
HACKNEY JOINT ESTATE CHARITY BALANCE SHEET 31 MARCH 2022 Notes 2022 2021 Fixed #ssets Investment property 26,530,000 25,715,000 Current assets Debtors Cash at bank and in hand 261,802 374 797 636.599 275,990 133 967 409,957 Curr¢D¢ li*bilities Creditors.. amounts falling due within one year 296 469 Net current #ssets 341,888 113,488 Creditors.. amounts falling due after more than one year 10 2 860 583 2 756 657 Pl¢¢ assets 24,011,305 23,071,831 Represented by: Endowment fund5 14 22,221,693 21,903,004 Unrestricted fun 15 Designaled funds 15 400,000 400,000 General fund5 15 1 389612 24,011,305 768 827 23,071,831 Approv¢d by the Trustee o 04.01.2023 Sied on its behalf by.. Councillor R Chapman Mr l Malik Directors The notes on pages 12 to 22 fornj part of these a¢¢ouths. Page 10
HACKNEY JOINT ESTATE CHARITY STATEMENT OF CASHFLOWS VOR THE YEAR ENDED 31 MARCH 2022 2022 2021 Not¢ Cash flows from operxtillg activities: Net ¢*$h provlded by operating actlvltles 12 240,830 191,534 Cash flows from investlng aetivities: Inte5t received Net ¢ash provided by Investillg a¢tivities: Change in ch and cash equivalents in the year 240,830 (191,532) Cash equivalents at the beginning of the year 325,499 Cash and cash equivalents al the end of the year 374,797 133,967 The noies on pages 12 to 22 form part of th¢s¢ a¢¢ounts. Pagell
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 l. Aecounting policies The princkpal accounting policies adopd, judgements and key sources of estimation uncerlainty in ihe preparation of the finan¢ial srktements are laid out below. 1.1. B¥$i$ of aeeounting The financial statements have been prepared for ihe year 10 31 March 2022. The financial statements have been prepared under the historical cosi convention with items r¢¢ognised at cost or transaction value unless otherwise stated in the relevant a¢oounting policies below or th¢ rLQtes to these financial staiements. The financial statements have been prepared in ac¢ordan¢e with Accounting and Reporting by Charities.. Statement of Recommended Practi¢e applicable to 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), th¢ Financial Reporting Standard applicable in ihe UK and Republi¢ of ITeland (FRS 102) and the Companies A¢1 2006. The charity constitutes a public benefit enttty as defined by FRS 102. The financiaI statements are presented in sterling and are rounded to the nearest pound. 1.2. Critical accounting estimates and aTeas of judgement Preparation of the financial statements requires the T[ree and management to make significant judgements and estimates. The items in the a¢¢tsunts where these judgemenis and estimates have been made include.. 2ssessing the appropriateness of the assumptions and methodology used in determining the fair value of investment properties- and estimatii)g future incoille and exp¢ndilure flows for ihe purpose of &8sessing going concern. l.J. Assessment of going concern The Trustee has assessed whetlier the use of the going concern assumption is appropriate in preparing these financial siaiements. The Trusiee has made this assessment in respect lo a period of one year from the dale of approval olthese financial statements. The Trust¢¢ of the Charity has concluded that there are no material un¢¢rtainlies rclaled to ¢vents or conditions that may ¢t significant doubt on the ability of the Charity to continu¢ as a going ¢on¢ern. Despite the additional challenges of the current cost of living crisis, the Trustee is of the opinion ihat the ¢harity will have sufficient Tesources to meet its liabilities as they fall due. PaRe 12
HACKNEY JOINT ESTATE CHARITY OTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 1.4. Income recognitlon Income 15 recogniscd in the period in which the charity has entitlement to the incoine, the arnount of income can be measured reliably and it is probable that ihe income will be received. Income is deferred only when the chariiy has to fulfil conditions before becomtng entitled to it or wher¢ the donor has sprfifi¢d that the iJJcom¢ is to be expended in a futur¢ accounting period. Incom¢ cotnpri5es rental in¢om¢ from inv¢stm¢nl property and inteTest receivable. Rental income from inv¢slment property is recognised when it be¢oJnes contractually due under the relevant lease or tenan¢y agreement and receipt is considered probable. Interest on funds held on deposit is included when receivable and ihe arntsunt can be m¢asur¢d reliably by the ¢harity- this 15 norn)a]ly upon notification olthe interest paid or payabl¢ by the bank. 1.5. Expenditure reeognition Liabilities arc recognised as expenditure as soon as there is a legal or construclive obligatlOD committing the charity to make a payEnent to a third party. il is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. All expenditLtre is accounted for on an accruals basis and includes attributable VAT which cannot be recovered. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated to the applicable expenditure h¢ading. Expenditure comprises the following.. Expenditure on raising funds comprises expenditure incurred on investment propeffies. Expenditure on charitable acttvities comprises grants payable in Ihe forni of distributions to connected charitiC5. Grants payabl¢ are included in th¢ statement of fiiian¢ial activities when approved and when the intended Tecipieni has either received the funds or been informed of the decision lo make the grant and has satisfied all related conditions. AllocatlOD ofsupport and governance Costs Support costs represent indirect charilable expenditure. In order to carry out the primary purposes of the charity it is necessary to provide support in the form of financial and governance prw¢dures, provision of office services and equipment and a suitable working environmeni. Governance costs comprise the Costs involving the public accouniabiliry of the charity (including audit ¢osls) and costs in respect to ils complian¢e wirh regulation and good practi¢¢. Support costs and governance costs are allocated directly to expenditure on raiSlDg funds. Paxe 13
HACKNKY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 1.7. InvestmeDt properties Inv¢stment properties are included in the accounts at market value at the year end. 31 March 2022 valuation is based oo a desktop valuation perfornied by Strettons Ltd on behalf of the charity. At 31 March 2021, investment properties wer¢ included in rhe accounts based on a desktop valuation perfomed by Strettons Ltd as at that dale. Prior to thai the property valualion had b¢¢n infornied by a desktop valuation p¢rfom)ed by Strettons Ltd, on behalf of the ¢harity in 2019 and historic valuations Lmdertaken in 2009 and 2010 and internal valuations as at 31" Mah 2015. Developmen( costs are written off as expenditure in the year in which they are incurred. Trustees also consider the impact of capital works perfom)ed within the properties since the I1 full revaluation when deterniining Ihe year end valuation. Gains and losses on the revaluation of investment properties are included in the statement of financia] activities. 1.8. Debtors Debtors are recogDi5¢d al the settletnenl atnount, less any provision for non-rewverabilily. Prepayments are valued at the amount prepaid. They have been discounted to the preseni value of the future cash receipl where such discounting is material. 1.9. Cash at bank and in hand Cash at bank and in hand represents su¢h a¢count% and instruments that are available on demand or have maturity of less than three months from the dale of a¢quisilion. 1.10. Creditors and provisions Creditors and provisions are recogiiiscd when there É5 an obligation at the baltnce sheet date as a result of a past event. it is probab5e that a transfer of economic benefit will be required in settlement, and the atnount of the 5ettlem¢ni can be estimated r¢liably. Creditors and provisions are recognised at the amollnt th¢ charity anticipates il will pay to settle the debi. They have been discounted to the present valu¢ of rhe future ¢Lsh payment where such discounting is material. 1.11. Fund a¢couNtillg Endowment funds Comprise the value of ihe freehold property seitled on the Charity at market valuation. Designated funds are monies Set aside of unrestricted general funds and designated for specific purpose5 by the trustee. G¢n¢ral funds represent those monies thal are freely available for application towards achieving any charitabl¢ purpose that fall within the charity's charitable objects. Further details on the nature and purpose of ¢ach fund is s¢t out in notes 14 and 15 to the financial stat¢ments. 2 Taxation The Charity is exempi from taxation on ils income and gains where they are applied for charitable purw>ses. PaRe 14
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 3 Rental income G¢neral fuDds 2022 2021 Sour¢e of rental income.. Residential 821,451 749,436 Commercia] 664,317 1.485.768 759,224 1,508.660 PaEe 15
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HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 (continued) Net income for tbe year This is stated atter charging: 2022 2021 Auditor's retnuneration (prior year) 104 3,010 Auditor's remuneration (¢urreni year) 7,220 7,220 Investment property Balance l April 2021 Property Rev*luatio Additions Balance 31 Mareh 2022 25,715,000 390,151 424,849 26.530,000 All freehold investment properties are v¢st¢d in Ha¢kn¢y Endowed Trustee Limited, th¢ 'tntsl corporation, tl)at is now the Trust¢¢. The properties ar¢ currently included on the balance sh¢¢l based on a desktop valuation performed by Strettons Ltd on behalf of the charity at 31 March 2022. Certain properties have been used as security for bank loans and further details are provided in note 10 lo Ih¢se accounts. Debtors 2nd prep8yments 2022 2021 Due from agent Rent receivable, les5 specific provision Prepayments Other debtors 173,582 47,822 23,617 16,781 261,802 138,765 89.778 30,666 16,781 275,990 Creditors: amounts falling due within one year 2022 2021 Bank loan (note l O) D¢ferred incotne OtheT creditors 90,773 130,514 88,540 141.431 294,711 296,469 Deferred income comprises rent5. seryice charges and insurance refunds received in advance. 2022 2021 Balance at l April Amounted reled to income Amount deferred in year Balance as ai 3 l March 141,431 (141,431) 130,514 130,514 144.861 (144,861) 141431 141,431 Page 17
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 (eontinued) io Creditors: amounts falling due after more than one year 2022 2021 Bank loans 2,860.583 2,756.657 Th¢ above liability is payable as follows.. Within one year (note 9) Between one and two years Between two and fIve years After more than five y¢ars 90.773 93,891 304.793 2.461,899 88,540 91,919 293.481 2,371,257 2951356 2 845 197 A loan with CAF Bank was enlered into by the end of March 2014 and the firsi draw down of funds was made in August 2014. The CAF Bank loan totalling £700,000 will be repaid over the next 17 years, with interest being payable monthly at a rate of 4.50/0 over th¢ Bank of England Base Rate. The loan is secured on properties at 184-186 Well Street and Celia Fiennes House. During 2019120 tlie two loans from Charity Bank £700,000 and £338,005 which were in place ag at 31 March 2019 were consolidated into a new loan with a facility totalling £3.165,467, which provides an additional £2.200,000 funding for a projeets in Well Sireet. The loan. of which £2,243.017 was utilised, as at 31 March 2022 will be repaid over the next 23 years, with interest being payable monthly at a raie of 2.650/0 over the Bank of England Base Rate. Th¢ loan is sccured (>n propert1¢5 at 184-186 Well StTeet, Celia Fiennes House and 204, 206. 208. 210 and 226 Well Street. li Capital Commitments As at 31 March 2022, Ihe Trus*e had entered into capital eommitrnents totalling £518,175, subject to planiiing p¢miission, in respect of the redevelopment of the freehold investment prtsperties at 204-210 Well Strcet Hackncy. The funding for this project was secured via bank a loan from Charity Bank. As at 31 March 2022, £1,500,000 of thc £2,200,000 had been drawn down. Page 18
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 (contlnued) 12 Reeollciliatiott of net movement in funds to net cash flow from operating ctivilies 2022 2021 P4et movemen¢ in fund$ as per the statemtnt of financial ttivities Adjustments for.. 939.474 (114.228) Additions to property portfolio 1390,151) {1.180.786} Revaluation of property portfolio {424,849) 584.657 Inierest re¢eivable (21 Decre&5e {increasel in debtors 14.188 {68.1151 Increase in creditors 102 168 586 940 Net cash used In operatlng *ttivities 240,830 1915341 13 Key management personnel The Charity considers its key management personnel comprise the Directors of the Trustee. The total employment benefits, including employer pension costs of key management personnel were £nil (2021 £nil)- There We no employees in this charity in 2022 (2021 nil). Page 19
HACKNEY JOT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR EfqDED 31 MARCH 2022 (continued) 14 Endowment funds The endowment fiinds comprise the freehold property settled on the Charity at market valuation. Net movetn¢nt in funds reflects any change in the market value of the properties and the value of the loans secured against them in ihe year. General expenditure related to the properties is treated as an expense of ihe general unrestri¢led fund which has th¢ benefit of the related rental income. Balance 31 MaTch 2021 Net movement Blance in fnd JI March 2022 TTn$fer 21.903.004 {106,160) 424,849 22,221,693 B¥lanc¢ 31 MaT¢h 2020 Net movement Bxl4D¢e in fund 31 Mar¢h 2021 Transfer 22,347,629 140,032 (584,657) 21,903,004 The iransfer lo endowment funds is to bring the Ya]ue of the fund in line with the market value of the endowed property, less the loans secured against them. 15 Unreslricted fund$- eurrent yeAr 2021122 The Gen¢ral Fund has accumulated over a number of years, due to ihe Parochial Cliarities waiving their riglit to a full distribution. This e1ureS that the Charity can meet its financial commitments into the future. The Trustee acknowledge5 that it is prudent to sei aside part of the Charity's unrestricied funds for the purpose of Inaintaining the freehold properties and distribution to ils constituent charities. As such, these are included iii the accounts as design¢iied funds as follows: Balance l April 2021 Balance 31 Mare 2022 Net infomel Transfer (expenditure) General fund Estate Repairs Reserve FutUTe D¢velopm¢nts Fund 768,827 100.000 719,783 (205.158) (98,998) 205,158 1,389,612 i 00,000 300 000 1.789.612 1,168,827 514,625 106,160 Unrestricted funds- prior year 2020121 Bai¥nct l April 2020 Bg19n¢e 31 March 2021 Net ineomel Transfer {expenditure) General furkd Esta1¢ Repairs Reserve Future tkvelopments Fund 438,430 100.O(M) 300 000 838,430 670,285 (199.856) (339,888) 199,856 768,827 100.000 300 000 1,168,827 470,429 (140,032) Page 20
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 (continued) Desienated funds The Estate Repairs Reserve is dedicated for repairs of the properties. £IOO.000 is maintained in reserve to meet the immediate requirements of the Estate during the new financi year. The Future Developments Fund is dedicated to meet extraordinary and planned futu repairs on properties. The balance of net current assets (after transfer to the Estate Repairs Reserve of £IOO,000) is held in reserve at the year end. The Trusl¢es maintsined this reserve at £300,000 at the year-end to allow for planned repairs in 2022123. The Directors of th¢ Tru5t¢¢ agreed lo cortsid¢r thes¢ funds and take stttk of their requirements in future years. 16 Analysis of net assets between funds- current year 2021122 EndoiTrinent Funds GenerAI Funds Designated Funds Total Funds Invesltnents Current assets Current h"abilitie5 Long term liabilities 25,173,050 1.356,950 236,599 (203,937) 26,530.000 636,599 {294,711) {2,860,583) (90,774) {1860583) Total 22 221693 1,389,612 400,000 24 OIA 305 Analysi5 of Det assets between funds - prioryear 2020121 Endowment Genernl Designated Funds Funds Funds Total Funds Investments Current assets Current Lwbisiiies Long term ]iabiiities 24,748201 966,799 9,957 {207,929) 25,715,000 409,957 {296,469) {2,756,657) 188540) (1756,657) Total 21903 004 768 827 400 000 23 071831 Page21
HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JI MARCH 2022 (continved) 17 Connected ebarities During the year ended 31 March 2022 Hackney Joini Estates Charily made distributions to the connected charities of £300,000. Addresses, purposes and charitable data of the connected parochial charities are as follows.. The Hackney Parochial Charities Charity No.: 219876 Addres5.' 6 Trull Fami Buildings Tetbuiy Gloucestershire £150,000 {Granis Awarded by th¢ Charity- £328,912) GL8 8SQ ATea of benefit.. Former ecclesiastical parlsh of St John Hackney Purpose: Relief of poverty Distribution received: one half South Hackney Parochial Charity Charity No.- 212336 Address.. 6 Trull Farm Buildings Teibury Gloucestershire £75,000 (Grants Awarded by the Charity - £140,131) GL8 8SQ Ecclesiastical parish of South Ha¢kney Almshouses, education, relief of need one qiiarter Area of benefit-. Purposes.. Distribution received.. West Hackney Parochial Chariiies Charity No. 208941 Address.. 6 Trull Farm Buildings Tetbury Gloucestershire £75.000 (Grants Awarded by the Charity- £175.656) GL8 8SQ Area of knefit.. Ecclesiastical parish of West Hackney Purposes.. Education and youth advancement, relief of need, local benefit Distribution rec¢ived.. one quarter Page 22
HACKNEY JOINT ESTATE CHARITY The following pages are for MANAGEMENT PURPOSES ONLY. the information does not form part of the Financial Statements on Ivhich the Independent Auditor has reported.
HACKNEY JOINT ESTATE CHARITY REVENUE ACCOUNT YEAR ENDED 31 MARCH 2022 31 March 2022 31 March 2021 Net ineome from properties Reni and service charges receivable 1,485,768 1,508.660 Deduct direct expenditure Genera] rate5 Repairs Vyner Court- lighting and caretaking Kenton Road- lighting and caretaking Tcrrare Road- lighting and caretaking Valentine Road- lighting and caretaking Well Sir¢¢t- phone, lighting and Caretaking Commission on collection of rents Insurance premiums Estate agent's fees Bad debts and provision for rent in arrears 39,363 205,158 4,393 1,238 14 898 61,355 199,856 3,241 1,477 270 2,101 59,356 97.339 33,580 4,727 48,369 85.130 32,339 16,267 117534 1,080,019 940,721 Miscellaneous revenue Other incorne Dep051t and bank interest Gross surplus 1,080,019 940,723 Indirect expenditure Remuneration of the Clerk- The Trust Partnership Trusi administration- The Trust Partnership Legal and professional charges Bookkecping and accounlancy Audit and a¢¢ount8ncy Miseellaneou5 Mortgage interest Mortgage legal and arrangement fee 37,455 40,282 9,436 85,169 12,349 7,324 4,263 95,113 17,484 22,268 13,967 10.230 1,822 77,825 265 394 814.625 210294 730,429 Net income for the ye4r Distributions The Hackney Parochial Charities South Haekney Paro¢hial Charities West Hackney Parochial Charities 150,000 75,000 130,000 65,000 260 000 470.429 Net surplus for the year 514.625 Page 23