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2023-03-31-accounts

HACKNEY JOINT ESTATE CHARITY

Charity Registration No. 219875

HACKNEY JOINT ESTATE CHARITY

REPORT AND FINANCIAL STATEMENTS

31 MARCH 2023

HACKNEY JOINT ESTATE CHARITY

Page
Legal and administrative information 1
Report of the Trustee 2
Independent auditor’s report 5
Statement of financial activities 8
Balance sheet 10
Statement of cashflows 11
Notes to the financial statements 12

HACKNEY JOINT ESTATE CHARITY

LEGAL AND ADMINISTRATIVE INFORMATION

Governing Instrument Charity Commission Scheme dated 1 March 1898 as amended by Scheme dated 24 August 2004 and Scheme dated 23 July 2010. Trustee Hackney Endowed Trustee Limited. The Trustee is the o owner of the assets and liabilities of the Charity. Directors of the Trustee Hackney Parochial Charities Ms M Cannon Councillor C Kennedy Mr A Hilton Cllr. R Chapman Cllr. S Patrick South Hackney Parochial Charity Mr D Paul-Worika Mrs J Andrews Cllr. J Ogunndemuren (appointed 31 Jan 23) West Hackney Parochial Charities Mr I Malik (Chair) Ms K Johnson Reverend Justin Gau Charity registered number 219875 Clerk to the Trustee Kellie Carson The Trust Partnership 6 Trull Farm Buildings Tetbury Gloucestershire GL8 8SQ Auditor Dunkley’s Woodlands Grange Woodlands Bradley Stoke Bristol BS32 4JY Property Agents Strettons Ltd Central House 189 - 203 Hoe Street London E17 3SZ Legal advisors Charles Russell Speechly LLP 5 Fleet Place London EC4M 7RD Bankers CAF Bank 30 Old Broad St, London EC2N 1HT Clydesdale Bank 154-158 Kensington High St London EC2N 1HT

Page 1

HACKNEY JOINT ESTATE CHARITY

REPORT OF THE TRUSTEE

The financial statements have been prepared in accordance with the accounting policies set out on pages 12 to 14 of the attached accounts and comply 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 in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

The year

These accounts record the 417th 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 line with the 1898 Scheme, the income from these assets is used to repair and insure the property with the remaining income being distributed to three parochial charities in the Borough of Hackney. These bodies appoint the Directors of the Corporate Trustee known as Hackney Endowed Trustee Ltd.

Structure, governance and management

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 Hackney comprising long and short residential leaseholds, shops, and office/commercial units. The Trustee regards itself as accountable to the three beneficiary grant-making charities: Hackney Parochial Charity, West Hackney Parochial Charity, and South Hackney Parochial Charity. In turn, the Parochial Charities, who are individually registered with the Charity Commission, make grants to local causes in need, such as youth groups, parenting groups and individuals in need, as well as providing social housing through almshouses.

Director appointment

There was one appointment during the year – that of Councillor J Ogunndemuren effective 31[st] January 2023. The constitution and governance is kept under review and no major change has been seen, as necessary. Directors are appointed to the Corporate Trustee, Hackney Endowed Trustee Limited and are put forward by Hackney Parochial Charities, South Hackney Parochial Charity and West Hackney Parochial Charities, in accordance with the governing documents.

Operations

The Directors of the Trustee meet quarterly with standing arrangements and delegations permitting 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, but instead facilitates the decision making of the directors and executes those decisions. The committee consists of three or more board Directors, each also representing their constituent charity (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 Trustee 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 basis. The Directors receive no remuneration.

Risk management

The Charity regularly reviews its risk policies and procedures. Directors maintain a risk register which is regularly updated and considered at quarterly meetings by the Board of Directors. The impact of the Covid19 pandemic on operations, activities and future plans is considered below. In terms of the impact of the pandemic on risk, Directors consider the main impact to be a reduced 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 to be:

Financial Risk - Properties remaining vacant awaiting redevelopment. Reduction in income from rents from market fluctuations especially during and after the Covid pandemic. Reduced asset valuation in real 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 management (continued)

Mitigation - Regular Board meetings with commercial agents, Strettons, to review empty properties and ensure rent reviews and collections are conducted on time. Strategic review of asset management planned. Additional Director meetings with project managers and advisors during the pandemic and the refurbishment.

Statement of Trustee’s responsibilities

The Trustee is responsible for preparing the Trustees’ report and accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires the Trustee to prepare accounts for 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:

The Trustee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the accounts 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 and activities

The object of the Charity is to manage its endowed property portfolio to maximise the net rental income (after costs) for distribution to three beneficiaries: Hackney Parochial Charities, South Hackney Parochial Charities and West Hackney Parochial Charities. The Trustee continues to implement its ten-year strategy and to reaffirm its mission statement to achieve the Charity’s objective whilst to contributing to the local community in Hackney. The main activity throughout the year has been to maintain the property portfolio in order to protect its value for the long term. 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 distribute surplus income to three individual parochial charities each charity with separate identifiable objectives to relieve hardship and need to the public within the local community. A distribution of £300,000 was made in the year. (2022 - £300,000).

Page 3

HACKNEY JOINT ESTATE CHARITY

REPORT OF THE TRUSTEE

Achievements, performance and financial review

During the year gross property revenues increased by 6.05% from £1,485,768 for the year ended 31 March 2022 to £1,575,597 for the year ended 31 March 2023, which is considered a return to trend after a dip in income in 2021-22, which was primarily due to loss of income from commercial rents during the pandemic. Expenditure for the year increased by 21.6% from £971,143 for the year ended 31 March 2022 to £1,181,166 for the year ended 31 March 2023. This is primarily due to an increase in mortgage costs and legal and professional fees. In the prior year, the Charity increased the distribution to the three parochial charities from £260,000 in 2020-21, to £300,000 in 2021-22. No further increase has been proposed in the current year.

The Charity’s objective is to continue to provide residential and commercial lettings to generate income to maintain the estate, principally in order that it may provide for the annual distribution to the parochial charities. The Directors of the Trustee have reviewed the performance of the Charity during the year against objectives set and are satisfied that the objectives have been met.

The valuation of investment properties in the accounts at 31 March 2023 has been calculated by the directors by reference to a desktop valuation performed by Strettons Ltd on behalf of the charity at 31 March 2022, and estimates of movements in property valuations since that date. This resulted in a loss on revaluation of £1,040,616 for the year ended 31 March 2023 (2022: gain of £424,849).

The Trustee continues to invest into the modernisation of the property portfolio and has commissioned an asset management plan to determine the levels of investment required to ensure the portfolio has longevity and attracts full marketing rent to maximise income. The asset management programme will enable the Trustee to ensure sufficient income is ringfenced for the future investment in the portfolio.

A capital programme of works continues to improve the quality of the portfolio and increase the annual passing rent that can be achieved for both residential and commercial properties. Directors have commissioned the final stages of the 204-210 Well Street project, which will provide an additional four residential units. The project is anticipated to be completed by 2024. The refurbishment of 192a, 194a, 200a and 234a Well Street (all residential units) has been completed and all units have been let to a total value of £92,400 passing rent per annum.

No fundraising activities were undertaken during the year.

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 £313,791 at 31 March 2023. The Trustee believes that the anticipated income for the year ending 31 March 2024, together with the cash balance of £240,214 as at 31 March 2023 is sufficient to cover these commitments and liabilities. At 31 March 2023 the Charity had Endowment funds of £22,261,013 (2022 - £22,221,693), and designated funds of £400,000 (2022 - £400,000). This left the Charity with general unrestricted funds of £1,704,931 (2022 - £1,389,612).

The Trustee is of the opinion that the Charity has made a good recovery from the additional challenges of the pandemic in 2022, and that it will continue to have sufficient resources to meet its liabilities as they fall due.

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 market. In the previous financial reporting period, Directors had reassessed the financial commitment required and had decided not to proceed.

In the current year, ‘The Triangle Working Party’ has reconvened and following a tender process commissioned a local Architect firm, to review the previous options for the redevelopment of the site. The proposal is to refurbish the existing site, rather than redevelopment. The Working Party will further consider in conjunction with various professional advisors the future possibilities for this site.

Approved by the Trustee and signed on its behalf on:

.………………………… Director of the Trustee

Page 4

HACKNEY JOINT ESTATE CHARITY

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITY

Opinion

We have audited the accounts of Hackney Joint Estate Charity (the ‘charity’) for the year ended 31 March 2023 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 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 accounts:

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 accounts section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts 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 accounts, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the accounts is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the accounts 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 and accounts, other than the accounts and our auditor’s report thereon. Our opinion on the accounts does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts 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 accounts 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion:

Page 5

HACKNEY JOINT ESTATE CHARITY

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITY

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees are responsible for the preparation of the accounts 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 accounts that are free from material misstatement, whether due to fraud or error.

In preparing the accounts, the trustees are responsible for assessing the charity’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 charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the accounts

Our objectives are to obtain reasonable assurance about whether the accounts 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 accounts.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the charity’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur. Audit procedures performed by the engagement team included:

Auditor’s responsibilities for the audit of the accounts (continued)

Page 6

HACKNEY JOINT ESTATE CHARITY

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEE OF HACKNEY JOINT ESTATE CHARITY

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

As a result of our procedures we did not identify any key audit matters relating to irregularities.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the accounts is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charity’s trustees, as a body, in accordance with section 144 of the Charities Act 2011 and with regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity’s trustees 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 charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Dunkley's Chartered Accountants Registered Auditors Woodlands Grange Woodlands Lane Bradley Stoke Bristol BS32 4JY

Date: .............................................

Page 7

HACKNEY JOINT ESTATE CHARITY

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2023

Notes
Income from:
Rent receivable 3
Interest receivable
Total income
Expenditure on:
Cost of raising funds
4
Charitable activities
Distributions
17
Total expenditure
Net income/(expenditure)
Transfer between funds
14/15
Gain/(loss) on investment properties
7
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward		 General
Estate Repairs
Funds
Reserve
£
£
1,575,597
-
824
-
1,576,421
-
671,487
209,679
300,000
-
971,487
209,679
604,933
(209,679)
(289,614)
209,679
-
-
315,319
-
1,389,612

100,000

1,704,931
100,000		 Future
Development
Reserve
£
-
-
-
-
-
-
-
-
-
-

300,000
300,000		 Endowment
Funds
£
-
-
-
-
-

-
-
79,935
(1,040,616)
(960,680)
22,221,693
21,261,013
Total Funds
2023
£
1,575,597

824
1,576,421
881,166

300,000

1,181,166
395,254
-

(1,040,616)
(645,361)
24,011,305

23,365,944		 Total Funds
2022
£
1,485,768
-
1,485,768



671,143

300,000
971,143





514,625
-
424,849
939,474

23,071,831
24,011,305

The notes on pages 12 to 22 form part of these accounts. All of the charity’s activities derived from continuing operations during the above two financial periods.

Page 8

HACKNEY JOINT ESTATE CHARITY COMPARATIVE INFORMATION

Analysis of income and expenditure in the year ended 31 March 2022 between general, designated and endowment funds.

General
Notes
Funds
£
Income from:
Rent receivable 3
1,485,768
Interest receivable
-
Total income
1,485,768
Expenditure on:
Cost of raising funds
4
465,985
Charitable activities
Distributions
17
300,000
Total expenditure
765,985
Gain on revaluation of investment
properties

Net income/(expenditure)
719,783
Transfer between funds
14/15
(98,998)
Loss on investment properties
Net movement in funds
620,785		 Estate Repairs
Reserve
£
-
-
-
205,158
-

205,158

(205,158)
205,158
-		 Future
Development
Reserve
£
-
-
-
-
-
-
-
-
-		 Endowment
Funds
£
-
-
-
-
-
-
-
(106,160)
424,849
318,689



Total Funds
2022
£
1,485,768
-

1,485,768

671,143

300,000


971,143
514,625
-

424,849
939,474







Page 9

HACKNEY JOINT ESTATE CHARITY

BALANCE SHEET
31 MARCH 2023
Notes
Fixed assets
Investment property
7
Current assets
Debtors
8
Cash at bank and in hand
Current liabilities
Creditors: amounts falling due
within one year
9
Net current assets
Creditors: amounts falling due
after more than one year
10
Net assets
Represented by:
Endowment funds
14
Unrestricted funds
15
Designated funds
15
General funds
15
Approved by the Trustee on
Councillor R Chapman )
Mr I Malik ) Directors		 £
217,051
240,214
457,265
(313,791)
 2023
£
26,000,000

143,474
(2,777,530)
23,365,944
21,261,013
400,000
1,704,931
23,365,944
2023 signed on its		 £
261,802
374,797
636,599
(294,711)
behalf by:		 2022
£
26,530,000
341,888
(2,860,583)

24,011,305
22,221,693
400,000
1,389,612
24,011,305

The notes on pages 12 to 22 form part of these accounts.

Page 10

HACKNEY JOINT ESTATE CHARITY

STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2023

Note
Cash flows from operating activities:
Net cash provided by operating activities
12
Cash flows from investing activities:
Interest received
Net cash provided by investing activities:
Change in cash and cash equivalents in the year
Cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 12 to 22 form part of these accounts.		 2023
£
(135,406)
824
824
(134,583)
374,797
240,214		 2022
£
240,830
-
-
240,830
133,967
374,797

Page 11

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023

1. Accounting policies

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

1.1. Basis of accounting

The financial statements have been prepared for the year to 31 March 2023.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 1 January 2019 and Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and Charities Act 2011.

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. Critical accounting estimates and areas of judgement

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

The items in the accounts where these judgements and estimates have been made include:

1.3. Assessment of going concern

The Trustee has assessed whether the use of the going concern assumption is appropriate in preparing these financial 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 that may cast significant doubt on the ability of the Charity to continue as a going concern. The Trustee is of the opinion that the Charity has made a good recovery from the additional challenges of the pandemic in 2022, and that it will continue to have sufficient resources to meet its liabilities as they fall due.

Page 12

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023

1.4. Income recognition

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received.

Income is deferred only when the charity has to fulfil conditions before becoming entitled to it or where the donor has specified that the income is to be expended in a future accounting period. Income comprises rental income from investment property and interest receivable. Rental income from investment property is recognised when it becomes contractually due under the relevant lease or tenancy agreement and receipt is considered probable. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

1.5. Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

All expenditure 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 heading.

Expenditure comprises the following:

Grants payable are included in the statement of financial activities when approved and when the intended recipient has either received the funds or been informed of the decision to make the grant and has satisfied all related conditions.

1.6. Allocation of support and governance costs

Support costs represent indirect charitable 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 procedures, provision of office services and equipment and a suitable working environment.

Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice.

Support costs and governance costs are allocated directly to expenditure on raising funds.

~~Page 13~~

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023

1.7. Investment properties

Investment properties are included in the accounts at market value at the year end. Their valuation at 31 March 2023 has been calculated by the directors by reference to a desktop valuation performed by Strettons Ltd on behalf of the charity at 31 March 2022, and estimates of movements in property valuations since that date. At 31 March 2022 and 31 March 2021, investment properties were included in the accounts based on desktop valuation performed by Strettons Ltd as at the year-end dates. 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 historic valuations undertaken in 2009 and 2010 and internal valuations as at 31[st] March 2015.

Development costs are written off as expenditure in the year in which they are incurred. Trustees also consider the impact of capital works performed within the properties since the last full revaluation when determining 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 recognised at the settlement amount, less any provision for non-recoverability. 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 provisions

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 recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

1.11. Fund accounting

Endowment funds comprise the value of the freehold property settled on the Charity at market valuation. The Charity does not apply the total return basis in relation to its Endowment funds.

Designated funds are monies set aside of unrestricted general funds and designated for specific purposes by the trustee.

General funds represent those monies that are freely available for application towards achieving any charitable purpose that fall within the charity's charitable objects.

Further details on the nature and purpose of each fund is set out in notes 14 and 15 to the financial statements.

2 Taxation

The Charity is exempt from taxation on its income and gains where they are applied for charitable purposes.

~~Page 14~~

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023

3 Rental income

Source of rental income:
Residential
Commercial		 General funds
2023
2022
£
£
903,980
821,451
671,617
664,317
1,575,597
1,485,768

Page 15

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

4
Property expenses
Rates and water rates
Lighting and caretaking
Repairs
Miscellaneous
Commission on collection of rents
Property insurance
Legal and professional
- enforcement and collection
- rent review and new leases
- other
Estate agent’s fees
Bad debts and rent arrears provision
Mortgage legal & arrangement fee
Mortgage interest
Governance costs (see note 5)		 General
Funds
Estate Repairs
Reserves
£
£
60,668
-
91,998
-
-
209,679

4,698
-
98,261
-
48,098
-
10,137
-
80,719
-
34,452
-
885
-
23,319
-
14,000
-
150,049
-
54,203
671,487
-
209,679		 Future
Development
Reserve
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Endowment
Funds
£
-
-

-

-

-
-
-
-
-
-
-
-
-
-
-		 Total Funds
2023

£
60,668
91,998

209,394
4,698
98,261
48,098
10,137
80,719
34,452

885
23,319
14,000
150,049
54,203
881,166
Total Funds
2022
£
39,363
65,899
205,158
4,263
97,339
33,580
9,885
53,414
21,870
4,727
(40,317)
14,285
95,113
66,564

671,143

All expenditure in the year ended 31 March 2023 was made from General Funds except for repairs and maintenance where £209,679 was expended from the Estate Repairs Reserves and £nil from the Future Development Reserve. Development expenditure totalling £510,616 was capitalised as at 31 March 2023 (2022 £390,151) (see note 7).

[General Funds Total Funds] 5 Governance costs Funds 2023 2022 £ £ £ Administration fees 35,121 46,891 Accountancy fees 12,014 12,349 Auditor’s remuneration for statutory 7,068 7,324 audit

54,203 66,564

Page 16

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

6 Net income for the year

This is stated after charging:

Auditor’s remuneration (prior year)

Auditor’s remuneration (current year)
7 Investment property
Balance Property
1 April 2022 Additions
£ £
26,530,000 510,616		 2023
£
468
6,600
Revaluation

£
(1,040,616)		 2022
£
104
7,220
Balance
31 March 2023
£
26,000,000

All freehold investment properties are vested in Hackney Endowed Trustee Limited, the ‘trust corporation’ that is now the Trustee. The valuation of investment properties in the accounts at 31 March 2023 has been calculated by the directors by reference to a desktop valuation performed by Strettons Ltd on behalf of the charity at 31 March 2022, and estimates of movements in property valuations since that date. Certain properties have been used as security for bank loans and further details are provided in note 10 to these accounts.

8 Debtors and prepayments
Due from agent
Rent receivable, less specific provision
Prepayments
Other debtors
9 Creditors: amounts falling due within one year
Bank loan (note 10)
Deferred income
Other creditors
Deferred income comprises rents, service charges and
insurance refunds received in advance.
Balance as at 1 April
Amounted released to income
Amount deferred in year
Balance as at 31 March


2023
£
115,155
62,531
22,582
16,781











217,051
2023
£
93,891
127,835
92,065
313,791
2023
£
130,514
(130,514)
127,835
127,835

~~Page 17~~

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

10 Creditors: amounts falling due after more than one year

Bank loans
The 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 years		 2023
£
2,777,530
93,891
97,672
316,478
2,363,380
2,871,421		 2022
£
2,860,583
90,773
93,891
304,793
2,461,899
2,951,356

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. The CAF Bank loan totalling £700,000 will be repaid over the next 16 years, with interest being payable monthly at a rate of 4.5% over the Bank of England Base Rate. The loan is secured on properties at 184-186 Well Street and Celia Fiennes House.

During 2019/20 the two loans from Charity Bank £700,000 and £338,005 which were in place as 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 projects in Well Street. The loan, of which £2,309,112 was utilised, as at 31 March 2023 will be repaid over the next 22 years, with interest being payable monthly at a rate of 2.65% over the Bank of England Base Rate. The loan is secured on properties at 184-186 Well Street, Celia Fiennes House and 204, 206, 208, 210 and 226 Well Street.

11 Capital Commitments

As at 31 March 2023, the Trustee had entered into capital commitments totalling £487,128, subject to planning permission, in respect of the redevelopment of the freehold investment properties at 204-210 Well Street Hackney. The funding for this project was secured via bank a loan from Charity Bank. As at 31 March 2023, £1,500,000 of the £2,200,000 had been drawn down.

Page 18

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

12
Reconciliation of net movement in funds to net cash
Net movement in funds as
per the statement of financial activities
Adjustments for:
Additions to property portfolio
Revaluation of property portfolio
Interest receivable
Decrease in debtors
(Decrease) / Increase in creditors
Net cash used in operating activities		 flow from operating activities
2023
2022
£
£
(645,361)
939,474
(510,616)
(390,151)
1,040,616
(424,849)
(824)
-
44,751
14,188
(63,973)
102,168
(135,406)
240,830

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 (2022 - £nil). There were no employees in this charity in 2023 (2022 - nil).

Page 19

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

14 Endowment funds

The endowment funds 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 secured against them in the year. General expenditure related to the properties is treated as an expense of the general unrestricted fund which has the benefit of the related rental income.

Balance Net movement Balance 31 March 2022 Revaluation in fund 31 March 2023 £ £ £ £ 22,221,693 79,935 (1,040,616) 21,261,013 Balance Net movement Balance 31 March 2021 Revaluation in fund 31 March 2022 £ £ £ £ 21,903,004 (106,160) 424,849 22,221,693

The transfer to endowment funds is to bring the value of the fund in line with the market value of the endowed property, less the loans secured against them.

15 Unrestricted funds – current year 2022/23

The General Fund has accumulated over a number of years, due to the Parochial Charities waiving their right to a full distribution. This ensures that the Charity can meet its financial commitments into the future.

The Trustee acknowledges that it is prudent to set aside part of the Charity’s unrestricted funds for the purpose of maintaining the freehold properties and distribution to its constituent charities. As such, these are included in the accounts as designated funds as follows:

Balance
1 April
2022
£
General fund
1,389,612
Estate Repairs Reserve
100,000
Future Developments Fund
300,000
1,789,612
nrestricted funds – prior year 2021/22
Balance
1 April
2021
£
General fund
768,827
Estate Repairs Reserve
100,000
Future Developments Fund
300,000
838,430		 Net income/
(expenditure)
£
604,933
(209,394)
-
395,254		 Net income/
(expenditure)
£
604,933
(209,394)
-
395,254
Revaluation
£
(289,614)
209,394
-

(79,935)
Revaluation
£
(289,614)
209,394
-

(79,935)		 Balance
31 March
2023
£
1,704,931
100,000
300,000
2,104,931
(79,935)
Net income/
(expenditure)
£
719,783
(205,158)
-
514,625
Revaluation
£
(98,998)
205,158
-

106,160		 Balance
31 March
2022
£
1,389,612
100,000
300,000
514,625 106,160
1,789,612

Unrestricted funds – prior year 2021/22

~~Page 20~~

HACKNEY JOINT ESTATE CHARITY

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

Designated funds

The Estate Repairs Reserve is dedicated for repairs of the properties. £100,000 is maintained in reserve to meet the immediate requirements of the Estate during the new financial year.

The Future Developments Fund is dedicated to meet extraordinary and planned future repairs on properties. The balance of net current assets (after transfer to the Estate Repairs Reserve of £100,000) is held in reserve at the year end. The Trustees maintained this reserve at £300,000 at the year-end to allow for planned repairs in 2023/24.

The Directors of the Trustee agreed to consider these funds and take stock of their requirements in future years.

16 Analysis of net assets between funds – current year 2022/23

Page 21

~~Page 21~~

HACKNEY JOINT ESTATE CHARITY NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2023 (continued)

17 Connected charities

During the year ended 31 March 2023 Hackney Joint Estates Charity 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 £150,000 (Grants Awarded by the Charity - £347,540) Charity No.: 219876 Address: 6 Trull Farm Buildings Tetbury Gloucestershire GL8 8SQ Area of benefit: Former ecclesiastical parish of St John Hackney Purpose: Relief of poverty Distribution received: one half South Hackney Parochial Charity £75,000 (Grants Awarded by the Charity - £192,543) Charity No.: 212336 Address: 6 Trull Farm Buildings Tetbury Gloucestershire GL8 8SQ Area of benefit: Ecclesiastical parish of South Hackney Purposes: Almshouses, education, relief of need Distribution received: one quarter West Hackney Parochial Charities £75,000 (Grants Awarded by the Charity - £151,616) Charity No.: 208941 Address: 6 Trull Farm 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

~~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 which the Independent Auditor has reported.

Net income from properties
Rent and service charges receivable
Deduct direct expenditure
General rates
Repairs
Vyner Court – lighting and caretaking
Kenton Road – lighting and caretaking
Terrace Road – lighting and caretaking
Valentine Road – lighting and caretaking
Well Street – phone, lighting and
Caretaking
Commission on collection of rents
Insurance premiums
Estate agent’s fees
Bad debts and provision for rent
in arrears
Miscellaneous revenue
Other income
Deposit and bank interest
Gross surplus
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
Net income for the year
Distributions
The Hackney Parochial Charities
South Hackney Parochial Charities
West Hackney Parochial Charities
Net surplus for the year








60,668
209,679
6,271
1,088
16
843
83,781
98,261
48,098
885
23,319
23,072
12,049
125,308
12,014
7,068
4,698
150,049
14,000
150,000
75,000
75,000		 31 March 2023
£
1,575,597








532,908		 31 March 2023
£
1,575,597








532,908








39,363
205,158
4,393
1,238
14
898
59,356
97,339
33,580
4,727
(40,317)
37,455
9,436
85,169
12,349
7,324
4,263
95,113
14,285
150,000
75,000
75,000		 31 March 2022
£
1,485,768
405,749
1,080,019
-
-
1,080,019
265,394
814,625



300,000
514,625





























1,042,689
-
824
1,043,513

348,259
695,254



300,000
395,254











Page 23