## **CHABAD LUBAVITCH UK**
## **CHARITY REGISTRATION NUMBER 227638**
## **ANNUAL REPORT AND ACCOUNTS**
**FOR THE YEAR ENDED 31 DECEMBER 2021**
1
## **LEGAL AND ADMINISTRATIVE INFORMATION**
Address: Lubavitch Foundation 107-115 Stamford Hill London N16 5RP Corporate Trustee: Lubavitch (UK) Limited
Central Administration: Rabbi Isaac Hirsh Sufrin - Trustee Elizabeth Heycock – Finance Director Jon Benjamin – Chief Operating officer Independent Auditors: Goldwins 75 Maygrove Road West Hampstead London NW6 2EG Principal Bankers: Barclays plc Level 12 1 Churchill Place London E14 5PH
2
## **Report of the Trustee for the Year Ending 31 December 2021**
## **Objectives and Activities**
Chabad Lubavitch UK’s charitable objects are the advancement and promotion of the Orthodox Jewish religion by providing facilities for the study of and instruction in Jewish religious literature; by the advancement of public education including education in the Orthodox Jewish faith and the provision of ancillary recreational facilities; by the provision of school rooms, meeting rooms and ancillary facilities for persons of the Jewish faith; and by the provision of financial assistance to persons of the Jewish faith who are in need to enable them to observe and perform the rites and practices of the Jewish religion.
We keep the ethos of the Lubavitch movement at the core of our activities when delivering these objectives by unconditionally providing a welcoming open door to Jewish people from all walks of life, by making Judaism accessible and relevant by empowering individuals to develop, associate, identify and participate, by caring for and supporting the welfare of Jewish people and communities with devotion and affection no matter the time, place or need and by educating a generation of dedicated and skilled community leaders who live by the words, "Love your fellow as yourself".
Whether through Chabad Houses, activities on university campuses, events throughout the year across the country, educational programmes or through our network of schools, the charity engages with thousands of beneficiaries of all ages and backgrounds. And in times of personal crisis, our Shluchim (local emissaries) are on hand to support those suffering loss, bereavement or other challenges.
## **Public Benefit**
The Trustee and its officers have regard to Section 17 of the Charities Act 2011 and the Charity Commission’s guidance on public benefit in delivering the charity’s various activities and consider that the ‘open door’ approach when reaching out to beneficiaries across the community reflects and fulfils the charity’s legal obligation to ensure that there is a public benefit in everything that the charity strives to do.
## **Safeguarding**
The charity takes the safeguarding of young people and other vulnerable persons extremely seriously and has, since 2015, worked closely with the NSPCC to develop and implement a comprehensive safeguarding policy and ensure that all relevant persons receive frequent periodic training appropriate to their roles. The policy is kept under constant review, in consultation with the NSPCC, and procedures have been established to ensure that all are fully aware of and implement the policy and understand their responsibilities. New employees are fully vetted and DBS checked and periodic update check then take place subsequently.
## **Our thanks**
We would like to thank all of our partners, supporters and friends for their continuing encouragement and assistance. We are grateful to all those who have given so much time and commitment to the advancement of the charity and its objectives.
We would also like to thank the professional team and the many members of our community who, due to the outgoing nature of our philosophy, so generously volunteer their time, and we would like to extend our heartfelt appreciation for their loyalty and ongoing support for the charity. As team members, they have often put aside personal needs and worked together to realise some of the charity’s key aspirations
3
and targets. Without the personal efforts that all on the team have made, none of our many achievements would have been possible.
## **Achievements and performance: Summary of some of our key activities in 2021**
## **Chabad Houses, present and future**
Our network of Chabad houses in towns and cities across the country, serve communities and university campuses and play a vital role in bringing Jewish knowledge and practice to thousands of beneficiaries every year through a range of innovative programmes and activities. With the effects of the Covid pandemic still evident in 2021, many of these activities continued online, often reaching even greater numbers of participants as a result, and our Shluchim and volunteers also rallied to the needs of communities and individuals isolated and apart from family and friends, particularly during the Festivals. Pesach, Rosh Hashanah and Chanukah ‘in a Box’ saw thousands of
festive food, educational and spiritual items distributed across the country so that no one needed to miss out on observing and celebrating these important spiritual events.
We continued to seek and implement advice about safe Covid practices to protect those engaging in our activities and to educate and explain about the pandemic and the vaccine response, using Rabbinic and Medical Experts.
As well as those that are formally part of the Chabad Lubavitch UK, we work closely with independent Chabad Centres under the umbrella of the international Chabad Lubavitch movement, providing professional and other support and guidance, and coordinating activities with our colleagues. We are indebted to all of our Shluchim and their families for their selfless commitment to the needs of those they serve, on Jewish festivals, Shabbatot and throughout the year.
Some of the speakers at Oxford Chabad in the last year.
## **Holiday Camps**
As lockdown restrictions eased over the summer, children and adults were eager to welcome the return of our always popular school holiday camps. Huge efforts were made to ensure the Covid safety of our activities and bubbles took on a new meaning for the children!
Over 1,900 Children attended camps with Chabad’s Camp Gan Israel Network around the UK. Many of the places were heavily subsidised, enabling children to enjoy a meaningful summer experience regardless of their parents’ ability to pay and irrespective of their family’s level of religious observance.
This included many children normally eligible for free school meals during term time, meaning that they received a meal that they might not otherwise have received at home during the holidays.
4
## **Lubavitch Children's Centre**
The Centre is a purpose built, state of the art facility in Stamford Hill, London, providing culturally sensitive child and adult services in a comfortable, welcoming and multi-lingual environment. The Centre offers a one-stop shop of services for children from infancy, and their parents and carers with a range of programmes to promote the physical and emotional wellbeing of families, support for new parents and practical activities and courses such as first aid, health advice, household budgeting, healthy eating and exercise classes. The Centre ensures to support the community with all its immediate needs, including physical (such as immunisations during the measles outbreak) and spiritual (Festival/Holiday Programmes).
The nursery provides high quality day-care in a warm and nurturing environment for ages 0 - 4 years old, and care for children with additional needs when necessary. As well as feeding children's minds, the Centre feeds their bodies with Kosher, hot, balanced three-course meals packed with fruit and vegetables.
Some 100 children and family members make use of the Centre on an average weekday. Annually we support over 3,000 families. We are supported in our efforts by Hackney Education and we have strong partnerships with Local Authorities in our area, with the Homerton and Whittington hospitals and with health trusts, the GP confederation, Hackney Ark and local voluntary family support organisations.
Restarted services are now almost back to our pre-Covid schedule. We have been able to continue providing 60 families every week with vouchers for fruit and vegetables and have manage to obtain grants to support 80 families with vouchers to purchase food for the Jewish holidays.
We have also been able to support many families to obtain financial support to cover energy bills as well
as a council tax reduction.
Most recently we have started supporting a few refugees from the Ukraine.
Another project we are heavily involved with is our immunisation clinic that is currently very busy due to the current polio scare.
As times moves on, we continue to do our best to support the community through whatever struggles they are facing.
## **CTeen Chabad Teen Network**
CTeen aims to provide a nurturing environment where teens can learn about themselves through giving to others, identify with individuals who share the same faith, and be part of a group that focuses on building core values and stresses positive character development. CTeen delivers a comprehensive curriculum based on a three-part framework; Educational, Humanitarian and Social.
## **Educational**
CTeen places education at the forefront, ensuring every programme is designed to enhance the development of important life skills.
5
## **Humanitarian**
CTeen helps teens build compassion toward others by giving back to the community through various humanitarian projects, helping those in need in wider society. Local events include volunteering with other charities such as soup kitchens for
those in need and charities helping children suffering from a variety of illnesses. Many participants have helped distributing festive foods and other items to help the vulnerable and isolated celebrate Festivals during the pandemic.
Leeds CTeens packing festival gift boxes.
## **Social**
CTeen builds social skills though positive affiliations, ensuring personal growth in a society where working together is the key to advancement.
## **CTeen College-Prep**
CTeen also offers a wonderful preparation and transition from secondary school to further education. CTeen members are guaranteed to find a ‘home-away-from-home’ when they enrol in a university featuring **Chabad on Campus** , which has student centres at 14 institutions across the country.
## **Jewish Learning Institute (JLI)**
JLI is the adult education arm of Chabad Lubavitch. Its mission is to make Jewish learning accessible and personally meaningful to every Jew, regardless of background or affiliation. JLI's insightful curricula utilise cutting-edge pedagogic techniques, embracing the ‘multiple intelligence’ model and utilising multimedia and an array of approaches to engage, educate, and inspire all kinds of minds in a dynamic Jewish learning experience **.**
6
**Financial Review**
## **Income and Expenditure**
Income in 2021 increased to £6,017,466 from £5,331,903 in 2020. During 2021 overall costs increased to £5,549,709 from £5,409,139 in 2020. This resulted in a net surplus for the year of £467,757 compared to a deficit the year before of £77,236. Included in the accounts is depreciation of £403,668 (2020 £479,807).
## **Principal risks**
The directors of the corporate Trustee, working with the Council of Management, have identified the major risks to which the charity may be exposed and have taken the necessary steps to monitor and control these to mitigate any impact they may have on the charity in the future. This includes continuing to keep under review and to update where necessary all of the charity’s governing and policy documents and financial systems.
The Council of Management receives reports from the Chabad Houses, branch locations and other operational areas regarding the services provided and adapts the supply of services responsively to changes in demand.
The charity is reliant on the continued philanthropic support of donors who gift approximately 55% of current income.
The Council of Management also reviews the performance of the charity's property portfolio. The properties are included in the balance sheet at their estimated market value. There is always a risk that property values might go down. To mitigate such risk, properties are formally valued approximately every five years by professional surveyors and are reviewed annually to ensure that the most recent formal valuation is still reasonable.
## **Governance**
As stated above, the directors of the corporate Trustee, together with the Council of Management, have undertaken a thorough and extensive review of the charity’s policies and processes and its satellite branches on matters of internal financial policy, control and risk. Care is taken to ensure that published financial statements comply with statute and accounting standards and the Charities SORP.
The Council oversees the relationship with the external auditor including approval of the audit plan and scope of the audit, an annual assessment of the auditor's independence and review of the level of fees payable for non-audit services.
## **Reserves policy**
Reserves are needed to bridge any funding gaps between commitments to educational and outreach activities and receiving resources through voluntary donations and grants. The Trustee has established a target level of reserves to protect the organisation and its charitable programmes by providing time to adjust to changing financial circumstances. It is considered that the minimum level of reserves as at 31 December 2021 would be £750,000 based on a sense of the likely impact on programmes that might be caused by a decline in income or an inability to reduce expenditure in the immediate short term. The unrestricted reserve has passed this value, and the trustees will monitor cash resources to consider investment in an income producing endowment to reduce long term dependence on donations and grants.
7
## **Looking to the future**
The Board of Directors and Council of Management are constantly looking at ways to develop and enhance the charity’s operations and the support it provides to Chabad branches and activities across the country. This includes identifying areas that are currently underserved with a view to opening branches in those locations, whilst also exploring ways to increase the sharing of resources and expertise among branches and affiliated organisations. This will help control overheads whilst providing more practical support to branches and avoiding areas of overlap.
## **Legal and administrative details**
The charity's financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statement below, and comply with applicable laws and the Charities SORP (FRS 102).
This trustees' report has been prepared in accordance with Part 8 of the Charities Act 2011.
## **Structure, governance and Management Statement of Trustees' responsibilities**
Chabad Lubavitch UK is governed by a Declaration of Trust dated 17[th] October 2018, which superseded a Declaration of Trust dated 21[st] January 1959 (as amended).
Trustee: The charity is governed by the Board of Directors of the corporate trustee Lubavitch (UK) Limited (Company No. 02932344), which is responsible for setting the charity's strategy, for ensuring good governance and that it fulfils its objectives of delivering public benefit.
The directors of the corporate trustee are:
- Rabbi Y Angyalfi
- Rabbi P Efune
- Rabbi I H Sufrin
- Mr Michael Rabin
- Mr Stephen Chevern
Organisation: The Board of Directors of the Trustee convene periodically, but a minimum of four times per year.
The Board of Directors is assisted by a Council of Management, which meets approximately every three weeks. Three new members joined the Council of Management during the year, signalling its ongoing commitment to enhance further its members’ knowledge and experience and to strengthen its connections to Chabad activities around the country. Members during the year were:
- Rabbi Y Angyalfi
- Rabbi S Arkush
- Rabbi N Dubov
- Rabbi P Efune
- Rabbi M Junik
- Rabbi D Katz
- Rabbi M Korer
8
- Rabbi S Lew
- Rabbi Y Pink
- Rabbi L Sudak
- Rabbi B Sudak
- Rabbi A M Sufrin
- Rabbi I H Sufrin
The Charities Act 2011 requires the trustees to prepare accounts for each financial year which give a true and fair view of its financial activities during the year and of its financial position at the end of the year. In preparing these accounts, the trustees should follow best practices and;
- Select suitable accounting policies and then apply them consistently;
- Observe the methods and principles of the Charity SORP;
- Make judgements and estimates that are reasonable and prudent;
- State whether applicable UK Accounting Standards have been followed; and
- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
Remuneration of trustees and senior management: The corporate trustee and its directors are not remunerated for their services as trustees of the charity. Where directors of the corporate trustee or members of their families carry out other roles in their capacities as rabbis/teachers (all of which roles existed before they became directors), they are remunerated at appropriate market rates but decisions about remuneration are only made after each has recused himself from the decision-making process, which is undertaken by the Council of Management. This arrangement has been endorsed by way of a Scheme approved by the Charity Commission. Transactions with related parties are disclosed in the notes to the financial statements. Remuneration of other senior personnel is similarly determined by reference to market rates and by the directors of the corporate trustee in conjunction with the Council of Management, subject to taking all necessary steps to avoid any actual or perceived conflicts of interest.
By order and on behalf of the Corporate Trustee, Lubavitch (UK) Limited
## **Signed:**
## **Rabbi I H Sufrin (Director)**
**24 October 2022**
9
## **INDEPENDENT AUDITORʼS REPORT TO THE TRUSTEE OF CHABAD LUBAVITCH UK**
## **Opinion**
We have audited the financial statements of Chabad Lubavitch UK (the ‘Charity’) for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
- give a true and fair view of the state of the Charity’s affairs as at 31 December 2021 and of its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
- have been prepared in accordance with the requirements of the Charities Act 2011.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRCʼs Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
## **Other information**
The trustee is responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
10
## **INDEPENDENT AUDITORʼS REPORT TO THE TRUSTEE OF CHABAD LUBAVITCH UK**
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the Charity and environment obtained in the course of the audit, we have not identified material misstatements in the Trustee’s Annual Report.
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:
- sufficient accounting records have not been kept;
- the financial statements are not in agreement with the accounting records and returns; or
- we have not obtained all the information and explanations necessary for the purposes of our audit.
## **Responsibilities of the trustee**
As explained more fully in the trustee’s responsibilities statement in the trustee’s report, the trustee is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustee is 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 trustee either intend to liquidate the Charity or to cease operations, or have no realistic alternative but to do so.
## **Our responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud are set out below.
11
## **INDEPENDENT AUDITORʼS REPORT TO THE TRUSTEE OF CHABAD LUBAVITCH UK**
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
- We enquired of management, which included obtaining and reviewing supporting documentation, concerning the charity's policies and procedures relating to the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
- We reviewed the financial statement disclosures and tested these to supporting documentation to assess compliance with applicable laws and regulations.
- In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments, assessed whether the judgements made in making accounting estimates are indicative of a potential bias and tested significant transactions that are unusual or those outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: [www.frc.org.uk/auditorsresponsibilities]. This description forms part of our auditor’s report.
This report is made solely to the Charity’s trustee, as a body, in accordance with section 144 of the Charities Act 2011 and the regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the Charity’s trustee 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 trustee as a body, for our audit work, for this report, or for the opinions we have formed.
**…………………………………… Goldwins Limited Statutory Auditor Chartered Accountants 75 Maygrove Road West Hampstead London NW6 2EG**
## **24 October 2022**
Goldwins Limited is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
12
## CHABAD LUBAVITCH UK Statement of financial activities
(incorporating an income and expenditure account) For the year ended 31 December 2021
|Endowment
funds
Note
£
Income from:
Donations and legacies
3
-
Grants
3
-
Charitable activities:
4
Outreach and Education
-
Other trading activities:
Functions and events
5
-
Investment activities
6
-
Other income
7
-
Total income
-
Expenditure on:
Raising funds
-
Charitable activities:
Outreach and Education
-
Total expenditure
8
-
Net income / (expenditure) for the
year
-
Transfers between funds
-
Net income / (expenditure) before
other recognised gains and losses
-
Gains on revaluation of fixed assets
12
-
Net movement in funds
-
Reconciliation of funds:
17
Total funds brought forward
70,000
Total funds carried forward
70,000|Endowment
funds
Note
£
Income from:
Donations and legacies
3
-
Grants
3
-
Charitable activities:
4
Outreach and Education
-
Other trading activities:
Functions and events
5
-
Investment activities
6
-
Other income
7
-
Total income
-
Expenditure on:
Raising funds
-
Charitable activities:
Outreach and Education
-
Total expenditure
8
-
Net income / (expenditure) for the
year
-
Transfers between funds
-
Net income / (expenditure) before
other recognised gains and losses
-
Gains on revaluation of fixed assets
12
-
Net movement in funds
-
Reconciliation of funds:
17
Total funds brought forward
70,000
Total funds carried forward
70,000|Unrestricted
funds
£
3,301,493
226,797
1,000,761
39,011
43,069
251,445|Restricted
funds
£
30,049
999,753
125,088
-
-
-|2021
Total
funds
£
3,331,542
1,226,550
1,125,849
39,011
43,069
251,445|2020
Total
funds
£
2,827,755
1,201,331
935,883
58,886
10,005
298,043|
|---|---|---|---|---|---|
||-|4,862,576|1,154,890|6,017,466|5,331,903|
||-
-|52,499
4,356,514|-
1,140,696|52,499
5,497,210|102,944
5,306,195|
||-|4,409,013|1,140,696|5,549,709|5,409,139|
||-
-|453,563
-|14,194
-|467,757
-|(77,236)
-|
||-
-|453,563
3,705,804|14,194
-|467,757
3,705,804|(77,236)
175,434|
||-
70,000|4,159,367
15,084,528|14,194
-|4,173,561
15,154,528|98,198
15,056,330|
||70,000|19,243,895|14,194|19,328,089|15,154,528|
All of the above results are derived from continuing activities.
There were no other recognised gains or losses other than those stated above.
The attached notes form part of these financial statements.
13
CHABAD LUBAVITCH UK Balance sheet As at 31 December 2021
|2021
Note
£
Fixed assets:
12
Current assets:
13
388,563
1,628,266
2,016,829
Liabilities:
14
(1,673,831)
15
Permanent endowment funds
Restricted funds
14,194
Total Restricted funds
13,500,712
5,743,183
Total Unrestricted funds
17
Total assets less current liabilities
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Net current assets / (liabilities)
Tangible assets
Total net assets
Creditors: amounts falling due after one year
Funds:
General funds
Approved by the corporate trustee and signed on its behalf by:
Total funds
Unrestricted funds:
Revaluation funds
24 October 2022
On behalf of Lubavitch (UK) Limited
Rabbi P Efune|2021
£
388,563
1,628,266|2021
£
19,966,568
342,998|2020
£
355,627
955,090|2020
£
16,753,417
(563,368)|
|---|---|---|---|---|
||2,016,829
(1,673,831)||1,310,717
(1,874,085)||
||14,194||-||
|||20,309,566
(981,477)||16,190,049
(1,035,521)|
||||||
|||19,328,089||15,154,528|
|||70,000
14,194
19,243,895||70,000
-
15,084,528|
||13,500,712
5,743,183||10,026,850
5,057,678||
||||||
|||19,328,089||15,154,528|
||||||
|||On behalf of Lubavitch (UK) Limited
Rabbi I H Sufrin|||
The attached notes form part of the financial statements.
14
## CHABAD LUBAVITCH UK Statement of cash flows For the year ended 31 December 2021
|Note
2021
£
Cash flows from operating activities:
Net cash provided by / (used in) operating activities
18
Cash flows from investing activities:
Interest/ rent/ dividends from investments
Sale/ (purchase) of fixed assets
88,985
Cash provided by / (used in) investing activities
Cash flows from financing activities:
Repayments of borrowing
25,709
Cash provided by / (used in) financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
19|Note
2021
£
Cash flows from operating activities:
Net cash provided by / (used in) operating activities
18
Cash flows from investing activities:
Interest/ rent/ dividends from investments
Sale/ (purchase) of fixed assets
88,985
Cash provided by / (used in) investing activities
Cash flows from financing activities:
Repayments of borrowing
25,709
Cash provided by / (used in) financing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
19|2021
622,027
88,985
25,709|2020
(398,048)|2020
£
747,947
(398,048)
34,485|
|---|---|---|---|---|
||25,709||34,485||
||||||
|||736,721
811,613||384,384
427,229|
|||1,548,334||811,613|
15
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## 1 Accounting policies
## a) Basis of preparation
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102 - effective 1 January 2015) - (Charities SORP FRS 102) and the Charities Act 2011.
The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.
## b) Going concern
The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern. The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.
## c) Income recognition
Income from charitable and trading activities is recognised when the charity has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.
Income from grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred. Income received in advance for the provision of specified service is deferred until the criteria for income recognition are met.
For legacies, entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is a treated as a contingent asset and disclosed if material.
## d) Donations of gifts, services and facilities
Donated professional services and donated facilities are recognised as income when the charity has control over the item or received the service, any conditions associated with the donation have been met, the receipt of economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), volunteer time is not recognised so refer to the trustees’ annual report for more information about their contribution.
On receipt, donated gifts, professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
16
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## 1 Accounting policies (continued)
## e) Interest receivable
- 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.
## f) Fund accounting
Unrestricted funds are available to spend on activities that further any of the purposes of charity. Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose. Restricted funds are donations which the donor has specified are to be solely used for particular areas of the charity’s work or for specific projects being undertaken by the charity.
- g) Expenditure and irrecoverable VAT
- Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that settlement will be required and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accrual basis and includes attributable VAT where it cannot be recovered.
## h) Allocation of support costs
Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back office costs, finance, personnel, payroll and governance costs which support the charity and its and activities. These costs have been allocated between cost of raising funds and expenditure on charitable activities. The basis on which support costs have been allocated are set out in note 8.
## i) Operating leases
Rental charges are charged on a straight line basis over the term of the lease.
## j) Tangible fixed assets
Items of equipment are capitalised where the purchase price exceeds £500. Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:
Freehold property and improvements 2% straight line Fixtures and fittings 20% reducing balance Computer equipment 20% reducing balance Motor vehicles 25% on reducing balance
An amount equal to the excess of the annual depreciation charge on revalued assets over the notional historical cost depreciation charge on those assets is transferred annually from revaluation reserve to the general reserve.
## k) Stocks
Stock is included at the lower of cost or net realisable value. Donated items of stock are recognised at fair value which is the amount the charity would have been willing to pay for the items on the open market.
17
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## 1 Accounting policies (continued)
## l) Debtors
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
## m) Cash at bank and in hand
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## n) Creditors and provisions
- Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
## o) Financial instruments
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.
## p) Pensions
The Charity finished operating its defined contribution scheme during 2015 on the retirement by the final member and the change in legislation to "Opt-in". The assets of the scheme are held separately from those of the Charity being invested with an insurance company. Any contributions payable for the year are charged in the statement of financial activities.
18
CHABAD LUBAVITCH UK
Notes to the financial statements
For the year ended 31 December 2021
|2 Detailed comparatives for the statement of financial activities
2020
Endowment
£
Income from:
Donations and legacies
-
Grants
-
Charitable activities:
Outreach and Education
-
Other trading activities
Functions and events
-
Investment activities
-
Other income
Total income
-
Expenditure on:
Raising funds
-
Charitable activities:
-
Total expenditure
-
Net income / expenditure
-
Transfers between funds
-
Net income / (expenditure) before
other recognised gains and losses
-
Gains / (losses) on revaluation of fixed assets
-
Net movement in funds
-
Reconciliation of funds:
Total funds brought forward
70,000
Total funds carried forward
70,000|2 Detailed comparatives for the statement of financial activities
2020
Endowment
£
Income from:
Donations and legacies
-
Grants
-
Charitable activities:
Outreach and Education
-
Other trading activities
Functions and events
-
Investment activities
-
Other income
Total income
-
Expenditure on:
Raising funds
-
Charitable activities:
-
Total expenditure
-
Net income / expenditure
-
Transfers between funds
-
Net income / (expenditure) before
other recognised gains and losses
-
Gains / (losses) on revaluation of fixed assets
-
Net movement in funds
-
Reconciliation of funds:
Total funds brought forward
70,000
Total funds carried forward
70,000|
2020
£
2,827,755
365,545
807,298
58,886
10,005
298,043
Unrestricted|2020
£
-
835,786
128,585
-
-
Restricted|2020
Total
£
2,827,755
1,201,331
935,883
58,886
10,005
298,043|
|---|---|---|---|---|
||-|4,367,532|964,371|5,331,903|
||-
-|102,944
4,341,824|-
964,371|102,944
5,306,195|
||-|4,444,768|964,371|5,409,139|
||-
-|(77,236)
1,455,896|-
(1,455,896)|(77,236)
-|
||-
-|1,378,660
175,434|(1,455,896)
-|(77,236)
175,434|
||-
70,000|1,554,094
13,530,434|(1,455,896)
1,455,896|98,198
15,056,330|
||70,000|15,084,528|0|15,154,528|
19
CHABAD LUBAVITCH UK
Notes to the financial statements
For the year ended 31 December 2021
## 3 Income from donations and legacies
|3 Income from donations and legacies|||||
|---|---|---|---|---|
|2021
Total
£
£
£
Donations and legacies
3,301,493
30,049
3,331,542
Grants
226,797
999,753
1,226,550
Total income
3,528,290
1,029,802
4,558,092
Included in the grants are £703,080 received from Hackney Learning Trust (2020: £ 657,611).
4 Income from charitable activities
2021
Unrestricted
Total
£
£
£
Outreach and Education
1,000,761
125,088
1,125,849
Total income from charitable activities
1,000,761
125,088
1,125,849
5 Income from other trading activities
2021
Unrestricted
Total
£
£
£
Functions and events
39,011
-
39,011
Total income from other trading activities
39,011
-
39,011
6 Income from investments
2021
Unrestricted
Total
£
£
£
Rental income received
43,069
-
43,069
43,069
-
43,069
7 Other income
2021
Unrestricted
Total
£
£
£
Coronavirus job retention scheme
251,445
-
251,445
251,445
-
251,445
Restricted
Unrestricted
Restricted
Restricted
Restricted
Restricted|£
3,301,493
226,797
Unrestricted|£
30,049
999,753
Restricted|2021
Total
£
3,331,542
1,226,550|2020
Total
£
2,827,755
1,201,331|
||3,528,290|1,029,802|4,558,092|4,029,086|
|||||2020
Total
£
935,883|
||1,000,761|125,088|1,125,849|935,883|
||Unrestricted
£
39,011|£
-
Restricted|2021
Total
£
39,011|2020
Total
£
58,886|
||39,011|-|39,011|58,886|
||Unrestricted
£
43,069|£
-
Restricted|2021
Total
£
43,069|2020
Total
£
10,005|
||43,069|-|43,069|10,005|
||Unrestricted
£
251,445|£
-
Restricted|2021
Total
£
251,445|2020
Total
£
298,043|
||251,445|-|251,445|298,043|
20
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
- 8 Analysis of expenditure
|Analysis of expenditure|||||||
|---|---|---|---|---|---|---|
|Basis of
allocation
Outreach and education
Direct
Legal & Professional
Direct
Accountancy fees
Direct
Auditor's remuneration
Direct
Wages
Staff time
Other staff costs
Direct
Donations paid
Direct
Book & shop supplies
Direct
Telephone
Staff time
Printing, postage & stationery
Staff time
Advertising
Staff time
Travel and Motor expenses
Staff time
Premises costs
Staff time
Computer maintenance
Staff time
Miscellaneous
Staff time
Bank charges
Staff time
Bank interest
Staff time
Depreciation
Staff time
Support costs
Governance costs
Total expenditure 2021
Total expenditure 2020|Support
cost
£
-
-
4,820
-
86,486
-
-
-
34,011
62,377
-
-
-
57,476
-
23,049
43,331
-
311,550
(311,550)
-
-
-|Governance
costs
£
-
3,158
-
24,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,158
-
(27,158)
-
-|Raising
Funds
£
10,976
-
-
-
35,795
-
-
-
-
-
5,728
-
-
-
-
-
-
-
52,499
-
-
52,499
102,944|Charitable
activities
£
1,369,056
67,951
-
-
2,012,944
73,084
230,564
26,571
-
-
-
120,920
851,043
-
2,701
-
-
403,668
5,158,502
311,550
27,158
5,497,210
5,306,195|2021
Total
£
1,380,032
71,109
4,820
24,000
2,135,225
73,084
230,564
26,571
34,011
62,377
5,728
120,920
851,043
57,476
2,701
23,049
43,331
403,668
5,549,709
-
-
5,549,709|2020
Total
£
1,061,824
108,235
15,706
25,000
2,245,088
85,783
239,510
22,064
35,956
62,814
12,282
75,026
743,210
39,736
71,643
24,598
60,857
479,807|
|||||||5,409,139|
|||||||5,409,139|
Donations were paid to individuals and other organisations during the year to support education and other charitable activities.
Of the total expenditure, £4,409,013 was unrestricted (2020: £4,444,768) and £1,140,696 was restricted (2020: £964,371).
Support and governance costs are allocated based on projected time spent by employees.
21
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## 9 Net income / (expenditure) for the year
|This is stated after charging / (crediting):
Depreciation
Auditor's remuneration
Audit (net)|2021
£
403,668
20,000|2020
£
479,807
21,000|
|---|---|---|
10 Analysis of staff costs, trustee remuneration and expenses, and key management personnel costs
|Staff costs were as follows:
Salaries and wages
Social security costs
Pension contributions|2021
£
2,014,106
69,147
51,972|2020
£
2,102,065
65,383
77,640|
|---|---|---|
||2,135,225|2,245,088|
The following number of employees received employee benefits (excluding employer pension) during the year between:
|£60,000 - £69,999
£70,000 - £79,999|2021
No.
1
1|2020
No.
1
-|
|---|---|---|
The total employee benefits including pension contributions of the key management personnel were £122,281 (2020: £74,685).
## Staff numbers
The average number of employees (head count based on number of staff employed) during the year was as follows:
|Raising funds
Charitable activities
Support
Governance|2021
No.
2
136
8
3|2020
No.
3
145
10
3|
|---|---|---|
||149|161|
The charity also acknowledges the support of the volunteers who were used in day to day charitable activities and who helped the charity to achieve its charitable objectives.
## 11 Taxation
The charity is exempt from tax as all its income is charitable and is applied for charitable purposes.
22
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## 12 Tangible fixed assets
|Tangible fixed assets|||||||
|---|---|---|---|---|---|---|
|Cost
At the start of the year
Additions in year
Disposals in year
Revaluation
At the end of the year
Depreciation
At the start of the year
Charge for the year
Eliminated on disposal
At the end of the year
Net book value
At the end of the year
At the start of the year|£
18,926,617
-
-
3,705,804
Freehold
property|£
775,000
-
(275,000)
-
Leasehold
property|£
2,469,517
118,588
-
-
Improvement
to premises
|£
1,114,855
6,927
-
-
Fixtures, fittings
& Equipment|£
183,757
5,500
-
-
Motor vehicles|Total
£
23,469,746
131,015
(275,000)
3,705,804|
||22,632,421|500,000|2,588,105|1,121,782|189,257|27,031,565|
||4,718,012
295,993
-|380,520
23,809
(55,000)|422,699
49,361
-|1,079,750
16,028
-|115,348
18,477
-|6,716,329
403,668
(55,000)|
||5,014,005|349,329|472,060|1,095,778|133,825|7,064,997|
||17,618,416|150,671|2,116,045|26,004|55,432|19,966,568|
||14,208,605|394,480|2,046,818|35,105|68,409|16,753,417|
Land with a value of £ 4,770,899 (2020: £4,770,899) is included within freehold property and is not depreciated. Professional and other trustee valuations were carried out so that freehold property is stated at fair value at the year end. All of the above assets are used for charitable purposes.
## 13 Debtors
|Debtors|||
|---|---|---|
|Trade debtors
Other debtors
Creditors: amounts falling due within one year
Bank overdrafts
Bank loans
Trade creditors
Taxation and social security
Other creditors
Accruals
Creditors: amounts falling due after one year
Bank loans|2021
£
178,862
209,701|2020
£
266,080
89,547|
||388,563|355,627|
||2021
£
79,932
90,242
142,088
215,100
1,049,494
96,975|2020
£
143,477
74,034
172,014
170,749
1,207,878
105,933|
||1,673,831|1,874,085|
||2021
£
981,477|2020
£
1,035,521|
||981,477|1,035,521|
## 14 Creditors: amounts falling due within one year
- 15 Creditors: amounts falling due after one year
Total bank loans of £1,071,719 (2020: £1,109,555) are secured against the following properties: 135 Clapton Common, London E5 9AE 42 St George Road, London SW19 4ED 228 Hale Lane, Edgware HA8 9QF 75a Cowley Rd, Oxford OX4 1HR 168 Shadwell Lane Leeds LS17 8AD
23
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
|16
Analysis of net assets between funds 2021
Tangible fixed assets
Net current assets / (liabilities)
Long term liabilities
Net assets at the end of the year
Analysis of net assets between funds 2020
Tangible fixed assets
Net current assets
Long term liabilities
Net assets at the end of the year
17
Movements in funds 2021
£
Unrestricted funds:
Revaluation fund
10,026,850
General funds
5,057,678
Total unrestricted funds
15,084,528
Restricted funds:
Foundation
-
Security grants fund
-
Children Centre
-
Nursery
-
Edgware
-
Total restricted funds
-
70,000
Total funds
15,154,528
Funds at the
start of the year
Permanent endowment funds|16
Analysis of net assets between funds 2021
Tangible fixed assets
Net current assets / (liabilities)
Long term liabilities
Net assets at the end of the year
Analysis of net assets between funds 2020
Tangible fixed assets
Net current assets
Long term liabilities
Net assets at the end of the year
17
Movements in funds 2021
£
Unrestricted funds:
Revaluation fund
10,026,850
General funds
5,057,678
Total unrestricted funds
15,084,528
Restricted funds:
Foundation
-
Security grants fund
-
Children Centre
-
Nursery
-
Edgware
-
Total restricted funds
-
70,000
Total funds
15,154,528
Funds at the
start of the year
Permanent endowment funds|Revaluation
fund
13,500,712
-
-|
Endowment
fund
-
70,000
-|
Unrestricted
funds
£
6,451,662
272,998
(981,477)|
Restricted funds
£
14,194
-
-|2021 Total funds
£
19,966,568
342,998
(981,477)|
|---|---|---|---|---|---|---|
|||13,500,712|70,000|5,743,183|14,194|19,328,089|
|||Revaluation
fund
10,026,850
-
-|
Endowment
fund
-
70,000
-|
Unrestricted
£
6,726,567
(633,368)
(1,035,521)|
Restricted
£
-
-
-|2020 Total
funds
£
16,753,417
(563,368)
(1,035,521)|
|||10,026,850|70,000|5,057,678|-|15,154,528|
|||£
-
4,862,576
Income|£
-
(4,409,013)
Expenditure|Transfers
£
(231,942)
231,942
|£
3,705,804
-
Revaluation|£
13,500,712
5,743,183
Funds at the
end of the year|
||15,084,528|4,862,576|(4,409,013)|-|3,705,804|19,243,895|
||-
-
-
-
-|30,049
296,673
571,140
131,940
125,088|(15,855)
(296,673)
(571,140)
(131,940)
(125,088)|-
-
-
-
-|-
-
-
-
-|14,194
-
-
-
-|
||-|1,154,890|(1,140,696)|-|-|14,194|
||||||||
||70,000|-|-|-|-|70,000|
||||||||
||15,154,528|6,017,466|(5,549,709)|-|3,705,804|19,328,089|
24
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
## Movements in funds 2020
|Movements in funds 2020|||||||
|---|---|---|---|---|---|---|
|Unrestricted funds:
Unrestricted revaluation reserve
General funds
Total unrestricted funds
Restricted funds:
Restricted revaluation reserve
Children Centre
Nursery
Edgware
Total restricted funds
Total funds
Permanent endowment funds|£
10,171,361
3,359,073
Funds at the
start of the year|£
-
4,367,532
Income
|£
-
(4,444,768)
Expenditure|Transfers
£
(319,945)
1,775,841
|£
175,434
-
Revaluation|£
10,026,850
5,057,678
Funds at the
end of the year|
||13,530,434|4,367,532|(4,444,768)|1,455,896|175,434|15,084,528|
||9,211,711
1,455,896
-
-|-
619,338
216,448
128,585|-
(619,338)
(216,448)
(128,585)|(9,211,711)
(1,455,896)
-
-|-
-
-
-|-
-
-
-|
||1,455,896|964,371|(964,371)|(1,455,896)|-|-|
||70,000|-|-|-|-|70,000|
||15,056,330|5,331,903|(5,409,139)|-|175,434|15,154,528|
## Restricted Funds:
The charity’s restricted funds during the year were made up as follows:
Children’s Centre - this fund was established to receive donations for the building of the new Children’s Centre.
## Permanent endowment funds:
L Steinberg endowment- The gift was made to the charity on condition that it is held as a permanent endowment, the income from which is freely available to fund the activities of the charity.
18 Reconciliation of net income / (expenditure) to net cash flow from operating activities
|Net income / (expenditure) for the reporting period
(as per the statement of financial activities)
Depreciation
(Increase)/ decrease in debtors
Increase/ (decrease) in creditors
Net cash provided by / (used in) operating activities|2021
£
467,757
403,668
(32,936)
(216,462)|2020
£
(77,236)
479,807
249,944
95,432|
|---|---|---|
||622,027|747,947|
25
CHABAD LUBAVITCH UK Notes to the financial statements For the year ended 31 December 2021
|19
Analysis of cash and cash equivalents
Cash at bank and in hand
Overdraft facility (repayable on demand)
Total cash and cash equivalents
Analysis of cash and cash equivalents 2020
Cash at bank and in hand
Overdraft facility (repayable on demand)
Total cash and cash equivalents|£
955,090
(143,477)
At 1
January
2021|Cash flows
£
673,176
63,545
|Other changes
£
-
-|£
1,628,266
(79,932)
At 31
December 2021|
|---|---|---|---|---|
||811,613|736,721|-|1,548,334|
||£
644,627
(217,398)
At 1
January
2020|Cash flows
£
310,463
73,921
|Other changes
£
-
-|£
955,090
(143,477)
At 31
December 2020|
||427,229|384,384|-|811,613|
## 20 Related party transactions
As well as employing the directors of the corporate trustee, the charity also employed several individuals who were related to the directors of the corporate trustee. Salaries paid to these individuals were as follows:
||||Annual teaching||
|---|---|---|---|---|
|Name|Job role|Relationship|salary|Loan to Charity|
||||£|£|
|Familyof Rabbi I H Sufrin|||||
|Rabbi I H Sufrin|Rabbi||4,800|107,000|
|Familyof Rabbi Y Angyalfi|||||
|Rabbi Y Angyalfi|Rabbi||20,437||
|Mrs S Angyalfi||Wife|20,437||
|Familyof Rabbi P Efune|||||
|Rabbi P Efune|Rabbi||-|27,500|
- 21 Corporate Trustee
The charity is governed by the board of directors of the corporate trustee Lubavitch (UK) Limited (a company limited by guarantee incorporated in England and Wales under company number 02932344), which is responsible for setting the charity's strategy, for ensuring good governance and that it fulfils its objectives of delivering public benefit. The directors of the corporate trustee during the reporting period were:
- Rabbi Y Angyalfi
- Rabbi P Efune
- Rabbi I H Sufrin
- Mr S Chevern
- Mr M Rabin
26