Charity registration number 227720
THE ESTATE CHARITY OF WILLIAM HATCLIFFE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
LEGAL AND ADMINISTRATIVE INFORMATION
Trustees Mr A C Blundy (Chair) Mr G Kirby (Vice Chair) Mr R Clough (Vice Chair) Mr R Hough (Treasurer) Reverend S Hall Mrs W Kirkman Mr J Watson Mr J Nicholson (Appointed 13 March 2023) Mr M Reid (Appointed 4 September 2023) Ms H McIntosh Ms C Melville Reverend S Winn Councillor P Slattery Clerk to the Trustees Ms S Tearle Charity number 227720 Principal address St Margaret’s Visitor Centre 2 Brandram Road Lewisham London SE13 5EA Auditor Myers Clark Egale 1 80 St Albans Road Watford Hertfordshire WD17 1DL Bankers CAF Bank Limited 25 Kings Hill Avenue Kings Hill West Malling Kent ME19 4JQ Handelsbanken 1 Cresswell Park Blackheath London SE3 9RD Solicitors Grant Saw Solicitors LLP Wood Wharf Building Horseferry Place London SE10 9BB Property managers Daniel Watney 165 Fleet Street London EC4A 2DW
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
CONTENTS
| Page | |
|---|---|
| Trustees' report | 1 - 5 |
| Statement of trustees' responsibilities | 6 |
| Independent auditor's report | 7 - 9 |
| Statement of financial activities | 10 - 11 |
| Balance sheet | 12 |
| Statement of cash flows | 13 |
| Notes to the financial statements | 14 - 23 |
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
TRUSTEES' REPORT FOR THE YEAR ENDED 31 MARCH 2023
The Trustees present their annual report and financial statements for the year ended 31 March 2023.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Charities Act 2011 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)" (effective 1 January 2019).
Objectives and activities
The Charity’s objects are :
Subject to :
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defraying of costs of repairs, insurance and outgoings payable in respect of the property of the Charity,
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paying all the proper costs, charges and expenses of, and incidental to, the administration and management of the Charity out of income - which may include establishing and maintaining a fund for capital expenditure on the properties,
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the net yearly income of the Charity shall be paid:One half to the Trustees of the Greenwich Charity of William Hatcliffe One fourth to the Trustees of the Lee Charity of William Hatcliffe One fourth to the Trustees of the Lewisham Charity of William Hatcliffe
Trustees continue to seek market rents on all commercial and residential properties and exploit opportunities to improve rental returns. When vacancies occur properties are inspected and, where necessary, a programme of work is implemented to protect the Trustees' long term interest in the premises. Trustees ensure that additional capital invested generates the appropriate return and that the environment in which the Trustees' property investments is situated is preserved and enhanced.
Works to maintain the overall "streetscape" are also undertaken as part of the preservation and enhancement of the properties and their environment.
Trustees do not anticipate any significant change in their strategy during the current year.
The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
Trustees rely upon the Beneficiary Charities to discharge the charitable requirements of William Hatcliffe for the public benefit as defined in the individual Trust Deeds. To aid this Trustees' responsibility is the effective management of the property portfolio and the generation of income.
Achievements and performance
The distributions to the three Beneficiary Charities totalled £500,000 for the year ending 31[st] March 2023. The trustees agreed at their March Trustees meeting that the distributions should be increased to £600,000 from the year 2023/2024.
As the income benefit of the capital investment programme is being seen, Trustees now consider that the sum of £336,000 should be the minimum assured to the Beneficiary Charities each year. At their meeting in March each year Trustees decide the total available for distribution.
As its name suggests, the Trust is responsible for, and derives its revenue from, the properties with which it was endowed in the Nineteenth Century.
Trustees residential properties comprises 22 flats above their commercial properties in Woolwich Road and 109 units in a block of houses and flats on Tuskar Street, Frobisher Street and Woodlands Park Road in the Royal Borough of Greenwich in South East London. The majority of these properties are let on Assured Shorthold Tenancies but 17 properties are subject to statutory tenancies limiting rental returns.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
Trustees continue to be of the opinion that the type of accommodation provided by the Trust properties benefits from a high level of demand. They agree with the recommendation of the Managing Agent that as they fall vacant refurbishment to a high standard should be undertaken. Trustees continue to believe that the capital cost is justified by the enhanced rental income that should be achieved, but will continue to carefully monitor cash flow and cost of borrowing to maintain a balance.
All residential and commercial properties are managed by Daniel Watney LLP.
Financial review
Income before grants, and donations for the year amounted to £2,230,398 (2022: £1,927,772). Expenditure was £1,808,386 (2022: £1,538,540). This includes management fees. Total reserves at the year-end amount to £69,060,592 (2022: £64,680,748).
In the context of the strong rental market, the managing agent has taken a balanced approach to renewals with uplifts of 8-10%. The gross residential income now exceeds £2,000,000 pa.
An ongoing programme of Cyclical External Decoration & Repair works, including replacement windows, has continued to improve the energy performance rating of the related properties. An EPC Audit was carried out in March 2022 to identify potential improvements in EPC rating for all the residential properties and estimated cost of improvement. The Managing agent recommends a balanced assessment of the potential for each unit, adopting sensible upgrades as far as possible in the coming years as the best approach.
The insurance claim for the four flood-affected properties has been settled and the properties re-let. As a result of the claim and a new reinstatement valuation there has been a significant increase in insurance premium. In addition the portfolio has also been designated as being in a flood risk area and this together with the claims, has meant the basement units are now effectively self-insured for flood. To mitigate this risk, the trustees have decided to set aside a regular amount into a Flood Damage and Prevention Fund and also to seek additional or alternative insurance at renewal.
Trustees are always mindful of their responsibility to manage the resources of the Trust wisely and prudently. We only engage specialist professional advisors when necessary to protect the interests of the Trust.
The charity has a bank loan of £800k which was raised to cover the development works on 79-81 Tuskar street. It is interest only with full repayment due in 2027. The three resulting properties have been re-let at a significantly increased rent. (Combined -£99,500 per year).
Trustees will need to have recourse to borrowings for the major building development planned over the next three years. As the final budget cost of the development of 47-53 Woolwich Road, Greenwich (the Island Site) becomes apparent Trustees will seek to negotiate the necessary loan from Handelsbanken to complete the project.
The bank will be offered appropriate security for its loan as already evidenced by the Legal Charge over Avener House that is in place. Trustees will carefully monitor their cash flow during the term of the loan. As part of the decision process, trustees will check that the rental income from the residential and commercial units on the redeveloped Island Site will enable them to repay all borrowing.
This should be achieved without detriment to their other activities and the level of distributions to the Beneficiary Charities.
Full planning permission was sought in spring 2022 for the Island Site, but is still pending.
Daniel Watney have carried out a property valuation as of 31 March 2023 and have stated the Fair value as £69,210,000.
Reserves - The Charity has net assets of £69,860,592 of which £68,410,000 represents the Permanent Endowment Fund which is the value of the property portfolio (£69,210,000), less the value of the two bank loans (£800,000). There is a total of £398,868 in Designated funds for property maintenance and for the repayment of the bank loans. This leaves the charity overall with General Unrestricted funds of £251,724 at the year end.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
Risk assessment
Trustees have assessed the major risks to which the Charity is exposed, and are satisfied that systems are in place to mitigate
exposure to the major risks which are as follows:
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Damage to trust assets - The entire property portfolio is insured for damage and loss of rent.
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Flood risk – Set aside a Flood Damage and Prevention Fund and seek additional or alternative insurance at renewal.
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Risk that the portfolio will not meet the minimum EPC rating by the deadline – there is a schedule of works to upgrade properties to at least the minimum rating. [The Government has recently removed the deadline, but a future government may re-introduce one.]
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Loss of Computer records – all records baked up offline.
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Loss of physical papers – papers are in locked cabinets and access to the office is limited to known key holders. Older
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papers archived
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Financial Control - All bank accounts are operated to their authorised signatory mandates.
Trustees review the Risk assessment at least annually.
Structure, governance and management
The charity is a charity limited by a charitable trust deed dated 12 November 1897.
The Charity's Scheme stipulates that the Trustees of The Estate Charity of William Hatcliffe shall, when complete, consist of 16 competent persons being:
Three Ex-officio Trustees.
Thirteen Representative Trustees.
The incumbents for the time being of the ancient parishes of Greenwich, Lee and Lewisham, being Trustees under the above mentioned Scheme of 12 November 1897, shall be the Ex-officio Trustees of the said Charity.
The Representative Trustees shall be appointed as follows: 7 by the Trustees of the Greenwich Charity of William Hatcliffe out of their number. 3 by the Trustees of the Lee Charity of William Hatcliffe out of their number. 3 by the Trustees of the Lewisham Charity of William Hatcliffe out of their number.
Nominees are required to confirm acceptance of appointment as a Trustee and their willingness to act in the interest of the Charity. Each appointment is made for the term of four years.
The Trustees who served during the year and up to the date of signature of the financial statements were: Mr A C Blundy (Chair)
Mr G Kirby (Vice Chair) Mr R Clough (Vice Chair) Mr R Hough (Treasurer) Reverend S Hall Mr A Austin (Resigned 1 June 2022) Mrs W Kirkman Mr J Watson Mr J Nicholson (Appointed 13 March 2023) Reverend T Goode (Resigned 4 July 2023) Mr M Reid (Appointed 4 September 2023) Ms H McIntosh Ms C Melville Reverend S Winn Councillor P Slattery Mr C Jeal
(Resigned 11 May 2022)
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
Mr Jeal died in May 2022, creating a vacancy as a trustee representative of the Lee Charity.
The Reverend T Goode resigned as an Ex officio trustee of the Lee charity and the Estate charity in July 2023 as he is no longer the incumbent at St Margarets.
Mr Austin retired as a trustee representative of the Greenwich Charity in June 2022, creating a vacancy, which was filled by Mr Malcolm Reid in September 2023.
Mr Nicholson was appointed as a trustee representative of the Lewisham Charity in March 2023 to fill the vacancy.
New Trustees are provided with a copy of the Trust Deed, the latest financial statements, relevant reports and copies of the Minutes of recent Trustees meetings. Apart from the three Ex-officio Trustees, who are the incumbents of the parishes in which the Beneficiary Charities are situated, all Trustees are nominated by those charities on the basis of their experience and knowledge relevant to a Trust primarily funded by its property portfolio.
The Trustees include in their number professionals of different disciplines as well as lay people with commercial and social experience.
Trustees are encouraged to acquaint themselves with the varied physical and geographical nature of the property portfolio. This is to enable them to make informed and prudent decisions based on the recommendations put to them by appropriately qualified professionals consulted by the Trust.
Trustees are made aware of their duties and responsibilities, expected to state their views at meetings and to question the professional advisers who attend Trustees meetings.
Trustees rely upon the advice of the Clerk for the efficient conduct of the Trust's affairs.
The Trustees generally meet twice each year in March and October. There is provision in the Trust Deed to summon Special Meetings.
If the Chairman or any Trustee considers it necessary the Clerk is requested to arrange additional meetings of any group of representative Trustees to consider and report on issues referred to them.
The Clerk is responsible for preparation and dispatch of the meeting notices and agenda with supporting papers. At their meeting, the Trustees:
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Receive reports from the Clerk on the administration of the Charity and on the recommendations of any working group of representative Trustees.
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Receive from the Chairman his commentary on the affairs of the Charity.
• Review the written report from the Managing Agent. The report also provides updates on any specific issues. Representatives of the Managing Agent also attend the meetings to provide additional information and respond to any questions from the
Trustees.
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Decide on policy and provide instructions on issues raised. Where appropriate they may authorise the Chairman, in consultation with the Clerk, to implement decisions taken.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
Structure, governance and management (continued)
The Clerk is responsible for the day-to-day administration of the Charity reporting to the Chairman and ViceChairmen. The Clerk will invite instructions where appropriate.
The Charity acknowledges a relationship with:
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the Greenwich Charity of William Hatcliffe and the Misses Smith
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the Lee Charity of William Hatcliffe
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the Lewisham Almshouse Charity of William Hatcliffe and Abraham Colfe.
A summary of grants paid to the Beneficiary Charities is set out in note 6 to the financial statements.
Plans for the future
The Trustees continue to accept the advice of the Managing Agent that the demand for rental accommodation would continue.
As a result the Hatcliffe Village (as a generic name the Trustees like to use for their properties in Frobisher Street, Tuskar Street and Woodlands Park Road) continues to be strongly placed to take advantage for the following reasons:
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The homogenous nature of the properties offers the opportunity for an overall 'style' .
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The age and varied nature of accommodation differentiates the Hatcliffe Village from current developments in Greenwich and its environs and offers a marketing opportunity .
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The Trust as a single landlord to a close-knit estate can achieve a consistency of approach .
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For the same reason it can secure economies of scale when work needs to be carried out on more than one unit .
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There is scope for utilising (over time) various parcels of land within the estate to create additional residential units.
The above features continue to be evident in newly refurbished or extended properties. The rental obtained on such properties, and their swift letting, has given Trustees confidence in implementing their plans for new developments and refurbishments.
Refurbishments are carried out for the following reasons:
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To comply with the Trust's legal obligations
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To improve the energy efficiency of the properties
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To ensure the properties have a continued life of 50 to 100 years
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On the advice of the Managing Agent, to enhance the letting value of the properties
The Trustees plan to redevelop 47-53 Woolwich Road. The plan is for nine residential units of various sizes and commercial space on the ground floor. This would mean that the development would be in line with the proven successful rebuilding of Sumner House and Avener House.
The plans are still going through the planning process.
As their strategy develops Trustees will continue to discharge their responsibilities to the three Beneficiary Charities.
Disclosure of information to auditor
Each of the Trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.
Furthermore Trustees have confirmed that there are no conflicts of interest in fulfilling their role as Trustee.
The trustees' report was approved by the Board of Trustees.
Mr A C Blundy (Chair)
Trustee
11 December 2023
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
STATEMENT OF TRUSTEES' RESPONSIBILITIES FOR THE YEAR ENDED 31 MARCH 2023
The Trustees are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that year.
In preparing these financial statements, the Trustees are required to:
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charities SORP;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Trustees are responsible for keeping sufficient accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. 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.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF THE ESTATE CHARITY OF WILLIAM HATCLIFFE
Opinion
We have audited the financial statements of The Estate Charity of William Hatcliffe (the ‘charity’) for the year ended 31 March 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
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give a true and fair view of the state of the charity’s affairs as at 31 March 2023 and of its incoming resources and application of resources, for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the 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 FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
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 Trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:
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the information given in the financial statements is inconsistent in any material respect with the trustees' report; or
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sufficient accounting records have not been kept; or
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the financial statements are not in agreement with the accounting records; or
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we have not received all the information and explanations we require for our audit.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE ESTATE CHARITY OF WILLIAM HATCLIFFE
Responsibilities of Trustees
As explained more fully in the statement of trustees' responsibilities, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the 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 cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.
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, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following;
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The nature of the industry and sector, control environment and business performance including the design of the remuneration policies, key drivers for trustee remuneration, bonus levels and performance targets;
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results of our enquiries of Management about their own identification and assessment of the risks of irregularities;
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any matters we identified having obtained and review the charitable company’s documentation of their policies and procedures relating to;
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identifying, evaluating and complying with laws and regulation and whether they were aware of any instances of non-compliance;
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detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
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the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
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the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the charity operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the charity’s ability to operate or to avoid a material penalty.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE ESTATE CHARITY OF WILLIAM HATCLIFFE
Audit response to risks identified
To address the risk of fraud through management bias and override of controls, we:
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performed analytical procedures to identify any unusual or unexpected relationships;
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tested journal entries to identify unusual transactions;
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assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
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investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
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agreeing financial statement disclosures to underlying supporting documentation;
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reading the minutes of meetings of those charged with governance; and
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enquiring of management as to actual and potential litigation and claims.
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 directors 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 is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters
Your attention is drawn to the fact that the charity has prepared financial statements 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)" (as amended) in preference to the Accounting and Reporting by Charities: Statement of Recommended Practice issued on 1 April 2005 which is referred to in the extant regulations but has now been withdrawn.
This has been done in order for the financial statements to provide a true and fair view in accordance with current Generally Accepted Accounting Practice.
Use of our report
This report is made solely to the charity’s trustees, as a body, in accordance with part 4 of the Charities (Accounts and Reports) Regulations 2008. 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.
Myers Clark Chartered Accountants Statutory Auditor
13 December 2023
Egale 1 80 St Albans Road Watford Hertfordshire WD17 1DL
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
STATEMENT OF FINANCIAL ACTIVITIES
FOR THE YEAR ENDED 31 MARCH 2023
| Current financial year Unrestricted Unrestricted Endowment funds funds funds general designated 2023 2023 2023 Notes £ £ £ Income from: Donations and legacies 3 4,600 - - Rental and other investment income 4 2,225,798 - - Total income 2,230,398 - - Expenditure on: Raising funds 5 1,222,169 - - Charitable activities 6 586,217 - - Total expenditure 1,808,386 - - Net gains/(losses) on investments 11 - - 3,957,832 Net incoming resources before transfers 422,012 - 3,957,832 Net incoming resources before transfers 422,012 - 3,957,832 Gross transfers between funds 364,832 320,000 (684,832) Net movement in funds 786,844 320,000 3,273,000 Fund balances at 1 April 2022 As originally reported (373,064) 78,868 65,137,000 Prior year adjustment (81,028) - - As restated (454,092) 78,868 65,137,000 Fund balances at 31 March 2023 251,724 398,868 68,410,000 |
Total 2023 £ 4,600 2,225,798 2,230,398 1,222,169 586,217 1,808,386 3,957,832 4,379,844 4,379,844 - 4,379,844 64,761,776 (81,028) 64,680,748 69,060,592 |
Total 2022 as restated £ - 1,927,772 1,927,772 988,597 549,943 1,538,540 2,598,992 2,988,224 2,988,224 - 2,988,224 61,692,524 - 61,692,524 64,680,748 |
|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
STATEMENT OF FINANCIAL ACTIVITIES (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Prior financial year
| Unrestricted Unrestricted Endowment funds funds funds general designated 2022 2022 2022 as restated Notes £ £ £ Income from: Rental and other investment income 4 1,927,772 - - Total income 1,927,772 - - Expenditure on: Raising funds 5 988,597 - - Charitable activities 6 549,943 - - Total expenditure 1,538,540 - - Net gains/(losses) on investments 11 - - 2,598,992 Net incoming resources before transfers 389,232 - 2,598,992 Gross transfers between funds (943,008) - 943,008 Net movement in funds (553,776) - 3,542,000 Fund balances at 1 April 2021 As originally reported 18,656 78,868 61,595,000 Prior year adjustment - - - As restated 18,656 78,868 61,595,000 Fund balances at 31 March 2022 (535,120) 78,868 65,137,000 |
Total 2022 as restated £ 1,927,772 |
|---|---|
| 1,927,772 | |
| 988,597 549,943 |
|
| 1,538,540 | |
| 2,598,992 | |
| 2,988,224 - |
|
| 2,988,224 61,692,524 - 61,692,524 |
|
| 64,680,748 |
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
BALANCE SHEET
AS AT 31 MARCH 2023
| Notes Fixed assets Investment properties 12 Current assets Debtors 13 Cash at bank and in hand Creditors: amounts falling due within one year 14 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 15 Net assets Capital funds Endowment funds 16 Income funds Unrestricted funds - designated ~~Unrestricted funds - general~~ Designated funds 17 General unrestricted funds |
2023 £ £ 69,210,000 90,890 662,117 753,007 (102,415) 650,592 69,860,592 (800,000) 69,060,592 68,410,000 398,868 398,868 (147,144) 251,724 69,060,592 |
2022 as restated £ £ 65,137,000 60,862 506,811 567,673 (231,925) 335,748 65,472,748 (792,000) 64,680,748 65,137,000 78,868 78,868 (613,988) (535,120) 64,680,748 |
|---|---|---|
The financial statements were approved by the Trustees on 11 December 2023
Mr A C Blundy (Chair) Trustee
Mr G Kirby (Vice Chair) Trustee
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023
| Notes Cash flows from operating activities Cash absorbed by operations 21 Investing activities Capital expenditure on investment property Investment income received Net cash generated from investing activities Financing activities Proceeds from new bank loans Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year |
2023 £ £ (1,963,324) (115,168) 2,225,798 2,110,630 8,000 8,000 155,306 506,811 662,117 |
2022 as restated £ £ (1,467,095) (943,008) 1,927,772 984,764 792,000 792,000 309,669 197,142 506,811 |
|---|---|---|
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
1 Accounting policies
Charity information
The Estate Charity of William Hatcliffe is a registered charity. The principal address is St Margaret's Visitor Centre, Brandram Road, Lewisham, London, SE13 5EA.
1.1 Accounting convention
The financial statements have been prepared in accordance with the charity's governing document, the Charities Act 2011, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following the Statement of Recommended Practice for charities applying FRS 102 rather than the version of the Statement of Recommended Practice which is referred to in the Regulations but which has since been withdrawn.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of investment properties at fair value]. The principal accounting policies adopted are set out below.
1.2 Prior period error
Where necessary, comparative figures have been adjusted to reflect the correct treatment of property agent's activity and any associated impact on funds.
1.3 Going concern
At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4 Charitable funds
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.
Designated funds comprise funds which have been set aside at the discretion of the Trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.
Endowment funds represent assets which must be held permanently by the charity. Income arising on the endowment funds can be used in accordance with the objects of the charity and is included as unrestricted income. Any capital gains or losses on the assets form part of the fund.
1.5 Income
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
1 Accounting policies
(Continued)
1.6 Expenditure
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit 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.
Fundraising costs comprise the costs incurred in maintaining and managing the investment properties. Support and governance costs are those which do not directly relate to charitable activities, and include the costs of audit and statutory compliance.
Grants are recognised and recorded in the financial statements at full cost at the time the funds are committed and communicated to the beneficiaries by the Board of Trustees.
1.7 Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the statement of financial activities.
1.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9 Financial instruments
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Derecognition of financial liabilities
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
2 Critical accounting estimates and judgements
In the application of the charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3 Donations and legacies
| Total | Total | ||
|---|---|---|---|
| 2023 | 2022 | ||
| £ | £ | ||
| Donations for | 400th year event | 4,600 | - |
4 Rental and other investment income
| **Unrestricted ** | Unrestricted | |
|---|---|---|
| funds | funds | |
| general | general | |
| 2023 | 2022 | |
| £ | £ | |
| Rental income | 2,142,186 | 1,911,498 |
| Other income | 82,052 | 15,022 |
| Interest receivable | 1,560 | 1,252 |
| 2,225,798 | 1,927,772 |
Other income in the year ended 31 March 2023 of £82,052, relates to one off insurance claims.
- 16 -
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
5 Raising funds
| 6 7 |
Unrestricted Unrestricted funds funds general general 2023 2022 £ £ as restated Repairs and other costs of the investment properties Insurance costs 74,283 - Repairs, maintenance and refurbishment costs 574,868 363,482 Utilities 57,815 41,126 Legal and professional 104,011 206,068 Other fundraising costs 10,555 2,113 Repairs and other costs of the investment properties 821,532 612,789 ~~Investment management~~ 400,637 375,808 1,222,169 988,597 Charitable activities Grants and donations Grants and donations 2023 2022 £ £ Grant funding of activities (see note 7) 500,000 500,000 Share of support costs (see note 8) 59,759 27,044 Share of governance costs (see note 8) 26,458 22,899 586,217 549,943 Grants payable Grants and donations Grants and donations 2023 2022 £ £ Grants to institutions: Greenwich Charity of William Hatcliffe and the Misses Smith 250,000 250,000 Lee Charity of William Hatcliffe 125,000 125,000 Lewisham Almhouses Charities 125,000 125,000 500,000 500,000 |
|---|---|
The payments made to institutions are in line with the charity's objects, as outlined on page 1 of the Trustees' Report.
- 17 -
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
| 8 Support costs Accountancy Rent and bank charges Clerks fees Loan interest Audit fees Trustees indemnity insurance Arrangement fees Trustees expenses Analysed between Charitable activities |
Support costs Governance costs £ £ 3,000 - 5,338 - 16,458 - 34,963 - - 22,212 - 1,390 - 1,800 - 1,056 59,759 26,458 59,759 26,458 |
2023 £ 3,000 5,338 16,458 34,963 22,212 1,390 1,800 1,056 86,217 86,217 |
Support costs Governance costs £ £ - - 9,728 - 13,950 - 3,366 - - 17,500 - 1,350 - 3,000 - 1,049 27,044 22,899 27,044 22,899 |
2022 £ - 9,728 13,950 3,366 17,500 1,350 3,000 1,049 |
|---|---|---|---|---|
| 49,943 | ||||
| 49,943 |
Governance costs includes payments to the auditors of £13,200 for audit fees for the year ended 31 March 2023 (2022: £17,500).
Governance costs also include additional costs of £9,012 incurred for the audit for the year ended 31 March 2022.
9 Trustees
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.
1 trustee was reimbursed for expenses in relation to meetings during the year, of £103.
10 Employees
The average monthly number of employees during the year was nil (2022: nil).
11 Net gains/(losses) on investments
| **Endowment ** | Endowment | |
|---|---|---|
| funds | funds | |
| 2023 | 2022 | |
| £ | £ | |
| Revaluation of investment properties | 3,957,832 | 2,598,992 |
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
12 Investment property
| Fair value At 1 April 2022 Additions through external acquisition Net gains or losses through fair value adjustments At 31 March 2023 |
2023 £ 65,137,000 115,168 3,957,832 |
|---|---|
| 69,210,000 |
Investment property comprises a mixture of both residential and commercial units. The fair value of the investment property has been arrived at on the basis of valuations carried out at 31 March 2023 by Daniel Watney LLP, Chartered Surveyors, who are not connected to the charity. The valuations were made on an open market basis by reference to market evidence of transaction prices for similar properties.
13 Debtors
| Amounts falling due within one year: Other debtors Prepayments and accrued income |
2023 £ 35,871 55,019 90,890 |
2022 £ 8,287 52,575 |
|---|---|---|
| 60,862 |
14 Creditors: amounts falling due within one year
| Other creditors Accruals and deferred income 15 Creditors: amounts falling due after more than one year Notes Bank loans |
2023 £ 10,975 91,440 102,415 2023 £ 800,000 |
2022 £ as restated 10,975 220,950 |
|---|---|---|
| 231,925 | ||
| 2022 £ 792,000 |
In respect of the two 'property Investment Loans' of £400,000 each, both of these have a 'Fixed Priority Legal Charge' over the office and commercial buildings at Avener House held under title deed TGL304152.
- 19 -
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
16 Endowment funds
Endowment funds represent assets which must be held permanently by the charity. Income arising on the endowment funds can be used in accordance with the objects of the charity and is included as unrestricted income. Any capital gains or losses arising on the assets form part of the fund.
| Balance at 1 April 2021 £ Permanent endowments Endowment fund 61,595,000 61,595,000 |
Transfers Revaluations gains and losses £ £ 943,008 2,598,992 943,008 2,598,992 |
Balance at 1 April 2022 £ 65,137,000 65,137,000 |
Transfers Revaluations gains and losses Balance at 31 March 2023 £ £ £ (684,832) 3,957,832 68,410,000 (684,832) 3,957,832 68,410,000 |
Transfers Revaluations gains and losses Balance at 31 March 2023 £ £ £ (684,832) 3,957,832 68,410,000 (684,832) 3,957,832 68,410,000 |
|---|---|---|---|---|
| 68,410,000 |
The transfer from unrestricted funds represents the additions to the investment property, £115,168, less the outstanding balance of the bank loan, £800,000.
17 Designated funds
The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:
| Property development fund Bank loan repayment fund |
Balance at 1 April 2021 £ 78,868 - 78,868 |
Incoming resources £ - - - |
Balance at 1 April 2022 £ 78,868 - 78,868 |
Transfers Balance at 31 March 2023 £ £ - 78,868 320,000 320,000 320,000 398,868 |
Transfers Balance at 31 March 2023 £ £ - 78,868 320,000 320,000 320,000 398,868 |
|---|---|---|---|---|---|
| 398,868 |
The property development fund has been established by the Trustees and authorised by the Charities Commission on 4 January 2008 in order to provide for the repair, improvement and rebuilding of investment properties.
In 2022/23, the Trustees agreed to establish a Bank Loan Repayment Fund to set aside the funds to repay the principal value of the bank loan when it falls due, in 2027. In order to do so, the Trustees have agreed to transfer £160,000 each year from the unrestricted funds over the five year loan term.
The transfer from unrestricted funds in 2022/23 includes two years' worth of transfers, due to the fund being established after the 2021/22 financial year, which was the year of the loan drawdown.
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THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
18 Analysis of net assets between funds
| Unrestricted funds Designated funds Endowment funds 2023 2023 2023 £ £ £ Fund balances at 31 March 2023 are represented by: Investment properties - - 69,210,000 Current assets/(liabilities) 251,724 398,868 - Long term liabilities - - (800,000) 251,724 398,868 68,410,000 |
Total Unrestricted funds Designated funds Endowment funds 2023 2022 2022 2022 £ £ £ £ 69,210,000 - - 65,137,000 650,592 256,880 78,868 - (800,000) (792,000) - - 69,060,592 (535,120) 78,868 65,137,000 |
Total 2022 £ 65,137,000 335,748 (792,000) 64,680,748 |
|---|---|---|
- 21 -
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
19 Operating lease commitments
Lessor
The leases are negotiated over terms of 5-15 years and rentals are fixed for 5-15 years. Some leases include a provision for five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.
At the reporting end date the charity had contracted with tenants the total minimum lease payments of £288,208 (2022: £325,692).
20 Related party transactions
Mr A C Blundy, Mr M Reid, Mr G Kirby, Mr R Hough, Ms H McIntosh, Mrs C Melville, Reverend S Winn and Councillor P Slattery, Trustees of the Charity, are also Trustees of the Greenwich Charity of William Hatcliffe and the Misses Smith. The Charity granted £250,000 (2022: £250,000) to this entity during the year. At the year end, £nil (2022: £nil) grants were outstanding to be paid to the Greenwich Charity of William Hatcliffe and the Misses Smith.
Mrs W Kirkman and R Clough, Trustees of the Charity, are also Trustees of the Lee Charity of William Hatcliffe. The Charity granted £125,000 (2022: £125,000) to this entity during the year. At the year end, £nil (2022: £nil) grants were outstanding to be paid to the Lee Charity of William Hatcliffe.
Reverend S Hall, Mr J Watson and Mr J Nicholson, Trustees of the Charity are also Trustees of the Lewisham Almshouse Charity of William Hatcliffe and Abraham Colfe. The Charity granted £125,000 (2022: £125,000) to this entity during the year. At the year end, £nil (2022: £nil) grants were outstanding to be paid to the Lewisham Almshouse Charity of William Hatcliffe and Abraham Colfe.
| 21 | Cash generated from operations | 2023 | 2022 | |
|---|---|---|---|---|
| £ | £ | |||
| as restated | ||||
| Surplus for the year | 4,379,844 | 2,988,224 | ||
| Adjustments for: | ||||
| Investment income recognised in statement of financial activities | (2,225,798) | (1,927,772) | ||
| Fair value gains and losses on investment properties | (3,957,832) | (2,598,992) | ||
| Movements in working capital: | ||||
| (Increase)/decrease in debtors | (30,028) | 27,387 | ||
| (Decrease)/increase in creditors | (129,510) | 44,058 | ||
| Cash absorbed by operations | (1,963,324) | (1,467,095) | ||
| 22 | Analysis of changes in net (debt)/funds | |||
| At 1 April 2022 | Cash flows | At 31 March | ||
| 2023 | ||||
| £ | £ | £ | ||
| Cash at bank and in hand | 506,811 | 155,306 | 662,117 | |
| Loans falling due after more than one year | (792,000) | (8,000) | (800,000) | |
| (285,189) | 147,306 | (137,883) |
- 22 -
THE ESTATE CHARITY OF WILLIAM HATCLIFFE
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023
23 Prior period adjustment
Changes to the balance sheet
| Changes to the balance sheet | |||||
|---|---|---|---|---|---|
| At | 31 March 2022 | ||||
| As previously | Adjustment | As | restated | ||
| reported | |||||
| £ | £ | £ | |||
| Fixed assets | |||||
| Investment properties | 65,137,000 | - | 65,137,000 | ||
| Current assets | |||||
| Debtors due within one year | 60,862 | - | 60,862 | ||
| Bank and cash | 506,811 | - | 506,811 | ||
| Creditors due within one year | |||||
| Other creditors | (150,897) | (81,028) | (231,925) | ||
| Creditors due after one year | |||||
| Loans and overdrafts | (792,000) | - | (792,000) | ||
| Net assets | 64,761,776 | (81,028) | 64,680,748 | ||
| Endowment funds | 65,137,000 | - | 65,137,000 | ||
| Designated funds | 78,868 | - | 78,868 | ||
| Unrestricted funds | (454,092) | (81,028) | (535,120) | ||
| Total equity | 64,761,776 | (81,028) | 64,680,748 | ||
| Changes to the profit and loss account | |||||
| Period ended 31 March | 2022 | ||||
| As previously | Adjustment | As | restated | ||
| reported | |||||
| £ | £ | £ | |||
| Charitable activities | 468,915 | 81,028 | 549,943 | ||
| Net movement in funds | 3,069,252 | (81,028) | 2,988,224 |
The accounts include one prior year adjustment to accrue for expenses which relate to the financial year ended 31 March 2022. This has resulted in an increase in expenditure of £81,028 and and increase in creditors of £81,028 as at 31 March 2022. As a result the funds have decreased by £81,028, as at 31 March 2022.
- 23 -