**Charity Registration No. 256893**
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
**ANNUAL REPORT AND FINANCIAL STATEMENTS**
**FOR THE YEAR ENDED 5 APRIL 2021**
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **LEGAL AND ADMINISTRATIVE INFORMATION**
**Trustees** M J Gee A H S Morgenthau R Freedman A Simon (Appointed 10 May 2021) **Charity number** 256893 **Principal address** 274a Kentish Town Road London NW5 2AA **Auditor** Citroen Wells Chartered Accountants Devonshire House 1 Devonshire Street London W1W 5DR **Bankers** Barclays Bank plc Cardiff Queen St Leicester LE87 2BB **Solicitors** Nicholas and Co 18-22 Wigmore Street London W1U 2RG
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **CONTENTS**
||**Page**|
|---|---|
|Trustees' report|1 - 3|
|Statement of trustees' responsibilities|4|
|Independent auditor's report|5 - 7|
|Statement of financial activities|8|
|Statement of financial position|9|
|Statement of cash flows|10|
|Notes to the financial statements|11 - 24|
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **TRUSTEES' REPORT** _**FOR THE YEAR ENDED 5 APRIL 2021**_
The trustees present their report and audited financial statements for the year ended 5 April 2021.
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 trust deed , 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 for the public benefit**
The charity's objectives include the support of a wide range of charitable organisations at the discretion of the trustees and as set out in the declaration of trust.
T he objective of the charity i s to maintain, and where possible to increase, the level of income and to distribute the income to chosen charitable beneficiaries exclusively to benefit education and training, overseas aid, arts and culture, health and general charitable purposes.
The charity's overall strategy to achieve the objective is effective management of its property portfolio to maximise rental returns. The charity's resources are reviewed at the regular trustees' meetings to allow informed decisions to be made on grant commitments.
The charity makes small and large grants to a wide variety of charitable causes in the UK and overseas. When the charity is approached to assist with substantial capital or building projects, the trustees undertake due diligence before deciding whether to make a commitment. Where the charity has made a commitment to make payments over several years, the trustees monitor the progress of the project before releasing payments.
The charity has not made use of any volunteers during the year.
The trustees review all commitments on a forwards five-year basis. During the year under review, the charity did not enter into any new commitments.
The trustees confirm that they have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity 's aims and objectives and in planning future activities and setting the grant making policy for the year.
## **Achievements and performance**
## Level of Income
Overall, the charity's investment income decreased by £469,788 (20 20 : increased by £238,959 ) compared to the previous year. Rental and other property income receivable decreased by £467,348 ( 2020 : increased by £238,560 ) whilst interest receivable decreased by £2,440 (20 20 : increased by £399 ). Notwithstanding the continued difficult circumstances prevailing in the UK commercial property market during the year, the trustees are satisfied with the performance of the portfolio.
## Income Distribution
During the year, 48.9% ( 2020 : 52.1 %) of the year's net incoming resources was distributed and committed to charitable beneficiaries to benefit education and training, overseas aid, art and culture, health and general charitable purposes , including support and governance costs allocated to those charitable activities .
## Unrestricted Funds
The charity's financial position at the end of the period was entirely satisfactory. The unrestricted funds during the financial year increased by 4% (20 20: decrease of 3.3 %) compared to the previous year .
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **TRUSTEES' REPORT (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## Factors relevant to achievement of objectives
Rental income is the main source of incoming resources. The prevailing market conditions have a significant effect on income generated, and conditions during the year continued to be difficult with commercial properties suffering from lower rental yields as a result of a continued decline in the popularity of UK high streets. The trustees attempt to mitigate these effects by negotiating rent with existing and new tenants to ensure a satisfactory income for the trust while recognising the reality of the tough economic conditions currently facing tenants.
The percentage of funds distributed and committed to charitable causes will vary from year to year because the trustees' grant making decisions are based on estimates and projections of income receivable which are naturally subject to change.
The trustees are responsible for monitoring the charity 's investment management and governance costs in order to maximise funds available for charitable purposes.
## **Financial review**
The Statement of Financial Activities, set out on page 8 of the financial statements , shows how the charity's incoming resources have been expended during the year ended 5 April 20 21 .
The charity continues to hold a substantial fund base from which the income generated is distributed through
grant making activities.
The charity 's assets are held in order to generate income for charitable donations. The main asset of the charity is a portfolio of commercial properties. The fair value of the investment property portfolio was assessed by M J Gee as at 5 April 20 21.
Net incoming resources available for distribution during the year were £924,010 (20 20: 1,327,948 ), which were used to fund charitable expenditure and governance costs tota l ling £451,536 (20 20 : £691,352 ). At 5 April 20 21 the charity held net assets of £18,409,464 ( 2020: 17,700,880 ). Projected grants payable over the next five years which the charity had committed to by the year end are approximately £514,000 (20 20 : £ 865,000 ) in total and at 5 April 20 21 had been fully accounted for as grant commitments payable.
During the year the charity received a surrender premium of £140,000 (2020: £365,000 ) in relation to one of its properties.
## **Investment policy**
The trustees follow a policy of maximising the return on investments while ensuring acceptable levels of risk. The trustees meet regularly to discuss whether performance has been matched to objectives.
## **Policy on reserves**
Reserves consist of unrestricted funds. It is the policy of the charity to distribute up to 100% of net income, in addition to any undistributed unrestricted funds, at the discretion of the trustees. Liquid funds are maintained at a level which is considered adequate to cover short term requirements.
## **Risk management**
The 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. Risk assessments are carried out in order to ascertain the likelihood of a risk event occurring, of its potential impact, and whether any cost effective mitigating action may be taken. Potential risks have been identified and are reviewed on a regular basis.
## **Plans for the future**
The future plans and objectives of the charity are to maintain and where possible to increase the level of
income and to distribute the income to chosen charitable beneficiaries.
To ensure that future plans and objectives are set, reviewed, and on target, trustees hold regular meetings to compare and discuss the budgeted and actual income/distributions and where necessary seek counsel from professional advisors.
- 2 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **TRUSTEES' REPORT (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **Structure, governance and management**
The charity was established by a charitable trust deed on 3 April 1967.
The trustees who served during the year were: M J Gee A H S Morgenthau R Freedman A Simon (Appointed 10 May 2021) E A Charles (Deceased 27 December 2020)
The power to appoint new or additional trustees is vested in the trustees. In exercising this power, the trustees would use their own network of contacts, including family members, to identify suitable candidates possessing the necessary knowledge and skills to act as trustees. Trustees are expected to identify their training needs and to take measures to ensure that these needs are met.
The charity has four trustees including a chartered accountant and a solicitor. Day to day matters are handled at the charity's office and regular meetings of the trustees are held. The trustees review all commitments on a forward five-year basis so that new projects can be undertaken and income is made available.
In 1997 the trustees made charitable settlements of £50 each to establish three new charitable trusts. Two of these trusts, the Jacqueline & Michael Gee Charitable Trust and the Diana and Allan Morgenthau Charitable Trust are controlled by the trustees M J Gee and A H S Morgenthau respectively and their wives .
The charity's property portfolio is managed on a professional basis by Archie Sherman Administration Limited of which M J Gee is the sole director and shareholder.
The trustees have not received any remuneration during the year. Details of expenses, fees and related party transactions are disclosed in notes 9 and 20 to the financial statements .
On behalf of the board of trustees
## **M J Gee**
Trustee Dated: 4 February 2022
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
## _**FOR THE YEAR ENDED 5 APRIL 2021**_
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:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP FRS102 ;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- 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 ARCHIE SHERMAN CHARITABLE TRUST**
## **INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF THE ARCHIE SHERMAN CHARITABLE TRUST**
## **Opinion**
We have audited the financial statements of The Archie Sherman Charitable Trust (the ‘charity’) for the year ended 5 April 2021 which comprise the statement of financial activities, the statement of financial position, the statement of cash flows and the 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 5 April 2021 and of its incoming resources and application of resources including its income and expenditure , for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- 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.
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE ARCHIE SHERMAN CHARITABLE TRUST**
## **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:
- the information given in the financial statements is inconsistent in any material respect with the trustees' r eport; or
- sufficient accounting records have not been kept; or
- the financial statements are not in agreement with the accounting records and returns ; or
- we have not received all the information and explanations we require for our audit.
## **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 liquidate the c harity or 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.
## **The extent to which the audit was considered capable of detecting irregularities including fraud**
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
- We obtained an understanding of the legal and regulatory frameworks that are applicable to the charity and determined that the most significant are those that relate to the reporting framework (FRS 102 as applied in the Charities SORP and the Charities Act 2011).
- We understood how the charity is complying with those frameworks by making enquiries of management and seeking representations from those charged with governance. We corroborated our understanding by reviewing supporting documentation including trustees meeting minutes and correspondence with regulatory bodies.
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF THE ARCHIE SHERMAN CHARITABLE TRUST**
- We assessed the susceptibility of the charity’s financial statements to material misstatement, including how fraud might occur by considering the risk of management override of internal control and by designating income recognition as a fraud risk. We performed journal entry testing by specific risk criteria, with a focus on journals indicating large or unusual transactions based on our understanding of the charity. We tested completeness of income through substantive tests performed, analytical review procedures and cut off tests on the income recognised.
- Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiries of management and those charged with governance, review of legal and professional expenses and review of trustee meeting minutes.
- The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
## **Use of our report**
This report is made solely to the charity’s trustees, as a body, in accordance with 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 auditors' 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.
## **Citroen Wells**
**Chartered Accountants Statutory Auditor**
4 February 2022 Devonshire House 1 Devonshire Street London W1W 5DR
Citroen Wells 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.
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**Notes**
**Income from:**
Investment income
**3**
**Expenditure on:**
Raising funds
**4**
**Net incoming resources**
Charitable activities
Education and t raining
**5**
Overseas a id
**5**
Arts and c ulture and g eneral c haritable c auses
**5**
Health
**5**
**Total charitable expenditure**
**Total expenditure**
Net gains/(losses) on investments
**11**
**Net movement in funds**
Fund balances at 6 April 2020
**Fund balances at 5 April 2021**|**2021**
**£**
1,161,202
237,192
924,010
15,209
30,445
297,401
108,481
451,536
688,728
236,110
708,584
17,700,880
18,409,464|**2020**
**£**
1,630,990
303,042
1,327,948
98,532
55,901
421,498
115,421
691,352
994,394
(1,236,315)
(599,719)
18,300,599
17,700,880|
|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
- 8 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **STATEMENT OF FINANCIAL POSITION**
## _**AS AT 5 APRIL 2021**_
|**Notes**
**Fixed assets**
Investment properties
**12**
Investments
**13**
**Current assets**
Trade and other receivables
**15**
Cash at bank and in hand
**Current liabilities**
**16**
Net current assets
**Total assets less current liabilities**
**Non-current liabilities**
**17**
**Net assets**
**Income funds**
Unrestricted funds|**2021**
**£**
**£**
16,889,067
885,680
17,774,747
143,932
1,467,882
1,611,814
(771,044)
840,770
18,615,517
(206,053)
18,409,464
18,409,464
18,409,464|**2020**
**£**
**£**
17,195,966
689,119
17,885,085
188,448
955,104
1,143,552
(838,244)
305,308
18,190,393
(489,513)
17,700,880
17,700,880
17,700,880|
|---|---|---|
The notes on pages 11 to 24 form part of these financial statements
The financial statements were approved by the Trustees on 4 February 2022
M J Gee **Trustee**
- 9 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **STATEMENT OF CASH FLOWS** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**Notes**
**Cash flows from operating activities**
Cash absorbed by operations
**23**
**Investing activities**
Improvements to investment property
Proceeds on disposal of investment
property
Investment income received
**Net cash generated from investing**
**activities**
**Net cash used in financing activities**
**Net increase in cash and cash equivalents**
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
**Cash and cash equivalents at end of year**|**2021**
**£**
**£**
(1,045,278)
-
346,448
1,161,202
1,507,650
-
462,372
955,104
50,406
1,467,882|**2020**
**£**
**£**
(1,304,169)
(105,337)
-
1,630,990
1,525,653
-
221,484
772,726
(39,106)
955,104|
|---|---|---|
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**THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **1 Accounting policies**
## **Charity information**
The Archie Sherman Charitable Trust is a charity registered in England and Wales. The charity's principal address is 274a Kentish Town Road, London, NW5 2AA.
## **1.1 Accounting convention**
The financial statements have been prepared in accordance with the charity's Trust Deed, 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)". 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 a mounts 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 freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
## **1.2 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.
## **1.3 Charitable funds**
The charity's unrestricted funds are attributable to the original amount settled on the charity, subsequent settlements, accumulated realised and unrealised capital gains/losses and undistributed income. Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.
## **1.4 Incoming resources**
Investment income is earned through holdings of assets for investment purposes such as shares and property. Income includes interest and rent and is recognised when the amount can be measured reliably. Interest income is recognised using the effective interest method and rental income is recognised as the charity’s right to receive payment is established.
## **1.5 Resources expended**
Expenditure on grants is recorded once the charity has made an unconditional commitment to pay the grant and this is communicated to the beneficiary or the grant has been paid, whichever is the earlier.
Other expenditure is included in the financial statements on an accruals basis.
Charitable activities include expenditure associated with grants payable , support costs and governance costs .
- 11 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **1 Accounting policies**
**(Continued)**
Support costs include staff, office and other costs incurred in the running of the charity.
Governance costs include those incurred in the governance of the charity and its assets and are primarily associated with constitutional and statutory requirements.
Support costs and governance costs have been apportioned against each individual charitable activity.
## **1.6 Investment properties**
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value as at the reporting end date. The surplus or deficit on revaluation is recognised in net income/(expenditure) for the year.
## **1.7 Non-current investments**
Fixed asset investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.
A subsidiary is an entity controlled by the charity. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
## **1.8 Cash and cash equivalents**
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.
## **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 statement of financial position 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 trade and other receivables 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 other payables, 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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **1 Accounting policies**
## **(Continued)**
## _**Derecognition of financial liabilities**_
Financial liabilities are derecognised when the charity ’s contractual obligations expire or are discharged or cancelled.
## **1.10 Employee benefits**
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
## **1.11 Foreign exchange**
Transactions denominated in foreign currencies are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Differences arising on commitments in foreign currencies are allocated against the relevant heading under charitable activities. Differences on bank balances are included with support costs.
## **1.12 Charitable c ommitments**
Charitable commitments are provided as liabilities, discounted at an appropriate rate, and shown as grants payable where they are legally or constructively binding. The excess of charitable commitments paid over the discounted commitments previously provided are treated as unwinding charges and included as part of grants payable.
## **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.
## **Key sources of estimation uncertainty**
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:
## **Valuation of investment properties**
Investment properties are recognised at fair value, with changes in fair value being recognised through profit or loss. The investment properties are stated at the trustees' valuation on an open market basis. There is an inevitable degree of judgement involved and value can only ultimately be reliably tested in the market itself.
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**3**
**Investment income**
Rental and other property income
Interest receivable
**4**
**Raising funds**
Property related costs|**2021**
**£**
1,161,162
40
1,161,202
**2021**
**£**
237,192
237,192|**2020**
**£**
1,628,510
2,480
1,630,990
**2020**
**£**
303,042
303,042|
|---|---|---|
Property related costs comprise £115,616 (2020: £161,975) of management fees together with other property related expenditure of £121,576 (2020: £141,067).
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## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **5 Charitable activities**
|**Education**
**and t raining**
**Overseas**
**a id**
**Arts and**
**c ulture and**
**g eneral**
**c haritable**
**c auses**
**£**
**£**
**£**
Grant funding of
activities (see note 6)
38,641
24,950
232,100
Foreign exchange
(34,075)
**-**
**-**
Share of support costs
(see note 7)
6,891
3,558
42,281
Share of governance
costs (see note 7)
3,752
1,937
23,020
15,209
30,445
297,401
**Analysis by fund**
Unrestricted funds
15,209
30,445
297,401
15,209
30,445
297,401
**For the year ended 5 April 2020**
Unrestricted funds
98,532
55,901
421,498
98,532
55,901
421,498|**Health**
**£**
97,860
(16,331)
17,451
9,501
108,481
108,481
108,481
115,421
115,421|**Total**
**2021**
**£**
393,551
(50,406)
70,181
38,210
451,536
451,536
451,536|**Total**
**2020**
**£**
518,428
39,514
90,337
43,073
691,352
691,352
691,352|
|---|---|---|---|
- 15 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**6**
**Grants payable**
**Education**
**and t raining**
**Overseas**
**a id**
**Arts and**
**c ulture and**
**g eneral**
**c haritable**
**c auses**
**£**
**£**
**£**
Grants to institutions:
Yad Vashem UK
Foundation
1,846
-
-
The Diana and Allan
Morgenthau Charitable
Trust
-
-
60,000
The Jacqueline and
Michael Gee Charitable
Trust
-
-
60,000
The Rosalyn and
Nicholas Springer
Charitable Trust
-
-
60,000
Jewish Child's Day
-
-
2,500
Jewish Care
-
-
-
Royal Opera House
Covent Garden
Foundation
-
-
-
The Royal National
Theatre
-
-
25,000
Norwood Ravenswood
-
-
-
Nightingale Hammerson
-
-
-
Community Security
Trust
-
-
15,000
Youth Aliyah - Child
Rescue (Yemin Orde)
6,952
-
-
Glyndebourne
Productions Limited
-
-
2,100
The British Friends of
the Jaffa Institute
-
-
-
Shaare Zedek UK
-
-
-
The Royal Academy of
Arts
-
-
-
UK Friends of I.D.C.
22,975
-
-
Carried forward
31,773
-
224,600|**Health**
**£**
-
-
-
-
-
37,500
-
-
15,000
20,000
-
-
-
-
4,649
-
-
77,149|**Total**
**£**
1,846
60,000
60,000
60,000
2,500
37,500
-
25,000
15,000
20,000
15,000
6,952
2,100
-
4,649
-
22,975
333,522|**2020**
**£**
1,833
81,250
81,250
81,250
4,881
37,500
25,000
25,000
15,000
20,000
15,000
11,053
2,100
5,675
6,808
17,000
23,000
453,600|
|---|---|---|---|
- 16 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**6**
**Grants payable**
**Education**
**and t raining**
**Overseas**
**a id**
**Arts and**
**c ulture and**
**g eneral**
**c haritable**
**c auses**
**£**
**£**
**£**
Brought forward
31,773
-
224,600
Tel Aviv University Trust
6,868
-
-
My Israel
-
-
2,500
The Israel Children's
Centers
-
-
-
The Belsize Square
Synagogue Annual
Israel Appeal
-
-
-
Save a Child's Heart
-
-
-
Magen David Adom UK
-
-
-
British Friends of the
Israel Guide Dog Centre
for the Blind
-
-
-
The Central British Fund
for World Jewish Relief
-
-
10,000
The Jerusalem
Foundation
-
19,950
-
38,641
19,950
237,100|**Health**
**£**
77,149
-
-
-
-
7,873
10,838
2,000
-
-
97,860|**Total**
**2020**
**£**
**£**
**(Continued)**
333,522
453,600
6,868
11,053
2,500
2,500
-
30,785
-
8,000
7,873
10,490
10,838
2,000
2,000
10,000
19,950
393,551
518,428|
|---|---|---|
- 17 -
**THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **7 Support costs**
|**Support**
**costs**
**Governance**
**costs**
**£**
**£**
Staff costs
39,763
-
Office service charges
10,364
3,454
Travelling
-
-
Overseas representatives
19,188
-
Other costs
21
-
Foreign exchange
845
-
Audit fees
-
4,524
Accountancy
-
27,000
Legal and professional
-
1,500
Insurance
-
1,732
70,181
38,210
Analysed between
Charitable activities
70,181
38,210|**2021**
**£**
39,763
13,818
-
19,188
21
845
4,524
27,000
1,500
1,732
108,391
108,391|**2020**
**£**
39,775
25,276
4,200
27,673
141
(408)
4,842
28,182
1,997
1,732
133,410
133,410|
|---|---|---|
Office service charges payable of £13,818 (20 20: £25,276 ) have been allocated between support costs (75%) and governance costs (25%) based on an estimate of usage.
The total support and governance cost s attributable to charitable activities are apportioned pro rata to the cost of grants.
## **8 Auditor's remuneration**
The analysis of auditor's remuneration is as follows:
|**Fees payable to the charity's auditor:**
Audit of the charity's annual accounts
**Non-audit services**
All other non-audit services|**2021**
**£**
4,524
27,000|**2020**
**£**
4,842
28,182|
|---|---|---|
## **9 Trustees**
The trustees have not received any remuneration during the current or prior year.
In the course of their duties as trustees, no travel expenses were paid (2 020 : £ 1,365 to M J Gee and £1,365 to R Freedman) during the year.
- 18 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **10 Employees**
## **Number of employees**
The average monthly number of employees during the year was:
|Administration
**Employment costs**
Wages and salaries
Social security costs|**2021**
**Number**
1
**2021**
**£**
39,521
242
39,763|**2020**
**Number**
1
**2020**
**£**
38,634
1,141
39,775|
|---|---|---|
There were no employees whose annual remuneration was £60,000 or more.
## **11 Net gains/(losses) on investments**
|Revaluation of investments
Revaluation of investment properties
Gain/(loss) on sale of investment properties
**Investment properties**
**Fair value**
At 6 April 2020
Disposals
At 5 April 2021|**2021**
**£**
196,561
-
39,549
236,110|**2020**
**£**
(26,326)
(1,209,989)
-
(1,236,315)
**2021**
**£**
17,195,966
(306,899)
16,889,067|
|---|---|---|
## **12 Investment properties**
M J Gee is a trustee of the charity with considerable knowledge and experience of the properties and his company Archie Sherman Administration Limited manages the Trust's portfolio of investment properties. The properties have been stated at their fair values as at 5 April 2021, as assessed by M J Gee based on an assessment of rental yields together with other relevant factors and agreed by the other trustees.
- 19 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**13**
**Fixed asset investments**
**2021**
**Notes**
**£**
Investments in subsidiaries
**21**
203
Listed investments
885,477
885,680
**2021**
**£**
Listed investments carrying amount
885,477
**Movements in non-current investments**
**Listed**
**Investments**
**Investments**
**in**
**subsidiaries**
**£**
**£**
**Cost or valuation**
At 6 April 2020
688,916
203
Valuation changes
196,561
-
At 5 April 2021
885,477
203
**Carrying amount**
At 5 April 2021
885,477
203
At 5 April 2020
688,916
203
**14**
**Financial instruments**
**2021**
**£**
**Carrying amount of financial assets**
Instruments measured at fair value through profit or loss
885,477|**2020**
**£**
203
688,916
689,119
**2020**
**£**
688,916
**Total**
**£**
689,119
196,561
885,680
885,680
689,119
**2020**
**£**
688,916|
|---|---|
- 20 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
|**15**
**Trade and other receivables**
**Amounts falling due within one year:**
Amount due from subsidiary
Other receivables
**Amounts falling due after one year:**
Other receivables
**Total debtors**
**16**
**Current liabilities**
Other taxation and social security
Grants payable
Other payables
Accruals and deferred income
**17**
**Non-current liabilities**
Grants payable|**2021**
**£**
1,059
129,165
130,224
13,708
143,932
**2021**
**£**
4,362
307,455
109,824
349,403
771,044
**2021**
**£**
206,053|**2020**
**£**
959
170,981
171,940
16,508
188,448
**2020**
**£**
8,423
375,325
105,313
349,183
838,244
**2020**
**£**
489,513|
|---|---|---|
- 21 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)**
## _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **18 Grant commitments**
||**Charitable**|
|---|---|
||**commitments**|
||**accrued**|
||**£**|
|Grant commitments recognised at the start of the year|864,838|
|Commitments made in the year|393,551|
|Grants paid during the year|(694,475)|
|Foreign exchange difference on commitments|(50,406)|
|Amount of grant commitments recognised at 5 April 2020|**513,508**|
|Grant commitments at 5 April 2021 recognised as:||
|Due within one year:|307,455|
|Due over one year:|206,053|
||**513,508**|
## **19 Operating lease commitments**
At the previous reporting end date the charity had a cost sharing arrangement in place with Archie Sherman Administration Limited, which committed it to bearing half of the rent for the charity's office premises. This agreement has now lapsed. The outstanding commitment for future minimum lease payments under non-cancellable operating leases fell due as follows:
|Within one year
Between two and five years|**2021**
**£**
-
-
-|**2020**
**£**
10,000
36,795
46,795|
|---|---|---|
- 22 -
**THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **20 Related party transactions**
During the year the charity made donations of £ 60 ,000 (20 20 : £ 81,250 ) to the Diana and Allan Morgenthau Charitable Trust (a charity of which A H S Morgenthau is also a trustee) and £ 60,000 (20 20 : £ 81,250 ) to the Jacqueline and Michael Gee Charitable Trust (a charity of which M J Gee is also a trustee).
During the year the charity paid property management fees of £115,616 (20 20 : £ 161,975) and office service charges of £13,818 (2020: £25,276) to Archie Sherman Administration Limited, a company controlled by M J Gee .
At the year end, the charity's subsidiary undertaking, ASCT Developments Limited ("the company"), owed the charity £ 1,053 (20 20 : £9 5 3). The company was dormant during the year.
## **21 Subsidiaries**
These financial statements are separate charity financial statements for The Archie Sherman Charitable Trust.
Details of the charity's subsidiaries at 5 April 2021 are as follows:
|**Name of undertaking**|**Registered**|**Nature of business**|**Class of**|**% Held**|
|---|---|---|---|---|
||**office**||**shares held**|**Direct Indirect**|
|Archie Sherman Trust|England &|Dormant|Ordinary|100.00|
|Nominees Limited|Wales||||
|(Company Number|||||
|00915582)|||||
|ASCT Developments|England &|Dormant|Ordinary|100.00|
|Limited (Company Number|Wales||||
|03741751)|||||
|Thamawell Limited|England &|Dormant|Ordinary|100.00|
|(Company Number|Wales||||
|00851792)|||||
The aggregate capital and reserves and the result for the year of subsidiaries excluded from consolidation was as follows:
|**Name of undertaking**|**Profit/(Loss)**|**Capital and**|
|---|---|---|
|||**Reserves**|
||**£**|**£**|
|Archie Sherman Trust|||
|Nominees Limited|||
|(Company Number|||
|00915582)|-|100|
|ASCT Developments|||
|Limited (Company Number|||
|03741751)|(16)|(388)|
|Thamawell Limited|||
|(Company Number|||
|00851792)|(55)|(186)|
The charity's subsidiaries are nominee companies which hold no assets in their own right.
- 23 -
## **THE ARCHIE SHERMAN CHARITABLE TRUST**
## **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)** _**FOR THE YEAR ENDED 5 APRIL 2021**_
## **22 Analysis of changes in net funds**
The charity had no debt during the year.
|**23**|**Cash generated from operations**|**2021**|**2020**|
|---|---|---|---|
|||**£**|**£**|
||Surplus/(deficit) for the year|708,584|(599,719)|
||Adjustments for:|||
||Investment income recognised in statement of financial activities|(1,161,202)|(1,630,990)|
||Foreign exchange differences|(50,406)|39,106|
||Gain on disposal of investment property|(39,549)|-|
||Fair value gains and losses on investment properties|-|1,209,989|
||Fair value gains and losses on investments|(196,561)|26,326|
||Movements in working capital:|||
||Decrease/(increase) in trade and other receivables|44,516|(68,262)|
||(Decrease) in trade and other payables|(350,660)|(280,619)|
||**Cash absorbed by operations**|(1,045,278)|(1,304,169)|
- 24 -