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2020-12-31-accounts

THE EXILARCH'S FOUNDATION ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

Charity No: 275919

THE EXILARCH'S FOUNDATION CHARITY INFORMATION

Trustees D.A. Dangoor CBE (Exilarch)
M.J. Dangoor
R.D. Dangoor
E.B. Dangoor
Registered Charity Number 275919
Address 4 Carlos Place
Mayfair
London
W1K 3AW
Auditors Wilson Wright LLP
Thavies Inn House
3-4 Holborn Circus
London EC1N 2HA
Bankers Barclays Bank plc
1 Churchill Place
London E14 5HP
National Westminster Bank plc
Kensington Royal Gardens Branch
55 Kensington High Street
London
W8 5ZG
Solicitors Gordon Dadds LLP
6 Agar Street
London
WC2N 4HN
Farrer & Co LLP
66 Lincolns Inn Fields
London
WC2A 3LH

THE EXILARCH'S FOUNDATION CONTENTS

Pages
Report of the Trustees 1-5
Report of the Independent Auditors 6-9
Statement of Financial Activities 10
Statement of Financial Position 11
Statement of Cashflows 12
Notes to the Accounts 13-22

THE EXILARCH'S FOUNDATION REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2020

The trustees present their report and accounts for the year ended 31 December 2020. The accounts have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) issued October 2019 and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2019.

The accounts have been prepared to give a ‘true and fair’ view and 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 Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

Reference and administrative information

The Charity was established by a Trust Deed dated 2 April 1978. Its registered charity number is 275919 and its principal office is at 4 Carlos Place, London W1K 3AW,

Aims

The charity is established to carry out all charitable objects, in any part of the world, within the legal meaning of the term, at the absolute discretion of the trustees. The trustees are constantly considering potential new charitable opportunities.

Governance and management

The Charity is governed by its Trust Deed dated 2 April 1978.

The power of appointment of new or additional trustees and the choice of successor is vested exclusively in the Exilarch, D.A. Dangoor CBE. No formal policies have been adopted for the induction and training of trustees.

The trustees during the year and at the date of this report were as follows:-

D.A. Dangoor CBE (Exilarch)

M.J. Dangoor

R.D. Dangoor

E.B. Dangoor

The trustees are legally responsible for the overall management and control of the charity and meet regularly throughout the year.

The investment committee (consisting of D.A. Dangoor CBE and M.J. Dangoor) reviews the charity's investments and investment policies, taking professional advice where appropriate.

Public Benefit

The Charities Act 2011 requires all charities to meet the legal requirement that its aims are for the public benefit. The Charity Commission in its Charities and Public Benefit guidance states that there are two key principles to be met in order to show that an organisation’s aims are for the public benefit: firstly, there must be an identifiable benefit or benefits and secondly, that the benefit must be to the public or a section of the public. The trustees consider that they have complied with Section 17 of the Charities Act 2011 including the guidance “public benefit: running a charity (PB2)”.

THE EXILARCH'S FOUNDATION REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2020

Aims, objectives, activities and achievements during 2020

Aim 1 - Iraq

The trustees have continued to keep their long-term sights on the eventual re-establishment of a Jewish community in Iraq through the setting up of educational and religious institutions. The Trustees’ strategy for achieving this principal aim, for so long as the security position in Iraq remains sufficiently unsettled for it to be impossible for Jews to resettle in significant numbers in Iraq and therefore impossible for the Charity to acquire land and/or begin construction on projects in Iraq, is to maintain appropriate levels of reserves and to monitor developments in Iraq with the assistance of a network of contacts throughout the Middle East, members of the former community of Iraqi Jews and academics worldwide, and public sources of information. In consultation with professional advisers and the Charity Commission, the Trustees have undertaken to carry out regular assessments of when the re-establishment of the Jewish community and large-scale expenditure by the Charity from this fund might become possible.

The Charity held a designated fund of £10 million for the purpose of assisting the setting up of educational and religious institutions in a future re-established Jewish community in Iraq.

The trustees continue to take note of:

The Trustees are keeping the designation of funds for this purpose under review.

Aim 2 – other charitable purposes

Alongside their above objective, the Trustees have during 2020 sought to identify effective ways of deploying the Charity’s resources so as to deliver maximum impact without adversely affecting its capacity to achieve its principal objective.

Monotheism

The Trustees continue to explore ways to take forward the recommendations contained in the report commissioned jointly with Birkbeck College on the feasibility of creating an institute for ethical monotheism which will include academic activities of research, teaching and publication, and practical engagement with social and public ethical issues.

THE EXILARCH'S FOUNDATION REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2020

Major grants

During the year a grant of £1.2m was made jointly to Cancer Research UK/The Francis Crick Institute, £0.25m to The Royal United Services Institute for Defence and Security, £0.2m to Dangoor Education and £0.2m to the Jewish Leadership Council. Further details of grants can be found in note 7 to the accounts.

Subsequent to the year-end, the Trustees pledged a further £1.5m to The Royal United Services Institute for Defence and Security.

Grants for educational institutions

Funding for educational institutions in the UK has been continued through 2020.

The academic results achieved at Westminster Academy have continued to improve more than 70% of student achieved grades 9-4 in each of the core subjects of English, Maths and Science, with a large proportion of these not having English as a first language.

The Academy students continue to achieve good IB results and in 2021, obtained an average of 35.8 points out of 45 (global average circa 29/45). Two students of the Academy achieved 44 out of 45 points and five students met their Oxbridge entry requirements.

The Charity continues to support the London Centre for Languages and Culture which was established by Pembroke College, Oxford.

Plans for future periods

The Trustees resolved that whilst they would continue to consider other applications for funding made to the Charity, they wished to continue to address the following areas over the coming years.

The advancement of education and the Jewish religion in Iraq

The Trustees have resolved to retain the fund designated for assisting in the re-establishment of a Jewish community in Iraq through the setting up of educational and religious institutions. They will review the level of funds designated for this large-scale project annually, and as part of the Charity’s ongoing monitoring of the situation consider whether continued retention of the funds remains appropriate.

As reported previously, the Trustees believe that it is to the advantage of the Charity to continue to accumulate these funds in order that the Charity may undertake the large-scale projects that will be required when the Jewish community returns to Iraq.

Educational projects and scholarships

The Trustees anticipate continuing their support of the Westminster Academy, of which the Charity is the Sponsor.

Universal Monotheism

The Trustees will continue to explore whether the Charity’s funds might beneficially be used to support the establishment of a new university and in particular the scope for the Charity to allocate additional funds for this project so as to make a meaningful contribution to the estimated £50 million costs involved.

THE EXILARCH'S FOUNDATION REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2020

Principal sources of income

During 2020 the Charity received investment income and interest of £6.5m. The majority of this took the form of rental income from commercial properties.

Principal risks and uncertainties

The trustees have given consideration to the principal risks and uncertainties to which the Charity is exposed. The Charity holds a significant investment property portfolio and any substantial decrease in property values or a substantial reduction in the ratio of tenanted properties to vacant ones would impact the Charity. The trustees monitor the impact of these risks and have concluded that there are sufficient reserves within the Charity to accommodate these.

Reserves Policy

The trustees are continuing to develop and refine the charity's reserves policy, taking into account both long term and short term projects.

The charity now holds an endowment fund of £64.03m and, of the other funds it holds, £10m remains designated for the specific purpose of assisting the setting up of educational and religious institutions in a future re-established Jewish community in Iraq. At the balance sheet date free reserves amounted to £14.6m.

It is the Charity's policy to retain reserves of a minimum of twelve months total expenditure excluding grants.

Investment Policy, Performance and Objectives

The Charity's policy is to invest primarily in real estate and donations have been received on that basis. The trustees consider these investments to be secure both in the medium and long term and their performance in terms of capital growth and income is expected to compare well to the rest of the market. The Charity is also exploring some non-property investments.

The Charity's investment properties were independently revalued at the balance sheet date. The resultant unrealised losses in the year of £0.2m are considered to mirror the current market conditions of the property sector in the UK.

Impact of COVID-19

During the year, the WHO declared a global COVID-19 pandemic and restrictions were put in place in the UK to contain the spread of this disease. The effects of the COVID-19 pandemic and subsequent lockdowns have impacted the income of the Foundation in 2020 as reflected in these financial statements. In some instances, the charity has provided rent concessions and extended payment periods, to assist lessees to remain viable in this difficult period.

The trustees continue to monitor the charity’s reserves, which are significant, on an ongoing basis and have regard to these prior to entering into grant commitments. The trustees reduced grant making in 2020 in light of the uncertainty arising from COVID-19.

THE EXILARCH'S FOUNDATION REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2020

Statement of Trustees’ Responsibilities

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 period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the 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.

Approval

This report was approved by the trustees on 26 October 2021 and signed on their behalf.

Exilarch

D.A. Dangoor CBE

THE EXILARCH’S FOUNDATION

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE EXILARCH’S FOUNDATION

Opinion

We have audited the financial statements of The Exilarch’s Foundation (“the charity”) on pages 6 to 22 for the year ended 31 December 2020, which comprise the statement of financial activities, the statement of financial position, the statement of cashflows and the notes to the financial statements, including significant accounting policies. The financial framework that has been applied in the preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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

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 trustee’s 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.

THE EXILARCH’S FOUNDATION

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE EXILARCH’S FOUNDATION

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on pages 4-5, 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.

THE EXILARCH’S FOUNDATION

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE EXILARCH’S FOUNDATION

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 that 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:

Capability of the audit in detecting irregularities, including fraud

Based on our understanding of the charity and the charity sector, we identified that the principal risks of non-compliance with laws and regulations related to the failure to comply with charity regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Charities (Accounts and Reports) Regulations 2008 and Charities Act 2011. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed by the auditors included:

• discussions with the trustees, including consideration of known or suspected instances of noncompliance with laws and regulations and fraud.

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

• assessing management's significant judgements and estimates in particular those relating to the valuation of the charity’s property portfolio.

• identifying and testing manual journal entries, in particular any journal entries posted with unclear rationale.

There are inherent limitations in the audit procedures described above, and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, 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.

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.

THE EXILARCH’S FOUNDATION

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE EXILARCH’S FOUNDATION

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 auditorʼs 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’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Wilson Wright LLP Chartered Accountants and Statutory Auditors Thavies Inn House, 3-4 Holborn Circus London EC1N 2HA Date: 28 October 2021

Wilson Wright LLP 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.

THE EXILARCH'S FOUNDATION STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted
Funds
Notes
£
Income
Legacy income
3
-
Investment income
4
6,504,437
Other income
5
-
Total income
6,504,437
Expenditure
Cost of raising funds
6
188,575
Charitable activities
7
3,969,902
Total expenditure
4,158,477
2,345,960
Gain on investments
14.1,14.3
699,383
Net movement in funds
3,045,343
Reconciliation of funds
Fund balances at 1 January 2020
34,818,816
Fund balances at 31 December 2020
37,864,159
Net income and net movement in
funds before gains and losses on
investments		 Unrestricted
Funds
£
-
6,504,437
-		 Expendable
Endowment
Fund
£
-
-
-		 Total Funds
2020
£
-
6,504,437
-		 Total Funds
2019
£
4,546,323
6,614,421
2,000,000
6,504,437 - 6,504,437 13,160,744
188,575
3,969,902		 -
-		 188,575
3,969,902		 1,511,516
4,423,890
4,158,477 - 4,158,477 5,935,406
-
819,497		 2,345,960
1,518,880		 7,225,338
1,868,095
3,045,343
34,818,816		 819,497
63,210,356		 3,864,840
98,029,172		 9,093,433
88,935,739
37,864,159 64,029,853 101,894,012 98,029,172

-10-

THE EXILARCH'S FOUNDATION STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2020

Notes
Fixed Assets
Investments
10.1
Current Assets
Debtors
11
Cash at bank
Creditors: Amounts falling due within one year
12
Net Current Assets
Creditors: Amounts falling due after more than
one year
13
Net Assets
Funds
Expendable endowment fund
14.1
Unrestricted funds:
Designated
14.2
General
14.3		 £
£
106,777,151
2,027,046
4,723,796
6,750,842
(4,978,998)
1,771,844
(6,654,983)
101,894,012
64,029,853
23,250,000
14,614,159
101,894,012
2020		 £
£
106,777,151
2,027,046
4,723,796
6,750,842
(4,978,998)
1,771,844
(6,654,983)
101,894,012
64,029,853
23,250,000
14,614,159
101,894,012
2020		 £
£
105,917,849
811,802
5,310,578
6,122,380
(5,785,883)
336,497
(8,225,174)
98,029,172
63,210,356
23,250,000
11,568,816
98,029,172
2019		 £
£
105,917,849
811,802
5,310,578
6,122,380
(5,785,883)
336,497
(8,225,174)
98,029,172
63,210,356
23,250,000
11,568,816
98,029,172
2019
101,894,012 98,029,172
64,029,853
23,250,000
14,614,159		 63,210,356
23,250,000
11,568,816
101,894,012 98,029,172

Approved by the Trustees and Authorised for Issue on 26 October 2021

Exilarch

D.A. Dangoor CBE

-11-

THE EXILARCH'S FOUNDATION STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

Notes
Net cash used in operating activities
16
Cash flows from investing activities
Interest income
Dividends and rental income from investments
Purchase of investment properties
Purchase of other investments
Issue of concessionary loans
Proceeds on disposal of investments
Proceeds from sale of investment properties
Net cash flow from investing activities
Net (decrease)/increase in cash and cash
equivalents in the year
Cash and cash equivalents at the beginning
of the year
Cash and cash equivalents at the end of the
year		 2020
£
(7,822,068)
7,759
6,568,359
(7,697,533)
(463,138)
-
139,993
8,679,846
7,235,286
(586,782)
5,310,578
4,723,796		 2019
£
(6,115,176)
43,468
6,627,768
(6,491,931)
(108,147)
(399,811)
1,189,537
8,062,167
8,923,051
2,807,875
2,502,703
5,310,578

-12-

THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting Policies

The principal accounting policies adopted and judgement in the preparation of the financial statements are as follows:

1.1 Basis of preparation of accounts and assessment of going concern

The financial statements(accounts) have been prepared under the historical cost convention except for investments which have been included at fair value and in accordance with Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued in October 2019 , the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) , the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2019.

The accounts have been prepared to give a " true and fair " view and 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 Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued in October 2019 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The financial statements are prepared in sterling which is the functional currency of the Charity.

The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.

The financial statements have been prepared on a going concern basis as the Board of Trustees consider there are no material uncertainties existing that may cast significant doubt as to its ability to continue as a going concern.

The Board of Trustees has considered the continuing uncertainty arising from the COVID-19 pandemic and does not believe this to have a material impact on going concern.

1.2 Consolidated and financial statements

Consolidated financial statements for the Charity and its wholly owned subsidiary, Edufilms Limited have not been prepared as the subsidiary was immaterial. As such the accounts reflect only the transactions and balances of the Charity.

1.3 Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the item(s) of income have been met, it is probable that the income will be received and the amount can be measured reliably.

Donations, are recognised when the charity has been notified in writing of both the amount and settlement date. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

Legacy gifts are recognised at the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executors to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when there has been a grant of probate, the executors have established there are sufficient assets in the estate to pay the legacy and the conditions attached to the legacy are either within the control of the charity or have been met. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is a treated as a contingent asset and disclosed if material.

-13-

THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

Rental income arising from operating leases on investment properties is accounted for on a straight line basis over the lease term. Incentives for lessees to enter into lease agreements are spread evenly over the lease terms, even if the payments are not made on such a basis. Rental income is measured at the fair value of the consideration receivable excluding VAT.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.

Expenditure

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:

Grants payable are payments made to third parties in the furtherance of the charitable objects of the charity. Unconditional grant offer is accrued once the recipient has been notified of the grant award. The notification gives the recipient a reasonable expectation that they will receive the one-year or multi-year grant.

The provision of a multi-year grant is recognised at its present value where settlement is due over more than one year from the date of the award, there are no unfulfilled performance conditions under the control of the Trust that would permit the Trust to avoid making the future payment(s), settlement is probable and the effect of discounting is material. The discount rate used is the average loan rate in the year in which the grant award is made. This discount rate is regarded by the trustees as providing the most current available estimate of the opportunity cost of money reflecting the time value of money to the Charity.

All expenditure is accounted for on an accruals basis. Irrecoverable VAT is charged against the expenditure heading for which it was incurred.

1.5 Allocation of support and governance costs

Support costs have been allocated between governance costs and other support costs. Governance costs comprise all costs involving the public accountability of the charity and its compliance with regulation and good practice. These costs include costs related to statutory audit and legal fees.

Governance costs and support costs relating to the cost of raising funds and expenditure on charitable activities have been apportioned on an equal basis. The allocation of support and governance costs is analysed in note 8.

1.6 Operating leases

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

-14-

THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

1.7 Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the closing rate of the month preceding that in which the transaction occurred. Exchange differences are taken to the Statement of Financial Activities.

1.8 Fund accounting

The following funds are held by the Charity:-

Expendable Endowment - these are capital funds which can only be converted into expendable income at the discretion of the Exilarch.

Unrestricted funds comprise those funds which the trustees are free to use for any purpose in furtherance of the charitable objects. Unrestricted funds include designated funds where the trustees, at their discretion, have created a fund for a specific purpose.

Realised and unrealised gains and losses on investments are allocated to the appropriate fund based on opening fund balances.

1.9 Fixed asset investments

Investment properties are measured initially at cost and subsequently at fair value at the reporting date. Valuation at fair value is made on an open market value basis by reference to market evidence of transaction prices for similar properties. Fair value adjustments are recognised as gains/losses on revaluation of fixed assets in the Statement of Financial Activities.

Investments in subsidiaries are measured initially at cost and subsequently at cost less impairment.

Other investments are initially measured at cost and subsequently at fair value at the reporting date. Realised and unrealised gains and losses are shown as gains/losses on investments in the Statements of Financial Activities.

1.10 Loans

Concessionary loans made in furtherance of the charity's objectives and repayable after more than one year are initially recognised at the amount paid with the carrying value adjusted in subsequent years to reflect repayments and any accrued interest. To the extent that the loan is assessed as irrecoverable, an impairment loss is recognised in the Statement of Financial Activities.

1.11 Financial instruments

Financial assets and financial liabilities are recognised when the charity becomes a party to the contractual provisions of the instrument. Additionally all financial assets and liabilities are classified according to the substance of the contractual arrangements entered into.

Basic financial assets, which include trade and other receivables and cash at bank are initially measured at transaction price (including transaction costs) and are subsequently carried at amortised cost.

Basic financial liabilities include trade payables, grants payable, other payables and deferred income are initially recognised at transaction price and subsequently carried at amortised cost.

2 Judgements and key sources of estimation uncertainty

In the application of the charity's accounting policies, the trustees are required to make judgments, 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.

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

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.

As disclosed in Note 10.1, the charity's investment properties have been valued on an open market value basis by an independent professional valuer, valuation of which is based on a number of assumptions including market conditions which prevailed at the Statement of Financial Position date.

3 Legacy income

As disclosed in previous years, the Charity was the sole beneficiary of the Estate of Sir Naim Dangoor CBE. On 24 February 2020, the Estate was quantified by virtue of a deed of release and assent. As such, the Estate of £4,546,323 was included as legacy income within the 2019 accounts.

4
5		 Investment income and interest
Unrestricted fund
Income from:-
Listed investments
Unlisted investments
Rent receivable
Interest on cash deposits
Other income
Unrestricted fund
Dilapidation receipt		 2020
£
158
117
6,496,403
7,759
6,504,437
2020
£
-		 2019
£
17,506
168
6,553,279
43,468
6,614,421
2019
£
2,000,000

This represents a settlement receipt in 2019 agreed on a dilapidation claim made against a former tenant by the Charity.

6
a
b		 Cost of raising funds
Unrestricted fund
Investment Property Costs
Rent payable
Rates
Insurance
Service charges
Repairs and maintenance
Legal and professional
Other costs
Publicity
Support costs (see note 8)		 2020
£
104,853
-
271
20,821
(94,140)
67,353
99,158
33,800
55,617
188,575		 2019
£
154,322
76,507
2,318
74,128
785,188
316,754
1,409,217
50,000
52,299
1,511,516

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

7
Expenditure on charitable activities
a
Grants
An analysis of grants is as follows:
Grants to institutions
SOCIAL WELFARE
Community development
Jewish Leadership Council
The Covenant & Conversation Trust
Spanish and Portuguese Jews' Congregation
The Faith & Belief Forum
Woolf Institute
Jewish Lads and Girls Brigade
Centre for Jewish Life
The Board Deputies of British Jews
Best Beginnings
Beit Halochem UK
University Jewish Chaplancy
Chazak
Norwood
Jewish Book Week
Maccabi GB
The Kessler Foundation
Torah Action Life
Veteran Games
Community Security Trust
The Fostering Network
Jerusalem Foundation
Other
Ethics
Tony Blair Institute for Global Change
Global Leadership Foundation
Hospitals, Medical Education and Research
Cancer Research UK/The Francis Crick Institute
Magen David Adom UK
University College London Hospital
Other
General
EDUCATION
University/College
Dangoor Education
Women's Interfaith Network
British Exploring Society
Westminster Academy
Imperial College-Space Science & Engineering Foundation
Sephardi Voices USA
Yakar Educational Foundation
Middle East Education
Imperial College-UK Space Design Competition
March of the Living UK
Society for Preservation of Israel
Heritage Sites
Other
Sundry
The Royal United Services Institute for Defence and Security
The Royal Marines Charity Trust Fund
Carried forward		 £
£
200,000
180,000
175,000
106,000
72,028
50,000
15,500
30,000
30,000
25,000
20,000
20,000
20,000
20,000
20,000
-
-
-
-
-
-
315,238
-
10,000
1,200,000
72,500
-
35,000
3,958
2,620,224
201,712
148,535
120,000
98,585
70,000
50,000
40,000
15,000
-
-
-
61,564
250,000
15,000
1,070,396
3,690,620
2020		 £
£
100,000
-
67,994
169,500
-
50,000
35,000
30,000
-
-
20,000
10,000
-
-
-
50,000
46,000
25,000
19,500
6,000
20,977
239,331
130,000
5,000
-
-
1,590,000
13,876
5,244
2,633,422
116,720
283,723
-
248,362
-
-
-
20,000
76,000
20,000
10,474
31,459
-
15,258
821,996
3,455,418
2019		 £
£
100,000
-
67,994
169,500
-
50,000
35,000
30,000
-
-
20,000
10,000
-
-
-
50,000
46,000
25,000
19,500
6,000
20,977
239,331
130,000
5,000
-
-
1,590,000
13,876
5,244
2,633,422
116,720
283,723
-
248,362
-
-
-
20,000
76,000
20,000
10,474
31,459
-
15,258
821,996
3,455,418
2019
116,720
283,723
-
248,362
-
-
-
20,000
76,000
20,000
10,474
31,459
-
15,258
3,455,418

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

7
a
b		 Expenditure on charitable activities
Grants (continued)
Brought forward
Finance costs
Support costs (see note 8)
Other expenditure
Amount written off subsidiary's loan (see 7d below)
Loan advance impairment provision (see note 11(i) )		 2020
£
3,690,620
223,664
55,618
3,969,902
-
-
3,969,902		 2019
£
3,455,418
310,942
52,299
3,818,659
380,231
225,000
4,423,890

c Where significant grant payments are due in greater than one year the amounts have been discounted to reflect their net present value. Finance costs represent finance charges in respect of the unwinding of the grants.

d The subsidiary's loan was in respect of programme related amounts advanced to fund a film production for educational purposes and was in furtherance of the charity's objectives.

e
Reconciliation to Grants Payable:
Commitments at 1 January 2020
Commitments made in year
Grants paid during the year
Finance costs
Difference on exchange
Commitments at 31 December 2020
Commitments at 31 December 2020 are payable as follows:-
Within one year (note 12)
After more than one year (note 13)		 £
12,576,787
3,816,050
(5,829,467)
223,664
(69,812)
10,717,222
4,062,239
6,654,983
10,717,222		 £
15,429,683
3,606,587
(6,671,555)
310,942
(98,870)
12,576,787
4,351,613
8,225,174
12,576,787
8 Support costs
Apportionment basis
Property expenses
Governance
Bank charges
Professional fees
Audit fees		 2020
£
Total costs
20,632
1,492
57,986
31,125		 2020
£

Cost of
raising funds		 2020
£


Expenditure
on charitable
activities
50%
10,316
746
28,993
15,563		 2019
£
Total
costs		 2019
£


Cost of
raising
funds
50%
8,657
759
23,795
19,088		 2019
£
Expenditure
on charitable
activities
50%
8,658
759
23,795
19,087
50%
10,316
746
28,993
15,562		 17,315
1,518
47,590
38,175
111,235 55,617 55,618 104,598 52,299 52,299

9 Trustees and employees

No remuneration was paid to the trustees or their connected persons for the year, nor were any expenses reimbursed to them (2019 - £nil).

There were no persons employed by the charity during the year or the previous year.

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

10.1
Fixed asset investments
Fair values
At 1 January 2020
Additions at cost
Disposals at carrying value
Gain on fair value adjustments
At 31 December 2020		 Shares in
UK Investment
Listed
group Other
Properties
Investments
undertaking investments
Total
£
£
£
£
£
104,650,000
258,384
1
1,009,464
105,917,849
7,697,533
-
-
463,138
8,160,671
(7,100,000)
-
-
(139,993)
(7,239,993)
(202,533)
(93,328)
-
234,485
(61,376)
105,045,000
165,056
1
1,567,094
106,777,151

The investment properties have been revalued at the reporting year end date on an open market value basis by an independent Chartered surveyor, Robert Mitchell MRICS and represent their fair value.

The charity is a leasehold tenant and pays a peppercorn rent to the freeholder of a property which is owned by a company in which the Trustees, except for R.D. Dangoor, are directors/shareholders with control of the company.

Listed investments are carried at fair value and represent investment in equities which are traded in quoted public markets, primarily the London Stock Exchange.

See note 10.2 for shares in group undertakings.

Analysis of investments at fair value
at 31 December 2020
UK investments
Ordinary shares:
Listed
Investments amounting to more than 5 per cent of
the total portfolio :
International Consolidated
Airlines Group SA
Entain plc
10.2
Interest in subsidiary		 Analysis of investments at fair value
at 31 December 2020
UK investments
Ordinary shares:
Listed
Investments amounting to more than 5 per cent of
the total portfolio :
International Consolidated
Airlines Group SA
Entain plc
10.2
Interest in subsidiary		 2020
£
165,056
39,750
119,803		 2019
£
258,384
156,250
93,474
At cost less impairment
Balance at 1 January 2020 and at 31 December 2020
Details of the Charity's subsidiary:		 Shares in
group
undertaking
£
1
Interest in subsidiary
Shares in
group
undertaking
£
At cost less impairment
Balance at 1 January 2020 and at 31 December 2020 1
Details of the Charity's subsidiary:
Company
Country of
registration or
incorporation
Class
Shares held
Edufilms Limited
England &
Wales
Ordinary
100%
The results of Edufilms Limited for the year ended 31 December 2020 were as follows:
Capital and reserves
Loss for the year		 Principal
activity
Educational
film
programme
production
and
distribution
£
(6,617)
(6,618)

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

11 Debtors

Trade receivables
Amounts owed by subsidiary undertaking
Other receivables
Prepayments and accrued income		 2020
£
1,175,620
53,571
508,776
289,079
2,027,046		 2019
£
88,695
49,671
510,745
162,691
811,802

Amounts owed by subsidiary undertaking represent concessionary loans made to facilitate the production and distribution of educational films. There is no fixed repayment term and the amount does not bear interest (see also Note 7b).

Other receivables include Concessionary loans detailed as follows:

All three loans meet the criterion for treatment as programme related concessionary loans. D.A. Dangoor CBE is a director of the Westminster Academy.

12 Creditors: Amounts falling due within one year

Creditors: Amounts falling due within one year
Trade payables
Taxation and social security
Other payables
Accruals and deferred income
Grants payable		 2020
£
42,087
211,785
217,621
445,266
4,062,239
4,978,998		 2019
£
58,452
-
237,966
1,137,852
4,351,613
5,785,883

13 Creditors: Amounts falling due after more than one year

Grants payable
14.1
Expendable endowment fund
At 1 January 2020
Gain on investments in the year
At 31 December 2020		 2020
£
6,654,983
2020
£
63,210,356
819,497
64,029,853		 2019
£
8,225,174
2019
£
62,221,343
989,013
63,210,356

The capital can only be converted into expendable income at the discretion of the Exilarch.

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

14.2 Designated funds

Designated funds
2020
£
At 1 January 2020 and at 31 December 2020
23,250,000
Purposes:
Assisting the setting up of educational and religious institutions in a future
re-established Jewish community in Iraq
Advancement of Universal Monotheism
Affordable housing project for teachers at the Westminster Academy
UK Israel Healthcare Innovation Project		 2019
£
23,250,000
10,000,000
7,000,000
5,000,000
1,250,000
23,250,000
14.3
General fund
At 1 January 2020
Incoming resources in the year
Gain on investments in the year
Resources expended in the year
At 31 December 2020		 2020
£
11,568,816
6,504,437
699,383
(4,158,477)
14,614,159		 2019
£
3,464,396
13,160,744
879,082
(5,935,406)
11,568,816

15 Analysis of charity net assets between funds

Expendable Endowment
Unrestricted Funds:
Designated
General		 Investments
£
64,029,853
23,250,000
19,497,298
106,777,151		 Current
Assets Less
Liabilities
£
-
-
1,771,844
1,771,844		 Long Term
Liabilities
£
-
-
(6,654,983)
(6,654,983)		 Total
£
64,029,853
23,250,000
14,614,159
101,894,012

16 Reconciliation of net movement in funds to net cash used in operating activities.

Net movement in funds
Adjustments for:
Investment income and Interest
(Profit)/loss on sale of fixed assets
Decrease/(increase) in valuation of fixed assets investments
Profit on disposal of investment in associate
Private equity investments fair value adjustments
Non cashflow-concessionary loan written off
Net (increase)/decrease in debtors
Net decrease in current liabilities
Net decrease in grants payable
Net cash used in operating activities		 2020
2019
£
£
3,864,840
9,093,433
(6,504,437)
(6,614,421)
(1,579,847)
137,833
295,861
(1,795,689)
-
(103,902)
(234,485)
(106,327)
-
654,902
(1,483,337)
146,197
(321,098)
(4,674,306)
(1,859,565)
(2,852,896)
(7,822,068)
(6,115,176)

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THE EXILARCH'S FOUNDATION NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

17 Analysis of changes in net debt

Analysis of changes in net debt
Cash at bank
At 1 January 2020
Cashflow movements
At 31 December 2020		 2020
£
5,310,578
(586,782)
4,723,796		 2019
£
2,502,703
2,807,875
5,310,578

18 Operating lease arrangements

18.1 Lessor

At the balance sheet date the charity had future minimum rentals receivable under non-cancellable operating leases, which fall due as follows:

Within one year
Between two and five years
In over five years		 2020
£
6,961,177
24,425,018
41,750,103
73,136,298		 2019
£
7,104,505
24,751,060
40,865,086
72,720,651

18.2 Lessee

At the balance sheet date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

19

Within one year
Between two and five years
In over five years
Financial commitments
Amounts contracted for but not provided:
Acquisition of fixed asset investments		 2020
£
102,260
409,040
7,312,264
7,823,564
2020
£
2,341,198		 2019
£
96,260
385,040
6,876,299
7,357,599
2019
£
1,322,556

20 Related parties disclosures

There were no related party transactions undertaken in the current year. In the comparative year, legacy income was received as disclosed in note 3, and a disposal of an associate made in respect of a company all the Trustees (except R.D. Dangoor) were directors and shareholders.

21 Events after the reporting date

The charity sold an investment property in April 2021 for £2.4m plus costs. The property was valued at £2.2m as at 31 December 2020 and is included within these accounts.

In August 2021, the charity acquired an investment property for £5.5m.

-22-