REGISTERED CHARITY NUMBER: 803548
REPORT OF THE TRUSTEES AND
FINANCIAL STATEMENTS FOR THE YEAR ENDED 5 APRIL 2023
FOR
FRIENDS OF ACHIEZER ARAD
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
FRIENDS OF ACHIEZER ARAD
CONTENTS OF THE FINANCIAL STATEMENTS for the year ended 5 April 2023
| Page | |||
|---|---|---|---|
| Report of the Trustees | 1 | to | 4 |
| Report of the Independent Auditors | 5 | to | 8 |
| Statement of Financial Activities | 9 | ||
| Balance Sheet | 10 | ||
| Cash Flow Statement | 11 | ||
| Notes to the Cash Flow Statement | 12 | ||
| Notes to the Financial Statements | 13 | to | 22 |
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
The Trustees present their report with the financial statements of the charity for the year ended 5 April 2023. The trustees have adopted the provisions of the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities'.
OBJECTIVES AND ACTIVITIES
Objectives and aims
The Trustees stand possessed of the Trust Fund upon trust to pay or apply the whole of the income and the capital of the Trust Fund to or towards or in furtherance or for the benefit of such one or more charities, charitable institutions or charitable purposes in any part of the world in such shares and in such manner as the Trustees in their absolute discretion may from time to time determine and in particular for the relief of poverty, provided always that:
a) The Trustees shall have power if they so think fit to make payments direct to individual persons in any part of the world and in particular in the town of Arad, Israel (provided that such persons shall qualify as charitable beneficiaries according to English Law) and shall not be limited to making payments to organisations or institutions.
b) Nothing herein contained shall empower or authorise the Trustees to apply any part of the Trust Fund or the income thereof other than for the purposes which are charitable according to English Law.
Public benefit
The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit, and 'The Advancement of Religion for the Public Benefit' in particular, when reviewing the aim and objectives and in planning the charity's future activities. The aims of the charitable company for the public benefit are detailed in the 'Objectives and Activities' section of this report and the main activities undertaken in order to carry out the charitable company's aims for the public benefit are outlined under 'Achievements and Performance' above.
ACHIEVEMENT AND PERFORMANCE
Charitable activities
Funds were principally raised from the charity's investment properties as well as from donations received from corporate donors, individuals and other registered charities.
During the year under review income increased from £359,558 to £907,690. Expenditure increased from £1,162,942 to £1,370,694 resulting in a net deficit of £463,004 (2022 - deficit of £803,384). The charity made grants totalling £1,154,100 (2022 £1,031,236) during the year in support of institutions whose objects are in line with the objects of the charity.
Grantmaking
The trustees welcome applications from the general public and seek to make donations and loans which meet the charity's objectives and satisfy the principals set out within the Trust Deed.
The trustees meet regularly to consider applications and approve these based on the merits and circumstances of the cause. Where necessary, the trustees will meet applicants face to face to explore the most effective way of providing assistance.
FINANCIAL REVIEW
Investment policy and objectives
Investments are made only once the trustees have taken advice from professional advisors. In order to maximise income whilst retaining access to funds, remaining funds, when available, are invested until they are distributed to charitable beneficiaries. During the year the charity was able to purchase additional investment properties which will be used to further fund the activities of the charity.
Page 1
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES
for the year ended 5 April 2023
FINANCIAL REVIEW
Reserves policy
The trustees have established the level of reserves (that is those funds that are freely available) that the charity ought to have. Reserves are needed to bridge the funding gaps between spending on activities and receiving resources through voluntary donations. The trustees consider that the ideal level of reserves as at 5 April 2023 would be 12 months of administrative costs.
At the year end free reserves were negative £2,860,116 and total reserves were £4,519,696. The trustees are actively pursuing sources of funding in order to ensure that there are sufficient reserves to provide for future financial stability and flexibility and to enable the charity to expand its activities.
FUTURE PLANS
The Friends of Achiezer Arad Trust will continue to support other charitable institutions or charitable purposes in any part of the world to promote poverty and hardship alleviation programmes.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing document
The Charity is constituted under a Declaration of Trust dated 5 March 1990 and was registered with the Charity Commission on 4 July 1990 under Registered Charity Number 803548.
Recruitment and appointment of new trustees
The Articles of Association stipulate that there must be a minimum of three trustees and there is no maximum number of trustees. Additional trustees may be appointed by the existing trustees at any time, either to fill a casual vacancy or as an addition to the existing trustees. Any trustees so appointed will hold office only until the next Annual General Meeting and will then be eligible for re-election.
No trustee had any beneficial interest in any contract with the charitable entity during the year.
Potential trustees are invited to informally attend trustee meetings prior to appointment and a comprehensive induction programme is available. Additionally individual trustees may undertake external training in a particular area of their role on the Governing Body.
Organisational structure
The board of trustees administers the charity. The board meets quarterly. The day to day management of Friends of Achiezer Arad is delegated by the trustees to the Principal.
Induction and training of new trustees
The charitable entity strives to ensure equal opportunities and diversity in the employment of staff and trustee appointments. Selection criteria and procedures are regularly reviewed to ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities.
Wider network
At present Friends of Archiezer Arad does not consider itself part of a wider network.
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FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
STRUCTURE, GOVERNANCE AND MANAGEMENT
Risk management
The Trustees regularly undertake a review of the major risks to which the Charity is exposed, and systems designed to mitigate those risks are considered on an ongoing basis.
There are two major risks that have been identified by the Trustees. A significant proportion of the investment properties are held under the terms of an endowment made to the charity. A fall in property values and rental income could effect the operations of the charity. The Trustees feel that the risk is mitigated by their expertise in the property market, which would allow them to protect the interests of the Charity.
The Trustees spend a large amount of their personal time ensuring that the property investment portfolio is run on a professional basis. They also have the assistance of Avon Estates, a professional property management business, who provide their services on a pro bono basis.
Another risk that has been identified by the Trustees is that of misappropriation of funds. This has been mitigated by ensuring that all outgoing cheques require the signature of two of the Trustees.
The charity has systems in place to ensure that any existing or potential trustees are not disqualified from acting as a trustee.
REFERENCE AND ADMINISTRATIVE DETAILS Registered Charity number
803548
Principal address
Avon House 2 Timberwharf Road London N16 6DB
Trustees
Mr I Moskovitz Mrs C Moskovitz Mr S Reich
Auditors
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
Bankers
National Westminster Bank Plc 135 Bishopsgate London EC2M 3UR
STATEMENT OF TRUSTEES' RESPONSIBILITIES
The trustees are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued
The law applicable to charities in England and Wales, the Charities Act 2011, Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed 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, including the income and expenditure, of the charity for that period. In preparing those financial statements, the trustees are required to
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charity SORP;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and to 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.
Approved by order of the board of trustees on 16 January 2024 and signed on its behalf by:
Mr I Moskovitz - Trustee
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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Opinion
We have audited the financial statements of Friends of Achiezer Arad (the 'charity') for the year ended 5 April 2023 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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give a true and fair view of the state of the charity's affairs as at 5 April 2023 and of its incoming resources and application of resources, for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Charities Act 2011.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 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 Report of the Independent Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:
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the information given in the Report of the Trustees is inconsistent in any material respect with the financial statements; or
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sufficient accounting records have not been kept; or
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the financial statements are not in agreement with the accounting records and returns; or
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we have not received all the information and explanations we require for our audit.
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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Responsibilities of trustees
As explained more fully in the Statement of Trustees' Responsibilities, the trustees are responsible for the preparation of the financial statements which 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 charity or to cease operations, or have no realistic alternative but to do so.
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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Our responsibilities for the audit of the financial statements
We have been appointed as auditors 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 a Report of the Independent Auditors 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 our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
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the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills identify or recognise non-compliance with applicable laws and regulations;
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we identified the laws and regulations applicable to the charitable company through discussions with management and from our commercial knowledge and experience of the sector Friends of Achiezer Arad belongs to;
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we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the association, including the Companies Act 2006, Charities Act 2011, Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland (FRS 102) (effective 1 January 2019), Trustees Act, Bribery Act and data protection;
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we assessed the extent of compliance with the laws and regulations identified above through making enquiries ofmanagement and inspecting legal correspondence; and
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identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the charity's financial statements to material misstatement, including obtaining anunderstanding of how fraud might occur, by:
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making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge ofactual, suspected and alleged fraud; and
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considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations,including the ones that ensure that the grants are used for intended purposes.
To address the risk of fraud through management bias and override of controls, we:
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performed analytical procedures to identify any unusual or unexpected relationships;
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tested journal entries to identify unusual transactions;
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assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
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investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
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agreeing financial statement disclosures to underlying supporting documentation;
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reading the minutes of meetings of those charged with governance;
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enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
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.
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
16 January 2024
Raffingers LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006
Page 8
FRIENDS OF ACHIEZER ARAD
STATEMENT OF FINANCIAL ACTIVITIES for the year ended 5 April 2023
| Notes INCOME AND ENDOWMENTS FROM Donations and legacies 2 Investment income 3 Total EXPENDITURE ON Raising funds 4 Charitable activities 5 Relief of poverty, advancement of education and furtherance of religion Total NET INCOME/(EXPENDITURE) RECONCILIATION OF FUNDS Total funds brought forward TOTAL FUNDS CARRIED FORWARD |
Unrestricted funds £ 610,947 296,743 907,690 184,051 1,186,643 1,370,694 (463,004) 4,982,700 4,519,696 |
Endowment fund £ - - - - - - - - - |
2023 Total funds £ 610,947 296,743 907,690 184,051 1,186,643 1,370,694 (463,004) 4,982,700 4,519,696 |
2022 Total funds £ 33,527 326,031 359,558 112,983 1,049,959 1,162,942 (803,384) 5,786,084 4,982,700 |
|---|---|---|---|---|
CONTINUING OPERATIONS
All income and expenditure has arisen from continuing activities.
The notes form part of these financial statements
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FRIENDS OF ACHIEZER ARAD
BALANCE SHEET 5 April 2023
| Notes FIXED ASSETS Investments Investments 10 Investment property 11 CURRENT ASSETS Debtors 12 Cash at bank CREDITORS Amounts falling due within one year 13 NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES CREDITORS Amounts falling due after more than one year 14 NET ASSETS FUNDS 17 Unrestricted funds TOTAL FUNDS |
Unrestricted funds £ 100 8,924,550 8,924,650 1,179,507 13,321 1,192,828 (4,053,044) (2,860,216) 6,064,434 (1,544,738) 4,519,696 |
Endowment fund £ - - - - - - - - - - - |
2023 Total funds £ 100 8,924,550 8,924,650 1,179,507 13,321 1,192,828 (4,053,044) (2,860,216) 6,064,434 (1,544,738) 4,519,696 4,519,696 4,519,696 |
2022 Total funds £ 100 3,972,000 3,972,100 1,274,093 1,496,772 2,770,865 (173,421) 2,597,444 6,569,544 (1,586,844) 4,982,700 4,982,700 4,982,700 |
|---|---|---|---|---|
The financial statements were approved by the Board of Trustees and authorised for issue on 16 January 2024 and were signed on its behalf by:
Mr I Moskovitz - Trustee
The notes form part of these financial statements
Page 10
FRIENDS OF ACHIEZER ARAD
CASH FLOW STATEMENT for the year ended 5 April 2023
| Notes Cash flows from operating activities Cash generated from operations 1 Interest paid Net cash provided by/(used in) operating activities Cash flows from investing activities Purchase of investment property Net cash (used in)/provided by investing activities Cash flows from financing activities New loans in year Loan repayments in year Net cash (used in)/provided by financing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period |
2023 £ 3,584,648 (73,443) 3,511,205 (4,952,550) (4,952,550) - (42,106) (42,106) (1,483,451) 1,496,772 13,321 |
2022 £ (939,413) (63,031) (1,002,444) - - 581,250 (89,552) 491,698 (510,746) 2,007,518 1,496,772 |
|---|---|---|
The notes form part of these financial statements
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE CASH FLOW STATEMENT for the year ended 5 April 2023
1. RECONCILIATION OF NET EXPENDITURE TO NET CASH FLOW FROM OPERATING ACTIVITIES
2.
| Net expenditure for the reporting period (as per the Statement of Financial Activities) Adjustments for: Interest paid Decrease/(increase) in debtors Increase in creditors Net cash provided by/(used in) operations ANALYSIS OF CHANGES IN NET DEBT At 6.4.22 £ Net cash Cash at bank 1,496,772 1,496,772 Debt Debts falling due within 1 year (42,104) Debts falling due after 1 year (1,586,844) (1,628,948) Total (132,176) |
2023 £ (463,004) 73,443 94,586 3,879,623 3,584,648 Cash flow £ (1,483,451) (1,483,451) - 42,106 42,106 (1,441,345) |
2022 £ (803,384) 63,031 (204,290) 5,230 (939,413) At 5.4.23 £ 13,321 13,321 (42,104) (1,544,738) (1,586,842) (1,573,521) |
|---|---|---|
The notes form part of these financial statements
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
1. ACCOUNTING POLICIES
Basis of preparing the financial statements
The financial statements of the charity, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Charities Act 2011. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value, as modified by the revaluation of certain assets.
Critical accounting judgements and key sources of estimation uncertainty
Preparation of the accounts requires the trustees and management to make significant judgements and estimates.
The item in the accounts where these judgements and estimates have been made is the valuation of investment properties.
Income
All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.
Where income has related expenditure (as with fundraising or contract income), the income and related expenditure are reported gross in the Statement of Financial Activities.
Donations, grants and gifts are recognised when receivable. In the event that a donation is subject to fulfilling performance conditions before the charity is entitled to the funds, the income is deferred and not recognised until it is probable that those conditions will be fulfilled in the reporting period. Income from Gift Aid tax reclaims is recognised for any donations with relevant Gift Aid certificates recognised in income for the year. Any amounts of Gift Aid not received by the year-end are accounted for in income and accrued income in debtors.
For legacies, entitlement is taken on a case by case basis as the earlier of the date on which: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the charity that a distribution will be made, or when a distribution is received from the estate.
Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor's intention to make a distribution. If the legacy is in the form of an asset other than cash or an asset listed on a recognised stock exchange, recognition is subject to the value of the asset being able to be reliably measured and title to the asset has passed to the charity. Where legacies have been notified to the 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.
Income received in advance for a future fundraising event or for a grant received relating to the following year are deferred until the criteria for income recognition are met.
Donated goods and services, including volunteers
Donated facilities and gifts in kind are included at the value to the charity where this can be quantified.
In accordance with the Charities SORP FRS 102 volunteer time is not recognised.
Expenditure
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.
Grants
continued...
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
1. ACCOUNTING POLICIES - continued
Expenditure
Grants offered subject to conditions which have not been met at the year end date are noted as a commitment but not accrued as expenditure.
Raising funds
Raising funds includes all expenditure incurred by the charity to raise funds for its charitable purposes and includes costs of all fundraising activities, events and non-charitable trading.
Charitable activities
Charitable activities comprise of grants payable in furtherance of the charitable objectives of the charity. Grants payable are included in the statement of financial activities when approved and when the intended recipient has either received the funds or been informed of the decision to make the donation and has satisfied all related conditions. Grants approved but not paid at the end of the financial year are accrued for.
Governance costs
Governance costs comprise those costs associated with meeting the constitutional and strategic requirements of the charity and the audit fees and costs linked to the strategic management of the charity.
Investments
Investment property
Properties held for investment purposes are included in these accounts at open market value. The valuations are determined as set out in note 11 to these accounts.
Realised gains (or losses) on investment properties are calculated as the difference between disposal proceeds and their carrying value or their purchase value if acquired during the financial year. Unrealised gains (or losses) are calculated as the difference between fair value at the year end and their carrying value at that date. Realised and unrealised gains (or losses) are credited (or debited) in the year which they arise.
Investments in Syndicates
The charity had three minority holdings of 25% or less in property investment syndicates at the year end. The treatment in the accounts is to include only the charity's net share in these holdings at cost in the Balance Sheet and the net Income/(Deficit) under the heading Investment Income in the Statement of Financial Activities.
Current assets investment
Current asset investments are investments which held at cost with a maturity date of less than one year.
Taxation
The company is considered to pass the tests set out in Sch. 6, para. 1 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Pt. 11, Ch. 3 of the Corporation Tax Act 2010 or s. 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
Fund accounting
Funds held by the Charity are:
General Reserve:
This represents funds that can be used in accordance with the objects of the charity at the discretion of the Trustees.
Revaluation Reserve:
This Reserve can only be used by the Charity upon transfer to the General Reserve when a revaluation is realised on the disposal of the underlying Investment.
continued...
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
1. ACCOUNTING POLICIES - continued
Cash at bank and in hand
Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months form the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits.
Debtors
Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to be present value of the future cash receipt where such discounting is material.
Creditors and provisions
Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provision are recognised at the moment the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payments where such discounting is material.
Financial instruments
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments.
Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value except for bank loans which are subsequently measured at the carrying value plus accrued interest less repayments. The financing charge to expenditure is at a constant rate calculated using the effective interest method.
2.
3.
DONATIONS AND LEGACIES
| Donations INVESTMENT INCOME Rents received Syndicate income |
2023 £ 610,947 2023 £ 145,817 150,926 296,743 |
2022 £ 33,527 2022 £ 138,238 187,793 326,031 |
|---|---|---|
continued...
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
4. RAISING FUNDS
Raising donations and legacies
| Property expenditure Interest payable and similar charges |
2023 £ 110,608 73,443 184,051 |
2022 £ 49,952 63,031 112,983 |
|---|---|---|
5. CHARITABLE ACTIVITIES COSTS
| Relief of poverty, advancement of education and furtherance of religion GRANTS PAYABLE Relief of poverty, advancement of education and furtherance of religion |
Grant funding of activities (see note 6) £ 1,171,871 |
Support costs (see note 7) £ 14,772 2023 £ 1,171,871 |
Totals £ 1,186,643 2022 £ 1,037,839 |
|---|---|---|---|
6. GRANTS PAYABLE
Relief of poverty, advancement of education and furtherance of religion
continued...
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
6. GRANTS PAYABLE - continued
The total grants paid to institutions during the year was as follows:
| Acheinu Cancer Support Beis Aharon Trust Beis Rochel D'Satmar Bonei Olam Chevras Mo'oz Ladol CMA Trust Colel Polen Kupath Ramban David Family Foundation Friends of Rachashei Lev Friends of Yeshiva Luzern Keren Ohr Kollel Beis Yisroel D'Chasidei Gur Kollel Bnei Yissachar Kollel Rabinow Kollel Satmar Kollel Shas Yidden Kupat Ezer Lenisuin Beis Yisoel Mars.Org Side By Side Trust Talmud Torah Chasidei Gur Talmud Torah Vuchesed The New Rachministrivke Synagogue Trust United Talmudical Associstes Ltd Vitnitz Centre Institution Yesamach Levav Trust Yeshiva Chidushei Harim Yeshiva Lev Simcha Yesoday Hatorah School British Friends of Kupat Hair Ohr Vetikvah Support the Charity Worker The Tsechenov Institution Tomchei Torah Vuchesed Yeshiva Daas Sholem Shotz Yeshuos Shabbos Zoreya Tzedokos Ltd Grants less than £10,000 |
2023 £ 35,000 10,000 25,000 - 85,800 - 15,350 29,283 18,100 - 40,900 - 17,000 10,000 10,000 158,000 17,000 39,000 315,000 48,000 58,270 - 16,350 10,000 23,500 - 21,000 10,000 - - - - 50,000 - - - 91,547 1,154,100 |
2022 £ 24,000 - - 22,000 137,019 10,000 52,150 - - 18,000 130,500 23,108 - - - 152,500 17,400 43,287 35,000 - - 20,500 36,700 - - 57,652 - - 25,000 18,958 10,000 37,500 10,850 10,000 23,000 10,000 106,112 1,031,236 |
|---|---|---|
Grants to individuals totalled £17,771 (2022 - £6,603).
All grants were made to institutions whose objects are in line with those of the charity.
continued...
Page 17
REGISTERED CHARITY NUMBER: 803548
REPORT OF THE TRUSTEES AND
FINANCIAL STATEMENTS FOR THE YEAR ENDED 5 APRIL 2023
FOR
FRIENDS OF ACHIEZER ARAD
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
FRIENDS OF ACHIEZER ARAD
CONTENTS OF THE FINANCIAL STATEMENTS for the year ended 5 April 2023
| Page | |||
|---|---|---|---|
| Report of the Trustees | 1 | to | 4 |
| Report of the Independent Auditors | 5 | to | 8 |
| Statement of Financial Activities | 9 | ||
| Balance Sheet | 10 | ||
| Cash Flow Statement | 11 | ||
| Notes to the Cash Flow Statement | 12 | ||
| Notes to the Financial Statements | 13 | to | 22 |
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
The Trustees present their report with the financial statements of the charity for the year ended 5 April 2023. The trustees have adopted the provisions of the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities'.
OBJECTIVES AND ACTIVITIES
Objectives and aims
The Trustees stand possessed of the Trust Fund upon trust to pay or apply the whole of the income and the capital of the Trust Fund to or towards or in furtherance or for the benefit of such one or more charities, charitable institutions or charitable purposes in any part of the world in such shares and in such manner as the Trustees in their absolute discretion may from time to time determine and in particular for the relief of poverty, provided always that:
a) The Trustees shall have power if they so think fit to make payments direct to individual persons in any part of the world and in particular in the town of Arad, Israel (provided that such persons shall qualify as charitable beneficiaries according to English Law) and shall not be limited to making payments to organisations or institutions.
b) Nothing herein contained shall empower or authorise the Trustees to apply any part of the Trust Fund or the income thereof other than for the purposes which are charitable according to English Law.
Public benefit
The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit, and 'The Advancement of Religion for the Public Benefit' in particular, when reviewing the aim and objectives and in planning the charity's future activities. The aims of the charitable company for the public benefit are detailed in the 'Objectives and Activities' section of this report and the main activities undertaken in order to carry out the charitable company's aims for the public benefit are outlined under 'Achievements and Performance' above.
ACHIEVEMENT AND PERFORMANCE
Charitable activities
Funds were principally raised from the charity's investment properties as well as from donations received from corporate donors, individuals and other registered charities.
During the year under review income increased from £359,558 to £907,690. Expenditure increased from £1,162,942 to £1,370,694 resulting in a net deficit of £463,004 (2022 - deficit of £803,384). The charity made grants totalling £1,154,100 (2022 £1,031,236) during the year in support of institutions whose objects are in line with the objects of the charity.
Grantmaking
The trustees welcome applications from the general public and seek to make donations and loans which meet the charity's objectives and satisfy the principals set out within the Trust Deed.
The trustees meet regularly to consider applications and approve these based on the merits and circumstances of the cause. Where necessary, the trustees will meet applicants face to face to explore the most effective way of providing assistance.
FINANCIAL REVIEW
Investment policy and objectives
Investments are made only once the trustees have taken advice from professional advisors. In order to maximise income whilst retaining access to funds, remaining funds, when available, are invested until they are distributed to charitable beneficiaries. During the year the charity was able to purchase additional investment properties which will be used to further fund the activities of the charity.
Page 1
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES
for the year ended 5 April 2023
FINANCIAL REVIEW
Reserves policy
The trustees have established the level of reserves (that is those funds that are freely available) that the charity ought to have. Reserves are needed to bridge the funding gaps between spending on activities and receiving resources through voluntary donations. The trustees consider that the ideal level of reserves as at 5 April 2023 would be 12 months of administrative costs.
At the year end free reserves were negative £2,860,116 and total reserves were £4,519,696. The trustees are actively pursuing sources of funding in order to ensure that there are sufficient reserves to provide for future financial stability and flexibility and to enable the charity to expand its activities.
FUTURE PLANS
The Friends of Achiezer Arad Trust will continue to support other charitable institutions or charitable purposes in any part of the world to promote poverty and hardship alleviation programmes.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing document
The Charity is constituted under a Declaration of Trust dated 5 March 1990 and was registered with the Charity Commission on 4 July 1990 under Registered Charity Number 803548.
Recruitment and appointment of new trustees
The Articles of Association stipulate that there must be a minimum of three trustees and there is no maximum number of trustees. Additional trustees may be appointed by the existing trustees at any time, either to fill a casual vacancy or as an addition to the existing trustees. Any trustees so appointed will hold office only until the next Annual General Meeting and will then be eligible for re-election.
No trustee had any beneficial interest in any contract with the charitable entity during the year.
Potential trustees are invited to informally attend trustee meetings prior to appointment and a comprehensive induction programme is available. Additionally individual trustees may undertake external training in a particular area of their role on the Governing Body.
Organisational structure
The board of trustees administers the charity. The board meets quarterly. The day to day management of Friends of Achiezer Arad is delegated by the trustees to the Principal.
Induction and training of new trustees
The charitable entity strives to ensure equal opportunities and diversity in the employment of staff and trustee appointments. Selection criteria and procedures are regularly reviewed to ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities.
Wider network
At present Friends of Archiezer Arad does not consider itself part of a wider network.
Page 2
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
STRUCTURE, GOVERNANCE AND MANAGEMENT
Risk management
The Trustees regularly undertake a review of the major risks to which the Charity is exposed, and systems designed to mitigate those risks are considered on an ongoing basis.
There are two major risks that have been identified by the Trustees. A significant proportion of the investment properties are held under the terms of an endowment made to the charity. A fall in property values and rental income could effect the operations of the charity. The Trustees feel that the risk is mitigated by their expertise in the property market, which would allow them to protect the interests of the Charity.
The Trustees spend a large amount of their personal time ensuring that the property investment portfolio is run on a professional basis. They also have the assistance of Avon Estates, a professional property management business, who provide their services on a pro bono basis.
Another risk that has been identified by the Trustees is that of misappropriation of funds. This has been mitigated by ensuring that all outgoing cheques require the signature of two of the Trustees.
The charity has systems in place to ensure that any existing or potential trustees are not disqualified from acting as a trustee.
REFERENCE AND ADMINISTRATIVE DETAILS Registered Charity number
803548
Principal address
Avon House 2 Timberwharf Road London N16 6DB
Trustees
Mr I Moskovitz Mrs C Moskovitz Mr S Reich
Auditors
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
Bankers
National Westminster Bank Plc 135 Bishopsgate London EC2M 3UR
STATEMENT OF TRUSTEES' RESPONSIBILITIES
The trustees are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Page 3
FRIENDS OF ACHIEZER ARAD
REPORT OF THE TRUSTEES for the year ended 5 April 2023
STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued
The law applicable to charities in England and Wales, the Charities Act 2011, Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed 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, including the income and expenditure, of the charity for that period. In preparing those financial statements, the trustees are required to
-
select suitable accounting policies and then apply them consistently;
-
observe the methods and principles in the Charity SORP;
-
make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and to 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.
Approved by order of the board of trustees on 16 January 2024 and signed on its behalf by:
Mr I Moskovitz - Trustee
Page 4
REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Opinion
We have audited the financial statements of Friends of Achiezer Arad (the 'charity') for the year ended 5 April 2023 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (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 2023 and of its incoming resources and application of resources, 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 Auditors' 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 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 Report of the Independent Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:
-
the information given in the Report of the Trustees is inconsistent in any material respect with the financial statements; 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.
Page 5
REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Responsibilities of trustees
As explained more fully in the Statement of Trustees' Responsibilities, the trustees are responsible for the preparation of the financial statements which 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 charity or to cease operations, or have no realistic alternative but to do so.
Page 6
REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
Our responsibilities for the audit of the financial statements
We have been appointed as auditors 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 a Report of the Independent Auditors 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 our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
-
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills identify or recognise non-compliance with applicable laws and regulations;
-
we identified the laws and regulations applicable to the charitable company through discussions with management and from our commercial knowledge and experience of the sector Friends of Achiezer Arad belongs to;
-
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the association, including the Companies Act 2006, Charities Act 2011, Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland (FRS 102) (effective 1 January 2019), Trustees Act, Bribery Act and data protection;
-
we assessed the extent of compliance with the laws and regulations identified above through making enquiries ofmanagement and inspecting legal correspondence; and
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identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the charity's financial statements to material misstatement, including obtaining anunderstanding of how fraud might occur, by:
-
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge ofactual, suspected and alleged fraud; and
-
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations,including the ones that ensure that the grants are used for intended purposes.
To address the risk of fraud through management bias and override of controls, we:
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performed analytical procedures to identify any unusual or unexpected relationships;
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tested journal entries to identify unusual transactions;
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assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
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investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
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agreeing financial statement disclosures to underlying supporting documentation;
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reading the minutes of meetings of those charged with governance;
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enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
Page 7
REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEES OF FRIENDS OF ACHIEZER ARAD
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
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.
Raffingers LLP, Statutory Auditor 19-20 Bourne Court Southend Road Woodford Green Essex IG8 8HD
16 January 2024
Raffingers LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006
Page 8
FRIENDS OF ACHIEZER ARAD
STATEMENT OF FINANCIAL ACTIVITIES for the year ended 5 April 2023
| Notes INCOME AND ENDOWMENTS FROM Donations and legacies 2 Investment income 3 Total EXPENDITURE ON Raising funds 4 Charitable activities 5 Relief of poverty, advancement of education and furtherance of religion Total NET INCOME/(EXPENDITURE) RECONCILIATION OF FUNDS Total funds brought forward TOTAL FUNDS CARRIED FORWARD |
Unrestricted funds £ 610,947 296,743 907,690 184,051 1,186,643 1,370,694 (463,004) 4,982,700 4,519,696 |
Endowment fund £ - - - - - - - - - |
2023 Total funds £ 610,947 296,743 907,690 184,051 1,186,643 1,370,694 (463,004) 4,982,700 4,519,696 |
2022 Total funds £ 33,527 326,031 359,558 112,983 1,049,959 1,162,942 (803,384) 5,786,084 4,982,700 |
|---|---|---|---|---|
CONTINUING OPERATIONS
All income and expenditure has arisen from continuing activities.
The notes form part of these financial statements
Page 9
FRIENDS OF ACHIEZER ARAD
BALANCE SHEET 5 April 2023
| Notes FIXED ASSETS Investments Investments 10 Investment property 11 CURRENT ASSETS Debtors 12 Cash at bank CREDITORS Amounts falling due within one year 13 NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES CREDITORS Amounts falling due after more than one year 14 NET ASSETS FUNDS 17 Unrestricted funds TOTAL FUNDS |
Unrestricted funds £ 100 8,924,550 8,924,650 1,179,507 13,321 1,192,828 (4,053,044) (2,860,216) 6,064,434 (1,544,738) 4,519,696 |
Endowment fund £ - - - - - - - - - - - |
2023 Total funds £ 100 8,924,550 8,924,650 1,179,507 13,321 1,192,828 (4,053,044) (2,860,216) 6,064,434 (1,544,738) 4,519,696 4,519,696 4,519,696 |
2022 Total funds £ 100 3,972,000 3,972,100 1,274,093 1,496,772 2,770,865 (173,421) 2,597,444 6,569,544 (1,586,844) 4,982,700 4,982,700 4,982,700 |
|---|---|---|---|---|
The financial statements were approved by the Board of Trustees and authorised for issue on 16 January 2024 and were signed on its behalf by:
Mr I Moskovitz - Trustee
The notes form part of these financial statements
Page 10
FRIENDS OF ACHIEZER ARAD
CASH FLOW STATEMENT for the year ended 5 April 2023
| Notes Cash flows from operating activities Cash generated from operations 1 Interest paid Net cash provided by/(used in) operating activities Cash flows from investing activities Purchase of investment property Net cash (used in)/provided by investing activities Cash flows from financing activities New loans in year Loan repayments in year Net cash (used in)/provided by financing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period |
2023 £ 3,584,648 (73,443) 3,511,205 (4,952,550) (4,952,550) - (42,106) (42,106) (1,483,451) 1,496,772 13,321 |
2022 £ (939,413) (63,031) (1,002,444) - - 581,250 (89,552) 491,698 (510,746) 2,007,518 1,496,772 |
|---|---|---|
The notes form part of these financial statements
Page 11
FRIENDS OF ACHIEZER ARAD
NOTES TO THE CASH FLOW STATEMENT for the year ended 5 April 2023
1. RECONCILIATION OF NET EXPENDITURE TO NET CASH FLOW FROM OPERATING ACTIVITIES
2.
| Net expenditure for the reporting period (as per the Statement of Financial Activities) Adjustments for: Interest paid Decrease/(increase) in debtors Increase in creditors Net cash provided by/(used in) operations ANALYSIS OF CHANGES IN NET DEBT At 6.4.22 £ Net cash Cash at bank 1,496,772 1,496,772 Debt Debts falling due within 1 year (42,104) Debts falling due after 1 year (1,586,844) (1,628,948) Total (132,176) |
2023 £ (463,004) 73,443 94,586 3,879,623 3,584,648 Cash flow £ (1,483,451) (1,483,451) - 42,106 42,106 (1,441,345) |
2022 £ (803,384) 63,031 (204,290) 5,230 (939,413) At 5.4.23 £ 13,321 13,321 (42,104) (1,544,738) (1,586,842) (1,573,521) |
|---|---|---|
The notes form part of these financial statements
Page 12
FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS for the year ended 5 April 2023
1. ACCOUNTING POLICIES
Basis of preparing the financial statements
The financial statements of the charity, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Charities Act 2011. The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value, as modified by the revaluation of certain assets.
Critical accounting judgements and key sources of estimation uncertainty
Preparation of the accounts requires the trustees and management to make significant judgements and estimates.
The item in the accounts where these judgements and estimates have been made is the valuation of investment properties.
Income
All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.
Where income has related expenditure (as with fundraising or contract income), the income and related expenditure are reported gross in the Statement of Financial Activities.
Donations, grants and gifts are recognised when receivable. In the event that a donation is subject to fulfilling performance conditions before the charity is entitled to the funds, the income is deferred and not recognised until it is probable that those conditions will be fulfilled in the reporting period. Income from Gift Aid tax reclaims is recognised for any donations with relevant Gift Aid certificates recognised in income for the year. Any amounts of Gift Aid not received by the year-end are accounted for in income and accrued income in debtors.
For legacies, entitlement is taken on a case by case basis as the earlier of the date on which: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the charity that a distribution will be made, or when a distribution is received from the estate.
Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor's intention to make a distribution. If the legacy is in the form of an asset other than cash or an asset listed on a recognised stock exchange, recognition is subject to the value of the asset being able to be reliably measured and title to the asset has passed to the charity. Where legacies have been notified to the 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.
Income received in advance for a future fundraising event or for a grant received relating to the following year are deferred until the criteria for income recognition are met.
Donated goods and services, including volunteers
Donated facilities and gifts in kind are included at the value to the charity where this can be quantified.
In accordance with the Charities SORP FRS 102 volunteer time is not recognised.
Expenditure
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.
Grants
continued...
Page 13
FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
1. ACCOUNTING POLICIES - continued
Expenditure
Grants offered subject to conditions which have not been met at the year end date are noted as a commitment but not accrued as expenditure.
Raising funds
Raising funds includes all expenditure incurred by the charity to raise funds for its charitable purposes and includes costs of all fundraising activities, events and non-charitable trading.
Charitable activities
Charitable activities comprise of grants payable in furtherance of the charitable objectives of the charity. Grants payable are included in the statement of financial activities when approved and when the intended recipient has either received the funds or been informed of the decision to make the donation and has satisfied all related conditions. Grants approved but not paid at the end of the financial year are accrued for.
Governance costs
Governance costs comprise those costs associated with meeting the constitutional and strategic requirements of the charity and the audit fees and costs linked to the strategic management of the charity.
Investments
Investment property
Properties held for investment purposes are included in these accounts at open market value. The valuations are determined as set out in note 11 to these accounts.
Realised gains (or losses) on investment properties are calculated as the difference between disposal proceeds and their carrying value or their purchase value if acquired during the financial year. Unrealised gains (or losses) are calculated as the difference between fair value at the year end and their carrying value at that date. Realised and unrealised gains (or losses) are credited (or debited) in the year which they arise.
Investments in Syndicates
The charity had three minority holdings of 25% or less in property investment syndicates at the year end. The treatment in the accounts is to include only the charity's net share in these holdings at cost in the Balance Sheet and the net Income/(Deficit) under the heading Investment Income in the Statement of Financial Activities.
Current assets investment
Current asset investments are investments which held at cost with a maturity date of less than one year.
Taxation
The company is considered to pass the tests set out in Sch. 6, para. 1 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Pt. 11, Ch. 3 of the Corporation Tax Act 2010 or s. 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
Fund accounting
Funds held by the Charity are:
General Reserve:
This represents funds that can be used in accordance with the objects of the charity at the discretion of the Trustees.
Revaluation Reserve:
This Reserve can only be used by the Charity upon transfer to the General Reserve when a revaluation is realised on the disposal of the underlying Investment.
continued...
Page 14
FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
1. ACCOUNTING POLICIES - continued
Cash at bank and in hand
Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months form the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits.
Debtors
Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to be present value of the future cash receipt where such discounting is material.
Creditors and provisions
Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provision are recognised at the moment the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payments where such discounting is material.
Financial instruments
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments.
Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value except for bank loans which are subsequently measured at the carrying value plus accrued interest less repayments. The financing charge to expenditure is at a constant rate calculated using the effective interest method.
2.
3.
DONATIONS AND LEGACIES
| Donations INVESTMENT INCOME Rents received Syndicate income |
2023 £ 610,947 2023 £ 145,817 150,926 296,743 |
2022 £ 33,527 2022 £ 138,238 187,793 326,031 |
|---|---|---|
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
4. RAISING FUNDS
Raising donations and legacies
| Property expenditure Interest payable and similar charges |
2023 £ 110,608 73,443 184,051 |
2022 £ 49,952 63,031 112,983 |
|---|---|---|
5. CHARITABLE ACTIVITIES COSTS
| Relief of poverty, advancement of education and furtherance of religion GRANTS PAYABLE Relief of poverty, advancement of education and furtherance of religion |
Grant funding of activities (see note 6) £ 1,171,871 |
Support costs (see note 7) £ 14,772 2023 £ 1,171,871 |
Totals £ 1,186,643 2022 £ 1,037,839 |
|---|---|---|---|
6. GRANTS PAYABLE
Relief of poverty, advancement of education and furtherance of religion
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NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
6. GRANTS PAYABLE - continued
The total grants paid to institutions during the year was as follows:
| Acheinu Cancer Support Beis Aharon Trust Beis Rochel D'Satmar Bonei Olam Chevras Mo'oz Ladol CMA Trust Colel Polen Kupath Ramban David Family Foundation Friends of Rachashei Lev Friends of Yeshiva Luzern Keren Ohr Kollel Beis Yisroel D'Chasidei Gur Kollel Bnei Yissachar Kollel Rabinow Kollel Satmar Kollel Shas Yidden Kupat Ezer Lenisuin Beis Yisoel Mars.Org Side By Side Trust Talmud Torah Chasidei Gur Talmud Torah Vuchesed The New Rachministrivke Synagogue Trust United Talmudical Associstes Ltd Vitnitz Centre Institution Yesamach Levav Trust Yeshiva Chidushei Harim Yeshiva Lev Simcha Yesoday Hatorah School British Friends of Kupat Hair Ohr Vetikvah Support the Charity Worker The Tsechenov Institution Tomchei Torah Vuchesed Yeshiva Daas Sholem Shotz Yeshuos Shabbos Zoreya Tzedokos Ltd Grants less than £10,000 |
2023 £ 35,000 10,000 25,000 - 85,800 - 15,350 29,283 18,100 - 40,900 - 17,000 10,000 10,000 158,000 17,000 39,000 315,000 48,000 58,270 - 16,350 10,000 23,500 - 21,000 10,000 - - - - 50,000 - - - 91,547 1,154,100 |
2022 £ 24,000 - - 22,000 137,019 10,000 52,150 - - 18,000 130,500 23,108 - - - 152,500 17,400 43,287 35,000 - - 20,500 36,700 - - 57,652 - - 25,000 18,958 10,000 37,500 10,850 10,000 23,000 10,000 106,112 1,031,236 |
|---|---|---|
Grants to individuals totalled £17,771 (2022 - £6,603).
All grants were made to institutions whose objects are in line with those of the charity.
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 5 April 2023
7. SUPPORT COSTS
| SUPPORT COSTS | ||
|---|---|---|
| Governance | ||
| costs | ||
| £ | ||
| Relief of poverty, advancement of education and | ||
| furtherance of religion | 14,772 | |
| AUDITORS' REMUNERATION | ||
| Fees payable to the charity's auditors for the audit of the charity's financial statements | 2023 £ 14,772 |
2022 £ 10,644 |
8. AUDITORS' REMUNERATION
9. TRUSTEES' REMUNERATION AND BENEFITS
There were no trustees' remuneration or other benefits for the year ended 5 April 2023 nor for the year ended 5 April 2022.
Trustees' expenses
There were no trustees' expenses paid for the year ended 5 April 2023 nor for the year ended 5 April 2022.
10. FIXED ASSET INVESTMENTS
| FIXED ASSET INVESTMENTS | |
|---|---|
| MARKET VALUE | Shares in group undertakings £ |
| At 6 April 2022 and 5 April 2023 | 100 |
| NET BOOK VALUE | |
| At 5 April 2023 | 100 |
| At 5 April 2022 | 100 |
There were no investment assets outside the UK.
The charity's investment at the balance sheet date is comprised of a 100% holding in Orphan Support Limited, a company registered in England and Wales. The primary activity of Orphan Support Limited is property investment.
The company made a profit for the year of £6,605 (2022 - £3,908) and had positive aggregate capital and reserves of £8,746 (2022 - £2,141) at the balance sheet date.
The charity is exempt from preparing consolidated accounts in view of the fact that it is a small group.
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NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
11. INVESTMENT PROPERTY
| FAIR VALUE At 6 April 2022 Additions At 5 April 2023 NET BOOK VALUE At 5 April 2023 At 5 April 2022 |
£ 3,972,000 4,952,550 8,924,550 8,924,550 3,972,000 |
|---|---|
The properties were valued as at 5 April 2023 by the trustees, on an open market value basis, with the assistance of their professional advisors and based on their knowledge of the property market and the specific properties owned.
12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
| Trade debtors Other debtors 13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Bank loans and overdrafts (see note 15) Other creditors 14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Bank loans (see note 15) |
2023 £ 36,590 1,142,917 1,179,507 2023 £ 42,104 4,010,940 4,053,044 2023 £ 1,544,738 |
2022 £ 12,429 1,261,664 1,274,093 2022 £ 42,104 131,317 173,421 2022 £ 1,586,844 |
|---|---|---|
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NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
15. LOANS
An analysis of the maturity of loans is given below:
| Amounts falling due within one year on demand: Bank loans Amounts falling between one and two years: Bank loans Amounts falling due between two and five years: Bank loans 16. SECURED DEBTS The following secured debts are included within creditors: Bank loans The loans are secured on certain of the charity's properties. 17. MOVEMENT IN FUNDS Unrestricted funds General fund TOTAL FUNDS Net movement in funds, included in the above are as follows: Unrestricted funds General fund TOTAL FUNDS |
At 6.4.22 £ 4,982,700 4,982,700 Incoming resources £ 907,690 907,690 |
2023 £ 42,104 42,104 1,502,634 2023 £ 1,586,842 Net movement in funds £ (463,004) (463,004) Resources expended £ (1,370,694) (1,370,694) |
2022 £ 42,104 42,104 1,544,740 2022 £ 1,628,948 At 5.4.23 £ 4,519,696 4,519,696 Movement in funds £ (463,004) (463,004) |
|---|---|---|---|
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NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 5 April 2023
17. MOVEMENT IN FUNDS - continued
Comparatives for movement in funds
| At 6.4.21 £ Unrestricted funds General fund 5,786,084 TOTAL FUNDS 5,786,084 Comparative net movement in funds, included in the above are as follows: Incoming resources £ Unrestricted funds General fund 359,558 TOTAL FUNDS 359,558 |
Net movement in funds £ (803,384) (803,384) Resources expended £ (1,162,942) (1,162,942) |
At 5.4.22 £ 4,982,700 4,982,700 Movement in funds £ (803,384) (803,384) |
|---|---|---|
General fund
Unrestricted Reserves are made up of a General Reserve and a Revaluation Reserve and are used for the following purposes:
(i) To make interest free loans to charitable beneficiaries whom the Trustees feel would benefit from this form of assistance as opposed to an outright donation; and
(ii) To acquire new investments with the goal of providing continuing annual donations to charitable beneficiaries in the future.
18. RELATED PARTY DISCLOSURES
During the year, the charity recieved donations of £400,000 from companies of which certain of the trustees are directors and £11,138 from its subsidiary undertaking.
The charity's properties are managed free of charge by a company of which Mr I Moskovitz is a director. A deemed management charge of £16,378 has been recognised in the accounts as a donation.
During the year the charity made grants of £158,000 (2022 - £152,500) to Kollel Shas Yiden, a charity of which Mr I Moskovitz is a trustee.
Included in other creditors is a loan of £2,999,125 due to Y & Y Management Limited and £12,000 due to Avon Ground Rents Limited, companies controlled by certain of the trustees of this charity.
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FRIENDS OF ACHIEZER ARAD
NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 5 April 2023
19. FRC ETHICAL STANDARD - PROVISIONS AVAILABLE FOR SMALL ENTITIES
In common with many other organisation of our size and nature we use our auditors to assist with the preparation of the financial statements.
20. AUDITOR LIABILITY LIMITATION AGREEMENT
The charity has entered into a liability limitation agreement with Raffingers, the statutory auditor, in respect of the statutory audit for the period ended 5 April 2023. The proportionate liability agreement follows the standard terms in Appendix B to the Financial Reporting Council's June 2008 Guidance on Auditor Liability Agreements and was signed by the trustees on 18 April 2023.
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