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2020-12-31-accounts

INTERNATIONAL P.E.N.

TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

CHARITY NUMBER: 1117088 COMPANY NUMBER: 05683997

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CONTENTS

Page
REPORT OF THE BOARD OF TRUSTEES 3 - 30
Objectives and activities 3 - 13
Transforming International P.E.N. 13 - 17
Achievements and performance 17 - 19
Plans for the future 19 - 20
Financial Review 20 - 23
Structure, governance and management 24 - 26
Risk and internal controls 26 - 28
Other matters 28 - 30
STATEMENT OF TRUSTEES’ RESPONSIBILTIES 31
INDEPENDENT AUDITOR’S REPORT 32 - 36
FINANCIAL STATEMENTS
Statement of financial activities 37 - 38
Statement of financial position 39
Cash flow statement 40
Notes to the financial statements 41 - 53
REFERENCE AND ADMINISTRATIVE INFORMATION 54

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This report incorporates the Directors’ Report required for Companies Act purposes.

The Trustees of International P.E.N. present their Annual Report and financial statements for the year ended 31 December 2020 under the Charities Act 2011, the Companies Act 2006 and Accounting and Reporting by Charities: 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).

This year, to ensure our reporting of activity and finances over the year is accessible to all, we have produced three documents:

All these documents are available on our website: https://pen-international.org/who-we-are/governance

OBJECTIVES AND ACTIVITIES

International P.E.N. is a worldwide association of writers. It was founded in 1921 and is governed under the PEN Charter which was originally passed in 1948 and subsequently amended. It exists to promote friendship, fellowship and intellectual co-operation among writers everywhere, regardless of their political or other views; to fight for freedom of expression and to defend vigorously writers suffering from oppressive regimes. International P.E.N. connects an international community of writers from its Secretariat in London. It is a forum where writers meet freely to discuss their work; it is also a voice speaking out for writers, silenced in their own countries. Through Centres in over 100 countries, PEN operates on five continents. International P.E.N. is a non-political organisation which holds Special Consultative Status at the UN and Associate Status at UNESCO.

The objectives for 2020 followed the organisation’s strategic plan 2020 – 2023. The strategic plan was developed through consultations with the Board of Trustees and staff as well as the membership, and was adopted at Congress in Manila, Philippines in 2019.

PEN International’s overarching goal is to promote and defend freedom of expression, literatures and linguistic diversity, and mutual respect and tolerance across borders .

As it enters its 100[th] year anniversary, PEN works alongside, and often partners with, a range of human rights, free expression, literary, and cultural organisations to affect change on issues of common concern. However, PEN remains a unique and often singularly effective voice for the change it promotes through combining literary events with freedom of expression concerns. As writers, we are uniquely placed to use our stories to

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open minds and encourage dialogue. Our influence reaches leaders and communities – we engage them through creative voices and experience, we unite writers of influence globally to press for a world where writers and freedom of expression are fully protected; where languages and literatures are respected and celebrated; and where the free exchange of literatures and ideas build tolerance and understanding within and across borders.

In order to pursue our goals of promoting freedom of expression, languages and literatures PEN’s four overarching objectives are:

1. Creating new spaces for literature, language, debate, dialogue idea and opinions

Through our sub-granting programme, the civil society programme, which aims to contribute to a dynamic and informed civil society, by creating spaces for creativity and dialogue, where ideas are shared and challenged and where expression in all its forms can flourish. The CSP offers a flexible framework for PEN Centres to identify and propose locally relevant projects, which promote and strengthen civic spaces for expression. The programme aims to strengthen initiatives, which enhance the participation of women and minorities in asserting, and claiming their rights, these include through campaigns and advocacy, literary events, festivals, and community outreach; educational support programmes, literary and research initiatives.

The current grant giving system is based on open calls that encourage the participation of PEN Centres based primarily in official Development Assistant Committee (DAC) recipient countries.

Due to the COVID 19 pandemic, all of PEN’s in-person activities moved on-line. As a result, PEN provided small grants to 25 PEN Centres largely from the global south, to develop their on-line presence. Across the world, PEN Centres seized the opportunity to develop digital inclusion and reach new audiences through digital platforms such as Facebook, Twitter, Instagram, and YouTube, and used online sites such as Zoom and Microsoft Teams to hold their meetings and connect their membership. On-line activities provided new spaces for free expression using literature as the vehicle to enhance participation, particularly of marginalized groups in debates around freedom of expression and other rights, to encourage critical thinking and empower those who have no voice. Centres developed a range of events, which ran through the second half of the year – webinars, literary readings, podcasts, and training sessions on a range of issues – from challenges to free expression under the pandemic to women’s poetry and activism. PEN hired two expert digital consultants to support PEN Centres with their digital projects, providing tailored mentoring and online training. As a result, all Centres improved their digital skills and reached new audiences, through growing their social media following for literature and freedom of expression.

In 2020 Day of the Dead also went digital. Eleven PEN Centres in Latin America were supported with small grants to commemorate Day of the Dead and Day against Impunity. Centres ran online activities, which ranged

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from poetry readings to those focused on cases of writers murdered because of their work. Centres across the region called for an end to impunity and for redress for those killed solely for expression their opinions. For further information on the impact of these projects, see PEN’s Impact Report 2020 .

2. Improving the situation of writers at risk who are displaced, imprisoned or otherwise persecuted

Freedom of Expression and PEN’s work have been deeply affected by the global COVID 19 pandemic. Although COVID 19 may be a new virus, with deep and wide-ranging impact that will not be possible to measure for years to come, its effect on freedom of expression and on writers in prison are not new. The crisis has thrown into sharp focus the systemic problems that writers who speak out have long faced, problems that PEN International has set out to challenge from its start a century ago. These are likely to continue in some form long after a vaccine is rolled out and this pandemic faded into history.

A pattern we are seeing is that writers arrested and persecuted for their comments on the virus are often the same who have for years, been the subject of harassment and persecution for standing up and challenging states. It is not just COVID 19 commentary that is subject to censorship, but dissident voices in general. They protested injustice before and during COVID and will continue to protest new injustices. Finally, the ravages of COVID through many of the world’s prisons, with deaths and illness fast spreading, and families denied access has highlighted the pre-existing problem of appalling conditions and lack of medical care that prisoners have always suffered.

In 2020, PEN continued to support writers at risk, including those detained or otherwise persecuted for their opinions expressed in writing – by monitoring and reporting on cases, advocacy and campaigning, solidarity actions and through the provision of assistance for securing financial, relocation and asylum support. PEN’s 2019 Case list was published in May 2020.

Because of the global pandemic, PEN’s work in the first half of the year with the International Cities of Refuge (ICORN) experienced a dramatic drop in the number of cases presented for assessment. However, the second half of the year saw numbers rise - PEN received 115 applications for comment in 2020, close to that of the previous year (119), assessed, and returned 110 applications. In addition, there was a growing level of engagement on a one-to-one basis with applicants. The number of asylum support requests from ICORN applicants has dramatically increased during this year, reflecting the closing of borders due to the coronavirus pandemic, which has presented particular challenges.

The overwhelming majority of applications continue to come from the Middle East and North Africa (MENA) region, with writers in the region particularly at risk for reporting on conflict, human rights violations and political turmoil. Many Egyptian writers were imprisoned solely for exercising their right to freedom of expression and their human rights work, and exiled writers in Egypt face considerable problems and little protection. Political protests in Iraq and Lebanon exacerbated the situation for writers and journalists in these countries, and in the Palestinian Territories, the stifling freedom of expression climate in the Gaza strip

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disproportionately targets writers and artists. In addition, the Israeli closure of Gaza is having a devastating effect, making it nigh on impossible for writers to seek protection. Women writers in Gaza are particularly at risk, targeted by both family and state actors, and face gender-based violence. LGBTQ+ writers face acute persecution throughout the region.

Nearly 50% of the applications presented to PEN for comment from the MENA in 2020 came from Iran, which has consistently high numbers of writers in prison and going into exile. Religious and ethnic minorities – in particular Kurdish writers - are amongst those targeted by the state for peacefully expressing themselves. The gravity of threats to writers and artists perpetrated by the Iranian state necessities an absolute need for longterm relocation in the majority of cases. Economic sanctions make it impossible to send money to Iran, and therefore persecuted writers in the country – many of whom are excluded from employment as part of their persecution - are unable to access emergency funding to ease their predicament. The coronavirus pandemic has exacerbated the situation, increasing fears for the safety of persecuted writers, especially those detained. Thanks to additional support from the Sida grant, PEN was able to increase its language support to the Protection Team, particularly in Farsi to deal with the large number of cases from Iran. In 2020, twenty-four cases were assessed and returned to ICORN from the MENA region.

In Europe and Central Asia, civil space continued to shrink, particularly in parts of the former Soviet Union. PEN recorded a rise of applications from writers in these countries. In Belarus, tens of thousands of people took to the streets in peaceful protest due to rigged elections in August 2020. Hundreds were detained including many writers and artists, suffering arrests, beatings, destruction of instruments, and loss of jobs. In Ukraine and Uzbekistan, where new applications were received, journalists and activists continue to face harassment and threats connected to their reporting. PEN Ukraine, PEN Moscow and Russian PEN have been key partners in providing support to displaced writers from the region in need of protection. The persecution of independent voices in Azerbaijan continues, with journalists and bloggers subjected to physical attacks, harassment and threats, often with impunity; six were behind bars at the end of 2020. Persecution of LGBTQ+ individuals and communities is growing in these regions (as well as increasing pushback on women’s rights), where laws criminalising the propaganda of homosexuality have also been used to target writers.

Requests for assistance from Turkish writers continue, though in fewer numbers. More than three years since a failed coup attempt, the Turkish government continues its relentless and pervasive crackdown on civic space, media freedom and dissenting voices. Turkey retains the dubious accolade of the world’s biggest jailer of journalists; at least 87 were behind bars at the end of 2020.

From Asia, PEN continues to receive regular requests for protection, relocation and financial assistance including from Bangladeshi writers in the wake of the killings of several secular bloggers there since February 2015, reflecting the restrictive freedom of expression climate in the country. Although fatal attacks have significantly decreased, the climate for freedom of expression has continued to deteriorate, with Bangladesh’s vibrant civil society also under attack. Legislative changes, poor law enforcement, lack of governmental

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support for the principle of freedom of expression, attempts to undermine independent media and a justice system under-resourced and ill-equipped to provide recourse to victims of rights violations have all contributed to the silencing of dissenting voices, through murder, imprisonment, self-censorship or exile.

The year has also seen an increase in applications from China, reflecting the deteriorating freedom of expression climate especially in the Xinjiang Uyghur Autonomous Region (XUAR); Uyghur applicants also continue to face risk of persecution from beyond China’s borders. Issues relating to digital security, consent and safety of family members are particularly complex and pressing in these cases.

The critical security situation in Afghanistan is placing many writers and journalists at risk from both state and non-state actors, and those at particular risk include Hazara people, women, LGBTQ+ individuals, or those defending those groups, especially outside of Kabul, where anti-government elements hold more power. Eighteen applications from Asia were assessed and returned to ICORN in 2020.

In the Americas, given the scale of violence and threats against journalists, PEN recognises the need to expand its reach in the region. Two cases were assessed and returned to ICORN for the Americas in 2020.

The number of requests for assistance and protection from writers from sub-Saharan and north Africa has been consistently high for many years. There is a lot of diversity in the countries of origin of applicants from the region, although the majority come from the horn of Africa. The positive political developments in Ethiopia since 2018 may have led to a drop in applications, although applications from neighbouring Eritrea remain high.

The majority of applicants to ICORN from the continent are living as refugees in exile and are going through the UNHCR resettlement process, which can take several years. Only a fraction can be placed through the ICORN network, and most emergency funding and short-term relocation programmes do not address the needs of writers in need of long-term protection. It is hoped that through our growing network of African Centres and developing partnerships with local organisations on the ground (in particular the DefendDefenders East and Horn of Africa Human Rights Project) more sustainable complementary pathways can be found to support those in long-term limbo at the local and regional level. A capacity-building project with PEN Uganda to support displaced and refugee writers in the country started in 2019. This project will provide much needed solidarity and respite for writers from the region exiled in Uganda. Thirteen assessments were returned to ICORN for Africa in 2020.

Campaigning – Emblematic Cases

Emblematic cases featured in our Campaign for the Day of the Imprisoned Writer or which were the focus of individual statements or actions through PEN’s Rapid Action Network (RAN) include the following cases:

Ugandan writer and journalist, Kakwenza Rukirabashaija who was arrested in April 2020 by the military police. Accused of violating Uganda’s COVID19 control regulations through a post he had made on his Facebook page, his interrogation under torture centred on his novel, The Greedy Barbarians , a book critical of endemic official

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corruption in Uganda. Although he was released on bail, court proceedings have dragged. PEN continues to monitor this case. Here is a link to more information on the case https://pen-international.org/news/ugandarelease-kakwenza-rukirabashaija

Prominent investigative journalist and filmmaker, Hopewell Chin’ono was violently arrested at his home in Zimbabwe and charged with inciting public violence based on a Twitter post in which he had expressed support for peaceful anticorruption protests planned for July 31. It is however believed that the authorities targeted Hopewell for judicial harassment because of his investigative reports on alleged high-level corruption on COVID19 supplies. https://pen-international.org/news/zimbabwe-release-journalist-hopewell-chinono-anddrop-all-charges-against-him. Hopewell was released on bail after 45 days of detention at a maximum security prison, banning his lawyer from representing him and frivolous denials of his bail applications. PEN continues to monitor this case.

Award-winning Zimbabwean writer, playwright and filmmaker Tsitsi Dangarembga whose novel This Mournable Body was shortlisted for the 2020 Booker Prize, was arrested in Harare while peacefully protesting corruption. This was on July 31, a day when opposition, civil society and professional association activists had called peaceful anticorruption demonstrations. Dangarembga was detained overnight and released on a cash bail, ordered to surrender her passport and report to the police every week. Here is a link for information about her case https://pen-international.org/news/zimbabwe-drop-charges-against-writer-tsitsi-dangarembga PEN continues to monitor this case.

On a positive note, in February 2020, the conviction of Ugandan academic, activist and poet Stella Nyanzi was quashed, ending her detention in jail. Here is a link the statement we issued on the good news of her court victory https://pen-international.org/news/uganda-academic-activist-and-poet-dr-stella-nyanzi-releasedconviction-quashed

Several of PEN’s main cases in the Americas, have shown encouraging progress and in some cases positive results. Roberto de Jesús Quiñones Haces , a Cuban poet, was released on 4th September 2020. We campaigned on his case continuously throughout the year

https://www.youtube.com/watch?v=4rST7SMcNP0&t=2s. At least 15 centres in the Region contributed with specific actions on his behalf.

Ending impunity in Mexico, Lydia Cacho ’s case has shown some promising progress, some of those accused of the attacks against her are on trial or in jail. Also a conviction for the murder of journalist Miroslava Breach was secured and sentence passed, Miroslava’s case has been a focus of long term PEN campaigning during 2017and 2018.

In Asia, Myanmar poet and activist, Maung Saungkha, was facing three months in jail at a time when those incarcerated are at a great risk of infection from COVID 19. After the statement was circulated on Sep 2nd, the

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court verdict on Sep 4 gave him a reduced sentence of a fine with no mandatory jail time. Following on from the news, he thanked PEN International first among the NGOs that advocated on his behalf.

PEN advocated on several cases of writers facing judicial harassment in India , particularly that of elderly poet P Varavara Rao on medical grounds. A Marxist poet and activist, Rao is considered an important figure in Telugu literature, and has since the late 1960s published numerous poetry collections. His arrest took place in November 2018, and he has been detained ever since, accused of his purported connection with an alleged plot to assassinate Prime Minister Narendra Modi. However, PEN considers that he is being held for his views and that he is being penalized for his continued advocacy for the underprivileged communities in India, including indigenous tribal groups. Several appeals that he be freed on bail in the past year have been rejected.

In Europe PEN co-organised, an advocacy campaign to mark Kurdish reporter Nedim Türfent’s 1500th day behind bars, including two successful online events in English and Turkish, social media clips, solidarity messages and a joint statement with 43 civil society organisations. PEN also coordinated a joint statement with 37 Centres and other civil society organisations to protest the closure of online station Ozgürüz, led by Can Dündar, and issued statements in two other cases of judicial harassment ( Nurcan Baysal and Ragip Zarakolu ). PEN International also joined two English PEN statements concerning the United Kingdom together with Scottish PEN, Irish PEN and Wales PEN Cymru, urging the Church of England to overturn a judgment in relation to an Irish-language epitaph. PEN International and six PEN Centres also signed on to a broader NGO statement calling for the release of Julian Assange .

In the Middle East and North Africa activists In Egypt were among those briefly arrested during protests calling for the release of political prisoners who they feared are at particular risk of contracting the disease in overcrowded and medically under-resourced prisons. These fears tragically came to be founded with the death in prison in May of filmmaker Shady Habash, reportedly after having ingested sanitizer. Yet more people continued to be detained, such as in June when Sanaa Seif, also a filmmaker, who had protested outside the prison where her brother, a PEN main case, Alaa Abd El Fattah , was detained

In Iran, the plight of Narges Mohammadi, who is serving a long prison term, became more acute with the news that she had COVID-like symptoms. PEN’s calls for her release were replicated in a joint statement by United Nation Special Rapporteurs, and soon after some relief came when she was allowed to speak to her children, now living in Europe, for the first time in over a year. PEN also demanded the dropping of charges against three writers who were ordered to enter prison in May despite the extent of COVID in the jails.

Fears for the welfare of prisoners in Bahrain, also seeing widespread COVID 19 outbreaks in jails, led to the release of many political prisoners, but a number of human rights defenders and journalists remained behind bars. PEN joined call for them also be released. The crisis in Yemen which has led to deep suffering across the country, also saw death sentences served against four journalists by the de facto Houthi government in Sanaa. They had been arrested four years earlier on charges of spying and ‘false news’. The hosting of the Hay Literary

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Festival in Abu Dhabi gave an opportunity to highlight the poor state of freedom of expression in the United Arab Emirates, including long sentences being served by three human rights defenders and activists.

3. Addressing structural threats and barriers to freedom of expression

Structural threats to freedom of expression are confronted and where possible revoked by challenging all forms of censorship including the increasing restrictions to digital freedom on-line and restrictions of freedom of expression for minorities such as LGBTQI communities. PEN opposes the criminalization of speech, insult or defamation laws – with the exception of speech, which directly incites violence. Across the world, demands for stricter regulation of freedom of speech to deal with the very real threat of political violence, is also central to many organised hate speech campaigns.

Fake news has been a paramount concern in these days of COVID 19. On the one hand, writers have been arrested and censored on accusations of ‘false news’ for publishing alternative narratives about the pandemic to those of their governments. On other hand, governments have issued their own ‘fake news’ and denied access to information. Yet this has always been the case. Challenging government policy, investigative journalism, alternative narratives have been labelled ‘false’, ‘fake’, ‘disinformation’, ‘spreading public unrest’, and even ‘threat to public security’. These are one of the most common reasons used to penalize writers for decades, even centuries.

Emergency laws aimed at containing the virus can seem reasonable but have been applied to shut down criticism. In this way, such laws replicate the instrumentalisation of other laws seemingly aimed at protecting the public. Laws dealing with anti-terrorism, defamation, religion, and traditional values are all widely used to shut down criticism of leaders and against non-conformists and minority voices.

PEN, together with several Zimbabwean, regional and global civil society organizations co-signed a joint statement addressed to the Speaker of the Zimbabwe Parliament raising concerns about the gazetted Cybersecurity and Data Protection Bill. Here is a link to the statement

https://pen-international.org/news/zimbabwe-government-cybersecurity-bill

Also, after years of advocacy spearheaded by PEN Sierra Leone and other local civil society groups, with support from PEN International, in August, the Sierra Leone Parliament repealed the country’s criminal defamation law. This effectively ended the criminalization of defamation and seditious libel. PEN is exploring with PEN Sierra Leone further action, particularly on capacity strengthening of journalists on the new, more progressive legal and policy environment and ways to secure the gains of the successful advocacy.

We worked on barriers to freedom of expression such as restrictive laws in Honduras , Nicaragua and Cuba . These countries are facing repressive censor laws and measures that were hardened during the COVID 19 crisis. On Chile specifically, PEN International condemned legal actions taken against the activists and artists of " " LASTESIS, authors of the performance piece A rapist in your way , which has been performed in more than 35 countries. These actions, brought by a branch of the Chilean police force, the Carabineros, put freedom of

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expression at risk and demonstrate the increasing threat to writers, artistic and social activists and journalists who criticize security and government policies. We also published a statement on USA and the restrictions to free expression after the murder of George Floyd .

China continues to be a priority, with the country comprising of the largest number of cases within the 2019 Case List. The situation within China remains grave, particularly for vulnerable minorities in Xinjiang, and the extent of the threat posed to writers at risk increasingly extends beyond the county’s national boundaries, with exiled writers facing the risk of refoulement or persecution of family members still inside China. The recent implementation of the national security law in Hong Kong is a particular concern for freedom of expression in the territory, which has long acted as a sanctuary for writers in China. To address the scale of the challenge, the first meeting of the China Planning Group (CPG) was convened in August 2020. The role of the CPG is to coordinate a long-term strategy of actions between several PEN centres working on issues of freedom of expression and the protection of writers at risk in China.

The targeting of writers and journalists criticising government policies continues to be a frequent issue throughout the region, with several recent cases in India emerging in response to criticism of the Indian government’s implementation of the controversial Citizenship (Amendment) act. In Thailand , public criticism of the ruling monarchy remains fraught with danger, and several writers and activists were charged under the country’s highly punitive lèse-majesté law for their peaceful participation in pro-democracy protests in recent months.

The implementation of broad emergency powers in response to the COVID 19 pandemic in countries such as Cambodia , Myanmar , Philippines , and Thailand is also a pressing concern given each country’s welldocumented reputation for using security measures to censor criticism and criminalise dissent. In Singapore, government efforts to ostensibly counter the issue of ‘fake news’ surrounding COVID 19 through legislation has resulted in its use against organisations who criticised the government’s early handling of the pandemic. The health dangers posed by COVID-19 have been exacerbated through the on-going implementation of internet shutdowns in Bangladesh , Myanmar, and the Indian-administered union territory of Jammu and Kashmir, resulting in the denial of access to information crucial to the health and well-being of vulnerable populations.

At EU level , PEN International continues to be involved in the work of a grand coalition of NGO’s that advocates for a European instrument tackling Strategic Lawsuits Against Public Participation (SLAPPs), including engagement in the development of a Model Directive. Recently, the European Commission has started signalling interest in initiating the legislative process and there is a group of like-minded MEPs. Furthermore, PEN International also signed on to a statement in support of the mandate of the OSCE Representative on Freedom of the Media. With 28 other civil society organisations, we expressed our deep concern over the decision of the representatives of Azerbaijan and Tajikistan to block the renewal of the mandate of Harlem Désir.

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4. Strengthening the institutional capacity and sustainability of PEN, so that the movement is fully representative and relevant

Efforts to ensure the sustainability of the PEN movement beyond its centenary are concentrated around three main areas, fundraising, cultivating diverse and young members to ensure the organisation remains relevant, and professional development - building skills to deliver PEN’s objectives. Capacity building and knowledge sharing is the Secretariat’s primary role in the coming years. In order to achieve PEN’s vision, significant resources will be required at all levels – Board, Centre and Secretariat.

In order to maintain the Secretariat’s support to the membership in skills training we also moved our capacitybuilding programme online. We have developed an online series of ten capacity building webinars in Spanish and English, with approximately 45 PEN members participating from Africa, Asia, and Latin America. The membership have increased their knowledge and skills on a range of practical and thematic issues from project management, financial management and monitoring and evaluation as well as fundraising, gender, and diversity. Presentations and resources on each webinar were widely shared and all sessions were recorded for the benefit of those unable to attend in person. The webinar series ran in both English and Spanish (for the Americas) attracted participation from over 40 Centres in the Global South. Funds to ensure adequate internet access were provided to 7 PEN Centres largely from Africa.

Congress and PEN’s AGM

PEN International held its 86[th] Annual Congress, its first-ever digital Congress with the theme: Freedom of Expression in Times of Pandemic . The Congress marked the beginning of our one-year journey towards PEN’s Centenary in 2021. From 2 to 6 November 2020, 296 participants from 90 PEN Centres gathered online to examine and debate the challenges to free expression around the world. The Assembly adopted a resolution calling for public access to sound medical and scientific information about the virus, which should not be limited to suit political or economic interests. It also calls for the global emergency not to be used by governments to further silence voices of opposition.

The Assembly of Delegates welcomed 3 new PEN Centres to the PEN family, namely PEN Ecuador, PEN Greece and its first indigenous language Centre - PEN Chiapas Multicultural. The Congress consisted of 9 hours of live sessions, made possible by 104 hours of web development work. Our digital reach and engagement far out performed the reach of in person meetings with two public panels reaching over 7,000 people.

More information is provided in PEN’s Memorandum and Articles of Association, including restrictions applicable to PEN. This can be viewed on our website https://pen-international.org/who-we-are/governance or is available by request.

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PUBLIC BENEFIT

Article 19 of the Universal Declaration of Human Rights (UDHR) addresses freedom of expression as follows:

"Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers".

The trustees have paid due regard to the guidance issued by the Charity Commission in deciding what activities the charity should undertake, to further its charitable purposes for the public benefit.

International P.E.N. coordinates the activities of PEN Centres across the world in defence of freedom of expression and provides international support, research, policy development and programming to further this aim. The Charity Commission's RR12 declares: "there is an obvious public benefit in promoting human rights. For individuals whose human rights are thereby secured, the benefit is immediate and tangible. There is also a less tangible, but nonetheless significant, benefit to the whole community that arises from our perception that the fundamental rights of all members of the community are being protected."

CRITERIA FOR MEASURING SUCCESS

International P.E.N. has a diverse framework for measuring its impact effectiveness. Linked to the organisational log frame, qualitative and quantitative indicators are recorded through tracking tables, case studies, focus groups and questionnaires. These are used to determine the effectiveness and appropriateness of activities. Our approach aims to be participatory and adaptable in order to understand the impact of PEN’s work across the organisation by bringing the voices of writers and members working in a variety of contexts together, to build a comprehensive picture of PEN’s work. Lessons learnt, including from achievements and challenges, are fed into planning and to strengthen the work going forward. Meaningful feedback and honest analysis is at the core of our system, as is our means of capturing data which harnesses the strength of PEN as an organisation of writers who can tell stories of change. Programmes are subject to external and independent evaluations when required by funders.

TRANSFORMING INTERNATIONAL P.E.N.

While PEN’s Strategic Plan 2020-2023 represents an evolutionary development, rather than a radical shift in organisational direction, it also aims to improve PEN International’s accountability and governance.

At the Secretariat, a Management Group with representatives from each team meeting bi-weekly was established to plan, discuss and take decisions on key issues facing the organisation internally. The management group was set up to increase participation and transparency in the decision-making processes and greater accountability by senior managers to the staff and Board.

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Due to the pandemic, staff were required to work remotely from mid-March 2020. This provoked a number of challenges for the organisation, including the need to acquire new hardware for homeworkers. Due to new ways of working, PEN commissioned a health and safety workstation review for each member of staff to ensure everyone was working from home in an appropriate and comfortable manner. Furthermore, PEN adopted a working at home policy, which set out the parameters for remote working. The Senior Management Team also adopted flexible hours approach to support staff with home schooling and careering responsibilities. PEN provided a number of trainings, which were welcome by staff, including on GDPR and digital security. The finance team has continued to strengthen PEN’s financial and administration policies and procedures, providing training to staff and specific support to the sub-granting programme with a webinar dedicated to budgeting and reporting for the global membership.

The Finance, Administration and HR Director led the development of a new Finance Strategy, adopted by the Board of Trustees, which includes the need to develop a resilience fund from 2020 – 2023. The resilience fund is intended to stabilise the organisation’s finances, minimise the likelihood of end of year deficits and with the fundraising strategy increase the organisation’s sustainability with a view to growth in the 3[rd] and 4[th] year of the strategy.

CELEBRATION OF PEN CENTENARY HIGHLIGHTING PEN’S MISSION TODAY

In December 2020, the Board of PEN International decided to adapt the celebration of PENs 100th anniversary to the health crisis's context and its imposed restrictions. The board decided to celebrate PEN’s 100+1 anniversary: the centenary celebrations will extend from 2021 to 2022, until the PEN International Congress meeting in Uppsala, Sweden, in late September.

Centenary celebrations will be looking back to PEN’s rich history and acknowledging the fantastic network of close to 150 centres it has become. The centenary slogan is 100 years of celebrating literature and protecting freedom of expression . Each PEN Centre will be invited to join the celebration through its campaigns, debates, webinars, literary readings, civil society programs and all activities organised in 2021 and 2022. The international secretariat has thus shared with all centres the logo, the banner, the slogan and the hashtag of the centenary, with branding guidelines.

All celebrations will link the mission of PEN today with its centenary history. They started on 15 January 2021 with the PEN Freedom of Expression Award in the context of the Writers Unlimited Festival in The Hague —on the same day of the 50th anniversary of the PEN Emergency Fund. All regional network meetings in the Americas, Africa, Asia-Pacific, Europe and MENA will start the preparations of the PEN Centenary Congress. The Women Writers Meeting in March debated, and the Writers for Peace meeting in April will debate, the mission of its committee in the light of its historical achievements. The Writers in Prison Committee conference in partnership with ICORN will reflect on the extraordinary development of PEN’s Protection of Writers at Risk

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network and present challenges for writers in exile. The meeting of the Translation and Linguistic Rights Committee in June will celebrate the 25th anniversary of the Universal Declaration of Linguistic Rights.

In June, PEN will launch the PEN Centenary Archive Collection Online Exhibition: more than 90 centres have contributed to this huge archive of the centres' archives. It will give the scope of PEN’s presence worldwide and will narrate the many histories of PEN Centre's life, congresses, committee meetings and the development of the PEN Charter. It will showcase an organisation that has grown non-stop, increasing the number of literary communities gathered and increasing their commitment to peace and freedom since 1921.

The launching of PEN International A history —a coffee-table book of more than 300 pages and 500 images will take place in September. A team of six authors and twenty researchers have worked for more than two years to collect the documents, pictures and narrations of PEN's history about writers in exile or imprisoned, translation and linguistic rights, and writers for peace and women writers. The book will be published in English, French, Spanish, German, Swedish, Catalan and Basque languages, including special editions with chapters about Slovene, Tibetan Writers Abroad, Belgian Francophone, Danish and American PEN.

The PEN Centenary Congress will take place at the end of September in digital mode. Salman Rushdie, Svetlana Alexievich, Margaret Atwood, Ngugi wa Thiong’o, Orhan Pamuk, J.M Coetzee, Sihem Ben Sedrine, Can Dündar, Oleg Sentsov and Elena Poniatowska will be among the keynote speakers and panel participants.

A PEN Centenary statement will reflect on the mission of PEN International for the next 100 years, and the assembly of delegates will elect a new president on the threshold of a new century for PEN International.

FUNDRAISING STRATEGY FOR THE CENTENARY BUILDING PEN SUSTAINABILITY IN THE LONG TERM

In last year’s report we noted that one of our five transformationa l aims was ‘to use the PEN Centenary as a focus for fundraising over the next years, by redefining the fundraising strategy in both the short and long term’ and to create a dedicated Fundraiser function to support this. This has been achieved, although the position was not filled until halfway through the financial year. The initial focus for this role was ensuring appropriate communication with active and, crucially, lapsed members of the Publishers Circle and Writers Circle, which led to current-year and previous-year late donations being received plus additional donations from existing members. A ‘Centenary Patrons’ Giving and Recognition scheme was also promptly conceptualised and created, with some early successes.

As of last year’s report, we could not foresee the longer-term impact of Covid, the extended lockdowns and threats to usually steady economies. Fundraising is even more challenging than usual, with many of our contacts and prospects struggling financially, but we have seen some positive news in increased book sales and publishers posting strong accounts – leading to a development focus on this market, which we are intensifying in 2021.

In 2020, we formed a strong partnership with the Moomin company, including new income-generating activities and a multi-year donation pledge. We are in negotiation with other new partners on innovative

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REPORT OF THE BOARD OF TRUSTEES 2020

initiatives, meeting our longer-term objectives. We were successful in securing ‘centenary’ funding through Patrons’ approaches, from several members of our Circles, in addition to their annual pledges – a remarkable achievement (double funding) which we hope to build on in 2021-22.

We have also had meetings and submitted initial proposals to several large potential funders for ‘step change funding’ or ‘capital investment’. In all of our approaches we balance immediate need with a request for supporters to pledge multi-year support through regular giving or membership of one of our Circles, thus supporting our sustainability objectives.

Future strategies

PEN International has historically not been a ‘fundraising charity’. Our new approach (made possible by the Centenary) comes necessarily with unknowns. The world is changed: economic uncertainty has made analysis and planning an art not a science. Engagement events and networking opportunities are on hold or high risk for the foreseeable future, both in terms of attendance levels and any net financial gain from those events. Budget reliance on new sources is high, and not without risk, especially given the nature of the cause combined with the added challenges created by long-term economic impact of global pandemic. Depending on the efficacy of vaccination and the extent to which ‘normal life’ resumes, we hope to see a slow but steady return to physical events, travel in-person to meetings, and attendance at networking events: relationship fundraising which will safeguard PEN longer term. PEN’s leadership groups will also take a role in this work, including through the creation of a high-level Fundraising Development Board to attract new members such as philanthropists and business leaders. In 2021-22, we hope to launch two further Circles to enlarge and strengthen our networks and supporter base, a Lawyers Circle and an Agents Circle.

The fundraising strategy being developed and implemented around the period of PEN’s Centenary is divided into three interdependent strands: (1) The immediate priority: to raise funding for core operational costs in 2021; (2) To build relationships and secure pledges for future support in 2022 and beyond, helping the organisation to have security in programme planning. (3) To raise sponsorship restricted to Centenary activity costs.

This approach addresses the need to raise funding towards resilience reserves. A percentage of any unrestricted donations will be directed towards this purpose. On restricted project applications, an element will be allocated to infrastructure costs, a proportion of this directed towards strengthening our reserves position. All three strands are in real terms inseparable, and part of one donor-focussed strategy. Our priority/ideal approach is to inspire unrestricted giving in 2021 as well as commitment to continue with annual gifts. In addition to in-year gifts we hope to secure pledges of future support: through partnership agreements; through contributions to one of the existing annual giving circles, and possibly through newly developing circles; by increasing regular giving from low-value/high-volume groups, through recurring gifts as ‘Friends of PEN’. All of the activities will be conducted in the spirit of PEN’s Fundraising Principles.

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REPORT OF THE BOARD OF TRUSTEES 2020

In last year’s Report we said: “The Board considers fundraising an urgent priority to support the growing demands from writers at risk and for PEN’s programmatic work . The overarching goal is: to achieve an organisational step change in which PEN has the capacity to coordinate and sustain effective campaigns and programmes throughout the PEN network, and in which the scale and impact of PEN’s programmes attracts on-going support from a variety of funding sources at both the local and international level.” This call to action remains the case now; indeed, even more so.

ACHIEVEMENTS AND PERFORMANCE

INDEPENDENT REVIEW INTO PEN’S GOVERNANCE

In 2020, the Board appointed George Gawlinski to undertake a 360[0] review of governance and leadership within the charity. This was in the context of serious concerns about secretariat workload and morale, high staff turnover and a breakdown in relations within the Board. The below highlights recommendations based on the Governance Code provided by George Gawlinski:

During the year, we have seen a significant change at the leadership level within the charity. In late 2020, Ola Larsmo was elected the Deputy Chair of the board of trustees. The Executive Director of the organisation who was in post during the majority of 2020 has now stepped back to concentrate on the Centennial and the organisation is currently being led by Interim Executive Director Romana Cacchioli.

CONNECTING THE PEN COMMUNITY

2020 has been a challenging year in many respects, particularly for freedom of expression as the global COVID 19 pandemic locked borders, restricted travel, with many governments taking advantage of the situation to impose further limits on free expression. However, PEN was quick to move its activities online and grasped the opportunity to enhance its digital capacity and presence. PEN appointed two digital consultants and along with an approach to enhance digital inclusion, the civil society programme changed its focus to support digital projects through small grants. Additional resources including communications expertise meant that the PEN community was able to connect like never before.

The launch of PEN’s twitter account for the Americas was piloted in mid-October 2020 to connect and amplify the work of PEN Centres as well as to involve the wider public and human rights community in Latin America

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REPORT OF THE BOARD OF TRUSTEES 2020

and the Caribbean. In 2021, PEN plans to launch social media channels for the MENA region to grow its reach and support Centre development. Regional meetings, thematic Committee meetings and Congress were all transferred online facilitating greater participation of the membership in PEN events and trainings. PEN’s first digital congress was a great success. It consisted of a static portion with pre-recorded messages and translated texts as well as live sessions.

In a live, but closed session of the Writers in Prison Committee, registered participants numbered 162, with 53 Centres speaking during the Centres Updates session

The success of the events belie some of the important challenges faced including the short timeframe, the completely new format, linguistic and translation challenges, and connectivity issues for many of the membership particularly in Africa.

Overall, the digital format enabled greater participation - gave voice to Centers who cannot afford to join inperson Congresses and provided rich learning in developing new standards and procedures for digital events.

In October, PEN piloted a new initiative, Creative Witnesses , a filmed event that displayed new and original creative work by musicians and artists, inspired by writers imprisoned, harassed, or sometimes murdered because of their commitment to freedom of expression. The event was organised by Ege Dündar, volunteer coordinator of PEN International’s work with young writers including the Ilkyaz literary site, to show solidarity with writers at risk and enable their work to reach a wider audience. The event was the first of three aimed to engage a broader range of artists and reach a younger supporter base. Live streamed on Facebook, the event drew significant viewers and likes

GRANT-MAKING

Grant-making is a core aspect of our charitable work and this continues to grow. However, due to the pandemic the majority of our civil society grant activities were done virtually with no travels. During the year we awarded a total of £131,878 in grants through our civil society programme (CSP) (2019: £163,032).

Grants-making allocated by continent:

The feedback from PEN Afrikaans is illustrative of the usefulness of the digital grant, which is representative of the most positive Centre feedback.

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REPORT OF THE BOARD OF TRUSTEES 2020

We have not only added social media platforms to our online presence (Instagram, YouTube), but we launched a website and have become more attuned to creating content to utilise across digital platforms. This entails using new tools at our disposal – for instance, software to design images for Instagram and to convert audio files into video files for use on YouTube – and consciously thinking beforehand about the types of social media posts and content we want to disseminate in each week, i.e. adopting a more considered approach.

PLANS FOR THE FUTURE

In 2021 PEN International will celebrate its 100th year. The global pandemic has forced the organisation to revisit its plans for Centenary celebrations. At the end of 2020, the Board considered the prospect of an in person Centenary Congress in Oxford as too great a risk given the situation and continuing concerns over the pandemic and ongoing lockdowns. Whilst hopes of vaccination programmes hold promises of lifting of lockdowns in the global north, participation by our global south membership is deemed unlikely. The Board therefore took the decision that the Centenary congress and all events would continue online until 2022.

As a result of full programme of online events leading up to Centenary Congress have been scheduled.

2021 also marks year 2 of our strategic plan, therefore all public events will be themed to explore PEN strategic foci – Hate Speech, Linguistic Rights and Promoting Gender and Diversity. A research report will be published on the theme of linguisitic rights which will make a series of recommendations on how attainment of linguistic and other rights for indigenous communities of the Americas.

PEN will continue its close partnership with ICORN and the PEN Emergency Fund and will provide personalised support to writers in need. We will continue to monitor and undertake research with respect to writers persecuted for their work and to advocate on their behalf for improvements in their situations.

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REPORT OF THE BOARD OF TRUSTEES 2020

With support from Sida, PEN’s civil society programme will continue to support digital inclusion and online projects. An additonal digital consultant will be hired to enhance digital inclusion in the MENA region by supporting our Centres and growing public engagement on freedom of expression issues.

A gender and diversity programme is currently being mapped out through consultations with staff and the membership and we hope to provide a detailed roadmap on how gender and diversity can be better represented and achieved through the organisation’s work.

Finally PEN will continue to grow its supporter base both through institutional and major donor fundraising initiatives.

OUR FINANCE

In order to support our developments and growth we need a robust financial plan that ensures that we are growing turnover, surpluses and departmental contributions. The Board of Trustees have approved a three year financial strategy covering 2021 – 2023. The key strategyic aims are detailed below.

FINANCIAL REVIEW

International P.E.N.'s main sources of income arise from our charitable activities in three main business areas; Advocacy, Freedom of expression and Writers at risk. Income from these areas are made up from a mixture of grants, member dues, circles, and donations. Recognised income for the year was £1,444,233 (2019: £1,407,289). The largest proportion of our income is from SIDA ( Swedish International Development Cooperation Agency ) (2020: £770,007; 2019: £826,865). We also received £674,226 in grants, donations and earned income (2019: £580,424).

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REPORT OF THE BOARD OF TRUSTEES 2020

Despite the increase in turnover, after interest charges and investment performance the overall deficit on unrestricted funds for the year was £75,417 (2019: £285,336), linked to the COVID-19 pandemic. Positively we continue to see a bounce back in investment performance in quarter one of the new financial year.

In the year, we incurred centenary expenditure of £183,809 consisting of staffing and project activities.

Our cash position did not progress in the year as expected due to the Covid-19 pandemic, thankfully we were able to drawdown on cash reserves to support our programmes. We anticipate that we will have more unrestricted donations and grant commitments in place to meet the future costs of our programmes and it is not expected that we will have any issues with working capital over the next 12 months as we complete the centenary.

We maintain sufficient reserves to enable us to fulfil the objectives of the organisation. These reserves are held in a combination of both fixed and current assets including an investment portfolio managed on the board’s behalf by our investment managers Swissquote.

RECOGNISED INCOME

Cash income: January 2020 to December 2020

International P.E.N. is grateful to its donors for their generous support in assuring its income of £1,444,223 during 2020 (2019: £1,407,012) to allow it to purse its aim. The unrestricted income in 2020 was £323,540, a decrease of 7% on 2019, while the restricted income was £1,119,693 an increase of 6% on 2019.

Other principal restricted funding sources for 2020 include Sida, the Norwegian Ministry of Foreign Affairs, the International Cities of Refuge Network (ICORN), Evan Cornish Foundation, Fritt Ord Foundation, and the Banyan Trust amongst others. The funds from these donors go towards our research and policy work, civil society projects and the defence of writers at risk.

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REPORT OF THE BOARD OF TRUSTEES 2020

Included in restricted income are donations of £172,563 received towards our Centennial in 2021. This amount funded several centennial activities including staffing.

Our main sources of unrestricted income are the membership dues and the subscriptions to our Circles.

MEMBER DUES

Membership dues are paid by centres and individuals, the dues contribution of our centres to the work of International P.E.N. is essential – it not only helps support PEN’s work internationally but demonstrates the commitment of PEN members to support its important work world-wide. It is therefore vital for all our centres to pay their dues promptly to enable the secretariat to perform its charitable activities. At present, the community of PEN, through the dues collected by centres and the publishers, writers and readers circle contributes 26% of the annual budget of International P.E.N. Centres pay their membership dues on a yearly basis to International P.E.N. according to the numbers within their own membership. Each individual member of PEN pays dues both to the local centre and to International P.E.N.

The contribution of Centre dues is made according to the GDP of the country, in according to four categories: £14.40, £10.35, £5.75 and £3.45 (respectively per member per year).

CIRCLES

These are the Publishers, Writers, Readers and Screen Circles. Income from the Circles decreased in 2020. However, there was an increase in the Writers Circle’s income. The Trustees recognise the need to grow this basis of unrestricted income and have put plans in place within our new three years financial strategy to grow the Circles in 2021-2023.

COVID-19

It should be noted that COVID-19 has impacted PEN’s revenue from its member dues and Circles, with many members being unable to pay their membership dues during the lockdown period and suffering from lower income when it ended. At 31 December 2020, no bad debt provision was held in the balance sheet as a result of Covid-19, since all our debtors are recoverable. However, this affected the net cash outflow for payroll that was required and also increased costs associated with delivering the services.

Further to this, PEN remains supportive in an attempt to enable our Centres to continue to operate and make significant impacts in their advocacy for freedom of expression/writers in prison.

We remain cautious and vigilant over the threat of COVID-19 on our employees, services, and finances, but as noted in noted in the financial statements the Trustees consider that the charity is well placed to manage any further risks associated with the pandemic.

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REPORT OF THE BOARD OF TRUSTEES 2020

EXPENDITURE

Total expenditure was £1,690,681 (2019: £1,652,983). We spent £37,698 more in 2020 compared to 2019. The main items that make up this amount include:

VALUE FOR MONEY

Providing value for money is vital for any charity. Ensuring that we don't compromise on quality while ensuring we get as much as we can for our money, means spending less, spending well and spending wisely. A focus on value for money is an objective that all staff are now aware of. Every role has a requirement to think about the value for all orders they are placing, questioning costs they believe to be too high, and getting multiple quotes for purchases.

By looking at value for money we want to make sure that:

NET DEFICIT

We ended 2020 with a net unrestricted deficit of £75,417, compared to 2019 deficit of £249,421. The reduction was due to increased donations and effectiveness/efficiency strategy implemented later part of the year to control core cost due to the pandemic.

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REPORT OF THE BOARD OF TRUSTEES 2020

STRUCTURE, GOVERNANCE AND MANAGEMENT

PEN is a charity that was first set up in 1931. Since 2006, the activities of PEN have been undertaken through a charitable company, limited by guarantee. International P.E.N.'s governing document is the PEN Charter and its Constitution; International P.E.N.'s members are the PEN Centres meeting once a year as the Assembly of Delegates at PEN’s annual Congress.

We have a Board of up to 10 Trustees which includes the International President, International Secretary, and the International Treasurer:

The Board is responsible for setting the organisation’s strategy, reviewing and adopting the budget and financial reports.

The Search Committee of the Board oversees trustee recruitment.

Candidates are provided with a job description and are required to submit in writing a biography and a signed letter of acceptance of nomination, with a statement of intent. The deadline for submission of nominations is 3 months in advance of Congress. Centres eligible to vote must have paid their membership dues to International P.E.N. and each Centre has one vote. The secret ballot is managed and overseen by the Search Committee.

International P.E.N.'s Trustees have been elected at Congress (the annual meeting of the Assembly of Delegates). The responsibilities of the Board of International P.E.N. have been defined by its constitution. Trustees can serve up to two, three-year terms of office.

Trustees are not paid.

New Trustees are introduced to PEN with a formal induction programme. We also provide on-going training, based on periodic skill assessments.

The names of all those who are currently Trustees or who served as a trustee during the year to 31 December 2020 are set out in the section on “Reference and administrative information” at the end of this report. - - Further information on our current Trustees is available on our website (https://pen international.org/who we-are/our-people/board).

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REPORT OF THE BOARD OF TRUSTEES 2020

The Trustees delegate the day-to-day running of PEN to the Executive Director (ED). The work of the ED is guided by three sub-committees of the Board, each one chaired by a Trustee:

As part of our Human resource development and staff remuneration, PEN is committed to ensuring that we pay our staff fairly and in a way that ensures we attract and retain the right skills in order to have the greatest impact in delivering our charitable objectives. Delivery of our charitable vision and purpose is primarily dependent on the performance and efforts of our staff, which is the largest single element of charitable expenditure. We aim to recruit, subject to experience, towards the lower point within a salary band, providing scope to be rewarded for excellence and growth within the role. We do not employ interns without pay. We pay at least the London Living Wage for all our staff and are committed to encouraging our suppliers do the same. PEN evaluates each post against other posts in PEN and market comparators to arrive at salary rates based on a consistent and transparent process, designed to offer a fair pay framework for all salary assessments and decisions. The pay structure is reassessed on an annual basis. All staff confirmed in post are subject to regular performance conversations, at least annually but quarterly is strongly encouraged.

We are still in the process of implementing our current governance structure as a basis to develop and monitor our governance framework, Trustees recruitment, Trustees induction, Code of Conduct and succession planning.

Our Centres are legal members of our limited company, playing an important legal formal and informal role in our work. PEN Centres are voices for literature and freedom of expression in their respective - countries. A full list of current Centres is available on our website (https://pen international.org/centres) or by request.

International P.E.N. is committed to upholding its organisational culture in line with the seven overarching principles of the Charity Governance Code 2017: Organisational Purpose; Leadership; Integrity; Decision Making and Controls; Board Effectiveness; Diversity; and Openness and Accountability.

Over the next year, the Trustees will take further steps to embed the code across PEN, particularly with regard to setting the foundations for the governance objectives and outcomes in its future strategy.

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REPORT OF THE BOARD OF TRUSTEES 2020

The Interim Executive Director manages the office supported by a Senior Management team comprised of Finance, HR and Administration Director; and Director of International Programmes. The Senior Management Team is responsible for and provides oversight of the delivery of PEN’s strategy and programmes, human resources functions and ensuring compliance with Charity Commission guidelines, good governance, budgetary and funding requirements.

KEY MANAGEMENT PERSONNEL

The President, International Secretary and International Treasurer meet confidentially to discuss the performance and achievements of the charity during the year in order to determine suitable remuneration for key management personnel. Their recommendations are then put forward to the Trustees for discussion and approval.

RISK AND INTERNAL CONTROLS

The Trustees continue to review the risks facing PEN, the controls in place and the effectiveness of mitigating actions. International P.E.N. has a risk register which records risks and how they are mitigated, including (but not limited to) our income, assets, management, staff, partners and beneficiaries, reputation, financial controls and governance. The Trustees delegate risk management to the Executive Director and Finance, HR and Administration Director. The risk register is reviewed regularly by the Finance Committee and at least annually by the Board.

PEN has a comprehensive insurance policy, reviewed annually, and currently provided by Aston Lark Insurance. The Trustees have considered the nature and extent of any risks and uncertainties that arise as a result of Brexit and COVID-19. Any material concerns have been included in the following table, which set out the specific areas that give rise to the potential major risks for the next financial year.

Risk
Current mitigating actions		 Risk
Current mitigating actions
Reduced income due to the impact of
COVID-19 on PEN’s membership cutting
income by significant amounts in 2020
and the following years.
Brexit adds additional uncertainty into
the economy.

Increasing levels of income generation and generally finding
ways of diversifying our income streams

Reducing costs through delaying, reducing, or stopping core
expenditure where feasible (efficiency strategy)

Realigning staff structure PEN’s new strategy and budget
constraints
Risk of ill-health, reduced morale and of
resignations of key staff due to COVID-19
or
related impact and proposals for
restructuring/staff reductions/
redundancies
Comprehensive and updated risk assessments for staff
individually and of the office/workspaces to minimise the COVID-
19 infection risk, with special emphasis on minimising risk for
those vulnerable groups identified by government/NHS guidance
to be at higher risk of COVID-19

Significant staff support in place and exploration in consultation
with staff about further support needs including in relation to
wellbeing and enhanced engagement

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REPORT OF THE BOARD OF TRUSTEES 2020

----- Start of picture text -----
Unrestricted fundraising targets not met.  Board take strong lead in fundraising and new fundraising
strategy
 Continued outreach to publishers to increase membership of
Publishers’, Writers and Screenwriters Circles
 New funding streams legacy and crowd funding explored
Effectiveness of Senior Management  SMT review of roles and responsibilities review of JD as
Team (SMT) untenable workloads and weak organisational processes reasons
for departures of Directors with support from INTRAC
 Consultations with the Union
 Board approve process for recruitment and their involvement
 Additional support from Board members to support staff
Mismanagement of disbursed project  Improved disbursement of funds authorisation processes
funds to centres  Quarterly skype calls with Centres on project delivery and to
build centre relationships over time
 3 - 6 monthly reporting on projects and auditing
 Bribery and corruption policy shared, whistle-blower and
procurement particularly for those involved in Civil Society
programme
Politicisation or intolerant positions of  Centre Development strategy for problematic PEN Centres
centres  Board/SMT take action/missions to engage with Centres whose
messages is out of line with PEN Charter and human rights norms
(i.e. on LGBTI) Several centres closed or made dormant
 Hate Speech Working group – main subject congress Uppsala in
2020
Persecution of PEN members and  We always obtain consent before we carry out any campaigning
writers we assist for their work in the or advocacy on behalf of members or writers
organisation or for support provided  We carry out a risk assessment before a mission and have
developed a comprehensive risk assessment policy
Dramatic change in international  Campaigns and advocacy are more focused and underpinned by
support for freedom of expression robust research
demotivation and slows the Trust’s  Ensure that individual writers/Centres can advocate on issues of
ability to deliver its goals. concern to them both at national and international levels –
dialogue and debate need more than ever – role of the writer as
thought leader to counter extreme positions
 Build relations with key actors in international freedom of
expression field
Lack of resources needed to pursue step  Staff training received and on-going on project management;
change in capacity - i.e. timely M&E programme fully developed with on-going support from
recruitment of staff; training of INTRAC on developing learning framework – impact grid applied
International Secretariat and Centre in all reports for civil society programme
development  Staff training support from INTRAC M&E
 Independent coordination for the Americas and Asia
 Communications overhaul needed
Effectiveness of International Board and  Board now taking lead in strategy setting including the process
Committees  Board positions under 3 year election cycle
 At least two in person Board meetings per year
 Co-opt members (2) of the Board under review
 2 co-opted positions remain open
----- End of picture text -----

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REPORT OF THE BOARD OF TRUSTEES 2020

Injury/kidnapping of staff or consultant
on overseas assignment
Organisational travel security assessment strengthened – we use
these regularly, last risk assessment done for High level Turkey
mission

Work with local centres with good knowledge of situation and
risks in country being visited

Full cover travel insurance

Security protocols in development

OTHER MATTERS

INVESTMENT POLICY

The Trustees commissioned Swissquote as our broker during the year. At present, we have investment of £242,382 (2019: £231,177) held with the company. Trustees are currently updating our investment policy to comply with this activity. As part of our new financial strategy, we are now looking to create a policy for longer term investment of PEN’s reserves in order to spread risk and ensure PEN’s financial sustainability.

GOING CONCERN

The Trustees have reviewed our financial position and financial forecasts, taking into account the level of reserves and cash, and our systems of financial control and risk management.

It should be noted that COVID-19 has impacted PEN’s revenue from its member dues and Circles, with many members being unable to pay their membership dues during the lockdown period and suffering from lower income when it ended. At 31 December 2020, no bad debt provision was held in the balance sheet as a result of Covid-19, since all our debtors are recoverable. However, this affected the net cash outflow for payroll that was required and also increased costs associated with delivering the services.

As a result of this and an on-going review of operational and staffing costs, the Trustees believe that we are well placed to manage operational, financial, and COVID-19 risks successfully. The Trustees continue to believe it is appropriate to adopt the going concern basis of accounting in preparing the financial statements. As a charity, we are aware of the potential impact of coronavirus on our regional committee meetings, board meetings and our centenary in 2021. Strategic funding has already been secured for the next four years. In addition, we will continue to carry out risk assessment to mitigate any potential impact of coronavirus.

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TREASURY POLICY

The Trustees set aside available funds from our income to pay for anticipated costs and for planned events (Centennial). The Trustees also set aside a small amount each year, when income is strong, to allow for some flexibility in periods of economic downturn. In order to protect our charitable projects from the loss of shortterm funding, a target for a minimum level of free reserves has been set at three months’ grants receipts for project delivery together with three months’ expenditure. Therefore, our reserves target is £50,000.

Free, undesignated reserves amounted to £30,821 as at 31 December 2020. This is below target due to the impact of COVID-19. However, the shortfall in funds has been built into a strategic financial recovery modelling for the next three years. This policy is reviewed every year

RESERVES POLICY

The trustees set aside available funds from our income to pay for anticipated costs and for planned designated and resilience fund. These funds are:

The Trustees recognise the need to hold sufficient reserves to allow protection of core activities in the event of any income shortfalls to implement long-term strategic programmes and enable International P.E.N. to carry out its essential projects.

The policy aims to have sufficient free reserves to enable International P.E.N. to cope with fluctuations and to hold at least the equivalent of three months’ operating cost expenditure (£475,000).

Total reserves at 31 December 2020 were £510,273 (2019: £743,058) Restricted reserves held in 2020 were £447,341 (2019: £606,073) and unrestricted reserves were £62,932. Of this £32,111 were designated reserves while the free reserves were £30,821 (2019: £106,237).

Restricted reserves are those funds that have been received for particular purposes and projects and are shown in detail in note 16. Even though, the year ended with a deficit we are still able to meet our free reserves target level implied by the current reserves policy, which seeks to build reserves up to three months' operating expenditure. The Finance Subcommittee of the board will continue to monitor closely the reserves position with quarterly reviews during 2020. This policy is reviewed every year.

VOLUNTEERS

International P.E.N. is immensely grateful to the volunteers who contribute to our campaigns and communications work as well supporting our International programmes team with media monitoring on freedom of expression issues. Their skill, time and dedication helps us achieve our goals while offering them an opportunity to learn and gain experience in a field of work that has growing relevance in our world today.

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REPORT OF THE BOARD OF TRUSTEES 2020

AUDITOR

Our auditor, HW Fisher LLP, has indicated a willingness to continue in office and it is proposed that the firm be re-appointed as auditors for the ensuing year.

DISCLOSURE OF INFORMATION TO AUDITOR

In so far as each of the Trustees is aware:

Signed on behalf of the Trustees

Jennifer Clement Eric Lax President Treasurer 16 April 2021 16 April 2021

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STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees (who are also directors of International P.E.N. for the purpose of company law) are responsible for preparing the report of the board of trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires Trustees to prepare financial statements for each financial year that give a true and fair view of the state of the affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company 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 charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006 and regulations made thereunder. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERNATIONAL P.E.N.

OPINION

We have audited the financial statements of International P.E.N for the year ended 31 December 2020 which comprise the statement of financial activities, the statement of financial position, the cash flow statement and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 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.

32

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERNATIONAL P.E.N.

OTHER INFORMATION

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the report of the board of trustees.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

33

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERNATIONAL P.E.N.

RESPONSIBILITIES OF TRUSTEES

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

34

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERNATIONAL P.E.N.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some

material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the trustees of the charity.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

USE OF OUR REPORT

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose.

35

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERNATIONAL P.E.N.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the

charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Rich (Senior Statutory Auditor)

for and behalf of HW Fisher LLP

Chartered Accountants

Statutory Auditor

Acre House

11-15 William Road

London, NW1 3ER

……………………………………………………………

36

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

----- Start of picture text -----
Note General Designated Restricted Total Total
funds funds funds 2020 2019
£'000 £'000 £'000 £'000 £'000
Income
Income from charitable activities
Donations and legacies 3 202 - 173 375 224
Charitable activities 4 122 947 1,069 1,183
Total income 324 - 1,120 1,444 1,407
Expenditure
Expenditure on
Cost of raising funds
Expenditure on fundraising and publicity 17 - - 17 37
Expenditure on charitable activities
General advocacy and support 5 308 6 1,157 1,471 1,339
Writers in prison 5 79 2 122 203 277
Total expenditure on charitable activities 387 8 1,279 1,674 1,616
Total expenditure 404 8 1,279 1,691 1,653
Net gain / (loss) 23 14 - - 14 (39)
Total net income/(expenditure) before transfers (66) (8) (159) (233) (285)
Transfers between funds 17a (9) 9 - - -
Net income/(expenditure) after transfers/
(75) 1 (159) (233) (285)
Net movement in funds
Reconciliation of funds
Balances brought forward at 1 January 2020 106 31 606 743 1,028
Balances carried forward at
19 31 32 447 510 743
31 December 2020
----- End of picture text -----

All gains and losses recognised in the year are included on the Statement of Financial Activities.

The accompanying notes form part of these financial statements.

37

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

Comparative year

Comparative year
Note General
Designated		 Restricted
Total
funds funds funds 2019
£'000 £'000 £'000 £'000
Income
Income from charitable activities
Donations and legacies 3 224
-		 - 224
Charitable activities 4 126 - 1,057 1,183
Total income 350 - 1,057 1,407
Expenditure
Expenditure on
Cost of raising funds
Expenditure on fundraisingandpublicity 37
-		 - 37
Expenditure on charitable activities
General advocacy and support 5 379 5 955 1,339
Writers in prison 5 144
2		 131 277
Total expenditure on charitable activities 523
7		 1,086
1,616
Total expenditure 560 7 1,086
1,653
Net gain / (loss) (39)
-		 - (39)
Total net income/(expenditure) before transfers (249) (7) (29) (285)
Transfers between funds (1) 22 (21) -
Net income/(expenditure) after transfers/
Net movement in funds		 (250)
15		 (50) (285)
Reconciliation of funds
Balances brought forward at 1 January 2019 _356 _
16		 _656 _
1,028
Balances carried forward at 31 December 2019 19 106 31 606 743

38

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

Note 2020
2019
£'000 £'000
£'000
£'000
Non-current assets
Tangible assets
13a		 19
18
Investment
13b		 242
231
261
249
Current assets
Debtors
14
208		 148
Cash at bank and in hand
174		 486
382 634
Liabilities:
amounts fallingdue within oneyear
15
(133)		 (140)
Net current assets 249
494
Total assets less current liabilities 510
743
The funds of the charity
Unrestricted funds
Other charitable funds
19		 31
106
Designated funds
18		 32
31
63
137
Restricted funds
17		 447
606
510
743

Approved by the Trustees on 16[th] April 2021 and signed on their behalf

Eric Lax, Treasurer

Jennifer Clement, president

39

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020

Note
2020
2019		 Note
2020
2019		 Note
2020
2019		 Note
2020
2019		 Note
2020
2019
£'000 £'000
£'000		 £'000
Net cash outflow from
operating activities
20		 (303) (134)
Cash flows from investing activities
Payments to acquire fixed assets
13a
(9)		 (9)
Purchase of investment
13b
-		 (270)
Total capital expenditure (9) (279)
Change in cash and cash equivalents in the
reporting period		 (312) (413)
Cash and cash equivalents at the
beginning of the reporting period
Cash and cash equivalents at the
end of the reporting period		 486
174		 899
486
Cash at bank and in hand:
Increase (decrease) in cash 174 486
21 174 486

40

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

1. ACCOUNTING POLICIES

1.1 Accounting convention

The accounts have been prepared in accordance with the charity's Memorandum and Articles of Association, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102. The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £. The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

COVID-19 has impacted PEN’s revenue from its member dues and Circles, with many members being unable to pay their membership dues during the lockdown period and suffering from lower income when it ended. At 31 December 2020, no bad debt provision was held in the balance sheet as a result of Covid-19, since all our debtors are recoverable. However, this affected the net cash outflow for payroll that was required and also increased costs associated with delivering the services. However, based upon current forecasting expectation the trustees consider the impact of Covid-19 as medium term, rather than long term, on our performance and viability of our services.

Further to this, PEN remains supportive in an attempt to enable our Centres to continue to operate and make significant impacts in their advocacy for freedom of expression/writers in prison.

Although there are risks with this strategy, management has determined that the actions that it has taken are sufficient to mitigate the uncertainty and has therefore prepared the financial statements on a going concern basis as it has a reasonable expectation that PEN will continue in operational existence for the foreseeable future.

1.3 Critical estimates and judgements

International P.E.N.’s significant accounting policies are stated in this note. Not all of these significant accounting policies require the Trustees to make difficult, subjective, or complex judgements or estimates.

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The trustees do not believe there to be any judgements or estimates critical to the financial statements.

Other estimates that affect the Statement of Financial Activities comprise the allocation of support costs as detailed in the policy.

1.4 Income

Income other than grant income is recognised at the fair value of the consideration received or receivable for goods and services provided. Fair value takes into account settlement discounts allowed on services.

Income from donations and grants is recognised when the Charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably.

The value of services provided by volunteers has not been included in these financial statements. Gifts in kind are included where the sum can be accurately estimated.

Unrestricted income is deferred when this is received and relates to a period following the year end. Restricted income is deferred only when this relates wholly to a future period, as specified by the funder.

1.5 Grants received

Where grants are received for specific purposes they are credited to the restricted funds of International P.E.N. Grants that are awarded for a specific period are recognised in the SOFA in that period.

41

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

1.6 Grants payable

Grants payable as cash are accounted for in the period in which they are approved. Grants awarded to centres of International

P.E.N. are accounted for upon approval or payment date.

1.7 Basis of allocation of support costs

Staff and other support costs are allocated to the various activities of International P.E.N. based upon the direct staff costs

involved in delivering direct charitable activities and on the estimated time devoted to the governance of PEN.

1.8 Defined contributions pension scheme

Employer contributions to PEN’s defined contribution Pension Scheme are charged to the SOFA on an accruals basis.

1.9 Fund accounting

Unrestricted funds are available to spend on activities that further any of the purposes of the Charity.

Designated funds are donations where the donor has not specified a use, but the trustees have allocated these donations to specific projects being undertaken by the Charity.

Restricted funds are donations which the donor has specified are to be used solely for particular areas of the Charity’s work or for specific projects being undertaken by the Charity.

1.10 Expenditure and irrecoverable Value Added Tax

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:

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

Rental costs under operating leases are charged against income on a straight-line basis over the term of the lease.

1.11 Volunteers

International P.E.N. provides volunteering opportunities in a number of its activities. The work performed by the volunteers is well-appreciated and is explained in the Report of the board of trustees. No financial appraisal of the value of volunteering is included within these financial statements .

1.12 Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Asset Category

Office equipment 25% reducing balance Fixtures & Fittings 25% reducing balance Computer Equipment 25% reducing balance

The policy with respect to impairment reviews of fixed assets is that these assets are inspected regularly for any impairment and any defect remedied so as to maintain the current value.

All assets costing more than £500 are capitalised.

42

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

1.13 Investment

Investments are stated at market value at the balance sheet date. The SOFA includes the net gains and losses arising on revaluation and disposals throughout the year. Gains and losses on the disposal of investment assets are calculated as the difference between historical and market values. Investments intended to be held for a period of more than one year are disclosed as a fixed asset on the Balance Sheet. Investments that are expected to be drawn down and utilised within the year are disclosed as a short-term deposit on the Balance Sheet.

1.14 Bad debts

Provisions are made against monies due to International P.E.N. where the debt is overdue, and recovery is in doubt. Debts are written-off according to procedures agreed by the Trustees.

1.15 Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered and provision for bad and doubtful debts.

Prepayments are valued at the amount prepaid net of any trade discounts due.

1.16 Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or

less from the date of acquisition or opening of the deposit or similar account.

1.17 Creditors and provisions

Creditors and provisions are recognised where the Charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

1.18 Other financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. The Charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Except for fixed asset investments, basic financial instruments are recognised as the amount payable or receivable when the instrument is first recognised together with any subsequent transaction costs but modified in respect of trade debtors for an assessment of potential bad debt.

1.19 Foreign exchange

Transactions denominated in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. All differences are included in net outgoing resources. Where trustees hold restricted funds in foreign currency, gains and losses on foreign exchange are borne by unrestricted funds to maintain restricted gifts at their original value.

1.20 PEN Centres

PEN Centres are not treated as branches of International P.E.N. They are independently governed organisations.

1.21 Restricted funds

Project grants: Grants that are received for specified purposes are credited to a restricted fund. Expenditure that is attributable to such grants is charged directly to the fund in the statement of financial activities.

1.22 Designated funds

Fixed Assets: The balances on the funds represent our fixed asset portfolio. The capital costs of asset that are met from PEN’s own resources are represented by designated funds. Depreciation is charged directly against the fund in the statement of financial activities.

2. LEGAL STATUS OF THE CHARITY

International P.E.N. (or ‘’the Charity’’) is a company limited by guarantee incorporated in England and Wales. The registered office is 162-164 Abbey Street, Koops Mill Mews, Unit A, London, SE1 2AN.

43

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

3. INCOME FROM DONATIONS & LEGACIES

Source
Donations and legacies
Donations to unrestricted funds:
Individual contributions
PEN centre contributions
Other income
Donations to restricted funds:
Individual contributions		 2020
Unrestricted
funds
Restricted
funds
Total
£’000
£’000
£’000
202
173
375		 2019
Unrestricted
funds
Restricted
funds
Total
£’000
£’000
£’000
224
-
224		 2019
Unrestricted
funds
Restricted
funds
Total
£’000
£’000
£’000
224
-
224
2020
2019
£’000
£’000
53
36
149
176
-
12
202
224
2020
2019
£
£
173
-
173
-

44

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

4. INCOME FROM CHARITABLE ACTIVITIES

Grants receivable
Publishers Circle
Writers Circle
Readers Circle
Screen Circle
Other charitable activity income		 Unrestricted
funds
2020
Restricted
funds
2020
Total
funds
2020
Unrestricted
funds
2019
Restricted
funds
2019
Total
funds
2019
£’000
£’000
£’000
£’000
9
947
956
10
1,057
1,067
98
-
98
90
-
90
12
-
12
17
-
17
3
-
3
5
-
5
-
-
-
4
-
4
-
-
-
-
-
-
122
947
1,069
126
1,057
1,183
Restricted funds:
Norwegian Ministry of Foreign Affairs
ICORN
SIDA
Commonwealth Foundation
Other Income
Fritt Ord Foundation
Open Society Foundation (OSF)
Natur and Kultur
Evan Cornish Foundation
Banyan Tree Foundation
UNDEF		 2020
2019
£’000
£’000
51
88
770
-
-
93
88
827
-
-
9
-
-
9
20
-
29
-
-
-
20
-
947
1,057

5. ANALYSIS OF EXPENDITURE RELATING TO GENERAL ADVOCACY AND SUPPORT

Staff costs
Sub-grants to PEN Centres
Other centre development costs
Support costs (note 6)		 2020
2019
£’000
£’000
467
132
571
301
434
163
449
293
1,471
1,339

Analysis of expenditure relating to writers in prison

Staff costs
Other costs
Support costs (note 6)		 2020
2019
£’000
£’000
87
40
76
104
79
94
203
277

Continued overleaf

45

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

6. ANALYSIS OF SUPPORT COSTS AND GOVERNANCE COSTS

The Charity initially identifies the costs of its support functions. It then identifies those costs which relate to the governance

function. Governance costs include payments to the Auditors of £13,000 (2019: £13,000) and other financial services of £1,000 (2019: £1,000).

Having identified its governance costs, the remaining support costs together with the governance costs are all allocated against the charitable activities based on the time spent on those activities.

Support costs
Staff costs
Depreciation
Rent and occupancy
Office supplies and equipment
Other Costs
Governance costs (see below)		 General
advocacy and
support
Writers in
prison
Total
General
advocacy and
support
Writers in
prison
Total
2020
2020
2020
2019
2019
2019
£’000
£’000
£’000
£’000
£’000
£’000
97
28
125
62
21
83
6
2
8
5
2
7
-
-
-
79
26
105
17
5
22
15
4
19
16
4
20
65
22
87
165
37
202
67
19
86
301
76
377
293
94
387
Governance costs
Staff costs
Audit fees
Board meetings
Other costs		 General
advocacy and
support
Writers in
prison
Total
General
advocacy and
support
Writers in
prison
Total
2020
2020
2020
2019
2019
2019
£’000
£’000
£’000
£’000
150
33
183
21
5
26
11
3
14
10
3
13
-
-
-
16
5
21
4
1
5
20
6
26
165
37
202
67
19
86
Auditor’s remuneration
Statutory audit
Non audit service		 2020
2019
£’000
£’000
10
13
4
1
14
14

7. NET (EXPENDITURE) FOR THE YEAR

This is stated after charging:

This is stated after charging:
Operating lease rentals 2020
2019
£’000
£’000
84
85
84
85

46

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

8. ANALYSIS OF STAFF COSTS, TRUSTEE REMUNERATION AND EXPENSES, AND THE COST OF KEY MANAGEMENT

Wages and salaries
Social security costs
Pension
Number of employees whose emoluments during the year fell between:
£60,000 and £69,999
£90,000 and £99,999
£100,000 and £109,999		 2020
2019
£’000
£’000
749
692
76
67
37
34
862
793
2020
2019
2
-
-
1
1
-

The key management personnel of the Charity comprise the Trustees, the Executive Director, the Director of Finance, HR and Administration, the Director of International Programmes, and the Director of Centenary Programmes. Remuneration of key management personnel was £252,219 (2019: £246,862).

Trustee Expenses: None of the trustees received any remuneration during the year, but the Trustee Board (Six members) were reimbursed a total of £1,019 (2019: £6,678) travel and subsistence expenses.

The total expenses incurred by the Trustees in the discharge of their duties and paid to third parties was £16,788 (2019: £29,654).

However, two Trustees from our board donated £103,000 towards our core activities.

Number of volunteers was 1 (2019: 3). Volunteers assist with centenary project, supporting the International programmes team with media monitoring on freedom of expression issues.

9. STAFF NUMBERS

The average monthly head count was 21 staff (2019: 17) and the average monthly number of full-time equivalent employees (including casual and part time staff) during the year were as follows:

Charitable activities
Fundraising
Governance
Support		 2020
2019
Number
Number
11.5
1.5
2
-
15
-
2
-
15
17

10. PENSION AND OTHER POST-RETIREMENT BENEFIT COMMITMENTS

The Charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Charity in an independently administered fund. The pension cost charge represents contributions payable by the charity to the fund.

fund.
2020
2019
£’000
£’000
Contributions payable by the company for the year 37
34

The expense has been allocated to restricted and unrestricted expenditure on the same basis as wages and salaries.

47

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

11. RELATED PARTY TRANSACTIONS

At the year-end, the were no disclosable related party transactions. However, in 2019 we gave £5,000 to a centre where the president (KAHYANA, Danson Sylvester) is also a board member through our CSP project. The charity’s CSP grant-making process follows a criteria which is independent, transparent, and solely managed by the secretariat with no influence from the board.

12. CORPORATION TAX

As a charity, International P.E.N. is exempt from UK tax on income and gains to the extent that these are applied to its charitable objects. No UK tax charges have arisen in the Charity, during the year or the previous year.

13a. TANGIBLE FIXED ASSETS

Cost:
As at 1 January 2020
Additions
Disposals
As at 31 December 2020
Depreciation:
As at 1 January 2020
On disposals
Charge for year
As at 31 December 2020
Net book value
As 31 December 2020
As at 31 December 2019		 Office
Equipment
Fixtures &
Fittings
Computer
Equipment
Total
£,000
£,000
£,000
£,000
20
2
29
51
-
-
9
9
-
-
-
-
20
2
38
60
13
-
20
33
-
-
-
-
4
-
4
8
17
-
24
41
3
2
14
19
7
2
9
18

All assets are used for charitable purposes.

48

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

13b. INVESTMENTS

£,000 Valuation At 1 January 2020 231 Revaluation 11 Net book value As at 31 December 2020 242 As at 31 December 2019 231

14. DEBTORS

Trade debtors
Grants receivable
Other debtors
Prepayments and accrued income		 2020
2019
£’000
£’000
75
3
44
44
25
61
64
40
208
148

Bad debt provisions are based upon the debtor balances on individual accounts.

There has been no change in the basis of calculation during the year.

15. LIABILITIES: AMOUNTS DUE WITHIN ONE YEAR

Trade creditors
Grants awarded
Taxation and social security costs
Other creditors
Accruals and deferred income		 2019
2019
£’000
£’000
20
10
40
28
24
29
18
23
61
20
133
140

There was £3,430 of deferred income brought forward, released during the year was £3,000. Deferred income at the balance sheet date was £38,959 including £430 of the brought forward.

16. FINANCIAL INSTRUMENTS

Financial assets measured at fair value through profit and loss 2020
2019
£’000
£’000
242
231

49

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

17. ANALYSIS OF RESTRICTED FUNDS

17. ANALYSIS OF RESTRICTED FUNDS
Writers in Prison Committee (WIPC)
Swedish International Development
Cooperation Agency (SIDA)
Centre Development
Norwegian Ministry of Foreign Affairs
(NMFA)
Individual Donation (£610,200 towards the
following 3 Areas):
(i) International P.E.N. Centenary
(ii) Defence of Writers & Literature
(iii) Long Term Reserves
Writers in Prison Committee (WIPC)
Swedish International Development
Cooperation Agency (SIDA)
Centre Development
Norwegian Ministry of Foreign Affairs
(NMFA)
Individual Donation (£610,200 towards
the following 3 Areas):
(i) International P.E.N. Centenary
(ii) Defence of Writers & Literature
(iii) Long Term Reserves		 Balance
as at 1
January
2020
Incoming
resources
Resources
expended
Transfers
Unrestricted
Funds
Funds as
at 31
December
2020
Funds as
at 31
December
2019
£,000
£,000
£,000
£,000
£,000
£,000
40
126
(160)
-
6
40
-
770
(770)
-
-
-
8
-
-
-
8
8
37
51
(72)
-
16
37
115
173
(277)
-
11
115
203
-
-
-
203
203
203
-
-
-
203
203
606
1,120
(1,279)
-
447
606
Balance
as at 1
January
2019
Incoming
resources
Resources
expended
Transfers
Unrestricted
Funds
Funds as
at 31
December
2019
£,000
£,000
£,000
£,000
£,000
34
137
(131)
-
40
-
827
(806)
(21)
-
22
-
(14)
-
8
12
93
(68)
-
37
182
-
(67)
-
115
203
-
-
-
203
203
-
-
-
203
656
1,057
(1,086)
(21)
606

50

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

17. ANALYSIS OF FUNDS (Continued)

WIPC - The mobilisation of communication and support in opposition to the infringement of freedom of expression.

SIDA - Support for regional programmes for PEN centres and support for capacity and outreach in London.

Centre Development - Supporting exchanges mainly between the African centres.

NMFA - Support for the work of the Writers in Prison Committee in the Middle East, Asia and North Africa.

Individual donation – Support of the defence of writers and literature, PEN Centenary work, and to strengthen PEN’s long-term reserves.

18. ANALYSIS OF MOVEMENT IN DESIGNATED FUNDS

Fixed Assets Fund
Donation
Fixed Assets Fund
Donation		 Balance as at
1 January
2020
Resources
expended
Transfers
Funds as at
31 December
2020
Funds as at
31 December
2019
£’000
£’000
£’000
£’000
£’000
19
12
(8)
-
9
-
20
12
19
12
31
(8)
9
32
31
Balance as at
1 January
2019
Resources
expended
Transfers
Funds as at
31 December
2019
£’000
£’000
£’000
£’000
16
-
(7)
-
10
12
19
12
16
(7)
22
31

51

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

19. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Tangible fixed assets
Investments
Current assets
Creditors of less than one year		 Unrestricted
funds
2020
Designated
funds
2020
Restricted
funds
2020
Total
2020
Total
2019
£’000
£’000
£’000
£’000
£’000
-
19
-
19
18
-
-
242
242
231
109
13
260
382
634
(78)
-
(55)
(133)
(140)
31
32
447
510
743
Tangible fixed assets
Investments
Current assets
Creditors of less than one year		 Unrestricted
funds
2019
Designated
funds
2019
Restricted
funds
2019
Total
2019
£’000
£’000
£’000
£’000
-
18
-
18
-
-
231
231
161
13
460
634
(55)
-
(85)
(140)
106
31
606
743

20. RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net movement in funds
Add back depreciation charge
(Increase)/decrease in debtors
(Decrease)/increase in creditors
Unrealised (gain)/loss on investment
Net cash used in operating activities		 2020
2019
£’000
£’000
(233)
(285)
8
7
(60)
84
(7)
21
(11)
39
(303)
(134)

21. ANALYSIS OF CHANGES IN NET DEBT

The charity had no debt during the year.

22. COMMITMENTS UNDER OPERATING LEASES

Within one year - property
Between two and five years - property
Within one year - other
Between two and five years - other		 2020
2019
£’000
£’000
-
63
-
-
-
2
-
-
-
65

52

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

23. NET GAIN / (LOSS)

Currency exchange gain
Unrealised gains on investment		 2020
2019
£’000
£’000
3
(6)
11
(33)
14
(39)

53

NOTES TO THE FINANCIAL STATEMENTS YEAR END 31 DECEMBER 2020

REFERENCE AND ADMINISTRATIVE INFORMATION

Governance and management

Trustees

Jennifer Clement, president/chair (appointed 15 Oct 2015) Ola Larsmo, deputy chair (appointed 27 Sept 2018) Elected Trustees:

Eric Lax (appointed 19 August 2019) Ma Thida (appointed 28 December 2016) Regula Venske (appointed 15 Oct 2015) Kätlin Kaldmaa (appointed 28 Dec 2016) Iman Humaydan (appointed 30 Sept 2017) Burhan Sönmez (appointed 27 Sept 2018) Francis, David Warwick (appointed 2 October 2019) Kahyana, Danson Sylvester (appointed 2 October 2019)

Executive Director Carles Torner PhD (resigned 30 September 2020) Interim Executive Director Romana Cacchioli (appointed 1 October 2020) Company Secretary Carles Torner PhD (resigned 1 January 2020) Emmanuel Asamoah ACCA/MBA/MSc (appointed 1 January 2020) Senior Management Team Romana Cacchioli (appointed 6 April 2020), International Programmes Director Emmanuel Asamoah ACCA/MBA/MSc, Finance, HR & Administration Director Carles Torner PhD, Centenary Programmes Director Aaliya Ahmed (resigned 9 April 2020), International Programmes Director

Administrative information

Charity number 1117088 Company number 05683997 Registered office 162-164 Abbey Street, Koops Mill Mews, Unit A, London, SE1 2AN Independent auditors HW Fisher LLP Acre House 11-15 William Road London, NW1 3ER Bankers HSBC Plc 74 Goswell Road London, EC1V 7DA

Principal solicitors Bates Wells and Braithwaite 2-6 Cannon Street London EC4M 6YH

Official social media

Website Facebook Twitter

https://pen-international.org/ /pen-international @pen-international

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