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2021-03-31-accounts

Annual Report

Annual Report and Consolidated Accounts for the year ended 31 March 2021

Registered Charity No 215551

Morden College Some moments in time

1695

Morden College is founded by Sir John Morden, having made his fortune as an international trader and member of the Levant (Turkey) Company and East India Company. His intention is to provide board, lodging and a pension for traders who have fallen on hard times.

1708

John Morden dies aged 86, and is buried in the Morden College chapel crypt. Statues of Sir John and his wife, Dame Susan, are added to the western front of the College in 1717.

1708 – 1884

Under the terms of John Morden’s will, College Trustees are drawn from the Turkey Company, and should it fail (which it did in 1834) from the East India Company, and should that fail then from the Aldermen of the City of London, who have provided the Charity’s Trustees since 1884. A centenary plaque installed in the main entrance in 1984 commemorates the Aldermen’s association.

1966

Wells Court built (refurbished in 2008), adding a further 20 flats to enable the Charity to provide independent living to more people.

1951 – 2010

Broadbridge Close (1951), Montague Graham Court (1976), Peter Saunders Court (1994) and Graham Court (2010) continue the expansion of accommodation.

Continued on inside back cover

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Contents

Charity Information 4
Foreword from the Chair of Trustees 6
Our Vision, Culture and Values 8
Trustees’ Report 10
Independent Auditor’s Report 18
Consolidated Statement of Financial Activities 20
Group and Charity Balance Sheets 21
Consolidated Statement of Cash Flows 22
Notes to the Accounts 23

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Charity Information

Reference and administrative details for the year ended 31 March 2021

TRUSTEES

Chairman and Honorary Treasurer Alderman Sir David Wootton MA

Trustees

Alderman Sir Peter Estlin BSc FCA Alderman William Russell Alderman Professor Michael Mainelli FCCA FCSI FBCS Alderman Alison Gowman Alderman Alastair King Fredrik Widlund Dr Abigail Masterson

ADVISORS TO THE TRUSTEES

Honorary Surveyor George Gillon MBE FRICS

Advisor on Care Dr Caroline Shuldham OBE

PRINCIPAL OFFICE

19 St Germans Place, Blackheath London SE3 0PW

PRINCIPAL BANKERS

National Westminster Bank plc 13 Stratheden Road Old Dover Road, Blackheath London SE3 7SY

CHARTERED SURVEYORS

Gerald Eve LLP 72 Welbeck Street London W1G 0AY

INVESTMENT ADVISORS

Stanhope Consulting 35 Portman Square London W1H 6LR

OFFICERS AND SENIOR MANAGERS

Clerk to the Trustees & Chief Executive David Rutherford-Jones CB

Chaplain

AUDITOR

Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG

The Rev’d William Warren

SOLICITORS

Finance Director Kate Morris MSc ACMA BA (Hons)

Director of Real Estate Ed Mileham BSc (Hons) MRICS

Director of Health & Wellbeing Debbie Dollner

HR Director Jane Canini BSc (Hons) FCIPD

Director of Operations Richard McAllister

Farrer & Co LLP 66 Lincoln’s Inn Fields London WC2A 3LH

Attwaters Jameson Hill St. Clement’s House 27 Clement’s Lane London EC4N 7AE

INVESTMENT MANAGERS

Investec Wealth & Investment Limited 30 Gresham Street London EC2V 7QN

Sarasin & Partners LLP Juxon House 100 St Paul’s Churchyard London EC4M 8BU

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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CONSTITUTION

Morden College is the general title used for the administration of Sir John Morden’s Charity and Dame Susan Morden’s Charity. Both Charities were established under separate Trust Deeds but they share the same Registered Charity Number 215551.

Sir John Morden died on 6 September 1708 and his Charity was founded by a will dated 15 October 1702, proven on 6 October 1708. Sir John left approximately £12,500 to endow the Charity. It is administered by not less than seven and not more than nine Trustees. It is primarily for the benefit of elderly people who are in need of accommodation or financial assistance.

The Charity of Dame Susan Morden was founded by a will dated 6 May 1717 and is administered by the Trustees of Sir John Morden’s Charity in accordance with the Scheme established by the Charity Commissioners on 22 August 1986. It is primarily for the benefit of clergymen, churches and parochial buildings of the Church of England.

The Trustees of the Charity are drawn, in the main, from the Court of Aldermen of the City of London. Trustees who retire from the Court of Aldermen of the City of London remain eligible to continue to serve as Trustees of the Charity. Trustees are appointed on the basis that they possess the appropriate range of skills and experience that will assist the future growth and development of the Charity.

Where it is recognised that certain particular skills and experience needed are not met from the Aldermen group, the Charity has gone outside to look for sector experts, and two Trustees are currently non-Aldermen. All Trustees go through an induction programme.

All Trustees give their time freely and no Trustee remuneration was paid during the year. There were no related party transactions with Trustees nor did they receive any expenses during the year.

Trustees are required to disclose all relevant interests and register them with the Chairman of the Trustees and the Chief Executive.

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Foreword from the Chair of Trustees

My Foreword last year (year ended 31 March 2020) finished on a sombre note, the coronavirus had just landed in the UK. We thought at the time, in early/mid March 2020, that it would for certain be a 3-month event. In the event it has, thus far (I am writing this in September 2021) run for 18 months, a global pandemic. The overwhelming feel of the 12 months from mid/end March 2020 to April 2021 at Morden College was of restrictions to life and livelihoods; of isolation and loneliness for many, especially the Charity’s resident Beneficiaries; and of anxiety among our whole community as well as pressure on the staff. Financial year 2020/21 has unquestionably been tough for our community of Residents, our staff, and for our Residents’ families too.

Alderman Sir David Wootton MA

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021 ie

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Trustees agreed the Charity would ‘lockdown’ from 17 March 2020, ahead of the Government’s decision to lock the Nation down on 23 March 2020. Our strategy was underpinned by 3 pillars: Protect, Sustain, Communicate. The concept: Lockdown early and by doing so try and get ahead of the virus; to this end we asked our 310 or so Residents to isolate on our sites, initially in their flats, and in the Charity’s 60 bed residential care home (with nursing). Having asked Residents to isolate, they did. We then undertook to Protect and Sustain them. The former about maintaining tight control of access onto the Charity’s 3 sites and so keeping the number of human points of contact to a minimum; in order to reduce the risk of cross infection. The latter, Sustain, about ensuring our Residents in isolation had everything they needed. At the peak of the crisis, our staff delivered over 6,000 items of food, beverage, medicines, and non-perishable goods to our resident population every week. Communicate, the third pillar of our strategy, involved a ‘buddy’ system of staff and some friends, being grouped together with our resident Beneficiaries – the idea, that each of our Residents would be contacted by their buddy regularly; we wished no one to feel wholly alone, or abandoned. Engaging our staff for this task was inspired, since it helped to ensure that throughout the crisis the community of the College held together and were as informed as they could be.

The Charity journeyed to December 2020 without an outbreak of the virus on any of our sites, nor in our Care Home. A few staff members contracted the disease, two seriously so; but thankfully everyone recovered well.

After nine months of restrictions, understandably some of our Residents began to make unwise decisions. It had been a long year. Our older people were missing family, and contact. Just before Christmas the Delta variant of the virus began to creep into the College. To date, during 2021, there have been 10 cases amongst our resident group; and one of these 10, a gentleman in the Care Home, died. We were of course extremely sad at this death; but Trustees and I are thankful too that the community of the College has done so well to keep our Residents and our staff safe. It has been a Herculean effort.

The pandemic was, in the early months, a war on two fronts. The core business, to protect our community, of course. In parallel though we also had to focus very hard on maintaining our income flow; most of our commercial tenants (occupying the Charity’s investment real estate properties) either ceased trading or operated on a vastly reduced basis. By end of Quarter 1, Morden College was shy of in excess of £2.2m; our operations are wholly dependent on the income from our invested endowment. Negotiations with each individual tenant were protracted. Those were indeed challenging times. By year end I am delighted that the position had largely recovered, albeit we had voids among both our commercial estate, offices in particular, and a few still in our residential estate.

We ended the financial year, 31 March 2021, in a far stronger place financially, our Residents beginning to ease out of the third period of significant lockdown, and having taken in hand, albeit 9 months late, the Charity’s fabulous new facility, the John Morden Centre. The Centre promises to bring a new focus to life at Morden College for the older people we care for. My fellow Trustees and I also approved a redraft of the Business Plan, originally presented to us in March 2020, this new version ‘Business Plan 2021 – 24; is significantly changed and reflects the many lessons we have learned during the pandemic up until March 2021. In truth we are still learning lessons; and to this end a full Post Pandemic Review has now been instructed. I shall touch on its findings next year.

It remains for me to, as always, thank our Trustees. Your individual responses to the numerous challenges that arose during this crisis year have been exceptional. Thank you also to our Residents, for putting up with this pandemic and all the restrictions to life and fun that the crisis brought. Thank you for trusting us, especially your staff, as decisions were made and restrictions came and went. And on behalf of all of the Trustees and all our Residents, thank you to our staff. A tough year indeed, and I know that for many of you it was not simply tough at work, it was too very challenging at home and in your private lives.

Alderman Sir David Wootton Chair of Trustees

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Our Vision A world in which older people can live a good life, supported and safe.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Our Culture

This drives everything.

Our most valuable resource is our people, both our employees and our Residents. Our greatest strength is the Charity’s diversity. Our success is underpinned by the understanding all our people have of the culture we wish to see win through.

Our Values

The visible embodiment of our culture is evidenced every day by our staff as they go about their duties, underwritten by our Values.

Respectful

We are considerate, we foster a culture of dignity and we appreciate the different roles we each perform in delivering the objects of the Charity.

Compassionate

We are kind, caring, and inclusive.

Progressive

We are ambitious to embrace new ideas and technologies and keep improving what we do.

Accountable

We accept personal responsibility for how we act and for what we do, individually contributing to the Charity’s success; and we are accountable.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Trustees’ Report

FINANCIAL REVIEW

The consolidated net deficit before transfers between funds and investment gains for the year under review was £176k compared to a £2.59 million surplus for the previous year. With income down and costs significantly increased, this was the year financially and operationally fully impacted by the Covid pandemic.

INCOME

TOTAL INCOME FOR THE YEAR WAS

£14.95m

----- Start of picture text -----
2021 £14.95m
2020 £15.95m
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THIS IS AN OVERALL DECREASE OF 6%

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3%
11%
58%
INCOME
2021 28%
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CHARITABLE ACTIVITIES INVESTMENT INCOME FROM PROPERTY INVESTMENT INCOME FROM OTHER INVESTMENTS OTHER INCOME INCLUDING DONATIONS

(1) Income from charitable activities

Contributions from Beneficiaries for living accommodation (including the Care Home) this year were £4.127 million, a decrease of 4% compared to the previous year (2020: £4.314 million). This decrease is as a result of not being able to accept new Residents into the Care Home and our Independent Living accommodation due to the actions we took to manage the risk of infection spread. In other years we would have sought to fill empty beds and accommodation voids in our community and introduced new Beneficiaries.

(2) Investment income from property

Rental Income this year was £7.763 million a decrease of 5% compared to the previous year. Total income from property now includes the dividends from our Property Funds (previously categorised as ‘other investments’) and total income from property related investments is £8.68 million. The Covid pandemic significantly impacted the ability of some of our commercial tenants to pay rent, as they struggled with their own business models and demand. The staff team at Morden College actively managed the various scenarios with all of our tenants and as a result, the impact to rental collection in the end was minimised, in so far as was possible.

(3) Investment income from other investments

(4) Other income including donations

At £403,000 this compares to the previous year, 2020: £404,000, although this year includes here some £233,000 of Covid funding received from the local authority and HMRC under the furlough scheme.

(5) Fundraising

The Charity does not undertake fundraising activities during its normal course of operations.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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(1) Grants and out/in pensions

EXPENDITURE

TOTAL EXPENDITURE FOR THE YEAR WAS

£15.121m

2021 £15.121m
2020 £13.352m

THIS IS AN OVERALL INCREASE OF 13%

This exceptional increase is in the main due to the costs of extending our operations in order to protect our Residents during the pandemic, to manage the risk of infection spread and to sustain them during the restrictions; all the activities described here in the foreword by the Chair of Trustees. Removing this item, the increase in costs is 8% year on year.

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2%
6%
7%
2%
5%
4%
EXPENDITURE
40% 2021
34%
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GRANTS AND OUT/IN PENSIONS INDEPENDENT LIVING HOUSING COSTS CARE HOME COSTS FIRE SAFETY ENHANCEMENTS COVID 19 EXPENDITURE INVESTMENT MANAGERS’ FEES BOND INTEREST PROPERTY MANAGEMENT

Grants paid total £231,000 (2020: £322,000). The total number of Beneficiaries supported by grants (outpensions) was 92 (2020: 111). A number of people receiving such grants move into one of the Charity’s flats each year and the number supported in this way stood at 26 at the year end (2020: 32). The number living outside the College who receive financial assistance from the Charity was 66 (2020: 79). The ambition of Morden College is to develop the breadth of this aspect of our giving in the future.

(2) Independent Living Housing Costs (including the Quadrangle)

Independent living costs at £5.11 million show an increase of 16% compared to the previous year (2020: £4.39 million).

(3) Care Home Costs

Care Home costs show an 11% increase, rising from £5.52 million last year to £6.10 million this year.

The following one-off expenditure items took place during the course of the year and have impacted both Independent Living Housing Costs (including the Quadrangle) and Care Home costs; the 5-year electrical testing falling due, costs of council tax and water rates borne by the College on empty flats, exceptional boiler and lift repairs, costs associated with increase to laundry and cleaning routines, a higher than inflation increase to utility bills, an increased spend on legal fees, post construction and delivery costs relating to the John Morden Centre.

2021 was an exceptional cost year for the College in terms of maintenance of the estate, the delivery of a new building for Beneficiary use and significant improvements to our IT infrastructure and systems, quite apart from the costs of operating through the pandemic and the cost of many upgrades to delivery made as a result of our learnings from the pandemic.

We also, from 1 April 2020, increased pay for all at 2.5% and adjusted pay for some 60 staff bringing them in line with the London Living Wage.

(4) Investment Managers’ fees

Investment Manager’s fees are slightly increased year on year, rising from £275,000 (2020) to £291,000 at 6% and the overall costs of raising funds include the £1.021 million interest payment on the Bond.

(5) Property Management Costs

At £914,000 the costs associated with our direct property investments have increased again this year (2020: £898,000), there has been increased activity in terms of managing our assets including the continued preparations for the sale of our Lime Street asset (May 2020), ongoing negotiations on rent and the cost of legal advice in relation to the impact of the pandemic on rent collection.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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INVESTMENTS

Sir John Morden left approximately £12,500 to endow the College when he died in 1708 and the permanent endowment assets of the Charity are now valued at £246.8 million.

Sir John Morden left approximately £12,500 to endow the College when he died in 1708 and the permanent endowment assets of the Charity are now valued at £246.8 million. The permanent endowment assets include total College fixed assets, which includes the original land, investment properties and quoted investments.

The Charity’s investment policy provides that the minimum investment objective is to preserve the capital and income of the Charity’s portfolio from inflation.

The Trustees have adopted the Total Return approach to accounting for the investments for the Sir John Morden’s Charity’s Permanent Endowment with effect from 1 April 2016. The Trustees are using the statutory powers included in the Charities Act 2011 (“the Act”) and given effect by the Charities (Total Return) Regulations 2013 (“the Regulations”), which do not require Charity Commission approval in order for the Total Return basis to be adopted.

The Trust for Investment is considered to be the value of the permanent endowment as at 1 April 2016 and may be increased by the allocation of Unapplied Total Return, being the investment income and capital gains on the portfolio, from time to time.

The Trustees have determined that the Trust for Investment should be increased annually in line with RPI inflation to protect its real value, which has resulted in an increase of 1.4% in the current year (2020: 1.5%).

The Trust for Investment and the Unapplied Total Return together comprise the permanent endowment fund disclosed in the notes to the accounts.

The total return for the year ended 31 March 2021 was a gain of £27.9 million comprising income of £3.3 million and gains of £24.9 million, less investment management costs of £294k. The balance of the Unapplied Total Return Fund at 31 March 2020 was £2,253k and it is proposed that £2,979k is allocated to the Trust for investment, in line with the Trustees’ policy established in 2017, and £3,306k is converted to income and transferred to the unrestricted fund. The balance on the Unapplied Total Return Fund at 31 March 2021 is now £23.87 million.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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RESERVES

a. Unrestricted Funds

b. Restricted Funds

c. Permanent Endowment

These funds are the capital of the Charity and it is invested to produce income that is used to further the Charity’s work. The Permanent Endowment Fund may not be used for any other purposes. Its funds are invested in charitable property, investment property, quoted investments and cash deposits. The value of the Permanent Endowment Funds at the year end was £266.6 million, of which £246.81 million represents the Sir John Morden permanent endowment and £19.75 million represents the Dame Susan Morden permanent endowment.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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RISKS

The risks of the Charity are monitored on a regular basis, and appropriate action is taken to reduce the risk of disruption to the effectiveness of the Charity’s work and operations. The Charity’s risk management strategy utilises a hierarchical approach to the monitoring of risk with the overall operational strategy delegated to the Chief Executive. All identified risks are assessed for the likelihood of occurrence and their possible impact. The risk management system is designed to mitigate the likelihood of occurrence and/or the impact.

Currently the Charity assesses and monitors nine organisational risks, the following three are our key risks:

Property Investments

A sizeable proportion of the Charity’s endowment is invested in property and it is the responsibility of the Property Sub-Committee and the Asset Allocation Committee to review the overall performance of the Charity’s real estate. The portfolio is managed in house with an expert team but in addition these Committees are authorised to seek third party professional advice where required. All key decisions are ratified by the Board of Trustees.

Other Financial Investments

It is the responsibility of the Financial Investment SubCommittee and the Asset Allocation Committee to review the financial investment strategy and to set policies on such matters — it is also authorised to seek third party professional advice where required and changes to policies and recommended actions are ratified by the Board of Trustees. The investment strategy is to ensure that the value of the investment portfolio does not suffer a permanent diminution in value over the longer term. The strategy also has an objective to preserve the capital and income of the Charity’s portfolio from inflation.

Operations including Care Provisions

The Charity has assessed operational risk, which may be defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events under a number of areas such as care, health and safety and fire. These are monitored and processes have been put in place to minimise the Charity’s exposure to risks arising from such areas. This is all managed by an expert team in house, supported by the Compliance Manager.

The Covid pandemic has impacted the Charity in numerous ways. Reduced income from property assets and financial investments, the direct costs of protecting Morden College from the virus and the indirect costs of staff time and stress, and other key initiatives now put on hold. The capital values of our financial investments have since recovered and property values are holding.

STRUCTURE AND GOVERNANCE

Construction of Morden College began in 1695. It opened in 1700 for the benefit of poor, elderly merchants of good character who were either bachelors or widowers and who had failed in business through no particular fault of their own. Since that time, the qualifications for entry have been widened. They now include men or women of good character who have either been engaged in a trade, business or a profession as principals, or reached a position of authority or seniority, in employment and who, through accident, misfortune, disability, or infirmity have been prevented from continuing to follow their former calling and are in reduced material circumstances. The qualifications also include the spouses, partners, widows and widowers of such men and women.

The Trustees are also empowered to provide assistance by way of pensions and grants for the elderly in need whether or not they are resident in the Charity’s homes. Donations may also be made to other Charities that provide or undertake in return to provide items, services, or facilities to Beneficiaries of the Charity.

The Trustees determine the general policy of the Charity and delegate day-to-day management to the Clerk to the Trustees, whose role is that of Chief Executive. The Charity’s Senior Leadership Team holds regular meetings to review progress against objectives agreed with the Trustees. Meetings are minuted and copies are made available to the Chairman of the Trustees. The Chairman visits the Charity on a regular basis and meets with the Chief Executive.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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MANAGEMENT AND STAFF REMUNERATION

There are clear distinctions between the role of Trustees and the Senior Leadership Team. The Trustees hold a range of reserved matters and delegate certain authority to the Senior Leadership Team in order to run the organisation efficiently. Matters such as policy, strategy and budgets are prepared by the Senior managers for consideration and approval by the Trustees.

The Charity aims to pay salaries which are fair, competitive with the charity sector, and proportionate to the complexity of each role. In setting salaries, the Charity ensures:

Within Dame Susan’s charity the sole employee is the Chaplain who is supported in his role by the Chief Executive, the Finance Director and the Director of Real Estate and members of the staff team employed by Morden College as and when the need arises.

POLICIES

Applications policy

Applications for accommodation or outpensions have to be submitted in writing and must be supported by independent testimonials. Applications for grants are also made in writing and are normally for single payments unless the need is assessed as a continuing one when the Charity may award an annual Outpension. The Trustees review all applications carefully and satisfy themselves that the applicant is genuine, and the assistance sought is in accordance with the Charity’s aims. All applicants for accommodation are interviewed by the Chief Executive before being recommended for admittance by the Trustees.

Grant Making Policy

Every application for a grant must be submitted in writing and include the total cost of the project for which the grant is sought. All applications are scrutinised to ensure that the request for assistance falls within the scope of the Charity’s Scheme. Applicants who are eligible for help are visited to clarify any outstanding matters. If all is found to be in order, a report is made to the Trustees, who consider the application, and instruct whether the grant should be made together with any conditions relating to it. Compliance with any conditions made is monitored, and payment of grants may be withheld if the terms of assistance are not met.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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PUBLIC BENEFIT

The objective of the Charity is to relieve financial hardship suffered by older people and it does this primarily by providing living accommodation comprising independent living and a Care Home. We also make available such support as is necessary to enable Beneficiaries to live their lives in the community to the full.

The Charity also provides single grants and continuing annual grants, (referred to as outpensions) to older people in financial need but who do not necessarily wish to apply to the Charity for accommodation. Beneficiaries receiving such grants use the money to defray living costs as they see fit.

The objective of Dame Susan’s Trust is the advancement of religion by assisting the Church of England with the upkeep of their churches and associated activities and by maintaining and paying for the operating costs of the Morden College Chapel and its Chaplain.

The Trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the Charity’s aims and objectives and in planning future activities including the provision of accommodation, the making of grants and provision of outpensions.

The Charity fulfils these objectives by:

Applications for accommodation are received from older people who come from many different backgrounds but share a common problem in retirement in so far as they face financial difficulties. Enquiries for accommodation continue to be from all over the country as well as a small number from people living abroad but all applicants must have the right to live in the UK to qualify for accommodation. The number of applications has been increasing as the effects of financial austerity continue to be felt across the UK.

The Charity maintains a waiting list of applications but limits its public exposure other than that of the Care Home as it does not actively advertise its independent living accommodation as it seeks to control demand which outstrips supply.

As properties become vacant, they are refurbished before being made available to applicants. It is common for bathrooms and kitchens to be replaced prior to re-letting to ensure the standard meets the needs of older people and flooring is replaced on a regular basis.

The Charity, via the Dame Susan Trust, seeks to deliver public benefit by making grants to Church of England churches who lack the necessary funds to maintain, repair and improve the fabric of their own buildings.

The regular services of worship usually held throughout the year in the Morden College Chapel at Blackheath, at the Charity’s second site at Ralph Perring Court, Beckenham, and in Cullum Welch Court, the Care Home provided by Sir John Morden’s Charity, situated at Blackheath, were delivered in the context of Covid restrictions.

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and of the incoming resources and application of resources of the Charity for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with Charities Act 2011. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Through a system of internal controls, the Trustees seek to ensure all expenditure is properly incurred and properly authorised, that receipt of income is secure, and that the Charity’s property is fit for purpose.

The financial statements have been prepared in accordance with the accounting policies set out in the notes to the accounts and comply with the Charity’s governing document, the Charities Act 2011 and Accounting and Reporting by Charities’ Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland.

Alderman Sir David Wootton MA Chair of the Trustees

David Rutherford-Jones CB Clerk to the Trustees & Chief Executive

18 November 2021

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Independent Auditor’s Report to the Trustees of Morden College

Opinion

We have audited the financial statements of Morden College for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Group and Parent Charity Balance Sheets, the Consolidated Statement of Cash Flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. 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 group 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 group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Trustees’ 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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

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Responsibilities of Trustees for the financial statements

As explained more fully in the Trustees’ responsibilities statement set out on page 17, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group’s and the parent 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 group or the parent charity 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 noncompliance 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:

financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Charities Act 2011.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to the potential to manipulate accounting estimates and judgements and the posting of inappropriate journal entries. Audit procedures performed by the engagement team included:

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charity’s Trustees, as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity’s Trustees those matters we are required to state to them in an Auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity’s Trustees as a body for our audit work, for this report, or for the opinions we have formed.

Haysmacintyre LLP

Based on our understanding of the group and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to compliance with the regulations of the Care Quality Commission, the Charity Commission, Health and Safety regulations as well as general Charity Law, and we considered the extent to which non-compliance might have a material effect on the

Statutory Auditor 10 Queen Street Place London EC4R 1AG

Date: 1 December 2021

Haysmacintyre LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

Morden College Annual Report & Consolidated Accounts for the year ended 31 March 2021

20

Consolidated Statement of Financial Activities

for the year ended 31 March 2021

----- Start of picture text -----
Unrestricted Restricted Permanent Total Total
Funds Funds Endowment 2021 2020
Notes £’000 £’000 £’000 £’000 £’000
----- End of picture text -----

INCOME AND ENDOWMENTS FROM:
Charitable activities
Investment income from property
Investment income from other investments
Other income including donations
Total income
EXPENDITURE ON:
Charitable activities
Raising funds
Total expenditure
Net income/(expenditure) before investment
gains/(losses)
Net gains/ (losses) on investments		 4,127
-
-
4,127
4,314
6,696
382
1,606
8,685
8,174
3
-
30
1,700
1,730
3,058
4
406
(3)
-
403
404
2
11,230
409
3,306
14,945
15,950
5a
11,851
138
906
12,896
11,158
5b
1,782
153
289
2,225
2,194
2
13,634
291
1,195
15,121
13,352
(2,404)
118
2,111
(176)
2,598
9c
1,013
-
24,967
25,980
(4,599)
Net income/(expenditure)
Transfer between funds
Gain on revaluation of fxed assets
Net movement in funds
Reconciliation of funds
Total funds brought forward at 1 April 2020		 (1,391)
118
27,077
25,804
(2,001)
(178)
-
178
-
-
8
-
-
-
-
-
(1,569)
118
27,255
25,804
(2,001)
21,837
934
239,313
262,084
264,085
Total funds carried forward at 31 March 2021 20,268
1,052
266,568
287,888
262,084

All of the above results are derived from continuing activities. All gains and losses recognised in the year are included above. The accompanying notes form an integral part of this Statement of Financial Activities.

Morden College – Consolidated Statement of Financial Activities for the year ended 31 March 2021

21 ~~PE~~

Group and Charity Balance Sheets as at 31 March 2021

Notes Group
2021
£’000		 Group
2020
£’000		 Charity
2021
£’000		 Charity
2020
£’000
FIXED ASSETS
Tangible fixed assets
College Buildings 8 35,615 33,337 36,268 33,991
Other tangible fixed assets 8 2,342 2,041 2,342 2,042
37,957 35,378 38,610 36,033
Investment property 9 182,731 156,604 182,731 156,604
Quoted investments 9 85,234 85,715 85,234 85,715
Investment in Subsidiary Company
267,965 242,319 267,965 242,319
Total fixed assets 305,922 277,698 306,575 278,351
CURRENT ASSETS
Debtors 10 1,036 2,014 1,036 1,983
Short term deposits 10,103 12,110 10,103 12,110
Cash at bank and in hand 3,970 3,365 3,962 3,281
15,109 17,489 15,101 17,374
Creditors: amounts falling due within one year 11 (3,143) (3,102) (3,144) (2,987)
NET CURRENT ASSETS 11,966 14,387 11,957 14,387
Creditors: amounts falling due after more than one year 12 (30,000) (30,000) (30,000) (30,000)
NET ASSETS 287,888 262,084 288,532 262,738
FUNDS
Permanent endowment 14, 15
Sir John Morden 246,814 220,650 247,458 221,304
Dame Susan Morden 19,754 18,663 19,754 18,663
Restricted funds 14, 16 1,052 934 1,052 934
Unrestricted funds 14, 17 20,268 20,268 20,268 21,837
Total charity funds 287,888 262,084 288,532 262,738

The financial statements on pages 20 to 38 were approved and authorised for issue by the Board of Trustees and signed on 18 November 2021 on its behalf by:

David Rutherford-Jones CB Clerk to the Trustees & Chief Executive

Alderman Sir David Wootton MA Chairman of the Trustees

Morden College – Group and Charity Balance Sheets as at 31 March 2021

22

Consolidated Statement of Cash Flows

for the year ended 31 March 2021

----- Start of picture text -----
Group Group
2021 2020
Notes £’000 £’000
Cash flow from operating activities
Net cash provided/(used) in operating activities A (8,612) (7,944)
Cash flow from investment activities
Dividend, interest and rents from investments 10,414 11,232
Proceeds from the sale of investments 52,362 8,764
Purchase of investments (52,029) (10,909)
Purchase of tangible fixed assets (3,484) (3,844)
7,263 5,243
Cash flow from financing activities
- -
Cash inflows from new borrowing
Change in cash and cash equivalents in the reporting period 12 (1,318) (2,701)
Cash and cash equivalents at the beginning of the reporting period 15,391 18,176
Cash and cash equivalents to the end of the reporting period B 14,073 15,475
2021 2020
A. Reconciliation of net income/(expenditure) to net cash flow from operating activities £000 £000
Net income/(expenditure) for the reporting period 25,795 (2,001)
Adjustments for
Depreciation Charges 906 868
(Gains)/losses on investments (25,980) 4,599
Dividends, interest and rents from investments (10,414) (11,232)
(Increase)/decrease in debtors 947 (762)
Increase/(decrease) in creditors 127 481
(Increase)/decrease in work in progress - 103
Net cash provided/used in operating activities (8,620) (7,944)
B. Analysis of cash and cash equivalents
Cash in hand 3,970 3,365
Notice deposits (less than 3 months) 10,103 12,110
Total cash and cash equivalents 14,073 15,475
C. Cashflow Net Debt
At 1 At 31
April 2020 Cashflows March 2021
£'000 £'000 £'000
Cash in hand 3,281 681 3,962
Notice deposits 12,110 (2,007) 10,103
Sub-total 15,391 (1,326) 14,065
Long-term bond (30,000) - (30,000)
Net debt (14,609) (1,326) (15,935)
----- End of picture text -----

Morden College – Consolidated Statement of Cash Flows for the year ended 31 March 2021

23

Notes to the Accounts

for the year ended 31 March 2021

1. PRINCIPAL ACCOUNTING POLICIES

The accounts have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011 and UK Generally Accepted Accounting Practice as it applies from 1 January 2015. The accounts have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), (Second Edition, effective 1 January 2019) rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005, which has since been withdrawn.

Public Benefit

The Charity constitutes a public benefit entity as defined by FRS102.

Consolidation

The consolidated accounts incorporate the results of Sir John Morden’s and Dame Susan’s Charities (the Charity) and its subsidiary undertaking, Morden College Design and Build Limited. The consolidated entity is referred to as the Group.

Going Concern

The Charity has a significant level of cash reserves which were the equivalent of more than 12 months operating costs at the balance sheet date. These cash reserves provide adequate resources to finance the Charity’s day to day operations. On this basis, the Board has a reasonable expectation that the Charity has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months after the date on which the report and financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements.

Investment Gains and Losses

Realised gains and losses on quoted investments are based on the difference between the net disposal proceeds and the value.

Realised gains and losses on property investments are based on the difference between the net disposal proceeds and the brought forward valuation. Sales are recognised on exchange of contracts where completion takes place after the financial year end.

Unrealised gains and losses represent the difference between the market value of quoted investments and investment properties at the balance sheet date and their brought forward carrying value or purchase cost for investments acquired during the year.

Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. The principal judgements and sources of estimation uncertainty relate to the valuation of investment properties and the estimated useful lives of tangible fixed assets.

Income

Morden College – Notes to the Accounts for the year ended 31 March 2021

24

Expenditure

Investment property

The Charity’s Commercial investment properties were last professionally valued by Messrs Gerald Eve LLP, Chartered Surveyors, as at 31 March 2021 on an open market basis in accordance with the Royal Institution of Chartered Surveyors Valuation Professional Standards. The Charity’s residential investment properties were professionally valued by Messrs Humphreys Skitt, Surveyors, as at 31 March 2013 on an open market basis in accordance with the Royal Institution of Chartered Surveyors Valuation Professional Standards. Since that date, the investment properties have been revalued by the Trustees on an open market basis each year by taking into account published indices for the changes in property values. For the 2021 valuation, the estimated increases in residential property values for Greater London have been calculated by reference to the Nationwide Building Society’s survey results.

Investment properties are classified in the balance sheet as fixed assets unless there is a firm intention to dispose of them at which point they are transferred to current assets.

Quoted Investments

Quoted investments are shown at market value as at the balance sheet date. The SOFA includes the net gains and losses arising on revaluations and disposals throughout the year.

The Charity also owns 100% of the share capital of Morden College Design and Build Limited and the value of this investment is stated at cost (£2).

Tangible fixed assets

Useful lives of depreciable assets

The Trustees review their estimate of the useful lives of depreciable assets at each reporting date based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change and changes to circumstances which may require more frequent replacement of key buildings or components of existing buildings.

The key judgements and estimates applied in respect of housing provided for beneficiaries are disclosed in the accounting policy dealing with fixed assets and depreciation and include:

These are conservative assumptions that are broadly aligned with general practice followed by registered housing providers.

Capitalisation of property development costs

Distinguishing the point at which a project is more likely than not to continue, allowing capitalisation of associated development costs requires judgement. After capitalisation management monitors the asset and considers whether subsequent changes may indicate that impairment is required.

Morden College – Notes to the Accounts for the year ended 31 March 2021

25

Fixed Assets and Depreciation

Freehold land is not depreciated.

Depreciation of housing property components is charged so as to write down the cost of the components to their estimated residual value, on a straight-line basis, over their estimated useful economic lives within the Group. Housing property components are depreciated from the year following the replacement year. Estimated useful economic lives are assumed as follows:

Major components

Furniture and equipment 5 years Motor vehicles 4 – 10 years Computers 4 years

Grants

Grants payable are charged in the Statement of Financial Activities in the year that the payment is made to the recipient. All grants approved by the Trustees are conditional and are paid upon the completion of the conditions attached to them. Grants offered during the year but where conditions have not been met are not accrued as expenditure but are treated as contingent liabilities.

Pension costs

Pension payments are made to a defined contribution pension scheme. There is also one (2020: 1) member who was in the wound up defined benefits scheme and the Trustees have given their undertaking to use their best endeavours to ensure that this member does not suffer any loss of benefit following the closure of that scheme. All contributions are included in the SOFA when due.

Funds and Reserves Policy

Funds held by the Charity are:

Morden College – Notes to the Accounts for the year ended 31 March 2021

26

Taxation

The trust is a registered charity and as such its income and gains falling within sections 471 to 489 of the Corporation Tax Act 2010 or section 256 of the Taxation of Chargeable Gains Act 1992 are exempt from corporation tax to the extent that they are applied to its charitable objectives.

Financial Instruments

The Charity only has financial instruments of a kind that qualify as basic financial instruments such as debtors, creditors, cash at bank and listed investments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. Financial assets held at settlement cost comprise cash and bank and cash in hand together with debtors. Financial liabilities held at settlement value or amortised cost comprise rents received in advance, accruals and other creditors, and the fixed interest bond. The Financial investments disclosed in note 9 are the only financial instruments measured at fair value.

2. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES

----- Start of picture text -----
Unrestricted Restricted Permanent Total
Funds Funds Endowment 2020
£’000 £’000 £’000 £’000
----- End of picture text -----

Unrestricted
Funds
£’000
Restricted
Funds
£’000
Permanent
Endowment
£’000
Total
2020
£’000
INCOME AND ENDOWMENTS FROM
Charitable Activities
Investment income from property
Investment income from other investments
Other income including donations
Total income
EXPENDITURE ON
Charitable activities
Raising funds
Total expenditure
Net income/(expenditure) before investment gains/(losses)
Net gains/ (losses) on investments
Net income/(expenditure)
Transfer between funds
Gain on revaluation of fxed assets
Net movement in funds
Reconciliation of funds
Total funds brought forward at 1 April 2019
Total funds carried forward at 31 March 2020		 4,314
-
4,314
7,778
396
8,174
-
40
3,018
3,058
400
4
404
12,492
440
3,018
15,950
10,081
209
868
11,158
1,807
112
275
2,194
11,888
321
1,143
13,352
604
119
1,875
2,598
(547)
-
(4,052)
(4,599)
57
119
(2,177)
(2,001)
(1,004)
-
1,004
-
-
-
-
-
(947)
119
(1,173)
(2,001)
22,784
815
240,486
264,085
21,837
934
239,313
262,084

Morden College – Notes to the Accounts for the year ended 31 March 2021

27

3. INVESTMENT INCOME

2021
£’000
2020
£’000
Dividends and income from investments
Interest on Cash Deposits
4. OTHER INCOME		 1,730
3,016
-
42
1,730
3,058
2021
£’000
2020
£’000
Benefciary restaurant receipts and sundry income
COVID-19 Funding
Dame Susan Morden’s Charity		 170
400
233
-
-
4
403
404

5. EXPENDITURE

----- Start of picture text -----
Direct
Staff Other Apportioned
Costs Costs costs Total
£’000 £’000 £’000 £’000
----- End of picture text -----

Direct
Staf
Costs
£’000
Other
Costs
£’000
Apportioned
costs
£’000
Total
£’000
a. Charitable activities
2021
Grants and out/in pensions
Independent living housing costs
Quadrangle housing costs
Care home costs
JMC Projects delivery costs
Morden College Chapel costs
Fire Safety Enhancement Works
COVID19 Expenditure
2020
Grants and out/in pensions
Independent living housing costs
Quadrangle housing costs
Care home costs
JMC Projects delivery costs
Morden College Chapel costs
Fire Safety Enhancement Works
COVID19 Expenditure		 -
231
25
256
95
1,693
1,270
3,058
188
313
1,547
2,048
3,121
710
2,271
6,102
-
9
-
9
48
24
-
72
-
585
-
585
-
765
-
765
3,451
4,331
5,114
12,896
-
322
25
347
126
1,301
1,035
2,462
185
368
1,371
1,924
2,912
690
1,919
5,521
-
-
-
-
57
25
-
82
-
779
-
779
-
43
43
3,280
3,528
4,350
11,158

Morden College – Notes to the Accounts for the year ended 31 March 2021

28

Direct
Staf
Costs
£’000
Other
Costs
£’000
Apportioned
costs
£’000
Total
£’000
b. Cost of raising funds
2021
Quoted Investment Managers’ fees
Bond Interest
Property Management
2020
Quoted Investment Managers’ fees
Bond Interest
Property Management		 -
291
-
291
-
1,021
-
1,021
-
799
115
914
-
2,110
115
2,225
-
275
-
275
-
1,021
-
1,021
-
768
130
898
-
2,064
130
2,194
Donations,
grants
and out
pensions
£’000
Independent
living
housing
costs
£’000
 Sheltered
housing
costs
£’000
Care home
costs
£’000
Property
management
£’000
Total
£’000
c. Apportioned costs have been allocated on a use basis as follows
2021
Catering
-
-
Restaurant
-
77
Blackheath Social
-
19
Library & Muniments
-
4
Gardens
-
268
Administration
25
903
25
1,270
2020
Catering
-
-
Restaurant
-
93
Blackheath Social
-
6
Library & Muniments
-
5
Gardens
-
268
Administration
25
664
25
1,035		 271
438
-
709
-
-
-
77
19
-
-
38
4
-
-
8
87
141
-
496
1,166
1,693
115
3,901
25
1,270		 1,547
2,271
115
5,229
-
-
-
93
-
6
-
5
-
268
25
664		 219
386
-
605
-
-
-
93
6
-
-
12
5
-
-
10
87
154
-
509
1,054
1,379
130
3,252
25
1,035		 1,371
1,919
130
4,480

Morden College – Notes to the Accounts for the year ended 31 March 2021

29

6. PAYMENT OF OUT/IN PENSIONS

2021
£’000
2020
£’000
Individuals (Pensioners)
Administrative costs		 165
194
0
25
165
219

There were 92 pensioners at 31 March 2021 (2020 - 111)

7. WAGES AND SALARIES – STAFF COSTS (INCLUDING APPORTIONED COSTS)

----- Start of picture text -----
2021 2020
£’000 £’000
----- End of picture text -----

Wages and salaries
Social security costs
Accommodation costs
Pension contributions
Other costs including bank and agency staf		 5,797
5,348
566
531
-
0
297
265
284
156
6,944
6,300

Staff numbers

The average number of employees during the year including those who worked part-time was 213 (2020:228). Their full time equivalent was 186 (2020: 197) and their functional analysis was as follows:

2021
No.
2020
No.
Cost of raising funds
Property management
Charitable activities
Kitchen and domestics
Nursing
Premises, grounds and security
Home management and pastoral
Management and administration		 5
8
42
46
82
79
19
28
1
2
36
33
186
196
2021
2020
Highest paid employees, including benefts, excluding pensions
£60,000 to £80,000
£80,001 to £90,000
£90,001 to £120,000
£120,001 to £130,000		 6
2
1
2
2
-
1
1

The Group’s key senior managers are listed on page 4. Details of remuneration policy are set out in the Trustees’ Report. Total remuneration paid to senior managers, including employers NI, was £950k (2020: £713k).

No Trustees received any remuneration or reimbursement of expenses during the year (2020: none).

Morden College – Notes to the Accounts for the year ended 31 March 2021

30

8. TANGIBLE FIXED ASSETS

Group
£’000
Charity
£’000
Charitable Buildings
Cost
At 1 April 2020
Additions at Cost
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
At 31 March 2021
Net book value at 31 March 2021
Net book value at 31 March 2020		 42,113
42,766
3,052
3,052
45,165
45,818
8,775
8,775
775
775
9,550
9,550
35,615
36,268
33,337
33,991
Antiques &
valuables
£’000
Motor
vehicles
£’000
Computers
£’000		 Furniture &
equipment
£’000
Total
£’000
Other fxed assets – Group and Charity
Cost or Valuation
At 1 April 2020
Additions at Cost
Disposals/scrapped
At 31 March 2021
At valuation
At cost
Depreciation
At 1 April 2020
Disposals/scrapped
Charge for the year
At 31 March 2021
Net book value at 31 March 2021
Net book value at 31 March 2020		 1,688
11
293
-
-
143
-
(11)
-		 1,722
3,714
290
433
-
(11)
1,688
-
436		 2,012
4,136
-
-
-
1,688
-
436
-
11
103
-
(11)
-
-
-
63		 -
-
2,012
4,136
1,559
1,673

-
-
68
131
-
-
166		 1,627
1,793
1,688
-
271		 384
2,343
1,688
-
190		 163
2,041

Morden College – Notes to the Accounts for the year ended 31 March 2021

31

9. INVESTMENT ASSETS AT MARKET VALUE

2021
£’000
2020
£’000
a. Investment property
Residential
Commercial and Industrial incl Property Fund
b. Quoted investments
Fixed interest – UK & non UK
Equities – UK & non UK
Stockbrokers’ client account
Historical cost of investments held at 31 March 2021		 46,815
39,844
135,917
116,760
182,732
156,604
16,691
26,164
67,302
57,447
83,994
83,611
1,240
2,104
85,234
85,715
85,715
91,695
Property
£’000
In		 Quoted
vestments
£’000
Total
£’000
c. The movements in market value may be summarised:
Market value at 31 March 2020
Realised gains/(losses)
Unrealised gains/(losses)
Additions
Disposals
Change in stockbroker cash deposits
Market value at 31 March 2021		 156,604
-
12,503		 85,715
242,319
1,145
1,145
12,332
24,835
169,107
23,424
(9,800)
-		 99,192
268,299
28,605
52,029
(43,568)
(53,368)
1,006
1,006
182,731 85,234
267,965

Morden College – Notes to the Accounts for the year ended 31 March 2021

32

10. DEBTORS

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
----- End of picture text -----

Group
Charity
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Rent and contributions receivable
Prepayments and sundry debtors
Dividends and interest receivable
Due from subsidiary undertaking		 383
1,170
383
1,170
316
485
316
324
337
359
337
359
-
-
-
130
1,036
2,014
1,036
1,983

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Advance rents received 1,236 1,510 1,236 1,510
Tax, pensions and social security 180 160 180 160
Value Added Tax 231 221 231 221
Sundry creditors 829 1,152 829 1,037
Accruals 669 59 669 59
3,144 3,102 3,144 2,987
----- End of picture text -----

12. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group
Charity
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Fixed Interest Bond 30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000

The Bond has a maturity date of 27 March 2042 and carries a fixed rate of interest of 3.38% until maturity. The Bond is repayable as a single amount.

Morden College – Notes to the Accounts for the year ended 31 March 2021

33

13. ALLOCATION OF THE NET ASSETS OF THE GROUP AND CHARITY

Endowment
Funds
£’000
Restricted
Funds
£’000
Unrestricted
Funds
£’000
Total
Funds
£’000
Group 2021
College buildings
Other tangible fxed assets
Investments – Sir John Morden (SJM)
Investments – Dame Susan Morden (DSM)
Net current assets
Long-term liability (Bond)
Group 2020
College buildings
Other tangible fxed assets
Investments – SJM
Investments – DSM
Net current assets
Long-term liability (Bond)		 35,615
-
-
35,615
2,323
19
-
2,342
239,618
-
8,593
248,211
19,754
-
-
19,754
(742)
1,033
11,675
11,966
(30,000)
-
-
(30,000)
266,568
1,052
20,268
287,888
33,337
-
-
33,337
2,015
26
-
2,041
215,019
-
8,637
223,656
18,663
-
-
18,663
279
908
13,200
14,387
(30,000)
-
-
(30,000)
239,313
934
21,837
262,084
Endowment
Funds
£’000
Restricted
Funds
£’000
Unrestricted
Funds
£’000
Total
Funds
£’000
Charity 2021
College buildings
Other tangible fxed assets
Investments – SJM
Investments – DSM
Net current assets
Long-term liability (Bond)
Charity 2020
College buildings
Other tangible fxed assets
Investments – SJM
Investments – DSM
Net current assets
Long-term liability (Bond)		 36,268
-
-
36,268
2,323
19
-
2,342
239,618
-
8,584
248,202
19,754
-
-
19,754
(751)
1,033
11,684
11,966
(30,000)
-
-
(30,000)
267,212
1,052
20,268
288,532
33,991
-
-
33,991
2,015
26
-
2,041
215,019
-
8,637
223,656
18,663
-
-
18,663
279
908
13,200
14,387
(30,000)
-
-
(30,000)
239,967
934
21,837
262,738

Morden College – Notes to the Accounts for the year ended 31 March 2021

34

14. PERMANENT ENDOWMENT FUNDS

Balance at
1 April 2020
£’000
Income
£’000
Expenditure
£’000
Gains/
(losses)
£’000
Transfers
£’000
Balance at
31 March
2021
£’000
Group 2021
Sir John Morden
Dame Susan Morden
Group 2020
Sir John Morden
Dame Susan Morden		 220,650
3,306
(1,200)
23,881
178
246,814
18,663
-
5
1,086
-
19,754
239,313
3,306
(1,195)
24,967
178
266,568
221,938
3,018
(1,138)
(4,172)
1,004
220,650
18,548
-
(5)
120
-
18,663
240,486
3,018
(1,143)
(4,052)
1,004
239,313
Balance at
1 April 2020
£’000
Income
£’000
Expenditure
£’000
Gains/
(losses)
£’000
Transfers
£’000
Balance at
31 March
2021
£’000
Charity 2021
Sir John Morden
Dame Susan Morden
Charity 2020
Sir John Morden
Dame Susan Morden		 221,303
3,306
(1,200)
23,881
168
247,458
18,663
-
5
1,086
-
19,754
239,966
3,306
(1,195)
24,967
168
267,212
222,455
3,018
(1,138)
(4,172)
1,141
221,304
18,548
-
(5)
120
-
18,663
241,003
3,018
(1,143)
(4,052)
1,141
239,967

The Permanent Endowment Fund is a restricted fund that includes the current value of the original endowment that was to provide homes and financial assistance for the elderly. In 2016, the Trustees resolved to apply Total Return accounting to the portion of the Sir John Morden permanent endowment fund that is represented by fixed asset investments.

The Trustees have established a policy of transferring the investment income received in the year to the general fund and retaining the balance of the Unapplied Total Return within the endowment fund. This policy is reviewed annually by the Trustees.

The total of the Trust for Investment and the Unapplied Total Return these items make up the Permanent Endowment Fund and this has shown an increase of 5% year on year; this more accurately reflects the cost inflation pressures facing Morden College.

Income from the Trust for Investment is to be applied to the running costs of the Charity. The capital may be used to purchase property for charitable and investment purposes, but the maintenance and refurbishment of these properties must be paid from the income of the Charity.

Morden College – Notes to the Accounts for the year ended 31 March 2021

35

14. PERMANENT ENDOWMENT FUNDS (CONTINUED)

----- Start of picture text -----
Unapplied
Permanent Total
Endowment Return Total
£’000 £’000 £’000
----- End of picture text -----

Sir John Morden – Total Return accounting
Balance at 1 April 2019
Additions to endowment investments
Investment Income
Investment Losses
Investment Managers' Fees
Transfer from Unapplied Total Return
Allocation of Unapplied Total Return to Income		 209,622
9,849
219,471
-
-
-
-
3,018
3,018
-
(4,172)
(4,172)
-
(280)
(280)
209,622
8,415
218,037
3,144
(3,144)
-
212,766
5,271
218,037
-
(3,018)
(3,018)
Balance at 31 March 2020
Investment Income
Investment Losses
Investment Managers’ Fees
Transfer from Unapplied Total Return
Allocation of Unapplied Total Return to Income		 212,766
2,253
215,019
-
3,306
3,306
-
24,893
24,893
-
(294)
(294)
212,766
30,158
242,924
2,979
(2,979)
-
215,745
27,179
242,924
-
(3,306)
(3,306)
Balance at 31 March 2021 215,745
23,873
239,618

The Trust for Investment as at 1 April 2016, the date of adoption of Total Return accounting, was identified by the Trustees as being equal to the value of the fund’s investment portfolio as at that date. The Trustees have determined that the Trust for Investment should be increased annually in line with RPI inflation to protect its real value, which has resulted in an increase of 1.4% in the current year (2020: 1.5%).

Morden College – Notes to the Accounts for the year ended 31 March 2021

36

15. RESTRICTED FUNDS – GROUP AND CHARITY

----- Start of picture text -----
Balance at
Balance at 31 March
1 April 2020 Income Expenditure 2021
£’000 £’000 £’000 £’000
----- End of picture text -----

Balance at
1 April 2020
£’000
Income
£’000
Expenditure
£’000
Balance at
31 March
2021
£’000
2021
Welfare Fund
Gift Fund
Dame Susan Morden’s Charity general fund
2020
Welfare Fund
Gift Fund
Dame Susan Morden’s Charity general fund		 6
-
(1)
5
6
-
(1)
5
922
409
(289)
1,042
934
409
(291)
1,052
6
-
-
6
13
2
(9)
6
796
438
(312)
922
815
440
(321)
934

The Welfare Fund was created from a gift received some years ago and is for the benefit of Residents and staff and it is for expenditure that is not part of the Charity’s normal activities. The Gift Fund represents donations received for the benefit of the Care Home and its staff.

Morden College – Notes to the Accounts for the year ended 31 March 2021

37

16. UNRESTRICTED FUNDS – GROUP AND CHARITY

----- Start of picture text -----
Balance at
Balance at 31 March
1 April 2020 Income Expenditure Transfers 2021
£’000 £’000 £’000 £’000 £’000
----- End of picture text -----

Balance at
1 April 2020
£’000
Income
£’000
Expenditure
£’000
Transfers
£’000
Balance at
31 March
2021
£’000
2021
General fund
Accumulation of income
Designated funds (see notes below):
Extraordinary repairs
Future projects
2020
General fund
Accumulation of income
Designated funds (see notes below):
Extraordinary repairs
Future projects		 5,079
12,243
(13,634)
3,335
7,023
2,301
-
-
6
2,307
5,300
-
-
(585)
4,715
9,157
-
-
(2,934)
6,223
21,837
12,243
(13,634)
(178)
20,268
2,108
11,895
(11,888)
2,965
5,080
2,295
-
-
6
2,301
6,079
-
-
(779)
5,300
12,302
50
-
(3,195)
9,156
22,784
11,945
(11,888)
(1,004)
21,837

The Trustees reviewed the balances on all funds before authorising transfers between funds.

The Trust Deed requires the Trustees to maintain an Accumulation of Income fund to ensure that the fixed overheads of the Charity could be met for a limited period of time if income levels were temporarily insufficient to cover such costs. The Deed also requires a minimum transfer of £6k into this fund each year; having reviewed the balance on the fund the Trustees have determined that the fund should be increased by the minimum amount. The fund is invested in a cash deposit.

Under the Trust Deed the Trustees are also required to maintain an Extraordinary Repairs Fund (Building Reserve Fund) for the maintenance, extraordinary repair, improvement or refurbishment of the almshouses, other buildings and the infrastructure of the Charity. The funds are invested in a bank deposit account.

The Future Projects fund provides for the future expenditure on new projects of any kind to be undertaken in furtherance of the objects of the Charity. The balance of the surplus for the year, after transfers to the Extraordinary Repairs Fund and other Funds has been retained in this account.

The balance of the future projects fund was reduced in year by £2.9m to cover cost incurred for the JMC project to date. The balance of the extraordinary repairs fund was reduced by £585k to cover the costs of fire safety works enhancements.

Morden College – Notes to the Accounts for the year ended 31 March 2021

38

17. CAPITAL COMMITMENTS

----- Start of picture text -----
2021 2020
£’000 £’000
At 31 March – Contracted - -
– Authorised not contracted - -
----- End of picture text -----

18. SUBSIDIARY UNDERTAKING

The Charity incorporated a Private Limited Company, Morden College Design and Build Limited on 22 January 2013; the company is registered in England and Wales. The company supplied building construction services to Sir John Morden’s Charity for its building project, Alexander Court. The subsidiary has 2 issued shares of £1 each which are both beneficially owned by the Charity.

A summary of the subsidiary’s accounts for the year ended 31 March 2021 is shown below:

Profit and Loss Account

2021
£’000
2020
£’000
Turnover
Cost of Sales and Operating Expenses
Proft before taxation
Taxation
Proft after taxation
Balance Sheet
Current Assets
Current Liabilities
Net Assets
Shareholders’ funds		 2,448
3,291
(2,423)
(3,307)
25
(16)
-
-
25
(16)
138
537
(113)
(553)
25
(16)
25
(16)

19. OPERATING LEASES

The Charity derives the majority of its income from properties which are leased to commercial and residential tenants. The future minimum lease payments under non-cancellable operating leases are as follows:

Group & Charity
2021
£’000
2020
£’000
Not later than one year
Later than one year and not later than fve years
Later than fve years		 681
506
1,122
2,106
97,174
102,250
98,977
104,862

Morden College – Notes to the Accounts for the year ended 31 March 2021

Morden College Some moments in time

1971

Cullum Welch Court built, enabling the Charity to offer full-time residential nursing care for the first time.

1991

Ralph Perring Court built in Beckenham, more than doubling capacity by adding a further 101 flats, thus enabling the Charity to provide considerably more independent living facilities to both singles and couples.

2005

Cullum Welch Court completely rebuilt to include 60 en-suite bedrooms providing personal, nursing and dementia care.

2016

The most recent addition to independent living facilities, Alexander Court adds a further 30 flats for both singles and couples.

2020-21

Morden College locks down in the face of the global coronavirus pandemic. At the peak of the crisis, staff deliver 6,000 items of food, medicines and other essentials to over 310 Residents. A ‘buddy’ system is introduced with each Resident, whilst isolating, regularly contacted by their designated ‘buddy’ so they know they are not alone.

2021

As lockdowns ease, the fabulous new John Morden Centre fills with life – a social hub where the Morden community comes together, as well as a fully-equipped home for our Medical Outreach team.

Our cover photographs focus on the John Morden Centre – the brilliant new hub at the heart of our community.

Morden College

19 St Germans Place, Blackheath, London SE3 0PW Registered Charity No 215551

www.mordencollege.org.uk