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2020-12-31-accounts

The Incorporated Catholic Truth Society

Annual Report and Financial Statements

31 December 2020

Company Limited by Guarantee Registration Number 00057374 (England and Wales) Charity Registration Number 218951

Contents

Reports
Reference and administrative details 1
Report of the trustees 2
Independent auditor’s report 14
Financial statements
Statement of financial activities 19
Balance sheet 21
Statement of cash flows 22
Principal accounting policies 23
Notes to the financial statements 28

The Incorporated Catholic Truth Society

Reference and administrative details

Trustee management board Rt Rev. P Hendricks (Chairman) Rev. David Elliott (appointed 21 January 2020) Mrs C A Gates Mrs K Nash Dr W O’Neill Mr L Parsons QC Rev. Dr A Pinsent CEO, Publisher and Company Mr Pierpaolo Finaldi Secretary Registered office 40-46 Harleyford Road Vauxhall London SE11 5AY Company registration number 00057374 (England and Wales) Charity registration number 218951 Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Principal bankers The Royal Bank of Scotland plc 24 Grosvenor Place London SW1X 7HN Solicitors Fox Williams LLP, Solicitors 10 Finsbury Square London EC2A 1AF

The Incorporated Catholic Truth Society 1

Report of the trustees 31 December 2020

The trustees present their report together with the financial statements of The Incorporated Catholic Truth Society (the ‘Society’, ‘Charity’ or ‘CTS’) for the year ended 31 December 2020.

The report has been prepared in accordance with the Charities Act 2011 and constitutes a directors’ report for the purposes of company legislation.

The financial statements have been prepared in accordance with the accounting policies on pages 23 to 27 of the attached financial statements and comply with the charitable company’s Memorandum and Articles of Association, applicable laws and the requirements of 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 United Kingdom and Republic of Ireland (FRS 102).

Our mission, aims and activities

Our mission

The Mission of the Society is to carry out its apostolate of Catholic publishing and distribution for the benefit of the Catholic and wider Christian community, and of a wider body of general enquirers. The Mission of the Society is also to disseminate Catholic publications at reasonable prices. The Society receives financial and spiritual support from the Catholic community to carry out its work. In pursuit of its charitable aims during 2020, the Society sought to develop its publications, to distribute them widely and actively to contribute to the life of the Church. The Society made efforts to care for its resources, including staff, suppliers, customers and supporters.

Our objectives

The Charity’s main objects, as set out in its Memorandum and Articles of Association are:

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Report of the trustees 31 December 2020

Our mission, aims and activities (continued)

Activities and relevant policies

These objects are achieved through the principal activity of the Society, which is the publishing and disseminating of low-priced doctrinal, scriptural and educational works, assisting all Catholics to a better knowledge of their religion, spreading amongst nonCatholics information about the faith, and assisting the circulation of Catholic books and other audio, audio visual and electronic media.

Each of these activities has the principal aim of spreading knowledge of the Christian faith as widely as is possible within the United Kingdom, and increasingly to other English speaking constituencies as well. They serve the practising Catholic community, parishes, families, colleges and schools, as well as the wider groupings of general enquirers of other faiths and none. Such materials as these raise interest in the Catholic faith, the Society’s apostolate and gain new supporters, enabling the Society to continue its charitable work.

In setting the Society’s objectives and planning its activities, the trustees have given consideration to the Charity Commission’s guidance on public benefit.

Achievements and performance

Publishing

2020 was a very busy year for CTS’s activity as Publisher to the Holy See and included Pope Francis’s third Encyclical ‘Fratelli Tutti’ and the Holy Father’s Post Synodal Apostolic Exhortation, ‘Querida Amazonia’ among other documents.

CTS was also entrusted for the first time in a generation with the task of producing the official translation of the ‘Directory for Catechesis’ on behalf of the Vatican. This was done very quickly and accurately and the translation has gone on to be used in the USA, Australia, Philippines and Nigeria.

Due to the pandemic, CTS’s publishing activities had to be adapted through the year in response to the changing situation and needs of its benefactors

A new paperback format has been developed for publications that will be more attractive to online trade and individual purchasers to respond to the requirements of a post-covid business model 2020 began with much anticipation for the ‘Year of the Word: A God Who Speaks’ announced by the Bishops Conference of England and Wales to coincide with the 800th anniversary of the death of St Jerome and run for most of 2020. Dom Henry Wansbrough’s ‘A Year with the Bible’ was followed by a very accessible leaflet on the Year of the Word and Pope Francis’s Apostolic letter ‘Scripturae Sacrae Affectus’. However, many events relating to the Year of the Word were curtailed or cancelled, and therefore so was the publishing schedule designed to accompany it.

Several titles were produced for children preparing for First Holy Communion and young people of Confirmation age. These included a timely title on the Church year for children which included activities to be done in the family, something which came into its own during lockdown as families looked for ways to continue the practice of their faith without the usual support of their parish or Catholic school.

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Report of the trustees 31 December 2020

Achievements and performance (continued)

Publishing (continued)

The Charity produced a new title on the relationship between faith and mental health, which was especially relevant to people struggling with the effects of lockdown and the pandemic more generally on their sense of wellbeing. It also commissioned a text for publication in early 2021 on understanding from the perspective of faith.

CTS provided materials, suggestions and instructions for home liturgies and devotions to be practised in the family throughout the year. Many resources were provided for free through our website, and promoted on social media, to help the Catholic community remain in touch with the practise of the faith during the pandemic.

In 2020 CTS sold and distributed over 128,000 publications.

CTS has renewed its activities in the USA through a partnership with the Augustine Institute and plans to build on this in future.

Organisation

CTS was able to transition to remote working in March 2020 with minimal disruption in service to customers and parishes. Essential staff were able to continue working in a Covid Secure environment and the office in Vauxhall is ready to welcome back staff when regulations allow.

Fundraising

In response to the impact restrictions on public worship, and the fact that many were unable to return to church in person due to the need to shield themselves from any possible exposure, or because they were caring for a vulnerable person, CTS provided over 3,000 copies of the 2021 Sunday Missal at cost price so that the Sunday readings could be followed during Masses streaming online or in the course of private or family prayer and reflection.

For the first time, the Charity successfully raised funds exclusively via social media for a project to provide prisoners with the CTS calendar for 2021. This will be repeated in the future for suitable project-based fundraising.

CTS received £102,866 (2019 – £314,674) in voluntary income including several small legacies. The Advent Appeal was monitored in detail and provided a return on investment (ROI) on the higher end of what is expected for Direct Mail campaigns.

Coronavirus pandemic

The global pandemic presented key opportunities in the Charity’s central apostolate. Many individuals purchased directly from CTS in the absence of the ability to purchase materials from their parishes, which meant sales to individuals have increased. CTS books have been of great value to people in maintaining their devotional and liturgical life in lockdown, and the charity sought to further support its benefactors with several new publications specifically addressing the challenges of the global pandemic. Social media has also proved vital to maintaining the faith in this time and CTS has seen significantly higher engagements with its social media output.

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Report of the trustees 31 December 2020

Achievements and performance (continued)

Coronavirus pandemic (continued)

CTS has shifted its editorial and production capacity to longer term projects and invested time conserving its cash reserves by delaying new publications and reprints. The Charity has concentrated on maintaining cashflow by improving credit control and concentrating efforts on filing prompt claims for Gift Aid and VAT; staffing needs have been kept under review in the light of the Government’s Coronavirus Job Retention Scheme. The Charity is in a good position regarding liquidity, but in the light of the current pandemic-related slump, the Charity’s cash reserves will be monitored closely.

As for virtually all organisations in the UK, this single greatest impact on the mission and financial performance of CTS in 2020 was the COVID-19 pandemic, particularly the restrictive measures introduced by the government to contain and mitigate its effects. Following a positive beginning to the first quarter of the year, CTS felt the effects of lockdown and other control measures as soon as they were implemented.

Internally, CTS was well prepared to move to remote working for all employees without any interruption to all its services. Sales and distribution operations have continued seamlessly and a number of urgent publications have been produced under lockdown.

The COVID-19 crisis has had a significant negative effect on trade sales due to the closure of bookshops, of book distributors and the downgrading of book sales by online retailers such as Amazon. Whilst many publishers experienced notable surges in online sales during the first lockdown, and whilst a segment of the charity’s online distribution remained strong, overall sales were deeply impacted because of the centrality of the Catholic parishes in the UK to CTS’s mission.

In March, 2020 public communal worship was suppressed in the UK and throughout much of the world for the first time in living memory, indeed for the first time since CTS was founded. This meant that for a period of time Catholic parishes were essentially closed and, following that, open only for private prayer with strict limitations on the number of people permitted and how they could use the space. The Society has traditionally distributed many of its publications through sales racks in Catholic parishes, which are stocked with CTS books, leaflets, and prayer cards by the parishes, giving Catholic parishioners and any other visitors to the parishes easy access to the resources the charity publishes. However, when the parishes reopened for private prayer, and later for public communal worship, at the specific instruction of the Catholic Bishops of England and Wales, parishes were advised to remove CTS sales racks or remove the publications from them. This was done in order to reduce transmission of COVID-19 as it was considered difficult or impossible to ensure that browsed items could be identified and sanitised. This meant that after lockdown began CTS sales from parish racks dropped by 100%, and due to continuing restrictions, did not recover.

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Report of the trustees 31 December 2020

Achievements and performance (continued)

Coronavirus pandemic (continued)

In addition to ordering for the sales racks, Catholic parishes are key benefactors of the Charity in that they will often purchase resources in bulk for parish activities, particularly catechesis and sacramental formation (i.e. Confirmation and the Rite of Christian Initiation of Adults). During lockdown most parishes halted all of these activities, which meant that they did not need the resources to run them. This resulted in significant drops in the sales of some key CTS publications, particularly in our YouCat and Evangelium lines, and also in products related to parish-based sacramental formation and initiation, such as certificates and items purchased as gifts for the newly baptised, first holy communicants, and confirmandi. The Charity anticipates that these sales will recover strongly as parishes catch up on the sacramental initiation that was paused during lockdown and recommence their regular schedules, but the effect in 2020 on parish restrictions was on the whole unavoidably negative.

The trustees acknowledge that there will be challenges that lie ahead as a result of the pandemic. However, they believe that the Charity will be able to withstand these from a financial perspective and hence that it is appropriate for the Charity to prepare its financial statements on a going concern basis.

Financial report for the year

Results for the year

Total income for the year amounted to £858,633 (2019 – £1,449,567). Publishing sales during 2020 amounted to £733,556 (2019 – £1,124,995). Also included within income are legacies receivable amounting to £23,890 (2019 – £221,597); included in the 2019 figure was one large legacy of £137,649. Total income from donations and legacies for the year was £102,866 (2019 – £314,674).

Total expenditure amounted to £1,024,038 (2019 – £1,357,834). Expenditure for 2019 included a number of one-off restructuring costs including staff restructuring costs, which amounted to £15,258.

The deficit for the year, before actuarial movements on the defined benefit pension scheme liability, was £165,405 (2019 – a surplus of £91,733).

Reserves policy

An important feature of the Society’s work and charitable aims is that in pursuing its religious publishing, distribution and retailing it must engage directly in trading activities, which involve not insignificant elements of risk. The Society uses what trading income and non-trading income it receives to further its charitable activities.

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Report of the trustees 31 December 2020

Financial report for the year (continued)

Reserves policy (continued)

Planning permission for the latest redevelopment plans for St Anne’s Settlement has been submitted and vacant possession is required in Q2 of 2022. CTS will relocate in January 2022 with an option in place for CTS to return to the building when it has been completed. Designated funds for this relocation of £75,000 (2019 – £150,000) have been set aside for this purpose.

The Society’s reserves policy aims to strike a balance between having sufficient funds to pursue vigorously its charitable objective of publishing and distributing good Catholic resources on the one hand, and the need to maintain some kind of provision against unforeseen misfortune, on the other. The trustees are of the opinion that the size of such a buffer should be approximately equal to at least three months’ unrestricted cash expenditure.

Financial position

The balance sheet shows total funds of £386,750 (2019 – £805,155).

Funds restricted to specific purposes amounted to £16,819 (2019 – £17,282).

Funds totalling £75,000 (2019 – £300,000) have been designated, or set aside, by the trustees for specific purposes. These purposes and an analysis of the movements on the funds are set out in note 14 to the financial statements.

General funds of the Charity at 31 December 2020 were £835,931 (2019 – £859,873). Offset against general funds is a pension reserve of £541,000 (2019 – £372,000). At 31 December 2020 the Charity had ‘free reserves’ of £819,393 (2019 – £825,773) being the unrestricted general funds after deducting the net book value of tangible fixed assets i.e. £16,538 (2019 – £34,100).

The level of free reserves meets the desired buffer as described in the reserves policy above. However, the trustees will remain vigilant, especially during the current crisis, managing cash flow, reserves and expenditure on print and other capital projects to mitigate the impact of the reduction in orders.

Plans for the future

The Bishops Conference of England and Wales has officially announced the appointment of the CTS as publishers of the Revised Lectionary that is planned for 2022. This is an even larger project than the 2011 Missal and is an exciting challenge for the Society and its staff. This will involve CTS in considerable preparatory work and investment of time in 2021, but presents a great opportunity to provide significant volumes of high quality new publications to the Catholic community in England and Wales. The new lectionary will affect a significant proportion of the CTS’s backlist and in the interim reprint decisions will have to be made with caution.

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Report of the trustees 31 December 2020

Plans for the future (continued)

CTS is also working on a substantial series related to the new Directory for Catechesis comprising subject-specific guides for use by lay catechists, parish priests, parents, and Catholic school teachers involved in sacramental preparation, faith formation, or any other species of catechesis. It will include many topics of broad interest and relevance, including the role of social media and digital resources in catechesis and passing on the Catholic faith in family life, as well as topics of more specific concern, such as First Holy Communion catechesis. This series is being developed and written in collaboration with the Franciscan University Catechetical Institute (Steubenville) and Our Sunday Visitor. We anticipate publication beginning in 2021 and continuing through 2022 or 2023.

Coronavirus

Remote working has been undertaken across the board at CTS as wellbeing and health of all staff has been the Society’s highest priority. The IT systems have been adapted to this new way of working and have settled into a reliable and stable system. Future upgrades are planned in 2021 to maintain seamless remote working, data security and reliable connections.

The pandemic has been an opportunity to further rationalise supplier contracts and make cost-savings based on new ways of working.

Direct sales have been an increasingly important sales channel this year. This has meant significant investment of time and effort into our Social Media output and our website. The number of Social media engagements has grown significantly through the year as has our email list. All publications are now available to preview on our website and we have undertaken a full review of our ebook offerings to ensure that all files are up to date and being offered across the major platforms.

Governance, structure and management

Governance

The company, which is limited by guarantee (Company Registration No. 00057374 (England and Wales) ), is registered for charitable purposes with the Charity Commission (Charity Registration No. 218951).

The trustees are the directors of the Society for the purposes of company law.

The Trustee Management Board is currently made up of the Chairman and six members and meets quarterly to review the activities of the Society; the meetings were also attended by the CEO and Publisher. The trustees review up to date management accounts and business plans. They regularly receive a management report from the CEO and Publisher on progress in key areas of the Society’s apostolate, principally publishing, distribution, fundraising, and (whilst it was open) the retail bookshop. Progress is monitored against an annual plan containing key objectives, activities and targets. The trustees periodically review staffing, training, the Society’s risk register, pension provisions and liabilities, as well as major strategic projects requiring significant investment or otherwise central to the apostolate.

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Report of the trustees 31 December 2020

Governance, structure and management (continued)

Governance (continued)

A sub-committee reviews salary proposals made by the CEO and Publisher each year. The process is informed by the Society’s own salary review policy, performance management process and comparative data from the voluntary and private sectors.

Each trustee has responsibility for monitoring the Charity’s activities in specific areas and the skills mix of the members is reviewed regularly to ensure that the trustees have all the necessary skills and experience required to support the management team and the Charity’s best development.

New trustees are appointed by the existing Trustees after a formal recruitment process, supplemented by consultation with their advisers and the Catholic community. Thereafter, a candidate is invited to attend up to two Trustees’ meetings to gain knowledge of the Society’s work and the level of commitment and expertise it requires. Following this, the Trustees may confirm the appointment, which is initially for a term of three years. Members may be reappointed for further terms. Trustees bring their own considerable professional experience and relevant skill sets for the benefit of the Society. Information on trustee responsibilities, made available for example by the Charity Commission, is circulated from time to time to the trustees.

The following trustees were in office during the year ended 31 December 2020:

Trustee Appointed/ Resigned
Rt Rev. Paul Hendricks (Chairman)
Rev. David Elliott Appointed 21 January 2020
Mrs Carrie Ann Gates
Mrs Kate Nash
Dr William O’Neill
Mr Luke Parsons QC
Rev. Dr Andrew Pinsent

Company secretary Mr Pierpaolo Finaldi

No trustee received any remuneration in respect of their services as a trustee during the year (2019 – £nil). Three trustees received reimbursement of out-of-pocket expenses which amounted to £83 (2019 – £2,436 to two trustees). One trustee received commission of £1,200 (2019 – £nil) in respect of books written for CTS prior to becoming a trustee.

No trustee had any beneficial interest in any contract with the Charity during the year.

Brief biographical details of each of the trustees who served during the year are given below.

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Report of the trustees 31 December 2020

Governance, structure and management (continued)

Governance (continued)

Rt Rev. Paul Hendricks (Chairman), MA (Oxon), PhL; is a Roman Catholic Bishop, a former Seminary Bursar, and former Parish Priest with several years’ experience of overseeing parish finances.

Rev. David Elliott is a priest of the Ordinariate of Our Lady of Walsingham, Priest for the Reading Ordinariate Mission and the Head of Theology at The Oratory School.

Carrie Ann Gates (Treasurer), is a finance manager specialising in insurance accounting with many years’ experience in financial and management controls, planning and reporting. She is very active in a local Catholic parish and an enthusiastic member of Girlguiding as a multi-sectional leader and division commissioner.

Kate Nash is experienced in market research, marketing and public relations. She was formerly head of marketing and communications for a dot com; a co-director of an innovative marketing and publicity company for UK publishers; and a published novelist. In 2009 she founded the Kate Nash Literary Agency which represents the careers of bestselling authors as well as new talent.

Dr William O’Neill was educated in Manchester and Loughborough. He is a graduate of a number of Universities and has a PhD in Software Engineering. He has worked for large multinationals, public and charity sectors leading IT and business change programmes, most recently as Chief Technology Officer for the National Childbirth Trust.

Luke Parsons QC is a barrister specialising in Commercial Law.

Rev. Andrew Pinsent is a Research Fellow of Harris Manchester College, Research Director of the Ian Ramsey Centre for Science and Religion at Oxford University. A philosopher, theologian, priest, former businessman and former high energy physicist at CERN, he is a contributor via the media and his work in schools to public engagement with science, faith and the big questions of life.

Trustees’ responsibilities statement

The Charity’s trustees (who are also directors for the purposes of company law) is responsible for preparing the annual report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law 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 income and expenditure of the Charity for that period.

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

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Report of the trustees 31 December 2020

Governance, structure and management (continued)

Trustees’ responsibilities statement (continued)

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. 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.

Each of the trustees confirms that:

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

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

Liability of the members

The liability of the members is limited by guarantee. In the event of the company being wound up during the period of membership or within the year following, members are each required to contribute an amount not exceeding £1.

Organisational structure

The CEO and Publisher has responsibility for the day to day management of the Society’s business and reports to the trustees formally every quarter.

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Report of the trustees 31 December 2020

Governance, structure and management (continued)

Key management personnel

The Society’s staff operate in dedicated teams responsible across the principal functions of the Society’s apostolate; they meet regularly with their managers to ensure that key targets and objectives are being met.

The trustees monitor the Charity’s activities in operational areas and constant regard is had to the skills mix to ensure that the trustees have all the necessary skills required to contribute to the Charity’s development.

The key management personnel of the Society, responsible for directing and controlling, running and operating the Charity on a day to day basis, comprise the trustees together with the CEO and Publisher. The Trustees do not receive remuneration for their services as trustees.

The trustees set the remuneration of and determine any annual salary awards for the CEO and Publisher. Reference is made to remuneration for similar roles in the charity and private sectors, the level of responsibilities and skills attaching to the role, and the role itself in relation to other similar and different roles within the organisation. Regard may also be had to the annual job role performance review and to the particular standards, expectations and outcomes for the role. Finally, the overall financial performance of the Society is also considered in setting remuneration.

Employees

The Incorporated Catholic Truth Society strives to be an equal opportunities employer and applies objective criteria to assess merit. It aims to ensure that no job applicant or employee receives less favourable treatment on the grounds of age, race, colour, nationality, religion, ethnic or national origin, gender, marital status, sexual orientation or disability.

Selection criteria and procedures are reviewed to ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities. All employees are given equal opportunity and, where appropriate and possible, special training to enable them to progress both within and outside the organisation. The Incorporated Catholic Truth Society is committed to a programme of action to make this policy effective and brings it to the attention of all employees.

Volunteers

Over 500 volunteers manage CTS parish racks in parishes and other locations up and down the country, introducing enquirers and parishioners to material to support and nurture their faith. It is impossible to quantify the value and the full impact of this support, not only in parishes but also in schools. A lively and active parish bookrack can become a unique support to parish priests and pastoral workers in their outreach programs. We are always grateful to that small number of volunteers who help us on an ad hoc basis at various times in the year at our offices or warehouse on small but important projects and support.

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Report of the trustees 31 December 2020

Governance, structure and management (continued)

Risk management

The trustees continue to assess the major risks to which the Charity is exposed, in particular those relating to the specific operational areas and finances.

The current areas under review are:

The trustees believe that by monitoring reserve levels, by ensuring controls exist over key financial systems and that where necessary they are adapted or strengthened, and by examining the operational and business risks faced by the Charity, they have established effective systems to mitigate those risks.

Signed on behalf of the trustees:

Carrie Ann Gates Trustee Approved on: 9th August 2021

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Independent auditor’s report 31 December 2020

Independent auditor’s report to the members of The Incorporated Catholic Truth Society

Opinion

We have audited the financial statements of The Incorporated Catholic Truth Society (the ‘charitable company’) for the year ended 31 December 2020 which comprise the statement of financial activities, the balance sheet, the statement of cash flows, the principal accounting policies and the notes to the financial statements. 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).

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 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 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.

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 charitable company 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.

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Independent auditor’s report 31 December 2020

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 directors with respect to going concern are described in the relevant sections of this report.

Other information

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

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

We have nothing to report in this regard.

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 charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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Independent auditor’s report 31 December 2020

Matters on which we are required to report by exception (continued)

Trustees’ responsibilities

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors for the purposes 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 charitable company’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 has 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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

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Independent auditor’s report 31 December 2020

Auditor’s responsibilities for the audit of the financial statements (continued)

We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

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Independent auditor’s report 31 December 2020

Auditor’s responsibilities for the audit of the financial statements (continued)

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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 this report

This report is made solely to the charitable company’s trustees, 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 trustees those matters that 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 charitable company’s and the company’s trustees as a body, for our audit work, or the opinions we have formed.

Amanda Francis (Senior Statutory Auditor) 27 August 2021 For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

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Statement of financial activities (including and income and expenditure account) Year to 31 December 2020

Notes
Unrestricted
funds
£		 Restricted
funds
£		 Total
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Total
2019
£
Income from:
Donations and legacies
1
Interest receivable
Charitable activities
. Publication sales
2
Other sources:
. Coronavirus Job Retention
Scheme grants
Total income
Expenditure on:
Raising funds
3
Charitable activities
. Publication and dissemination of
Catholic publications
4
Total expenditure
Net (expenditure) income
Actuarial losses on defined
benefit pension scheme
17
Net movement in funds
6
Reconciliation of funds:
Total funds brought forward at
1 January 2020
Total funds carried forward at
31 December 2020
102,154
21,056

733,556
1,155		 712
—
—
—		 102,866
21,056
733,556
1,155		 313,549
9,898
1,124,995
—		 1,125
—
—
—		 314,674
9,898
1,124,995
—
857,921 712 858,633 1,448,442 1,125 1,449,567

8,279

1,014,584		 —
1,175		 8,279
1,015,759		 42,638
1,315,196		 —
—		 42,638
1,315,196
1,022,863 1,175 1,024,038 1,357,834 — 1,357,834
(164,942)

(253,000)		 (463)
—
(165,405)
**(253,000) **		 90,608
(244,000)		 1,125
—		 91,733
(244,000)

(417,942)
787,873		 (463)
17,282
(418,405)
805,155		 (153,392)
941,265		 1,125
16,157		 (152,267)
957,422
369,931 16,819 386,750 787,873 17,282 805,155

There were no recognised gains and losses other than those set out in the statement of financial activities above.

The Incorporated Catholic Truth Society 19

Statement of financial activities (including and income and expenditure account) Year to 31 December 2020

Analysis of continuing and discontinued operations

On 11 October 2018, the trustees unanimously agreed that the activities of the Westminster retail shop would be terminated due to continuing losses and the lease renewal due in June 2019. The shop’s activities represented a significant area of operations for the Charity as a whole and income and expenditure in respect to them ceased in July 2019. The table below provides an analysis of the financial results split between the Charity’s continuing operations and discontinued operations during 2019 (which relate wholly to the Westminster retail shop). Income and expenditure in respect to the discontinued operations were wholly unrestricted. All of the Charity’s activities during the year ended 31 December 2020 derived from continuing operations.

2020 2019
Continuing
£		 Dis-
continued
£		 Total
£		 Continuing
£		 Dis-
continued
£		 Total
£
Income
Expenditure
Net income for the year
Actuarial losses on defined
benefit pension scheme
Net movement in funds		 —
—		 —
—		 —
—		 1,428,830
(1,345,181)		 20,737
(12,653)		 1,449,567
(1,357,834)
—
—		 —
—		 —
—		 83,649
(244,000)		 8,084
—		 (91,733)
(244,000)
— — — (160,351) 8,084 (152,267)

The Incorporated Catholic Truth Society 20

Balance sheet 31 December 2020

Notes
2020
£		 2020
£		 2019
£		 2019
£
Fixed assets
Tangible assets
9
Current assets
Stocks
10
Debtors
11
Short term deposits
Cash at bank and in hand
Creditors: amounts falling due
within one year
12
Net current assets
Total net assets excluding
pension liability
Pension liability
17
Total net assets including
pension liability
The funds of the Charity
Restricted funds
13
Unrestricted funds
. Designated funds
14
. General funds
. Pension reserve
17

143,853

86,346
869,575
9,214		 16,538
911,212		 136,911
208,630
959,280
9,582		 34,100
1,143,055
1,108,988

(197,776)		 1,314,403
(171,348)



835,931

(541,000)		 859,873
(372,000)
927,750
(541,000)		 1,177,155
(372,000)
386,750 805,155
16,819
75,000
294,931		 17,282
300,000
487,873
386,750 805,155

Approved by the trustees

and signed on their behalf by: Carrie Ann Gates Trustee

Approved on: 9th August 2021

The Incorporated Catholic Truth Society Company Registration Number: 00057374 (England and Wales)

The Incorporated Catholic Truth Society 21

Statement of cash flows Year to 31 December 2020

Notes
2020
£		 2019
£
Cash flows from operating activities:
Net cash used in operating activities
A
Cash flows from investing activities:
Interest received
Purchase of tangible fixed assets
Net cash provided by (used in) investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at 1 January 2020
B
Cash and cash equivalents at 31 December 2020
B
(113,375)		 (32,331)
21,056
(1,459)		 9,898
(11,000)
19,597 (1,102)
(93,778)

968,862		 (33,433)
1,002,295

875,084		 968,862

Notes to the statement of cash flows for the year to 31 December 2020.

A Reconciliation of net movement in funds to net cash used in operating activities

2020
£		 2019
£
Net movement in funds (as per the statement of financial activities)
Adjustments for:
Depreciation charge
Actuarial losses on pension scheme
Pension cost less contributions payable
Pension finance cost
Interest receivable
(Increase) decrease in stocks
Decrease in debtors
Increase (decrease) in creditors
Net cash used in operating activities		 (418,405)
19,021
253,000
(91,000)
7,000
(21,056)
(6,942)
122,284
22,723		 (152,267)
16,814
244,000
(237,000)
7,000
(9,898)
142,592
228,571
(272,143)
(113,375) (32,331)

B Analysis of changes in net debt

Analysis of changes in net debt
At 1
Janua
Cash flows
£
9,582
(368)
959,280
(89,705)
—
(3,705)
968,862
(93,778)		 At 31
December
2020
£
Cash at bank and in hand
Short term deposits
Bank overdraft facility		 9,582
959,280
—		 (368)
(89,705)
(3,705)		 9,214
869,575
(3,705)
968,862 (93,778) 875,084

The Incorporated Catholic Truth Society 22

Principal accounting policies 31 December 2020

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

Basis of accounting

These financial statements have been prepared for the year to 31 December 2020 with comparative information given in respect to the year ended 31 December 2019.

The financial statements have been prepared under the historical cost convention with items initially recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these financial statements.

The financial statements have been prepared in accordance with 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 (Charities FRS 102 SORP 2015), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest pound.

Critical accounting estimates and areas of judgement

The most significant areas of adjustment and key assumptions that affect items in the financial statements are in respect to:

With respect to the next reporting period, the actuarial valuation of the pension scheme, along with the future impact of the ongoing Coronavirus pandemic remain the most significant areas of uncertainty that may affect the carrying value of assets held by the Charity.

The Incorporated Catholic Truth Society 23

Principal accounting policies 31 December 2020

Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of at least one year from the date of approval of these financial statements.

The Coronavirus pandemic has had a significant negative effect on trade sales due to the closure of bookshops, of book distributors and the downgrading of book sales by online retailers such as Amazon. The other main sources of CTS sales, Catholic Parishes, have also been closed to the public, reducing sales very significantly. However, CTS has shifted its editorial and production capacity to longer term projects and invested time conserving its cash reserves by delaying new publications and reprints. The Charity has concentrated on maintaining cashflow by improving credit control and concentrating efforts on filing prompt claims for Gift Aid and VAT; staffing needs have been kept under review in the light of the Government’s Coronavirus Job Retention Scheme. Additionally, CTS has increased the number of titles it offers through Amazon by 500% to take advantage of the increased internet searches for Catholic materials available for delivery. It has also reviewed its e-book offerings and resumed production of e-books across all platforms.

Reserves will be protected by simplifying the range of high cost items in the short term, and work will continue on projects which will see a return in the longer-term as the Catholic liturgical landscape evolves.

Therefore, the trustees are of the opinion that the Charity has planned carefully in order to meet its liabilities as they fall due and, whilst they acknowledge that there will be challenges ahead, they are of the opinion that the use of the going concern assumption in the preparation of these financial statements is appropriate.

Income recognition

Income is recognised in the period in which the Charity is entitled to receipt, the amount can be measured reliably and it is probable that the income will be received. Income is deferred only when the Charity has to fulfil conditions before becoming entitled to it or where the donor or funder has specified that the income is to be expended in a future accounting period.

Income comprises donations, legacies, interest receivable, and income from the sale of publications.

Donations are recognised when the Charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the Charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the Charity and it is probable that those conditions will be fulfilled in the reporting period.

The Incorporated Catholic Truth Society 24

Principal accounting policies 31 December 2020

Income recognition (continued)

In accordance with the Charities SORP FRS 102 volunteer time is not recognised.

Legacies are included in the statement of financial activities when the Charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the Charity.

Entitlement is taken as the earlier of the date on which either: the Charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the Charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the Charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the Charity, or the Charity is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material. In the event that the gift is in the form of an asset other than cash or a financial asset traded on a recognised stock exchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonable accuracy and the title of the asset having being transferred to the Charity.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity; this is normally upon notification of the interest paid of payable by the bank.

Income from publication sales is recognised when the significant risks and rewards of ownership have transferred to the buyer. This is usually at the point of sale. This includes sales of publications to schools and parishes who benefit from reduced prices.

Income from the Coronavirus Job Retention Scheme is credited to the statement of financial activities when the Charity is entitled to receive the funds and when the amount receivable can be quantified.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings. The classification between activities is as follows:

The Incorporated Catholic Truth Society 25

Principal accounting policies 31 December 2020

Expenditure recognition (continued)

Allocation of support and governance costs

Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the Charity it is necessary to provide support in the form of personnel development, financial procedures, provision of office services and equipment and a suitable working environment.

Governance costs comprise the costs involving the public accountability of the Charity (including audit costs) and costs in respect to its compliance with regulation and good practice.

Staff costs are allocated between expenditure on raising funds and expenditure on charitable activity based on the percentage of time spent on these activities by the employees of the Charity.

Support and governance costs are allocated to expenditure on charitable activities as it is considered that any apportionment to expenditure on raising funds would be immaterial.

Tangible fixed assets

All assets costing in excess of £500 and with an estimated useful life exceeding one year are capitalised in these financial statements.

Depreciation is provided at the following annual rates on a straight line basis in order to write off each asset over its estimated useful life:

Stocks

Stocks of books and pamphlets for resale are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving stock.

Debtors

Debtors are recognised at their settlement amount, less any provision for nonrecoverability. Prepayments are valued at the amount prepaid. Debtors have been discounted to the present value of the future cash receipt where such discounting is material.

The Incorporated Catholic Truth Society 26

Principal accounting policies 31 December 2020

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits. Cash placed on deposit for more than one year is disclosed as a fixed asset investment.

Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the Charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

Fund structure

The general funds comprise those monies which may be used towards meeting the charitable objectives of the Charity and may be applied at the discretion of the trustees.

The pension reserve is the net liability on the Charity’s defined benefit pension scheme.

The designated funds are monies set aside out of general funds for specific purposes by the trustees.

Restricted funds comprise monies raised for, or their use restricted to, a specific purpose, or contributions subject to donor imposed conditions.

Leased assets

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the statement of financial activities on a straight-line basis over the lease term.

Pension costs

Contributions to defined contribution pension schemes and to employees’ personal pension plans are charged to the statement of financial activities in the year in which they are payable.

The Charity operates a defined benefit pension scheme which is closed to new members and no existing employees are members. The scheme is funded by contributions from the employer. Pension scheme assets are measured using market values. Pension scheme liabilities are measured using the projected unit actuarial method and are discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. Actuarial gains and losses are recognised in the statement of financial activities as part of other recognised gains and losses for the period.

The Incorporated Catholic Truth Society 27

Notes to the financial statements Year to 31 December 2020

1 Income from: Donations and legacies

Unrestricted
funds
£		 Restricted
funds
£		 Total
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Total
2019
£
Donations
Legacies		 78,264
23,890		 712
—		 78,976
23,890		 91,952
221,597		 1,125
—		 93,077
221,597
102,154 712 102,866 313,549 1,125 314,674

2 Income from: Publication sales

The publication sales are attributable to two main areas:

An analysis of publication sales for the year is given below:

United Kingdom United Kingdom Overseas Overseas Total Total
2020
£		 2019
£		 2020
£		 2019
£		 2020
£		 2019
£
Publishing
Retail shop		 598,102
—		 921,977
20,737		 135,454
—		 182,281
—		 733,556
**— **		 1,104,258
20,737
598,102 942,714 135,454 182,281 733,556 1,124,995

3 Expenditure on: Raising funds

Unrestricted
funds
£		 Restricted
funds
£		 Total
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Total
2019
£
Staff costs
Communications
Other costs		 2,585
5,694
—		 —
—
—		 2,585
5,694
—		 29,655
12,779
204		 —
—
—		 29,655
12,779
204
8,279 — 8,279 42,638 — 42,638

The Incorporated Catholic Truth Society 28

Notes to the financial statements Year to 31 December 2020

4 Expenditure on: Publication and dissemination of Catholic publications

Unrestricted
funds
£		 Restricted
funds
£		 Total
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Total
2019
£
Publishing
Cost of publication sales
Cost of despatch, shipping, and
storage
Advertising and marketing costs
Staff and related costs
Premises costs
Communications
Computer costs
Depreciation
Banking and other costs
Professional fees
Auditor’s remuneration
Operation of retail shop
Cost of retail shop sales
Cost of despatch, shipping, and
storage
Premises costs
Communications
Computer costs
Banking and other costs
Professional fees		 275,427
117,732
18,295
426,209
30,992
7,921
76,536
19,021
9,659
5,992
26,800		 —
—
1,175
—
—
—
—
—
—
—
—		 275,427
117,732
19,470
426,209
30,992
7,921
76,536
19,021
9,659
5,992
26,800		 364,922
168,792
24,913
549,627
36,221
7,629
82,187
16,814
22,951
9,018
19,469		 —
—
—
—
—
—
—
—
—
—
—		 364,922
168,792
24,913
549,627
36,221
7,629
82,187
16,814
22,951
9,018
19,469
1,014,584 1,175 1,015,759 1,302,543 — 1,302,543
—
—
—
—
—
—
—		 —
—
—
—
—
—
—		 —
—
—
—
—
—
—		 13,353
(145)
(1,879)
149
(140)
(67)
1,382		 —
—
—
—
—
—
—		 13,353
(145)
(1,879)
149
(140)
(67)
1,382
— — — 12,653 — 12,653
1,014,584 1,175 1,015,759 1,315,196 — 1,315,196

5 Governance costs

Governance costs
Unrestricted
funds
£		 Restricted
funds
£		 Total
2020
£		 Unrestricted
funds
£		 Restricted
funds
£		 Total
2019
£
Professional fees
Auditor’s remuneration		 5,992

26,800		 —
—		 5,992
26,800		 9,018
19,469		 —
—		 9,018
19,469
32,792 — 32,792 28,487 — 28,487

6 Net movement in funds

This is stated after charging:

Total
2020
£		 Total
2019
£
Staff costs (note 7a)
Auditor’s remuneration
. Current year audit fee
. Under (over) provision in prior period
. Pension scheme audit fee
Depreciation
Operatinglease rentals		 428,794
21,000
3,100
2,700
19,021
14,908		 579,282
18,000
(1,178)
2,647
16,814
15,066

The Incorporated Catholic Truth Society 29

Notes to the financial statements Year to 31 December 2020

7a Employee and key management remuneration

Employee and key management remuneration
Total
2020
£		 Total
2019
£
Staff costs during the year were as follows:
Wages and salaries
Social security costs
Other pension costs
Redundancies
Other staff costs
Staff costs per function were as follows:
Costs of generating voluntary income
Publishing
Operation of a retail shop		 353,290
23,746
51,124
—
634		 467,256
39,767
48,800
15,258
8,201
428,794 579,282
2,585
426,209
—		 29,655
548,627
—
428,794 579,282

One employee earned between £60,000 and £70,000 (including taxable benefits but excluding employer’s pension contributions) during the year (2019 – none).

Contributions of £4,235 (2019 – £nil) were made to the personal pension schemes of higher paid members of staff during the year.

The average number of employees, analysed by function, was:

The average number of employees, analysed by function, was:
Average headcount
2020 2019
Fundraising
Publishing		 —
11		 1
12
11 13

Key management personnel

Key management personnel comprise the trustees and the CEO and Publisher. The total remuneration (including taxable benefits and employer’s national insurance contributions) payable to key management personnel during the year was £99,512 (2019 – £113,510).

7b Trustees’ remuneration

No trustee received any remuneration in respect of their services as a trustee during the year (2019 – £nil). Three trustees received reimbursement of out-of-pocket expenses which amounted to £83 (2019 – £2,436 to two trustees). One trustee received commission of £1,200 (2019 – £nil) in respect of books written for CTS prior to becoming a trustee.

8 Taxation

The Incorporated Catholic Truth Society is a registered charity and therefore is not liable to income tax or corporation tax on income or gains derived from its charitable activities, as they fall within the various exemptions available to registered charities.

The Incorporated Catholic Truth Society 30

Notes to the financial statements Year to 31 December 2020

9 Tangible fixed assets

Computers
and office
equipment
£
Cost
At 1 January 2020
Additions
At 31 December 2020
Depreciation
At 1 January 2020
Charge for year
At 31 December 2020
Net book values
At 31 December 2020
At 31 December 2019		 64,910
1,459
66,369
30,810
19,021
49,831
16,538
34,100

10 Stocks

Stocks
2020
£		 2019
£
Publications for sale 143,853 136,911
Debtors 2020
£		 2019
£
Publication sales
Other debtors
Legacies receivable
Prepayments and other accrued income		 39,647
17,564
11,100
18,035		 65,878
38,893
83,927
19,932
86,346 208,630

11 Debtors

12 Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
2020
£		 2019
£
Expense creditors
Taxation and social security costs
Royalties
Other creditors
Accruals and deferred income
Bank overdraft		 62,413
6,058
47,500
—
78,100
3,705		 30,627
6,870
78,397
1,472
53,982
—
197,776 171,348

The Incorporated Catholic Truth Society 31

Notes to the financial statements Year to 31 December 2020

13 Restricted funds

Restricted funds
At 1
January
2020
£		 Income
£
712
—
712		 Expenditure
£
(1,175)
—
(1,175)
Expenditure
£
—
—
—		 Transfers
£
—
—
—
Transfers
£
—
—
—		 At 31
December
2020
£
Prisoners’ appeal
University fund appeal
Total restricted funds		 17,212
70		 16,749
70
17,282 16,819
At 1
January
2019
£		 Income
£
1,055
70
1,125		 At 31
December
2019
£
Prisoners’ appeal
University fund appeal
Total restricted funds		 16,157
—		 17,212
70
16,157 17,282

Since 2008, the Charity has on occasions made appeals to make some of its publications available to deserving or less fortunate groups. The Charity continues to consider such appeals desirable and helpful. Each year the Charity appeals for support to supply free CTS materials to Catholic University chaplaincies in the UK during freshers’ week. An appeal was launched during 2015 to make available Catholic resources in prisons and completed during the year ended 31 December 2016. Any unspent balances on this fund may be transferred to general funds due to the inclusion of a clause enabling the Society to apply any amount raised over and above that which was needed for its general purposes.

14 Designated funds

At 1
January
2020
£		 New
designations
£		 Utilised/
released
£
(75,000)
(150,000)
(225,000)
Utilised/
released
£
(100,000)
(641)
(100,641)		 At 31
December
2020
£
75,000
—
75,000
At 31
December
2019
£
150,000
150,000
300,000
Relocation fund
Transformation fund		 150,000
150,000		 —
—
300,000 —
At 1
January
2019
£		 New
designations
£
Relocation fund
Transformation fund		 250,000
108,641		 —
42,000
358,641 42,000

The Relocation Fund represents funds set aside towards a possible relocation of the Charity’s office premises.

The Transformation Fund has been put in place to allow the Charity to further improve its technology infrastructure and make working in new and more flexible ways more efficient and convenient in future.

The Incorporated Catholic Truth Society 32

Notes to the financial statements Year to 31 December 2020

15 Analysis of net assets (excluding pension liability) between funds

General
funds
£		 Designated
funds
£


Restricted
funds
£


Total
2020
£		 General
funds
£

Designated
funds
£		 Restricted
funds
£		 Total
2019
£
Fund balances at 31
December 2019 are
represented by:
Tangible fixed assets
Net current assets
Total net assets excluding
pension liability		 16,538
819,393		 —
75,000

16,819		 16,538

911,212		 34,100
825,773		 —

300,000		 —
17,282		 34,100
1,143,055
835,931 75,000 16,819
927,750		 859,873 300,000 17,282 1,177,155

16 Liability of members

The Charity is constituted as a company limited by guarantee. In the event of the Charity being wound up, members are each required to contribute an amount not exceeding £1.

17 Pension commitments

The Charity operates a pension scheme providing benefits based on final pensionable pay. The assets of the scheme are held independently from the Charity’s finances. The contributions are determined on the basis of triennial valuations by a qualified actuary using the projected unit method.

The scheme’s assets consist of a unitised with profits policy with Phoenix Life Group, an investment bond, annuity policies held in the name of the trustees and a bank account.

The value of the scheme’s assets (excluding the value of annuity policies held in the name of the trustees) as at 31 December 2020 was £852,000 (2019 – £1,281,000).

The Charity’s contributions to the scheme were £91,000 for the year (2019 – £237,000). The scheme is closed to new members and no existing employees are members.

Present values of scheme liabilities, fair value of assets and deficit

2020
£’000		 2019
£’000		 2018
£’000		 2017
£’000		 2016
£’000
Fair value of scheme assets
Present value of scheme
liabilities
Deficit in scheme		 852
(1,393)		 1,281
(1,653)		 1,032
(1,390)		 844
(1,492)		 1,284
(2,029)
(541) (372) (358) (648) (745)

Movement in deficit during the year

Movement in deficit during the year
2020
£’000		 2019
£’000
Deficit at 1 January 2020
Contributions
Net loss on scheme
Actuarial losses
Deficit at 31 December 2020		 (372)
91
(7)
(253)		 (358)
237
(7)
(244)
(541) (372)

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Notes to the financial statements Year to 31 December 2020

17 Pension commitments (continued)

Reconciliation of opening and closing balances of the fair value of scheme assets

2020
£’000		 2019
£’000
Fair value of assets at start of period
Expected return on scheme assets
Actuarial gains
Benefits paid
Contributions by the Society
Fair value of assets at end ofperiod		 1,281
22
(28)
(514)
91		 1,032
33
15
(36)
237
852 1,281

Reconciliation of opening and closing balances of the present value of scheme liabilities

liabilities
2020
£’000		 2019
£’000
Present value of liabilities at start of period
Interest cost
Actuarial losses
Benefits paid
Present value of liabilities at end ofperiod		 1,653
29
225
**(514) **		 1,390
40
259
(36)
1,393 1,653

The estimated value of the employer contributions for the year ending 31 December 2021 is £95,000 (2020 – £93,000).

Actuarial assumptions

A full actuarial valuation was carried out at 30 June 2014 and updated to 31 December 2017 by a qualified independent actuary. The major assumptions used by the actuary were:

2020 2019
2018
2.10%
2.9%
3.60%
3.7%
3.00%
3.2%		 2017 2016
Discount rate
Rate of increase in pensions in
payment for pensionable service from
6 April 1997
Inflation assumption (RPI)		 1.4%
3.6%
2.9%		 2.50%
3.70%
3.20%		 2.70%
3.70%
3.40%

The mortality assumptions adopted at 31 December 2020 imply the following life expectancies in years:

Currentpensioners Retiringin 20years
Males
Females		 23.0
24.9		 24.4
26.4

The Incorporated Catholic Truth Society 34

Notes to the financial statements Year to 31 December 2020

17 Pension commitments (continued)

The assets in the scheme and the expected rate of return

Value
at 31
December
2020
£’000		 Value
at 31
December
2019
£’000		 Value
at 31
December
2018
£’000
Assets
Equities
Bonds
Unitised with profits
Cash
Total market value of assets
Actuarial value of liability
Deficit		 102
20
552
178		 103
21
709
448		 91
18
715
208
852
(1,393)		 1,281
(1,653)		 1,032
(1,390)
(541) (372) (358)

No long term expected rate of return has been provided as for accounting periods beginning on or after 1 January 2015. The expected return and interest cost have been replaced with a single net interest cost.

Information in respect to statement of financial activities

Analysis of net return on pension scheme

2020
£’000		 2019
£’000
Net interest cost and net return (7) (7)

Amounts recognised as other gains and losses

Amounts recognised as other gains and losses
2020
£’000		 2019
£’000
Actual return less expected return on pension scheme assets
Change in financial and demographic assumptions underlying the
scheme assets
Actuarial losses recognised		 (28)
(225)		 15
(259)
(253) (244)

18 Related party transactions

Aside from the transactions disclosed in note 7b, one trustee made a donation of £5 to the charity in 2020 (2019 – none).

There were no other related party transactions requiring disclosure in the year (2019 – none).

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Notes to the financial statements Year to 31 December 2020

19 Leasing commitments

Operating leases

At 31 December 2020 the Charity had total commitments under non-cancellable operating leases as follows:

leases as follows:
Land and buildings Other
2020
£		 2019
£		 2020
£		 2019
£
Operating lease payments which expire:
Within oneyear		 11,550 11,500 3,358 3,773

The operating lease liabilities are subject to the terms of the agreements relating to the relevant land and buildings and other assets.

The Incorporated Catholic Truth Society 36