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2020-12-31-accounts

St Mary’s Priory Fernham Residual Fund

Annual Report and Accounts

31 December 2020

Charity Registration Number 229393

Contents

Reports

Reference and administrative information 1
Trustees’ report 3
Independent auditor’s report 12
Accounts
Statement of financial activities 17
Balance sheet 18
Statement of cash flows 19
Principal accounting policies 20
Notes to the accounts 25

St Mary’s Priory Fernham Residual Fund

Reference and administrative information

Trustees Rt Rev David Cuthbert Brogan - Visitor
Rev Dr Stephen David Morgan (from 3 June
2020)
Mother Winsome Angela Durrant (from 3
June 2020)
Rev Dom Brendan Patrick Creeden (from 3
June 2020)
Rev Dom Michal Dymitr Mycka (from 3 June
2020)
Eileen Joan Murdoch (to 3 June 2020)
Rt Rev Geoffrey Scott (to 3 June 2020)
Simon Joseph Lovett (to 3 June 2020)
Acurcio Carmo Robinson D’Souza Alves (to 3
June 2020)
Bursar Eileen Joan Murdoch (to 3 June 2020)
Rev Dom Michal Dymitr Mycka (from 3 June
2020)
Principal address Saint Michael's Abbey
280 Farnborough Road
Farnborough
Hampshire
GU14 7NQ
Charity registration number 229393
Auditor Buzzacott LLP
130 Wood Street
London
EC2V 6DL
Bankers The Royal Bank of Scotland plc
Dundee Broughty Ferry
5thFloor
Bath Street
Glasgow
G2 4RS

St Mary’s Priory Fernham Residual Fund 1

Reference and administrative information

Investment managers Rathbone Investment Management Limited
8 Finsbury Circus
London
EC2M 7AZ
Solicitors Irwin Mitchell LLP
Davidson House
Forbury Square
Reading
RG1 3EU

St Mary’s Priory Fernham Residual Fund 2

Trustees’ report 31 December 2020

The trustees present their report together with the accounts of St Mary’s Priory Fernham Residual Fund (the charity) for the year ended 31 December 2020.

The accounts have been prepared in accordance with the accounting policies set out on pages 20 to 24 of the attached accounts and comply with the charity’s trust deed, applicable laws and the requirements of Statement of Recommended Practice on 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) (effective 1 January 2019).

INTRODUCTION

The charity was created by a deed dated 16 May 1963 and was known, until 7 March 2003, as the Community of Benedictine Nuns of St Mary’s Priory. The deed was amended on 1 December 1998 by a Scheme of the Charity Commissioners. A further Deed of Variation, dated 7 March 2003, was accepted by the Charity Commissioners following a decision to close the house at Fernham and disperse the individual members of the Community to other locations. Under this latter Deed of Variation, although the Community did not cease to exist, it ceased to carry on or direct any charitable works as a Community. The trustees now hold the assets of the charity for such charitable purposes connected with the advancement of the Roman Catholic Religion as they decide.

OVERALL OBJECTIVES

The trustees aim to use the assets of the charity, and the income thereof, for the support of the members of the Community, the advancement of the religious and other charitable works of the individual members, and for the advancement of the Roman Catholic religion - primarily by giving grants. The trustees are mindful of the need for the charity to demonstrate that it provides public benefit and they have had regard to the general guidance on the provision of public benefit published by the Charity Commission.

ACTIVITIES, SPECIFIC OBJECTIVES AND RELEVANT POLICIES

Activities and specific objectives

The activities of the charity can be divided into two main areas: caring for the sole remaining member of the Community, including supporting her ministry, and the advancement of the Roman Catholic religion - primarily by giving grants.

The trustees are very aware that they have a moral and legal obligation to care for the one remaining member of the Community. The sister has no private income of her own as all earnings, gifts or donations, and pensions have been covenanted to the charity.

St Mary’s Priory Fernham Residual Fund 3

Trustees’ report 31 December 2020

ACTIVITIES, SPECIFIC OBJECTIVES AND RELEVANT POLICIES (continued)

Activities and specific objectives (continued)

Investment policy

The trustees agreed in 2003 that the assets of the charity would be invested with a view to producing a return to cover future charitable expenditure. The trustees reviewed their investment policy in 2019 and agreed that the investment objective is to achieve a balanced return from income and capital growth while accepting a moderate degree of risk consistent with the charity’s ethical investment policies.

There are no restrictions on the charity’s power to invest. However, the trustees have requested that the investment managers do not invest in any company whose primary business is concerned with the manufacture of armaments, tobacco, alcohol or any products which would be used in connection with contraception or abortion or whose primary business entails labour exploitation. The trustees have delegated discretionary powers of management to Rathbone Investment Management Limited. The portfolio is managed with a view to producing a balance between income and capital returns.

Grant making policy

The trustees give consideration to applications for grants in accordance with the provisions of the trust deed and application forms have been drawn up to assist this process objectively. The primary aim of any such grants would be, as stated in the trust deed, the advancement of the Roman Catholic religion and applicants are required to state how the purpose for which they make the request conforms to this objective. The trustees’ policy is to distribute excess income but this does not preclude, in exceptional cases, the expenditure of capital.

The trustees have continued the priorities which have always been those of the charity, namely the Subiaco-Cassinese Congregation English Province, the wider SubiacoCassinese Congregation, and the other Catholic causes.

The majority of the English Province monasteries are financially well-off. Rather than wait for applications for funds, the trustees have taken a pro-active approach, aiming in particular to focus on the historic Grade one and Grade two Listed buildings in the care of the Province. These restorations will be attentive to public access, health and safety, heating and lighting, wheelchair access, sounds systems etc., which are all of public benefit. The onus is on the Abbot Visitor to identify the needs and to assess the financial abilities of the various communities during his canonical visitations of the houses.

St Mary’s Priory Fernham Residual Fund 4

Trustees’ report 31 December 2020

ACTIVITIES, SPECIFIC OBJECTIVES AND RELEVANT POLICIES (continued)

Policy on receipt of donations and legacies

The charity aims to achieve best practice in the way in which it communicates with donors and other supporters. It protects donors’ data and never sells data, it never swaps data and ensures that communication preference can be changed at any time. The charity does not employ the services of professional fundraisers. The charity undertakes to react to and investigate any complaints regarding its approach to those who give it money and to learn from them. During the year, the charity received no such complaints.

ACHIEVEMENTS AND PERFORMANCE

Review of the activities

The trustees have in 2020 in accordance with public benefit considerations, supported causes with the following parameters:

The Trustees have a proactive policy to support the efforts of the Abbot Visitor of the English Province of the Subiaco-Cassinese Congregation of the Order of St Benedict to prioritise the needs of the English Province monasteries. The needs of the monasteries are assessed at each canonical visitation. Particular focus is given to the needs of the sick, improvement of buildings (especially the historic listed buildings within the province) and such matters of public benefit as access, safety, and public participation in the spiritual life of the monastic communities.

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Trustees’ report 31 December 2020

ACHIEVEMENTS AND PERFORMANCE

Review of the activities (continued)

The Subiaco-Cassinese Congregation English Province

£10,000 was granted to St Augustine’s Abbey, Chilworth towards the provision of a new suitable archive for the preservation of documents and artefacts relating to the history of the Abbey and its former school. The work carried out involved converting an old tool room into a new suitable archive and major renovation work was carried out.

£40,020 was awarded to the Benedictine Priory of the Holy Cross in Chicago, USA. This is a young community of the English Province whose main source of income is their bed and breakfast facility. This has greatly suffered due to the Covid crisis which has restricted people’s movement and affected the hospitality industry as a result. The award contributed to the subsistence of the monks.

The following grants were awarded to Empress Eugenie Memorial Trust (Realty). This is a trust that is associated with St Michael’s Abbey Charitable Trust, which maintains the Church, monastery and the properties of St Michael’s Abbey, Farnborough, referred to as Farnborough Abbey:

The Wider Subiaco-Cassinese Congregation.

A grant of £ 1,733 was made to the Subiaco-Cassinese Fund of the Subiaco-Cassinese Congregation for the support of monasteries in need.

General Roman Catholic causes

£25,000 was awarded to Farnborough Abbey towards the reprinting of The Monastic Diurnal. This volume permits the public to participate in the Benedictine cycle of daily prayer.

£139,020 was granted to the Abbey of St Cecilia in Trastevere in Rome. This grant to the Benedictine nuns at this ancient Christian site is for physical improvements to their conventual buildings as well as assisting them in their important work in education, especially in the area of Gregorian Chant.

£103,000 was awarded for the restoration of the historic Cavaillé-Coll organ at Farnborough Abbey.

St Mary’s Priory Fernham Residual Fund 6

Trustees’ report 31 December 2020

ACHIEVEMENTS AND PERFORMANCE

Review of the activities (continued)

Further details of the grants and donations payable during the year are included in note 4 to the attached accounts.

COVID-19

The Covid-19 pandemic has continued to shape and nature of the world. It has impacted not only the basic nature of social interactions but has also had a significant economic impact at every level in ways which have been outside of the charity’s control.

The full impact of the pandemic on the charity's income and expenditure and financial position following the emergence of the global Covid-19 pandemic is still not fully known. The charity’s income will no doubt continue to be affected because of the falls in income from listed investments as the corporate sector, in particular, has reacted to the pandemic by reducing dividend payments. In terms of expenditure, the trustees believe there may be an increase in demand for grants to assist with the impact of Covid-19. The trustees will continue to keep both income and expenditure under review.

During the current Covid-19 pandemic, the trustees continue to communicate with their investment managers and, whilst there are concerns over fluctuations in world stock markets, they acknowledge also that the charity is a long term investor. As such, the charity will be able to wait for markets to stabilise over time whilst the trustees keep a watching brief.

Whilst there will undoubtedly be challenges ahead, the trustees do not expect material concerns to arise over the charity’s immediate financial position.

FINANCIAL REVIEW

Income for the year was £235,026 (2019 – £436,350). Income comprises £227,821 (2019 – £281,685) from investments and £7,205 (2019 – £12,616) from pensions of individual religious received under Deed of Covenant and a donation of £nil (2019 - £1,030). The prior year’s income included a legacy of £139,019.

Expenditure totalled £732,947 compared to £244,889 in 2019. During the current year the living expenses of the one remaining member of the Community who lives alone were paid. During 2019, the cost of caring for the Community included the nursing care fees of one other sister who passed away during that year. Expenditure on grants and donations, excluding allocated support costs, totalled £627,177 as compared to £105,000 in the previous year. Further details of grants and donations are provided in note 4 to the attached accounts and in an earlier section of this report.

Net expenditure before investment gains for the year amounted to £497,921 (2019 – net income of £191,461). Investment gains totalled £22,690 (2019 – gains of £862,298) and the net expenditure for the year, therefore, amounted to £475,231 (2019 – net income of £1,053,759).

St Mary’s Priory Fernham Residual Fund 7

Trustees’ report 31 December 2020

FINANCIAL REVIEW (continued)

Investment performance

The charity has a portfolio of investments with a market value at 31 December 2020 of £8,692,811 (2019 – £9,028,918) including cash awaiting investment of £141,377 (2019 - £597,520).

During the year, the charity’s investments achieved an income yield of 2.67% (2019 – 3.25%) and a capital yield of 0.27% (2019 - 9.33%). The performance of the portfolio reflected the condition of the markets generally throughout the period. The investment managers continued to invest in accordance with the trustees’ investment policy set out earlier in this report and in compliance with the ethical guidelines given to them. Further details of the investment portfolio are included in note 10 to the attached accounts.

The trustees continue to take a long term view regarding investment strategy and believe their policy remains appropriate.

Reserves policy and financial position

Reserves policy

The trustees have examined the requirement for free reserves i.e. those unrestricted funds not invested in tangible fixed assets, designated for specific purposes or otherwise committed.

The trustees agreed in 2003 that the bulk of the sale proceeds of the Fernham property would be invested with a view to producing a return to cover the future charitable expenditure outlined above.

In addition, the objectives of the charity would outlive the last member of the Community and funds should be invested with this in mind, though the trustees have no intention in declaring these invested funds as permanent endowment, as they may wish to spend capital.

The trustees’ policy is to distribute excess income but this does not preclude, in exceptional cases, the expenditure of capital.

The trustees consider that, given the nature of the charity’s work, the level of free reserves should be sufficient to generate sufficient income to meet annual expenditure. The trustees are of the opinion that this provides sufficient flexibility, provides adequate working capital to cover core costs, and will allow the charity to cope and respond to changes in the arrangements for the care of the last remaining member of the Community.

Financial position

The balance sheet shows general funds of £8,962,993 (2019 - £9,438,224) of which £8,786,712 (2019 - £9,426,861) are free reserves. The trustees are of the opinion that this level of reserves meets the reserves policy outlined above

St Mary’s Priory Fernham Residual Fund 8

Trustees’ report 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT

Governance

The Community continues to exist as an entity in Canon Law under the care of the Abbot Visitor of the English Province of the Benedictine Subiaco-Cassinese Congregation, even though, following the decision of the Community in December 2001, the house at Fernham was closed and the individuals dispersed to other locations.

The charity is governed by the trustees. The Prioress appointed the original trustees. The minimum number of trustees is five, to include any ex officio trustee and a maximum of two community members. Further trustees are appointed by the Visitor, who is an ex officio trustee, and is the Abbot Visitor of the English Province of the Benedictine SubiacoCassinese Congregation. The Visitor has the power to remove trustees.

The names of the trustees who served during the year are shown on page 1.

Structure and management reporting

The trustees are ultimately responsible for the policies, activities and assets of the charity. They meet regularly to review developments with regard to the charity or its activities and make any important decisions. When necessary, the trustees seek advice and support from the charity’s professional advisers, e.g. investments managers, solicitors and accountants.

Statement of trustees’ responsibilities

The trustees are responsible for preparing the trustees’ report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires the trustees to prepare accounts 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 accounts, the trustees are required to:

St Mary’s Priory Fernham Residual Fund 9

Trustees’ report 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Statement of trustees’ responsibilities (continued)

The trustees are responsible for keeping proper accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the accounts comply with the Charities Act 2011, the applicable Charity (Accounts and Reports) Regulations and the provisions of the charity’s trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Key management personnel

The trustees consider that they comprise the key management of the charity in charge of directing and controlling, running and operating the charity on a day to day basis.

The last remaining member of the Community, Eileen Murdoch, was a trustee of the charity until 3 June 2020 and her living and personal expenses are borne by the charity. However, in common with the other trustees, she received no remuneration in connection with her duties as a trustee.

No trustees received reimbursement for travel expenses in the year (2019 – £1,234 reimbursed to four trustees).

Risk management

In line with the requirement for trustees to undertake a risk assessment exercise and report on the same in their annual report, the trustees have looked at the risks the charity currently faces and have reviewed the measures already in place, or needing to be put in place, to deal with them.

The outbreak of the Covid-19 pandemic has clearly presented the trustees with challenges and affected its finances and activities in ways which could not have been foreseen. The trustees recognise their responsibility for the management of risks faced by the charity.

The financial and operational effects of Covid-19 are discussed above. Over and above these, the key risks for the charity, as identified by the trustees, are described below together with the principal ways in which they are mitigated:

The Community currently has one member. The trustees are aware that there is both a moral and legal obligation to care for the member, as she has no substantial resources of her own. As the sister grows older, so the need to provide care for the sister may increase. A key element of the management of this risk is ensuring that the charity has the available financial resources to finance this care both now and in the years ahead by carefully reviewing reserves.

St Mary’s Priory Fernham Residual Fund 10

Trustees’ report 31 December 2020

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Risk management (continued)

The charity donates significant sums in donations to advance the Roman Catholic religion. The trustees currently see their priorities as beginning with the support of the English Province of the Subiaco-Cassinese Congregation where there may be need; radiating outwards to the Congregation worldwide, the Benedictine world, particularly in the UK; other monastic and religious needs wherever they may arise; and ultimately the needs of the Church in general.

Whether or not the funds are used here in Great Britain or overseas, the trustees always ensure that they are fully briefed about and familiar with the work of a potential recipient of funds, that proof of receipt is obtained and that, wherever possible (and always in the case of monies sent overseas), a full written report of how the monies have been utilised and applied is obtained from the recipient.

The charity's principal asset comprises listed investments, the value of which is dependent on movements in UK and world stock markets. The investments are managed by a reputable investment manager who adheres to a policy agreed by the trustees. The investment strategy is assessed regularly to ensure it remains appropriate to the charity's needs – both now and in the future. During the current Covid-19 pandemic, the trustees continue to communicate with their investment managers and, whilst there are concerns over the volatility in world stock markets, they acknowledge also that the charity is a long term investor. As such, the charity will be able to wait for markets to stabilise over time whilst the trustees keep a watching brief.

Having assessed the major risks to which the charity is exposed, the trustees believe that by monitoring reserve levels, by ensuring controls exist over key financial systems, and by examining the operational and business risks faced by the charity, they have established effective systems to mitigate those risks.

FUTURE PLANS FOR THE CHARITY

It is not anticipated that there will be any significant changes to the charity’s activities in the forthcoming year.

The trustees will pay due heed to the impact of the Covid-19 pandemic and its consequences, both socially and economically, and will continue to work towards the good stewardship of the funds they hold for the present and future beneficiaries.

Approved by the trustees and signed on their behalf by:

David Cuthbert Brogan

Trustee Date: 15 July 2021

St Mary’s Priory Fernham Residual Fund 11

Independent auditor’s report 31 December 2020

Independent auditor’s report to the trustees of St Mary’s Fernham Residual Fund

Opinion

We have audited the accounts of St Mary’s Fernham Residual Fund (the ‘charity’) for the year ended 31 December 2020, which comprise the statement of financial activities, the balance sheet, the cash flows, the principal accounting policies and the notes to the accounts. 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 accounts:

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 accounts section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the accounts 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 accounts, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the accounts 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 accounts 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.

St Mary’s Priory Fernham Residual Fund 12

Independent auditor’s report 31 December 2020

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report and Accounts, other than the accounts and our auditor’s report thereon. Our opinion on the accounts does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts 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 accounts or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees are responsible for the preparation of the accounts 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 accounts that are free from material misstatement, whether due to fraud or error.

In preparing the accounts, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

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Independent auditor’s report 31 December 2020

Auditor’s responsibilities for the audit of the accounts

Our objectives are to obtain reasonable assurance about whether the accounts 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 accounts.

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.

How the audit was considered capable of detecting irregularities including fraud

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:

We assessed the susceptibility of the charity’s accounts to material misstatement, including obtaining an understanding of how fraud might occur, by:

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Independent auditor’s report 31 December 2020

Auditor’s responsibilities for the audit of the accounts (continued)

How the audit was considered capable of detecting irregularities including fraud (continued)

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:

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 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 accounts is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Independent auditor’s report 31 December 2020

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

Buzzacott LLP 21 July 2021 Statutory Auditor 130 Wood Street London EC2V 6DL

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

St Mary’s Priory Fernham Residual Fund 16

Statement of financial activities Year to 31 December 2020

Notes Unrestricted funds Unrestricted funds

2020
£		 2019
£
Income from:
Donations and legacies
1
Investments and interest receivable
2
Surplus on disposal of tangible fixed assets
Total income
Expenditure on:
Raising funds
. Investment management and related advisory fees
Charitable activities
. Care of members of the Community and the support of
their ministry
3
. Advancement of the Roman Catholic
religion through the provision of grants
4
Total expenditure
Net (expenditure) income before net investment
gains
6
Net investment gains
Net (expenditure) income and net movement in funds
Reconciliation of funds:
Total funds brought forward at 1 January 2020
Total funds carried forward at 31 December 2020
7,205

227,821
—		 152,665
281,685
2,000
235,026 436,350
51,515

27,597

653,835		 53,026
75,696
116,167
732,947 244,889

(497,921)
22,690		 191,461
862,298
(475,231)
9,438,224		 1,053,759
8,384,465
8,962,993 9,438,224

All recognised gains and losses are included in the statement of financial activities above.

All activities of the charity derived from continuing operations during the above two financial years.

St Mary’s Priory Fernham Residual Fund 17

Balance sheet 31 December 2020

Notes
2020
£		 2020
£		 2019
£		 2019
£
Fixed assets
Tangible assets
9
Investments
. Listed investments
10
. Programme related investments
11
Current assets
Debtors
12
Cash at bank and in hand
Current liabilities
Creditors: amounts falling due
within one year
13
Net current assets
Total net assets
Represented by:
The funds of the charity
Unrestricted funds









55,881
171,619		 176,281
8,692,811
—		 147,266
231,465		 11,363
9,028,918
50,000
8,869,092



93,901		 9,090,281
347,943
227,500

(133,599)		 378,731
(30,788)







8,962,993 9,438,224
8,962,993 9,438,224

Approved by the trustees and signed on their behalf by:

David Cuthbert Brogan

Trustee

Approved on: 15 July 2021

St Mary’s Priory Fernham Residual Fund 18

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:
Investment income and interest received
Proceeds from the disposal of tangible fixed assets
Repayment of loan classified as a programme related
investments
Purchase of tangible fixed assets
Proceeds from the disposal of investments
Purchase of investments

Net cash provided by 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
(529,444)		 (222,954)
229,417
—
50,000
(168,616)
1,706,439
(1,803,785)		 277,971
2,000
—
(13,864)
1,166,603
(1,223,260)
13,455 209,450
(515,989)

828,985		 (13,504)
842,489

312,996		 828,985

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
Gains on investments
Investment income and interest receivable
Surplus on disposal of tangible fixed assets
Increase in debtors
Increase in creditors
Net cash used in operating activities		 (475,231)
3,698
(22,690)
(227,821)
—
89,789
102,811		 1,053,759
3,198
(862,298)
(281,685)
(2,000)
(138,769)
4,841
(529,444) (222,954)

B Analysis of changes in net debt


Analysis of changes in net debt
As at 31
December
2019
£		 Cash flows
£		 As at 31
December
2020
£
Cash at bank and in hand
Cash held by investment managers
Total cash and cash equivalents		 231,465
597,520		 (59,846)
(456,143)		 171,619
141,377
828,985 (515,989) 312,996

St Mary’s Priory Fernham Residual Fund 19

Principal accounting policies 31 December 2020

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

Basis of preparation

These accounts have been prepared for the year to 31 December 2020 with comparatives provided for the year to 31 December 2019.

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

The accounts 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 United Kingdom and Republic of Ireland (Charities SORP FRS 102) issued on 16 July 2014, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

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

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

Critical accounting estimates and areas of judgement

Preparation of the accounts requires the trustees to make judgments and estimates. The key judgements and estimates used in the preparation of these accounts are the estimated useful lives of tangible fixed assets for the purpose of determining the annual depreciation charge; the allocation of support costs; and estimating future income and expenditure flows for the purpose of assessing going concern (see below).

Assessment of going concern

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

Since March 2020, the Covid 19 pandemic has changed the shape and nature of the world. It has impacted not only the basic nature of the social interactions but has also had a significant economic impact at every level in ways which have been outside of the charity’s control.

The full impact of the pandemic on the charity's income and expenditure and financial position following the emergence of the global Covid-19 pandemic is still not fully known. The charity’s income will no doubt continue to be affected because of the falls in income from listed investments as the corporate sector, in particular, has reacted to the pandemic by reducing dividend payments. In terms of expenditure, the trustees believe there may be an increase in the demand for grants to assist with the impact of Covid-19.

St Mary’s Priory Fernham Residual Fund 20

Principal accounting policies 31 December 2020

Assessment of going concern (continued)

During the current Covid-19 pandemic, the trustees continue to communicate with their investment managers and, whilst there are concerns over fluctuations in world stock markets, they acknowledge also that the charity is a long term investor. As such, the charity will be able to wait for markets to stabilise over time whilst the trustees keep a watching brief.

Undoubtedly there will be challenges ahead but the trustees do not expect material concerns to arise over the charity’s financial position or going concern. The trustees have concluded that the charity will have sufficient resources to meet its liabilities as they fall due.

Income recognition

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received.

Income comprises donations, investment income and interest receivable.

Donations, including salaries and pensions of individual religious received under Gift Aid or deed of covenant, 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.

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.

St Mary’s Priory Fernham Residual Fund 21

Principal accounting policies 31 December 2020

Income recognition (continued)

In accordance with the Charities SORP FRS 102 volunteer time is not valued and recognised in these accounts.

Investment income is recognised once the dividend has been declared and notification has been received of the dividend due.

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

The surplus on the disposal of tangible fixed assets is calculated as the difference between disposal proceeds and the net book value of the asset immediately prior to disposal.

Resources expended and the basis of apportioning costs

Expenditure is included in the statement of financial activities when incurred and includes any attributable VAT which cannot be recovered.

Expenditure comprise costs of raising funds and charitable activities. Costs of raising funds comprises investment management fees. Expenditure on charitable activities includes expenditure on the charity’s primary charitable purposes as described in the trustees’ report. Such costs include:

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 financial procedures, provision of office services and equipment.

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.

Support and governance costs are allocated to expenditure on charitable activities in proportion to the direct costs incurred on each charitable activity.

St Mary’s Priory Fernham Residual Fund 22

Principal accounting policies 31 December 2020

Services provided by members of the Community

For the purposes of these accounts, no monetary value has been placed on the administrative and other services provided by the members of the Community.

Tangible fixed assets

All assets costing more than £200 and with an expected useful life exceeding one year are capitalised.

The freehold land held by the charity comprises the cemetery attached to Fernham House in which some thirty members of the Community are buried. It is held in the accounts at £1.

The freehold residential building is designed, and used wholly, as private residential accommodation. It is stated at cost but not depreciated. The value and condition of the property is reviewed annually by the trustees, who are satisfied that its residual value is not materially less than its book value.

Disposals and additions are accounted for on legal completion of the relevant transaction.

Investments

Listed investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price.

The charity does not acquire put options, derivatives or other complex financial instruments.

As noted above the main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.

Realised gains (or losses) on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value is acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value at that date. Realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise.

St Mary’s Priory Fernham Residual Fund 23

Principal accounting policies 31 December 2020

Investments (continued)

Programme related investments are included on the balance sheet at cost less any impairment. Impairments (including loans subsequently converted to grants) are charged to expenditure on charitable activities.

Debtors

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

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.

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

Unrestricted funds represent those monies which are freely available for application towards achieving any charitable purpose that falls within the charity’s charitable objects.

St Mary’s Priory Fernham Residual Fund 24

Notes to the accounts 31 December 2020

1 Income from: Donations and legacies

Income from: Donations and legacies
2020
£		 2019
£
Legacies receivable
Pensions or other income of individual religious received under
Deed of Covenant
Other donations		 —
7,205
—		 139,019
12,616
1,030
7,205 152,665

2 Income from: Investments and interest receivable

Income from: Investments and interest receivable
2020
£		 2019
£
Investment income
. UK fixed interest
. UK equities
. Overseas fixed interest
. Overseas equities
. Alternatives
Interest received
. Interest on cash held by investment managers
Total		 16,925
112,164
15,992
62,929
19,114		 17,192
140,342
31,939
61,072
27,249
227,124
697		 277,794
3,891
227,821 281,685

3 Expenditure on: Care of members of the Community and the support of their ministry

ministry
2020
£		 2019
£
Living and personal expenses
Depreciation of motor vehicle
Funeral expenses
Cemetery expenses
Nursing home fees
Allocated support costs (note 5)		 18,329
3,101
—
5,042
—		 18,203
2,601
1,650
—
45,966
26,472
1,125		 68,420
7,276
27,597 75,696

4 Expenditure on: Advancement of the Roman Catholic religion through the provision of grants

2020
£		 2019
£
Grants and donations
Allocated support costs (note 5)		 627,177
26,658		 105,000
11,167
653,835 116,167

The charity makes grants to advance the Roman Catholic religion. Grants are made to organisations in accordance with the policy set out in the trustees’ report.

St Mary’s Priory Fernham Residual Fund 25

Notes to the accounts 31 December 2020

4 Expenditure on: Advancement of the Roman Catholic religion through the provision of grants (continued)

The charity makes grants to advance the Roman Catholic religion. Grants are made to organisations in accordance with the policy set out in the trustees’ report.

The grants payable during the year were as follows:

Recipient
Purpose ofgrant		 2020
£		 2019
£
—
—
—
—
—
—
—
55,000
10,000
5,000
5,000
30,000
105,000
St. Augustine Abbey
To contribute towards the renovation of St
Augustine’s Abbey’s archive room
Monastero Delle Benedictine
To the Abbey of Santa Cecilia, Rome, for the
support of the Benedictine community there,
and of its liturgical and educational
enterprises, such as the School of Gregorian
Chant and Liturgical Spirituality.
Monastery of the Holy Cross,
Chicago Priory
To provide financial assistance during the
Covid-19 pandemic
Subiaco Solidarity Fund (Curia
della Congregazione Sublacense
Cassinese)
To support the charitable work of the Subiaco-
Cassinese Congregation to which the
Community belongs
Empress Eugenie Memorial Trust a
charity associated with St Michael’s
Abbey, Farnborough
To support the major renovation works being
conducted at St Michael’s Abbey,
Farnborough
St Michael’s Abbey, Farnborough
For the restoration of the historic Cavaillé-Coll
organ at Farnborough
Printing cost of the Monastic Diurnal
Aid to the Church in Need (ACN)
To support ACN's work throughout the world
and to be used at their discretion where the
need is greatest
Douai Abbey Trust
To contribute towards remedial work after
storm damage to the Abbey Church
Our Lady and St. Joseph, Alcester
(Douai Abbey Parishes Trust)
To contribute towards refurbishment project
for the church hall
Stanbrook Abbey
To cover expenses of a sabbatical renewal
course and towards the expenses of running
a public study day
Umuoji Monastery (administered by
Pulscarden Abbey Elgin)
To cover the main expenses of the
choirmistress of this monastery in Nigeria
attending the three year Cantantibus Organis
course in Rome		 10,000
139,020
40,020
1,733
307,654
103,750
25,000
—
—
—
—
—
627,177

Rt Rev David Cuthbert Brogan is a trustee of St Michael's Abbey Charitable Trust, Farnborough, and its associated charity, Empress Eugenie Memorial Trust (Realty), which maintains Farnborough Abbey on behalf of St Michael’s Abbey. As noted above, grants of £436,404 were payable to these charities during the year. The grant of £103,750 to the St Michael’s Abbey Charitable Trust, for the restoration of the Famous Cavaillé-Coll organ, was paid in 2021 and is included within creditors (note 13).

St Mary’s Priory Fernham Residual Fund 26

Notes to the accounts 31 December 2020

4 Expenditure on: Advancement of the Roman Catholic religion through the provision of grants (continued)

Rt Rev David Cuthbert Brogan made the other trustees aware of his trusteeship of St Michael's Abbey Charitable Trust, and its associated charity, Empress Eugenie Memorial Trust (Realty) when seeking approval of the grants payable to those charities.

Rt Rev Geoffrey Scott, a trustee of the charity until 3 June 2020, is also a trustee of Oulton Abbey Nursing Home, Douai Abbey Trust and Douai Abbey Parishes Trust. Rt Rev Geoffrey Scott took no part in the discussions relating to the grants to these establishments.

Rt Rev Anselm Atkinson, was a trustee of the charity during the year to 31 December 2019, is also a trustee of Pluscarden Abbey. Rt Rev Anselm Atinkson took no part in the discussion relating to the grant to be administered by this establishment during 2019.

Commitment

There were no grant commitments at 31 December 2020. At 31 December 2019 the charity’s trustees had committed to make a donation, subject to completion of certain formalities, of £102,000 to the Abbey of Santa Cecilia, Rome, for the support of the Benedictine community there, and of its liturgical and educational enterprises, such as the School of Gregorian Chant and Liturgical Spirituality.

5 Support costs

2020
£		 2019
£
Insurance
Bank charges
Other expenses
Depreciation of computer equipment
Legal and professional fees
Governance costs
. Auditor’s remuneration
.Trustees’ expenses
. Legal Fees		 1,168
—
—
597
—
11,960
—
14,058		 778
24
644
597
2,246
12,080
1,234
840
27,783 18,443

Support costs have been allocated in proportion to direct costs incurred on charitable activities as follows:

2020
£		 2019
£
Advancement of the Roman Catholic religion through the provision of
grants
Care of members of the Community and the support of their ministry		 26,658
1,125		 11,167
7,276
27,783 18,443

St Mary’s Priory Fernham Residual Fund 27

Notes to the accounts 31 December 2020

6 Net (expenditure) income before net investment gains

This is stated after charging:

2020
£		 2019
£
Depreciation
Auditor’s remuneration (including VAT)
. Statutory audit services
.. This year
.. Previous year		 3,698
11,960
—		 3,198
11,500
580

7 Staff costs, key management personnel and trustees’ remuneration

The charity did not employ any staff during the year (2019 – none).

The last remaining member of the Community, Eileen Murdoch, was a trustee of the charity until 3 June 2020 and her living and personal expenses are borne by the charity. However, in common with the other trustees, she received no remuneration in connection with her duties as a trustee (2019 – none). No trustees were reimbursed expenses during the year (2019 – £1,234 reimbursed to four trustees).

The trustees consider that they comprise the key management of the charity in charge of directing and controlling, running and operating the charity on a day to day basis. No trustees received any remuneration (2019 – none).

8 Taxation

St Mary’s Priory Fernham Residual Fund 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.

9 Tangible fixed assets

Tangible fixed assets
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
Disposals
At 31 December 2020
Net book values
At 31 December 2020
At 31 December 2019		 Freehold
land
£
Freehold
residential
building
£
1
—
—
168,616
—
—
1
168,616
—
—
—
—
—
—
—
—
1
168,616
1
—		 Computer
equipment
£		 Motor
vehicles
£		 Total
£
2,587
—
(200)
12,405

—
—
14,993

168,616

(200)
2,387
12,405
183,409
1,029
597
(200)
2,601

3,101
—
3,630

3,698

(200)
1,426
5,702
7,128
961
6,703
176,281
1,558
9,804
11,363

St Mary’s Priory Fernham Residual Fund 28

Notes to the accounts 31 December 2020

10 Listed investments

Listed investments
2020
£		 2019
£
Listed investments
Market value at 1 January 2020
Additions at cost
Disposals at book value (see below)
Net unrealised gains
Market value 31 December 2020
Cash held by investment managers
Cost of listed investments at 31 December 2020		 8,431,398
1,803,785
(1,983,333)
299,584		 7,512,443
1,223,260
(1,055,578)
751,273
8,551,434
141,377		 8,431,398
597,520
8,692,811 9,028,918
6,650,902 6,338,022

Disposals at book value included above are made up of the following:

2020
£
1,706,439
276,894
1,983,333		 2019
£
Proceeds
Net realised losses (gains)
Disposals at book value		 1,166,603
(111,025)
1,055,578

Listed investments held at 31 December 2020 comprised the following:

2020
£		 2019
£
UK fixed interest
UK equities
Overseas fixed interest
Overseas equities
Alternatives		 405,370
3,241,552
512,355
3,617,869
774,288		 559,997
633,044
2,922,463
3,384,217
931,677
8,551,434 8,431,398

At 31 December 2020 listed investments included the following investment deemed material when compared to the overall portfolio valuation as at that date:

Market
value of
holding
£
451,429		 Percentage
of
portfolio
%
JP Morgan Asset Managers (UK) US Equity Income K income units 5.28

St Mary’s Priory Fernham Residual Fund 29

Notes to the accounts 31 December 2020

11 Investments – Programme related investments

Investments – Programme related investments
2020
£		 2019
£
At 1 January 2020
Amount repaid in the year
At 31 December 2020		 50,000
(50,000)		 50,000
—
— 50,000

The programme related investment represented a loan granted to the English Benedictine Order of Oulton Abbey to assist in implementing the recommendations arising from the review of the operation of the Oulton Abbey Nursing Home. The loan was interest free and was repayable at six months notice. This loan was repaid on 8 September 2020.

Rt Rev Geoffrey Scott, a trustee of the charity until 3 June 2020, is a trustee of the Oulton Abbey Nursing Home..

12 Debtors

Debtors
2020
£		 2019
£
Legacy receivable
Investment income and interest receivable
Amount held by St Michael’s Abbey Charitable Trust on behalf of the
charity (note 15)		 —
6,651
49,230		 139,019
8,247
—
55,881 147,266

13 Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
2020
£		 2019
£
Donations payable
Investment managers’ fees
Auditor’s remuneration
Accruals
Expense creditors		 103,750
13,049
12,000
—
4,800		 —
13,556
11,500
2,246
3,486
133,599 30,788

14 Unrealised gains

The funds of the charity include unrealised gains as follows:

2020
£		 2019
£
Total unrealised gains:
On investments
Reconciliation of movements in unrealised gains
Unrealised gains at 1 January 2020
In respect to disposals in year
Net gains arising on revaluation in the year
Unrealisedgains at 31 December 2020		 1,900,532 2,093,376
2,093,376
(492,428)
299,584		 1,449,968
(107,865)
751,273
1,900,532 2,093,376

St Mary’s Priory Fernham Residual Fund 30

Notes to the accounts 31 December 2020

15 Transactions with trustees and related parties

The last remaining member of the Community was a trustee of the charity until 3 June 2020. Her income is donated to the charity under a Gift Aid compliant Deed of Covenant. During the year, the total amount donated to the charity by the member while she was a trustee was £3,603 (2019 – £7,071).

During the period of transition from the former trustees to the current trustees, and while the charity is in the process of addressing the complexities of transferring the bank mandate, the transactions of the charity were administered through a dedicated bank account held by St Michael’s Abbey, Farnborough. As noted in note 4, Rt Rev David Cuthbert Brogan, is a trustee of that charity. During the year to 31 December 2020, the bank account received £175,678 and paid out £126,448 on behalf of the charity leaving a balance of £49,230. This balance is included within debtors in note 11.

Other transactions connected to trustees are disclosed in notes 4, and 7 to the accounts.

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

St Mary’s Priory Fernham Residual Fund 31