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2023-12-31-accounts

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Charity registration number 229943

SISTERS OF MERCY SUNDERLAND

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

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SISTERS OF MERCY SUNDERLAND

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Miss P A A Shoulder
Miss M M Rowntree
Miss S Christon
Miss K Matthews
Mrs A M Shanks
Mrs A M Thompson
Charity number 229943
Auditor Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
Bankers National Westminster Bank plc
52 Fawcett Street
Sunderland
SR1 1SB
Solicitors WBD (UK) LLP
The Spark
Draymans Way
Newcaslte Helix
Newcastle upon Tyne
NE4 5DE
Investment advisors Investec Wealth and Investment Limited
30 Gresham Street
London
EC2V 7QN

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SISTERS OF MERCY SUNDERLAND

CONTENTS

Page
Trustees' report 1 - 6
Independent auditor's report 7 - 9
Statement of financial activities 10
Balance sheet 11
Statement of cash flows 12
Notes to the financial statements 13 - 22

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2023

The trustees present their annual report and financial statements for the year ended 31 December 2023.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Charities Act 2011 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).

Objectives and activities

Our objectives are set to reflect our faith and community aims. Each year the trustees review our objectives and activities to ensure that they continue to reflect our aims.

The Charity's objectives are the promotion of the educational, religious and other charitable work of the Roman Catholic Church in England for the benefit of the public in such a way as the trustees shall from time to time, with the consent of the Sister Superior, determine, if and insofar as the trustees consider they may not usefully apply assets available for distribution in any one year in England, then they shall apply the same with such consent for such work elsewhere.

The Charity carries out a wide range of activities in pursuance of its charitable aims.

During the year to 31[st] December 2023, the Community, together with Trustees have spent much time reflecting on the age profile and wellbeing of the sisters and considering plans for the future.

After much consultation the community decided to draw up an agreement with St. John of God Hospitaller Services. During this year they have worked closely to agree provision for the “operational” management of staff and services. They have experienced a period of change and transition at the latter end of the year, however, with the retirement of some key staff they have found this adjustment to St. John of God a very positive experience, indeed their ethos and mission are very similar to the Sisters.

Public benefit

The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake and, in particular, its supplementary public guidance on the advancement of religion for the public benefit.

The trustees consider that the strategies employed to achieve the Charity's objectives for 2023 and the principal areas in which the Community is involved, set out below, provide benefit to the wider community in Northeast England, England as a whole, and elsewhere as the trustees see fit.

Achievements and performance

During the year to 31[st] December 2023, the sisters in the Community have continued to be actively involved in many works of Mercy in the Diocese:

Visiting the sick in their homes and hospitals;

Preparing retreats and educational talks in the Convent centre;

Sr Scholastica continues to offer support to seafarers at the Port of Sunderland;

Sisters working in various parishes offering administrative support and prayer reflections in schools;

Sister Michael leads a religious education group in the Centre twice a week and annually provides opportunities for them to have an Icon Writing Retreat where their work is celebrated in liturgy;

A number of the sisters continue to work closely with the Religious Education department in St. Anthony’s School and provide opportunities for young people to visit the convent and learn about the “Mercy ethos,” “popular piety” and other religious activities;

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

In July of this year Sr Josepha retired as Chair of Governors of St. Anthony’s RC Girls’ School following three years of service. Some of the elderly sisters who are unable to take part in active service offer their time to pray in the chapel for the needs of the world and local community;

The sisters work closely with the Youth Ministry Team and Sr. Josepha continues to represent the Community on the YMT board as well as hold the role of a Director;

Early in the year she accompanied over 600 young people and staff to “Flame” at the Wembley Arena in London. The sisters generously paid for transport for any youth groups living in outlying areas of the diocese, helping them get to their nearest train station; and

In August of this year, they were approached by the Multi-Academy Trust to assist St. John Bosco RC Primary School in finding a temporary home as their school had been identified as one of the schools beset with RAAC. It was fortuitous that Gabriel House was available and following a meeting of Trustees with CEO of the Trust, the sisters agreed to welcome the local Primary School into Gabriel House. They have thoroughly enjoyed being part of their journey and helping them in their hour of need. They were visited by Bishop Stephen the new bishop to the Diocese, and he gave his thanks and gratitude for their willingness to step in.

The sisters have also welcomed many visitors to the convent including:

The Community made several large donations during 2023 of which the most significant were the following:-

The Sisters continue to support local students to assist them in further and higher education, who would otherwise not have been able to afford their courses. 21 students received bursaries totalling £51,000.

The Community continues to provide financial assistance to three food banks, families in need and support for families during illness and death. One of the sisters continues to collect bread and vegetables etc., for local drop-ins and food banks etc., working in collaboration with local Christian Churches. This continues to be needed with the present high cost of living.

Financial review

The end of year saw our balance sheet in a healthy position with total funds standing at £31,364,051, an increase of £272,113 on last year £31,091,938. Before taking into consideration realised losses and gains on our investments, there was a deficit of £729,308 compared to a deficit in 2023 of £1,285,175.

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Policy on reserves

The trustees have reviewed their medium-term commitments (up to 5 years) and continue to acknowledge that:-

We have also reviewed our longer-term commitments (6 to 10 years) and are satisfied that we have a suitable reserves policy in place.

Principal funding sources

As in previous years, the four main sources of funding were investment income, bank interest, residential home fees and covenanted Sister's teaching pensions. This year there was a realised gain of £904,854 (2023: deficit £587,001) on sales undertaken by our investment advisors. This last source is not taken into account when budgeting as it is merely a by-product of their transposition of investments during the year and cannot be relied upon.

As reported earlier (in Achievements and Performance), our donations and grants paid amounted to £413,733 (2023 £1,189,415), all made either for the promotion of the Roman Catholic religion or the provision of education.

Investment policy and objectives

The Charity has a formal investment policy which is reviewed on a regular basis.

The investment objective is the achievement of a targeted return of both income and capital growth with a moderate level of risk. The investment Manager's definition of the current risk level is Medium/High. This is achieved by reference to a six asset class indices which together constitute a composite benchmark, against which, portfolio performance is measured. Our investments may be positioned either side of the composite benchmark weightings, in order to take tactical views on respective asset classes.

This policy also provides for our advisors to take account of certain ethical constraints which we have imposed.

The Community's investment powers are governed by the provisions of the Trustee Act 2000.

The Community receives advice from our investment managers, Investec Wealth & Investment Limited, who provide us with quarterly valuations of the portfolio. Our General Manager is instructed to receive weekly (or more frequently as events dictate) reports from the stockbrokers and meet with them at least twice a year to ensure that the fund is managed in accordance with our guidelines and within the ethical principles of the Community.

Our General Manager reports to the trustees on a regular basis and arranges for the stockbroker who manages the portfolio to visit us twice a year in order to discuss all matters relating to investment policy with the trustees. The trustees consider all advice received in meetings of the Council, although Sister Superior us empowered to take urgent decisions alone.

Investment performance:

The overall value of investments held at 31 December 2023 is £25,593,723 (2023: £25,090,253).

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Major risks and management of those risks

The major risks to which the Charity is exposed have been identified and considered. The trustees are satisfied that procedures are in place to cover all aspects of risk.

Internal control risks are minimised by the implementation of procedures for authorisation of all financial transactions. Procedures are also in place to ensure compliance with the health and safety of staff, clients and visitors to all our premises.

Cash flow risk

The Charity's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Charity uses foreign exchange forward contracts and interest rate swap contracts to hedge their exposures.

Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flows.

Credit risk

The Charity's principal financial assets are bank balances and cash, trade and other receivables, and investments. The Charity's credit risk is primarily attributable to its trade receivables. The amounts presented in the balances sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The charity has no significant concentration of credit risk, with exposure spread over many counterparties and customers.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the charity uses a mixture of long-term and short-term debt finance. Further details regarding liquidity risk can be found in the statement of accounting policies in the financial statements.

Structure, governance and management

The charity is governed by the single scheme approved by the Charity Commission on 24th January 2008. This scheme altered or affected the trusts of the charities formerly known as:-

Sisters of Mercy St. Annes' Convent Wolsingham Sisters of Mercy St. Anthony's Convent (229943) Sisters of Mercy St. Joseph's Convent Gosforth Sisters of Mercy Convent of Mercy Seaham Sisters of Mercy Convent of Mercy Hexham Sisters of Mercy St. Anthony's Secondary School Sisters of Mercy Educational Trust Sisters of Mercy Ryhope Property Trust

The trustees who served during the year and up to the date of signature of the financial statements were: Miss P A A Shoulder Miss M M Rowntree Miss S Christon Miss K Matthews Mrs A M Shanks Mrs A M Thompson

Recruitment and appointment of trustees

Recruitment of trustees is undertaken by a process of discernment by the Sister Superior.

The power of appointing new trustees is vested in the Sister Superior.

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Organisational structure

The Sisters of Mercy Sunderland (229943) is an autonomous religious order which is administered by Sister Superior for the time being, together with a Council consisting of four members of the Community and four other trustees. Sister Superior and the Council are elected by the members of the Community and four other trustees. Sister Superior and the Council are elected by the members of the Community for a term of three years, but the trustees are appointed for a term of four years. The governing documents require that the trustees, who are an unincorporated body, must be drawn from members of the Community or trusted lay people.

The Chair of Trustees is the Sister Superior of the Community.

The Community lives and operates from the Convent at Sunderland. The Community also has an established Branch House at Wolsingham.

Strategic financial decisions relating to all the convents are overseen by the trustees, although the day-to-day management of accounts is undertaken by the Finance Manager, and latterly General Manager. Mandates with the principal bankers are in place to the effect that any two Trustees may sign cheques. In the case of the Branch House this authority is delegated to the respective Sisters in Charge but under the ultimate authority of the trustees.

The accounts accompanying this report are the accounts of the charitable trusts on which the assets of the Community are held.

Induction and training of trustees

As part of the ongoing training programme, existing and new trustees are made aware of their responsibilities as trustees of the Charity. This programme includes:-

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SISTERS OF MERCY SUNDERLAND

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Statement of trustees' responsibilities

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

The law applicable to charities in England and Wales requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that year.

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

The trustees are responsible for keeping sufficient 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 Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees' report was approved by the Board of Trustees.

21 October 2024 Sister Josepha 21 Oct 2024 10:31:45 BST (UTC +1)

Miss K Matthews

Trustee

21 October 2024

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SISTERS OF MERCY SUNDERLAND

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF SISTERS OF MERCY SUNDERLAND

Opinion

We have audited the financial statements of Sisters of Mercy Sunderland (the ‘charity’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

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

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

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SISTERS OF MERCY SUNDERLAND

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF SISTERS OF MERCY SUNDERLAND

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the 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 cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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.

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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SISTERS OF MERCY SUNDERLAND

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF SISTERS OF MERCY SUNDERLAND

Other matters

Your attention is drawn to the fact that the charity has prepared financial statements 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 (FRS 102)" (as amended) in preference to the Accounting and Reporting by Charities: Statement of Recommended Practice issued on 1 April 2005 which is referred to in the extant regulations but has now been withdrawn.

This has been done in order for the financial statements to provide a true and fair view in accordance with current Generally Accepted Accounting Practice.

Use of our report

This report is made solely to the charity’s trustees, as a body, in accordance with part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an 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.

Simon Brown 25 Oct 2024 12:56:16 BST (UTC +1)

Simon Brown BA ACA DChA (Senior Statutory Auditor) for and on behalf of Azets Audit Services

.........................25 October 2024

Chartered Accountants Statutory Auditor

Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS

Azets Audit Services is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.

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SISTERS OF MERCY SUNDERLAND

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2023

**Unrestricted ** Unrestricted
funds funds
2023 2022
Notes £ £
Income from:
Donations and legacies 2 462,119 414,604
Investments 3 824,607 964,030
Total income 1,286,726 1,378,634
Expenditure on:
Raising funds 4 88,604 95,306
Charitable activities 5 1,927,430 2,568,503
Total expenditure 2,016,034 2,663,809
Net gains/(losses) on investments 10 1,001,421 (4,452,845)
Net movement in funds 272,113 (5,738,020)
Fund balances at 1 January 2023 31,091,938 36,829,958
Fund balances at 31 December 2023 31,364,051 31,091,938

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

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SISTERS OF MERCY SUNDERLAND

BALANCE SHEET

AS AT 31 DECEMBER 2023

Notes
Fixed assets
Tangible assets
12
Investments
13
Current assets
Debtors
14
Cash at bank and in hand
Creditors: amounts falling due within
one year
15
Net current assets
Total assets less current liabilities
Income funds
Unrestricted funds		 2023
£
£
5,364,145
25,593,723
30,957,868
363,480
173,667
537,147
(130,964)
406,183
31,364,051
31,364,051
31,364,051		 2022
as restated
£
£
5,379,578
25,090,253
30,469,831
437,103
324,723
761,826
(139,719)
622,107
31,091,938
31,091,938
31,091,938		 2022
as restated
£
£
5,379,578
25,090,253
30,469,831
437,103
324,723
761,826
(139,719)
622,107
31,091,938
31,091,938
31,091,938
30,469,831
622,107
31,091,938
31,091,938
31,091,938

The financial statements were approved by the Trustees on 21 October 2024

Sister Josepha 21 Oct 2024 10:31:45 BST (UTC +1)

21 October 2024

Miss K Matthews Trustee

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SISTERS OF MERCY SUNDERLAND

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £ £ £ £
Cash flows from operating activities
Cash absorbed by operations 19 (566,761) (2,177,331)
Investing activities
Purchase of tangible fixed assets (1,999) (4,398)
Proceeds from disposal of tangible fixed
assets - 9,451
Purchase of investments (8,713,250) (4,584,530)
Disposal of investments 8,306,347 5,509,594
Investment income received 824,607 964,030
Net cash generated from investing
activities 415,705 1,894,147
Net cash used in financing activities - -
Net decrease in cash and cash equivalents (151,056) (283,184)
Cash and cash equivalents at beginning of year 324,723 607,907
Cash and cash equivalents at end of year 173,667 324,723

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

Charity information

Sisters of Mercy Sunderland is a charity registered by Trust Deed in England and Wales. The principal address is given on the legal and administrative information page at the front of these financial statements. The nature of the charity's operations and principal activities are included on page 1.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's [governing document], the Charities Act 2011, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following the Statement of Recommended Practice for charities applying FRS 102 rather than the version of the Statement of Recommended Practice which is referred to in the Regulations but which has since been withdrawn.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

1.4 Income

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Interest on funds held on deposit is included when receivable and the amount paid can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

1.5 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit 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.

Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.

1.6 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Fixed assets costing £50 or more are initially recorded at cost.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings (restated) Not depreciated Fixtures and fittings 15% per annum Motor vehicles 25% per annum

Freehold land and buildings are not depreciatied

1.7 Fixed asset investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

1.8 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.11 Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

2 Donations and legacies

**Unrestricted ** Unrestricted
funds funds
2023 2022
£ £
Gifts - covenanted pensions and salaries 450,406 413,941
Donations from individuals 11,713 663
462,119 414,604

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

3 Investments

**Unrestricted ** Unrestricted
funds funds
2023 2022
£ £
Income from investments 808,356 943,956
Interest receivable 16,251 20,074
824,607 964,030
4 Raising funds
**Unrestricted ** Unrestricted
funds funds
2023 2022
£ £
Investment manager's fees 88,604 95,306
88,604 95,306
5 Charitable activities
Charitable
Charitable
activities activities
2023 2022
£ £
Staff costs 896,520 806,874
Premises costs 235,017 224,561
Household and provisions 91,542 106,167
Religious and chapel expenses 27,733 14,883
1,250,812 1,152,485
Grant funding of activities (see note 6) 413,733 1,189,415
Share of support costs (see note 7) 146,943 186,735
Share of governance costs (see note 7) 115,942 39,868
1,927,430 2,568,503

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

6 Grants payable

Charitable activities
2023
£
Grants to institutions:
Education grants 254,000
Religious grants 95,000
Community grants 10,000
Other grants < £5,000 19,733
378,733
Grants to individuals 35,000
413,733

7 Support costs

Support costs
Depreciation
Telephone
Motor and travel
Write off of loan
Bank charges
Printing, postage and
stationary
Subscriptions
Sister's expenses
Medical
Staff training
Audit fees
Legal and professional
Accountancy fees
Analysed between
Charitable activities		 Support
costs
Governance
costs
£
£
14,124
-
12,608
-
41,687
-
32,000
-
3,036
-
17,277
-
2,646
-
1,057
-
19,090
-
3,418
-
-
17,500
-
85,455
-
12,987
146,943
115,942
146,943
115,942		 2023
£
14,124
12,608
41,687
32,000
3,036
17,277
2,646
1,057
19,090
3,418
17,500
85,455
12,987
262,885
262,885		 Support
costs
Governance
costs
£
£
10,261
-
5,206
-
48,202
-
-
-
3,929
-
20,606
-
1,895
-
67,653
-
28,983
-
-
-
-
22,956
-
16,912
-
-
186,735
39,868
186,735
39,868		 2022
£
10,261
5,206
48,202
-
3,929
20,606
1,895
67,653
28,983
-
22,956
16,912
-
226,603
226,603

Governance costs includes payments to the auditors of £17,500 (2022- £22,956) for audit fees.

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

8 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.

9 Employees

The average monthly number of employees during the year was:

Care Staff
Domestic Staff
Management Staff
Administration Staff
Total
Employment costs
Wages and salaries
Social security costs
Other pension costs
The number of employees whose annual remuneration was more than £60,000
is as follows:
£60,001 - £70,000
£70,001 - £80,000		 2023
Number
16
12
6
3
37
2023
£
828,657
57,947
9,916
896,520
2023
Number
-
1		 2022
Number
14
10
6
3
33
2022
£
730,770
63,552
12,552
806,874
2022
Number
1
-

10 Net gains/(losses) on investments

**Unrestricted ** Unrestricted
funds funds
2023 2022
£ £
Revaluation of investments and cash movements 96,567 (3,865,844)
Gain/(loss) on sale of investments 904,854 (587,001)
1,001,421 (4,452,845)

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

11 Taxation

The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxationof Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.

12 Tangible fixed assets

Freehold land
and buildings
(restated)
£
Cost
At 1 January 2023
5,289,831
Additions
-
Disposals
-
At 31 December 2023
5,289,831
Depreciation and impairment
At 1 January 2023
-
Depreciation charged in the year
-
Eliminated in respect of disposals
-
At 31 December 2023
-
Carrying amount
At 31 December 2023
5,289,831
At 31 December 2022
5,289,831		 Fixtures and
fittings
Motor vehicles
£
£
356,702
85,812
1,999
-
-
(23,496)
358,701
62,316
279,452
73,315
11,826
2,296
-
(20,186)
291,278
55,425
67,423
6,891
77,250
12,497		 Total
£
5,732,345
1,999
(23,496)
5,710,848
352,767
14,122
(20,186)
346,703
5,364,145
5,379,578

See note 20 Prior Period Adjustment for details of restated Freehold land and buildings.

13 Fixed asset investments

Listed
investments
Unlisted
investments
£
£
Cost or valuation
At 1 January 2023
24,391,680
698,573
Additions
8,012,250
701,000
Valuation changes
383,457
-
Cash movement
-
(286,890)
Disposals
(7,713,347)
(593,000)
At 31 December 2023
25,074,040
519,683
Carrying amount
At 31 December 2023
25,074,040
519,683
At 31 December 2022
24,391,680
698,573		 Total
£
25,090,253
8,713,250
383,457
(286,890)
(8,306,347)
25,593,723
25,593,723
25,090,253

2023

2022

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

13
Fixed asset investments
Investments at fair value comprise:
UK Fixed income and equities
Overseas Fixed income and Equities
Commercial Property
Alternatives
Cash and Cash equivalents		 (Continued)
£
£
10,263,799
14,598,219
10,210,916
5,139,231
2,264,388
2,066,313
2,334,937
2,587,917
519,683
698,573
25,593,723
25,090,253		 (Continued)
£
£
10,263,799
14,598,219
10,210,916
5,139,231
2,264,388
2,066,313
2,334,937
2,587,917
519,683
698,573
25,593,723
25,090,253
25,090,253

Fixed asset investments revalued

Investments included above are held at market value as at the year end. The historical cost of these investments at the year end was £20,924,496 (2022: £20,786,349).

14
Debtors
Amounts falling due within one year:
Other debtors
Prepayments and accrued income
Amounts falling due after more than one year:
Other debtors
Total debtors		 2023
£
294,575
68,905
363,480
2023
£
-
363,480		 2022
£
32,000
78,528
110,528
2022
£
326,575
437,103

Other debtors include £Nil (2022 - £326,575) receivable after more than one year. The amount represents a loan advanced to Carntyne Care Home Ltd. to facilitate the disposal of Carntyne Residential Home by the trustees. The loan is repayable within a maximum of 12 years from the balance sheet date and £294,575 was repaid following the 2023 year end writing off an unrecovered balance of £32,000.

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

15 Creditors: amounts falling due within one year

Other taxation and social security
Trade creditors
Other creditors
Accruals and deferred income		 2023
£
18,837
27,190
37,003
47,934
130,964		 2022
£
12,809
-
37,891
89,019
139,719

16 Retirement benefit schemes

Defined contribution schemes

The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.

The charge to profit or loss in respect of defined contribution schemes was £9,916 (2022 - £12,552).. At the year-end £3,825 was included in other creditors (2022: £nil).

17 Analysis of net assets between funds

Analysis of net assets between funds
Unrestricted
Unrestricted
funds funds
2023 2022
£ £
Fund balances at 31 December 2023 are represented by:
Tangible assets 5,364,145 5,379,578
Investments 25,593,723 25,090,253
Current assets/(liabilities) 406,183 622,107
31,364,051 31,091,938
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023 2022
£ £
Aggregate compensation 157,701 151,393

18 Related party transactions

Transactions with related parties

During the year the charity entered into the following transactions with related parties:

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SISTERS OF MERCY SUNDERLAND

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

18 Related party transactions

(Continued)

The sisters, who are Trustees of the Charity, convenant their personal pension and income to the charity as shown in donations and legacies.

The charity is a related party with Youth Ministry Trust by having common trustees. During the year, the charity awarded a grant to Youth Ministry Trust amounting to £40,000 and incurred expenditure on behalf of the Trust, amount to £420. As at the year end, no balances were owed to the Trust.

19
Cash generated from operations
Surplus/(deficit) for the year
Adjustments for:
Investment income recognised in statement of financial activities
Proceeds from disposal of fixed assets
(Gain)/loss on disposal of investments
Fair value gains and losses on investments
Depreciation and impairment of tangible fixed assets
Movements in working capital:
Decrease in debtors
(Decrease)/increase in creditors
Cash absorbed by operations		 2023
2022
£
£
272,113
(5,738,020)
(824,607)
(964,030)
3,310
(7,209)
-
587,001
(96,567)
3,865,844
14,122
17,470
73,623
34,781
(8,755)
26,832
(566,761)
(2,177,331)

20 Prior Period Adjustment

During the audit of the 2023 year end, it was identified that an asset held on the balance sheet within freehold property, had been disposed of as part of a larger disposal of property in 2018. As a result, freehold property was being overstated by £750,699.

A prior period adjustment has been performed to reflect that adjustment. The impact of this adjustment is as follows:

Prior to 31 December 2021, the adjustment has resulted in a reduction in freehold property by means of a disposal of £750,699 and a correction to opening reserves of the same value.

As at 31 December 2022, the prior period adjustment of £750,699 has resulted in a reduction in freehold property and a reduction in funds. Freehold property as shown in the signed y/e 31 December 2022 accounts has reduced from £6,040,530 to £5,289,831, and funds have reduced from £31,842,637 to £31,091,938.