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2023-08-31-accounts

Charity registration number 235961

CHARITY FOR THE SISTERS OF MERCY MIDHURST ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2023

CHARITY FOR THE SISTERS OF MERCY MIDHURST

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Margaret Theresa O'Dwyer
Rose Patricia McGovern
Brigid Kelly
Annette Teresa Cooke
Mary McGrath
Paula Susan Thomas
Charity number 235961
Principal address Convent of Mercy
1 St. Margaret's Way
Midhurst
West Sussex
GU29 9FQ
Auditor Richard Place Dobson Services Limited
1 - 7 Station Road
Crawley
West Sussex
RH10 1HT
Bankers National Westminster Bank PLC
4 High Street
Petersfield
GU32 3JF
Solicitors Pothecary Witham Weld
70 St George's Square
London
SW1V 3RD
Investment advisors Charles Stanley
C/O Charles Stanley
25 Duke Street
London
EC2A 4AF

CHARITY FOR THE SISTERS OF MERCY MIDHURST

CONTENTS

Page
Trustees' report 1 - 5
Statement of trustees' responsibilities 6
Independent auditor's report 7 - 9
Statement of financial activities 10 - 11
Balance sheet 12
Statement of cash flows
Notes to the financial statements 13 - 22

CHARITY FOR THE SISTERS OF MERCY MIDHURST

TRUSTEES' REPORT

FOR THE YEAR ENDED 31 AUGUST 2023

The trustees present their report and accounts for the year ended 31 August 2023.

The trustees present their report with the financial statements of the charity for the year ended 31 August 2023. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

Objectives and activities

The Congregation of the Sisters of Mercy was founded in Baggot Street, Dublin in 1831, for the purpose of setting up schools for children who were financially deprived and also to minister to those in need. A house was founded in Midhurst in 1888 where the Sisters taught the children of the local community. The new Convent and School was placed under the protection of Blessed Margaret Pole and became St Margaret's Convent and School respectively.

The reorganisation of the Order's commitments continued in line with the strategy of rationalisation and consolidation already established in previous years.

The objectives of the Charity are as follows:

The primary objective of the Charity is the advancement of the Roman Catholic Religion. In pursuit of this aim, the Charity, through its various ministries, strives to meet the needs of our time wherever possible and as far as our resources allow. The underlying value is the belief in the uniqueness and dignity of each person and the development of their potential at every level. Facilities like the chapel are available to the public.

Our Mission Statement guides and inspires our charitable activities: As women of the Church today,

in the steps of our foundress, Catherine McAuley, with faith we commit ourselves, to show God's Mercy. By standing with those in need, reassessing our ministries, working to alleviate poverty, injustice and oppression. In collaboration with all people of goodwill, we strive to make the Gospel live in today's world. Through diverse apostolates and in collaboration with others, we commit ourselves to proclaim the Good News of God's love. To all people of our time by showing concern for those in need, Together we create an environment, which empowers all to find meaning, healing and wholeness of life.

The trustees have referred to the guidance in the Charity Commission’s general guidance on Public Benefit when reviewing the charity's aims and objectives and in planning future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives they have set.

page 1

CHARITY FOR THE SISTERS OF MERCY MIDHURST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

Achievements and performance

Outreach in different areas

The congeration aims to support the religuous anbd chariable works carried out by its menbers, The mionistris of the Sisters of the Congregation, all of which benefit members of the General Public, fall into the following areas:

The Trustees recognise the absolute necessity of ensuring the protection and safety of all those whom the charity serves. This means that all Sisters, in any kind of ministry obtain clearance from the Disclosure and Barring Service (DBS). The Trustees are committed to implementing all policies and procedures of Safeguarding set out by the Diocese of Arundel and Brighton and the RLSS (Religious Life Safeguarding Service).

Areas of ministry the Sisters have engaged in:

The Roman Catholic Diocese of Arundel and Brighton

The Sisters were engaged in parish ministry. This involved visiting people in their homes, nursing homes and hospitals, preparing children and adults to receive the Sacraments of First Holy Communion and Confirmation. Our Sisters regularly visited the elderly and took them hot food. A Sister worked as the Safeguarding Representative for the parish, organising DBS checks for volunteers and informing re appropriate training opportunities.

Ever aware of the growing numbers of mental health issues, the Sisters are available for people to come and talk to about any issues they may have. Since the outbreak of Covid-19, the Sisters have supported parishioners who are lonely and/or in isolation by phoning regularly to ‘check in and chat’, as well as volunteering nationally through the NHS Responder scheme. One Sister volunteered at a COVID vaccination centre in Chichester.

The Sisters continued to care for the planet by recycling as much as possible and by using public transport to reduce carbon emissions. They have also kept abreast of global issues and where possible showed support for those who are marginalised.

The Sisters gather each day to pray for the needs of the world and for those who ask for their prayers. For those Sisters who are no longer able to engage in active ministry, this is regarded as a valuable way of contributing to the healing of our world.

page 2

CHARITY FOR THE SISTERS OF MERCY MIDHURST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

Caring for the membership

The Congregation has an obligation, both moral and legal, to provide for its members, none of whom have resources of their own. Throughout the year the Charity continued to support members of the Congregation in their charitable and religious work, as well as the wellbeing of the members. In common with many religious Congregations in England, the age profile of the members of the Congregation is increasing as existing members grow older and the number of vocations has declined. The Charity realises that provision has to be made for the Sisters who need care.

Ongoing repairs and maintenance work was carried out during the year to update the property.

Financial contributions have also been made during the financial year for the relief of suffering. The contributions have been made to:

Financial review

A summary of the year's results can be found on the Statement of Financial Activities on page 10 of this report and accounts.

The Statement of Financial Activities shows total incoming resources of £372,846 and total resources expended of £254,532. Investments (including bond holdings) amounting to £11,408,070 and net current assets of £1,063,927 are held for the income they earn which go towards the financing of the Charity's present and future needs and the longer term maintenance of the Sisters. The Charity receives little by way of donations from the public. Net outgoing resources (before loss on investment holdings) for the year totalled £118,314 (2022: Net incoming resources - £552,281).

It is the policy of the Charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to approximately 12 month's expenditure. The trustees consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the Charity's current activities while consideration is given to ways in which additional funds may be raised. The level of reserves are currently in-line with 12 month's expenditure.

Investments have performed satisfactorily given market conditions. The trustees, with the advice of their brokers, have continued to trust in the long term capacity for markets to maintain their recovery and have made no major alterations in their portfolio, believing it to have the best possible spread in the circumstances.

In summary, the trustees have continued to be consistent in their long term strategy of the consolidation of resources and property assets in order to ensure the future of the sisters and their ministries.

Part of the Charity's funds is held as investments with the aim of producing an income in the shorter term and capital growth in the longer term. The objective is to achieve a balance between income and capital growth, the longer term growth being necessary for the maintenance of the Sisters, i.e. their retirement. This aim has been shared with the Investment Managers who give advice, knowing the Trustees' policy and ethical views. The Trustees receive at least a quarterly portfolio valuation. The Trustees review their investment policy annually.

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 risk the Congregation currently faces and have reviewed the measures needing to be put in place to deal with them. The Trustees have identified the following main areas where risks may occur:

page 3

CHARITY FOR THE SISTERS OF MERCY MIDHURST

TRUSTEES' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

Governance and Management looks at the risk of the Congregation's composition of current membership: a large percentage of the members are advanced in years and in need of care. The Trustees considered how best to provide for the needs of the older members of the Congregation and how to make good use of resources to support those who are still in active ministry.

Operational risk looks at the risks inherent in the Charity's activities, including working with children and vulnerable adults.

Financial risks include those that could arise as a result of poor budgetary control, inappropriate spending, inappropriate investment policies, etc.

Reputational risk looks at possible damage to the Congregation's and / or charity's reputation as recommended by COPCA.

Laws, regulations, external and environment risks look at the effects of government policies, the consequences of noncompliance with laws and regulations and poor risk assessment in the Charity's activities.

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

The plan over the coming year is to add a small extension to 1 St Margaret’s Way to create a small sitting room for the Sisters. We will also be able to use it as an overflow for the dining room, which, currently, is just big enough for the Sisters, but is too small to accommodate any visitors.

We also plan to carry out extensive roof repairs to St Joseph’s as well as renew the guttering and downpipes.

6 Little Ashfield will require some work and we plan to commence by recarpeting throughout the house and painting the external doors in the coming year.

Conclusion

The Trustees wish to record their recognition of the commitment of the members of the Congregation. Their dedication and contribution to advancing the Mission Statement is much appreciated.

Looking back over the year, the Trustees are grateful to the many people who have offered their expertise to guide and support them. This is regarded as a source of encouragement and affirmation.

page 4

CHARITY FOR THE SISTERS OF MERCY MIDHURST

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 AUGUST 2023

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.

page 6

CHARITY FOR THE SISTERS OF MERCY MIDHURST

INDEPENDENT AUDITOR'S REPORT

TO THE TRUSTEES OF CHARITY FOR THE SISTERS OF MERCY MIDHURST

Opinion

We have audited the financial statements of Charity for the Sisters of Mercy Midhurst (the ‘charity’) for the year ended 31 August 2023 which comprise the statement of financial activities, the balance sheet 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:

page 7

CHARITY FOR THE SISTERS OF MERCY MIDHURST

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF CHARITY FOR THE SISTERS OF MERCY MIDHURST

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatements due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud, the audit engagement team made enquiries of management, and those charged with governance, regarding the procedures relating to identifying, evaluating and complying with;

  1. laws and regulations and whether they were aware of any instances of non-compliance;

  2. detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

  3. the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, Charities Act 2011 and the Charities Statement of Recommended Practice. We performed audit procedures to detect non-compliance, which may have a material impact on the financial statements. These included reviewing financial statement disclosures and evaluating advice received from external advisors. There were no significant laws and regulations we deemed as having an indirect impact on the financial statements.

page 8

CHARITY FOR THE SISTERS OF MERCY MIDHURST

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

TO THE TRUSTEES OF CHARITY FOR THE SISTERS OF MERCY MIDHURST

Risks identified Audit response Management Override Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to any significant, unusual transactions entered into outside of the normal course of business. Revenue Recognition Audit procedures performed included but were not limited to performing walk through tests to identify the control procedures in place and once an understanding of the income process was gained, a substantive test was carried out using a sample basis to ensure the income existed and were complete in the accounts.

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.

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.

Richard Place Dobson Services Limited

3 June 2024 Ground Floor 1 - 7 Station Road Crawley West Sussex RH10 1HT

Richard Place Dobson Services Limited 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.

page 9

CHARITY FOR THE SISTERS OF MERCY MIDHURST

STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 AUGUST 2023

Current financial year
Unrestricted
Unrestricted
funds
funds
general
designated
2023
2023
Notes
£
£
Income from
Donations received
3
-
-
Investments
4
268,051
-
Other incoming resources
5
104,795
-
Total income
372,846
-
Expenditure on:
Raising funds
6
-
19,955
Charitable activities
7
209,003
25,574
Total resources expended
209,003
45,529
Net gains/(losses) on investments
11
-
(299,880)
Net incoming resources before transfers
163,843
(345,409)
Gross transfers between funds
(275,574)
275,574
Net movement in funds
(111,731)
(69,835)
Fund balances at 1 September 2022
252,159
12,620,857
Fund balances at 31 August 2023
140,428
12,551,022		 Total
2023
£
-
268,051
104,795
372,846
19,955
234,577
254,532
(299,880)
(181,566)
-
(181,566)
12,873,016
12,691,450		 Total
2022
£
21,030
174,575
628,461
824,066
20,451
251,334
271,785
21,078
573,359
-
573,359
12,299,657
12,873,016

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

All income and expenditure derive from continuing activities.

page 10

CHARITY FOR THE SISTERS OF MERCY MIDHURST

STATEMENT OF FINANCIAL ACTIVITIES (CONTINUED) INCLUDING INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31 AUGUST 2023

Prior financial year

Unrestricted
Unrestricted
funds
funds
general
deisgnated
2022
2022
Notes
£
£
Income from
Donations received
3
21,030
-
Investments
4
174,575
-
Other incoming resources
5
77,987
550,474
Total income
273,592
550,474
Expenditure on:
Raising funds
6
-
20,451
Charitable activities
7
217,334
34,000
Total resources expended
217,334
54,451
Net gains/(losses) on investments
11
-
21,078
Net incoming resources before transfers
56,258
517,101
Gross transfers between funds
(146,288)
146,288
Net movement in funds
(90,030)
663,389
Fund balances at 1 September 2021
342,190
11,957,467
Fund balances at 31 August 2022
252,160
12,620,856		 Total
2022
£
21,030
174,575
628,461
824,066
20,451
251,334
271,785
21,078
573,359
-
573,359
12,299,657
12,873,016

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

All income and expenditure derive from continuing activities.

page 11

zo23 z{t22
Notes s T s $
Firedassets
'langibieassets 13 219,4s3 258,980
Invesiments t4 Ii,408.070 11"72t,1,70
I _627,523
Currentassets
Debtors 15 33,980 6,100
Cash atbankandinhand 1,041,383 Rq? 7qq
1,A75,363 9A33e9
Creditors:amountstallingduewithinone
year 16 (11,436) {10,533)
Net crinentassets 1,063.927 892,866
Totalassets lesscurrentliabilities 12,691.450 r2,873,016
Income funds
Unrestricted funds
Designatedhrlds
General unrestlictedfrlnds		 t7 12,526,021
165-429		 12,62A.856
252,160
12,691,450 12,873,016
r2,691.450 12.873.016

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

1 Accounting policies

Charity information

Charity for the Sisters of Mercy Midhurst is a charity set up under a trust deed and registered with the Charities Commission in England and Wales.

1.1 Accounting convention

The financial statements have been prepared in accordance 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)". 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 principal accounting policies adopoted 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.

Designated funds comprise funds which have been set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.

1.4 Income

Sisters Pension income and other incoming resources is included in the Statement of Financial Activities (SOFA) in the year to which it relates.

Donations, legacies and similar incoming resources are included in the year in which they are receivable which is when the charity becomes entitled to the resource.

Income from Investments is included in the SOFA in the year in which it is receivable.

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.

page 13

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

1 Accounting policies

(Continued)

All expenditure is included on an accruals basis and is recognised when a legal or constructive obligation arises.

Charitable costs relate to the cost of serving the community and have been allocated directly to functional headings as shown in the SOFA.

Governance costs are included as and when a legal and constructive obligation arises, and include legal and professional costs, audit fees and bank charges.

Support costs are those functions which assist the work of the charity but do not directly relate to undertaking charitable activities. Support costs include governance costs. These costs have been allocated to the main charitable activity.

1.6 Tangible fixed assets

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

Land and buildings Straight line over fifty years Fixtures, fittings & equipment 15% straight line Motor vehicles 20% straight line Improvements to property 15% straight line

All assets costing more than £500 are capitalised.

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.

page 14

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 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 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 Taxation

The charity is exempt from tax on its charitable activities.

1.12 Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

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

1.13 Retirement benefits

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

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The key accounting estimates and judgements are:

Valuation of investments - this is provided by the investment manager and is based on bid value at the year end date.

Estimation of residual value, useful economic life and depreciation of freehold land and buildings.

page 15

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

3 Donations received

Total Unrestricted
funds
general
2023 2022
£ £
Donations - 21,030

4 Investments

Unrestricted Unrestricted
funds funds
general general
2023 2022
£ £
Rental income 8,300 7,800
Income from listed investments 141,897 130,000
Interest receivable 117,854 36,775
268,051 174,575

5 Other incoming resources

Unrestricted Unrestricted Unrestricted Total
funds funds funds
general general designated
2023 2022 2022 2022
£ £ £ £
Net gain on disposal of tangible fixed assets 10,000 - 550,474 550,474
Sisters pension income 94,795 77,987 - 77,987
104,795 77,987 550,474 628,461
Raising funds
Unrestricted Unrestricted
funds funds
designated designated
2023 2022
£ £
Portfolio management 19,955 20,451
19,955 20,451

6 Raising funds

page 16

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

7 Charitable activities

Direct Direct
charitable charitable
expenditure expenditure
2023 2022
£ £
Staff costs 19,056 45,340
Depreciation and impairment 14,527 14,028
Rates and water 2,825 5,177
Insurance 16,027 17,579
Light and heat 9,516 11,748
Telephone 2,050 4,944
Postage and stationery 1,795 1,899
Provisions and cooking 19,863 20,950
Chapel expenses 340 80
Courses and subscriptions 3,195 1,956
Donations and stipends 27,421 4,137
Repairs and maintenance 39,722 50,158
Sisters' expenses 38,229 42,860
Garden expenses 5,303 6,670
Motor expenses 8,539 6,991
208,408 234,517
Share of governance costs (see note 8) 26,169 16,817
234,577 251,334
Analysis by fund
Unrestricted funds - general 209,003 217,334
Unrestricted funds - designated 25,574 34,000
234,577 251,334

page 17

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

8 Support costs

Support costs
Support costs
Governance
costs
£
£
Bank charges
-
348
Auditors' remuneration
-
10,500
Legal and professional fees
-
15,321
-
26,169
Analysed between
Charitable activities
-
26,169		 2023
Support costs
Governance
costs
£
£
£
348
-
471
10,500
-
7,200
15,321
-
9,146
26,169
-
16,817
26,169
-
16,817		 2022
£
471
7,200
9,146
16,817
16,817

Governance costs includes payments to the auditors of £10,500 (2022 - £7,200) for audit fees.

9 Trustees

The trustees are also members of the community. Members are maintained by the charity and premises, meals and other living expenses are paid by the charity. None of the trustees (or any persons connected with them) received any remuneration during the year or receive any reimbursement of expenses other than those received as an acting member of the community.

10 Employees

The average monthly number of employees during the year was:

2023 2022
Number Number
Midhurst Convent 1 2
Employment costs 2023 2022
£ £
Wages and salaries 15,916 38,227
Social security costs 1,467 4,091
Other pension costs 1,673 3,022
19,056 45,340

The Trustees are the key members of management and do not receive remuneration from the Charity.

There were no employees whose annual remuneration was £60,000 or more.

page 18

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

11 Net gains/(losses) on investments

Unrestricted Unrestricted
funds funds
designated designated
2023 2022
£ £
Revaluation of investments (298,860) -
Gain/(loss) on sale of investments (1,020) 21,078
(299,880) 21,078

12 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.

13 Tangible fixed assets

Land and
buildings
Fixtures, fittings
& equipment
Motor vehicles
Improvements
to property
£
£
£
£
Cost
At 1 September 2022
294,286
8,395
44,070
48,900
Disposals
(25,000)
-
-
-
At 31 August 2023
269,286
8,395
44,070
48,900
Depreciation and impairment
At 1 September 2022
100,516
1,140
29,443
5,572
Depreciation charged in the year
-
1,259
5,933
7,335
At 31 August 2023
100,516
2,399
35,376
12,907
Carrying amount
At 31 August 2023
168,770
5,996
8,694
35,993
At 31 August 2022
193,770
7,255
14,627
43,328		 Total
£
395,651
(25,000)
370,651
136,671
14,527
151,198
219,453
258,980

14 Fixed asset investments

page 19

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

14
Fixed asset investments
Listed
investments
£
Cost or valuation
At 1 September 2022
4,389,497
Additions
-
Valuation changes
(298,860)
Disposals
(126,534)
At 31 August 2023
3,964,103
Carrying amount
At 31 August 2023
3,964,103
At 31 August 2022
4,389,497		 (Continued)
Bonds and
Deposit
accounts
Total
£
£
7,331,673
11,721,170
112,294
112,294
-
(298,860)
-
(126,534)
7,443,967
11,408,070
7,443,967
11,408,070
7,331,673
11,721,170		 (Continued)
Bonds and
Deposit
accounts
Total
£
£
7,331,673
11,721,170
112,294
112,294
-
(298,860)
-
(126,534)
7,443,967
11,408,070
7,443,967
11,408,070
7,331,673
11,721,170
11,408,070
11,408,070
11,721,170

The value of investments held outside of the UK was £339,534 (2022: £318,695)

The historical cost of investments was £3,964,104 (2022: £3,267,216).

No investments were held in companies which represented more than 5% of the total fixed assets held.

15 Debtors

Amounts falling due within one year:
Other debtors
Prepayments
Amounts falling due after more than one year:
Other debtors
Total debtors		 2023
£
476
3,504
3,980
2023
£
30,000
33,980		 2022
£
1,035
5,067
6,100
2022
£
-
6,100

The charity sold some land for consideration of £5,000 and a balance of £30,000 receivable in 10 years time with the option to sell or return the land.

page 20

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

16 Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
Trade creditors
Accruals and deferred income		 2023
£
1,140
10,296
11,436		 2022
£
-
10,533
10,533

17 Designated funds

The income funds of the charity include the following designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes:

Movement in funds
Balance at Incoming Resources Transfers Investments Balance at
1 September resources expended gains/losses 31 August 2023
2022
£ £ £ £ £ £
Investment fund 12,027,086 - (19,955) - (299,880) 11,707,251
Land and buildings fund 193,770 - (25,000) - - 168,770
Building fund 400,000 - (25,574) 275,574 - 650,000
12,620,856 - (70,529) 275,574 (299,880) 12,526,021
Movement in funds
Balance at Incoming Resources Transfers Investments Balance at
1 September resources expended gains/losses 1 September
2021 2022
£ £ £ £ £ £
Investment fund 10,203,774 - (20,451) 62,942 232,136 12,027,086
Land and buildings fund 1,103,693 550,474 (34,000) (1,426,397) - 193,770
Building fund 650,000 - - (250,000) - 400,000
11,957,467 550,474 (54,451) 71,252 232,136 12,620,856

The Investment Fund is set aside to provide income for the ongoing use in ministries and allowing the sisters to provide the charity objects.

The Land and Buildings Fund is set aside to represent the charity's use of Land and Buildings. The movement in the year represents the annual depreciation charge.

The Building Fund represents the balance of funds set aside to cover the ongoing upkeep and repair costs of the buildings.

page 21

CHARITY FOR THE SISTERS OF MERCY MIDHURST

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 AUGUST 2023

18
Analysis of net assets between funds
Unrestricted
funds
2023
£
Fund balances at 31
August 2023 are
represented by:
Tangible assets
50,684
Investments
-
Current assets/(liabilities)
365,318
416,002		 Designated
funds
2023
£
168,769
11,408,070
698,609
12,275,448		 Total
Unrestricted
funds
2023
2022
£
£
219,453
13,726
11,408,070
-
1,063,927
238,434
12,691,450
252,160		 Designated
funds
2022
£
245,254
11,721,170
654,432
12,620,856		 Total
2022
£
258,980
11,721,170
892,866
12,873,016

Included within the designated fund balance is an investment revaluation reserve of £822,401 (2022: £1,122,281).

19 Related party transactions

There were no disclosable related party transactions during the year (2022 - none).

20
Cash generated from operations
(Deficit)/surpus for the year
Adjustments for:
Investment income recognised in statement of financial activities
Gain on disposal of tangible fixed assets
Loss/(gain) 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
Increase/(decrease) in creditors
Cash absorbed by operations
21
Analysis of changes in net funds
The charity had no debt during the year.		 2023
£
(181,566)
(268,051)
(10,000)
1,020
298,860
14,527
2,122
903
(142,185)		 2022
£
573,359
(174,575)
(550,474)
(21,078)
-
(10,283)
2,960
(157)
(180,248)

page 22