THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2020
THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
I N D E X
Year ended 31 December 2020
| Page | |
|---|---|
| General information | 2 |
| Trustees’ annual report | 3 |
| Independent examiner’s report | 7 |
| Statement of financial activities | 8 |
| Balance sheet | 9 |
| Notes to the financial statements | 10 |
| Appendices | |
| Investment summary | Appendix 1 |
| History of grants paid to the Royal College of Surgeons of England | Appendix 2 |
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
G E N E R A L I N F O R M A T I O N
Year ended 31 December 2020
Charity Registration number
252951
Patron
HRH The Duke of Kent KG
Trustees Justin Ash Lord Ribeiro Kt CBE FRCS (Retired 5 October 2020) Julian Soper Jolyon Berry Antony Narula FRCS(Eng) Paul Copsey Howard Sabin FRCS(Eng), FRCS(Ed) (Appointed 6 October 2020) Jonathon Randall (Appointed 6 October 2020) Registered office 22 Chancery Lane London WC2A 1LS Independent examiner Gordon Spinks ACA Dixon Wilson 22 Chancery Lane London WC2A 1LS Secretary Michael Messent Principal address 7 Hansard Place Romsey Hampshire SO51 0EL Investment bankers and advisers Cazenove Capital Management Limited 1 London Wall Place London EC2Y 5AU Bankers Coutts & Co St Martin’s Office 440 Strand London WC2R 0QS
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
T R U S T E E S ’ A N N U A L R E P O R T
Year ended 31 December 2020
This report should be read in conjunction with the information given on page 2.
Creation
The Fund was created in 1967 as a charitable foundation by contributions from Freemasons of the English Constitution to commemorate the 250th Anniversary of the original Grand Lodge Meeting.
Governing instrument
The governing instrument is a Declaration of Trust dated 8 May 1967.
Objects and public benefit
The Trustees have considered the guidance in respect of public benefit given by the Charity Commission in accordance with the requirements of the Charities Act 2011.
The object of the Fund as set out in paragraph 5 of the Declaration of Trust, as amended by resolution of the Trustees dated 20 May 2014, is to hold the Trust Fund and the income thereof upon trust firstly to pay therefrom all the proper costs and expenses incurred by the Trustees in administering the Charity and the property thereof and subject thereto to apply the same (whether by payments from capital or income) in furthering, in conjunction with the Royal College of Surgeons of England (a registered charity no. 212808), research in the science of surgery provided that in no accounting year shall the expenditure of the Trustees towards the Royal College exceed five per centum of the capital value of the Trust Fund calculated at the end of the accounting year immediately prior to incurring such expenditure. Trust capital is held in perpetuity, subject only to the deduction of all proper costs and expenses incurred by the Trustees should these not be covered by income.
All grants are made to the Royal College of Surgeons of England in accordance with the object of the Trust. The recipient charity has confirmed that, in their opinion, its activities satisfy the public benefit test. The Trustees are satisfied that this is for the public benefit and that there is no detriment or harm that might arise from carrying out this object. No person or body receives any private benefit other than as a beneficiary.
Organisational structure
The Secretary has overall control of the general conduct of the Fund's activities and is responsible for the implementation of the policies of the Trustees.
Trustees’ policies
The Trustees' policies are:
(a) to invest trust capital in order to provide a total return to further the trust objective.
- (b) to give grants to the Royal College of Surgeons of England.
Trustees
The names of the individuals who served as Trustees during the period are shown on page 2.
The power to appoint new Trustees is vested in the Grand Master of the United Grand Lodge of England.
There must be at least three and no more than seven Trustees.
The Trustees have unrestricted power of investment.
The Trustees meet at least twice each year to consider the Charity's activities and performance.
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
T R U S T E E S ’ A N N U A L R E P O R T
Year ended 31 December 2020
Reserves
In line with the guidance issued by the Charity Commission, the Trustees have reviewed the need for reserves. The Trustees seek to apply all income in pursuance of the stated objects of the Fund as soon as is reasonably prudent. The present intention of the Trustees is to make annual grants to the Royal College of Surgeons of England sufficient to contribute to the support of four research fellowships. The Trustees and the College seek to fund a consistent number of research fellowships, year on year, and, to achieve this objective, the Trustees may have to resort to capital, within the permitted limit. The extent to which capital has been expended over the years is reflected in the figures of net current assets as set out in note 13 on page 13.
The Trustees monitor the level of reserves regularly.
Connected charities
There are no connected charities.
Investment policy
It is the policy of the Trustees to invest in equities, in fixed interest stocks, in alternative investments, and to place money with deposit takers.
From May 2020 and currently, the benchmark ranges for asset allocation were 55-80% Global equities, 5-25% fixed interest, 5-25% alternative investments and 0-10% cash. The investment policy was updated in the year in light of market developments in order to achieve the long term objective which is to generate a total return of inflation + 4%.
The objective is to achieve growth in capital and income. Within that broad objective, the aim of the Trustees is to obtain an annual total return sufficient to allow the disbursement of £220,000 or thereabouts from these investments, after covering expenses, to be achieved with effect from and including the year 2015. The current year disbursement of £180,000 is a temporary reduction from the targeted disbursement and is in response to financial uncertainty owing to the Covid-19 pandemic.
The Trustees seek to produce the best possible financial return in order to achieve the greatest amount of money available for the furtherance of medical research, whilst investing in a manner consistent with the Fund’s aims and avoiding investing in businesses which may reasonably be regarded as undertaking activities which are injurious to individuals or society in general. The Trustees have resolved to invest in ESG funds with a weighting of 5-10%, providing they meet all other investment criteria. It is recognised that it is unrealistic to have zero tolerance to holdings in securities due to the way some investments are held within funds and because businesses are reclassified from time to time. As shown in the following table, some tolerance of restricted businesses shall be permitted, however there shall be no direct investment in certain businesses, as specified:
| Direct investment | Total exposure in any one fund |
Total exposure overall |
|
|---|---|---|---|
| Tobacco | No | 7.5% | 2.5% |
| Gambling | No | 7.5% | 2.5% |
| Pornography | No | 2.5% | 1% |
| Predatory Lending | No | 2.5% | 1% |
| Fossil Fuels | Yes | 10% | 5% |
The Trustees have appointed Cazenove Capital Management Limited ("Cazenove") as investment advisers. Cazenove have discretion to change the investments without the specific instructions of the Trustees. Some funds are placed on deposit with Cazenove, otherwise investments are to be held in pooled funds. The performance benchmarks are the FTSE All Share Index for equity funds, the FTSE Government All Stocks Index for fixed interest funds, and 7 day LIBID for alternative investments. Cazenove report four times a year to the Trustees on the investment performance of the Fund and the investment policy is reviewed by the Trustees at least once a year.
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
T R U S T E E S ’ A N N U A L R E P O R T
Year ended 31 December 2020
Financial review
During the year investment income totalled £163,943 (2019 - £215,159). 2020 included a donation of £312 (2019 - £150), received from individual donors. All donations were treated as additions to the endowment (capital) fund with the aim of increasing the value of annual grants to the Royal College of Surgeons of England.
Grants amounting to £180,000 (2019 - £220,000) were made by the Trustees to the Royal College of Surgeons of England.
At the year-end the investments were valued at £7,004,427 (2019 - £6,923,863). The Trustees are aware of the impact of the Covid-19 pandemic on the valuation of and the future income from the investments. The Trustees continue to work with their investment advisers to mitigate the impact, and have reduced the expenditure on grants this year, albeit capital can be called upon to meet a shortfall in income, if one occurs. All investments are held in accordance with the Declaration of Trust.
The unrestricted fund shows a total deficit of £19,855. In accordance with the Charities SORP (FSR102) it is acceptable to carry forward a deficit, as the Trustees have a realistic expectation that future income will be received to cover the shortfall.
Cazenove levied investment management charges in the year amounting to £24,160 (2019 - £24,519).
In accordance with the terms of an Order granted by the Charity Commissioners dated 20 May 2011, the Trustees have identified the unapplied total return at 31 December 2012 based on the difference between the net funds at that date less the initial capital of £582,769. Additions to the unapplied total return have been calculated for subsequent accounting periods based on the excess total return less grants and expenses, as set out in note 13 to the financial statements. An application of the unapplied total return has been made in the year to 31 December 2020, in respect of the shortfall of income of £8,680 arising for the year ended 31 December 2019. The Trustees concluded that it was not necessary to obtain advice regarding the use of power conferred on the Trustees by the Order.
Financial statements
Accounts are set out on pages 8 to 14. They have been drawn up in compliance with the relevant provisions of the Charities Act 2011 and with the Declaration of Trust.
Statement of Trustees’ responsibilities
The Trustees are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
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 Charity's financial activities during the year and of its financial position at the end of the year. In preparing financial statements giving a true and fair view, the Trustees should follow best practice and:
-
select suitable accounting policies and then apply them consistently;
-
observe the methods and principles of the Charities SORP;
-
make judgments and estimates that are reasonable and prudent;
-
state whether applicable accounting standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue in operation.
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
T R U S T E E S ’ A N N U A L R E P O R T
Year ended 31 December 2020
The Trustees are responsible for keeping accounting records which disclose with reasonable accuracy the financial position of the charity and which enable them to ensure that the financial statements comply with the regulations made under the Charities Act 2011. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
On behalf of the Trustees
JUSTIN ASH
2021 9 June
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
I N D E P E N D E N T E X A M I N E R ’ S R E P O R T
Year ended 31 December 2020
INDEPENDENT EXAMINER'S REPORT TO THE TRUSTEES OF THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
I report to the Trustees on my examination of the accounts of the Trust for the year ended 31 December 2020.
Responsibilities and basis of report
As the Charity Trustees of the Trust you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 (‘the Act’). You are satisfied that an audit is not required for this year under charity law and that an independent examination is needed.
I report in respect of my examination of the Trust’s accounts carried out under section 145 of the 2011 Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the Act. Dixon Wilson, a firm of Chartered Accountants of which I am a partner, has provided bookkeeping services to the Trust and I have applied the FRC’s Revised Ethical Standard in carrying out my examination.
An independent examination does not involve gathering all the evidence that would be required in an audit and consequently does not cover all the matters than an auditor considers in giving their opinion on the accounts. The planning and conduct of an audit goes beyond the limited assurance that an independent examination can provide. Consequently, I express no opinion as to whether the accounts present a ‘true and fair’ view and my report is limited to those specific matters set out in the independent examiner’s statement.
Independent examiner’s statement
I am qualified to undertake the examination by being a qualified member of the Institute of Chartered Accountants in England and Wales.
I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
-
accounting records were not kept in respect of the Trust as required by section 130 of the Act; or
-
the accounts do not accord with those records; or
-
the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a ‘true and fair view’ which is not a matter considered as part of an independent examination; or
-
the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
GORDON SPINKS ACA Dixon Wilson 22 Chancery Lane London WC2A 1LS
17 June 2021
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
S T A T E M E N T O F F I N A N C I A L A C T I V I T I E S
Year ended 31 December 2020
| Unrestricted Endowment Note Funds Funds £ £ Income and expenditure Income and endowments from: Donations and legacies 4 - 312 Investments 163,943 - Total 163,943 312 Expenditure on: Raising funds 5 - 24,160 Charitable activities 6 183,798 - Total resources expended 183,798 24,160 Net outgoing resources before other recognised gains and losses (19,855) (23,848) Other recognised (losses)/gains: Net investment (losses)/gains in year 9 - (70,054) Net movement in funds for the year (19,855) (93,902) Transfer between funds 13 8,680 (8,680) Total (deficit)/funds brought forward (8,680) 7,155,126 Total (deficit)/funds carried forward (page 9) (19,855) 7,052,544 |
2020 Unrestricted Endowment Total Funds Funds £ £ £ 312 - 150 163,943 215,159 - 164,255 215,159 150 24,160 - 24,519 183,798 223,839 - 207,958 223,839 24,519 (43,703) (8,680) (24,369) (70,054) - 758,060 (113,757) (8,680) 733,691 - 27,650 (27,650) 7,146,446 (27,650) 6,449,085 7,032,689 (8,680) 7,155,126 |
2019 Total £ 150 215,159 215,309 24,519 223,839 248,358 (33,049) 758,060 725,011 - 6,421,435 7,146,446 |
|
|---|---|---|---|
All amounts are in respect of continuing operations.
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
B A L A N C E S H E E T
At 31 December 2020
| Note Fixed assets Investments at market value 9 Current assets Debtors 10 Cash Creditors: amounts falling due within one year 11 Net current liabilities Total net assets 13 Represented by: Capital funds – Endowment 14 Income funds – Unrestricted |
2020 £ 7,101,893 2,191 27,827 30,018 (99,222) (69,204) 7,032,689 7,052,544 (19,855) 7,032,689 |
2019 £ 7,200,442 8,947 56,474 65,421 (119,417) (53,996) 7,146,446 7,155,126 (8,680) 7,146,446 |
|---|---|---|
The financial statements on pages 8 to 14 were approved by the Trustees on 2021. 9 June
JUSTIN ASH Trustee
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Year ended 31 December 2020
1. General information
The Charity is an unincorporated trust. The principal address of the Charity is 7 Hansard Place, Romsey, Hampshire SO51 0EL.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective October 2019) – (Charities SORP (FRS 102)).
The Freemasons’ Fund for Surgical Research meets the definition of a public benefit entity under FRS 102.
Preparation of the accounts on a going concern basis
The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern.
These financial statements have been prepared under the historical cost convention modified to include the revaluation of investments.
The financial statements are presented in Sterling which is the functional currency of the company and rounded to the nearest £.
Income recognition
All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received, and the amount of income receivable can be measured reliably.
Donations are recognised once the Charity has entitlement to the donations, it is certain that the donations will be received, and the monetary value of the donations can be measured with sufficient reliability.
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity; this is normally upon notification of the interest paid or payable by the bank. Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.
Expenditure recognition
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to that expenditure, it is probable that settlement will be required, and the amount of the obligation can be measured reliably. For grants payable, this is the point at which the recipient is notified. All expenditure is accounted for on an accruals basis.
Investments
Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.
Cash balances held as part of a fixed asset investment portfolio are presented as part of fixed assets.
(continued)
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
Year ended 31 December 2020
2. Accounting policies (continued)
Realised gains and losses
All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year-end and their carrying value. Realised and unrealised investment gains and losses are combined in the Statement of Financial Activities.
Capital funds – Endowment
Incoming resources arising from Endowment funds are unrestricted unless otherwise specified by the donor.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities, or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
3. Staff numbers
The average number of persons employed by the charity during the year was 0 (2019 - 0).
| 4. Voluntary income Other donations |
2020 £ 312 |
2019 £ 150 |
|---|---|---|
| 5. Expenditure on raising funds Investment management charges |
2020 £ 24,160 |
2019 £ 24,519 |
| 6. Expenditure on charitable activities Note Grants to Royal College of Surgeons of England Governance costs: Accountancy and independent examination 7 Bank charges LEI provider fee |
2020 £ 180,000 3,240 483 75 183,798 |
2019 £ 220,000 3,300 455 84 |
| 223,839 |
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Year ended 31 December 2020
| 7. Total resources expended has been stated after charging Accountancy Independent examination |
2020 £ 1,950 1,290 3,240 |
2019 £ 1,980 1,320 |
|---|---|---|
| 3,300 |
8. Trustees
Trustees are not remunerated, and no expenses have been incurred.
| 9. Investments Quoted investments: Carrying value (market value) at beginning of year Less: proceeds of disposals Add: cost of additions Net (loss)/gain for the year (page 8) Carrying value (market value) at end of year Cash Total fixed asset investments (page 9) Quoted investments at cost |
2020 £ 6,923,863 (2,261,474) 2,412,092 (70,054) 7,004,427 97,466 7,101,893 5,604,017 |
2019 £ 6,409,791 (1,021,988) 778,000 758,060 |
|---|---|---|
| 6,923,863 276,579 |
||
| 7,200,442 | ||
| 5,233,549 | ||
| 10. Debtors Accrued income |
2020 £ 2,191 |
2019 £ 8,947 |
| 11. Creditors: amounts falling due within one year Grants payable Accruals |
2020 £ 90,000 9,222 99,222 |
2019 £ 110,000 9,417 |
| 119,417 |
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Year ended 31 December 2020
12. Financial assets and liabilities
The following are financial assets that qualify as basic financial instruments and are initially recognised at their transaction value and subsequently measured at their fair value through income and expenditure:
transaction value and subsequently measured at their |
fair value through income and expenditure: |
|
|---|---|---|
| 2020 | 2019 | |
| £ | £ | |
| Financial assets | ||
| Investments | 7,004,427 | 6,923,863 |
| 13. Analysis of net assets between funds Unrestricted funds Endowment funds Total at 31 December 2020 |
Fixed assets £ - 7,101,893 7,101,893 |
Net current assets £ (19,855) (49,349) (69,204) |
Total £ (19,855) 7,052,544 7.032,689 |
|---|---|---|---|
At 31 December 2012, the Trustees identified that the Trust had funds of £2,742,349 representing unapplied total return, calculated as the total net assets of £3,325,118 at that date, less the initial capital of £582,769. Since that date, the following movements have taken place:
| At 1 January (Decrease)/increase in unapplied total return Investment management fees Allocated to trust for application (page 8) At 31 December |
2020 £ 4,059,174 (70,054) (24,160) (8,680) 3,956,280 |
2019 £ 3,353,283 758,060 (24,519) (27,650) 4,059,174 |
|---|---|---|
After the year-end the Trustees resolved to make a transfer of £19,855 from Endowment funds to Unrestricted funds as permitted under the constitution of the Fund.
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THE FREEMASONS’ FUND FOR SURGICAL RESEARCH
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Year ended 31 December 2020
14. Capital funds – Endowment
Capital funds which at 31 December 2020 amounted to £7,052,544 arise from contributions received as follows from the Supreme Grand Chapter:
| the Supreme Grand Chapter: | |
|---|---|
| Prior to 31 December 1969 | £582,769 |
| During the year ended 31 December 2014 | £2,424,900 |
| During the year ended 31 December 2016 | £35,000 |
| During the year ended 31 December 2017 | £22,000 |
| During the year ended 31 December 2018 | £27,733 |
In light of the capital contribution from the Supreme Grand Chapter in May 2014 and the value of the Fund immediately prior to its receipt, it was resolved by the Trustees that future Freemasons’ Fellowships, tenable at The Royal College of Surgeons, shall henceforth be attributed to the United Grand Lodge of England and to the Supreme Grand Chapter in the proportion of 3:2 with effect from 1 January 2015. Of the four Fellowships funded in the year ended 31 December 2020, two were attributed to the United Grand Lodge of England. The position since 1 January 2015 is as follows:
| Year | Proportion | United Grand Lodge | Supreme Grand Chapter | Total |
|---|---|---|---|---|
| 2015 | 2:2 | 2 | 2 | 4 |
| 2016 | 3:1 | 3 | 1 | 4 |
| 2017 | 3:2 | 3 | 2 | 5 |
| 2018 | 2:2 | 2 | 2 | 4 |
| 2019 | 2:2 | 2 | 2 | 4 |
| 2020 | 2:2 | 2 | 2 | 4 |
15. Related party transactions
There have been no related party transactions in the year.
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