# **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST TRUSTEES’ REPORT AND ACCOUNTS FOR THE YEAR ENDED 5 APRIL 2022**
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST LEGAL AND ADMINISTRATIVE INFORMATION**
|**Trustees**|Adam Munthe (Chair)|
|---|---|
||John Harkness (Deputy Chair)|
||Martin Drury|
||Lindsay Stainton|
||Turi Munthe|
||Tobie Munthe|
||Peter Richey|
||Edward Bonham-Carter|
||Alex Walsh|
|**Secretary**|Josephine Sheridan|
|**Charity Number**|283266|
|**Principal Address**|5 Earls Walk|
||London|
||W8 6EP|
|**Auditors**|Chariot House Limited Chartered Accountants|
||44 Grand Parade|
||Brighton|
||East Sussex BN2 9QA|
|**Solicitors**|Charles Russell Speechlys|
||5 Fleet Place|
||London|
||EC4M 7RD|
|**Investment advisors**|Walker Crips Investment Management Ltd|
||Old Change House|
||128 Queen Victoria Street|
||London EC4V 4BJ|
- 1 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **CONTENTS**
||**Page**|
|---|---|
|Trustees’ report|3 - 9|
|Statement of Trustees’ responsibilities|10|
|Independent auditors report|11 - 13|
|Statement of financial activities|14|
|Balance Sheet|15|
|Cash Flow Statement|16|
|Notes to the accounts|17 - 24|
- 2 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **TRUSTEES’ REPORT**
## _FOR THE YEAR ENDED 5 APRIL 2022_
The Trustees present their report and accounts for the year ended 5 April 2022.
The accounts have been prepared in accordance with the accounting policies set out in the note to the accounts and comply with the Charity Trust deed, the Charities Act 2011 and the Statement of Recommended Practice, "Accounting and Reporting by Charities", applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS102) effective 1 January 2019.
## **Objectives and activities**
The Charity Trust’s objectives are to protect and maintain, for the benefit of the public, Hellens Manor, Much Marcle, Herefordshire, and to make the house available for educational and cultural activities relevant to the local community. The PMM Charity Trust was given a cy-près authorisation by the Charity Commission to sell Southside House to help us maximise our charitable purposes at Hellens.
The house is regularly open to the general public on payment of a nominal entrance fee which covers a guided tour. Specialist groups are catered for with organised tours.
The Charity Trust is engaged in a number of activities, most of which are designed to encourage activities in music, literacy/literature/poetry, and the environment, with emphasis placed on activities of special benefit to the local community in Herefordshire, with the West Midlands.
In order to achieve its objectives, the Chairman, a working party of the Trustees, together with the General Manager and team at Hellens Manor are actively engaged in promoting visitors and organising special events, whilst ensuring that the property is maintained in good order, and that its unique nature is not destroyed by excessive exposure.
The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the Charity Trust should undertake.
Restoration and repairs continue under the supervision of our historic architecture consultant, Patrick McIlroy.
Education and cultural activities continue to be developed in accordance with the charity trust’s feasibility studies.
## **Hellens**
## **General**
Preparations for the 2022 season were still affected by COVID-19, but we identified that these could be managed under the existing safety regulations with reasonable success.
- 3 -
Picture and miniature restoration and conservation have continued with Alan Derbyshire of the V&A Museum. We are also creating a more robust inventory of the entire collection (Southside House and Hellens) with the help of Dr Juan Tafur, Curator at Southside House and this before the SSH collection is moved to Hellens.
Some of our volunteer guides have used the period of COVID-19 lockdown to research their areas of interest relating to Hellens in order to contribute to the shared archive on G-Suite. Charlie Kimberley has continued her work successfully to develop a volunteer programme covering areas such as guiding, gardens and stewarding. This is producing excellent results, good contacts and improved support.
Hellens supports local charities and communities through sharing resources and facilities. Regular events include a monthly Produce Market supporting local producers, a local Women's Group, an art class, a Sustainability Cafe and our own Back2Wild project for vulnerable children and teenagers.
Annually, the Big Apple festival celebrates local cider and perry producers, and the Herefordshire Forest School Association Outdoor Learning Conference. Other individual charitable and community events include Carriage Foundation Study Day, historical exploration days for local primary schools, a project with Hereford College of Arts Textile Department, 'Young Shakespeare' for local schools in collaboration with Ledbury Poetry Festival, a Green Investing Workshop and a Death Cafe.
## **Works**
The Haywain Barn now operates with The Great Barn as a multi-purpose performance centre for both educational and cultural activities in the community. WC's are provided with one suitable for disabled use. The timber frame repairs to the Barns are of exceptional quality, and serve for demonstration purposes.
The Georgian Stable restoration provides Hellens with short-term residential space for the Trust's community projects both with children and adults.
Conservation and restoration objectives at Hellens continue to focus on the main house, the fabric of the Georgian Stables, the chimneys in the Great Kitchen, and the White Dining room. A quinquennial report by our Historical Architect was completed on the house and outbuildings. Repairs to the East front have not been completed, nor to the gallery wing. COVID-19 has not helped in any of this, but we have continued much of our restoration and conservation work nonetheless. A new biomass system has at last been completed, and installed to support the entire estate using our own fuel resources.
## **Activities**
Concerts, seminars for local primary school teachers, school choirs, educational visits, and historical and story-telling projects have continued more vibrantly at the house for local school children. _Shakespeare for the Young_ continue their school events on site. Community activities continue, as do activities for Much Marcle's twinning with Le Barroux, a village in Southern France, initiated by the Chairman, with visits between residents, and especially school children.
The Chairman is also President of the Ledbury/Strömstadt twinning association where choir, sport and cultural activities continue. In addition to these activities, our yearly local festivities continue - The Ledbury Poetry Festival, Hellens Garden Festival (for the local Children’s Hospice St Michael’s), Hellensmusic Festival, The Big Apple Festival, Church, and Primary school activities, B2W project, and local Rotary/ Lions clubs evenings, etc.
Workshops, events and poetry jams were hosted again for the Ledbury Poetry Festival (of which the
- 4 -
Charity is a Patron, and the Chairman an active partner/advisor). Poets were sponsored into twelve local primary schools. Approx. 3,000 children are now reached through our sponsorship, although many less following the impact of COVID.
Historical organisations from all over the country have made special visits.
The local branch of the National Association of Decorative and Fine Arts Societies (NADFAS) continues to be involved with textile restoration at Hellens on a weekly basis. The team is now midway through the frieze in needlepoint of Hellens’ history over the last thousand years, receiving much attention from needlework associations nationally.
## **Southside House**
## **General**
After agreement with the Charity Commission, Southside House has been sold with the transfer of ownership due to take place on completion, by latest March 2023. All monies realised will return to the Charity for exclusive use at Hellens.
Southside House is still open for concerts, guided tours, private tours/hire and school visits until this winter 2022/23. The team, observing protocol, have recorded and packed the contents of the Muniments and old Green Rooms. These have been boxed and stored, and the team continues to sort, list and pack the archives. Furniture and pictures are now being prepared for professional storage with Williams and Hill. The gardens have been maintained as has the House and its collections.
## **Works**
Our conservation/restoration project on the north façade is now completed. Restoration work on adjacent roofs continues.
## **Activities**
National Trust and Historic Houses groups have visited the House as well as Rotary groups. The gardens have become a small but significant wildlife and eco feature.
## **Achievements and performance**
The Charity Trust's achievements can be seen in the above explanation of our activities. In general, we consider that the right balance has been struck between responsible care, restoration and conservation of the fabric of the two houses and their contents, and the best use of the properties for the advancement of the education of the public by means of our interactive work in and for the local communities. Our Patron HRH Princess Alexandra continues to support the Trust with enthusiasm in the midst of her very busy life.
## **Financial review**
The Statement of Financial Activities, which follows the Auditors Report, shows a net surplus before gains/(losses) on investments of £3,699 compared to a deficit of (£22,646) in the previous year.
- 5 -
Note 11 shows a gain on investment assets of £407,078 (2021 – £1,545,125) compared with an opening value of £8,160,975, representing a year on year increase in the value of investments of 5.0%. Further comment on this movement is given under Investment Policy below.
## **Reserves policy**
The trustees aim to maintain free reserves in unrestricted funds at a level which equates to approximately 6 months of unrestricted charitable expenditure. The trustees consider that this level will provide sufficient funds to respond to any sudden loss of income and ensure that support and governance costs are covered.
The trustees consider that a level of 6 months is sufficient given the flexibility afforded by the total return approach towards the investment of the permanent endowment which allows trustees to transfer amounts from the unapplied total element of the endowment fund in the case of urgent need.
The balance held as unrestricted funds at 5 April 2022 was £2,310,459, of which £84,040 are regarded as free reserves, after allowing for funds tied up in fixed assets. Over an average 6-month period charitable expenditure payments in the period equated to approximately £282,407, whilst the total value of the funds transferred from the Endowment Fund investments to the unrestricted funds for the same period was £196,549. This combined with free reserves of £84,040 totalled £280,590 which was therefore adequate for the Trust’s requirements.
In total some £196,570 (2021 - £195,316) has been expended on the restoration of the properties during the year, all of which was charged on maintenance of properties through the SOFA. No additions were made to the properties during the year (2021 - £0).
## **Investment policy**
The investment portfolio increased in market value during the year by approximately 5.0% or £407,078. Including the income return (£435,499), the increase was of the order of 10.3%. This compares with a rise of 10.1% in the FT All Share index over the same period. As at 5 April 2022 the Endowment Fund was invested as follows:
||5 April|2022|5 April|2021|
|---|---|---|---|---|
||Market|value|Market|value|
|Bonds|£428,828|4.6%|£1,001,426|11.2%|
|Investment Trusts|£7,521,949|80.8%|£6,798,985|75.8%|
|Cash|£198,515|2.2%|£8,728|0.0%|
|Historic Chattels|£105,281|1.1%|£105,281|1.2%|
|Land|£1,052,189|11.3%|£1,052,189|11.8%|
|Accrued Bond Income|£5,423|0.0%|£6,063|0.0%|
|Totals|£9,312,185|100.0%|£8,972,672|100.0%|
As in the previous year, there were redemptions in the Bond section of the portfolio. Reinvestments were made after due consideration by the Trustees covering renewable energy and social housing. These investments are new to the portfolio but will help to maintain the overall income level at around £425,000 without unduly increasing the risk.
During the year there was an increase from £425,634 to £435,499 in income generated, a rise of 2.3%. Looking ahead the main investment fear is that there will be severe dividend cuts as a result of the Covid19 situation which will affect the dividend-paying ability of the Investment Trusts we hold.
- 6 -
However, the investment manager is confident that the Investment Trusts we hold will maintain their payouts, having built up substantial reserves over the years to carry them over difficult times such as we are now experiencing and to keep intact their records of steadily rising pay-outs. Indeed, there might well be some surprise increases. So far our income stream has shown a useful, albeit modest increase.
The Charity Trust has considered social, environmental and ethical considerations in its investment policy.
## **Asset cover for funds**
Note 15 sets out an analysis of the assets attributable to the various funds. These assets are sufficient to meet the Charity’s obligations on a fund by fund basis.
## **Plans for the future**
The Trust continues to work towards a position where we concentrate more funds and efforts on the educational work in the communities, and this especially at Hellens where we serve a wider and more vulnerable parish, and will in the future be based.
We are also enthusiastic about our Hellensmusic Festival which is moving into its 10th anniversary. We have enjoyed packed houses, considerable community awareness, good participation from local schools and colleges, and national coverage until the impact of COVID on our activities. We plan to continue the programme for ten days in May each year.
Our musical initiatives with Espressivo concerts, William Howard (ex-Schubert Ensemble), the Wye Valley Chamber Music Festival, Much Marcle and Eastnor Primary Schools and John Masefield Secondary School, continue to provide the context for our educational efforts over the next years, as well as a venue for concerts.
The Georgian Stables provide accommodation for seminars, workshops, and poets for the Ledbury Poetry Festival in July where we concentrate our resources on the ‘Schools’ initiative (close to 3,000 children worked with the 'Poet-in-schools' initiative). Our chairman is a working patron of the poetry festival. The Great Barn is a favoured venue for the Festival's events.
The Hellens Garden Festival in aid of the children’s hospice movement continues to flourish, involving, however, much more work for the Trust since we became actively responsible for the management and organisation of the festival in 2016. Development continues in the parkland with new specimen trees.
The growth in the level of activities relating to the Hellensmusic and the Hellens Garden Festivals has become such that it was decided to create two legal entities to manage the events as separate organisations, independent of the trust. Hellens Garden Festival was established as a Community Interest Company (CIC) on 16 May 2016, whilst Hellensmusic was established as a Charitable Incorporated Organisation (CIO) on 1 June 2016. The activities of both events are now accounted for separately in the organisations’ own accounts.
It should also be noted that we work with our two other family trust organisations – Villa San Michele on Capri (created by Dr Axel Munthe) www.villasanmichele.eu, and now owned by the Swedish State, and Munthe’s Hildasholm in Dalarna, Sweden www.hildasholm.org.se
- 7 -
Our other activities through the year are concerned with the Trust’s principle focus on musical education, literacy and language work, and ecology and the environment, together with programmes of lectures, seminars, teaching work, concerts, and community activities. Further details are provided elsewhere in the Trustees report.
## **Structure, governance and management**
The Trustees who served during the year were:
|Edward Bonham-Carter|Finances|
|---|---|
|Martin Drury|Houses’ fabric & landscape|
|John Harkness|Deputy Chairman & Finances|
|Adam Munthe|Chairman/Houses’ Supervisor|
|Tobie Munthe|Educational/Cultural|
|Turi Munthe|Media/Social/Political|
|Peter Richey|Furniture & woodwork|
|Lindsay Stainton|Pictures, miniatures|
|Alex Walsh|Legal|
Andrew Kean, our Financial Controller since 1 April 2016 continues to be an effective professional of integrity and acumen.
The Charity Trust was established by a declaration of trust of Major M.G.M.L. Munthe dated 21 August 1981, and is registered with the Charity Commissioners for England and Wales (No. 283266).
A majority of two-thirds of the Trustees is required to remove or appoint a trustee.
The policies and procedures adopted by the Charity Trust for the induction and training of Trustees is a simple process because new Trustees invariably will already have strong links with the Charity Trust before their election. The nature of the Charity Trust also means that new Trustees are only chosen if they have experience and expertise in areas that complement the objectives of the Charity Trust and therefore will need little by way of training.
The Trustees meet on a regular basis two or three times a year, including at least one meeting at each house. Each of the Trustees has a particular function in the management of the Charity Trust (see above).
**Hellens** has a General Manager, Justine Peberdy, who is responsible for managing and overseeing all activities. Sam Massey is Financial Administrator and also runs the tearooms. Jan Vernall oversees the gardens, and Kieran Terry is woodsman and beekeeper. Kat Terry guides, is responsible for the Physic Garden, organises our NADFAS ladies, and heads the Hellens Garden Festival committee. Charlie Kimberley guides and assists in the gardens, and Sam Panter is responsible for housekeeping.
**Southside House** also has an Administrator/Curator, Juan Tafur who will remain in situ until completion of sale. Tamer Abd-Alkrem, a Syrian student granted residency in the UK contributes on a part-time basis with educational/cultural events and gardening, whilst Tom and Georgie Georgeson, and Luke and Chiara Baker assist with general administrative duties.
- 8 -
During the accounting period John Harkness, a Trustee and our investment consultant, working from the London offices of stockbrokers Walker Crips Stockbrokers Limited oversaw the investment activities of the Charity Trust.
The Trustees have conducted a review of the major risks to which the Charity Trust is exposed, in particular those related to the operations and finances of the Charity Trust and are satisfied that systems have been established to mitigate those risks.
On behalf of the Board of Trustees
## **Adam Munthe**
Trustee
Dated: October 2022
- 9 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **STATEMENT OF TRUSTEES’ RESPONSIBILITIES**
The Trustees are responsible for preparing the Trustees’ Report annual accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each year which give a true and fair view of the state of affairs of the Charity Trust and of the incoming resources and application of resources of the Charity Trust for that year. In preparing the financial statements the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the applicable Charities SORP;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charities (Accounts and Reports) Regulations, and the provisions of the Trust deed. They are also responsible for safeguarding the assets of the charity and taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
So far as the Trustees are aware, there is no audit information of which the charity’s auditors are unaware, and each Trustee has taken all the steps that he or she ought to have taken as a Trustee in order to make himself or herself aware of any relevant audit information, and to establish that the charity’s auditors are aware of that information.
- 10 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **Opinion**
We have audited the financial statements of The Pennington Mellor Munthe Charity Trust (the 'charity') for the year ended 5 April 2022 which comprise the Statement of Financial Activities, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
- In our opinion the financial statements:
- give a true and fair view of the state of the charity's affairs as at 5 April 2022 and of its incoming resources and application of resources for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Charities Act 2011.
## **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 Auditors 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 trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our Report of the Independent Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
- 11 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
## **Matters on which we are required to report by exception**
We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:
- the information given in the Report of the Trustees is inconsistent in any material respect with the financial statements ; or
- sufficient accounting records have not been kept; or
- the financial statements are not in agreement with the accounting records and returns; or
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of trustees**
As explained more fully in the Statement of Trustee Responsibilities, the trustees are responsible for the preparation of the financial statements which 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 liquidate the charity or to cease operations, or have no realistic alternative but to do so.
## **Our responsibilities for the audit of the financial statements**
We have been appointed as auditors 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 a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- 12 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Charities Act 2011 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel when considered necessary. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
## **Use of our report**
This report is made solely to the charity's trustees, as a body, in accordance with Section 144 of the Charities Act 2011 and regulations made under Section 154 of that Act. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditors' 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.
Chariot House Limited (Eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006) Chartered Accountants & Statutory Auditor 44 Grand Parade Brighton, East Sussex BN2 9QA
Date: October 2022..................................
- 13 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **STATEMENT OF FINANCIAL ACTIVITIES**
## _FOR THE YEAR ENDED 5 APRIL 2022_
|**Notes**
**Incoming resources from:**
Donations and legacies
**2**
Charitable activities
**3**
Other trading activities
**4**
Investments
**5**
**Total income**
**Expenditure on raising funds**
**6**
_Costs of raising funds :_
Costs of raising funds from visitors & events
Activities for raising funds: cost of goods
**4**
Investment management costs
_Expenditure on charitable activities:_
Running costs of historic properties
Historic property repair & maintenance costs
Insurance
Charitable donations
**Total resources expended**
**Net income/(expenditure) before**
**gains/(losses) on investments**
**Other recognised gains/(losses):**
Net gains/(losses) on investment assets
**Net income/(expenditure)**
**Transfers between funds**
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
**Total funds carried forward**|**Unrestricted**
**funds**
**Endowment**
**funds**
**Designated**
**funds**
**Total**
**2022**
**Total 2021**
12,399
-
**-**
**12,399**
62,494
124,236
-
**- 124,236**49,652
80,590
-
**- 80,590**11,453
635
423,895
10,969**435,499**425,634|
|---|---|
||**217,860**
**423,895**
**10,969 652,724**549,233|
||50,378
-
**-**
**50,378**
14,332
7,134
-
**- 7,134**
907
26,698
-
**- 26,698**24,116|
||**84,210**
**-**
**-**
**84,210**
39,355
328,630
-
**- 328,630**307,596
196,570
-
**-**
**196,570**
195,316
24,478
-
**- 24,478**23,362
15,137
-
**- 15,137**
6,250|
||**564,815**
**-**
**- 564,815**532,524|
||**649,025**
**-**
**- 649,025**571,879|
||**(431,165)**
**423,895**
**10,969**
**3,699**
(22,646)
4,327
308,716
14,139
**327,182**
1,749,609|
||**(426,838)**
**732,611**
**25,108**
**330,881**
1,726,963
**343,099**
**(393,099)**
**50,000**
**-**
-|
||**(83,739)**
**339,512**
**75,108**
**330,881**
1,726,963
2,394,199
8,972,672
225,043
11,591,914
9,864,951
**2,310,460**
**9,312,184**
**300,151**
**11,922,795**11,591,914|
- 14 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **BALANCE SHEET**
## _**AS AT 5 APRIL 2022**_
|**Notes**
**Fixed assets**
Tangible assets
**9**
Heritage assets
**10**
Investments
**11**
**Total fixed assets**
**Current assets**
Debtors
**12**
Cash at bank and in hand
**Total current assets**
**Creditors: amounts falling due within one year**
**13**
**Net current assets/(liabilities)**
**Total assets less current liabilities**
**Trust funds**
Endowment funds
**15**
Designated funds – Restoration Reserve
**15**
Unrestricted funds
**15**|**2022**
**2021**
**£**
**£**
3,383,887
3,384,627
2
2
8,538,069
8,154,912|
|---|---|
||**11,921,958**
**11,539,541**|
||11,449
14,082
48,008
88,208|
||**59,457**
**102,290**
58,620
49,917
**837**
**52,373**|
||**11,922,795**
**11,591,914**|
||9,312,184
8,972,672
300,151
225,043
2,310,460
2,394,199|
||**11,922,795**
**11,591,914**|
The accounts were approved by the Trustees on October 2022
Adam Munthe John Harkness **Trustee Trustee**
- 15 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **CASH FLOW STATEMENT**
## _**FOR THE YEAR ENDED 5 APRIL 2022**_
||**2022**||**2021**||
|---|---|---|---|---|
|**Reconciliation of net movement in funds to net**
**cash flows from operating activities**|**£**|**£**|**£**|**£**|
|Net movement in funds|330,881||1,726,963||
|Investment income|(435,499)||(425,634)||
|Depreciation|2,340||2,020||
|(Deduct gains)/add back losses on investments
|(327,182)||(1,749,609)||
|(Increase)/decrease in debtors|2,634||8,150||
|Increase/(decrease) in creditors|8,703||17,339||
|**Net cash outflow from operating activities**||(418,123)||(420,771)|
|**Returns on investments and servicing of finance**|||||
|Investment income received|435,499||425,634||
|Change in value of investments – not realised as cash|(168,455)||110,416||
|**Net cash inflow from returns on investments and**
**servicing of income**||**267,044**||**536,050**|
|**Cash flows from investing activities and capital**|||||
|**expenditure**|||||
|Purchase of tangible fixed assets|(1,600)||-||
|Disposal of tangible fixed assets|-||-||
|Additions/purchases of investments|(1,343,958)||(914,601)||
|Proceeds from disposals of investments|1,456,436||892,628||
|**Net cash outflow from capital expenditure**||**110,878**||**(48,973)**|
|**Increase/(decrease) in cash in the year**||**(40,201)**||**66,306**|
|**Reconciliation of net cash flow to movement in**|||||
|**net cash funds**|||||
|Net cash funds at beginning of the year||88,208||21,902|
|Change in net funds during the year||(40,201)||66,306|
|**Net cash funds at end of the year**||**48,007**||**88,208**|
- 16 -
## **THE PENNINGTON-MELLOR-MUNTHE CHARITY TRUST**
## **NOTES TO THE ACCOUNTS**
## _**FOR THE YEAR ENDED 5 APRIL 2022**_
## **1. Accounting Policies**
## **Basis of accounting**
The accounts have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Charities Act 2011, the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS102) effective 1 January 2019, and applicable regulations. They are prepared in UK pounds sterling, which is the functional currency of the charity. Monetary amounts in these statements are rounded to the nearest pound.
## **Preparation of financial statements on a going concern basis**
The financial statements have been prepared on a going concern basis as the Trustees’ assessment is that the Charity (which is a public benefit entity) is a going concern. The accounts have been prepared under the historical cost convention with items recognized at cost or transaction value unless otherwise stated in the relevant note(s) to the accounts, or where modified to include the revaluation of certain fixed assets. There are no material uncertainties about the charity’s ability to continue in operation.
## **Funds structure**
The charity has a single, restricted Endowment Fund representing those assets which must be held permanently by the Charity Trust, principally in the form of investments. Income arising on the Endowment Fund may be used in accordance with the objects of the Charity Trust, for which purpose it is transferred to unrestricted funds. Any capital gains or losses arising on the investments form part of the Endowment Fund.
Investment management charges and legal advice relating to the Fund are charged against unrestricted funds. The Endowment Fund is restricted as stipulated in an order with the Charity Commissioners for England and Wales dated 19 May 2000.
The Unrestricted Income Fund consists of those funds which the Trustees are free to use for any purpose in furtherance of the Charity Trust objects.
## **Incoming resources**
All incoming resources are accounted for on a receivable basis, and have been included gross. Income is recognised once the Charity Trust has entitlement to it, there is sufficient certainty of receipt and it is therefore probable that the income will be received, and the amount of income receivable can be measured reliably. Income may be deferred where it relates to a future period. Donations are recognised when they have been communicated and received in writing, with notification of both the amount and settlement date. The incoming resources from the Endowment Fund are unrestricted and form part of the Unrestricted Fund.
- 17 -
## **Resources expended**
All resources expended are accounted for on an accruals basis, and are allocated to the applicable expenditure headings in the financial statements.
## **Allocation of support and governance costs**
Support costs have been differentiated between governance costs and other support costs. All running, establishment and governance costs have been allocated to charitable activities, as set out in note 6 to the accounts.
## **Cost of raising funds**
The costs of raising funds consist of the cost of generating funds from visitors and events, from the sale of goods related to the property such as stationery and books, and the investment management fees.
## **Charitable activities**
Expenditure on charitable activities includes the running costs of the historic properties, their repair and maintenance costs, insurance and charitable donations.
## **Tangible fixed assets and depreciation**
No depreciation is provided in respect of properties and the historic chattels as the residual value is considered to be greater than their carrying value.
All other assets costing more than £500 are capitalised and valued at historical cost less depreciation. Depreciation is charged on fixtures and fittings, equipment, and plant and machinery from the year of acquisition on a straight-line basis over their estimated useful life of five years (i.e. 20% per annum).
## **Fixed asset investments**
Fixed asset investments are stated at market value as at the balance sheet date using the closing quoted market price, details of which are provided in a valuation report by the investment managers. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year.
## **Realised gains and losses**
All gains and losses are taken to the statement of financial activities as they arise. Realised gains and losses 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 opening carrying value or purchase price and their valuation at market price at the year-end. Realised and unrealised investment gains and losses are combined in the statement of financial activities.
## **Pension**
The Charity Trust operates a defined contribution workplace pension scheme on behalf of employees which is run by NEST and which complies with the statutory requirements and regulations governing pension auto-enrolment.
- 18 -
## **Heritage Assets**
The Charity Trust owns two historic properties, Hellens and Southside House, which, together with their contents are protected and maintained for the benefit of the public. The properties are both Grade 2 listed buildings and are open to the public during certain months of the year. Note 10 below provides further details of how they are accounted for in the financial statements.
## **2. Donations and legacies**
|**2.**|**Donations and legacies**|||||||
|---|---|---|---|---|---|---|---|
|||||||**2022**|**2021**|
|||||||**£**|**£**|
||Donations and gifts|||||**12,399**|**62,494**|
||Legaciesreceivable|||||**-**|**-**|
|||||||**12,399**|62,494|
|**3.**|**Charitable activities**|||||||
|||||||**2022**|**2021**|
|||||||**£**|**£**|
||Admission fees, rent, photo shoots, book sales|||||**124,236**|49,562|
||Memberships|||||**-**|90|
|||||||**124,236**|49,652|
|**4.**|**Other trading activities**|||||||
|||||||**2022**|**2021**|
|||||||**£**|**£**|
||Activities for raising funds|||||**80,590**|11,453|
||Activities for raising funds: costs of goods|||||**(7,134)**|(907)|
|||||||**73,456**|10,546|
|**5.**|**Investment & Other income**|||||||
||**Unrestricted**||**Endowment Designated**|||**2022**|**2021**|
|||**funds**||**funds**|**funds**|**£**|**£**|
||Income from listed investments
|635||423,895|10,969|435,499|424,906|
||Interest receivable
|-||-|-|-|728|
||Total Investment income
|**635**||**423,895**|**10,969**|**435,499**|425,634|
|**6.**|**Analysis of expenditure on raising funds**|||||||
|||**Staff Depreciation Other**||||**Total**|**Total**|
|||**costs**|||**costs**|**2022**|**2021**|
||||**£**|**£**|**£**|**£**|**£**|
||**Cost of raising funds**|||||||
||- Costs of raising funds from|15,199||-|35,179|50,378|14,332|
||visitors and events|||||||
||- Activities for raising funds:||-|-|7,134|7,134|907|
||cost of goods|||||||
||||- 19 -|||||
## **3. Charitable activities**
## **4. Other trading activities**
## **5. Investment & Other income**
|-Investment management costs|
-|-26,698 26,698 24,116|
|---|---|---|
||**15,199**|**- 69,011 84,210 39,355**|
|**Charitable activities**|||
|Running costs of historic properties|||
|Activities undertaken directly
|186,647|- 83,877 270,524 233,463|
|Support costs|||
|Governance costs|-|2,340 55,765 58,105 74,133|
|Historic property repair and maintenance costs|||
|Activities undertaken directly
|-|- 196,570 196,570 195,316|
|Insurance|||
|Activities undertaken directly
|-|- 24,478 24,478 23,362|
|Charitable donations|||
|Activities undertaken directly
|-|-15,137 15,137 6,250|
||**186,647**|**2,340 375,827 564,814 532,524**|
Governance costs include payments to auditors of £4,500 (2021: £4,200) for audit fees.
## **7. Related party transactions and Trustees’ expenses**
The Trustees, and any other persons connected with them give freely of their time and expertise without any form of remuneration or other benefit in cash or kind. No expenses were paid to the Trustees during this or the previous year.
The trustee John Harkness is a consultant for a firm of stockbrokers who managed the portfolio of investments. During the year the firm of stockbrokers charged £26,698 as management fees (2021 - £24,116). Their services were provided on an arms’ length basis.
## **8. Employees**
## **Number of employees**
The average monthly number of employees during the year was:
||**2022**|**2021**|
|---|---|---|
||**Number**|**Number**|
|Southside House|**1**|1|
|Hellens|**8**|7|
||**9**|**8**|
|**Employment costs**|||
||**2022**|**2021**|
||**£**|**£**|
|Gross salaries
|
**155,402**|141,381|
|Employers NIC|**6,546**|3,168|
|Employers pension contributions|**2,773**|2,181|
||**164,721**|146,730|
There were no individual employees whose annual remuneration, (which consists of gross salary,
- 20 -
employers’ National Insurance contributions and employers’ pension contributions was £60,000 or more).
The remuneration of Key Management Personnel, who are the General Manager of Hellens and the Curator/Administrator of Southside House, totalled £61,757
## **9. Tangible fixed assets**
|**Cost**
At 6 April 2021
Additions
**At 5 April 2022**
**Depreciation**
At 6 April 2021
Charge for the year
**At 5 April 2022**
**Net book value**
**At 5 April 2022**
At 6 April 2021|**Land and**
**buildings**
**Historic**
**Chattels**
**Plant &**
**Machinery**
**Fixtures,**
**fittings &**
**equipment**
**Total**
3,231,738
149,199
8,050
159,865**3,548,852**
-
-
-
1,600
**1,600**|
|---|---|
||**3,231,738**
**149,199**
**8,050**
**161,465 3,550,452**|
||-
-
5,600
158,625
**164,225**
-
-
1,400
940
**2,340**|
||**0**
**0**
**7,000**
**159,565**
**166,565**|
||**3,231,738**
**149,199**
**1,050**
**1,900 3,383,887**|
||3,231,738
149,199
2,450
1,240**3,384,627**|
Included within historic chattels are a number of items received from the Estate of Malcolm Munthe which have been included at a nominal value of £1, as significant costs would be involved in valuing them, which would be onerous compared with the additional benefit derived by users of these financial statements.
## **10. Heritage assets**
The objectives of the Charity Trust are to protect and maintain two properties, Hellens and Southside House, and their contents for the benefit of the public. The properties are both Grade 2 listed buildings and are open to the public during certain months of the year.
These two properties have been included in the financial statements at a nominal £1 each, as significant costs would be involved in valuing the asset which would be onerous compared with the additional benefit derived by users of these accounts in assessing the stewardship of the assets by the Trustees. Later additions and works of a capital nature have been capitalised at cost, and included in within Tangible Fixed Assets.
The buildings and their contents have been insured for total values of up to £16,250,935 for Hellens and £15,722,228 for Southside House.
- 21 -
## **11. Fixed asset investments**
|Market Value at 6 April 2021
Disposals at opening book value
Acquisitions at cost
Change in value in year
**Market Value at 5 April 2022**
Historical cost:
At 5 April 2022
At 5 April 2021|**Endowment**
**fund**
**Unrestricted**
**fund**
7,806,474
8,829
(1,354,422)
-
1,254,896
-
249,251
(756)|
**Designated**
**fund**
210,159
(19,520)
89,062
12,031|**Endowment**
**fund cash**
8,728
-
-
189,787|
**Unrestricted**
**fund cash**
**Designated**
**fund cash**
**Total**
111,901
14,884
8,160,975
-
-
(1,373,942)
-
-
1,343,958
(36,769)
(6,466)
407,078|
|---|---|---|---|---|
||**7,956,199**
**8,073**|**291,732**|**198,515**|**75,132**
**8,418**
**8,538,069**|
||7,238,487
9,073|271,338|162,296|75,132
8,418
7,764,744|
||7,287,644
9,073|202,391|8,728|111,901
14,884
7,634,621|
## **12. Debtors**
|**12. Debtors**|||
|---|---|---|
||**2022**|**2021**|
||**£**|**£**|
|Prepayments and accrued income|**11,449**|14,082|
|**13. Creditors: amounts falling due within one year**|||
||**2022**|**2021**|
||**£**|**£**|
|Taxes and social security|**2,504**|959|
|Other creditors
|**43,036**|37,608|
|Accruals|**4,920**|4,500|
|Deferred income|**8,160**|6,850|
||**58,620**|49,917|
## **13. Creditors: amounts falling due within one year**
## **14. Endowment funds**
The Endowment fund represents those assets which must be held permanently by the Charity Trust, principally investments. Income arising on the Endowment fund can be used in accordance with the objects of the Charity Trust and is transferred to unrestricted funds.
Any capital gain or losses arising on the investments form part of the Endowment fund. Investment management charges and legal advice relating to the fund are charged against unrestricted funds. The Endowment fund is restricted as stipulated in an order with the Charity Commissioners for England & Wales dated 19[th] May 2000.
- 22 -
## **Movement in funds**
|||**Movement in funds**|
|---|---|---|
||**Balance at Incoming Resources**|**Transfers Investment Balance at**|
||**6 April 2021 resources expended**|**gain/(loss) 5 April 2022**|
|**Permanent endowments**|||
|Endowment fund|8,972,672 423,895-|(393,099) 308,716**9,312,184**|
||8,972,672 423,895 -|(393,099)308,716**9,312,184**|
## **15. Analysis of net assets between funds**
|Fund balances at 5 April 2022 are represented by:
- Tangible fixed assets
- Heritage assets
- Investments
- Current assets
- Creditors: falling due within one year
At 5 April 2022|**Unrestricted**
**funds**
**Endowment**
**funds**
**Designated**
**funds**
**Total**
2,226,419
1,157,468
-
**3,383,887**
-
2 -
**2**
83,205
8,160,137
300,151
**8,543,493**
59,457
(5,423)
-
**54,034**
(58,621)
-
-**(58,621)**
**2,310,460**
**9,312,184**
**300,151 11,922,795**|
|---|---|
At 5 April 2022
## **16. Capital commitments**
There were no capital commitments authorised by the Trustees as at the Balance Sheet date.
## **17. Post balance sheet date events**
One of the historic properties included under Note 10 ‘Heritage Assets’ above, Southside House, was sold after the end of the present accounting period for the sum of £9 million. Contracts were exchanged on 3[rd] May 2022 and an initial deposit of 5% of the full price, £450,000, was received by the Trust on 10[th] May.
According to the terms of the contract, completion of the sale will take place once the remaining sum of £8,550,000 has been received by the Trust. This may occur any time after 1[st] October 2022.
Completion of the sale will take place on the earlier of either of the following dates: 12 months from the date of exchange of contracts; or a date specified by written notice, which may be served on or after 1[st] October 2022. This date is to be at least two months after the date of service of the notice.
- 23 -
## **18. Contingent asset/liability**
The charity is not currently registered for VAT. It is in the process of carrying out a comprehensive review of its activities to determine whether or not it may now need to register for VAT.
Given the complexity of these activities in terms of their VAT liabilities it is extremely difficult to determine whether or not there is an amount due to or repayable from HMRC at this point in time and whether a VAT registration is required. Therefore, no provision has been made in these accounts for either a contingent asset or liability
- 24 -
## **19. Prior year Statement of Financial Activities**
|**Incoming resources from:**
Donations and legacies
Charitable activities
Other trading activities
Investments
**Total income**
**Expenditure on raising funds**
_Costs of raising funds :_
Costs of raising funds from visitors & events
Activities for raising funds: cost of goods
Investment management costs
_Expenditure on charitable activities:_
Running costs of historic properties
Historic property repair and maintenance costs
Insurance
Charitable donations
**Total resources expended**
**Net income/(expenditure) before**
**gains/(losses) on investments**
**Other recognised gains/(losses):**
Gains/(losses) on investment assets
**Net income/(expenditure)**
**Transfers between funds**
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
**Total funds carried forward**|**Unrestricted**
**funds**
**Endowment**
**funds**
**Designated**
**funds**
**Total**
**2021**
62,494
-
-
**62,494**
49,652
-
-
**49,652**
11,453
-
-
**11,453**
1,352
414,701
9,581
**425,634**|
|---|---|
||**124,951**
**414,701**
**9,581**
**549,233**|
||
14,332
-
-
1**4,332**
907
-
-
**907**
24,116
-
-
**24,116**|
||**39,355**
**-**
**-**
**39,355**
307,596
-
-
**307,596**
195,316
-
**195,316**
23,362
-
-
**23,362**
6,250
-
-
**6,250**|
||**532,524**
**-**
**-**
**532,524**|
||**571,879**
**-**
**-**
**571,879**
**(446,928)**
**414,701**
**9,581**
**(22,646)**
5,241
1,694,415
49,953
**1,749,609**|
||**(441,687)**
**2,109,116**
**59,534**
**1,726,963**
**365,712**
**(415,712)**
**50,000**
**-**|
||**(75,975)**
**1,693,404**
**109,534**
**1,726,963**
2,470,174
7,279,268
115,509
**9,864,951**
**2,394,199**
**8,972,672**
**225,043**
**11,591,914**|
- 25 -