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2025-06-30-accounts

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INSTITUTE OF OUR LADY OF MERCY

ANNUAL REPORT

JULY 2024 - JUNE 2025

Registered Charity No. 290544

Institute of Our Lady of Mercy

REPORT FOR THE YEAR ENDED 30 JUNE 2025

Contents
Trustees and Advisors for the year ended 30 June 2025 2
Report of the Trustees for the year ended 30 June 2025 4 - 35
Independent auditors’ report to the Trustees of the Institute of Our Lady of Mercy 37 - 40
Statement of fnancial activities for the year ended 30 June 2025 41 -42
Balance Sheet as at 30 June 2025 43
Cashfow statement for the year ended 30 June 2025 44
Notes to the fnancial statements for the year ended 30 June 2025 45 - 76

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Institute of Our Lady of Mercy

TRUSTEES AND ADVISORS

FOR THE YEAR ENDED 30 JUNE 2025

Name of the Charity Institute of Our Lady of Mercy

PrincipalAddress Institute of Our Lady of Mercy

Convent of Mercy

Date of Registration 30 November 1984

Cemetery Road

Yeadon

Charity Registration No 290544

Leeds

LS19 7UR

Trustees

Mary Bernadette Holmes Bernadette Patricia Roche Lynda Irene Dearlove Catherine Groden Ita Christina O'Donnell

(Sr. Bernadette Holmes)

(Sr. Bernie Roche) (Sr. Lynda Dearlove) (Sr. Jude Groden) (Sr. Christina O'Donnell)

Property Advisors

The JTS Partnership LLP Number One The Drive Great Warley Brentwood Essex CM13 3DJ

Legal Advisors (From July 2024) Stone King LLP Upper Borough Court Upper Borough Walls Bath BA1 1RG

Investment Advisors

Charles Stanley & Company Limited 25 Luke Street London EC2A 4AR

Independent Auditors (From July 2024) Buzzacott Audit LLP 130 Wood Street London EC2V 6DL

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Principal Bankers

The Co-operative Bank PLC

1 Balloon Street Manchester M4 4BE

Lloyds Banking Group

25 Gresham Street London EC2V 7HN

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REPORT OF THE TRUSTEES

FOR THE YEAR ENDED 30 JUNE 2025

Introduction

period ended 30 June 2025. The report and statements are prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK

and Republic of Ireland (FRS 102) (e�ective 1 January 2015) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities Act 2011, with the Charity's own Trust Deed and in accordance with the accounting policies as set out on pages 45 to 52.

Under a Uniting Direction issued by the Charity Commission under section 12(1) of the Charities Act 2011, this charity (i.e. Institute of Our Lady of Mercy (Charity Registration Number 290544)) is the reporting charity and its related charities, The Costello Fund (Charity Registration Number 290544-6) and The Fullerton Fund (Charity Registration Number 290544-7) are the linked charities. The Fullerton Fund was dormant and was removed from the Charity Commission register on 21 March 2025.

The e�ect of the Uniting Direction for accountancy and reporting purposes is that a single set of accounts is presented for the two charities combined. Under the Uniting Direction, both charities continue to exist as independent entities in all other respects .

The Institute of Our Lady of Mercy (The Institute) is an Order of Roman Catholic Sisters of Mercy (the Congregation). It is one of three strands of the Mercy family in Great Britain, stemming from the first foundation of Catherine McAuley. It was formed from the union of twenty autonomous Congregations and was formally recognised by the Vatican as a Religious Congregation of Pontifical Rights in November 1983.

The Charity is a charitable trust on which the assets of the Congregation are held and the vehicle through which the charitable activities of the Congregation are conducted. The Charity is governed by a Trust Deed dated 24 October 1984 as amended by a Deed of Revocation and Declaration dated 25 June 1992, a Deed of Declaration dated 9 March 2000 and schemes of the Charity Commission dated 9 February 1989, 15 February 1989, 28 July 1995, and 31 December 2000.

The Charity is registered with the Charity Commission with registered number 290544. The Trustees are incorporated under the provisions of Section 251 of the Charities Act 2011 as "the Trustees of the Institute of Our Lady of Mercy" by a Scheme of the Charity Commission dated 29 October 1985.

The Trustees registered a new entity with the Charity Commission: Institute of Our Lady of Mercy CIO (registered Charity Number 1201690) on 24 January 2023. All Trustees of the Charitable Trust are Trustees of the CIO.

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It was previously reported that it was the intention to transfer the assets and liabilities of the Charitable Trust by no later than 1 January 2024. Trustees, sta� and legal advisors finalised the due diligence that facilitated the majority of the assets and liabilities to the new CIO at midnight on 31 December 2025.

The Fullerton Fund was dormant and was removed from the Charity Commission register on 21[st] March 2025. The Costello Fund was transferred on 31 December 2025.

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Structure, Governance and Management

The Appointment of Trustees

year term at the ‘General Chapter’.

in the Institute is vested by the Church in the General Chapter”. Delegates attending the Chapter determine the policies and priorities of the Institute. They also elect the Institute Leader and Congregational Leadership Team from those Sisters who are eligible for election. The Institute Leader and the members of the Congregational Leadership Team are, by virtue of clause 6(1) of the Charity’s Trust Deed, also Trustees of the Charity.

The Constitutions of the Congregation dictate that the Institute Leader requires the deliberative vote of the Congregational Leadership Team to establish and close houses, acquire or alienate goods or property, and determine such matters as the appointment of Local leaders to Communities and the admission of members to the Novitiate.

The Ninth General Chapter took place from 22 May – 2 June 2023 and saw the election of a new Leadership Team (who are also Trustees) who took up o�ice from 1 September 2023. Sr Bernadette Holmes (existing Trustee) was elected as the new Institute Leader. Sr Bernadette Roche was elected as the Assistant Leader; and Sisters Lynda Dearlove, Jude Groden and Christina O’Donnell were also elected to the Leadership Team. Delegates of the Chapter gave the new Team the authority to alter the legal structure of the Institute, with the transfer of assets and liabilities from the present Charitable Trust to the Institute of Our Lady of Mercy CIO.

The Induction and Training of Trustees

All Trustees are members of the Congregation and as such have a comprehensive knowledge of the various works and structure of the Charity. They met with the previous Team to conduct a comprehensive handover and also meet with the Institute Advisors.

Throughout their term in o�ice, Trustees attend formal training courses on the duties of Trustees and seek guidance and advice from their legal, investment, Human Resources and property advisors on the day-to-day issues which arise in carrying out their duties.

Trustees have received training from a number of sources and also by virtue of their memberships of The Conference of Religious (COR), Union of Superior Generals (UISG) and the Association of Provincial Bursars (APB). They have attended training sessions and updates in relation to governance, finance, care, health and safety, GDPR and Safeguarding. Following the period-end, the Institute has also joined the National Council for Voluntary Organisations (NCVO), which will create further training opportunities.

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Organisational Structure

The Institute Leader holds overall responsibility. The remaining Trustees each hold designated areas of responsibility; However, they work together flexibly as a team. If a Trustee has a period of absence, the remaining Trustees organise to cover their roles between them.

All major decisions are made by the group at formal meetings held over three days in 11 months of the year. (An example would include any specific project expenditure over £2,000). Trustees meet regularly outside of formal meetings via conference call facilities. Occasionally, there is a need to make a decision outside of the scheduled meetings. In this case, a quorum of at least three Trustees is required to authorise a decision.

Various roles of responsibility are held by members of the congregation, for example, as Local Leaders or as part of various committees. These members of the Congregation assist the Trustees and attend meetings relevant to their activity. Appointments are made by Trustees for a specific time-period then reviewed.

As part of the review of operations and the ongoing preparation for transfer from the Charitable Trust to the CIO, the Trustees have given considerable thought and reflection in the reporting period to the most appropriate organisational structure. This is to enable the new CIO to be as e�ective as possible in both caring for members of the Institute and delivering services to its many beneficiaries. Consequently, from the summer of 2024, a revised head o�ice sta� structure was implemented with the new roles of Chief Executive O�icer, Head of Finance and Business and Compliance Manager. These appointments formally announced in July 2024 further develop the Institute’s operational resilience and support the move towards sequentially separating out the operational leadership and management of the Institute from its governance function.

The Senior Leadership Team attend the meetings relevant to their activity on a monthly basis. The Institute Property Advisors (The JTS Partnership LLP) and Legal advisors (Stone King LLP from 1[st] July 2024) liaise with Trustees and the Sta� Team on a regular basis. They deal with the Charity Commission on behalf of the Institute, as to governance and wider issues, including subject access requests and any matter relating to actual or potential litigation, as required and necessary. They submit regular written updating reports and attend Trustee Meetings bi- monthly. The Institute’s Independent auditors (Buzzacott Audit LLP) and Investment Manager (Charles Stanley & Company Limited, “Charles Stanley”) attend Trustee Meetings on a bi- annual basis.

Separate bi-annual meetings are held with the Institute’s insurers and independent insurance intermediary (The JTS Partnership LLP).

The Trustees have appointed working groups to focus on particular workstreams in greater detail. These working groups typically include one or more Trustees, members of the Congregation, relevant sta� and professional advisors. There are working groups on CIO, employment, care, safeguarding and communication.

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All Sisters who were able, participated in a General Gathering in May 2025, reviewing and planning the implementation of Chapter decisions.

St Joseph’s Park Hill School in Burnley until 4 July 2025 when it sadly closed, was run by an appointed Head Teacher, sta� and Board of Governors to whom day to day management was delegated. A member of the Leadership Team served as a Governor on the Board of St Joseph’s Park Hill School, Burnley. The Institute Leader was the Proprietor of the School.

The Institute operates two Registered Care Homes, run by appointed Care Home Managers. Within the Institute the Communities with Care are supported by a Care Team led by a Care Services Manager. During this reporting period significant management changes have taken place, including the appointment of a Head of People and Services, and a new Care Quality Lead. These two senior sta� ensure compliance and assist the Trustees in their statutory obligations.

Charity’s property and have no money of their own, having taken a Vow of Poverty. All living costs are incurred by the Charity. Other than the Trustees there are no key management personnel.

The Congregation

The Catholic Church requires members of a Religious Congregation to profess three vows: Poverty, Chastity and Obedience. Sisters of Mercy take a fourth vow: ‘to serve the poor, sick and those in need’ – our ‘Charism’.

The Sisters covenant all their personal income to the Charity and live in established community houses. Each community budgets for groceries, utilities, vehicle costs and property maintenance. Each Sister is given an allowance each year to allow her autonomy and to manage any personal costs that arise. Extraordinary expenditure such as large-scale property maintenance are considered by the Trustees.

Sisters who are members of the Congregation work in various Ministries in the name of the Congregation. As at 30 June 2025 there were 121 Sisters ministering from approximately 35 sites in Britain, Kenya and Romania.

Employees

The Institute recognises that sta� lie at the heart of its mission and charitable work. The work of sta� directly supports both beneficiaries and the welfare of the Sisters. In the past, Sisters and sta� have worked very closely together, for example in schools and care homes. This continues in a di�erent way as the number of Sisters decreases. Many Sisters sit alongside sta� on management teams overseeing operational elements of the Institute’s work. For example in the Institute’s Governance, in care homes, in schools and in employment matters. The sharing of this Mercy ethos and charism with sta� continues formally and informally through building supportive relationships and demonstrating pastoral concern for all our sta� whatever their role or location, the sharing of Mercy wisdom and experience from the Sisters is a hallmark of the Institute’s support to all its valued sta�.

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As at 30 June 2025, the Charity had 236 employees, equating to 180 full time equivalents (FTE’s) (full time being 35 hours). A breakdown of employee numbers is given in the table below:

----- Start of picture text -----
Sta� Numbers Percentage FTE FTE
Percentage
Care Homes 105 45% 89 49%
Communities with Care 68 29% 46 26%
Communities 19 8% 9 5%
Institute-Run School 29 12% 26 14%
Other 15 6% 10 6%
Total Employees 236 100% 180 100%
----- End of picture text -----

----- Start of picture text -----
Role Purpose FTE FTE Percentage
Care 126 70%
Education 23 13%
Administration 13 7%
Maintenance (other) 9 5% (5%)
Total 180 100%
----- End of picture text -----

(Note: With the exception of administration and maintenance sta�; those employed within Care Homes and Communities have been classified as “Care”; those employed within schools are classified as “Education”).

Pay Policy and Commitment to being a Good Employer

The Institute continues to closely monitor and adapt its approach to fair remuneration and reward. This is imperative in the highly competitive UK employment market. Recruitment and retention remain challenging particularly in certain geographic areas and in the Care sector generally. The Institute continues to provide competitive rates of pay for its roles, helping to attract and retain sta� who possess the skills, knowledge and values needed to deliver its charitable aims and objectives.

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In deciding pay rates each year, Trustees consider a variety of matters; including a�ordability, current market rates, cost of living rises, the gender pay gap, equitable remuneration, di�erentiation, business plans and the relationship between job responsibility and pay. All Institute sta� continue to be paid at least the ‘real living wage’, including London based sta�.

The Institute strives to be an employer of choice for sta� in the sectors and the locations in which it operates. Many sta� have been with the organisation for a long period of time which is strong testimony to the supportive working environment, positive team spirit and the sense of belonging and contribution the working culture provides.

Career development opportunities are available to all sta� irrespective of whether they work full time or part time. Similarly, the Institute reiterates its commitment to encouraging employees to take advantage of the many opportunities to undertake professional development, which is available at all levels and in all roles. Where possible, training is o�ered at di�erent times including during working time to meet the needs of part time sta� alongside a blended learning approach to widen further participation.

Well-being

A variety of wellbeing initiatives are available for all employees. The ‘employment o�er’ includes:

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With mental health an important topic in all parts of society including the workplace, the Institute continues to support sta� accessing talking therapies.

The Institute remains indebted to its employees who go above and beyond in delivering high-quality

External Links

Members of the Institute of Our Lady of Mercy have links with many other bodies within the Catholic Church:

Mercy International Association (MIA)

The Sisters of the Institute of Our Lady of Mercy are part of a global Mercy Family. Leaders of Mercy Congregations worldwide are members of Mercy International Association and three Members serve on the Board, together with a number of lay people. The Members meet twice a year, on Zoom in November and in person in Baggot Street Centre, Dublin, in May. This Centre, which was the first Convent of Mercy founded by Catherine McAuley, is now an International Centre for the whole Mercy world and through its website, newsletters and courses connects the Mercy Family and o�ers a number of events throughout the year for all those connected to the Sisters of Mercy.

Conference of Religious (COR)

countries. The Leader of the Institute, is a member of COR by virtue of her position. Collaboration among leaders is encouraged and COR also provides training for Trustees and Sta�.

Union of Superior Generals (UISG)

The Leader of the Institute, is a member of UISG by virtue of her position.

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Safeguarding

Institute Safeguarding Policy Statement

The Institute of Our Lady of Mercy is committed to the National Safeguarding Policies and Procedures of the Catholic Church in England and Wales, to take all reasonable steps to protect all who are vulnerable from any form of abuse and to promote a safe environment for them. This commitment flows from the fact that we are all made in the image and likeness of God and the Church's common belief in the dignity and uniqueness of every human life. We start from the principle that each child, young person and adult at risk has a right to expect the highest level of care and protection, love, encouragement and respect that we can give. We will liaise closely and openly with statutory agencies to ensure that any concerns or allegations of abuse are promptly reported and appropriately dealt with, victims supported and alleged source of harm held to account. The Institute’s commitment to the ‘One Church’ approach to safeguarding in the Catholic Church in England and Wales is also affirmed by this statement. Our expectation is that this statement will be accepted and upheld by our Sisters and Associates, Staff, Volunteers and all who work for and with us in the Institute and also those who use our premises and individuals who use or access our services.

The Institute participated in the CSSA safeguarding audit in May 2025. This audit assessed the e�ectiveness of current safeguarding arrangements within the Institute by considering practice against the eight National Safeguarding Standards over the last twelve months.

Sta� and Sisters have remained committed to ensuring e�ective safeguarding within its structures. Safeguarding governance is well embedded, albeit there is further room for improvement and formalisation of information sharing processes. Achievements against objectives of the 3-year safeguarding plan again would benefit from formal acknowledgement and updating of the plan.

Essential safeguarding information is held and managed by the safeguarding lead, who ensures that DBS and training are up to date. The designated safeguarding lead oversees the implementation of a safeguarding training programme for all sta� and Sisters, and central records are kept of attendance. Non- attendance is taken seriously and is delegated to the link Trustee or head of people and services to follow up.

The Institute have e�ectively evidenced the value placed on communication, which is emphasised by a well presented and informative website, where the importance of safeguarding is clear, appearing both on the front page and dedicated website pages. Sta� and members feel valued in the Institute and sta� retention of senior leaders and managers within convents with care is good. The views of all members and sta� are encouraged, and an ‘open door policy’ appears to be well established in the Institute and includes access to senior managers, the CEO and Trustees.

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The Institute utilise the skills and knowledge of safeguarding professionals and regularly consults with the Religious Life Safeguarding Service (RLSS) on a variety of safeguarding issues. The Institute have also recruited consultants with expertise in care to support with the development and audit of convents with care.

The Institute is committed to ensuring optimum independence of all members, and sta� and senior leaders work hard to ensure high standards of care are consistent across the organisation, but also that autonomy, individuality and person-centred practice is prioritised.

grading of “Results Being Achieved”, which is attributed to the hard work and dedication of members and sta� to embed good practice in all eight of the National Safeguarding Standards.

Following the audit the Safeguarding Lead has amended the 3 Year Safeguarding Plan and has incorporated the audit recommendations. All of the 3-month and 6-month recommendations have been completed. In the early part of 2026 focus will turn to the 12-month recommendations (Deadline Aug 26).

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Related Parties

Mercy Great Britain CIO (Registered Charity No.1154195)

Mercy Great Britain CIO was established in October 2013 in order to raise funds for the Mercy International Association. The Mercy International Centre, based at the original Convent of Mercy in Baggot Street, Dublin, is the focal point for all Sisters of Mercy throughout the world. Sr Patricia Bell, (a member of the Institute of Our Lady of Mercy is a Trustee for this charity). The Trustees of Mercy Great Britain CIO have been in communication with the Trustees of the Institute with a view to gaining their consent for the future dissolution of this charity.

Sister Bernadette Holmes is a member of the Mercy International Association by virtue of being the Institute Leader.

No funds were donated to the charity from 1[st] January 2024 until its closure on 15[th] June 2025.

Women@TheWell (W@W, Registered Charity No. 1118613)

The Women@TheWell Charity was established by the Institute of Our Lady of Mercy in 2006. The charity provides services to vulnerable women trapped in multiple cycles of abuse and social exclusion. Services are provided for women by women in a supportive environment with the goals of diverting them from the criminal justice system and working towards meaningful and rewarding participation.

The Institute of Our Lady of Mercy has the right to appoint two Trustees of Women@TheWell. Sr Bernadette Holmes, Sr Catherine Heron, Sr Susan Browne and Sr Colette Cronin have served as Trustees for Women@TheWell during 2024-5: Sr Bernadette resigned on 3rd December 2024; Sr Catherine resigned 30[th] January 2025; Sr Susan resigned on 2[nd] April 2025. Sr Colette was appointed on 2[nd] April 2025. Sr Lynda Dearlove, Trustee, is the founder and was the CEO of Women@TheWell and resigned from this shortly after being elected to stand as Trustee of the Institute of Our Lady of Mercy at the 2023 Chapter. She continues to act as a special advisor. Additionally, four members of the Congregation were active volunteers at Women@TheWell in 2024-5.

Women@TheWell leases a property from the Institute of Our Lady of Mercy in Kings Cross London at a peppercorn rent and then sublets back the top two floors of the building to the Institute. Sr Lynda Dearlove is one of the community members living there. The Institute donated £240,000 to the charity in the 12-month period to 1 July -30 Jun 2025 (Jan 2024 – June 2025: £370,935). Of the donations made during the year ending 30 June 2025, £100,000 related to the period when Sr Bernadette was a Trustee of Women@TheWell and £100,000 after she had resigned.

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Institute of Our Lady of Mercy CIO (Registered Charity No. 1201690)

As detailed previously in the report, the Institute of Our Lady of Mercy has registered a new Charitable Incorporated Organisation (CIO), which was dormant on 30 June 2025. The transfer of the majority of assets and liabilities of the Institute of Our Lady of Mercy Charitable Trust to the CIO took place at midnight on the 31[st] December 2025.

ARISE Foundation (Registered Charity No. 1165248)

Sr Lynda Dearlove, Trustee, has been a Trustee of the ARISE Foundation since January 2017. ARISE is a non-governmental organisation dedicated to preventing modern slavery and human tra�icking. ARISE facilitates joint anti-tra�icking projects with frontline groups in high-risk regions. All projects are locally led by partners. Their accompaniment, which values mentoring and programmatic training for partners, increases the ability of frontline groups to meet the needs of their local communities.

No funds were donated to the charity in 2024-5 (2023-24: £nil).

SPACE International

Sr Lynda Dearlove, Trustee, also serves as a Trustee of SPACE International (based in New York). SPACE is an international non-governmental organisation that consists of sex trade survivors from around the world, speaking out, changing how people think about prostitution; advocating for the Abolitionist Legislative Model which is the most e�ective and comprehensive approach in addressing the sex trade. £10,000 was donated to the charity in 2024-5 (2023-24: £nil).

CAP International

Sr Lynda Dearlove, Trustee, also serves as a Trustee of CAP International (based in Paris). The Coalition for the Abolition of Prostitution (CAP International) is a movement made of grassroots and survivors-led frontline exiting support organisations united around a common objective: the abolition of the systems of prostitution and tra�icking in human beings for the purpose of sexual exploitation. As of today, the growing Coalition includes 35 organisations in 27 countries.

No funds were donated to the charity in 2024-5 (2023-24: £nil).

Trustee’s Pensions

Pension income received from the Trustees, who are Sisters, is included as income within the Statement of Financial Activities.

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Objectives, Aims and Activities

The Charity’s principal objects are set out in its Trust Deed and are the advancement of religion and other charitable work under the direction of the Institute including, in particular the relief of poverty, the advancement of the Roman Catholic Religion, the advancement of education and the nursing of the sick poor in England and Wales or anywhere in the world; or which are carried on by a charity having similar charitable objects.

The work of the Sisters of Mercy in relieving poverty, nursing the sick and advancing education and religious studies is inspired by the Foundress, Catherine McAuley. Under the direction of the Institute’s Trustees, this work is carried on by individual Sisters acting within parish communities, in schools, care homes and in the wider community.

the continuing challenges of the increasing age profile and the decline in the number of Sisters. A programme of rationalising property holdings continues, to ensure that property is used as e�iciently as possible. Where appropriate, property is leased to other charitable organisations which have similar aims.

Public Beneft

2011 to have regard to the Charity Commission’s guidance on public benefit.

its supplementary guidance on the advancement of religion both when reviewing the Charity’s objectives and in planning future activities. In summary, the Charity provides public benefit in the following ways:

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Strategic Report

Planned Transfer to CIO Structure

The Ninth General Chapter approved the transfer of all assets and liabilities of the Institute of Our Lady of Mercy Charitable Trust to a new charitable incorporated organisation: Institute of Our Lady of Mercy CIO (Registered Charity No. 1201690). Working closely with professional advisors over the course of 2023-25, Trustees and sta� have undertaken due diligence and other cross function preparatory work to facilitate the transfer to the new CIO. This transfer took place at midnight on 31 December 2025.

Change in Reporting Period

Trustees had originally planned the transfer of all assets and liabilities to the new Charitable Incorporated Organisation on 30 June 2024. In order for there to be a smooth transition for accounting and reporting purposes, it was determined that it would be preferable to extend the original reporting period by six months.

The Charity Commission allows registered charities to alter its accounting year once every three years. To achieve this, the minimum reporting period is six months, and the maximum reporting period is eighteen months. At the end of 2023, the Charity therefore adopted a new period end of June 2024 and will report to the end of June each year henceforth. Thus, giving a reporting period from 1st January 2023 to 30th June 2024 of eighteen months. The Charity Commission were notified of this intention, and our filing has remained up-to-date.

Readers of these Financial Statements should be aware of this change and that amounts reported period on period are therefore not directly comparable.

New Management Structure

As part of the review of operations and the ongoing preparation for transfer from the Charitable Trust to the CIO, the Trustees have given considerable thought and reflection in the reporting period to the most appropriate organisational structure to enable the new CIO to be as e�ective as possible in both caring for members of the Institute and delivering services to its many beneficiaries. Consequently, from the summer of 2024, a revised head o�ice structure was implemented with the new roles of Chief Executive O�icer, Head of Finance, Head of People and Services, and Business and Compliance Manager. These appointments during 2024 further developed the Institute’s operational resilience and support the move towards sequentially separating out the operational leadership and management of the Institute from its governance function.

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Professional Advisers

Trustees continue the process of reviewing all of the Institute’s relationships with professional advisors. As part of this, with e�ect from 1st July 2024, Stone King LLP have been appointed as the Institute’s legal advisers. Similarly, Buzzacott Audit LLP have been appointed as auditors for the period from 1 July 2024. This review continues with tenders for investment management being considered in January 2026.

The Changing Needs of the Congregation

at 30 June 2025, the mean Congregation Member age is 83 (82.6) with a median age of 83.3. Over 50% of the Congregation is in receipt of formal care. It is anticipated that a high proportion of Sisters will require care over the coming years, and that the size of the congregation will diminish. At each monthly meeting the Trustees consider the changing care needs of Sisters and update a matrix to ensure they are e�ectively tracking and predicting the provision of care beds.

Property Management

increases the capacity of care facilities available for Sisters in the south of England. Twenty one Sisters transferred from the Community with Care at Wanstead on 21[st] January 2025. The Wanstead site (including the current convent and former school) was sold, and completion took place simultaneously with the move.

The following properties were sold during the period, 1[st] July 2025 to 28th February 2026:

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Several properties are either on the market or being prepared for disposal in 2026.

The Institute appointed a Property Coordinator in April 2025 to further support the Trustees with their portfolio.

IT Developments

Trustees are aware of the importance of robust cyber security and contract an IT consultancy to manage the IT infrastructure. Sta� and Sisters receive regular training and updates on cyber security. The Institute works with third party providers to look at telephone systems, ensuring that these are fit for purpose ahead of the ISDN and PTSN system closedowns.

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The Advancement of Education

The Institute of Our Lady of Mercy is involved in education in diverse ways. The Institute owns several school sites which are listed below.

local community and an e�ective way of pursuing the advancement of education. Many of these sites were the original educational foundations founded by Sisters of Mercy and the freehold of these sites continues to be owned by them.

Voluntary Aided Schools retained by the Institute of Our Lady of Mercy

Direct ownership of the sites of these schools and the Trusteeship of the schools continues to be retained by the Institute. However, the Trustees continue to consult with the Archdiocese of Liverpool concerning the potential transfer of the trusteeship and land of both Liverpool Schools to the Archdiocese.

A grant was received from the Department for Education and Skills in previous years for building works at the respective schools. See note 24 for further details of these grants.

Name
Responsible Authority		 Name
Responsible Authority
Broughton Hall Catholic High School,
West Derby, Liverpool
Liverpool Local Education Authority
Maricourt Catholic High School, Maghull,
Liverpool		 Sefton Local Education Authority

Voluntary Aided or Academy Schools leased to the local Dioceses

schools run by Local Education Authorities or as Academy Trusts. In most of these cases, leases have been granted to the local Roman Catholic Dioceses who maintain the property and ensure that it is used as a Catholic school.

The Institute’s Financial Statements do not include any value for Voluntary Aided or Academy schools leased to the local dioceses as the value represented by these sites is not realisable by the Institute for so long as they continue to be used by the schools in question.

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----- Start of picture text -----
Name
St Paul’s RCVA School, Alnwick Bishop Bewick Catholic Education Trust
St Joseph’s Catholic Primary, South East London Catholic Academy Trust Ltd
renamed to St Oscar Romero Catholic Academy
Bermondsey
Trust in 2025
St John Fisher Catholic Voluntary St Ralph Sherwin Catholic Multi Academy Trust
Academy, Alvaston, Derby
The McAuley Catholic High School, The McAuley Catholic High School Trust
Doncaster
St Mary’s Catholic Primary School, Eltham, South East London Catholic Academy Trust
Ltd renamed to St Oscar Romero Catholic
London SE9
Academy Trust in 2025
St Mary’s College, Hull St Cuthbert Roman Catholic Academy Trust
Endsleigh Holy Child Voluntary Catholic Academy, St Cuthbert Roman Catholic Academy Trust
Hull
St Mary’s Catholic Primary School, Whitstable (Part Kent Catholic Schools Partnership
of Kent Catholic Schools Partnership (a Multi-
Academy Trust)).
----- End of picture text -----

Private Fee-Paying School run by the Institute of Our Lady of Mercy

Name Responsible Authority/Lessee
St Joseph’s Park Hill School, Burnley, Lancashire Institute of Our Lady of Mercy

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Private Fee-Paying Schools in buildings owned by the Institute

There are a number of instances where parents have formed bodies to take over the running of former independent Convent schools on the understanding that the Roman Catholic ethos will be maintained.

----- Start of picture text -----
Name Responsible Authority/Lessee
Our Lady’s School Abingdon, Oxfordshire Leased to Our Lady’s Abingdon Trustees Ltd until its
sad and sudden closure in August 2025.
St Mary’s Hare Park School, Gidea Park, Essex Leased to St Mary’s Hare Park School
St Philomena's School, Frinton-on-Sea, Essex Leased to St Philomena’s School Ltd
Mylnhurst Catholic Preparatory School & Nursery, Leased to Mylnhurst Ltd and Mylnhurst Sports
Ecclesall, She�ield Education and Leisure
St Thomas More School, Colchester The Former Convent Building is leased to the school
and makes up part of the school provision.
----- End of picture text -----

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Institute of Our Lady of Mercy

Care of the Sick, Support for the Poor

The provision of care remains the largest part of the Institute’s charitable activities with the largest

The Institute is committed to ensuring high quality care in an environment where each person’s dignity is esteemed and valued and where individuality and privacy are respected. The Institute seeks to achieve this aim by promoting the ethos and values gifted by our Foundress, Venerable Catherine McAuley.

The Charity owns and operates two Registered Care Homes and three ‘Communities with Care’. The Communities with Care provide accommodation and care to meet a range of needs to support retired, elderly and frail members of the Institute.

Care Management Structure

The Care Management Group ensures the Institute meets its legal obligation to run safe, e�ective, caring, responsive and well-lead homes.

Registered Care Home managers, Care and Service managers in our Convent with Care were supported and managed by the Head of People and Services on behalf of the Trustees. Care sta� are also closely supported by Trustees and the head o�ice team. The Head of People and Services is also the link for the Care Quality Lead. The Care Quality Lead is the Institute’s Nominated Individual with the Care Quality Commission (“CQC”) and is responsible for reviewing clinical and operational policies ensuring compliance with CQC regulations and best practice. Trustees and Care Home Managers use the internal quality assurance audits (including Regulation 17 reports) to identify strengths and areas for further service development.

Registered Care Homes

The Institute owns and operates two CQC registered care homes: Mercy Care Centre in Derby and McAuley Mount Residential Care Home in Burnley. Both homes are rated as ‘good’ by the CQC. Mercy Care Centre provides up to 50 residents with a mix of residential and dementia care and is adjacent to our close to care apartments in Kinsale Court. McAuley Mount Care Home cares for up to 26 residents and celebrated its Golden Jubilee in 2025, which is shown on the front cover of this report. Trustees and senior management maintain a programme of care home visits.

Communities with Care

The Institute continues to develop the necessary practical and pastoral support for Sisters and sta� as they adjust to the decrease in the number of Sisters and their increasing vulnerability.

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Institute of Our Lady of Mercy

The addition of the southern site in Brentwood alongside the existing northern sites at Hull and Whitby has doubled the bed spaces and increased the resilience to provide high quality care for Sisters.

McAuley Mount Residential Care Home, Burnley

On 24[th] March 2025, Residents, Sta�, Sisters and Invited Guests came together to celebrate the 50[th] Anniversary of McAuley Mount. A Mass was celebrated by Bishop John Arnold to give thanks for the 50 years of care that has taken place on this site.

Mother Ita Cahill and the Burnley Sisters of Mercy had a dream of developing a place for retired clergy and their housekeepers. The seeds were sown, and the building work began on the 26 rooms that were built with communal areas.

Over the years the home has developed in di�erent ways to respond to the care needs of the time, which is how our Foundress Catherine McAuley, in the past listened to the needs in Dublin in the 1830's, as she founded the Congregation of the Sisters of Mercy. Care facilities were established in Dublin and across the world and are to this day flagship services to those who need care.

Over the years McAuley Mount became a registered residential home for the clergy and other retired people of the area.

Sta� endeavour to provide a high quality of care, dignity, respect and personalised care to those who live there. The caring environment provides physical, psychological, emotional and spiritual support to each person, their family or carer. The values of Mercy and Compassion are rooted in the daily activities of this home. The residents make it the happy home it is, and sta� reflect this in the day-to-day running of the home.

A CQC Inspection received on 20[th] March confirmed the excellence of the Home and the rating given was Good.

Pastoral care is provided by one of the Sisters and priests. Medical and nursing support is provided by the local services of Burnley to enable residents to remain in the Home until death, if this is their choice. In the Jubilee Year of Hope of 2025, it was a delight to celebrate 50 years of Mercy.

We remain open to where Mercy May Yet Be for all in the area of care as we walk into the future.

Sheltered Accommodation

now managed on behalf of the Institute by Sanctuary Housing who took over from ‘Johnnie Johnson’ Housing Trust on 1 January 2025.

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Institute of Our Lady of Mercy

St Anne’s Court, Newcastle upon Tyne is let on a long lease to the Trustees of the ‘Orders of St John Care Trust’. After the Trustees of the Orders of St John indicated their wish to withdraw from the lease, the previous Institute Trustees approved this request. The current Trustees are progressing the disposal of this site.

Other Involvement in Care

Many of the Congregation have worked within the nursing profession and many have dedicated their lives to caring for others. Sisters continue to undertake volunteer work supporting the sick and the poor – for example through visitation.

As in other areas of Ministry, the Institute leases properties to external organisations to further its Objectives of Nursing the Sick and Disabled:

As in other areas of Ministry, the Institute leases properties to external organisations to further its
Objectives of Nursing the Sick and Disabled:		 As in other areas of Ministry, the Institute leases properties to external organisations to further its
Objectives of Nursing the Sick and Disabled:
Organisation and Location
Description
Zoe’s Place Crossbeck, Normanby
O�ers respite and palliative terminal care to babies and
support to their parents.
Rainbows Bereavement Support GB Liverpool Provides support to children to grieve and grow after loss.
Zoe’s Place, Liverpool (until they transferred to
Liverpool Zoe’s Place in summer 2025)		 O�ers respite and palliative terminal care to babies and
support to their parents.

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Institute of Our Lady of Mercy

Advancement of Religion and other Charitable Work

The Institute of Our Lady of Mercy contributes, by the work of individual Sisters, to both religious and wider education in schools; they work with a wide range of people including migrants and asylum seekers, homeless people, vulnerable young people, people with disabilities, vulnerable elderly and prisoners. Traditionally. Sisters of Mercy have had a particular involvement in supporting vulnerable women. Many Sisters of the Institute are active in local parishes in the religious education of both adults and children, including sacramental preparation and the Rite of Christian Initiation of Adults (RCIA). The Sisters are also involved in retreat and prayer ministry, spiritual accompaniment and various types of counselling services. Some Sisters are trained to o�er alternative therapies for the wellbeing of the whole person. Often this work is done for little or no financial remuneration, thus contributing to the benefit of the general public.

Properties owned by the Institute are also leased to other charitable organisations for a variety of purposes at nil or concessionary rents:

----- Start of picture text -----
Property Purpose
Alnwick, Northumberland: The Costello Centre Used for community purposes.
Brentwood, Essex Sion Catholic Community for Evangelisation (until 5 [th]
January 2026)
Derby, Bridge Gate Women’s Work
Eltham, London: The Haven Centre Used for a variety of community purposes.
Kings Cross, London: Women@TheWell Provides services to vulnerable women.
----- End of picture text -----

Congregational Activity

As stated previously, Members of the Congregation follow their own individual ministries and contribute to society in a number of di�erent ways:

A number of Sisters work directly for the Congregation (for which they receive no remuneration).

Some Sisters conduct paid work outside of the Congregation in respect of which they receive a salary or are paid a stipend, which they then in turn covenant to the Charity.

Whilst many Sisters are retired, or are retiring from paid professions, a large proportion are active volunteers.

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Institute of Our Lady of Mercy

important way in which the Sisters have sought to meet the needs of those it is seeking to help.

Charitable Donations

their aims and objectives. Trustees respond to appeals on behalf of the Congregation. These donations are usually made from investment income. In addition, each Community also has its own budget to contribute to local charities and those in need. Please refer to Account Notes 11 and 29 on pages 58, 59 and 72.

Page 27

Institute of Our Lady of Mercy

Plans for the Future

Adoption of CIO Legal Structure

The Institute of Our Lady of Mercy was established as a Charitable Trust in 1984. This has served the needs of the Institute well; however, the changing demographics of the membership has necessitated exploration of alternative legal structures, and a new Charitable Incorporated Organisation (CIO) was approved by the Charity Commission in January 2023.

Delegates of the Ninth General Chapter of the Institute (which took place from 22 May – 2 June 2023) unanimously gave the new Team the authority to alter the legal structure of the Institute, with the transfer of assets and liabilities from the present Charitable Trust to the Institute of Our Lady of Mercy CIO.

As a consequence of due diligence, Trustees delayed the transfer to CIO until midnight on 31st December 2025.

as all assets and liabilities, excluding land and buildings in the process of being sold and those with administration issues, will be transferred to the new entity, no impairment has been deemed necessary.

– Acts of Chapter What Mercy may yet be

As detailed above, Delegates of the Chapter gave the new Team the authority to alter the legal structure of the Institute, with the transfer of assets and liabilities from the present Charitable Trust to the Institute of Our Lady of Mercy CIO.

The Chapter also considered the next phase of the Mercy story. Many di�erent views and concerns were raised and discussed, but there was a broad consensus that Sisters wish to face the future with positive determination.

Work will begin in the coming year on developing a second charity for mercy ministries, a “Doors of Mercy CIO”.

Page 28

Institute of Our Lady of Mercy General

will continue to closely monitor the operations and activities of the Institute.

The Institute continues to review its business operations, processes and structures to ensure they remain fit for purpose and will act if necessary to respond to changing circumstances.

The Institute continues to work ever more closely with its operational managers, providing them with Human Resources (“HR”), Health & Safety (“H&S”), Finance, Data Protection, IT and legal expertise.

GDPR eLearning and cyber security training continue to be delivered. Regular data protection advice and data reviews by the Institute’s Data Protection O�icer and Caldicott Guardian supports managers and sta� with their ongoing compliance with the policies and procedures.

The renewal of IT hardware and software continues to ensure that the Institute’s operations meet the demand to communicate safely and e�ectively in a connected world.

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Institute of Our Lady of Mercy

Financial Review

Risk Management

With the support of its professional advisors and sta� team the Institute maintains a comprehensive risk register which is reviewed regularly. Where key risks are identified mitigating actions are agreed and the appropriate remedies actioned to ensure that risks are kept within the agreed risk profile for the Institute. Managed risks include both internal Institute issues and areas where the Institute has obligations to regulators and other stakeholders.

The declining number of religious Sisters who can provide the necessary vision and direction for the charity is mitigated through support for all sta� and a programme of continued professional development in which all sta� directly or indirectly benefit. The Institute strives to achieve this by using fit for purpose policies and procedures, placing a strong emphasis on developing positive working relationships and following organisational values in day-to-day operations. The involvement of advisors, and increased management support (e.g., administration, finance, IT, data protection and human resources) at the Generalate also helps to manage risk. Similarly, with the reducing number of Sisters the functions and responsibilities taken on by lay sta� become increasingly important for the Institute to keep under review.

markets and high inflation are eased by using investment managers who provide regular reports on investment performance and benchmark financial returns. While this approach has ensured that su�icient working capital is available to meet the Institute’s needs, the Institute needs to continually monitor the draw on its resources and cash flow, ensuring that prudent stewardship decisions are made.

The Institute operates three Communities with Care for frail Sisters where high-level care can be provided e�iciently in an appropriate environment.

The Institute of Our Lady of Mercy is a member of the Religious Life Safeguarding Service (RLSS) and the Catholic Safeguarding Standards Agency (CSSA). The Institute employs a Safeguarding Lead and has a Safeguarding Trustee Sub-Committee, which includes an Institute Trustee and several lay advisors. The Sub-Committee takes legal advice on safeguarding matters as and when required. This structure will help ensure that the Institute continues to invest in ongoing training in relation to its safeguarding responsibilities whilst also supporting the Trustees, other Sisters, and sta� in their duty of care towards vulnerable groups.

Trustees recognise that the ongoing strategic management of the Institute is an area that requires considerable attention on an ongoing basis. When issues arise and decisions are required Trustees seek the support and advice of their senior management team at the Generalate together with their professional advisors. Similarly, the management of their care facilities and other charitable work form a commitment to take wide advice from the Institute’s sta� and advisors together with a readiness to adjust their resourcing and plans to meet changing operational needs.

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Institute of Our Lady of Mercy

Fundraising

The Institute is predominantly funded by income from the covenanted salaries and pensions of Sisters, care home fees, school fees, rents and investment income, rather than seeking to raise money from the public through fundraising appeals.

Other Policies

set down in policy statements. These are all reviewed on a regular basis and amended where necessary to take account of changing circumstances and practices. All Communities are issued with financial guidelines.

The requirements of Charity law and their bearing upon the working practices of the Charity have been the subject of discussion at Trustee Meetings. The importance of full compliance with legal requirements is understood. The Legal Advisers the Institute uses include a specialist Charity Team who attend Bi-Monthly Trustee Meetings.

Policy on Reserves

The Trustees’ policy is to maintain the current level of reserves, as far as is possible (having taken account of the potential for fluctuation in the investment markets). It is hoped that the investment of reserves will provide a secure, long term income stream for the Charity.

preserve the ongoing legacy of the Institute of Our Lady of Mercy well into the future.

Where there isn’t currently a formal reserve policy in place due to the large reserves previously held, it is the intention of the Trustees to document this in the coming year to ensure there are su�icient funds held for future commitments and plans. The total reserves at the end of the reporting period are £105.1m. Restricted reserves amount to £2.2m (2024: £15.2m). The unrestricted reserves amount to £102.9m (2024: £129.0m).

The Charity’s policy on restricted funds is to record separately donations, grants and other income sources where restrictions are imposed that are narrower than the Charity’s overall objectives.

Grant Making Policy

Grants, which comprise gifts and charitable bequests, are considered by the Trustees on a regular basis when it is decided which charities or causes are to be supported. The grants are made to support charitable work.

When considering grant requests, the Trustees assess:

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Institute of Our Lady of Mercy

Summary

The Institute funds its charitable activities mainly through incoming resources from Sisters’ salaries and pensions, care home fees, school fees, investment income, the sale of investments and the sale of fixed assets surplus to requirements. As per the accounts, the Institute had a deficit of £39.1m for the year to 30 June 2025. The deficit mainly relates to impairment of buildings of £33.9m, the Institute intends to gift two school buildings that were previously held at a combined value of £32.2m.

Restricted funds totalled £2.2m and unrestricted funds totalled £102.9m. The Institute is in the process of disposing of properties which will give rise to profit on the sale of assets to mitigate the current deficit.

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Institute of Our Lady of Mercy

Investments

Powers

The investments of the charity are pooled together and invested as a whole; the capital and interest being applied pro rata to the capital invested. There are two linked charities:

The investment powers of the Trustees, which are set out in the Trust Deed, are widely drawn and authorise the Trustees to sell, call in and convert money and to vary and transpose investments (subject to such consents as may be required by law). Power is given to invest monies in the purchase of stocks, funds, securities or other investments (including freehold and leasehold property) of whatsoever nature and wheresoever and whether involving liability or not; the Trustees have the same full and unrestricted powers of investing and transposing all investments as if they were entitled thereto beneficially. Where income arising from investments is not applied to the objects of the charity there is power to invest and accumulate the same. In this respect, the Trustees, by order of the Charity Commission, are authorised to appoint Investment Advisors and to delegate to them discretionary powers of management. During the reporting period, Charles Stanley & Company Limited have managed the Institute’s investments.

Policy

The Investment Policy of the Trustees laid down to the Investment Advisors is “to achieve long term growth of both capital and income together with a reasonably high level of current income. The assets should be managed to at least maintain the real capital value of the portfolio, whilst generating a sustainable level of income to support the various charitable activities”.

assets, and 64% in equity investments, is considered satisfactory and gives an acceptable level of risk to the Trustees. The Trustees require ethical considerations to be considered in the choice of investments in accordance with these guidelines.

In broad terms ethically acceptable investments, mostly equities, are chosen because they do not, through their activities, disadvantage any part of the world population or make irresponsible use of natural resources. Additionally, such investments should have a positive impact on the quality of life for communities at large, have an ethical approach to climate change, health, housing and medicine, and have a strong human rights record. Specifically, direct investments not meeting these criteria include those engaging in and profiting from the following industries: armaments, mining, tobacco, gambling and pornography. The same guidelines should apply in the use of collective investment

Page 33

Institute of Our Lady of Mercy

vehicles with the exception that the investment manager may select funds so long as there is no material breach of the above criteria. The Trustees do not have an outright exclusion on Fossil Fuels but following a review of the sector took the decision to sell down the existing direct equities in the portfolios by no later than 31 December 2025. The Institute no longer holds fossil fuel equities.

Charles Stanley uses the services of Ethical Screening and MSCI to monitor ESG and other related matters regarding the investments and updates to the Trustees are provided at the half-yearly meetings.

Social Investment Policy

The Trustees’ policy is that where possible they will seek to make investments that further the aims of the charity for the public benefit. The Trustees do not expect a financial return, or the main purpose of these investments is not for a financial return. These investments mainly relate to properties being let, usually at a peppercorn or below market rent, to individuals or organisations whose work relates to the advancement of the charity’s aims.

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Institute of Our Lady of Mercy

Statement of Trustees’ Responsibilities

accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

statements for each financial year which give a true and fair view of the state of a�airs of the charity and its linked charities, and of the incoming resources and application of resources of the charity and its linked charities for that period.

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and its linked charities and enable them to ensure that the financial statements comply with the Charities Act 2011, the relevant Charity (Accounts and Reports) Regulations and the provisions of the charity’s Trust Deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may di�er from legislation in other jurisdictions.

INDEPENDENT AUDITORS

The Trustees appointed Buzzacott Audit LLP as independent auditors to the Charity from 1 July 2024.

Page 35

Institute of Our Lady of Mercy

APPROVAL

The Strategic Report and Trustees’ Report have been approved by the Trustees on

Signed:

TRUSTEE

17 April 2026 Date: Signed:

TRUSTEE

Date: 17 April 2026

Page 36

Independent auditor’s report to the trustees of the Institute of Our Lady of Mercy

Opinion

We have audited the accounts of the Institute of Our Lady of Mercy, which includes the charity's linked charities - The Costello Fund (Charity Registration Number 290544-6) and The Fullerton Fund (Charity Registration Number 290544-7) (referred to here onwards as the "charity") for the year ended 30 June 2025 which comprise the statement of financial activities, the balance sheet, the statements of cash flows principal accounting policies and the notes to the accounts. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the accounts:

Basis for opinion

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

Emphasis of matter – accounts prepared on a basis other than going concern

We draw your attention to page 43 to the accounts which explains that the trustees intend that the charity’s operations should cease and that a request be made for its removal from the Central Register of Charities, following the transfer of the activities, assets and liabilities to the newly formed Charitable Incorporated Organisation (CIO) (Institute of Our Lady of Mercy CIO, Charity Registration Number: 1201690). The majority of the assets and liabilities were transferred at midnight on 31 December 2025, with the remainder to be transferred within the next financial period. Therefore, the trustees do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the accounts. Accordingly, the accounts have been prepared on a basis other that going concern as described on page 43. Our opinion is not modified in respect to this matter.

Other information

The other information comprises the information included in the annual report, including the trustees’ report, other than the accounts and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the accounts 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 accounts or our knowledge obtained in the course of the audit or

Page 37

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 accounts 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 on in this regard.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report.

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

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 35, the trustees are responsible for the preparation of the accounts and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of accounts that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the accounts

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 accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these accounts.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

Page 38

How the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

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

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

Page 39

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

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.

Buzzacott Audit LLP Statutory Auditor 130 Wood Street London EC2V 6DL

Date 21 April 2026

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

Page 40

INSTITUTE OF OUR LADY OF MERCY

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 30 JUNE 2025

Note
Income from:
Donations and legacies
5
Charitable activities
6
Investment income
7
Other income
8
Total income
Expenditure on:
Raising funds
9
Charitable activities
109
Total expenditure
Net (expenditure)/income before net
gains/(losses) on investments
Net gains/(losses) on investments
18,19
Net (expenditure)/income
Transfers between funds
24
Net movement in funds before other
recognised gains/(losses)
Other recognised gains/(losses):
Impairment on tangible fixed assets
17
Net movement in funds		 Unrestricted
funds
Year ended
30 June
2025
£
2,656,786
4,257,390
3,086,397
1,798,677
11,799,250
153,783
17,814,993
17,968,776
(6,169,526)
932,601
(5,236,925)
360,176
(4,876,749)
(21,220,147)
(26,096,896)		 Restricted
funds
Year ended
30 June
2025
£
-
-
90,543
-
90,543
6,698
77,125
83,823
6,720
8,946
15,666
(360,176)
(344,510)
(12,640,111)
(12,984,621)		 Total
funds
Year ended
30 June
2025
£
2,656,786
4,257,390
3,176,940
1,798,677
11,889,793
160,481
17,892,118
18,052,599
(6,162,806)
941,547
(5,221,259)
-
(5,221,259)
(33,860,258)
(39,081,517)		 Total
funds
Period from 1
January 2023
to
30 June
2024
(As restated)
£
4,113,161
5,437,444
4,277,314
903,404
14,731,323
273,348
23,973,225
24,246,573
(9,515,250)
(235,560)
(9,750,810)
-
(9,750,810)
-
(9,750,810)

Page 41

INSTITUTE OF OUR LADY OF MERCY

STATEMENT OF FINANCIAL ACTIVITIES (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2025

Note
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward
24,25		 Unrestricted
funds
Year ended
30 June
2025
£
128,962,382
(26,096,896)
102,865,486		 Restricted
funds
Year ended
30 June
2025
£
15,199,709
(12,984,621)
2,215,088		 Total
funds
Year ended
30 June
2025
£
144,162,091
(39,081,517)
105,080,574		 Total
funds
Period from 1
January 2023
to
30 June
2024
£
153,912,901
(9,750,810)
144,162,091

The Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 45 to 76 form part of these financial statements.

One of the linked charities, The Fullerton Fund, was dormant in the year and therefore had no activity. The other linked charity, The Costello Fund, had income of £88,920 which is included within Investment Income above, expenditure of £83,591 which is included in Expenditure on Charitable Activities above and gains on investments of £5,662 included above. The total funds carried forward of the linked charities at 3 June 2025 was £2,134,409.

Page 42

INSTITUTE OF OUR LADY OF MERCY

BALANCE SHEET AS AT 30 JUNE 2025

2025
Note
£
Fixed assets
Tangible assets
17
37,906,418
Investment property
18
9,463,095
Investments
19
50,385,995
Total fixed assets
97,755,508
Current assets
Stock
20
-
2,882
Debtors
21
1,102,230
850,549
Current asset investments
27
1,944,580
1,349,957
Cash at bank and in hand
27
5,354,659
1,825,827
Total current assets
8,401,469
4,029,215
Creditors: amounts falling due within one
year
22
(1,076,403)
(1,057,786)
Net current assets
7,325,066
Total assets less current liabilities
105,080,574
Total net assets
105,080,574
Charity funds
Restricted funds
24,25
2,215,088
Unrestricted funds
24,25
102,865,486
Total funds
24,25
105,080,574
The
financial
statements
were
approved
and
authorised
for
issue
by
the
_______and signed on their behalf by:
17 April 2026		 2024
(As restated)
£
77,271,654
8,508,100
55,410,908
141,190,662
2,971,429
144,162,091
144,162,091
15,199,709
128,962,382
144,162,091
Trustees
on

Sr Mary Bernadette Holmes Trustee

Sr Bernadette Patricia Roche Trustee

The notes on pages 45 to 76 form part of these financial statements.

Included within unrestricted funds is £2,134,409 relating to The Costello Fund - one of the reporting charity's linked charities. The other linked charily is dormant and does not hold any funds.

Page 43

INSTITUTE OF OUR LADY OF MERCY

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2025

Cash flows from operating activities
Net cash used in operating activities
26
Cash flows from investing activities
Dividends, interests and rents from investments
Purchase of tangible assets
Proceeds from the sale of tangible assets
Proceeds from sale of investments
Purchase of investments and investment property
Net cash provided by investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 Year ended
30 June
2025
£
(8,828,940)
3,176,940
(1,958,936)
5,978,697
7,705,987
(1,950,293)
12,952,395
4,123,455
3,175,784
7,299,239		 Period from
1 January
2023 to
30 June
2024
£
(11,236,608)
4,277,314
(3,138,599)
1,557,000
8,118,014
(2,231,378)
8,582,351
(2,654,257)
5,830,041
3,175,784

No separate reconciliation of net debt has been prepared as there is no difference between the net cash (debt) of the charity and the above cash and cash equivalents.

The notes on pages 45 to 76 form part of these financial statements

Page 44

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

1. General information

Institute of Our Lady of Mercy (the “Charity” or the “Institute”) is a registered charity with the Charity Commission with registered number 290544. The principal address of the Charity is The Generalate, Convent of Mercy, Cemetery Road, Yeadon, Leeds, LS19 7UR.

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - 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 Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011. The accounts combine, on a line-by-line basis, the results of the charity and its linked or related charity (see note 14), made up to the balance sheet date.

Both the reporting charity and the linked charities meet the definition of a public entity under FRS 102.

Under a Uniting Direction issued by the Charity Commission under section 12(1) of the Charities Act 2011, this charity (i.e.. Institute of Our Lady of Mercy (Charity Registration Number 290544)) is the reporting charity and its related charities, The Costello Fund (Charity Registration Number 290544-6) and The Fullerton Fund (Charity Registration Number 290544-7) are the the linked charities. The Fullerton Fund was dormant and was removed from the Charity Commission register on 21 March 2025.

The effect of the Uniting Direction for accountancy and reporting purposes is that a single set of accounts is presented for the two charities combined. Under the Uniting Direction, both charities continue to exist as independent entities in all other respects.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The financial statements are prepared in sterling, which is the functional currency of the entity. Monetary amounts in these financial statements are rounded to the nearest pound (£1).

In the prior year, the Trustees decided to extend the accounting period to 18 months to 30 June 2024. In the current year the Trustees have prepared the accounts for the full 12 months to 30 June 2025. Prior figures presented within the accounts are therefore not directly comparable with the current year.

Page 45

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.2 Going concern

The Trustees registered a new entity with the Charity Commission: Institute of Our lady of Mercy CIO (registered charity number 1201690) on 24 January 2023. All Trustees of the Charitable Trust are Trustees of the CIO.

As previously reported, the Trustees intended to transfer the assets and liabilities of the Charitable Trust to the newly established Charitable Incorporated Organisation (CIO). Following completion of due diligence by Trustees, staff and legal advisors, the majority of assets and liabilities were transferred to the CIO at midnight on 31 December 2025.

The financial statements have therefore been prepared on a basis other than going concern, however, as all assets and liabilities, excluding land and buildings in the process of being sold and those with administration issues, will be transferred to the new entity at net book value, no adjustments to the carrying values of assets or liabilities have been deemed necessary.

The Fullerton Fund was dormant and was removed from the Charity Commission register on 21 March 2025.

The amount held in Costello fund, another linked charity, was represented by quoted investments at the year end.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Charity accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed at the end of the accounting policies.

Page 46

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.3 Income

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.

Fees and similar income

Fees receivable and charges for teaching or residential care are accounted for in the year in which the service is provided.

Grants receivable

Grants are recognised in the Statement of Financial Activities when receivable and in accordance with the terms of the grant.

Major grants received towards the cost of acquiring fixed assets are included as restricted income, and transfers made to unrestricted funds as the assets are depreciated.

Investment income

UK Dividends and Fixed Interest Stocks are recognised when the income due is declared as being payable. Bank and short-term deposit interest is accrued up to the accounting date. These are included within Investment income in the Statement of Financial Activities.

Donations, legacies and gifts

Donations, legacies and gifts are included in the Statement of Financial Activities when the trustees are reasonably certain that the funds will be received. Income from sisters earning salaries and sisters receiving pensions is accounted for on an accruals basis (see Note 4).

The recognition of income from legacies is dependent on establishing entitlement, the probability of receipt and the ability to estimate with sufficient accuracy the amount receivable. Evidence of entitlement to a legacy exists when the Charity has sufficient evidence that a gift has been left to them (through knowledge of the existence of a valid will and the death of the benefactor) and the executor is satisfied that the property in question will not be required to satisfy claims in the estate. Receipt of a legacy must be recognised when it is probable that it will be received and the fair value of the amount receivable, which will generally be the expected cash amount to be distributed to the Charity, can be reliably measured.

Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.

2.4 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.

Expenditure on raising funds includes all expenditure incurred by the Charity to raise funds for its charitable purposes and includes costs of all fundraising activities events and non-charitable trading.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Charity's objectives, as well as any associated support costs.

Page 47

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.4 Expenditure (continued)

All expenditure is inclusive of irrecoverable VAT.

Grants payable

Grants payable are payments made to third parties in the furtherance of the charitable objectives. The grants are accounted for where either the trustees have agreed to pay the grant without condition and the recipient has a reasonable expectation that they will receive a grant, or any condition attaching to the grant is outside the control of the trustees.

Governance costs

Governance costs include external audit, strategic costs and professional services in relation to the governance of the charity.

2.5 Tangible fixed assets and depreciation

Tangible fixed assets costing £1,000 or more (£5,000 or more if property related) are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

(i) Freehold land & buildings

Land and buildings include freehold and leasehold premises. Land and buildings are stated at cost (or deemed cost for land and buildings held at valuation at the date of transition to FRS 102) less accumulated depreciation and accumulated impairment losses.

(ii) Fixtures and fittings, equipment and motor vehicles

Fixtures and fittings, equipment and motor vehicles are stated at cost less accumulated depreciation and accumulated impairment losses.

(iii) Land is not depreciated. Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

Buildings - 50 years
Motor vehicles - 4 years
Fixtures and fittings - 5-10 years
Equipment - 2-5 years

Page 48

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.6 Investments

I nvestment properties

Investment properties are valued annually.

Investment properties have been valued by The JTS Partnership LLP, Chartered Surveyors, who are independent external valuers.

The valuations were in accordance with the requirements of the RICS UK Valuation Standards and FRS 102. Investment Properties are valued to Market Value assuming that the property would be sold subject to any existing leases.

The valuer’s opinion of Market Value was primarily derived using: (i) comparable recent market transactions on arm’s length terms.

(ii) using an estimate of the future potential net income generated by use of the property, because its specialised nature means that there is no market-based evidence available.

Quoted securities

The quoted securities are valued at market value based on the bid price of the quotation in the Stock Exchange Daily Official list or similar recognised market value. Realised and unrealised gains and losses on sale or revaluation of investments are taken to the Statement of Financial Activities in the year in which they arise.

2.7 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

2.8 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

2.9 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of financial activities as a finance cost.

2.10 Financial instruments

The Charity has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial asset s

Basic financial assets, including trade and other receivables, cash and bank balances and investments, are initially recognised at transaction price. Such assets are subsequently carried at amortised cost using the effective interest method.

Page 49

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.10 Financial instruments (continued)

At the end of each reporting year financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in income and expenditure.

If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in income and expenditure.

The Charity has chosen to designate certain debt instruments that would be classified as basic financial instruments as fair value through profit and loss as permitted by section 11.4 (b) of FRS 102. The recognition, measurement and disclosure requirements of FRS 102 in respect of financial instruments measured at fair value through income and expenditure have been applied to these designated financial instruments. Financial assets designated as at fair value through income and expenditure at inception are those that are managed and whose performance is evaluated on a fair value basis.

Other financial assets, including investments in equity instruments are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in income and expenditure.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Offsetting

Financial assets and liabilities are offset, and 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.

2.11 Operating leases

Rentals paid under operating leases are charged to the Statement of financial activities on a straightline basis over the lease term.

Page 50

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

2. Accounting policies (continued)

2.12 Pensions

Teaching staff belong to the Teachers' Pension Scheme, which is a multi-employer defined benefit scheme. As the information as to the underlying share of assets and liabilities by employer is not available, the scheme is accounted for as a defined contribution scheme and contributions are charged to the Statement of Financial Activities in the year in which they are payable. The effects of this are disclosed in Note 29.

The Institute operates a defined contribution scheme for other staff. Contributions are charged to the Statement of Financial Activities in the year in which they are payable. The costs of the defined contribution scheme are charged to relevant activity within unrestricted funds based on the type of work performed.

2.13 Related party transactions

The Charity discloses transactions with related parties which are not wholly owned within the Institute. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the Trustees, separate disclosure is necessary to understand the effect of the transactions on the Charity’s financial statements.

2.14 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.

2.15 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Investment income, gains and losses are allocated to the appropriate fund.

Page 51

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

3. Critical judgements and estimates

Valuation of investment properties

The Charity makes an annual estimate of the open market value of investment properties. The Trustees take into account advice from third parties, including valuations performed externally, and by using all knowledge and information available to them, including market yields, replacement cost, tenant covenant strength, the availability of suitable purchasers, the wider property market conditions and the nature of the asset held.

Impairment of tangible assets

The Trustees apply judgement in assessing whether tangible assets are impaired. This includes evaluating indicators of impairment and estimating recoverable amounts using assumptions relating to future cash flows, discount rates, and asset utilisation. These estimates are inherently uncertain and may differ from actual outcomes.

4. Prior year adjustments

The following reclassifications have been made as the Trustees have concluded this better reflects the nature of the balance or transaction. There was no impact on the Charity's total funds and total net assets.

Nature of balance or Clasification before 2024
transaction restatement Restated clasification (£)
Cash held with investment Cash at bank and in hand Current asset investments
managers (see Note 27) (see Note 27) 1,349,957
Sisters salary and pensions Charitable activities (see Donations and legacies
received Note 6) (see Note 5) 4,002,013

5. Donations and legacies

Donations
Sisters' salaries and pensions		 Unrestricted
funds
Year ended
30 June
2025
£
42,702
2,614,084
2,656,786		 Total
funds
Year ended
30 June
2025
£
42,702
2,614,084
2,656,786

Page 52

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

5. Donations and legacies (continued)

Donations
Sisters' salaries and pensions		 Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
(As restated)
£
111,148
4,002,013
4,113,161		 Total
funds
Period from
1 January
2023 to
30 June
2024
(As restated)
£
111,148
4,002,013
4,113,161

Donations are received from various sources including parent teacher association donations from schools, care home donations from visitors and donations made for the overseas missions.

Sisters' salaries and pensions relate to income from sisters earning salaries and sisters receiving pensions which is gifted to the Charity under a deed of covenant.

During the year, the sisters' salaries and pensions have been reclassified from charitable activities to donations and legacies. As a result, the comparatives have been restated (see Note 4).

6. Charitable activities

School fees
Care home fees
Grant receivable		 Unrestricted
funds
Year ended
30 June
2025
£
1,029,786
3,187,699
39,905
4,257,390		 Total
funds
Year ended
30 June
2025
£
1,029,786
3,187,699
39,905
4,257,390

Page 53

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

6. Charitable activities (continued)

School fees
Care home fees
Grant receivable		 Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
(As restated)
£
1,442,423
3,954,625
40,396
5,437,444		 Total
funds
Period from
1 January
2023 to
30 June
2024
(As restated)
£
1,442,423
3,954,625
40,396
5,437,444

During the year, the sisters' salaries and pensions have been reclassified from charitable activities to donations and legacies. As a result, the comparatives have been restated (see Note 4).

7. Investment income

Income from investment properties
Income from quoted investments
Bank and other similar interest		 Unrestricted
funds
Year ended
30 June
2025
£
782,115
2,267,896
36,386
3,086,397		 Restricted
funds
Year ended
30 June
2025
£
-
90,543
-
90,543		 Total
funds
Year ended
30 June
2025
£
782,115
2,358,439
36,386
3,176,940

Page 54

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

7. Investment income (continued)

Income from investment properties
Income from quoted investments
Bank and other similar interest		 Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
£
947,648
3,106,262
94,222
4,148,132		 Restricted
funds
Period from
1 January
2023 to
30 June
2024
£
-
129,182
-
129,182		 Total
funds
Period from
1 January
2023 to
30 June
2024
£
947,648
3,235,444
94,222
4,277,314

One of the linked charities, The Fullerton Fund, was dormant in the year and therefore had no activity. The other linked charity, The Costello Fund, had income of £88,920 which is included within Investment Income in the Statement of Financial Activities, expenditure of £83,591 which is included in Expenditure on Charitable Activities and gains on investments of £5,662 in the Statement of Financial Activities. The total funds carried forward of the linked charities at 3 June 2025 was £2,134,409.

8. Other income

Sundry income
Profit on disposal of fixed assets		 Unrestricted
funds
Year ended
30 June
2025
£
266,022
1,532,655
1,798,677		 Total
funds
Year ended
30 June
2025
£
266,022
1,532,655
1,798,677

Page 55

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

8. Other income (continued)

Sundry income
Profit on disposal of fixed assets		 Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
£
157,641
745,763
903,404		 Total
funds
Period from
1 January
2023 to
30 June
2024
£
157,641
745,763
903,404

9. Raising funds

Investment management fees
Investment management fees		 Unrestricted
funds
Year ended
30 June
2025
£
153,783
Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
£
263,490		 Restricted
funds
Year ended
30 June
2025
£
6,698
Restricted
funds
Period from
1 January
2023 to
30 June
2024
£
9,858		 Total
funds
Year ended
30 June
2025
£
160,481
Total
funds
Period from
1 January
2023 to
30 June
2024
£
273,348

Page 56

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

10. Expenditure

Staff costs (Note 14)
Other costs
Support and governance costs allocation
(Note 12)
Depreciation
Grants payable (Note 11)
Staff costs (Note 14)
Other costs
Support and governance costs allocation
(Note 12)
Depreciation
Grants payable (Note 11)		 Convents
and religous
activities
Year ended
30 June
2025
£
2,825,608
4,284,942
2,479,551
2,233,302
528,779
12,352,182
Convents
and religious
activities
Period from
1 January
2023 to
30 June
2024
£
3,519,727
6,004,576
2,997,668
3,165,590
934,349
16,621,910		 Schools and
education
Year ended
30 June
2025
£
1,145,610
478,106
11,291
7,588
857
1,643,452
Schools and
education
Period from
1 January
2023 to
30 June
2024
£
1,230,155
273,118
4,539
3,984
874
1,512,670		 Care homes
and other
care
activities
Year ended
30 June
2025
£
3,433,994
563,671
54,506
32,753
358
4,085,282
Care homes
and other
care
activities
Period from
1 January
2023 to
30 June
2024
£
4,817,978
841,954
169,851
8,654
208
5,838,645		 Total
funds
Year ended
30 June
2025
£
7,405,212
5,326,719
2,545,348
2,273,643
529,994
18,080,916
Total
funds
Period from
1 January
2023 to
30 June
2024
£
9,567,860
7,119,648
3,172,058
3,178,228
935,431
23,973,225

Support costs have been allocated to running costs in proportion to the total costs of those charitable activities.

One of the linked charities, The Fullerton Fund, was dormant in the year and therefore had no activity. The other linked charity, The Costello Fund, had income of £88,920 which is included within Investment Income in the Statement of Financial Activities, expenditure of £83,591 which is included in Expenditure on Charitable Activities and gains on investments of £5,662 in the Statement of Financial Activities. The total funds carried forward of the linked charities at 3 June 2025 was £2,134,409.

Page 57

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

11. Analysis of grants

Grants payable (2025)
Missions
Costello
Fullerton
General
Grants payable (2024)
Missions
Costello
Fullerton
Douglas Fund
Sisters Patrimony
General		 Unrestricted
funds
Year ended
30 June
2025
£
12,972
-
122,000
317,933
452,905
Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
£
60,497
-
-
-
25,000
463,783
549,280		 Restricted
funds
Year ended
30 June
2025
£
-
77,089
-
-
77,089
Restricted
funds
Period from
1 January
2023 to
30 June
2024
£
-
132,872
232,409
20,870
-
-
386,151		 Total
funds
Year ended
30 June
2025
£
12,972
77,089
122,000
317,933
529,994
Total
funds
Period from
1 January
2023 to
30 June
2024
£
60,497
132,872
232,409
20,870
25,000
463,783
935,431

Number of grants paid to institutions- 901 (2024- 938) amounting to £447,926 (2024- £832,836) Number of grants paid to individuals- 338 (2024- 1,067) amounting to £82,068 (2024- £102,595)

Page 58

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

11. Analysis of grants (continued)

Institutional grants

CAFOD - Syria/Turkey Earthquake Appeal
Jesuit Refugee Service UK
Durham University - Catherine McAuley Scholarship
Caritas Internationales - Libya
Caritas Internationales - Morrocco
Caritas Internationales - Afghanistan
Caritas Internationales - Crisis in the Holy Land Appeal
Caritas Internationales - Ukraine Appeal
Sion Catholic Community
St Joseph's R C Primary School
St Monica's Housing
Women@theWell
The Verona Fathers (Nekempte School Project)
Whispers of Hope
Women's Work
Others		 2025
£
3,190
11,000
-
-
-
-
-
-
-
6,000
5,000
241,734
-
400
-
180,602
447,926		 2024
£
10,000
-
40,000
5,005
5,005
5,005
5,006
5,006
1,424
12,000
5,000
371,805
60,000
11,896
20,000
275,684
832,836

Page 59

INSTITUTE OF OUR LADY OF MERCY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

12. Governance and support costs

Support costs
Postage and telephones
Property and general administration
Legal fees
Other expenses
Governance costs
Independent auditor's remuneration
Accountancy fees
Legal fees
Support costs
Postage and telephones
Property and general administration
Legal fees
Other expenses
Governance costs
Independent auditor's remuneration
Accountancy fees
Legal fees		 Unrestricted
funds
Year ended
30 June
2025
£
103,413
1,116,638
307,640
7,649
1,535,340
114,000
804,537
91,471
2,545,348
Unrestricted
funds
Period from
1 January
2023 to
30 June
2024
£
125,061
1,377,378
256,072
9,509
1,768,020
132,798
1,200,507
70,733
3,172,058		 Total
funds
Year ended
30 June
2025
£
103,413
1,116,638
307,640
7,649
1,535,340
114,000
804,537
91,471
2,545,348
Total
funds
Period from
1 January
2023 to
30 June
2024
£
125,061
1,377,378
256,072
9,509
1,768,020
132,798
1,200,507
70,733
3,172,058

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13. Net expenditure/(income) are stated after charging/(crediting):

Period from
1 January
Year ended 2023 to
30 June 30 June
2025 2024
£ £
Depreciation of owned assets 2,273,643 3,178,228
Operating lease cost 66,054 115,339
Independent auditor's remuneration for audit services 114,000 132,798
Profit on disposal of tangible assets (1,532,655) (745,763)

14. Staff costs

Wages and salaries
Social security costs
Pension costs		 Year ended
30 June
2025
£
6,441,834
588,800
374,578
7,405,212		 Period from
1 January
2023 to
30 June
2024
£
8,373,383
705,687
488,790
9,567,860

The average number of persons employed by the Charity during the year was as follows:

School services
Care homes
Other staff		 Year ended
30 June
2025
No.
29
105
102
236		 Period from
1 January
2023 to
30 June
2024
No.
35
105
98
238

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

14. Staff costs (continued)

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Period from
1 January
Year ended 2023 to
30 June 30 June
2025 2024
No. No.
In the band £60,001 - £70,000 1 1
In the band £80,001 - £90,000 1 -

15. Trustees' remuneration and expenses

During the year, no Trustees received any remuneration or other benefits (2024 - £NIL).

All the trustees are members of the Congregation and beneficiaries of the Charity and reside in the Charity's property and have no money of their own, having taken a vow of poverty. All living costs and items such as travel expenses are incurred by the Charity. Other than the trustees there are no key management personnel.

During the year ended 30 June 2025, no Trustee expenses have been incurred (2024 - £NIL).

16. Taxation

The reporting charity and the linked charities are registered charities and as such is entitled to certain tax exemptions on income and gains from investments, and surpluses on any trading activities carried on in furtherance of the charity's primary objectives, if these surpluses are applied solely for charitable purposes.

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17. Tangible assets

Cost or valuation
At 1 July 2024
Additions
Disposals
Transfer to investment properties
At 30 June 2025
Depreciationand impairment
At 1 July 2024
Charge for the year
On disposals
Transfer to investment properties
Impairment charge
At 30 June 2025
Net book value
At 30 June 2025
At 30 June 2024		 Freehold
land and
buildings
£
92,053,536
1,499,535
(5,614,405)
(946,120)
86,992,546
15,959,489
1,849,855
(1,168,498)
(201,891)
33,860,258
50,299,213
36,693,333
76,094,047		 Motor
vehicles
£
703,837
5,724
(6,495)
-
703,066
603,905
38,964
(6,360)
-
-
636,509
66,557
99,932		 Fixtures
and fittings
£
7,523,103
434,944
-
-
7,958,047
6,504,883
346,079
-
-
-
6,850,962
1,107,085
1,018,220		 Equipment
£
1,494,483
18,733
-
-
1,513,216
1,435,028
38,745
-
-
-
1,473,773
39,443
59,455		 Total
£
101,774,959
1,958,936
(5,620,900)
(946,120)
97,166,875
24,503,305
2,273,643
(1,174,858)
(201,891)
33,860,258
59,260,457
37,906,418
77,271,654

During the year, the Charity recognised an impairment loss of £33,860,258 (2024: £Nil) in respect of the two properties.

The transfer from tangible fixed assets to investment properties during the year relates to one property previously occupied by beneficiaries and now rented to a third party.

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18. Investment property

Valuation
At 1 July 2024
Additions
Surplus on revaluation
Reclassification from tangible fixed assets
At 30 June 2025
Valuation
At 1 January 2023
Additions
Surplus on revaluation
At 30 June 2024		 Freehold
investment
property
£
8,508,100
74,965
135,801
744,229
9,463,095
Freehold
investment
property
£
7,896,920
811,084
(199,904)
8,508,100

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19.
Investments
Valuation
At 1 July 2024
Additions
Disposal proceeds
Unrealised and realised gains
At 30 June 2025
Market value
At 30 June 2025
At 30 June 2024
Valuation
At 1 January 2023
Additions
Disposal proceeds
Unrealised and realised gains
At 30 June 2024
Market value
At 30 June 2024
At 31 December 2022		 Quoted
securities
£
55,410,908
1,875,328
(7,705,987)
805,746
50,385,995
50,385,995
55,410,908
Quoted
securities
£
62,144,284
1,420,294
(8,118,014)
(35,656)
55,410,908
55,410,908
62,144,284

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Investments (continued)

Quoted securities (2025)
Equity
Corporate debt
Sovereign debt
Preference shares
Quoted securities (2024)
Equity
Corporate debt
Sovereign debt
Preference shares		 Year ended
30 June
2025
£
43,081,490
5,145,190
1,970,565
188,750
50,385,995
Period from
1 January
2023 to
30 June
2024
£
47,200,394
6,594,826
835,458
780,230
55,410,908		 Total
funds
Year ended
30 June
2025
£
43,081,490
5,145,190
1,970,565
188,750
50,385,995
Total
funds
Period from
1 January
2023 to
30 June
2024
£
47,200,394
6,594,826
835,458
780,230
55,410,908

One of the linked charities, The Fullerton Fund, was dormant in the year and therefore had no activity. The other linked charity, The Costello Fund, had income of £88,920 which is included within Investment Income in the Statement of Financial Activities, expenditure of £83,591 which is included in Expenditure on Charitable Activities and gains on investments of £5,662 in the Statement of Financial Activities. The total funds carried forward of the linked charities at 3 June 2025 was £2,134,409.

20. Stocks

2025 2024
£ £
Finished goods and goods for resale - 2,882

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21. Debtors

Due after more than one year
Loans
Due within one year
Trade debtors
Other debtors
Prepayments and accrued income		 2025
£
454,489
454,489
333,028
26,687
288,026
1,102,230		 2024
£
479,316
479,316
292,794
24,827
53,612
850,549

Loans due after more than one year relate to a loan to a registered charity, which is secured and is interest free, and one loan to individuals which is interest free.

Loan repayments due within one year included within other debtors amount to £24,827 (2024- £24,827). Loans due after more than one year are repayable as follows: £100,000 (2024- £100,000) is repayable between two and five years and £354,489 (2024- £379,316) is repayable in more than five years.

22. Creditors: Amounts falling due within one year

Trade creditors
Taxation and social security
Other creditors
Accruals and deferred income
Deferred income at 1 July 2024
Resources deferred during the year
Amounts released from previous periods		 2025
£
190,119
169,967
111,706
604,611
1,076,403
2025
£
41,031
100,530
(41,031)
100,530		 2024
£
274,210
124,617
111,285
547,674
1,057,786
2024
£
16,781
41,031
(16,781
41,031

Deferred income represents income received in advance for charitable activities which will be recognised as income in subsequent accounting periods.

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23. Financial instruments

2025 2024
£ £
Financial assets measured at fair value through income and
expenditure
Financial assets measured at fair value through income and expenditure 50,385,995 55,410,908

Financial assets measured at fair value through income and expenditure comprise quoted investments.

24. Statement of funds

Statement of funds - current year

Unrestricted
funds
General funds
Restricted
funds
Maricourt High
School- grants
Broughton Hall
High School-
grant
Special account
No 5
Costello Fund
Total of funds		 Balance at 1
July 2024
£
128,962,382
1,740,846
11,259,441
76,004
2,123,418
15,199,709
144,162,091		 Income
£
11,799,250
-
-
1,623
88,920
90,543
11,889,793		 Expenditure
£
(17,968,776)
-
-
(232)
(83,591)
(83,823)
(18,052,599)		 Transfers
in/(out)
£
360,176
(55,027)
(305,149)
-
-
(360,176)
-		 Gains/
(Losses)
£
(20,287,546)
(1,685,819)
(10,954,292)
3,284
5,662
(12,631,165)
(32,918,711)		 Balance at
30 June
2025
£
102,865,486
-
-
80,679
2,134,409
2,215,088
105,080,574

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

24. Statement of funds (continued)

Statement of funds - prior year

Unrestricted
funds
General Funds
Restricted
funds
Maricourt High
School- grants
Broughton Hall
High School-
grant
Fullerton Fund
Special account
No 5
Costello Fund
The Douglas
Fund
Total of funds		 Balance at
1 January
2023
£
137,920,710
1,823,387
11,717,165
232,409
72,511
2,146,719
-
15,992,191
153,912,901		 Income
£
14,602,141
-
-
-
1,758
106,554
20,870
129,182
14,731,323		 Expenditure
£
(23,850,564)
-
-
(232,409)
(268)
(142,462)
(20,870)
(396,009)
(24,246,573)		 Transfers
in/(out)
£
540,265
(82,541)
(457,724)
-
-
-
-
(540,265)
-		 Gains/
(Losses)
£
(250,170)
-
-
-
2,003
12,607
-
14,610
(235,560)		 Balance at
30 June
2024
£
128,962,382
1,740,846
11,259,441
-
76,004
2,123,418
-
15,199,709
144,162,091

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24. Statement of funds (continued)

The restricted funds consist of the following:

• Special account No 5 is a separate fund in which a sister's personal assets are held in accordance with Canon Law.

• As outlined in the trustees report, The Costello Fund is a linked charity (Charity Registration Number 290544-6). The fund is utilised for the the advancement of education generally. As at 30 June 2025, the amount held in funds was represented by quoted investments.

• Maricourt High School, Maghull and Broughton Hall High School, Liverpool funds are in respect of grants received from the Department for Education and Skills for building works at the respective schools. These grants are initially credited to restricted reserves. The funds are transferred to unrestricted funds at the same rate that the properties are depreciated, 2025: £360,176 (2024: £540,265). During the year, the Charity recognised an impairment loss of £33,860,258 (2024: £Nil) in respect of the buildings at Maricourt School and Broughton School (see Note 17). Of the total impairment loss, £12,640,111 relates to the restricted fund.

• The Douglas Fund relates to funds received from Mercy International Association on behalf of the Douglas Family to be distributed to a Mercy Ministry (on ministries) engaged in activities which promote the current focus of Mercy Global Action. In 2023 the focus was Water, Migration and Domestic and Family Violence. The Institute distributed the funds to two organisations in the period to 30 June 2024.

• As outlined in the trustees report, The Fullerton Fund is a linked charity (Charity Registration Number 290544-7). The Fund was created following the disposal of the freehold property of St Mary's Residential Care Home, Worthing which was held in a separate fund concerned with the provision of a convalescent home for the sick and poor. On disposal of the freehold property the proceeds were transferred to the Fullerton Fund for the relief of the sick and poor in England and Wales. The Fullerton Fund was dormant in the year and was formally closed and removed from the Charity Commission Register on 21 March 2025.

25. Analysis of net assets between funds

Analysis of net assets between funds - current year

Tangible fixed assets
Quoted investments
Investment property
Debtors due after more than one year
Current assets
Creditors due within one year
Total		 Unrestricted
funds
2025
£
37,906,418
48,271,381
9,463,095
454,489
7,846,506
(1,076,403)
102,865,486		 Restricted
funds
2025
£
-
2,114,614
-
-
100,474
-
2,215,088		 Total
funds
2025
£
37,906,418
50,385,995
9,463,095
454,489
7,946,980
(1,076,403)
105,080,574

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25. Analysis of net assets between funds (continued)

Analysis of net assets between funds - prior year

Tangible fixed assets
Quoted investments
Investment property
Debtors due after more than one year
Current assets
Creditors due within one year
Total		 Unrestricted
funds
2024
£
64,271,367
53,306,084
8,508,100
479,316
3,455,301
(1,057,786)
128,962,382		 Restricted
funds
2024
£
13,000,287
2,104,824
-
-
94,598
-
15,199,709		 Total
funds
2024
£
77,271,654
55,410,908
8,508,100
479,316
3,549,899
(1,057,786)
144,162,091

26. Reconciliation of net movement in funds to net cash flow from operating activities

Net expenditure for the year before other recognised gains/(losses) (as per
Statement of Financial Activities)
Adjustments for:
Depreciation charges
Profit on disposal of tangible assets
(Gain)/loss on investments
Dividends, interest and rents from investments
Increase in debtors
Increase in creditors
Decrease/(increase) in inventory
Net cash used in operating activities		 Year ended
2025
£
(5,221,259)
2,273,643
(1,532,655)
(941,547)
(3,176,940)
(251,681)
18,617
2,882
(8,828,940)		 Period from
1 January
2023 to
2024
£
(9,750,810)
3,178,228
(745,763)
235,560
(4,277,314)
(39,270)
163,863
(1,102)
(11,236,608)

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025

27. Analysis of cash and cash equivalents

Cash at bank and in hand
Cash held by investment managers
Total cash and cash equivalents		 2025
£
5,354,658
1,944,581
7,299,239		 2024
(As restated)
£
1,825,828
1,349,956
3,175,784

During the year, the cash held with investment managers have been reclassified from cash at bank and in hand to current asset investments on the balance sheet. As a result, the comparatives have been restated (see Note 4).

28. Analysis of changes in net debt

Cash at bank and in hand
Liquid investments		 At 1 July
2024
£
1,825,827
1,349,957
3,175,784		 Cash flows
£
3,528,832
594,623
4,123,455		 At 30 June
2025
£
5,354,659
1,944,580
7,299,239

29. Grant commitments

At 30 June 2025, the Charity had total grant commitments of £780,000. £240,000 is payable within one year and £540,000 is payable in two to five years. As grants are authorised annually and there's no authorisation in place at year end with regards to future grants, no amounts are included in the financial statements for these amounts.

The grant commitments are payable without any contingent conditions attached, with donations to be used for core costs. Operations of the grant recipient must continue to run in order to receive the grants committed in the future. These commitments will be funded from general cash reserves. The recipient must provide annual narrative and financial report by 1 September each year for the payments following year to be authorised.

30. Pension commitments

There are two pension schemes in operation for employees of the Institute, these are both expensed from unrestricted funds. These are a defined contribution scheme for non-teaching staff and the Teachers' Pension Scheme ('TPS'), a defined benefit pension scheme. The assets of the defined contribution scheme are held separately from those of the Institute in an independently administered fund. The pension cost charge represents contributions payable by the Institute to the fund.

The total pension cost for the period was £371,444 (2024: £488,790) which includes contributions to the TPS of £90,748 (2024: £109,417). Total contributions of £45,536 (2024: £46,471) were outstanding at the period end which includes £9,159 (2024: £9,895) in relation to the TPS. These balances are included in taxation and social security creditors.

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30. Pension commitments (continued)

Teachers' Pension Scheme

The TPS is an unfunded multi-employer defined benefits pension scheme governed by The Teachers’ Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014 (as amended). Members contribute on a “pay as you go” basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

Valuation of the Teachers' Pension Scheme

The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to ensure scheme costs are recognised and managed appropriately and the review specifies the level of future contributions.

Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2020. The valuation report was published by the Department for Education on 27 October 2023, with the SCAPE rate, set by HMT, applying a notional investment return based on 1.7% above the rate of CPI. The key elements of the valuation outcome are:

• Employer contribution rates set at 28.68% of pensionable pay (including a 0.08% administration levy). This is an increase of 5% in employer contributions and the cost control result is such that no change in member benefits is needed.

• Total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £262,000 million and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £222,200 million, giving a notional past service deficit of £39,800 million

The result of this valuation will be implemented from 1 April 2024. The next valuation result is due to be implemented from 1 April 2028.

A copy of the valuation report and supporting documentation is on the Teachers’ Pensions website.

Under the definitions set out in FRS 102, the TPS is an unfunded multi-employer pension scheme. The Institute is unable to identify its share of the underlying assets and liabilities of the plan. Accordingly, the Institute has taken advantage of the exemption in FRS 102 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. The Institute has set out above the information available on the scheme.

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31. Related parties

The trustees consider that their relationship with Women@thewell, a registered charity, is such that it is a related party, the Institute's right to appoint two trustees and the relationship with Women@thewell as outlined in the Trustees Report. The Institute leases premises to Women@thewell at a peppercorn rent. During the period the Institute donated £240,000 to the charity (2024: £370,935) and has grant commitments totalling £240,000 due within one year (2024: £240,000) due within one year). The common trustee resigned from Women@thewell on 3 December 2024. Of the donations made during the year ended 30 June 2025, £100,000 related to the period where a trustee of the Institute was on the trustee board of Women@thewell.

Donations from trustees regarding their salaries and pension during the year amounted to £83,965 (2024: £108,179).

During the year, the Charity made a donation of £10,000 (2024: £nil) to Space International which consitutes a related party due to a common trustee.

There was also a payment to relatives of the Headteacher totalling £1,783 during the year (2024: £529) and £180 outstanding at year end (2024: £nil).

There were no further related party transactions in the year for the reporting charity or the linked charities (2024: none).

32. Operating lease commitments- Lessee

At 30 June 2025 (comparative period 30 June 2024) the Charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

Motor vehicles
Not later than 1 year
Later than 1 year and not later than 5 years		 2025
£
45,482
15,280
60,762		 2024
£
54,677
60,762
115,439

33. Operating lease commitments- Lessor

At 30 June 2025 (comparative period 30 June 2024) the Charity had was entitled to receive minimum lease payments under non-cancellable operating leases as follows:

Property
Not later than 1 year
Later than 1 year and not later than 5 years
More than 5 years		 2025
£
89,717
412,677
1,321,973
1,824,367		 2024
£
254,055
994,444
10,769,671
12,018,170

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34. Uniting direction

Under a Uniting Direction issued by the Charity Commission under section 12(1) of the Charities Act 2011, this charity (i.e. Institute of Our Lady of Mercy (Charity Registration Number 290544)) is the reporting charity and its related charities, The Costello Fund (Charity Registration Number 290544-6) and The Fullerton Fund (Charity Registration Number 290544-7) are the linked charities. The Fullerton Fund was dormant in the year and was formally closed and removed from the Charity Commission Register on 21 March 2025.

The effect of the Uniting Direction for accountancy and reporting purposes is that a single set of accounts is presented for the two charities combined. Under the Uniting Direction, both charities continue to exist as independent entities in all other respects.

The Fullerton Fund was dormant and was removed from the Charity Commission register on 21 March 2025.

The Costello Fund was active during the period and the results are outlined in the SOFA and various notes to these accounts.

35. Post balance sheet events

Transition to Charitable Incorporated Organisation (CIO)

As previously reported, the Trustees intended to transfer the assets and liabilities of the Charitable Trust to the newly established Charitable Incorporated Organisation (CIO). Following completion of due diligence by Trustees, staff and legal advisors, the majority of assets and liabilities were transferred to the CIO at midnight on 31 December 2025.

The Costello Fund was also transferred on this date.

Property Transactions

The following disposals occurred after the reporting date. Whilst the property transactions have informed on the assessment of fair value of investment properties and impairment of tangible fixed assets these transactions represent non-adjusting post balance sheet events:

Our Lady’s School, Abingdon (OLA)

Our Lady’s School, Abingdon closed unexpectedly in August 2025, and the property was returned to the direct care of the Institute after the reporting period. The property is expected to be placed on the market in Spring 2026.

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35. Post balance sheet events (continued)

Investment Management Appointment

In January 2026, the Trustees completed a competitive tender process for investment advice and management. Following this process, CCLA was appointed as the new investment advisors and fund managers. Implementation of the new arrangements will commence in February 2026. This appointment represents a non adjusting post balance sheet event.

Page 76