The Congregation of the Sisters of Nazareth Charitable...

Year Ended 31 March 2013

The Congregation of the Sisters of Nazareth Charitable Trust Annual Report and Accounts

Charity Registration Numbers:

228906 England and Wales

SC040507 Scotland

THE CONGREGATION OF THE SISTERS OF NAZARETH CHARITABLE TRUST PAGE 1

CONTENTS

Reference and Administrative Details of the Charity, its Trustees and Advisers ................................................... 4

Trustees .............................................................................................................................................................. 4

Officers ............................................................................................................................................................... 4

Administrative Details ........................................................................................................................................4

Trustees’ Report ..................................................................................................................................................... 6

Introduction........................................................................................................................................................ 6

Mission Statement of The Sisters of Nazareth ................................................................................................... 6

Mission of the Charity.........................................................................................................................................7

Sisters in the Communities .............................................................................................................................7

Activities ......................................................................................................................................................... 8

History of Hammersmith Foundation and the Need for Restructure................................................................. 8

Governance ........................................................................................................................................................ 9

Current Trustees of The Charity .........................................................................................................................9

Trustees’ Responsibilities .................................................................................................................................10

Structure and Management Reporting in the UK............................................................................................. 10

Activities, Specific Objectives and Relevant Policies ........................................................................................ 11

Provision of Residential Care ........................................................................................................................ 11

Caring for Members of the Congregation..................................................................................................... 12

Caring for Children with Special Needs ........................................................................................................ 12

Care Village Development ............................................................................................................................13

Other Ministries............................................................................................................................................14

Review of Year and Future Plans ...................................................................................................................... 15

Incoming and Outgoing Resources ............................................................................................................... 15

Investment Performance..............................................................................................................................16

Financial Position..........................................................................................................................................16

Reserves Policy .............................................................................................................................................16

Employees, Volunteers and Members of the Congregation ............................................................................ 17

Independent Auditor’s Report..............................................................................................................................18

Introduction...................................................................................................................................................... 18

Respective Responsibilities of Trustees and Auditor........................................................................................ 18

Scope of the Audit of the Accounts .................................................................................................................. 18

Opinion on Accounts ........................................................................................................................................19

Matters on which we are required to report by exception.............................................................................. 19

Statement of Financial Activities ..........................................................................................................................20

Discontinued operations ......................................................................................................................................21


Balance Sheet .......................................................................................................................................................22

Cash Flow Statement............................................................................................................................................23

A Adjustment of Net Incoming (Outgoing) Resources Before Net Investment Gains to Net Cash Inflow (Outflow) from Operating Activities ................................................................................................................. 24

B Management of Liquid Resources ........................................................................................................... 24

C Analysis of Changes in Net Funds ............................................................................................................ 24

Principal Accounting Policies ................................................................................................................................25

Basis of Accounting...........................................................................................................................................25

Incoming Resources..........................................................................................................................................25

Resources Expended and the Basis of Apportioning Costs............................................................................... 25

Tangible Fixed Assets........................................................................................................................................26

Freehold Land and Buildings.............................................................................................................................26

Assets Under Construction ...............................................................................................................................26

Long Leasehold Buildings..................................................................................................................................26

Other Tangible Fixed Assets .............................................................................................................................26

Fixed Asset Investments ...................................................................................................................................26

Liquid Resources...............................................................................................................................................26

Funds Structure ................................................................................................................................................27

Services Provided by Members of the Congregation ....................................................................................... 27

Notes to the Accounts ..........................................................................................................................................28

1. Voluntary Income ....................................................................................................................................28

2. Investment Income and Interest Receivable........................................................................................... 28

3. Miscellaneous Income.............................................................................................................................28

4. Provision of Residential and Care Services for Adults ............................................................................. 29

5. Provision of Residential and Care Services for Children.......................................................................... 29

6. Provision of Nursery Services .................................................................................................................. 29

7. Grants and Donations in Support of the Congregation’s Work Overseas and of Other Organisations...30

8. Governance Costs....................................................................................................................................30

9. Net Movement in Funds.......................................................................................................................... 30

10. Staff Costs and Trustees’ Remuneration ................................................................................................. 31

11. Taxation ...................................................................................................................................................31

12. Tangible Fixed Assets...............................................................................................................................32

13. Investments .............................................................................................................................................32

14. Debtors ....................................................................................................................................................33

15. Creditors: Amounts Falling Due Within One Year ................................................................................... 33

16. Restricted Funds ......................................................................................................................................33


17. Designated Funds ....................................................................................................................................34

18. Analysis of Net Assets Between Funds .................................................................................................... 34

19. Contingent Liabilities ...............................................................................................................................34

20. Capital Commitments..............................................................................................................................34

21. Post Balance Sheet Events....................................................................................................................... 35

22. Connected Entities...................................................................................................................................35

The Congregation of the Sisters of Nazareth................................................................................................ 36

The Congregation of the Sisters of Nazareth Generalate............................................................................. 36

Nazareth Care Charitable Trust and NRV Development (Blackburn) Limited .............................................. 37

23. Ultimate Control......................................................................................................................................38


REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS

TRUSTEES

Sister Anna Maria Doolan – appointed 1 April 2012, Chair from December 2012

Sister Teresa Bernadette Fallon – appointed 30 November 2012

Sister Margaret Anne Gibbons – appointed 1 April 2012 and resigned 6 October 2013

Sister Mary Anne Monaghan – resigned 1 April 2012, Chair until April 2012

Sister Mary Patricia Enright – resigned 1 April 2012

Sister Catherine Teresa Higgins – resigned 1 April 2012

Sister Kathleen Marie Hoye – resigned 1 April 2012

Sister Elizabeth O’Shea – resigned 1 April 2012

Sister Brenda McCall – resigned 2 December 2012, Chair April – December 2012

OFFICERS

Regional Superior – UK Region Sister Anna Maria Doolan

Chief Executive Officer – UK Region Robert York

ADMINISTRATIVE DETAILS

Principal Office Larmenier Centre 162, East End Road London, N2 0RU

Email: [email protected]

Website: www.sistersofnazareth.com

Charity Registration Numbers: 228906 (England and Wales) SCO40507 (Scotland)

Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL

mailto:[email protected]�

http://www.sistersofnazareth.com/�


Principal Bankers (until August 2013) The Royal Bank of Scotland plc

189‐191 Camden High Street London NW1 7BP

Principal Bankers (from May 2013) Barclays Bank plc Acorn House 36‐38 Park Royal Road London NW10 7JA Principal Solicitors Stone King LLP 13 Queen Street

Bath BA1 2HJ


TRUSTEES’ REPORT 31 MARCH 2013

The Trustees present the report and accounts for the year ended 31 March 2013 of the Congregation of the Sisters of Nazareth Charitable Trust (“the Charity”), which operates throughout the United Kingdom (UK).

The accounts have been prepared in accordance with the accounting policies set out on pages 25 to 27 of the attached accounts. They comply with the Charities Trust Deed, applicable laws and the requirements of the Statement of Recommended Practice on “Accounting and Reporting for Charities” commission issued in March 2005.

INTRODUCTION

The Congregation of the Sisters of Nazareth (“the Congregation”) is an international Roman Catholic religious congregation consisting of 252 Sisters worldwide. It was founded in Hammersmith in England where its Generalate (governing body) is located still, and is divided into five regions across the world: American, Australasian, Irish, South African and United Kingdom (UK region).

Most of the work of the Congregation takes place within “Nazareth Houses” which are substantial buildings operated mainly as care homes for frail older people. The Congregation owned 37 such houses across its regions on 31 March 2013. Nazareth Care Charitable Trust (herein known as “the Charity”) and its sister organisations are currently developing two retirement villages in the UK, catering for older people who are looking for support while maintaining an independent lifestyle. They also run two day care nurseries for young children.

The accounts accompanying this report are those of the Charitable Trust which holds certain of the assets of the Congregation in England, Wales, Scotland and Northern Ireland and which is now responsible for the care of the Sisters in the UK region and for supporting and enabling the individual ministry of those Sisters.

MISSION STATEMENT OF THE SISTERS OF NAZARETH

The mission statement of the Sisters of Nazareth was reviewed at the Congregation’s general chapter in 2012 and is now:

“We, the Sisters of Nazareth, aim to share the love of God through our ministries of care and education and our openness to respond to the needs of the times.”

“Whatsoever you do to the least of my people you do to me.”

Words of Jesus Christ (1 Matt 25:40)


Sisters representing the UK region at the General Chapter with the Superior General Sister Mary Anne Monaghan (Centre) in August 2012.

MISSION OF THE CHARITY

The Charity aims to support the religious and other charitable works (‘ministries’) carried on by the individual members of the Congregation (‘Sisters’) in the UK and to care for the Sisters throughout their lives within the Congregation in the UK. In addition, during the year it continued to provide care and assistance to older people in need of support at 2 care establishments in Northern Ireland.

SISTERS IN THE COMMUNITIES England & Wales Scotland Birkenhead 6 Edinburgh 5 Cardiff 5 Glasgow 6 Cheltenham 4 Crosby 7 Finchley 4 Hammersmith 15 Lancaster 5 Manchester 8 Northampton 4 Plymouth 5


Southend On Sea 5

ACTIVITIES

Prior to 1 April 2012, the Charity provided care and assistance to older people in need at 15 establishments within the UK known as Nazareth Houses. In addition, the Charity provided day care nursery services and pre‐school activities for young children within two Nazareth Houses and in one of the Nazareth Houses, aided by Nugent Care, the Sisters provided respite services to children with special needs.

With effect from 1 April 2012, the responsibility for managing those care services for older people situated in Great Britain and the responsibility for the operation of children’s day care nursery services and pre‐school activities transferred to Nazareth Care Charitable Trust, a registered charity and a company limited by guarantee. Further details of Nazareth Care Charitable Trust and of the transfer are provided in the statement in respect to discontinued activities within the attached accounts and in note 22 to the attached accounts.

During the year to 31 March 2013, the Charity continued to provide care and assistance to older people in two establishments in Northern Ireland and, with the assistance of Nugent Care, to provide respite services for children with special needs. In addition, it made available certain assets (including 13 establishments) to Nazareth Care Charitable Trust for the provision of care to older people in the UK. However, its principal activity was, and will continue to be, to support and enable the religious and charitable ministries of the individual Sisters in the UK Region as well as caring for those Sisters.

HISTORY OF HAMMERSMITH FOUNDATION AND THE NEED FOR RESTRUCTURE

Victoire Larmenier, foundress of the Sisters of Nazareth, and two fellow novices of the Little Sisters of the Poor came to London in 1851 from Brittany in France. They were invited by Cardinal Wiseman, Bishop of Westminster at the time, in order to provide care and home for the aged catholic poor of London, whose only shelter were the workhouses. The site on which Nazareth House ‐ Hammersmith stands was originally a market garden until it was sold to the Sisters in 1856 for £3,500. In 1857 the foundation stone was laid and the main block was built and

furnished at a cost of £8,000. This Sisters moved in with 120 elderly poor and 30 handicapped children.

The Congregation grew dramatically in size from its humble beginnings in a small, cramped house in Brook Green. With the continued support of many benefactors and of public authorities, the Congregation strives to meet the challenges of a growing population of frail older people. By the close of the first decade of the twenty first century, the Congregation owned and operated 15 care establishments for older people in the UK and operated a number of services for children.

By this time, with the increasing age profile of the Sisters and fact that the regulation concerning the operation of care services, both for older people and children, was becoming ever more complex, the Congregation began a strategic review and debate about the legal structure of the Congregation’s activities within the UK and in other Regions of the world. The result of this review within the UK was the establishment of other charities and entities, including Nazareth Care Charitable Trust, to take responsibility for the operation of care establishments and the continued development of retirement villages for older people at two sites – one near Blackburn and the other in Plymouth. This change in structure allowed also the Superior General and the


Congregation’s General Council to focus on overseeing the religious lives of the Congregation and its work across all five regions through another charity – The Congregation of the Sisters of Nazareth Generalate.

These measures enabled this Charity, The Congregation of the Sisters of Nazareth Charitable Trust, to take full responsibility for the oversight of the UK regional affairs, to support of the Sisters within the UK and to enable their individual ministries. The changes in structure took three years to accomplish but were realised fully with effect from 1 April 2012.

GOVERNANCE

The worldwide Congregation is governed by the Superior General and her General Council, and together with its supporting staff, are referred to as ‘the Generalate’. They are elected by the Congregations General Chapter who meet in session every six years: the 25th such Chapter took place in August 2012. Those elected may only serve a maximum of two consecutive 6 year terms in the same office.

In the UK, the Congregation was incorporated under the name of ‘The Trustees of the Congregation of the Sisters of Nazareth Charitable Trust’ by order of the Charity Commission on 7 October 2005, (Charity Registration Numbers: 228906 (in England and Wales) and SCO40507 (in Scotland)).

The Charity is governed by a Deed of Trust dated 16 January 2005.

The Superior General appoints the Trustees of the Charity. As all Trustees are Sisters, they have a detailed knowledge of the work and structure of the Charity.

Following their appointment, new Trustees work for a time alongside existing Trustees. They also meet with the Charity’s senior staff and its legal, accounting, investment and property advisers to obtain a full brief on their responsibilities and to fully acquaint them on the Charity’s position.

Details of the Trustees who were in office as at the date on which this report was signed are set out below:

CURRENT TRUSTEES OF THE CHARITY

Sister Anna Maria Doolan – Chair

Sister Anna Maria trained as a Registered General Nurse, and has recently completed a Postgraduate Diploma in Leadership and Management at Loughborough University. She has worked as a care home manager at a number of homes in the UK and Ireland and was appointed Superior at Nazareth House Lancaster in 2006. She became Regional Councillor of the UK region in 2009 and was appointed Regional Superior in October 2012, taking up her new post in December 2012, at which time she also took over as chair of both the Charity and the Congregation.

Sister Teresa Bernadette Fallon

Sister Teresa trained as a Registered General Nurse at Southampton University Hospital in the 1970s and has worked as a care home manager at several Nazareth Houses in the United Kingdom, Northern Ireland and Australia. She has completed courses on Social Work Management, Health Education and Continuing Care of the Dying Patient and Family. She was appointed Superior at Nazareth House Cheltenham in 2006 and became a Regional Councillor for the UK Region in November 2012.


TRUSTEES’ RESPONSIBILITIES

The Trustees are responsible for preparing the Trustees’ report and the accounts in accordance with UK law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales and Scotland requires the Trustees to prepare accounts for each financial year giving a true and fair view of the state of affairs of the Charity and of the incoming resources and their application for that period. In preparing these accounts, the Trustees are required to:

• Select suitable accounting policies and then apply them consistently; • Observe the methods and principles of the Statement of Recommended Practice (Accounting and

Reporting by Charities) (the Charity SORP); • Make judgements on estimates that are reasonable and prudent; • State whether applicable United Kingdom Accounting Standards have been followed, subject to any

material departures disclosed and explained in the accounts; and • Prepare the accounts on the going concern basis unless it is inappropriate to presume that the Charity

will continue in operation. The Trustees are responsible for keeping accounting records that disclose with reasonable accuracy, at any time, the financial position of the Charity and enable them to ensure that the accounts comply with the following; Charities Act 2011, the Charity (Account and Reports) Regulations 2008 and the Charity’s Trustees Investment (Scotland) Act 2005, The Charity’s Accounts (Scotland) Regulations 2006 and the provision of the Charity’s Trust Deed. They are also responsible for safeguarding assets of the Charity and hence are taking reasonable steps for the prevention and detection of fraud and other irregularities.

STRUCTURE AND MANAGEMENT REPORTING IN THE UK

The Congregation in the UK (England, Wales, Scotland and Northern Ireland) comprises of 15 communities of Sisters each of which is the responsibility of the Regional Superior and her Council. Each community has a Sister Superior. Throughout the year there is regular contact and communication between each of the Communities and the Regional team.

Since April 2012, Care Homes and Nurseries in the UK have been managed by Nazareth Care Charitable Trust, operating under the auspices of the Congregation of the Sisters of Nazareth UK region. The UK regional office is based in the grounds of Nazareth House Finchley, in North London.

The Charity’s Trustees continue to be supported by the senior management team of Nazareth Care Charitable Trust which acts in an advisory capacity to the board and assists in the review of the Congregation’s business focus. When necessary, the Trustees seek advice and support from the Charity’s professional advisers, including property consultants, solicitors and accountants.


ACTIVITIES, SPECIFIC OBJECTIVES AND RELEVANT POLICIES

PROVISION OF RESIDENTIAL CARE

CARE HOMES

The Congregation has a long history of providing high quality care homes for older people at all its UK residential domiciles and nursing homes. Whilst the operation of 13 of these care homes situated in the UK transferred to Nazareth Care Charitable Trust with effect from 1 April 2012, the Charity continues to own all of the properties comprising these care establishments and individual Sisters continue to provide ministry within the homes.

In all Nazareth Houses, the Sisters encourage a spirit of unity and partnership between themselves, staff of Nazareth Care Charitable Trust, visitors and residents, creating a friendly and welcoming atmosphere. The Charity’s direct operational involvement from April 2013 relates to the houses within Northern Ireland.

There are lots of activities on the go at a Nazareth House, giving residents something to look forward to every day/week. One of the Congregation’s core values is hospitality and this is evident by the high standard of cuisine and varied menus available.

Visitors to Nazareth houses are struck by the peaceful atmosphere and the widespread evidence of care. Each member of staff aims to maintain the privacy, dignity, rights and quality of life for all its residents, regardless of creed or race, caring for their physical, psychological and spiritual needs until the end of their lives. The constant physical presence of Sisters in their pastoral and governance role on the floors of each house, is regarded by the residents, their families and by Nazareth staff, as totemic of the quality of care provided and remains a central activity of the Sisters, even after their management duties have been taken over by staff.

Nazareth Houses are well rooted in the local communities. The ‘Friends of Nazareth’ and local church groups provide volunteer support and also donations of cash to support service improvements. Relatives of residents also volunteer. Outings to the local sites or shops may be arranged for residents able to travel, often using a house minibus driven by a volunteer. There is substantial Chapel within each house and this is usually well attended during Sunday mass in particular, with many relatives and other visitors from the local community. Houses use their extensive grounds and facilities to host regular community and fundraising events, such as fetes, quiz nights, sponsored walks, raffles, ‘cream teas’ and sky diving. In one house within the UK region a large field is used by local schools to host regular football matches, PE lessons and sports days.

Nazareth Houses comply with local and national housing standards and are regularly awarded high scores by inspectors from both national and local regulatory authorities. Under the Health and Social Care Act grades and star ratings are no longer awarded. However, all houses are reported to be compliant.


NAZARETH HOUSE DERRY – CLOSURE

It was with deep regret that the Trustees of The Congregation of Sisters of Nazareth Charitable Trust, which owns and operates the Nazareth House Residential Care Home, Bishop Street, Derry, Northern Ireland announced on 7 June 2013 that, unfortunately, the facility will close. The decision was based on the findings and recommendations of a strategic review of the facility conducted by independent consultants – BDO.

The House closed on 7 September 2013. It continued to provide care until that date for the remaining residents until alternative accommodation was sourced with the support of the Western Health and Social Care Trust.

BDO’s recommendation for closure was based on the following driving forces:

• Falling demand for residential care • Unsustainable financial performance of the home • The facility requiring significant capital investment

The Sisters of Nazareth have managed the residential care home in Derry for over 120 years and are very saddened at the necessary closure and the subsequent loss of jobs in the locality.

The Trustees and Sisters would like to thank the people of Derry, Bishops, priests and parishioners of the dioceses and associates of the home for their ongoing support and generosity which have enabled the Congregation to serve the residents for over 120 years.

CARING FOR MEMBERS OF THE CONGREGATION

All Sisters wish to continue their individual ministries for as long as they are able to do so. However, in common with many religious congregations across the world, increasing numbers of Sisters are of the age at which they may need additional care support.

Nine Sisters were receiving care in the UK as of 31 March 2013, most within the care homes owned by the Charity but operated by Nazareth Care Charitable Trust. This number will inevitably rise in the coming years but Trustees are including within their building plans, any necessary improvements to ensure good access to Convent facilities to assist Sisters with limited mobility or other disabilities.

CARING FOR CHILDREN WITH SPECIAL NEEDS

The Charity provides respite services at Nazareth House Crosby for up to 5 children with special needs at any one time. The respite service is managed by Nugent Care. During the year 68 children were supported by the service. Unfortunately, due to changes in government funding and policy relating to respite care of children with special needs, the Trustees have taken the decision to close the service with effect from 31 January 2014.

This decision has not been taken lightly as the service is evidently greatly needed by those who use it and the care of children is firmly rooted within the foundations of the organisation. The Trustees regret the decision they have had to take to close the units which was due to several political pressures.


CARE VILLAGE DEVELOPMENT

Two sites owned by the Charity are leased to Nazareth Care Charitable Trust: a site near Blackburn and a site at Plymouth. Their progress is summarised below:

THE DEVELOPMENT OF CARE VILLAGES

BLACKBURN

The site previously occupied by Nazareth House Blackburn is leased to Nazareth Care Charitable Trust by way of a 999 year lease commencing 24 June 2006. The lease was granted in return for a £1.2 million premium. Of this, £1.1 million related to phase 1 of the development of the Blackburn site, entailing the conversion of the existing care home into separate residential units of close care accommodation for sale or rent to older people. The remaining £0.1 million of the premium was a nominal sum relating to the future development of the site.

Nazareth Care Charitable Trust in turn granted a 125 year under‐lease on matching terms to NRV Development (Blackburn) Limited. Under the terms of the head lease and under‐lease, the phase 1 premium were repayable to the Charity together with accrued interest, by Nazareth Care Charitable Trust and NRV Development (Blackburn) Limited respectively following the sale of the 24th unit.

The construction of phase 1 of the development by NRV Development (Blackburn) Limited, creating 39 assisted living flats within the previous care home building, was completed in January 2008. By the end of August 2012 all 39 apartments were occupied.

The original intention was for the majority of the apartments to be sold, with maybe six retained for rentals to extend admission to people with limited means. However, with the market difficulties arising from the worldwide recession experienced throughout the sales period, some flexibility has had to be introduced to increase occupancy, in particular to minimise voids service charge costs.

A ‘ try before you buy’ scheme was introduced by NRV Development (Blackburn) Limited to give a prospective buyer the opportunity to experience facilities and services available before purchasing an apartment and individuals looking into selling their existing properties were able to rent for a time by way of an assured shorthold tenancy until their sale had been completed. The increasing occupancy on the site enhanced social activity and engendered a lively atmosphere.

At 31 March 2012, ten of the apartments that had been let on an assured shorthold tenancy by NRV Development (Blackburn) Limited were acquired by the Charity at arm’s length being market value less a small discount to reflect the bulk purchase. These properties are included within the attached accounts as investment properties.


These transactions and the sale by NRV Development (Blackburn) Limited of the remaining apartment on the development enabled the outstanding debt due to the Charity from Nazareth Care Charitable Trust and NRV Development (Blackburn) Limited to be repaid during 2012 and 2013 and the Project books for phase 1 to be closed. This amount represented the lease premium for the phase 1 land plus the accumulated interest amount totalling £203,000. The phase has broken even overall but in addition the Congregation overall has been able to recover a greatly enhanced land value.

Building work on phase 2A which comprises the construction of 31 new build two‐bedroom apartments and 2 two‐bedroom bungalows on the site commenced in November 2011 and was completed in May 2013.

PLYMOUTH

Before the start of the year the Sisters had approved the remodelling of Nazareth House Plymouth ‐ the development work to be carried out by NRV Development (Plymouth) Limited. The former Saint Augustine’s building on the site has now been demolished and will be replaced by a new block (Block A) providing 45 assisted living apartments for sale to older people, together with convent facilities for the Sisters. The contract was awarded to OPCO Construction Limited which started construction work in August 2012 but, due to the company going into administration in June 2013, the project has been

seriously delayed. NRV Development (Plymouth) Limited is currently undergoing a re‐tendering process to appoint a new construction company.

If sales of the first phase go well (and there appears to be a great deal of interest) two further blocks will be built on the site, providing independent living apartments for older people.

Plymouth will thus become the first Nazareth Retirement Village to feature both a care home and assisted and independent living.

OTHER MINISTRIES

Sisters undertake many activities that complement their work in the practical ministries, such as providing pastoral care, ministering to the dying and bereavement counselling. They also run a Mission Alive programme, holding awareness sessions for all staff to tell them about the Congregation, its history, its values and how these relate to its present activities. These sessions help develop teamwork skills and reinforce a culture of service excellence across the Congregation. Staff appreciate the efforts made to include them in the Nazareth family. Sisters across the region are also involved in:

• hospital chaplaincy • prison support • care home and domiciliary visits • provision of prayer centres • evangelisation


REVIEW OF YEAR AND FUTURE PLANS

INCOMING AND OUTGOING RESOURCES

A summary of the results can be found on page 20 of the attached accounts.

The transfer with effect from 1 April 2012 of the operation of 13 care establishments, in particular, to Nazareth Care Charitable Trust has led to a significant reduction in both incoming resources and resources expended in 2013 compared with the prior year.

Incoming resources decreased to £11.8 million (2012: £36.3 million). Within this total, operational income from the two care establishments for older people still operated by the Charity in Northern Ireland and the respite services for children with special needs amounted to £3.2 million and £0.5 million respectively (2012: £23.8 million from 15 care establishments for older people and £0.6 million respectively). In 2012 the Charity also received £0.8 million from the provision of day care nursery and pre‐school services for children – these were transferred to Nazareth Care Charitable Trust with effect from 1 April 2012 also.

Voluntary income of £7.4 million included a one‐off donation of £5 million from The Congregation of the Sisters of Nazareth Generalate, a connected charity. Investment income and interest receivable amounted to £0.02 million (2012: £0.09 million), reflecting the transfer of investments to The Congregation of the Sisters of Nazareth Generalate at 31 March 2012.

Miscellaneous income amounted to £0.7 million (2012: £0.3 million)

Operational costs reduced by approximately 74%, from £27.8 million in 2012 to £7.3 million in 2013 for the reasons outlined above. Grants and donations in support of the Congregation’s work overseas will in future be the responsibility of The Congregation of the Sisters of Nazareth Generalate and so fell to £nil (2012: £0.2 million).

The restructuring of the Congregation’s activities led to two significant donations during the year. Firstly, the transfer of responsibility for managing the Congregation’s thirteen care homes in the UK and the day care nursery and pre‐school children’s services on 1 April 2012 led to the Charity donating (or transferring) assets primarily comprising cash and bank balances to Nazareth Care Charitable Trust at the start of the year. These assets amounted to £4.6 million and are shown in the statement of financial activities as a donation to Nazareth Care Charitable Trust. Secondly, short term deposits totalling £1.1 million were transferred to The Congregation of the Sisters of Nazareth Generalate and are shown in the statement of financial activities as a donation to The Congregation of the Sisters of Nazareth Generalate.

Governance costs have been reduced significantly to £0.03 million compared to £0.3 million in 2012 when they included legal and other professional costs in respect to the strategic review.

These factors resulted in an outflow of funds for the year of £1.2 million, compared to the net inflow in 2012 of £7.8 million. However, as stated above, the 2013 results have been impacted significantly by the restructuring exercise and, in particular, by the transfer of operational responsibility and the donation of relevant assets to connected charities.


INVESTMENT PERFORMANCE

As previously stated, virtually all centrally‐held investments, together with the short‐term cash deposits, were transferred to The Congregation of the Sisters of Nazareth Generalate at the commencement of 2013.

A summary of the movements on investments can be found in note 13 to the accounts.

FINANCIAL POSITION

The balance sheet shows total funds of £47.3 million (2012: £48.6 million).

RESERVES POLICY

The Charity holds two restricted funds totalling £0.5million including £0.2million held by Nazareth House Glasgow to be applied towards the costs of the future development of the home. The balance of the restricted funds (£0.3 million) comprises the balance of past property proceeds from the disposal of a property in Wavertree, in the Roman Catholic Archdiocese of Liverpool, which are restricted to use within the Archdiocese.

Unrestricted funds at 31 March 2013 amounted to £46.8 million and comprised three designated funds and the general fund.

The care services fund represents the net assets used in the provision of residential care for older people in two homes in Northern Ireland and the provision of day care nursery and pre‐school services for children.

The tangible fixed assets fund represents the net book value of the Charity’s land and buildings and other tangible fixed assets (excluding those used in respect to the provision of residential care for older people in two homes in Northern Ireland and the provision of day care nursery and pre‐school services for children). These assets are essential to the continued mission of the Charity and include care establishments leased to Nazareth Care Charitable Trust.

The buy‐back fund comprises funds to enable the Charity to buy back apartments at Blackburn should the current tenants of phase 1 wish to exercise their right to surrender their leasehold rights to the Charity.

The general fund comprises those assets not designated by the Trustees or restricted in their application as at 31 March 2013. The fund includes monies to cover temporary shortfalls in incoming resources due to timing differences and amounts to enable the Charity to cope with unforeseen emergencies.

The Trustees are in the process of formulating their reserves policy. The restructure that has occurred over the past few years now needs to be consolidated and a period of reflection is required in order that the Trustees may assess the future needs of the Charity in the light of its mission and future plans, in particular future property needs and refurbishment/development requirements.


EMPLOYEES, VOLUNTEERS AND MEMBERS OF THE CONGREGATION

The trustees wish to record their recognition and appreciation for the professionalism and commitment of all their staff, volunteers and individual members of the Congregation.

Approved by the trustees and signed on their behalf by:

Sister Anna Maria Doolan

Trustee and Regional Superior

Date Approved: 11 December 2013


INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF THE CONGREGATION OF THE SISTERS OF NAZARETH CHARITABLE TRUST 31 MARCH 2013

INTRODUCTION

We have audited the accounts of The Congregation of the Sisters of Nazareth Charitable Trust for the year ended 31 March 2013 which comprise the statement of financial activities, the balance sheet, the cash flow statement, the principal accounting policies and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The report is made solely to the Charity’s Trustees as a body, in accordance with Section 144 of the Charities Act 2011 and with regulations made under section 44 (i) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and Regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended). 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.

RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITOR

As explained more fully in the Trustees’ responsibilities statement set out in the Trustees’ report, the Trustees are responsible for the preparation of financial statements and for being satisfied that they give a true and fair view.

We have been appointed auditor under section 144 of the Charities Act 2011 and section 44 (i) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under those Acts. Our responsibility is to audit and express an opinion on the accounts in accordance with applicable law and International Standards of Auditors (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

SCOPE OF THE AUDIT OF THE ACCOUNTS

An audit involves obtaining evidence about the amounts and disclosures in the accounts sufficient to give reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Charity’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the accounts. In addition, we read all the financial and non‐financial information in the Trustees’ report to identify material inconsistencies with the audited accounts and to identify any information that is apparently material incorrect based on, or materially inconsistent with the knowledge acquire by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.


OPINION ON ACCOUNTS

In our opinion the accounts:

• give a true and fair view of the state of the Charity’s affairs as at 31 March 2013 and of the incoming resources and application of resources, for the year ended then;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practices: and

• have been prepared in accordance with the requirements of the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters where the Charities Act 2011 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

• the information given in the Trustees’ report is inconsistent in any material respect with the accounts; • proper accounting records have not been kept; • the accounts are not in agreement with the accounting records and returns; or • we have not received all the information and explanations we require for our audit.

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

Date: 19 December 2013

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


STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 MARCH 2013

Notes

Unrestricted funds £

Restricted funds £

2013 Total funds £

2012 Total funds £

Incoming resources Incoming resources from generated funds

. Voluntary income 1 6,437,881 984,206 7,422,087 10,668,689

. Investment income and interest receivable

2 23,823 — 23,823

89,863

Incoming resources from charitable activities

. Charges for residential and care services for adults

3,167,690 — 3,167,690

23,830,989

. Charges for residential and care services for children

528,449 — 528,449

597,951

. Charges for nursery services — — — 793,402 Other incoming resources . Surplus on disposal of tangible fixed assets

— — —

69,999

. Miscellaneous income 3 249,750 — 249,750 253,895

Total incoming resources 10,407,593 984,206 11,391,799 36,304,788

Resources expended Charitable activities . Provision of residential and care services for adults and support of the Sisters and their ministry

4 6,765,874 — 6,765,874

26,535,664

. Provision of residential and care services for children

5 530,707 — 530,707

547,808

. Provision of nursery services 6 — — — 751,354

. Grants and donations in support of the Congregation’s work overseas and of other organisations

7 — — —

191,928 . Donation to The Congregation of the Sisters of Nazareth Generalate (Registered Charity No. 1138876)

22 1,134,263 — 1,134,263

— . Donation to Nazareth Care Charitable Trust (Registered Charity No. 1113666)

22 4,129,288 50,255 4,179,543

—

Writedown of development costs — — — 200,000 Governance costs 8 28,000 — 28,000 261,570

Total resources expended 12,588,132 50,255 12,638,387 28,488,324

Net (outgoing) incoming resources for the year

(2,180,539) 933,951 (1,246,588)

7,816,464

Transfers between funds 16 770,499 (770,499) — —

Net movement in funds 9 (1,410,040) 163,452 (1,246,588) 7,816,464 Fund balances brought forward at 1 April 2012

48,243,803 333,625 48,577,428

40,760,964

Fund balances carried forward at 31 March 2013 46,833,763 497,077 47,330,840 48,577,428

There is no difference between the net movement in funds stated above, and the historical cost equivalent.

The Charity has no recognised gains and losses other than those shown above and therefore no separate statement of total recognised gains and losses has been prepared.


DISCONTINUED OPERATIONS YEAR ENDED 31 MARCH 2013

With effect from 1 April 2012, as the final stage of the reorganisation of the Congregation’s legal structure in the UK, the Charity transferred to Nazareth Care Charitable Trust (Nazareth Care Charitable Trust) responsibility for managing thirteen of its care homes for older people and for managing its day care nursery and pre‐school services in England, Wales and Scotland.

The incoming resources and resources expended relating to these activities are defined as discontinuing activities in respect to the year ended 31 March 2012 within the Congregation of the Sisters of Nazareth Charitable Trust for the purposes of Financial Reporting Standard 3 “Reporting Financial Performance” (FRS 3).

In addition, in June 2013, the Charity announced the closure of its care home in Derry, Northern Ireland. The House closed on 7 September 2013. As the decision to close the House was made within three months of the year end, it too constitutes a discontinued activity in respect to the year ended 31 March 2013.

2013 2012 Continuing

£ Discontinued

£Total

£Continuing

£Discontinued

£ Total

£

Incoming resources 10,678,117 1,131,843 11,809,960 14,759,886 21,544,902 36,304,788 Resources expended 11,631,081 1,425,467 13,056,548 4,485,194 24,003,130 28,488,324

Net (outgoing) incoming resources for the year

(952,964) (293,624) (1,246,588) 10,274,692

(2,458,228)

7,816,464


BALANCE SHEET 31 MARCH 2013

Notes

2013£

2013£

2012£

2012 £

Fixed assets Tangible assets 12 36,938,250 33,952,302 Investments 13 1,026,374 1,101,766

37,964,624 35,054,068 Current assets Debtors 14 5,170,651 4,230,539 Short term deposits — 2,142,626 Cash at bank and in hand 4,500,430 9,308,233

9,671,081 15,681,398 Creditors: amounts falling due within one year 15 (304,865) (2,158,038)

Net current assets 9,366,216 13,523,360

Total net assets 47,330,840 48,577,428

Represented by: Funds and reserves Restricted funds 16 497,077 333,625 Unrestricted funds . Designated funds 17 38,295,298 38,528,672 . General fund 8,538,465 9,715,131

47,330,840 48,577,428

Approved by the trustees on and signed on their behalf by:

Sister Teresa Bernadette Fallon

Trustee

Date of approval: 11 December 2013


CASH FLOW STATEMENT YEAR ENDED 31 MARCH 2013

Notes

2013£

2013£

2012£

2012 £

Net cash (outflow) inflow from operating activities A

(2,517,133)

6,726,348

Returns on investments and servicing of finance

Investment income and interest received

—

71,878

Capital expenditure and financial investment

Capital expenditure Payments to acquire tangible fixed assets

(4,508,688)

(2,957,916)

Receipts from disposal of tangible fixed assets

—

76,021

Receipts from disposal of investments

75,392

—

(4,433,296) (2,881,895)

(4,433,296) (2,881,895)

(6,950,429) 3,916,331 Management of liquid resources Decrease in liquid resources B 2,142,626 914,033

(Decrease) increase in cash C (4,807,803) 4,830,364


A ADJUSTMENT OF NET INCOMING (OUTGOING) RESOURCES BEFORE NET INVESTMENT GAINS TO NET CASH INFLOW (OUTFLOW) FROM OPERATING ACTIVITIES

2013£

2012 £

Net (outgoing) incoming resources before net investment gains (1,246,588) 7,816,464 Depreciation charge 1,000,075 1,241,628 Non-cash assets donated to the Nazareth Care Charitable Trust 152,097 — Non-cash assets donated to the Congregation of the Sisters of Nazareth Generalate 156,423

—

Net losses (gains) on disposal of tangible fixed assets 522,665 (69,999) Investment income and interest receivable — (89,863) Increase in debtors due within one year (1,248,632) (2,234,668) (Decrease) increase in creditors (1,853,173) 62,786

Net cash (outflow) inflow from operating activities (2,517,133) 6,726,348

B MANAGEMENT OF LIQUID RESOURCES

Short term deposits

2013 £

At 1 April 2012 2,142,626 Cash flow (854,058) Transfer to Congregation of the Sisters of Nazareth Generalate (Registered Charity No. 1138876)

(1,288,568)

At 31 March 2013 —

C ANALYSIS OF CHANGES IN NET FUNDS

At 1 April 2012 £

Cash flows £

At 31 March 2013 £

Cash in hand and at bank 9,308,233 (4,807,803) 4,500,430


PRINCIPAL ACCOUNTING POLICIES 31 MARCH 2013

BASIS OF ACCOUNTING

The accounts have been prepared under the historical cost convention, as modified by the inclusion of investments at market value, and in accordance with the requirements of the Charities Act 2011 and the Charity’s Accounts (Scotland) Regulations 2006. Applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practices) and the Statement of Recommended Practice “Accounting and Reporting by Charities” (SORP 2005) have been followed in the preparation of these accounts.

INCOMING RESOURCES

Incoming resources are recognised in the period in which the Charity is entitled to receive them and the amounts can be measured with reasonable certainty. Income is deferred only when the Charity has to fulfil conditions before becoming entitled to it or where the donor of funder has specified that the income is to be expended in future accounting periods.

Legacies are included in the statement of financial activities when the Charity is advised by the personal representative of an estate that payment will be made or property transferred and the amount involved can be quantified.

RESOURCES EXPENDED AND THE BASIS OF APPORTIONING COSTS

Expenditure is included in the statement of financial activities when incurred and includes attributable VAT which cannot be recovered.

Resources expended include the following:

• The costs of generating funds comprise of the fees paid to investment managers in connection with the management of the Charity’s listed investments, net of rebates received. Rebates arise from the fees deducted automatically through charges for common investment funds and related transactions exceed the fees agreed between the Charity and its investment managers.

• The costs of charitable activities comprise expenditure on the Charity’s primary purpose as described in the Trustees’ report and include:

o Provision of residential and care services for adults, including the running costs of the individual care homes operated by the Congregation.

o Provision for residential and care services for children, including the running costs of the individual care homes generated by the congregation for children.

o Provision of accommodation for the operation of care homes and nursery services managed by Nazareth Care Charitable Trust.

o Support of the Congregation’s work overseas and of other organisations relates, in the main, to the grants and donations in support of the Congregation’s work overseas and the support of other Roman Catholic charitable organisations.

• Governance costs include expenditure on central administration and compliance with the constitutional and statutory requirements.

In allocating expenditure to headings, no significant apportionments have had to be used.


TANGIBLE FIXED ASSETS

All assets and improvements to existing assets with a cost of more than £1,500 and with an expected useful life exceeding one year are capitalised. As permitted under the transitional arrangements of Financial Reporting Standard 15 (FRS 15), the Charity has opted to adopt a policy of not revaluing its tangible fixed assets, which are stated at cost.

A review for impairment of a tangible fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of any tangible fixed asset may not be recoverable.

FREEHOLD LAND AND BUILDINGS

Freehold land and buildings are included at cost, net of any impairment provision.

Freehold buildings are depreciated from their first complete year of occupation at a rate of 2% per annum on the straight‐line basis in order to write the building off over the estimated useful economic life to the Charity.

ASSETS UNDER CONSTRUCTION

Assets under construction are not depreciated. On completion they are transferred to freehold land and buildings and are depreciated accordingly.

LONG LEASEHOLD BUILDINGS

Long leasehold buildings are included at cost, and are depreciated once the lease reduces to 50 years, at a rate of 2% per annum on the straight‐line basis.

OTHER TANGIBLE FIXED ASSETS

Other tangible fixed assets are capitalised and depreciated at the following annual rates in order to write them off over their estimated useful lives.

• Furniture and equipment 10% to 33.3% per annum on the straight‐line basis • Motor vehicles 25% per annum based on reducing balance.

Assets are depreciated once they are brought into use.

FIXED ASSET INVESTMENTS

Investments are included on the balance sheet at their market value at the end of the financial period. Realised and unrealised gains (or losses) are credited (or debited) to the Statement of Financial Activities in the year in which they arise.

Investment properties are included on the balance sheet at their open market value at the end of the financial period. Realised and unrealised gains (or losses) are credited (or debited) to the Statement of Financial Activities in the year in which they arise.

LIQUID RESOURCES

Liquid resources comprise of sums on short‐term deposits with banks regulated in the United Kingdom.


FUNDS STRUCTURE

Restricted funds represent voluntary income received to the benefit of specific homes whose assets are otherwise unrestricted. However, such income is usually expended within the financial year in which it is received. Details of unexpended balances, if any, are provided in note 16.

The remainder of the Charity’s funds are unrestricted. Within the unrestricted funds the Trustees have designated amounts for specified purposes. Details of these are given in note 17.

SERVICES PROVIDED BY MEMBERS OF THE CONGREGATION

For the purposes of these accounts, no monetary value has been placed on the care, administrative and other services provided by the members of the Congregation.


NOTES TO THE ACCOUNTS 31 MARCH 2013

1. VOLUNTARY INCOME


Restricted funds £

Total 2013 £

Total 2012 £

Legacies — 362,707 362,707 228,383 Covenanted salaries and pensions of individual religious

800,128 — 800,128

873,727

Stipends received by religious and covenanted

564,553 — 564,553

—

Donation from The Congregation of the Sisters of Nazareth Generalate (note 22)

5,073,200 — 5,073,200

8,783,430

Donation from NRV Development (Blackburn) Limited

— — —

71,104

Other donations — 621,499 621,499 712,045

6,437,881 984,206 7,422,087 10,668,689

Covenanted salaries and pensions represent the salaries and pensions of individual Sisters donated by them to the Charity.

2. INVESTMENT INCOME AND INTEREST RECEIVABLE


Restricted funds £

Total 2013 £

Total 2012 £

Income from listed investments — — — 2,640 Interest receivable . Bank interest 23,823 — 23,823 49,224 . Loan interest — — — 37,999

23,823 — 23,823 89,863

3. MISCELLANEOUS INCOME


Restricted funds £

Total 2013 £

Total 2012 £

Rent and retreat income 35,373 — 35,373 10,446 Income from Houses 32,365 — 32,365 105,589 Income from communities 150,000 — 150,000 — Management services 27,500 — 27,500 — Other income 4,512 — 4,512 137,860 249,750 — 249,750 253,985


4. PROVISION OF RESIDENTIAL AND CARE SERVICES FOR ADULTS


Restricted funds £

Total 2013 £

Total 2012 £

Staff costs 2,617,673 — 2,617,673 16,914,669 Premises 945,847 — 945,847 3,429,757 Care and welfare 1,359,091 — 1,359,091 3,181,001 Management and administration of the Care Homes

677,386 — 677,386

1,792,434

Other 169,347 — 169,347 — Depreciation 996,530 — 996,530 1,217,803

6,765,874 — 6,765,874 26,535,664

The costs of providing residential and care services include the living and personal expenses of individual Sisters, all of whom are either directly or indirectly involved in such work.

The significant reduction in costs relating to the provision of residential and care services for adults reflects the transfer by the Charity of the operation of thirteen of its residential care homes for older people to Nazareth Care Charitable Trust (note 22) with effect from 1 April 2013.

5. PROVISION OF RESIDENTIAL AND CARE SERVICES FOR CHILDREN


Restricted funds £

Total 2013 £

Total 2012 £

Staff costs 417,221 — 417,221 424,527 Premises 43,634 — 43,634 42,519 Care and welfare 34,067 — 34,067 38,159 Management and administration of the nursery services

32,240 — 32,240

37,693

Depreciation 3,545 — 3,545 4,910

530,707 — 530,707 547,808

6. PROVISION OF NURSERY SERVICES


Restricted funds £

Total 2013 £

Total 2012 £

Staff costs — — — 597,955 Premises — — — 49,521 Care and welfare — — — 53,354 Management and administration of the nursery services

— — —

31,609

Depreciation — — — 18,915 — — — 751,354

The significant reduction in costs relating to the provision of nursery services reflects the transfer by the Charity of the operation of its day care nursery and pre‐school services to Nazareth Care Charitable Trust (note 22) with effect from 1 April 2013.


7. GRANTS AND DONATIONS IN SUPPORT OF THE CONGREGATION’S WORK OVERSEAS AND OF OTHER ORGANISATIONS


Restricted funds £

Total 2013 £

Total 2012 £

Donations to the Congregation overseas to support its work

. South Africa (note 22) — — — 14,021

. India (note 22) — — — 23,336 Total overseas donations — — — 37,357 CAFOD — — — 11,100 Medaille Trust — — — 15,000 Other donations of less than £10,000 — — — 128,471 — — — 191,928

8. GOVERNANCE COSTS


Restricted funds £

Total 2013 £

Total 2012 £

Legal and professional fees — — — 40,117 Audit and accountancy services 28,000 — 28,000 62,995 Archivist — — — 10,600 Strategic management — — — 147,858

28,000 — 28,000 261,570

9. NET MOVEMENT IN FUNDS

This is stated after charging:

Total 2013 £

Total 2012 £

Staff costs (note 10) 3,034,893 18,207,891 Auditor’s remuneration and audit costs, including VAT . Statutory audit (current year) 28,000 33,888 . Statutory audit (prior year) — 20,947 . Other advisory services — 8,160 Depreciation 1,000,075 1,241,628


10. STAFF COSTS AND TRUSTEES’ REMUNERATION

Staff costs during the year were as follows:

2013 £

2012 £

Wages and salaries 2,729,869 16,812,308 Social security costs 157,163 1,004,723 Other pension costs 35,243 53,516

2,922,275 17,870,547 Payments to agency staff 112,618 337,344

3,034,893 18,207,891

Staff costs per function were as follows:

Provision of residential and care services 2,617,672 17,507,678 Provision of nursery services 417,221 597,955 Governance — 102,258

3,034,893 18,207,891

The number of employees earning £60,000 per annum or more (including taxable benefits but excluding employer pension contributions) during the year was as follows:

2013Number

2012 Number

£70,001 - £80,000 — 2 £90,001 - £100,000 — 1

The charity paid £nil (2012 – £24,750) towards defined contribution pension plans for the higher paid employees.

The average number of employees during the year was:

2013 2012

Provision of care, including residential and nursing care homes and children’s services 219

1,456

As members of the Congregation, the trustees’ living and personal expenses during the year were borne by the Charity, but they received no remuneration or reimbursement of expenses in connection with their duties as trustees during the year (2012 ‐ £nil).

11. TAXATION

The Congregation of the Sisters of Nazareth Charitable Trust is a registered charity and, therefore, is not liable to income tax or corporation tax on income or gains derived from its charitable activities, as they fall within the various exemptions available to registered charities.


12. TANGIBLE FIXED ASSETS

Freehold land and buildings

£

Assetsunder

construction£

Longleaseholdbuildings

£

Furnitureand

equipment£

Motorvehicles

£

Total £

Cost At 1 April 2012 39,172,346 2,862,076 104,500 3,403,875 709,575 46,252,372 Additions 4,354,624 — — 127,771 26,293 4,508,688 Reclassification 2,862,076 (2,862,076) — — — — Disposals — — — (1,043,618) (337,410) (1,381,028)

At 31 March 2013 46,389,046 — 104,500 2,488,028 398,458 49,380,032

Depreciation At 1 April 2012 10,185,099 — — 1,616,686 498,285 12,300,070 Charge for year 927,781 — — 31,184 41,110 1,000,075 On disposals — — — (560,681) (297,682) (858,363)

At 31 March 2013 11,112,880 — — 1,087,189 241,713 12,441,782

Net book values At 31 March 2013 35,276,166 — 104,500 1,400,839 156,745 36,938,250

At 31 March 2012 28,987,247 2,862,076 104,500 1,787,189 211,290 33,952,302

13. INVESTMENTS

2013

£

2012

£

Listed investments — 75,392 Investment properties 1,026,374 1,026,374

1,026,374 1,101,766

Investment properties are included in the accounts at an estimate of their open market value determined by reference to the prices at which they are offered for sale to third parties.

2013£

2012 £

Listed investments Market value at 1 April 2012 75,392 75,392 Disposals (75,392) —

Market value at 31 March 2013 — 75,392

Cost of listed investments at 31 March 2013 — 75,392

No listed investments were held at 31 March 2013.

2013£

2012 £

Guaranteed equity bonds — 75,392


14. DEBTORS

Due within one year

2013£

2012

£

Charges for care services 36,537 646,103 Prepayments and accrued income 89,631 399,132 Building proposals and feasibility studies — 427,840 Amount due from The Congregation of the Sisters of Nazareth Generalate(note 22) 4,461,250

2,420,000

Amount due from Nazareth Care Charitable Trust (note 22) 583,233 39,872 Loan to NRV Development (Blackburn) Limited (note 22) — 203,748 Other debtors — 93,844 5,170,651 4,230,539

The costs in respect to building proposals and feasibility studies relate to the planned redevelopment of Nazareth House Glasgow in 2012/13 and 2013/14.

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2013£

2012 £

Expense creditors 90,161 440,395 Other creditors 21,890 67,474 Taxes and social security 24,979 435,841 Due to The Congregation of the Sisters of Nazareth Charitable Trust IrishRegion 83,588

—

Accruals and deferred income 84,247 1,214,328

304,865 2,158,038

16. RESTRICTED FUNDS

At 1 April

2012

£

Incoming

resources

£

Resources

expended

£

Transfers

£

At 31 March

2013 £

Restricted donations and legacies 50,255 984,206 (50,255) (770,499) 213,707 Property proceeds under restrictive covenant

283,370 — — —

283,370

333,625 984,206 (50,255) (770,499) 497,077

The restricted donations and legacies fund represents income given specifically for the benefit of individual homes whose assets are otherwise unrestricted. Unspent funds as at 31 March 2013 represent monies held by Nazareth House Glasgow to be applied towards property development.

Property proceeds under restrictive covenant represents the remaining balance of the proceeds of the disposal of a property in Wavertree, in the Roman Catholic Archdiocese of Liverpool, which are restricted to use within the Archdiocese.


17. DESIGNATED FUNDS

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

At 1 April 2012 £

Newdesignations £

Utilised/ released £

At 31 March 2013 £

Care services fund 38,528,672 — (32,256,756) 6,271,916 Tangible fixed assets fund — 31,273,382 — 31,273,382 Buy-back fund — 750,000 — 750,000 Total designated funds 38,528,672 32,023,382 (32,256,756) 38,295,298

The care services fund represents those net assets applied in the provision of care services at Nazareth House Belfast and Nazareth House Derry. These assets are essential to the continued operation of the homes and therefore have been designated as a separate fund.

The tangible fixed assets fund represents the net book value of the Charity’s land and buildings and other tangible fixed assets (excluding those used in respect to the provision of residential care for older people in two homes in Northern Ireland and the provision of day care nursery and pre‐school services for children). These assets are essential to the continued mission of the Charity and include care establishments leased to Nazareth Care Charitable Trust.

The buy‐back fund comprises funds to enable the Charity to buy back apartments at Blackburn should the current tenants of phase 1 who completed their purchase prior to September 2013 wish to exercise their right to surrender their leasehold rights to the Charity.

18. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Restricted funds £

General fund £

Designated funds £

Total 2013 £

Fund balances at 31 March 2013 are represented by: Tangible fixed assets — — 36,938,250 36,938,250 Investments — — 1,026,374 1,026,374 Net current assets 497,077 8,538,465 330,674 9,366,216 Total net assets 497,077 8,538,465 38,295,298 47,330,840

19. CONTINGENT LIABILITIES

A contingent liability arises in respect of allegations concerning the standard of care provided to children in the Congregation’s homes between approximately 1940 and 1970. The amount involved cannot be quantified, but the Trustees deny any liability based on the facts available to them.

20. CAPITAL COMMITMENTS

At 31 March 2013 the Charity had capital commitments, authorised but not contracted for, in respect to the development of Nazareth House Glasgow of £7 million (2012 – none).


21. POST BALANCE SHEET EVENTS

It was with deep regret that the Trustees of The Congregation of Sisters of Nazareth Charitable Trust, which owns and operates the Nazareth House Residential Care Home, Bishop Street, Derry, Northern Ireland announced on 7 June 2013 that, unfortunately, the facility will close. The decision was based on the findings and recommendations of a strategic review of the facility conducted by independent consultants – BDO.

The House closed on 7 September 2013. It continued to provide care until that date for the remaining residents until alternative accommodation was sourced with the support of the Western Health and Social Care Trust.

It is not possible to provide any accurate estimate of the costs of closure at the date of signing these accounts or of the likely disposal proceeds from the sale of the site.

A decision has been made also to close the children’s respite services at Nazareth House, Crosby due to changes in government funding and policy relating to respite care of children with special needs. The closure will take place on 31 January 2014. The Charity provides respite services at Nazareth House Crosby for up to 5 children with special needs at any one time. The respite service is managed by Nugent Care. This decision has not been taken lightly as the service is evidently greatly needed by those who use it and the care of children is firmly rooted within the foundations of the organisation. The Trustees regret the decision they have had to take to close the units which was due to several political pressures.

22. CONNECTED ENTITIES

The Charity is connected to The Congregation of the Sisters of Nazareth (the Congregation), an unincorporated international religious congregation, founded by Victoire Larmenier and recognised by the Vatican, currently comprising 252 Sisters worldwide. The Superior General of the Congregation appoints the Trustees of the Charity.

The Charity is connected also to two other registered charities, details of which are given below:

Name Registration numbers etc Principal activities

The Congregation of the Sisters of

Nazareth Generalate (CSNG)

A registered charity (Charity

Registration No 1138876 (England

and Wales))

The support of the Congregation

and its work throughout the world.

Nazareth Care Charitable Trust A registered charity (Charity

Registration No 1113666) and a

company limited by guarantee

(Company Registration No 5518564

(England and Wales)), and

SC042374 (Scotland)).

With effect from April 2012, the

provision of residential and care

services to older people in need

through the operation of 13

establishments within the U.K.

known as Nazareth Houses and the

development and operation of two

retirement villages.

In the case of CSNG the Superior General of the Congregation also appoints the trustees. In respect to Nazareth Care Charitable Trust, the Superior General of the Congregation is the sole member of the charitable company. With effect from April 2012, the Charity and Nazareth Care Charitable Trust have three Trustees in common. None of the trustees of the Charity are trustees of CSNG with effect from April 2012.


At no point during the accounting period did any of the three charities control one or more of the others. As a consequence consolidated accounts are not prepared.

Nazareth Care Charitable Trust has a number of subsidiary companies with which it forms the Nazareth Care Charitable Trust Group. Details of the subsidiaries are as follows:

Name Registration numbers etc Principal activities

NRV Development (Blackburn)

Limited

Company Registration No 05906057

(England and Wales)

The development of a retirement

village in Blackburn.

NRV Development (Plymouth)

Limited


(England and Wales)

The development of a retirement

village in Plymouth.

NRV (Blackburn) Limited Company Registration No 06297407

(England and Wales)

A company providing comprehensive

and flexible services, including

laundry and cleaning, gardening and

general handyman services to

residents at the retirement village in

Blackburn.

Nazareth Catering Limited Company Registration No 06740428

(England and Wales)

A company providing catering

services to the retirement villages.

NRV Management (Plymouth)

Limited


(England and Wales)

The provision of management

services at the retirement village in

Plymouth

Nazareth Home Care Limited Company Registration No 08461286

(England and Wales)

The provision of domiciliary care

services

Consolidated accounts of the Nazareth Care Charitable Trust Group are prepared and filed with both the Charity Commission and Companies House.

During the year there have been a number of transactions between the Charity and its connected entities, details of which are given in the paragraphs below.

THE CONGREGATION OF THE SISTERS OF NAZARETH

The Charity authorised and paid a grant of £nil (2012 ‐ £14,021) during the year to 31 March 2013 to support the work of the Congregation in South Africa and a grant of £nil (2012 ‐ £23,336) to support the work of the Congregation in India. These grants are detailed in note 7. At 31 March 2013, there was no indebtedness between the Charity and the Congregation (2012 – £nil).

THE CONGREGATION OF THE SISTERS OF NAZARETH GENERALATE

During the year to 31 March 2013, the Charity was notified of grants from CSNG amounting to £5,073,200 (2012 ‐ £8,783,430) (see note 1). At 31 March 2013 the Charity was owed £4,461,250 (2012 – £2,420,000) by CSNG being grants authorised but not paid across as at that date (see note 14).

During the year a donation was made by the Charity to the CSNG amounting to £1,134,263 being in respect to short term deposits transferred following the completion of the re‐structuring.


NAZARETH CARE CHARITABLE TRUST AND NRV DEVELOPMENT (BLACKBURN) LIMITED

RETIREMENT VILLAGES

On 3 April 2007, the Charity granted a 999‐year head‐lease to Nazareth Care Charitable Trust with effect from 24 June 2006, over the site occupied by Nazareth House, Blackburn, for a lease premium of £1.2 million.

Of this premium, £1.1 million related to Phase 1 of the development of the Blackburn site, which entailed the conversion of the existing care home into separate residential units of close care accommodation for sale or rent to older people. The remaining £0.1 million of the premium was a nominal sum relating to future development on the site, which was to be re‐assessed once development of further parts of the site was approved.

Nazareth Care Charitable Trust in turn granted a 125‐year under‐lease on matching terms to NRV Development (Blackburn) Limited.

Under the terms of the head‐lease and under‐lease, the Phase 1 premium was repayable, together with accrued interest, by Nazareth Care Charitable Trust and by NRV Development (Blackburn) Limited respectively, following the sale of the 24th unit. Any outstanding balance on the account would continue to accrue interest until the date of repayment in full. During the year interest of £nil (2012 ‐ £32,526) was earned on the lease premium.

At 31 March 2012, ten of eleven apartments remaining of those that had been let on assured shorthold tenancies by NRV Development (Blackburn) Limited were acquired by the Charity for £1.03 million by offset against the balance outstanding on the lease premium, reducing it to £204k. The acquisition was at arm’s length for a price based on market value, with a small discount to reflect the bulk purchase.

The remaining balance including accrued interest amounting to £204k (see note 14) at was repaid in full with accrued interest during May 2012 from proceeds of the sale of the remaining apartment to its tenant.

Under the terms on which NRV Development (Blackburn) Limited sells apartments within the retirement village, should the purchaser for any reason wish to vacate the property at any time and not sell it on the open market, NRV Development (Blackburn) Limited undertakes to buy back the unit. This option was removed for sales completed after September 2013. It is calculated that the maximum liability to NRV Development (Blackburn) Limited in the event that several leaseholders simultaneously exercise the buy back option would be £750,000. Should NRV Development (Blackburn) Limited not have sufficient funds to meet this liability, the Charitable Trust has agreed to meet any shortfall.

At 31 March 2013, the Charity was owed £nil (2012 ‐ £204k) from NRV Development (Blackburn) Limited relating to audit fees paid on behalf of the company by the Charity.

NAZARETH HOUSES

With effect from 1 April 2012, the final stage of the re‐organisation of the Congregation’s legal structure in the U.K. outlined in the Trustees’ report took effect and the Charity transferred to Nazareth Care Charitable Trust responsibility for managing its business operations across all Houses in England, Wales and Scotland. All staff previously working for the Charity also transferred to Nazareth Care Charitable Trust.

The Charity retains ownership of all the properties involved in the transfer, but transferred (or donated) to Nazareth Care Charitable Trust assets needed for business purposes. The Transfer Deed dated 2 April 2012 identified ‘Assets’ as including contracts, cash, equipment, goodwill, insurance, intellectual property, records,


registrations, the benefit of the debts, the vehicles and any other property, rights and assets of the Charity relating primarily to the functions of carrying out the business.

The assets transferred at 1 April 2012 were as follows:

£

Tangible fixed assets 522,665 Debtors 566,662 Cash 4,857,786 Creditors due within one year (1,757,570) Creditors due more than one year (10,000) 4,179,543

23. ULTIMATE CONTROL

The Congregation of the Sisters of Nazareth Charitable Trust, which is constituted as a trust, is controlled by the Congregation of the Sisters of Nazareth by virtue of the fact that the Superior General of the Congregation appoints the trustees.

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