The Portsmouth Diocesan Trust

THE PORTSMOUTH DIOCESAN TRUST

(Registered Charity No: 246871)

TRUSTEES’ REPORT

AND

FINANCIAL STATEMENTS

31 AUGUST 2010

haysmacintyre

Chartered Accountants

Registered Auditors

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES’ ANNUAL REPORT

FOR THE PERIOD ENDED 31 AUGUST 2010

LEGAL AND ADMINISTRATIVE DETAILS

BOARD OF TRUSTEESBishop Crispian Hollis (Chairman)

Mr Peter Burns

Mgr Canon Nicholas France

Rev Dominic Golding

Miss Catherine Hargaden

Mgr Vincent Harvey VG

Rev Canon Richard Hind

Rev Canon David Hopgood

Mr Peter Hancock

Mrs Sheila Hughes

Mgr Thomas McGrath VG

Mr Iain McGrory Resigned 10th February 2011

Mrs Clare McKenna

Mgr John Nelson VG

Mr Kevin Ryan

Mr Alan Sendall

Mrs Elizabeth Slinn

SECRETARY TO THE TRUSTEESRev Mr Stephen D Morgan

CHARITY NUMBER246871

ADMINISTRATIVE CENTRESt Edmund House

Edinburgh Road

Portsmouth

PO1 3QA

BANKERSLloyds TSB Bank Plc

2-4 Palmerston Road

Southsea

PO5 3QH

SOLICITORSBlake Lapthorn

Harbour Court Compass Road

North Harbour

Portsmouth

PO6 4ST

AUDITORShaysmacintyre

Fairfax House

15 Fulwood Place

London

WC1V 6AY

INVESTMENT ADVISORSBlackRock Investment Managers

33 King William Street

London

EC4R 9AS

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES' ANNUAL REPORT

FOR THE YEAR ENDED 31 AUGUST 2010

The Trustees present their Report together with the financial statements of The Portsmouth Diocesan Trust and subsidiary companies for the year ended 31 August 2010, which are prepared in accordance with the Statement of Recommended Practice (SORP) 2005.

GOVERNING INSTRUMENT

The Charity was constituted by a Trust Deed dated 4 September 1934 registered under Charity Number 246871. On 11 September 1934 its Trustees were incorporated under the Charitable Trustees Incorporation Act 1872 in the name of Portsmouth Roman Catholic Diocesan Trustees Registered. Following an Order of the Charity Commission dated 14 August 2002, this Trust Deed was revoked and a new Trust Deed dated 5 August 2002, and a Deed of Variation dated 7 April 2004, were put in place by the Bishop and the Trustees. On 20 July 2001, there was a Direction from the Charity Commission, that all the charities of which the Trustees are Trustees except the Portsmouth Roman Catholic Priests’ Retirement Fund (Charity Number 1061194) and the charities holding real property in the Channel Islands, should be treated as a single charity for the purposes of registration and accounting under the Charities Act 1993.

TRUSTEES

These are set out on page 1.

GENERAL CHARITABLE OBJECTIVES

The objectives of the charity include the following: -

The provision, maintenance and upkeep of churches, public chapels and presbyteries belonging to or connected with the Roman Catholic Church in the Diocese.

The provision, maintenance and carrying on of the religious services of the said Church in such churches and public chapels or other places of like character.

Generally for any such charitable purpose or purposes as in the opinion of the Bishop may be calculated to lead to the advancement or maintenance of the Roman Catholic religion.

ORGANISATION

The Charity is governed by the Trustees, who meet on a regular basis to attend to the financial, property, legal and administrative affairs of the Diocese. In accordance with Canon Law, a Diocesan Finance Council exists to give advice to the Bishop and Trustees, which meets at the same time as the Trustees. Also, a number of specialist committees, as set out below, play a part in developing policy and then monitoring specific areas of Diocesan affairs.

The Diocese of Portsmouth was created on 19 May 1882 when the original administrative counties of Hampshire and Berkshire were separated from the Archdiocese of Southwark. It now comprises an area bounded by a line from Bournemouth in the west, north as far as the outskirts of Oxford, then following the south bank of the River Thames eastwards through Reading and Maidenhead to Windsor before turning south through Sandhurst and Aldershot to Havant, together with the Isle of Wight and the Channel Islands. The Diocese is divided into parishes, which at the period end numbered 97. Each is established and operates under the Church’s 1983 Code of Canon Law which bestows on them separate canonical status. This explains their treatment in these Accounts, specifically, the columnar approach and their separate classification as “Designated Funds”. Canon Lawrequires that each parish must have a Finance Committee to assist in the administration of the temporal goods of the parish by the parish priest.

In accordance with the Church’s Canon Law, in January 2010, the Bishop made his quinquennial report to the Holy See regarding the state of the Diocese and of his episcopal ministry.

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES’ ANNUAL REPORT (Continued)

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TRUSTEE COMMITTEES

At the period end the Trustees had twelve committees who undertake oversight of certain aspects of the Charity’s activities. Their authority is set out under terms of reference constituted in accordance with clause 12.2 of the Trust Deed and renewed annually. Of these committees, the following four cover the major areas of the Charity’s activities: the Compliance Committee, the Finance & Property Committee, the Investments Committee and the Schools Committee. These committees are composed of trustees together with non-trustee members with relevant expertise and experience.

The Compliance Committee

The Committee is to provide oversight of and take decisions, on behalf of the Trustees, in relation to legal compliance, financial compliance, risk assessment, health and safety, data protection, insurance policy, insurance issues in relation to parishes, liaison with the Catholic Church Insurance Association (CCIA) at Aylesbury and any other matter relating to compliance or insurance referred to the Committee by the Trustees with the Bishop’s approval. The Committee comprises three trustees appointed by the Trustees with the Bishop’s approval, the secretary to the Trustees and others appointed by the Trustees with the Bishop’s approval. The Committee must meet at least quarterly. Two trustee members constitute a quorum. A trustee member may veto any resolution of the Committee, in which event the matter in question must be referred to the Trustees for decision. The minutes of each meeting must be produced to the Trustees at their next meeting.

Amongst others, the trustees who were at the period end members of this committee were Mr Kevin Ryan, Canon Richard Hind, Mr Iain McGrory and Rev Dominic Golding.

The Finance & Property Committee

The Committee is to provide oversight of and take decisions, on behalf of the Trustees, in relation to approval of projects, approval of loans, property acquisition and disposal, including leasing, property inspections, grants from the funds of any of the charities the subject of the 2001 Direction referred to under Governing Instrument above and any other matter relating to finance or property referred to the Committee by the Trustees with the Bishop’s approval. The Committee may not authorise any project the capital amount or value of which is above £250,000 or any project which the Trustees have directed is to be referred to them for decision. The Committee must meet at least once every two months. Otherwise the composition and rules about meetings and reporting to the Trustees are the same as those for the Compliance Committee.

Amongst others, the trustees who were at the period end members of this committee were Mgr John Nelson, Canon Richard Hind, Mgr Thomas McGrath, Mr Peter Burns, Mr Peter Hancock and Mr Iain McGrory.

The Investments Committee

The Committee is to provide oversight of and take decisions, on behalf of the Trustees, in relation to investment policy, short term “cash” investment, liaison with investment managers and any other matter relating to investments referred to the Committee by the Trustees with the Bishop’s approval. The Committee may not authorise the investment of any new monies the capital amount of which is above £250,000, the rolling over of any existing investment the capital value of which is above £1,000,000 or any new or existing investment which the Trustees have directed is to be referred to them for decision. Otherwise the composition and rules about meetings and reporting to the Trustees are the same as those for the Compliance Committee.

Amongst others, the trustees who were at the period end members of this committee were Mgr John Nelson, Mr Peter Hancock and Mr Iain McGrory.

The Schools Committee

The Committee is to provide oversight of and take decisions, on behalf of the Trustees, in relation to strategic planning for Catholic education in the Diocese and any other matter relating to schools within the Diocese referred to the Committee by the Trustees with the Bishop’s approval. Otherwise the composition and rules about meetings and reporting to the Trustees are the same as those for the Compliance Committee.

Amongst others the trustees who were at the period end members of this committee were Mgr Vincent Harvey, Mgr John Nelson, Miss Catherine Hargaden and Canon Richard Hind.

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES' ANNUAL REPORT (Continued)

TRUSTEE COMMITTEES (continued)

At the period end the other committees were the Bamenda Committee, the Budgetary Committee, the Claims Committee, the Communications Committee, the Personnel Committee, and the Safeguarding Committee. In January 2010, the trustees established the Pastoral Formation Committee to oversee the operations of the Department for Pastoral Formation and the Living Our Faith Impact Committee to provide trustee scrutiny of the collection, investment and spending of monies raised under the Living Our Faith capital campaign. In February 2011 the trustees dissolved the Communications Committee.

TRUSTEE INDUCTION AND TRAINING

New trustees are appointed by resolution of the trustees with the approval of the Bishop and are provided with induction training prior to or following their appointment although no specific policy for the induction and training of trustees has been adopted.

ACTIVITIES AND ACHIEVEMENTS

Following the change in 2005, in reorganising parishes into 24 pastoral areas, further work has been carried out to build the necessary relationships between parishes within pastoral areas to enable them to become single parishes. This continues to be driven by a recognition of the centrality of the Sunday Eucharist in Catholic life and of the developing sense of Catholic stewardship in those areas.

Some years ago the parishes on the island of Guernsey were united into a single parish under the patronage of Our Lady and the Saints of Guernsey. In the period prior to that of this report the parishes of Jersey were united into a single parish, as were those of Winchester, Alresford and part of Andover. In September 2010 the four parishes comprising the Solent pastoral area united to form a single parish under the patronage of Our Lady Star of the Sea, and in December 2010 the four parishes of the Three Rivers pastoral area united to form a single parish under the patronage of St Swithun Wells.

Throughout the year the Diocese has continued its work as a diocese in accordance with its charitable objects in the following areas:

The provision, maintenance and upkeep of churches, public chapels and presbyteries belonging to or connected with the Roman Catholic Church in the Diocese. Construction of the new church at Waterlooville continued throughout the period, is at the date of this report substantially complete and will be dedicated and opened by the Bishop in the presence of the Apostolic Nuncio on 1st July 2011. Further work continues towards the building of the church at Hungerford, and negotiations with the Daughters of Wisdom have secured the prospect of an enlarged church at St Joseph’s, Romsey in the St Swithun Wells parish. A pastoral centre has been built at Immaculate Conception and St Joseph’s, Christchurch. The church hall and parish centre at St Mary’s, Alton have been completely rebuilt where the church is being entirely reroofed and reordered as at the date of this report. Construction of a pastoral centre at St Peter’s, Winchester has commenced. The church of Our Lady of Walsingham, Portchester was closed, the building being uneconomic to continue to maintain. A public statue of St John was unveiled outside the Cathedral west door in July 2010.

The provision, maintenance and carrying on of the religious services of the said Church in such churches and public chapels or other places of like character. In September 2009 the relics of St Therese of Lisieux were brought to the Cathedral and over 5,000 pilgrims attended various acts of worship and veneration. Throughout the year weekly Mass attendance remained steady at about 38,000 people. In September 2010 the Diocese organised the attendance of over 5,000 people at events connected with Pope Benedict’s visit to Great Britain.

The provision, maintenance and upkeep of houses of study, halls and colleges for the education and training of priests and persons desirous of becoming priests of the said Church in the Diocese or elsewhere. At the beginning of the period there were nine men in formation for the priesthood, of whom two were ordained priest in July 2010.

The provision, maintenance and upkeep of schools and colleges for the general education both religious and secular or religious or secular of children and young persons, whether or not members of the said Church. Over 26,000 children attend Voluntary Aided Catholic schools within the diocese, and a further 5,000 independent Catholic schools. During this period a joint Catholic and Anglican Voluntary Aided primary and a joint Catholic and Anglican Voluntary Aided secondary school were opened on the Isle of Wight. Construction of a new primary school at Thatcham commenced and the Diocese began to engage with the consequences of the conversion of some Voluntary Aided schools to Academies.

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES' ANNUAL REPORT (Continued)

LOOKING FORWARD

Bishop Hollis reaches the canonical age of retirement in November 2011. It is expected that a successor will be appointed some time in 2011.

The pastoral centre at St Peter’s, Winchester will be completed and construction of new churches at Hungerford and Romsey should commence. The Trustees continue to seek to dispose of surplus land in order to apply the proceeds towards meeting their objectives.

A new translation of the Roman missal will start to be used from September 2011 with the full implementation taking place in December 2011. Activities to introduce this translation and to educate clergy and people are planned.

Following the success of the Living Our Faith campaign the Bishop has appointed a vocations promoter: a priest of the Diocese. In September 2011 five men will commence their studies and formation for the priesthood, and three men for the permanent diaconate. The Diocese will continue to support the establishment of the Personal Ordinariate of Our Lady of Walsingham.

The new school at Thatcham will be completed in time for the admissions in September 2012, and the joint primary school on the Isle of Wight will move to its new location in newly built premises, subject to the availability of public funding. It is expected that upwards of a dozen schools will seek to convert to Academy status, subject to the approval of the Trustees.

FUNDRAISING

The Living Our Faith campaign concluded in June 2010 and at the date of this report the total funds pledged amount to £13,552,792.

The Trustees have dedicated these funds under four separate headings:

Clergy training and support £2,856,117

Parish and pastoral area lay formation £2,856,117

Renewing facilities £1,428,059

Parish local funds £6,412,198

At the date of the report £4,854,895 has been received, allocated between the funds as follows:

Clergy training and support £1,091,503

Parish and pastoral area lay formation £1,091,503

Renewing facilities £545,751

Parish local funds £2,728,757

The Trustees have approved the disbursement of these funds in accordance with the campaign objectives, as follows:

Clergy support £nil

Parish and pastoral area lay formation £323,023

Renewing facilities £40,000

Parish local funds £1,184,853

Amongst these disbursements are: £391,183 towards the construction of the parish pastoral centre at Winchester, £164,209 towards the new church at Waterlooville, £189,000 towards the employment of five youth and pastoral workers across the Diocese.

The Trustees anticipate making further disbursements of Living Our Faith funds in the coming years including meeting the cost of the Diocesan vocations promoter, clergy sabbaticals and the maintenance of students for the priesthood.

THE PORTSMOUTH DIOCESAN TRUST

TRUSTEES' ANNUAL REPORT (Continued)

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FINANCIAL REVIEW

The Statement of Financial Activities is in the main summary of the financial activities of the Charity for the period. This shows an increase in funds of £1,960,921(2009 Increase -£567,493) on normal activities, with a decrease in investment funds of £735,769 (2009 Increase -£780,200). The investment properties were formally revalued at 31st August 2010. Included in income are legacies to the value of £1,324,931 compared to £561,549in 2009.

Devolved Formula Capital funds continued to be transferred to the Diocese, to be held on behalf of the voluntary aided diocesan schools. At the period end, a total of £4,207,049 (2009 - £4,495,290) was held for those schools.

Improving and maintaining the properties owned by the Charity is a major priority, with a total of £2,080k (2009 £1,614k) spent on repairs and a further £2,015k (2009 £2,209k) spent on capital projects during the period. Surplus tangible fixed assets were also disposed of in the period realising £294k (2009 £391k), creating a loss of £6k (2009gain£295k).

To facilitate the funding of this expenditure on property, all parish funds are lodged centrally, thereby enabling interest free loans to be made to parishes undertaking these major expenditures, should these parishes not have sufficient financial resources available. The basis under which the Diocesan bankers are willing this facility has altered and this will have significant cost implications in the current and subsequent years. The Trustees will ensure that the Charity has sufficient resources to meet these commitments before entering into any contracts.