The trustees present their annual report and financial statements for the year ended 5 April 2025.
The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the charity's governing document, the Companies Act 2006 and the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).
The Murphy Neumann Charity Company exists to help meet the basic and enduring mental and physical health and social care needs of vulnerable people without regard to belief, race, gender, sexuality, disability, age, background or location in England and Wales. The Charity has three main objects and principal activities. These are:
to support projects aimed at helping those in society who suffer economic or social disadvantage or hardship arising from disability and/or social exclusion;
to assist those working to alleviate chronic illness and disabling disease; and,
to help fund research into medical conditions (particularly among the very young and the elderly) for which there is as yet no cure.
The Charity does not initiate projects of its own and only donates funds to charities registered with and recognised by the Charity Commission.
The principal area of charitable activity is the provision of funds or grants to organisations active in the three areas indicated above. The trustees liaise regularly with charities to which donations have been made. During the year written information was received from all the charities we supported. In some cases the trustees were able to see at close quarters how donations were implemented. The trustees make it a practice to examine the audited accounts/financial statements of all charities in receipt of donations. It remains the intention of the trustees to continue to support a core group of charities with whom Murphy Neumann has worked over many years as well as to help fund other organisations that match the Charity’s priorities.
Of the forty charities to which donations were made, thirteen are relatively high-profile organisations serving a large and well attested client base. Murphy Neumann made donations to fourteen charities primarily concerned with ameliorating the conditions of those who suffer specific economic or social disadvantage or hardship; nine charities most active in the investigation and alleviation of disabling and potentially terminal diseases; and the remainder smaller, community-based charities, providing a mix of services to a clientele broadly drawn from among those who fall within the Charity’s overall catchment.
The trustees do not have a fixed policy with regard to the number of charities that can be supported. Each year a decision is taken on how much money is available for distribution without putting Murphy Neumann at risk. The trustees are mindful that donations should not be so small that they make little or no impact on the needs of recipients. Not only could such donations hinder rather than help recipients but they would diminish the funds available to other charities with a perceived greater claim. With these considerations in mind the trustees remain of the opinion that for the time being grants should be fixed at a maximum of £2,500 and a minimum of £800. The majority of grants fall within the range £1,000 - £2,000.
Murphy Neumann complies with the Public Benefit requirements as set out by the Charity Commission. The trustees are of the opinion that the Charity demonstrates Public Benefit by virtue of the activities in which it is engaged. Funds are distributed to charities and through them to charitable causes and are intended to help ameliorate the effects of economic or social disadvantage, hardship arising from disability and/or social exclusion, chronic illness and disabling disease. Donations are made annually in January to foster the work of charities in England and Wales which are able to demonstrate their effectiveness in these spheres. All donations made by the trustees are exclusively for these purposes.
It is difficult to measure the impact of (relatively) small grants on large organisations. In most cases grants are made to general funds rather than to support specific initiatives. In the case of smaller charities grants are invariably made towards named and known projects. This might include the purchase of specialist equipment, sponsoring programmes or activities or funding long term research into disabling diseases. Many charities are anxious to improve user facilities while others seek to extend their reach in local communities. Given present circumstances, even a modest donation can have a considerable impact. Grants made to smaller charities, particularly those with outreach programmes, are especially welcomed. Here even a modest donation helps to achieve positive outcomes.
Murphy Neumann was established by virtue of a donation made by Dr. & Mrs Edgar Neumann. The Charity conducts the material part of its activities through grant making. Grants are generated by distributing dividend income derived from an investment portfolio. The trustees are advised on investment policy by Charles Stanley & Co. Ltd, one of the largest stockbrokers and investment managers in the U.K. The Charity maintains a well-diversified investment portfolio geared to high quality businesses offering capital growth as well as sustainable dividend income.
The Charity continues to invest in companies that are conservatively financed and enjoy strong asset backing with stable cash flows. Dividend record and the prospect of dividend enhancement are primary considerations. However, there remains a good deal of uncertainty. Politicians need to develop convincing and consistent plans purposed to get the economy through challenging times and to secure the long-term prosperity of the nation. Businesses value stability but in recent times they have had to face a rapidly changing macro landscape, supply chain problems, volatile markets, high inflation and political flux. Long term energy security is only one of the issues of concern. However, the trustees believe that the Charity is best served by continuing to maintain a broadly balanced portfolio comprising a high proportion of companies with wide international exposure.
Trustees were able to increase charitable distribution during the year. Dividend payments have, for the time being at least, returned to pre-pandemic levels although the situation remains fragile in some sectors. Trustees continue to ensure that Murphy Neumann is not over exposed in any one sector and equally that it is in a position to benefit as and when the global economy gains momentum.
In the period ended 5 April 2025:
Total income was £77,228 (2024 – £78,294) a decrease of 1.4% driven by reduced investment income.
Total expenditure was £81,652 (2024 – £82,764).
In the period ended 5 April 2025 a number of acquisitions and disposals were made. Unrealised gains arising from the revaluation of fixed asset investments were £12,190 (2024 – £90,425 gain). Realised loss were £27,540 (2024 – £2,945 gain).
At 5 April 2025 the investment portfolio was valued at £1,843,653 (2024 – £1,904,126). Net current assets were £70,954 (2024 – £30,255), which included cash in hand of £70,792.
The Charity intends to continue the activities outlined above. The trustees are always looking for ways to improve the performance of the portfolio and by doing so, to increase disposable income, believing that it remains in the best interests of the Charity and its beneficiaries for the original donation to be invested and the returns on the investments to be spent in line with the Charity’s objects. Trustees also believe that it would be disadvantageous to the long term interests of current and future beneficiaries if the investment portfolio was diminished in favour of any one charity to the disadvantage of other charities which may now or in future benefit from the distribution of funds. Furthermore, the founding document does not indicate that the donors had any particular preference with regard to individual charities or that they favoured one charitable purpose over another.
Reserves policy
Trustees conduct regular reviews of the reserves of the Charity. These reviews encompass the nature of the income and expenditure streams, the need to match variable income with on-going commitments and the nature of the reserves themselves (that is, those funds that are freely available). Trustees are keenly aware that inadequate reserves could put the Charity at risk. Therefore, they have set aside £20,000 to meet and slightly exceed the operating costs of the Charity over a twelve month period. This should meet any unforeseen costs as well as day-to-day expenditure.
The Charity was established by Memorandum and Articles of Association on 27 March 1963 and is constituted as a limited company. No right to subscribe for shares in the charitable company was granted or exercised during the year. The Memorandum of Association of the Company prohibits the payment of any dividend.
Murphy Neumann is a relatively small charity. It does not engage staff, does not make use of volunteers or raise funds through voluntary giving, does not own, rent or lease property, has no retail activity and does not hold events. Each trustee is bound by a Code of Practice for Trustees which is designed to ensure that the organisation is effective, open and accountable in its dealings and that the highest standards of integrity and stewardship are achieved. The trustees work very much as a team, each playing a dynamic part in relation to the activities of the Charity as a whole.
The trustees, who are also the directors for the purpose of company law, and who served during the year were:
The trustees are experienced business managers and keen supporters of the voluntary sector. In order to quantify the skills mix, the trustees have each provided a summary of their expertise. This is updated annually. There are no constitutional provisions relating to appointments and no formal procedures for appointing new trustees. In the event of the appointment of a new trustee or trustees, the existing trustee body would expect to draw upon a pool of like-minded individuals appropriately qualified who would be prepared to support the Charity.
Trustee Training
The trustees accept ultimate responsibility for directing the affairs of the Charity and ensuring that it is solvent, well managed and able to fulfil the charitable purposes for which it was established. Trustees are thoroughly familiar with all aspects of the administration of the Charity. In order to keep up to date on developments in the sector, trustees subscribe to various publications all of which are circulated internally. Trustees take advice from their accountants and other professional advisers on an ‘as need’ basis. Periodically time is set aside to revisit the key documents which set out the operational framework of the Charity as well as to review current objectives and future plans. Trustees are encouraged when possible to attend appropriate external training events where these will facilitate the undertaking of their role.
Risk Management
On an annual basis the trustees undertake a review of the risks to which the Charity is exposed. A document has been prepared setting out the perceived risks to the wellbeing of the Charity. This comprises the identification, measurement, management, monitoring and reporting of risk and facilitates the process of mitigation as and when appropriate. The greatest risks to the Charity are a short/medium term drop in investment income possibly caused by a global event such as another pandemic and/or the possibility of cyber attack. It is extremely difficult to ‘second guess’ the economy or to anticipate changes in the political terrain. However, the trustees in conjunction with the broker have taken steps to diversify the portfolio in such a way that it could withstand a period of turbulence in the markets. Cyber attack is a risk that has increased significantly in recent years. Trustees take information security and assurance very seriously. It is the responsibility of all trustees to be security conscious and to abide by the Security Control and Data Protection Policy. Trustees modify the risk which involves choosing and implementing a security mechanism that reduces the likelihood of a successful attack, or the impact that would result from such an attack. Trustees make sure that information is held under secure conditions.
The trustees meet on a formal basis twice annually though they communicate regularly by means of telephone, video conference, email and text. There is no specified division of labour but the trustees divide between them the tasks of administration, management, liaison with external bodies, compliance and so forth. A formal procedure is in place for dealing with incoming correspondence.
Governance
The Charity subscribes to the principles set out in the Charity Commission’s booklets including but not restricted to, The Essential Trustee: What You Need to Know (CC3), Charity trustee: what’s involved (CC3a), Managing a charity’s finances: planning, managing difficulties and insolvency (CC12), Charities and Investment Matters: A guide for trustees (CC14), Charity reporting and accounting: the essentials (CC15d), Charity reserves: building resilience (CC19), Charity and Risk management (CC26), It's your decision : charity trustees and decision making (CC27), Public Benefit: the public benefit requirement (PB1), Public Benefit: running a charity (PB2), Public benefit: reporting (PB3), Good Governance: A Code for the Voluntary and Community Sector and Charity governance, finance and resilience: 15 questions trustees should ask. Trustees are mindful of Charity boards and governance. Trustees take note of charity specific legislation and maintain a watching brief on potentially related legislation that may impact on charities.
The trustees' report was approved by the Board of Trustees.
I report to the trustees on my examination of the financial statements of Murphy-Neumann Charity Company Limited (the charity) for the year ended 5 April 2025.
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011 (the 2011 Act). In carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the 2006 Act; or
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
Murphy-Neumann Charity Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hayling Cottage, Upper Street, Stratford St Mary, Colchester, Essex, CO7 6JW.
The accounts have been prepared in accordance with the charity's governing document, the Companies Act 2006 and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.
All expenditure is accounted for on an accruals basis and has been included under expense categories that aggregate all costs for allocation to activities. Where costs cannot be directly attributed to particular activities they have been allocated on a basis consistent with the use of the resources.
Governance costs are those incurred in connection with administration of the company and compliance with constitutional and statutory requirements.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less and bank overdrafts.
Debtors
Trade and other debtors are recognised at the settlement amount due after and trade discounts offered. Prepayments are valued at the amount prepaid after taking account of any discounts due.
Included within governance costs - legal and professional fees is £9,781 (2024 - £10,374) in relation to investment management fees.
Mr M J Lockett (trustee) provided management and administration services to Murphy-Neumann Charity Company Limited during the year ended 5 April 2025 to the value of £11,500 (2024 - £11,500). This transaction, which is permitted by the Memorandum of Association of the charitable company, was paid in the year ended 5 April 2025 and was made in the normal course of business.
Apart from the above transactions, no remuneration was paid out of the funds of the charity to any trustee or to any person known to be connected with any of them.
During the year £96 (2024 - £nil) was reimbursed to trustees in relation to transportation for a trustee meeting.
The average monthly number of employees during the year was:
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
The share capital is owned by Mr M J Lockett, a trustee of the charity. The shares carry no rights to dividends, profits or distributions from the company.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
There were no disclosable related party transactions during the year other than those outlined in note 6 above. (2024 - none).