gloucester diocesan board of finance annual report & accounts 2014 · 2016. 11. 30. · 5...

Gloucester Diocesan Board of Finance

Annual Report

& Accounts

2014

1

Contents

board of directors

Rt Revd Michael Perham (President)

retired 21 November 2014

Rt Revd Martyn Snow (Act’g President)

Mary Adlard (Chair)

Revd Craig Bishop

Revd Nicholas Bromfield

Canon Nigel Chetwood

Revd Deborah Forman

Anna Griffiths

resigned 11 November 2014

Dr Steve Grindrod

Very Revd Stephen Lake

Anthony McFarlane

Canon Ian Marsh

Revd Canon Richard Mitchell

Revd Canon Mike Parsons

Les Reilly

Revd Jacqueline Rodwell

resigned 24 October 2014

Henry Russell

Ven Jackie Searle

Revd David Smith

Graham W Smith

Ven Robert Springett

Michael Storey

Prof Jennifer Tann

principal officers

Benjamin Preece Smith – Secretary

Julie Ridgway – Head of Finance

Board of Directors and Principal Officers .....................................1

Summary results..................................................................................2

Directors’ report .................................................................................3

Strategic report ....................................................................................6

Report of the auditors .................................................................... 11

Accounting policies .......................................................................... 13

Statement of financial activities ..................................................... 16

Summary income & expenditure account................................... 17

Statement of total recognised gains & losses ............................. 17

Consolidated balance sheet ........................................................... 18

Parent balance sheet ........................................................................ 19

Statement of cash flows .................................................................. 20

Notes to the accounts .................................................................... 21

solicitor

Jos Moule; Diocesan Registrar

Veale Wasborough Vizards

Orchard Court, Orchard Lane

Bristol BS1 5WS

auditors

haysmacintyre

26 Red Lion Square,

London

WC1R 4AG

bankers

Barclays Bank plc

288 Britannia Warehouse

The Docks

Gloucester GL1 2YJ

investment managers

CCLA Investment Management Ltd

80 Cheapside

London EC2V 6DZ

registered office

Church House

College Green

Gloucester GL1 2LY

Company limited by guarantee

Registered number 162165

Registered charity number 251234

2

How have we done?

Highlights from this year’s accounts

number of stipendiary clergy funded

2014: 2013: change:

parish share contributions

2014: 2013: change:

general fund net outgoing resources (“loss”)*:

2014: 2013: change:

balance sheet value (nett assets)

2014: 2013 change:

*Excluding Good & Faithful Servant Ltd: 2014: £409k, 2013: 718k, change: -44%

126

3

129 -2%

£5.9m £5.8m +2%

-70% £794k £238k

£75m £74m +1%

3

Directors’ report for the year ended 31 December 2014

Structure, Governance and Management

The Gloucester Diocesan Board of Finance (DBF) is a company limited by guarantee and a registered

charity. Its governing instrument is the Memorandum and Articles of Association.

Its membership comprises:

The Bishop of Gloucester as president, ex-officio.

Each and every member for the time being of the Diocesan Synod.

Members co-opted to ensure that lay members constitute a majority of the DBF.

Elections and co-options take place every three years. The current triennium runs until September

2015.

The DBF, which meets four times each year, is the principal policy making body. It takes advice from

its Board of Directors, constituted as the Bishop’s Council, which examines issues in detail and

makes recommendations. The Council also take executive action in certain matters and deals with

day to day issues. The membership of the Bishop’s Council is as follows:

Ex-officio members:

The Bishop of Gloucester

The Chair of the DBF

The Bishop of Tewkesbury

The Dean of Gloucester

The Archdeacon of Gloucester

The Archdeacon of Cheltenham

The Chair of the House of Clergy of the Diocesan Synod

The Chair of the House of Laity of the Diocesan Synod

The Chair of the Diocesan Board of Education

A nominated representative of the Houses Committee

A nominated representative of the Diocesan Advisory Committee

Members elected by the DBF – House of Clergy

Two clergy members of the DBF from the Archdeaconry of Gloucester

Two clergy members of the DBF from the Archdeaconry of Cheltenham

One Proctor in Convocation from among the members of General Synod

Members elected by the DBF – House of Laity

Three lay members of the DBF from the Archdeaconry of Gloucester

Three lay members of the DBF from the Archdeaconry of Cheltenham

One lay member from among the members of General Synod

Co-opted members

Up to two members may be co-opted by the Bishop’s Council

Nominations

Up to two members may be nominated by the Bishop

4


Structure, Governance and Management (continued)

Trustees are recruited, as indicated above, through a mixture of ex-officio positions, elections and

nominations. The Nominations Committee in conjunction with the Diocesan Secretary oversee

membership elections.

The DBF’s induction and training programme for trustees is being developed and will be ready for

the start of the new triennium later this year.

The DBF was assisted in its work during the year by a number of committees:

Finance Committee (Chair: Mary Adlard) acts in all matters relating to the management of the

DBF’s finances, including setting policy, framing the budget, critically reviewing the budget to

ensure value for money and monitoring financial performance;

Audit Committee (Chair: Bruce Evans) reports to the DBF on matters relating to the auditors,

the annual accounts and internal controls. It also acts as the risk management group;

Glebe Committee (Chair: Timothy Griffin) acts in all matters relating to the management of

glebe properties and the strategic conversion of glebe assets to maximise returns;

Houses Committee (Chair: Anthony McFarlane) discharges the responsibilities of the DBF in its

capacity as the Diocesan Parsonages Board and acts in all matters relating to the provision and

maintenance of clergy houses.

The DBF is the financial custodian for the Diocese of Gloucester, which is an administrative and

pastoral area within the Church of England. The DBF therefore has important relationships with the

national institutions of the Church of England, specifically:

Archbishops’ Council, to which it pays grants based on an apportionment system for funding

national training of ordinands and the activities of the various national boards and councils, as

well as General Synod.

Church Commissioners, from which the DBF receives grants and which acts for tax and national

insurance purposes as the pseudo-employer of diocesan clergy. The DBF pays for clergy

stipends through the Church Commissioners.

Church of England Pensions Board, which provide pensions for clergy and DBF’s lay staff.

Locally, the DBF works with Parochial Church Councils (PCCs) which are legally independent bodies

that pay contributions, based on an apportionment system, to the DBF to fund its activities. The

DBF is a tenant of the Dean and Chapter of Gloucester Cathedral, from whom it rents office

accommodation.

The DBF manages various charities on behalf of their respective trustees, for which grants and

management charges are paid, namely the Voluntary Schools Fund (VSF) and the Charity of Ann

Edwards (AEC).

5


Objectives and Activities

The principal objective of the Gloucester Diocesan Board of Finance (“the DBF”), as set out in the

Memorandum of Association, is “to promote and assist the work, objects and purposes of the Church of

England for the advancement of the Christian religion in the Diocese of Gloucester”.

In pursuing this objective, the DBF acts as the financial executive of and employer for the Gloucester

Diocesan Synod. As such it undertakes three principle activities:

It funds costs associated with the vast majority of Church of England clergy in the diocese,

It is responsible for the custody and management of the synod's funds.

It provides services to other organizations within the diocese, primarily PCCs and schools.

These specific activities are fulfilled within a broader strategic context for the Church of England

within the diocese set out in the Diocesan Strategic Vision; Journeying Together which identifies

four core areas of work.

Worshipping together

Offering facilities and services open to all in our communities is a core activity of the

Church. The Board ensures that a professional, trained minister of religion is available to every

community in our diocese to take and oversee public worship. The GDBF also supports and trains

unpaid and lay ministry to undertake and support this work.

Sharing our Christian faith and values

The Board supports the sharing of the Christian faith not only through provision of

theological training and ministers of religion but also through activities such as communication of the

Christian faith through regional media, the provision of officers to support the teaching of the

Christian faith in schools and wider training programme.

Providing a visible presence in every community and parish

The Board supports parish ministry through support of local parochial ministry, lay and

ordained, and helping PCCs maintain and develop local church buildings through oversight of the

care and maintenance of these buildings through the Faculty system, support and advice from the

Diocesan Advisory Committee (DAC), ensuring any buildings which are no longer needed for

regular worship are reused in the public interest and by making grants to other organisations.

Serving the wider world

The Church of England is a collection of people who, motivated by their faith, form part of

the biggest volunteer network in our country. It provides youth workers and independent public

figures in areas and to communities that the statutory sector may not reach. It is committed to

caring for everyone in our communities, whether or not they “do church”. The Board supports this

by providing professional support and training, ensuring stipendiary ministers are housed and paid

and providing grants to organisations.

6


Public benefit

The directors are aware of the Charity Commission’s guidance on public benefit and, in particular,

the supplementary guidance for charities whose aims include advancing religion and have regard to

that guidance in their administration of the charity.

Strategic report

Achievements and performance

Journeying Together

The centrally funded work of the diocese has been managed by Bishop’s Staff Team overseen by the

Board and its committees in accordance with an approved Action Plan linked to Journeying Together.

Of particular note in 2015 are the following developments:

A review of the Parish Share system was initiated by the Finance Committee whose

recommendations went out for consultation with deaneries in early 2015. In the light of this

consultation the Board will consider a final proposal for change at its meeting on 27 May 2015.

This will come to Synod in June 2015 for debate and approval with implementation in 2016.

A review has also been commissioned on the use of the Diocesan Stipends Fund. With the

potential growth in the Stipends Fund arising from glebe sales the Board has commissioned a

separate review on how this additional funding should be used strategically by the diocese. The

Board will also finalise its recommendations in May and seek the approval of Synod in June.

The Board has revised the use of the Development Fund and established a new quasi-

autonomous group to be known as “Stewards” who will oversee the distribution of mission

grants of up to £400k p.a. This will be funded by a combination of the existing fund, the sale of

Glenfall House and the profits generated by Good and Faithful Servant Limited. The Board have

appointed a Secretary to this fund working to the Bishop of Tewkesbury as Chair and is

currently in the process of recruiting Stewards. It is expected the fund will be operational by

autumn 2015.

A substantial programme of Safeguarding awareness training was carried out in the year with

over 1,000 church officers trained between August 2013 and February 2015 in a series of events

around the diocese. This is the significant public action of a comprehensive safeguarding action

plan which works to best practice in the sector. This plan was reported to and affirmed by

Diocesan Synod in February 2015.

Acts of Synod

In addition to the underlying strategic direction of Journeying Together 2014 saw the engagement of

Diocesan Synod with significant social issues. The Board was instructed by Synod to resource and

promote the work of Credit Unions (February 2014) and Hunger/Food-banks (May 2014). This

resulted in a number of activities and financial support to both local and national bodies working in

these areas. The diocesan office has offered financial, practical and human support to the

Gloucestershire, Stroud Valley and Churches Mutual Credit Unions as well as local food-banks

across the diocese and the Trussell Trust.

7


Funding the provision of clergy

The principal expenditure of the board is funding the provision of clergy which constitutes 82% of its

unrestricted charitable expenditure.

At Diocesan Synod in October 2012 it was agreed to reduce the number of parochial clergy posts

by six full time equivalent posts between 2013 and 2015. By the end of 2014 around half of this

reduction had been made. Plans for further reductions are being considered in the light of vacancy

levels and mission planning.

Deanery Action Plans are currently being developed in line with Journeying Together. A significant part

of this planning process is identifying the stipendiary clergy requirements of each place against a

background of a shortage of ministers and budget management. This inter-relates significantly with

the review of the parish share system which is looking to see how this core funding stream can be

improved to increase support to those areas most in need; both in terms of financial deprivation and

mission opportunity.

Management of Synodical Funds

Due to a strong year in the investment markets and despite operating losses the Balance Sheet for

GDBF increased ahead of inflation by £1.8m or 2.4%. This continues to raises concerns that the full

benefit of the Board’s total return investment policy is being held back by accounting legislation. The

Board has resolved to redress this by adopting the Charity Commission provisions on accounting for

endowments on a total return basis as soon as the Church Commissioners revise church legislation

to enable this. Should this not be completed by the end of 2015 the Board is minded to use existing

permissible expenditure to replicate the impact of this change of policy in the coming financial year.

Glebe management continued strongly with planning permissions being sought on a number of sites

and likely to produce good capital returns in 2015 onwards. The most substantial of these sites was

refused permission in 2014 but will go to appeal in 2015.

Provision of Support Services

The support services of the diocese have continued to adjust to the reduced funding agreed by

Synod in October 2012. This has led to a recalibration of expectations and capacity but (despite

some necessary compromises) by focusing on the Journeying Together plans and Synod motions it is

believed the strategic contribution of the diocesan offices to the Church’s mission has been

maintained.

8


Financial Review

Ongoing Activities

The financial year to 31 December 2014 saw the Board move closer towards its target of a balanced

budget on ongoing activities (excluding pension deficit payments) by the end of 2015. The ongoing

deficit on the general fund account excluding Good and Faithful Servant profits was down from

£744k to £409k, a reduction of 44%.

The overall reduction in general funds for the year was £427k, leaving just £671k in the general fund

reserve. Whilst designated funds means this is not a going concern issue it does emphasise the

importance of ensuring both income and expenditure for 2015 are kept to budget to minimise any

further erosion of this core fund and a more fundamental restructuring of the Board’s funding of

parish clergy.

Good and Faithful Servant (G&FS) has returned to significant profit, contributing £171k to the

general fund in 2014. The work streams of G&FS are now more secure and there are existing

planning permissions available to keep this subsidiary active for the next two years and more in the

pipeline.

The Parish Giving Scheme (PGS) became a separate charity from 1 November 2014, whilst it will

continue to operate for the benefit of the diocese and be housed in the diocesan offices it is now a

legally distinct charity with national scope. As at the end of 2014 there were six participating

dioceses and another three are expected to join in 2015. In 2015 the income and expenditure of

PGS is expected to be in excess of the Board’s.

Plans for future periods and their principal risks and uncertainties

The key challenge of the recent past and present has been the need to ensure a sustainable model of

funding parish ministry in the diocese against sustained, long term deficits. If this can be substantially

resolved by the end of 2015 the diocese will need to look forward to a new mode of life in seeking a

return to a growth in the activities of the Church in the diocese and thereby the growth of the

Kingdom of God. As set out above; in 2014 the Board made or initiated a number of structural

changes in how the diocesan finances operate which are designed to help resource and enable the

diocese be most effective in responding to this new life. These can be seen in three main areas;

Parish Share and Parochial Ministry

The review of the Parish Share system is hoped to ensure greater long term sustainability to the

funding of parochial ministry, which importantly will seek to build in an ongoing flexibility to fund

new and growing ministry rather than simply maintaining historic ministries. Parish Share collection

has been a long term challenge for the diocese and has driven, arguably over-driven, much strategic

decision making on the resourcing of ministry and mission in the diocese for the past twenty years.

Commitment to parish share is fundamental to securing the existing basis of the Church’s ministry

from which any growth may be planned.

Glebe/Diocesan Stipends Fund and New Ministries

The Board is also developing a proposed new policy for the use of the Diocesan Stipends Fund. This

is enabled by potential windfalls from glebe disposals which may come to fruition over the next few

years and provide substantial additional funding. This, it is hoped, will enable the resourcing of more

curacies, pioneer ministries and training opportunities to support the growth of the Church without

having to make additional calls on existing congregations. The size and scope of these opportunities

9


will only be known as the glebe sales are realised over the next few years. The policy will reflect

this uncertainty and be sufficiently flexible to ensure any additional income will help grow the

Kingdom effectively.

G&FS/Development Fund

The third leg of this restructuring is already in place but not yet fully operational. Bishop’s Council

voted in in early 2015 to establish a quasi-autonomous body to oversee the distribution of mission

grants from the Development Fund of up to £400k p.a. This will be funded by the activities of G&FS,

the sale proceeds of Glenfall House and the pre-existing development fund.

This will be the most flexible and unrestricted element of the new funding structure and be able to

plug gaps in resourcing the Kingdom which may be currently unsupported or unrecognised by

existing funding streams. The success of this activity will depend on the profits of G&FS, the sale of

Glenfall House, the recruitment of excellent Stewards but most importantly the energy and

enthusiasm of all Christians to think of new and innovative ways to share the transforming Gospel of

Jesus Christ in our diocese.

Investment policy

The DBF maintains a review of its investments through the Finance Committee, which also monitors

performance against market benchmarks and considers the adequacy of its investment mix. The

Finance Committee retains the services of independent investment advisors to ensure that it

receives impartial advice.

The DBF considers that investing in a range of medium-low risk funds across two fund managers

serves to spread risk through diversity and uses the investment management skills of professional

fund managers to achieve good performance.

For commentary on investment performance please see Management of Synodical Funds on page 7.

Reserves policy

The policy of the DBF is to hold between 4 and 8 months of parish share plus the deficit for the year

on the general fund in free reserves (i.e. for 2014 between £2.2m and £4.2m). This level is

considered prudent to manage for the cash flow deficit experienced each year resulting from parish

share contributions being remitted irregularly during the year, (whereas the DBF’s expenditure is

fairly constant on a month by month basis), and also to allow for unexpected occurrences.

At the end of 2014 free reserves stood at £0.7m which is below the lower end of the specified

range. This is the effect of several years of high deficits and a high investment in board housing

which is treated as designated funds. Comfort is taken from designated reserves in excess of £14m

which shows that management is able to undertake asset restructuring to secure the Board’s future

as a going concern.

10


Directors’ responsibilities in respect of the financial statements

The Directors are required by company law to prepare financial statements, based on applicable

accounting standards, which give a true and fair view of the state of affairs of the DBF as at the end

of the financial year and of the result of the year and which comply with the Companies Act 2006.

The Directors ensure that, in preparing the financial statements, suitable accounting policies have

been used and applied consistently, and reasonable and prudent judgments and estimates have been

made. The Directors have a reasonable expectation that the DBF has adequate resources to

continue in operational existence for the foreseeable future. For this reason, they continue to adopt

the going concern basis in preparing the accounts.

The Directors are also responsible for ensuring that adequate systems of internal control are in

operation, for maintaining adequate accounting records, for safeguarding the assets of the DBF and

for preventing and detecting fraud and other irregularities. They are also responsible for showing

that the assets are applied in accordance with charity law.

Statements as to disclosure of information to auditors

The Directors have taken all the necessary steps to make sure that they are aware of any relevant

audit information and to establish that the auditors are aware of that information.

As far as the Directors are aware, there is no relevant audit information of which the company's

auditors are unaware.

The Directors are responsible for the maintenance and integrity of the corporate and financial

information included on the charitable company's website. Legislation in the United Kingdom

governing the preparation and dissemination of financial statements may differ from legislation in

other jurisdictions.

Appointment of Auditors

During the year, in line with best practise, the appointment of auditors was put out to formal tender

and haysmacintyre were duly appointed as auditors.

+ Martyn Mary Adlard

President, Gloucester DBF Chair, Gloucester DBF

Signed: 27th May 2015

11

Independent Auditors’ Report To the Members of Gloucester Diocesan Board of Finance

We have audited the financial statements of Gloucester Diocesan Board of Finance for the year

ended 31 December 2014 which comprise the Group Statement of Financial Activities, the Group

Summary Income and Expenditure Account, the Group and Parent Balance Sheet, the Group Cash

Flow Statement 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).

Respective responsibilities of trustees and auditors

As explained more fully in the Directors’ Responsibilities Statement set out on page 10, the

Directors (who are also the Trustees of the charitable company for the purposes of charity law) are

responsible for the preparation of the financial statements and for being satisfied that they give a

true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland). Those standards require us

to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. This report is

made solely to the charity’s members as a body in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the charity’s

members 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 members as a body for our audit work, for this

report, or for the opinions we have formed.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting

Council's web-site at www.frc.org.uk/auditscopeukprivate.

Opinion on the financial statements

In our opinion the financial statements:

give a true and fair view of the state of the group and parent charitable company’s affairs as

at 31 December 2014 and of the group’s incoming resources and application of resources,

including its income and expenditure, for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on the other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report and the Strategic Report for the

financial year for which the financial statements are prepared is consistent with the financial

statements.

http://www.frc.org.uk/auditscopeukprivate

Independent Auditors’ Report cont To the Members of Gloucester Diocesan Board of Finance

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006

requires us to report to you if, in our opinion:

the parent charitable company has not kept adequate and sufficient accounting records, or

returns adequate for our audit have not been received from branches not visited by us; or

the parent charitable company’s financial statements are not in agreement with the

accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

haysmacintyre 26 Red Lion Square

Statutory Auditor London

WC1R 4AG

Date: 27th May 2015

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

13

Accounting policies for the year ended 31 December 2014

The principal accounting policies adopted are as follows:

Basis of Accounting

The financial statements are prepared under the historical cost convention, modified to include the

revaluation of listed investments, and in accordance with the Statement of Recommended Practice

(SORP) “Accounting and Reporting by Charities” issued in March 2005, and applicable Accounting

Standards in the United Kingdom.

These financial statements consolidate the results of the charitable company and its wholly-owned

subsidiaries on a line by line basis. The subsidiaries are Jumping Fish Limited, The Good and Faithful

Servant Limited and the Anne Edwards Charity. A separate statement of financial activities, or

income and expenditure account, for the charitable company itself is not presented because the

charitable company has taken advantage of the exemptions afforded by section 408 of the

Companies Act 2006 and SORP 2005. The surplus of the parent charity for the year was £1,645k

(2013: surplus of £2,066k).

Incoming resources

Parish Share contributions by parishes are included in the financial statements when received.

Donations are recognised when received. Legacies are recognised when there is reasonable

certainty as to both entitlement and amount. Grants are generally included in the financial

statements when received, to ensure that there is reasonable certainty as to both entitlement and

amount. However, in cases where the grant relates to a specific project, it is recognised when the

project expenditure takes place. Interest and dividends are included in the financial statements

when received. Rental income is recognised in the period to which the rent relates.

Resources expended

All expenditure is accounted for on an accruals basis and has been classified under headings that

aggregate all costs related to that category. Where costs cannot be directly attributed to particular

headings they have been allocated to activities on a basis consistent with the use of the resources.

Indirect costs have been allocated to various cost headings on the basis of the head count. Grants

payable are charged in the year when the offer is conveyed to the recipient. Governance costs are

those incurred in connection with the administration of the Board as an organisation and

compliance with constitutional and statutory requirements.

14


Depreciation

Depreciation on equipment is calculated on a straight line basis at annual rates estimated to write

off the assets over their respective expected useful lives, as follows:

Leasehold property improvements 5% Assets under construction 0%

Office equipment 20% Office furniture 12½%

Telephone equipment 20% Computer equipment 25%

No depreciation is provided on clergy houses. As the remaining useful life of these assets exceeds

50 years and a programme of planned maintenance ensures that the residual value does not fall

below the carrying value, any depreciation would be immaterial. An annual impairment review is

carried out in accordance with FRS15 and 11.

Pensions

The Board operates two defined benefit pension schemes for its lay staff, and contributes to the

Clergy Pension Scheme (also a defined benefit scheme) for serving clergy in the diocese. Costs are

assessed in accordance with actuarial advice and based on the most recent actuarial valuation of the

scheme. Pension costs and disclosures have been reported in accordance with FRS17.

Tangible fixed assets

Clergy houses owned by the Board as corporate property are included in the financial statements

at historical cost.

Clergy houses owned by benefices are included in the financial statements at a carrying value

established by the directors and based on a professional valuation in December 2000. Houses

acquired since that date are included at cost, and any major improvements are capitalised to the

extent that the carrying value does not exceed the estimated net realisable value. Although the

Board does not own these houses, it has the responsibility for maintaining them and receives any

sale proceeds on disposal if the house becomes surplus under a pastoral scheme. Under FRS5 the

Board considers that it has access to the benefits of these houses and also the associated risks and

therefore needs to recognise them as assets in the financial statements. Solar PV panels installed on

clergy houses are included within the asset value of the house and depreciated on a straight line

basis over 25 years.

Fixed asset investments

Listed investments are stated at open market value at the balance sheet date. For units held in

managed funds of the Central Board of Finance this is the published bid price. Investment

properties, which comprise the glebe portfolio, are stated at directors’ valuation. The valuation is

arrived at after taking appropriate professional advice and is reviewed each year. Certain short-

term cash deposits, which are held for long term investment purposes, are included in fixed asset

investments.

15


Stock and WIP

Work in progress is valued at the lower of costs and nett realisable value. Cost includes all direct

expenditure and an appropriate proportion of fixed and variable overheads.

Fund accounting

The resources of the Board are classified according to restrictions imposed on their use by donors

or by legislation, and in accordance with the SORP, as follows:

• Endowment funds represent money that must be permanently held as capital, and may not

be spent as income. Expendable endowment may, however, be spent as income under

certain circumstances.

• Restricted funds may only be used for the purposes for which the money was originally

gifted or bequeathed to the Board, or as expressed in the trusts under which the funds are

held.

• Unrestricted funds are monies available for use at the discretion of the Board. The General

Fund is for the day to day running of the Board, and is funded by the parish share.

However, certain funds have been earmarked for particular purposes, and these are

termed designated funds. Such funds are kept separate for administrative purposes but do

not constitute legally separate funds.

Operating leases

Rental payments under operating leases are charged to the Statement of Financial Activities on a

straight line basis over the term of the lease.

16

Consolidated statement of financial activities for the year ended 31 December 2014

Not

es Genera

l

fund

Desi

gnat

ed

funds

Rest

rict

ed

funds

Endow

ment

funds

Total

2014

Total

2013

Incoming resources £’000 £’000 £’000 £’000 £’000 £’000

Voluntary income:

parish share contributions 1 5,932 - - - 5,932 5,811

church commissioners 2 30 - - - 30 29

grants, donations & legacies 3 323 300 36 - 659 986

parish giving scheme 3a - - 5,374 - 5,374 3,562

Activities for generating funds 4 1,649 106 - - 1,755 478

Investment income:

interest & dividends 5 649 28 79 - 756 766

rents receivable - - 85 - 85 109

Income from charitable activities:

fees, chaplaincy & other income 510 - - - 510 527

Other incoming resources:

gain on disposal of fixed assets - - - - - 1,149

other 3 2 15 - 20 23

Total incoming resources 9,096 436 5,589 - 15,121 13,440

Resources expended

Costs of generating funds 4 1,105 - - - 1,105 143

Charitable activities:

provision of clergy 6 6,798 135 - - 6,933 7,107

management of synodical funds 191 9 229 - 429 483

provision of support services 7 1,046 654 103 28 1,831 1,795

pensions liability 145 - - - 145 146

parish giving scheme grants 3a - - 5,374 - 5,374 3,562

Governance costs 8 49 - 1 - 50 42

Total resources expended 9,334 798 5,707 28 15,867 13,278

Net incoming/(outgoing)

resources (238) (362) (118) (28) (746) 162

Transfers between funds 19, 21 (189) 2,191 (94) (1,908) - -

Net incoming/(outgoing) resources before

gains (427) 1,829 (212) (1,936) (746) 162

Gains on investment assets 14 - 36 87 2,414 2,537 1,688

Revaluation of property 13 25 25 -

Realised losses (investment disposal) 14 - - - (40) (40) 206

Net movement in funds (427) 1,865 (125) 463 1,776 2,056

Funds brought forward at 1 Jan 14 1,098 12,120 2,571 57,930 73,719 71,663

Funds carried forward at 31 Dec 14 18 671 13,985 2,446 58,393 75,495 73,719

17

Consolidated summary income & expenditure account for the year ended 31 December 2014

2014 2013

£’000 £’000

Gross income 15,121 12,291

Total expenditure (15,867) (13,278)

Net expenditure for the year (746) (987)

Net realised (losses)/gains on disposal of fixed assets/investments (40) 1,355

Net (deficit)/surplus for the year (786) 368

All of the surpluses and deficits shown above arise from continuing operations.

The summary income and expenditure account is derived from the statement of financial activities shown

on page 15. Gross income represents total incoming resources of £15,121k (2013: £13,440k) less the gain

on disposal of tangible fixed assets of £0k (2013: £1,149). The statement of financial activities, together with

the accompanying notes provides full information on the movement of the Board’s funds in the year.

Full historical cost information is not available for glebe and certain benefice houses.

Consolidated statement of total recognised gains & losses for the year ended 31 December 2014

2014 2013

£’000 £’000

Net surplus/(deficit) for the year (786) 368

Revaluation of property 25 -

Unrealised gains on revaluation of investment assets 2,537 1,688

Total recognised gains for the year 1,776 2,056

18

Consolidated balance sheet as at 31 December 2014

Not

es 2014 2013

£’000 £’000

Tangible assets 13a 49,135 47,864

Investments 14a 22,513 22,993

Fixed Assets 71,648 70,857

Stock and work in progress 15 1,267 330

Debtors: amounts falling due after one year 16a 432 328

Debtors: amounts falling due within one year 16a 1,282 796

Cash at bank and in hand 2,803 3,245

Current Assets 5,784 4,699

Creditors: amounts falling due within one year 17a (753) (653)

Net Current Assets (Current assets less creditors <1 year) 5,031 4,046

Total Assets less current liabilities (Fixed Assets plus NCA) 76,679 74,903

Creditors: amounts falling due after one year 17a (1,184) (1,184)

Net Assets 75,495 73,719

Endowment funds 18,21 58,393 57,930

Restricted funds 18,20 2,446 2,571

Designated funds (unrestricted) 18,19 13,985 12,120

General fund (unrestricted) 18 671 1,098

Reserves 75,495 73,719

Approved by the Board of Directors on 27th May 2015 and signed on its behalf by

Mary Adlard, Chair


19

Parent company balance sheet as at 31 December 2014

Not

es 2014 2013

£’000 £’000

Tangible assets 13b 48,030 46,759

Investments 14b 22,605 23,118

Fixed Assets 70,635 69,877

Stock and work in progress - -

Debtors: amounts falling due after one year 16b 932 329

Debtors: amounts falling due within one year 16b 1,764 1,594

Cash at bank and in hand 2,223 2,248

Current Assets 4,919 4,171

Creditors: amounts falling due within one year 17b (557) (674)

Net Current Assets (Current assets less creditors <1 year) 4,362 3,497

Total Assets less current liabilities (Fixed Assets plus NCA) 74,997 73,374

Creditors: amounts falling due after one year 17b (1,184) (1,184)

Net Assets 73,813 72,190

Endowment funds 18,21 57,740 57,311

Restricted funds 18,20 979 1,067

Designated funds (unrestricted) 18,19 13,985 12,120

General fund (unrestricted) 18 1,109 1,692

Reserves 73,813 72,190

Approved by the Board of Directors on 27th May 2015 and signed on its behalf by

Mary Adlard, Chair


20

Consolidated cash flow statement for the year ended 31 December 2014

Not

es 2014 2013

£’000 £’000

Net cash (outflow)/inflow from operating

activities 22 (2,744) (2,019)

Dividends received 5 679 682

Interest received 5 77 84

Interest paid 10 (9) (24)

Return on investment and servicing finance 747 742

Purchase of tangible fixed assets 13a (1,422) (569)

Sale of tangible fixed assets 13a - 2,047

Purchase of fixed asset investments 14a (690) (1,097)

Sale of fixed asset investments 14a 3,667 1,153

Investing activities and capital expenditure 1,555 1,534

(Decrease)/increase in cash in the year (442) 257

2014 2013

Reconciliation of net cash flow to movement in net funds: £’000 £’000

Funds as at 1 January 2014 3,245 2,988

Cash inflow/(outflow) (442) 257

Funds as at 31 December 2014 2,803 3,245

21

Notes to the consolidated accounts for the year ended 31 December 2014

Note 1

Parish Share

Com

mitte

d in

2014 (

mem

o)

Rec

eive

d in 2

014

re 2

014

Rec

eive

d in 2

014

re p

rior

yea

rs

2014 2013

£’000 £’000 £’000 £’000 £’000

Gloucester City 511 514 5 519 488

Severn Vale 528 541 5 546 518

Forest South 416 429 3 432 408

Wotton 643 646 - 646 637

Stroud 718 693 13 706 737

Cheltenham 1,091 1,083 7 1,090 1,065

North Cotswold Deanery 713 703 12 715 698

Cirencester 784 769 6 775 744

Tewkesbury & Winchcombe 512 503 - 503 516

Parish Share contributions 5,916 5,881 51 5,932 5,811

Note 2

Income from the Church Commissioners 2014 2013

£’000 £’000

Guaranteed annuities 2 2

Grant re Bishop’s share of registrar’s retainer 28 27

Church Commissioner grants received 30 29

22


Note 3

Grants, donations & legacies 2014 2013

£’000 £’000

Ecclesiastical Insurance Group grant 106 101

Voluntary Schools Fund grants 224 217

Landfill Tax Credit Scheme grants - 12

Other grants 213 232

Other restricted grants/donations 36 58

Ordination Training (restricted) donations - 65

Bishop’s Mission (restricted) donation - 250

Donations 80 51

Grants, donations & legacies 659 986

Note 3a

Parish Giving Scheme

During the year, the Parish Giving Scheme (PGS) became a separate charitable company – Parish Giving

Scheme, incorporated on 23rd December 2013, registered as a charity on 17th March 2014. The charitable

activities of the PGS commenced on 1st November 2014 and were transferred from GDBF at that date.

The Parish Giving Scheme enables individuals to make donations restricted to a specific parish within the

Dioceses of Gloucester, Chichester, Winchester and Exeter, a grant is then made for the full donation plus

any relevant gift aid to the parish to which the gift is restricted. This is carried out on a monthly basis. In

2014 grants were made to parishes totalling £5,374k (2013: £3,562k) funded by donations of £4,336k

(2013: £2,872k) and related Gift Aid of £1,038k (2013: £690k). This activity is in support of the general

objectives of the DBF and therefore the costs of operating the scheme are borne from general funds and

through grants towards these costs, funded from the member Dioceses.

Note 4

Activities for generating funds

Inco

me

2014

Exp

enditure

2014

Net

Profit

2014 Inco

me

2013

Exp

enditure

2013 Net

Profit

2013

£’000 £’000 £’000 £’000 £’000 £’000

Rental of vacant housing 443 - 443 390 - 390

Investment Management costs - (35) (35) - (34) (34)

Other income (SLA etc) 51 - 51 33 - 33

Property Development: G&FS* 1,214 (1,043) 171 - (73) (73)

Educational services: JF Ltd* 47 (27) 20 55 (36) 19

Total 1,755 (1,105) 650 478 (143) 335

*The principal activity of Good & Faithful Servant (G&FS) is the development of property, whilst Jumping Fish’s

(JF Ltd) is the publication of educational materials and professional services, for advertisement of the Christian

religion

23


Note 5

Interest & dividends 2014 2013

£’000 £’000

Income from fixed asset investments 679 682

Other interest receivable and similar income 77 84

Interest & dividends 756 766

Note 6

Provision of clergy

2014 2013

£’000 £’000

National Church responsibilities:

Training of ordinands 259 250

Pooling of ordinand support costs (22) 3

Mission agencies pension contributions 15 10

Retired clergy housing costs (CHARM) & grants 79 81

Diocesan responsibilities:

Stipends and National insurance contributions 3,001 3,043

Clergy pension contributions 970 980

Housing costs including removal and resettlement 1,485 1,437

Selection of Ordinands 208 220

Diocesan training 99 85

Ministerial support - non-staff costs 306 341

- staff costs 423 547

Parish support during vacancy and illness 52 52

Other costs 58 58

Provision of clergy 6,933 7,107

24


Note 7

Provision of support services

Direct

costs

Over-

heads 2014 2013

£’000 £’000 £’000 £’000

Churches Buildings 96 53 149 150

Pastoral Committee 98 - 98 111

Social Responsibility inc families 185 - 185 211

Education (designated) 415 143 558 535

Youth Strategies (fixed term designated) - - - 10

Communications 125 53 178 128

Giving 115 - 115 92

Ann Edwards Charity 77 - 77 13

Legal & Professional 176 - 176 154

Grants made payable (see below) 43 - 43 132

Grant to Archbishops’ Council 222 - 222 230

Diocesan Office* 30 - 30 29

Provision of support services 1,582 249 1,831 1,795

* The administrative departments of the DBF undertake work on behalf of related organisations, such as the

Diocesan Trust and Voluntary Schools Fund. Whilst this is in certain respects a “direct cost” of providing

Services to other councils it is presented as an overhead to better reflect the nature of the cost.

25


Note 7 continued

Provision of services: Grants made 2014

Detail of grants over £1,000: number £’000 purpose

Cheltenham Minster 1 10 DV

Gloucester Churches Together 1 10 CR

Cheltenham Festivals 1 8 DV

Matson PCC 1 5 DV

All Saints Academy 1 5 DV

Churches Mutual Credit Union 1 5 DV

Grants made in the year 43

2014 2013 2014 2013

Summary of grants made: number number £’000 £’000

Church repairs (CR) 1 1 10 10

Landfill Tax Credit Scheme* (LT) - 1 - 12

Closure Support (CS) - 1 - 50

Development Grants (DV) 6 2 33 60

Grants made in the year 7 5 43 132

* Grants made under the Landfill Tax Credit Scheme were funded entirely by matching grants received from

the Gloucestershire Environmental Trust. The grants received are shown as donations in the incoming

resources section of the Statement of Financial Activities.

Note 8

Governance costs 2014 2013

£’000 £’000

Diocesan Office 10 11

Synod expenses 22 15

Auditor’s remuneration 18 16

Governance costs 50 42

26


Note 9

Net incoming/(outgoing) resources are stated after charging: 2014 2013

£’000 £’000

Depreciation 60 39

Auditors remuneration - audit 15 18

- non-audit 3 1

Interest on Church Commissioner’s loans:

Loan for Solar Panel installations 3 9

Value Linked Loans on parsonage houses 11 31

Operating leases: Land and buildings (note 23) 31 31

Operating leases: Other (note 23) 8 8

Note 10

Interest on long term loans 2014 2013

£’000 £’000

Interest on loans wholly or partly repayable beyond 5 years 9 24

All interest relates to value linked loans, being equity share loans made to the DBF by the Church

Commissioners in respect of Parsonage Housing (note 6).

27


Note 11

Employees and office holders 2014 2013

Costs of employees and officer holders £’000 £’000

salaries and stipends 1,268 1,193

social security costs 98 103

other costs - 95

other pension costs 443 457

Employees, incl. clergy in DBF employment: 1,809 1,848

stipends 2,883 2,812

social security costs 224 227

pension costs 1,009 980

Parochial clergy funded by the DBF: 4,116 4,019

2014 2013

Number of employees including clergy in DBF employment Number Number £’000

Full time equivalent 40 39

Parochial clergy funded by the DBF 126 129

The number of employees whose emoluments exceeded £60,000 were as follows:-

Employees earning between £60,001 and £70,000 - 1

Employees earning between £70,001 and £80,000 1 -

The employer's pension contribution for staff earning over £60,000 was £19,549. (2013: £18,367)

Certain directors of the Board who are also clergy received benefits during the year from the Board

as part of its normal charitable activity of providing a stipend and housing for clergy in the diocese.

These benefits are disclosed as related party transactions in note 24 below.

28


Note 12

Pensions

Church of England Funded Pensions Scheme

The Gloucester Diocesan Board of Finance participates in the Church of England Funded Pensions

Scheme and employs 127 (2013: 123) members of the Scheme out of a total membership of

approximately 8,400 active members.

The Church of England Funded Pensions Scheme is a defined benefit scheme but the Gloucester

Diocesan Board of Finance is unable to identify its share of the underlying assets and liabilities - each

employer in that scheme pays a common contribution rate. A valuation of the Scheme was carried out

as at 31 December 2012. This revealed a shortfall of £293m, with assets of £896m and a funding target

of £1,189m, assessed using the following assumptions:

An investment strategy of:

for investments backing liabilities for pensions in payment, an allocation to gilts, increasing

linearly from 10% at 31 December 2012 to 2/3 by 31 December 2029, with the balance in

return-seeking assets; and

for investments backing liabilities prior to retirement, a 100% allocation to return-seeking

assets.

Investment returns of 3.2% pa on gilts and 5.2% pa on equities;

RPI inflation of 3.2% pa (and pension increases consistent with this);

Increase in pensionable stipends of 3.2% pa; and

Post-retirement mortality in accordance with 80% of the S1NMA and S1NFA tables, with

allowance made for improvements in mortality rates from 2003 in line with the CMI 2012 core

projections, with a long term annual rate of improvement of 1.5% for males and females.

For schemes such as the Church of England Funded Pensions Scheme, paragraph 9(b) of FRS 17

requires the Gloucester Diocesan Board of Finance to account for pension costs on the basis of

contributions actually payable to the Scheme in the year.

Following the results of the 2012 valuation, the Gloucester Diocesan Board of Finance’s contribution

rate is due to increase from 38.2% to 39.9% of pensionable stipends from 1 January 2015 (of which

14.1% will be in respect of the £293m shortfall in the Scheme and 25.8% is in respect of accrual of

future benefits and the day-to-day expenses of running the Scheme).

Contributions rates will be reviewed at the next valuation of the Scheme, due as at 31 December

2015.

29


Note 12 cont.

Pensions cont.

Church of England Pension Builder Scheme

For eligible salaried employees who commenced employment after1st January 2013, the Gloucester

Diocesan Board of Finance participates in the Church of England Pension Builder Scheme (PBS),

within the Church Workers Pension Fund.

The PBS is a defined benefit scheme, which is administered by the Church of England Pensions

Board and provides benefits at retirement based on contributions made to the PBS prior to the

date of retirement.

The assets of the PBS are held separately from those of the employer. As at the formal valuation at

December 2010, the PBS was in surplus on an ongoing funding basis. A formal valuation of the PBS

is being carried out as at December 2013 but, as at February 2015, the final results have yet to be

announced. Pension Builder 2014 commenced in February 2014 so will be included in the next

valuation due as at December 2016.

The Gloucester Diocesan Board of Finance is unable to identify its share of the underlying assets

and liabilities as each employer is exposed to actuarial risks associated with the current and former

employees of other entities participating in the PBS. For schemes like this, paragraph 9(b) of

financial Reporting Standard 17 (FRS17) required the Gloucester Diocesan Board of Finance to

account for pension costs on the basis of contributions actually payable to the Scheme in the year.

The Gloucester Diocesan Board of Finance contributes 20% of basic salary and the employees are

required to contribute a minimum contribution of 3.3%. The Gloucester Diocesan Board of

Finance’s contributions for the year totalled £25,064 and there was £1,410 outstanding at the year

end.

The Gloucester Diocesan Board of Finance had 14 (5 at 31st December 2013) active members in

the PBS at 31 December 2013.

Church of England Defined Benefits Scheme

The Employer participates in the Church of England Defined Benefits Scheme (DBS), part of the

Church Workers Pension Fund. It is not possible for an individual employer to determine its share

of the underlying assets and liabilities as each employer, through the Life Risk Pool, is exposed to

actuarial risks associated with the current and former employees of other entities participating in

the DBS. In such cases, FRS 17 requires the employer to account for its contributions to the DBS

as if it were a defined contribution scheme but to make certain additional disclosures based on

available information. The required disclosures, together with a description of the operation of the

DBS, are given below.

For funding purposes, the DBS is divided into sub-pools in respect of each participating employer as

well as a further sub-pool, known as the Life Risk Pool. The Life Risk Pool exists to share certain

risks between employers, including those relating to mortality and post-retirement investment

returns.

30

The division of the Scheme into sub-pools is notional and is for the purpose of calculating ongoing

contributions. They do not alter the fact that the assets of the Scheme are held as a single trust

fund out of which all the benefits are to be provided. From time to time, a notional premium is

transferred from employers’ sub-pools to the Life Risk Pool and all pensions and death benefits are

paid from the Life Risk Pool.

If following an actuarial valuation of the Life Risk Pool there is a surplus or deficit in the pool and

the Actuary so recommends, further transfers may be made from the Life Risk Pool to the

employers’ sub-pools, or vice versa. The amounts to be transferred (and their allocation between

the sub-pools) will be settled by the Church of England Pensions Board on the advice of the

Actuary.

A valuation of the DBS is carried out once every three years. In the 31 December 2010 valuation,

the Life Risk Section was shown to be in deficit by £6.7m and some £5.5m was notionally

transferred from the employers’ sub-pools to the Life Risk Pool. This increased the employer’s

contributions that would otherwise have been payable. At 31st December 2014, the Employer had

28 active members and 26 deferred members in the fund.

The next valuation of the DBS was carried out as at 31st December 2013 but, as at February 2015

resulting contributions have yet to be formally agreed.

31


Note 13a Group

Tangible Fixed Assets

Assets

under

construction

Leasehold

property

improvements

Freehold

Property

Office

Equipment Total

Cost or valuation: £’000 £’000 £’000 £’000 £’000

At 1 January 2014 175 177 47,508 113 47,973

Additions 513 31 834 44 1,422

Disposals (116) - - - (116)

Revaluation - - 25 - 25

At 31 December 2014 572 208 48,367 157 49,304

Depreciation:

At 1 January 2014 - - 64 45 109

Charge for year - 10 29 21 60

Disposals - - - - -

At 31 December 2014 - 10 93 66 169

Net book value:

At 1 January 2014 175 177 47,444 68 47,864

At 31 December 2014 572 198 48,274 91 49,135

Freehold properties include Glenfall House, the diocesan retreat and conference centre, at valuation. See note 19

for details.

The Board has vested in it two redundant churches. One is leased to the Methodist Church on a long lease at a

peppercorn rent. The other is held pending disposal. No value is attributed to these properties.

32


Note 13b Parent

Tangible Fixed Assets

Assets

under

construction

Leasehold

property

improvements

Freehold

Property

Office

Equipment Total

Cost or valuation: £’000 £’000 £’000 £’000 £’000

At 1 January 2014 175 177 46,397 113 46,862

Additions 513 31 834 44 1,422

Disposals (116) - - - (116)

Revaluations - - 25 - 25

At 31 December 2014 572 208 47,256 157 48,193

Depreciation:

At 1 January 2014 - - 58 45 103

Charge for year - 10 29 21 60

Disposals - - - - -

At 31 December 2014 - 10 87 66 163

Net book value:

At 1 January 2014 175 177 46,339 68 46,759

At 31 December 2014 572 198 47,169 91 48,030

33


Note 14a Group

Fixed Asset Investments

Properties

Assets

under

construction Investments

Total

2014 2013

£’000 £’000 £’000 £’000 £’000

Market value at 1 Jan 2014 3,771 375 18,847 22,993 21,155

Additions - 29 661 690 1,097

Disposals (27) (9) (3,671) (3,707) (947)

Unrealised inv. gains/(losses) 1,590 - 947 2,537 1,688

Market Val at 31 Dec 2014 5,334 395 16,784 22,513 22,993

Historic cost at 31 Dec 2014 - - 12,272 12,272 14,558

Gains on investment assets

Unrealised gains (as above) - - 947 947 1,688

Glebe revaluation (as above) 1,590 - - 1,590 -

Gain/(loss) realised on disposal (57) - 17 (40) 206

Total investment gains 1,533 - 964 2,497 1,894

Note 14b Parent

Fixed Asset Investments Properties

Assets

under

construction Investments

Total

2014 2013

£’000 £’000 £’000 £’000 £’000

Market value at 1 Jan 2014 3,771 375 18,972 23,118 20,645

Additions - 29 661 690 1,748

Disposals (27) (9) (3,671) (3,707) (947)

Unrealised inv. gains/(losses) 1,590 - 914 2,504 1,672

Market Val at 31 Dec 2014 5,334 395 16,876 22,605 23,118

Historic cost at 31 Dec 2014 - - 11,915 11,915 14,915

Gains on investment assets

Unrealised gains (as above) - - 914 914 1,672

Glebe revaluation (as above) 1,590 - - 1,590 -

Gain/(loss) realised on disposal (57) - 17 (40) 207

Total investment gains 1,533 - 931 2,464 1,879

34


Investments comprise:- Group Parent

2014 2013 2014 2013

£’000 £’000 £’000 £’000

(i) Listed investments (equities)

UK Investments 6,024 5,748 5,886 5,620

Non-UK investments 5,944 6,428 5,847 6,329

11,968 12,176 11,733 11,949

(ii) Listed investments (fixed interest)

UK Investments 914 728 914 728

Listed Investments total 12,882 12,904 12,647 12,677

(iii) Unlisted investments

Property 2,180 1,897 2,127 1,850

Fixed Interest 1,410 3,586 1,148 3,342

Other 312 460 304 452

(iv) Good and Faithful Servant Limited - - 650 650

The Board owns 100% of the issued ordinary share capital of this company which is incorporated in the UK.

The principal activity of this company was the development of property, with a view to donate profits to the

parent company, the Gloucester Diocesan Board of Finance Limited.

(v) Jumping Fish Limited - - - -

The Board owns 100% of the issued ordinary share capital of this company which is incorporated in the UK.

The principal activity of this company was the publication of educational materials and professional services,

for advertisement of the Christian religion (share capital of £1).

Listed Investments total 16,784 18,847 16,876 18,972

Note 15

Stock and Work In Progress

Stock and work in progress comprises work in progress amounting to £1,267k (2013: £330k) in relation to

property developments undertaken by the Good & Faithful Servant Ltd. Work in progress is valued at the

lower of cost and net realisable value.

35


Note 16a

Consolidated group debtors Due within one year Due after one year

2014 2013 2014 2013

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 1,212 588 58 79

Staff car loans 3 1 5 -

Loans to parishes 66 78 267 249

Parish Giving Scheme - - 102 -

Due from the Church Commissioners 1 129 - -

Debtors 1,282 796 432 328

Included in debtors is an amount of £96k (2013- £191k) due from related charities. These charities are

administered by staff of the Board, but the trustees are separate from the directors of the Board.

Note 16b

Parent company debtors Due within one year Due after one year

2014 2013 2014 2013

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 379 379 58 80

Staff car loans 3 1 5 -

Loans to parishes 66 78 267 249

Good & Faithful Servant Ltd 1,241 824 500 -

Jumping Fish Ltd 24 71 - -

Ann Edwards Charity - 11 - -

Voluntary Schools Fund 45 95 - -

Parish Giving Scheme - - 102 -

Diocese of Gloucester Academies Trust 5 6 - -

Due from the Church Commissioners 1 129 - -

Debtors 1,764 1,594 932 329

The Good and Faithful Servant Limited balance relates to a loan for working capital to fund ongoing capital

projects. Included in debtors is an amount of £120k (2013 - £273k) due from related charities. These charities

are administered by staff of the Board, but the trustees are separate from the directors of the Board.

36


Note 17a

Consolidated group creditors Due within one year Due after one year

2014 2013 2014 2013

£’000 £’000 £’000 £’000

Accruals and sundry creditors 476 336 - -

Loans 60 60 - -

CBF Loan (Solar Panels) - - 750 750

Value Linked Loans (Church Commissioners) 217 217 434 434

PGS: Loans from other Dioceses - 40 - -

Creditors 753 653 1,184 1,184

Included in 'Accruals and sundry creditors' is a total of £54k (2013 - £51k) due to related charities which are

administered by staff of the Board and whose trustees are also trustees of the Board.

Value linked loans from the Church Commissioners are repayable on sale of the property to which they relate.

Any capital profit or loss arising on sale of the property accrues to the Church Commissioners and the Board in

proportion to the equity invested.

Note 17b

Parent company creditors Due within one year Due after one year

2014 2013 2014 2013

£’000 £’000 £’000 £’000

Accruals and sundry creditors 273 357 - -

Loans 60 60 - -

CBF Loan (Solar Panels) - - 750 750

Ann Edwards Charity 7 - - -

Value Linked Loans (Church Commissioners) 217 217 434 434

PGS: Loans from other Dioceses - 40 - -

Creditors 557 674 1,184 1,184

Included in 'Accruals and sundry creditors' is a total of £61k (2013 - £51k) due to related charities which are

administered by staff of the Board and whose trustees are also trustees of the Board.

Value linked loans from the Church Commissioners are repayable on sale of the property to which they relate.

Any capital profit or loss arising on sale of the property accrues to the Church Commissioners and the Board in

proportion to the equity invested.

37


Note 18

Analysis of net assets by fund:

Summary

Gen

eral

Funds

Des

ignate

d

Funds

Res

tric

ted

Funds

Endow

men

t

Funds

Total

Funds at 31 Dec 2014 are represented by: £’000 £’000 £’000 £’000 £’000

Tangible fixed assets 333 13,845 1,585 33,372 49,135

Fixed asset investments - 858 1,579 20,076 22,513

Current assets 4,117 940 727 - 5,784

Creditors (1,281) (651) (5) - (1,937)

Inter-fund indebtedness (2,498) (1,007) (1,440) 4,945 -

Total Funds at 31 Dec 2014 671 13,985 2,446 58,393 75,495

Funds include the following unrealised gains on investments:

Unrealised gains at 1 Jan 2014 1,450 124 429 5,545 7,548

Net gains on revaluation in the year - 36 87 2,414 2,537

Unrealised gains at 31 Dec 2014 1,450 160 516 7,959 10,085

Inter-fund indebtedness arises as a result of transactions relating to certain funds being effected through the

General Fund. Such indebtedness is settled periodically, usually by cash transfer.

38


Note 18 (continued)

Analysis of net assets by fund

Detail

Tangi

ble

Fixe

d A

sset

s

Fixe

d A

sset

Inve

stm

ents

Curr

ent

Ass

ets

Cre

ditor

s

Inte

r-fu

nd

Indeb

tednes

s

Total

£’000 £’000 £’000 £’000 £’000 £’000

General Fund 333 - 4,117 (1,281) (2,498) 671

Development - 858 940 - (858) 940

Albright general 1,200 - - - (50) 1,150

Houses capital 12,474 - - (651) (750) 11,073

Curates’ Housing Fund - - - - 652 652

Education 1 - - - (1) -

Viney Hill 170 - - - - 170

Designated Funds 13,845 858 940 (651) (1,007) 13,985

Housing for elderly clergy - 37 38 - 43 118

Ordination training - 161 - - 97 258

Diocesan Pastoral Fund 575 1,057 131 - (1,227) 536

Stratton Davis - 283 25 - (10) 298

Bishop’s Mission Fund - - - - 108 108

Ann Edwards Charity 1,010 - 500 (1) - 1,509

Education - - - - 17 17

Other restricted funds - 41 33 (4) (468) (398)

Restricted Funds 1,585 1,579 727 (5) (1,440) 2,446

Pensions & assistance - 128 - - 136 264

Benefice Property 29,469 - - - (709) 28,760

Diocesan Stipends Fund 635 13,932 - - 5,153 19,720

Ann Edwards Charity 95 558 - - - 653

Glebe Property 3,173 5,458 - - 365 8,996

Endowment Funds 33,372 20,076 - - 4,945 58,393

Total Funds at 31 Dec 2014 49,135 22,513 5,784 (1,937) - 75,495

39


Note 19

Designated funds

Bala

nce

at

1 Jan 2

014

Inco

min

g

Res

ourc

es

Res

ourc

es

Exp

ended

Net

gain

s/(los

ses)

on a

sset

s

Tra

nsf

ers*

Bala

nce a

t

31 D

ec 1

4

£’000 £’000 £’000 £’000 £’000 £’000

Development Fund 983 29 (108) 36 - 940

Albright Bequest 1,150 - - - - 1,150

Houses Capital 9,108 - - - 1,965 11,073

Curates’ Housing Fund 709 79 (136) - - 652

Education - 328 (554) - 226 -

Viney Hill development 170 - - - - 170

Total Funds at 31 Dec 2014 12,120 436 (798) 36 2,191 13,985

Unrestricted funds are monies available for use at the discretion of the Board. The General Fund is for the day

to day running of the Board, and is funded by the parish share. However, certain funds have been earmarked

for particular purposes, and these are termed designated funds. Such funds are kept separate for administrative

purposes but do not constitute legally separate funds.

The Development Fund has been designated to make a fund available to finance mission initiatives approved by

Bishop’s Council.

The Albright Bequest represents monies bequeathed by Miss Albright. From this bequest two loans were made

to Glenfall House Trust (GHT) secured on the freehold of Glenfall House which is owned by the GHT. The

directors are of the opinion that the terms of these loans are such that the ultimate benefits and liabilities of

ownership of Glenfall House remains with the Board with a right to use the house granted to the GHT. Glenfall

House has therefore been recognised as an asset of the Board of Finance in accordance with FRS5. It is included

in the balance sheet at £1.2m based on a valuation carried out in 2000 by a qualified chartered surveyor.

*The Houses Capital Fund represents the cost, less outstanding loans, of houses owned by the Board to provide

accommodation for assistant curates and team vicars. In 2014 a review was undertaken to ensure both recent

and historic pastoral changes, and the subsequent movement in housing assets, had been correctly reflected in

the relevant funds. This resulted in a transfer of assets valued at £3,850k from Benefice Property, to the Houses

Capital Fund (£1,965k) and Glebe Property (£1,885k) respectively (see also note 21).

The Curate’s Housing Fund was established in 2009 using proceeds from the sale of curate’s housing to fund

housing allowances for curates to enable them to purchase their own house and thereby make better provision

for their retirement.

The Education Fund brings together the Education work undertaken by GDBF in one column with income

specific to that activity, primarily from the Voluntary Schools Fund and St Matthias Trust. The transfer from the

General Fund at the year-end is the portion of this work funded by the general fund, and by extension Parish

Share.

The Viney Hill Fund relates to a property owned by GDBF, but used by Viney Hill Adventure Centre for

charitable purposes consistent with those of the GDBF.

40


Note 20

Restricted funds

Bala

nce

at

1 Jan 2

014

Inco

min

g

Res

ourc

es

Res

ourc

es

Exp

ended

Net

gain

s/(los

ses)

on a

sset

s

Tra

nsf

ers

Bala

nce a

t

31 D

ec 1

4

£’000 £’000 £’000 £’000 £’000 £’000

Housing for elderly clergy 114 2 - 2 - 118

Ordination training 249 - - 9 - 258

Diocesan pastoral fund 514 48 (25) 56 (57) 536

Stratton Davis fund 278 12 (10) 18 - 298

Bishop’s Discretionary Mission Fund 185 25 (102) - - 108

Ann Edwards Charity 1,545 42 (78) - - 1,509

Education 10 10 (3) - - 17

Brinkman High School DWT (13) 26 (13) - - -

Parish Giving Scheme - 5,374 (5,374) - - -

Other (311) 50 (102) 2 (37) (398)

Total Funds at 31 Dec 2014 2,571 5,589 (5,707) 87 (94) 2,446

Restricted funds may only be used for the purposes for which the money was originally gifted or bequeathed to

the Board.

The Housing for Elderly Clergy Fund derives from various bequests and is used to give assistance to retired

clergy of the diocese in difficulty with their housing requirements.

The Ordination Training Fund derives from various bequests, principally from the late Mrs. M Harries. The

income is used to fund ordination training.

The Diocesan Pastoral Fund is derived principally from the proceeds of sale of surplus parsonage houses as a

result of pastoral reorganisations under the Pastoral Measure 1983. Under the Measure, the Fund must be used

firstly in connection with expenses relating to pastoral schemes and redundant churches. To the extent that it is

considered that any remaining funds are not required, or are not likely to be required, for these purposes then

the funds may be applied to any general purpose of the Board. Periodically, excess funds are allocated to

designated funds. See note 21 for description of 2014’s transfer.

The Stratton Davis Fund arises from a bequest received in 2001 from the estate of the late Mr. David Stratton

Davis. The terms of the settlement are that the fund may be used for the repair or restoration of churches and

their fixtures and fittings in the diocese. The Board has decided initially to use the income to make an annual

grant to the Gloucestershire Historic Churches Trust.

The Bishop’s Discretionary Mission Fund derives from a donation received in 2013 and restricted to mission

works of the Church of England at the Bishop of Gloucester’s discretion. The Charity of Ann Edwards

restricted funds comprise the Extraordinary Repair Fund (ERF) and the Cyclical Maintenance Fund (CMF).

These funds were established in the governing instrument and are for future repairs and maintenance. Transfers

are made each year as described in note 5. The Inter-fund indebtedness between this fund and the General fund

relates to uncompleted transfers of cash from the Repair Fund for extraordinary repairs and communal services.

41


Note 20 (continued)

A restricted grant for £10k was given to the Education department in 2013 by the Coleford Brinkdale Trust

for the RE Learning Wall Project. The Learning Walls Project involves working with RE subject leaders in 6

schools in the Diocese to produce a web based resource to improve focussed integrated assessment

The Brinkman High School DWT restricted fund is made up of donations from 2013’s Episcopal services and

direct donations from parishes and individuals which the GDBF promised to match fund when making grants

to the Diocese of Western Tanganyika (DWT) for building and furnishing the Brinkman High School.

The Other Restricted funds include a negative fund balance of £398k for Glebe revenue. This relates to

glebe rental income less professional fees, repairs and maintenance against Glebe assets (the asset is held in

the Glebe Property endowment fund – see note 21). The transfer of £37k relates to an internal management

charge to the general fund.

Note 21

Endowment funds

Bala

nce

at

1 Jan 2

014

Inco

min

g

Res

ourc

es

Res

ourc

es

Exp

ended

Net

gain

s/(los

ses)

on a

sset

s

Tra

nsf

ers*

Bala

nce a

t

31 D

ec 1

4

£’000 £’000 £’000 £’000 £’000 £’000

Pensions & assistance 253 - - 11 - 264

Benefice property 32,585 - - 25 (3,850) 28,760

Diocesan stipends fund 18,951 - (28) 797 - 19,720

Ann Edwards Charity 620 - - 33 - 653

Glebe property 5,521 - - 1,533 1,942 8,996

Total Funds at 31 Dec 2013 57,930 - (28) 2,399 (1,908) 58,393

Permanent endowment funds represent money that must be permanently held as capital, and may not be spent

as income. Expendable endowment funds represent money that must be held as capital, but may be expended

when certain conditions are satisfied.

The Pensions & Assistance Fund is permanent endowment represented by a house used to provide

accommodation for retired clergy, and a cash balance arising from the sale of a second house.

The Benefice Property Fund represents the value of benefice houses. These houses are owned by benefices, but

are recognised as assets by the Board under FRS5 – see Accounting Policy f on page 13 for details. The fund is

classified as expendable endowment as under certain conditions the value of the houses may be realised and the

proceeds used as income.

*In 2014 a review was undertaken to ensure both recent and historic pastoral changes, and the subsequent

movement in housing assets, had been correctly reflected in the relevant funds. This resulted in a transfer of

assets valued at £3,850k from Benefice Property, to the Houses Capital Fund (£1,965k) and Glebe Property

(£1,885k) respectively (see also note 19). The remaining transfer balance of £57k into the Glebe property fund

relates to a redevelopment which was held in the Diocesan Pastoral fund, but reverted back to Glebe when the

redevelopment was written off (see note 20).

The Diocesan Stipends Fund (DSF) represents ancient endowments and other gifts and legacies. The Fund is

governed principally by the Diocesan Stipends Funds Measure 1953 and the Endowment and Glebe Measure

1976, as amended. The Fund is mainly invested in CBF managed funds. Income generated from the Fund must

be used to fund stipends. The Fund is expendable under certain circumstances.

42


Note 21 (continued)

The Endowment Fund of the Charity of Ann Edwards represents the original endowment of the charity,

comprising mainly the sale proceeds of Edwards College, the original almshouse in South Cerney. This

money may not be spent as income.

Glebe property represents glebe land previously held by incumbents but transferred to the Board under the

Endowment and Glebe Measure 1976. Income derived from rents must be used to fund stipends. Proceeds

of sale of glebe land must be transferred to the DSF.

Note 22

Reconciliation of net (outgoing)/incoming resources to net cash

(outflow)/inflow from activities 2014 2013

£’000 £’000

Net (outgoing)/incoming resources for the year (746) 162

Depreciation 60 39

(Increase)/Decrease in stock (937) (330)

(Increase) in debtors and prepayments (590) (57)

Increase in creditors and accruals 100 58

Investment income and interest paid (747) (742)

Loss/(surplus) on disposal of tangible fixed assets 116 (1,149)

Cash outflow from operating activities (2,744) (2,019)

Note 23

Financial Commitments: Operating Leases

2014 2013

Annual commitments in respect of operating leases £’000 £’000

which expire within one year - -

which expire between two and five years 16 8

Operating leases; equipment 16 8

which expire within one year 6 6

which expire between two and five years 25 25

Which expire after five years - -

Operating leases; property 31 31

Operating leases; property - Church House (£3k per month) and 9 College Green (£1k per month) are on

rolling monthly leases, with a lease signed for 4 College Green to 1st February 2018 (£25k annual), and an

annual lease for 3 Dollar Street (£2k a quarter).

43


Note 24

Related Party Transactions

Payments to Trustee Directors

Certain directors are also holders of ecclesiastical office and receive a stipend, pension and

accommodation to enable them to meet the duties of their office and not their duties as trustees.

Stipends payable were in the range £24,380 to £33,010 (2013: £23,900 to £32,360). Pension

contributions are as for the Church of England Funded Pension Scheme outlined in note 12. The

number of directors receiving these stipends and benefits was 10 (2013 - 12). In addition two (2013:

two) directors received reimbursement of expenses in connection with their ecclesiastical office.

Directors’ expenses for 2014 and 2013 were less than £1,000.

gloucester diocesan board of finance annual report & accounts 2014 · 2016. 11. 30. · 5...

Documents