gloucester diocesan board of finance annual report ... · revd canon john wright (resigned 30/1/13)...

DS13/05

Gloucester Diocesan Board of Finance

Annual Report & Accounts 2012

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Contents

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

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

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

Report of the auditors....................................................................... 9

Accounting policies .......................................................................... 11

Statement of financial activities ..................................................... 14

Summary income & expenditure account................................... 15

Statement of total recognised gains & losses............................. 15

Balance sheet ..................................................................................... 16

Statement of cash flows .................................................................. 18

board of directors Rt Revd Michael Perham (President) Mary Adlard (Chair – apt 13/10/12) Richard Bach (resigned 30/8/12) Revd Craig Bishop (apt 1/8/12) Revd Nicholas Bromfield (apt 12/9/12) Canon Nigel Chetwood (apt 12/9/12) Revd Skye Denno (resigned 30/8/12) Revd Mark Evans (resigned 30/8/12) Revd Deborah Foreman (apt 29/9/12) Anna Griffiths (apt 29/9/12) Dr Steve Grindrod (apt 12/9/12) Revd Canon N Heavisides (resigned 30/8/12) Very Revd Stephen Lake Anthony McFarlane Canon Ian Marsh Revd Canon Richard Mitchell Revd Canon M. Parsons (apt 12/9/12) Les Reilly Revd Jacqueline Rodwell Tom Rucker Henry Russell (apt 12/9/12) Helen Sammon (resigned 30/8/12) Ven Geoffrey Sidaway (resigned 30/6/12) Prof Jennifer Tann Revd Canon Celia Thompson (resigned 30/8/12) Ven Jackie Searle (apt 12/9/12) Revd David Smith Graham W Smith Ven Robert Springett Michael Storey (apt 24/10/12) Rt Revd John Went (resigned 11/3/13) Revd Canon John Wright (resigned 30/1/13) principal officers Benjamin Preece Smith – Secretary

Notes to the accounts..................................................................... 19

solicitor Jos Moule; Diocesan Registrar Veale Wasborough Vizards Orchard Court, Orchard Lane Bristol BS1 5WS

auditors Mazars LLP Clifton Down House, Beaufort Buildings Clifton Down, Clifton, Bristol BS8 4AN

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

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How have we done? Highlights from this year’s accounts

number of stipendiary clergy funded 2012: 2011: change: 131 131 0

parish share contributions 2012: 2011: change:

£5.6m £5.6m 0%

general fund (ongoing) deficit for the year* 2012: 2011: change:

£1.2m £0.7m +71%

balance sheet value (nett assets) 2012: 2011: change:

£72m £71m +1% *Calculated as nett incoming resources before gains less exceptional items

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Directors’ report for the year ended 31 December 2012

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 five 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

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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 was under review but owing to restructuring was not introduced in time for the start of a new triennium. The Secretary will ensure suitable training is undertaken in 2013.

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

the 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;

the Audit Committee (Chair – Thomas Rucker) reports to the DBF on matters relating to the auditors, the annual accounts and internal controls. It also acts as the risk management group;

the 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;

the 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:

The 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.

The 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.

The Church of England Pensions Board, which provide pensions for clergy the 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).

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 organisations within the diocese, primarily PCCs and schools.

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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.

The objectives of the Board, as set out above, is to support the work of the Church of England. The activities the Church undertakes may be classed into four categories, each of which the GDBF supports directly.

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.

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.

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.

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Financial Review

Ongoing Activities

The outturn for 2012 was a great disappointment. The “ongoing loss” on the basis previously reported (nett general fund reserves less exceptional items) was £1.2m. This has a number of causes, both underlying concerns and one-off (but not “exceptional”) items.

The principle cause of the high deficit in 2012 was failure to match the budgeted level of Parish Share. The budgeted parish share was £6.0m producing a budget deficit of £0.6m. The actual collection of £5.6m therefore raised the deficit expected to £1.0m. This shortfall is very disappointing as the national church has produced information on parish share which shows that Gloucester’s parish share has failed to keep pace with inflation and the rates of increase being experienced more widely in the Church. Another national report shows that personal donations to parishes have been increasing substantially, significantly supported by GDBF officers. Voluntary income to PCCs within the diocese in 2006 was £9.1m, by 2010 it had increased to £12.1m, a £3m increase. Of this £3m increase only £0.2m was passed on in Parish Share.

As a result of this substantial expected shortfall the Board radically adjusted its five year plan, maintaining the ultimate objective of achieving a balanced budget by 2015 but with a much greater level of ongoing cost reductions to meet this challenge. This had a significant impact of increasing in year costs to fund redundancies and restructuring. The result of this restructure has increased the overall deficit in 2012 by around £0.3m, offset only slightly by Good & Faithful Servant’s (G&FS) profits for the year of £0.1m.

As well as cost cutting, the Board sought to address the underlying lack of engagement with Parish Share. +Michael has led a series of presentations around the diocese to ensure the crucial link between the capacity of the DBF to fund parochial ministry and Parish Share is understood by all PCC officers in the diocese.

Other Activities

Cash-flow remained difficult in the year due to delayed house sales. This situation was alleviated in early 2013.

Investment performance and 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 an independent investment advisor 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.

Investment markets in 2012 were good, however there continues to be a significant difference in income yield between the two portfolios (Rathbones being substantially lower in income yield than the historic CCLA holdings), putting some pressure on the SoFA by suppressing investment income. The investment income from the installation of panels on vicarages has helped partially redress this issue in 2012.

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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 2012 between £2.1m and £4.2m). This level is considered prudent to account 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 2012, free reserves stood at £1.0m which is below the bottom end of the specified range. This is partially addressed by the sale of houses in early 2013 and ongoing cost savings but will remain under review. The high level of designated funds provides comfort that this is not a going concern issue.

Plans for future periods

Budget 2013 and onwards As noted above the Board has taken a radical approach to ensuring a balanced budget by 2015. This has included £327k of ongoing cost reductions, virtually all relating to support and governance services. A further £100k of cost reductions from services is planned for 2014 as well as the loss of four and a half full-time equivalent clergy posts before the end of 2015. Further cuts to the budget will be made in 2014 for 2015 if necessary.

The revised parish share budget for 2013 is on target.

The Board therefore anticipates a substantial reduction in the ongoing deficit in 2013.

Glenfall House With great sadness the diocesan retreat house at Glenfall will close on 31 July 2013. Shortly thereafter the property will revert to the GDBF to be sold commercially. Funds from the sale will remain designated until a permanent alternative provision for retreat and spirituality support is in place.

Lay pension scheme The Defined Benefit pension scheme for lay staff has an indicative deficit attributed to Gloucester DBF of £1.3m; this will be met by monthly payments against a fifteen year period until such time as the Board feels able to fund the deficit by a lump-sum payment. The DBF reluctantly made the decision to close the scheme to new members in March 2012.

Glebe The current planning environment is highly favourable to development of glebe land; as a result there will be a substantial increase in the amount of actively promoted sites in 2013, with sales following in due course.

Good and Faithful Servant Ltd G&FS have a good order book but due in part to the organisational restructure and departure of the Property Manager these may not materialise until 2014.

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Risk Management

The Directors confirm that the major risks, to which GDBF is exposed, as identified by the management and Directors, have been reviewed and that systems have been established to manage those risks. Directors delegated to the Audit Committee the task of ensuring that risks are reviewed. Department heads have defined the risks in their areas, reporting on the measures in place to manage and monitor such risks, implementing procedures designed to minimise any potential impact on GDBF should any of the risks materialise.

Audit Committee members review the risk register and report to Bishop’s Council their findings and also make recommendations as to areas for further work.

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.

Appointment of Auditors A resolution to reappoint Mazars LLP as auditors to the Company and to authorise the Directors to fix their remuneration will be proposed at the Annual General Meeting.

+ Michael Gloucestr: Mary Adlard President, Gloucester DBF Chair, Gloucester DBF

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Audit report for the year ended 31 December 2012

We have audited the financial statements of Gloucester Diocesan Board of Finance for the year ended 31 December 2012 which comprise the Group Summary Income and Expenditure Account, the Consolidated Statement of Recognised Gains and Losses, the Group and Parent Charitable Company Balance Sheets, 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 auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 8, 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.

We have been appointed auditor under the Companies Act 2006 and section 151 of the Charities Act 2011 and report in accordance with those Acts. 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 Ethical Standards for Auditors. This report is made solely to the company’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 charitable company’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 charitable company and the charitable company’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 website 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’s and the parent charitable company’s affairs as at 31 December 2012 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 and the Charities Act 2011.

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

Opinion on the other matter prescribed by the Companies Act 2006

In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

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 and the Charities Act 2011 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 financial statements are not in agreement with the accounting records and returns; or

certain disclosures of trustees’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit..

I Holder (Senior Statutory Auditor)

for and on behalf of Mazars LLP

Chartered Accountants and Statutory Auditor

Clifton Down House Beaufort Buildings Clifton Bristol BS8 4AN

Date

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

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Accounting policies for the year ended 31 December 2012

These financial statements have been prepared 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. 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.

The Board is a registered charity and so achievements cannot be measured by normal commercial criteria of profit and loss. Accordingly, in order to give a true and fair view, the directors have applied the provisions of section 396(5) of the Companies Act 2006 and have presented a Statement of Financial Activities instead of a Profit and Loss Account. This has been prepared in accordance with the SORP and in the opinion of the directors better reflects the nature of the Board’s activities.

These financial statements consolidate the results of the charitable company and its wholly-owned subsidiaries on a line by line basis. 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 £1,335k (2011: deficit of £1,435k).

For the first time, the Ann Edwards Charity (AEC) accounts were consolidated into the accounts as the Trustees felt the changing of the AEC’s charitable objectives were now wide enough to fit with the GDBF’s. The prior year comparison has been restated accordingly.

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. Overheads have been allocated to various cost headings primarily 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.

Parish Giving Scheme The Parish Giving Scheme enables individuals to make a donation to GDBF, which is restricted to a specific parish. GDBF makes a grant to the relevant parish for the full value of this gift and any related gift aid within ten days of receipt.

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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:

Office equipment 20% Office furniture 12½%

Telephone equipment 20% Computer equipment 25%

Hire equipment 25% Vehicles 20%

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 Office equipment is stated at cost less accumulated depreciation.

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.

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.

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.

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• 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.

Consolidated statement of financial activities for the year ended 31 December 2012

Gen

eral

fu

nd

Des

igna

ted fu

nds

Res

tric

ted

fund

s

Endo

wm

’t

fund

s

Total

2012

(restated)

Total

2011

Incoming resources Not

es

£’000 £’000 £’000 £’000 £’000 £’000

Voluntary income:

parish share contributions 1 5,550 - - - 5,550 5,553 church commissioners 2 30 - - - 30 26 grants, donations & legacies 3 240 354 55 - 649 647 parish giving scheme 3a - - 1,332 - 1,332 796 Activities for generating funds 4 1,436 90 - - 1,526 2,226 Investment income: interest & dividends 5 610 30 53 - 693 781 glebe rents - - 55 - 55 70 Income from charitable activities: fees, chaplaincy & other income 402 - - - 402 451 Other incoming resources: gain on disposal of fixed assets - 223 - 778 1,001 229 Ann Edwards charity income - - 74 - 74 69 other 95 45 61 - 201 111

Total incoming resources 8,363 742 1,630 778 11,513 10,959

Outgoing resources

Activities for generating funds 4 1,016 - - - 1,016 1,691 Charitable activities: provision of clergy 6 6,862 128 145 - 7,135 7,132 management of synodical funds 189 9 269 - 467 221 provision of support services 7 1,017 774 90 29 1,910 1,931 pensions liability 109 - - - 109 - Ann Edwards charity exp. - - 13 - 13 14 parish giving scheme grants 3a - - 1,332 - 1,332 796 Governance costs 8 162 - - - 162 149 Exceptional item: pensions 12 - - - - - 127

Total outgoing resources 9,355 911 1,849 29 12,144 12,061

Nett (outgoing)/incoming resources (992) (169) (219) 749 (631) (1,102)

Transfers between funds (231) 231 - - - -

Nett incoming resources before gains (1,223) 62 (219) 749 (631) (1,102) Gains/(losses) on investment assets 14 - 46 114 1,483 1,643 (971) Realised gains (glebe disposal) 14 - - - 42 42 315

Nett movement in funds (1,223) 108 (105) 2,274 1,054 (1,758) Funds brought forward at 1 Jan 12 2,186 12,158 2,301 53,964 70,609 72,367

Funds carried forward at 31 Dec 12 17 963 12,266 2,196 56,238 71,663 70,609 14

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Consolidated summary income & expenditure account for the year ended 31 December 2012

2012

(restated)

2011

£’000 £’000

Gross income 10,512 10,730

Total expenditure (12,144) (12,061)

Nett expenditure for the year (1,632) (1,331)

Net realised gains on disposal of fixed assets 1,043 544

Nett surplus/(deficit) for the year (589) (787)

All of the profits and losses shown above arise from continuing operations.

The summary income and expenditure account is derived from the statement of financial activities shown on page 14. Gross income represents total incoming resources of £11,513k less the gain on disposal of tangible fixed assets of £1,001k. 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 2012

2012

(restated)

2011

£’000 £’000

Nett surplus/(deficit) for the year (589) (787)

Unrealised gains/(losses) on revaluation of investment assets 1,643 (971)

Total recognised gains/(losses) for the year 1,054 (1,758)

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Consolidated balance sheet as at 31 December 2012 Company Number 162165

2012 (restated)

2011

Not

es

£’000 £’000

Tangible assets 13 47,938 47,508

Investments 14 20,844 19,689

Fixed Assets 68,782 67,197

Stock and work in progress - 498

Debtors: amounts falling due after one year 15 316 234

Debtors: amounts falling due within one year 15 1,356 1,235

Cash at bank and in hand 2,988 2,453

Current Assets 4,660 4,420

Creditors: amounts falling due within one year 16 (575) (471)

Nett Current Assets (Current assets less creditors <1 year) 4,085 3,949

Total Assets less current liabilities (Fixed Assets plus NCA) 72,867 71,146

Creditors: amounts falling due after one year 16 (1,204) (537)

Nett Assets 71,663 70,609

Endowment funds 17,20 56,238 53,964

Restricted funds 17,19 2,196 2,301

Designated funds (unrestricted) 17,18 12,266 12,158

General fund (unrestricted) 17 963 2,186

Reserves 71,663 70,609

Approved by the Board of Directors on 23 May 2013 and signed on its behalf by

Mary Adlard, Chair

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Parent company balance sheet as at 31 December 2012

2012 (restated)

2011

Not

es

£’000 £’000

Tangible assets 13 46,833 46,475

Investments 14 20,334 19,205

Fixed Assets 67,167 65,680

Stock and work in progress - -

Debtors: amounts falling due after one year 15 514 234

Debtors: amounts falling due within one year 15 1,816 2.245

Cash at bank and in hand 1,787 1.612

Current Assets 4,117 4.091

Creditors: amounts falling due within one year 16 (556) (416)

Nett Current Assets (Current assets less creditors <1 year) 3,561 3,675

Total Assets less current liabilities (Fixed Assets plus NCA) 70,728 69,355

Creditors: amounts falling due after one year 16 (1,204) (537)

Nett Assets 69,524 68,818

Endowment funds 17,20 55,632 53,383

Restricted funds 17,19 754 913

Designated funds (unrestricted) 17,18 12,266 12,158

General fund (unrestricted) 17 872 2,364

Reserves 69,524 68,818

Approved by the Board of Directors on 23 May 2013 and signed on its behalf by

Mary Adlard, Chair

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Consolidated cash flow statement for the year ended 31 December 2012

2012 (restated)

2011

Not

es

£’000 £’000

Parish Share SoFA 5,550 5,553

Other nett cash outflows 21 (6,738) (7,160)

Operating activities 21 (1,188) (1,607)

Dividends received 5 569 652

Interest received 5 124 129

Interest paid 10 (29) (21)

Return on investment and servicing finance 664 760

Purchase of tangible fixed assets 13 (1,585) (2,132)

Sale of tangible fixed assets 13/SoFA 2,114 229

Purchase of fixed asset investments 14 (1,718) (3,435)

Sale of fixed asset investments 14 2,248 4,965

Investing activities 1,059 (373)

Increase/(Decrease) in cash in the year 535 (1,220)

2012 2011

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

Cash at Bank Bal Sh 2,453 3,673

Funds as at 1 January 2012 2,453 3,673

Cash at Bank Bal Sh 2,988 2,453

Funds as at 31 December 2012 2,988 2,453

Increase/(Decrease) in cash in the year 535 (1,220)

19

Notes to the consolidated accounts for the year ended 31 December 2012

Note 1 Parish Share

Com

mitt

ed in

20

12 (m

emo)

Rece

ived

in 2

012

re

201

2

Rece

ived

in 2

012

re

prio

r ye

ars

2012 2011

£’000 £’000 £’000 £’000 £’000

Gloucester City 502 459 - 459 457

Severn Vale 501 499 5 504 505

Forest South 374 380 4 384 390

Wotton 611 604 9 613 593

Stroud 703 661 23 684 718

Cheltenham 1,036 1,028 1 1,029 1,020

North Cotswold Deanery 674 656 8 664 709

Cirencester 717 712 26 738 691

Tewkesbury & Winchcombe 485 474 1 475 470

Parish Share contributions 5,603 5,473 77 5,550 5,553

Note 2 Income from the Church Commissioners 2012 2011

£’000 £’000

Guaranteed annuities 3 -

Grant re Bishop’s share of registrar’s retainer 27 26

Church Commissioner grants rec’d 30 26

Note 3 Grants, donations & legacies 2012 2011

£’000 £’000

Ecclesiastical Insurance Group grant 101 101

Voluntary Schools Fund grants 267 274

Landfill Tax Credit Scheme grants 18 33

Other grants 223 182

Donations 40 57

Grants, donations & legacies 649 647

20


Note 3a Parish Giving Scheme

The Parish Giving Scheme enables individuals to make a donation to the Gloucester DBF restricted to a specific parish within the Dioceses of Gloucester, Chichester or Winchester. Gloucester DBF then makes a grant 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 2012 grants were made to a total of 115 parishes totalling £1,332k funded by donations of £1,076k and related Gift Aid of £256k. 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 part grant funded from the Dioceses of Chichester and Winchester.

Note 4 Activities for generating funds

Inco

me

2012

Expe

nditu

re

2012

Nett Profit

2012 Inco

me

2011

Expe

nditu

re

2011

Nett Profit

2011

£’000 £’000 £’000 £’000 £’000 £’000

Rental of vacant housing 267 - 267 183 - 183

Other rents 101 - 101 67 - 67

Property Development: G&FS 1,100 (974) 126 1,918 (1,650) 268

Educational services: Jpg. Fish 58 (42) 16 58 (41) 17

Total 1,526 (1,016) 510 2,226 (1,691) 535

Note 5 Interest & dividends 2012 2011

£’000 £’000

Income from fixed asset investments 569 652

Other interest receivable and similar income 124 129

Interest & dividends 693 781


Note 6 Provision of clergy

2012 2011

National Church responsibilities: £’000 £’000

Training of ordinands 247 246

Pooling of ordinand support costs (13) (88)

Mission agencies pension contributions 14 16

Diocesan responsibilities:

Stipends 4,060 4,193

Housing 1,791 1,802

Selection of ordinands 251 158

Diocesan training and support 480 505

HFEC Grants - 9

Other costs 305 291

Provision of clergy 7,135 7,132

Note 7 Provision of support services

Direct costs

Over-heads 2012 2011

£’000 £’000 £’000 £’000

Parish Resources Department 3 - 3 5

Churches Buildings 129 46 175 166

Pastoral Committee 95 - 95 93

Social Responsibility 175 43 218 231

Education (designated) 430 212 642 632

Children and Young People (general) 96 - 96 77

Youth Strategies (fixed term designated) 66 - 66 79

Communications 84 37 121 146

Giving 72 - 72 81

Grants made payable (see below) 104 - 104 131

Grant to Archbishops’ Council 230 - 230 235

Diocesan Office* 29 59 88 55

Provision of support services 1,513 397 1,910 1,931

* 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.

21

22


Note 7 continued Provision of services: Grants made 2012

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

Berkeley 3 20 CR/LT

Psalms 1 14 DV

Gloucester Historic Churches Trust 1 11 CR

The Rock 1 7 DV

Grants re Energy Audits 50+ 57 DV

Repayment 2008 Grant: Cecil Adams - (5)

Grants made in the year 56+ 104

2011 2012 2012 2011

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

Church repairs (CR) 2 2 13 17

Landfill Tax Credit Scheme* (LT) 3 2 18 33

Training of Ordinands^ (TofO) - - - 13

Development Grants (DV) 7 52+ 78 68

Repayment 2008 Grant: Cecil Adams - - (5) -

Grants made in the year 12 56+ 104 131

* Grants made under the Landfill Tax Credit Scheme are 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.

^One off grant to WEMTC to assist training provision.

23


Note 8 Governance costs 2012 2011

£’000 £’000

Diocesan Office 38 31

Synod expenses 17 14

Auditor’s remuneration 14 16

Legal and professional costs 93 88

Governance costs 162 149

Note 9 Items of expenditure required to be disclosed 2012 2011

Net outgoing/incoming resources are stated after charging: £’000 £’000

Income from fixed asset investments 15 63

Other interest receivable and similar income 6 8

Operating leases: Land and buildings (note 22) 39 35

Operating leases: Other (note 22) 7 10

Note 10 Interest on long term loans 2012 2011

£’000 £’000

Interest on loans wholly or partly repayable beyond 5 years 29 21

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).

24


Note 11 Employees and office holders

2012 2011

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

salaries and stipends 1,419 1,413

social security costs 122 120

other pension costs 424 379

Employees, incl. clergy in DBF employment: 1,965 1,912

stipends 2,669 2,743

social security costs 225 235

other pension costs 936 980

Parochial clergy funded by the DBF: 3,830 3,958

2012 2011

Number of employees and officer holders Number number

Full time 34 34

Part time 28 28

Employees, incl. clergy in DBF employment: 62 62

Parochial clergy funded by the DBF: 131 131

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

Employees earning between £80,001 and £90,000 1 -

Employees earning between £170,001 and £180,000 1 -

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 23 below.

A voluntary redundancy process was undertaken late in 2012, the related payments of which are recorded as earnings within 2012 regardless of payment date. This significantly affects the employee earning brackets for the year


Note 12 Pensions

The Gloucester DBF participates in the Church of England Funded Pensions Scheme and employs 128 members of the Scheme out of a total membership of approximately 9,000 active members.

The Church of England Funded Pensions Scheme is a defined benefit scheme but the Gloucester DBF is unable to identify its share of the underlying assets & liabilities – each employer in that scheme pays a common contribution rate.

A valuation of the Scheme was carried out as at the 31 December 2009. This revealed a shortfall of £262m, with assets of £605m and a funding target of £867m, assessed using the following assumptions:

-

Investment strategy:

for investments backing liabilities for pensions in payment: An allocation to gilts, increasing linearly from nil at 31 December 2009 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 return: 4.4% p.a. on gilts and 5.9% p.a. on equities;

- RPI inflation of 3.8% p.a. (and pension increases consistent with this);

- Increase in pensionable stipends:

3.8% p.a.

- Post-retirement mortality in accordance with 80% of the S1NA tables, with allowance for improvements in mortality rates from 2003 according to the “medium cohort” projections, and subject to a minimum annual improvement of 1.5% for males and 1.0% for females.

For schemes such as the Church of England Funded Pensions Scheme, paragraph 9(b) of FRS 17 requires the Gloucester DBF to account for pension costs on the basis of contributions actually payable to the Scheme in the year.

Following the results of the 2009 valuation, changes were made to benefits being built up in the Scheme from 1 January 2011 and the contribution rate was set at 38.2% of pensionable stipends (of which 14.7% is in respect of the £262m shortfall in the Scheme and 23.5% is in respect of accrual of future benefits and the day-to-day expenses of running the Scheme).

Contribution rates will be reviewed at the next valuation of the Scheme, due as at 31 December 2012.

Lay staff of the GDBF are included in a multi-employer Defined Benefit pension scheme operated by the Church of England Pensions Board (CEPB). During the year the CEPB received the new actuarial valuation for the lay pension scheme dated 31 December 2010. This valuation has identified an indicative liability to the GDBF of £1.3m, despite the significant improvements resulting from the last negotiation. GDBF are currently negotiating the terms and quantum of this deficit with CEPB, however in line with the ongoing treatment of the scheme no specific liability is recognised as the reasonable and consistent nature of the deficit allocation to contributing bodies cannot be conclusively affirmed. On 30 March 2012 GDBF agreed in principle to close the DB scheme to new staff and is in the process of agreeing alternative provision. The DB scheme will remain open for existing staff but with a cap on the level of contributions the GDBF will make.

25

26


Note 13 Tangible Fixed Assets

AEC Property

Freehold Property

Office Equip’t Total

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

At 1 January 2012 1,039 46,446 341 47,826

Additions 72 1,505 8 1,585

Disposals - (1,105) (298) (1,403)

At 31 December 2012 1,111 46,846 51 48,008

Depreciation:

At 1 January 2012 6 - 312 318

Additions - 29 13 42

Disposals - - (290) (290)

At 31 December 2012 6 29 35 70

Nett book value:

At 1 January 2012 1,033 46,446 29 47,508

At 31 December 2012 1,105 46,817 16 47,938

AEC Property includes Freehold Land (£95k) and Buildings (£1,010k), plus equipment & furniture held by the Ann Edwards Charity. The Freehold Land is held as an endowment, whilst the remaining tangible fixed assets are restricted to the purposes of the charity (shown as unrestricted in the AEC accounts).

Freehold properties include Glenfall House, the diocesan retreat and conference centre, at valuation. See note 18 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.

The Parent Company’s tangible fixed assets match those of the Freehold Property and Office Equipment above.

27


Note 14 Fixed Asset Investments Properties Investm’ts Cash

Total 2012

Total 2011

£’000 £’000 £’000 £’000 £’000

Market value at 1 Jan 2012 3,735 15,954 - 19,689 21,875

Additions - 1,718 - 1,718 3,435

Disposals (42) (2,164) - (2,206) (4,650)

Revaluation 172 1,471 - 1,643 (971)

Market Val at 31 Dec 2012 3,865 16,979 - 20,844 19,689

Historic cost at 31 Dec 2012 - 14,953 - 14,953 14,659

Gains on investment assets

Unrealised gains (as above) - 1,471 - 1,471 (971)

Glebe revaluation 172 - - 172 315

Total investment gains 172 1,471 - 1,643 (656)

The Investments of the parent company are £510k (£293k cost) less than that of the consolidated group, and £1,100 greater then that of the consolidated group, both cost and market value being 100% holdings in G&FS and Jumping Fish Ltd.

Of the investment portfolio £5.2m is managed by Rathbones In listed investments. Of these investments £2.6m are UK investments and £2.6m are overseas investments. No one investment is deemed material to the GDBF.

All other fixed asset investments are unlisted investments and primarily represent holdings in Central Board of Finance managed funds.

No historical cost is quoted for investment properties as these represent historic glebe assets brought on to the balance sheet in 1994 at valuation.

The Properties above match the Parent Company’s fixed asset investments along with £16,469k of the investments (total investment gain for Parent Company was £1,617k).

28


Note 15a Consolidated group debtors

Due within one year Due after one year

2012 2011 2012 2011

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 1,117 1,167 113 -

Staff car loans 1 3 2 4

Loans to parishes 91 34 201 230

Due from the Church Commissioners 147 31 - -

Debtors 1,356 1,235 316 234

Included in debtors is an amount of £231k (2011- £253k) 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 15b Parent company debtors


2012 2011 2012 2011

£’000 £’000 £’000 £’000

Prepayments and sundry debtors 1,130 1,162 113 -

Staff car loans 1 3 2 4

Loans to parishes 91 34 201 230

Good & Faithful Servant Ltd 405 998 198 -

Jumping Fish Ltd 42 17 - -

Due from the Church Commissioners 147 31 - -

Debtors 1,816 2,245 514 234

Included in debtors is an amount of £248k (2011 - £256k) due from related charities. These charities are administered by staff of the Board, but the trustees are separate from the directors of the Board.

29


Note 16a Consolidated group creditors


2012 2011 2012 2011

£’000 £’000 £’000 £’000

Accruals and sundry creditors 412 411 - -

Loans 60 60 - -

CBF Loan (Solar Panels) - - 750 -

Value Linked Loans (Church Commissioners) 103 - 434 537

PGS: Loans from other Dioceses - - 20 -

Creditors 575 471 1,204 537

Included in 'Accruals and sundry creditors' is a total of £53,000 (2011 - £52,000) 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 16b Parent company creditors


2012 2011 2012 2011

£’000 £’000 £’000 £’000

Accruals and sundry creditors 393 356 - -

Loans 60 60 - -

CBF Loan (Solar Panels) - - 750 -

Value Linked Loans (Church Commissioners) 103 - 434 537

PGS: Loans from other Dioceses - - 20 -

Creditors 556 416 1,204 537

Included in 'Accruals and sundry creditors' is a total of £53,000 (2011 - £52,000) 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.

30


Note 17 Analysis of nett assets by fund: Summary

Gen

eral

Fu

nds

Des

igna

ted

Fu

nds

Rest

ricte

d

Fund

s

Endo

wm

ent

Fund

s

Total

Funds at 31 Dec 2012 are represented by: £’000 £’000 £’000 £’000 £’000

Tangible fixed assets 16 11,331 1,010 35,581 47,938

Fixed asset investments - 802 1,338 18,704 20,844

Current assets 2,535 857 934 334 4,660

Creditors (1,225) (537) (17) - (1,779)

Inter-fund indebtedness (363) (187) (1,069) 1,619 -

Total Funds at 31 Dec 2012 963 12,266 2,196 56,238 71,663

Funds include the following unrealised gains on investments:

Unrealised gains at 1 Jan 2012 1,450 60 202 2,299 4,011

Nett gains on revaluation in the year - 46 72 1,525 1,643

Unrealised gains at 31 Dec 2012 1,450 106 274 3,824 5,654

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.

31


Note 17 (continued) Analysis of nett assets by fund Detail

Tang

ible

Fi

xed

Asse

ts

Fixe

d As

set

Inve

stm

ents

Curr

ent

Asse

ts

Cred

itors

Inte

r-fun

d In

debt

edne

ss

Total

£’000 £’000 £’000 £’000 £’000 £’000

General Fund 16 - 2,535 (1,225) (363) 963

Development - 802 857 - (618) 1,041

Albright general 1,200 - - - - 1,200

Houses capital 9,961 - - (537) (316) 9,108

Curates’ Housing Fund - - - - 747 747

Education - - - - - -

Viney Hill 170 - - - - 170

Designated Funds 11,331 802 857 (537) (187) 12,266

Housing for elderly clergy - 31 35 - 46 112

Ordination training - 136 - - 32 168

Diocesan Pastoral Fund - 894 355 - (809) 440

Stratton Davis - 242 21 - (10) 253

Ann Edwards Charity 1,010 - 473 (1) - 1,482

Other restricted funds - 35 50 (16) (328) (259)

Restricted Funds 1,010 1,338 934 (17) (1,069) 2,196

Pensions & assistance - 100 - - 136 236

Benefice Property 33,486 - 15 - (916) 32,585

Diocesan Stipends Fund 713 14,498 - - 2,285 17,496

Ann Edwards Charity 95 510 - - - 605

Glebe Property 1,287 3,596 319 - 114 5,316

Endowment Funds 35,581 18,704 334 - 1,619 56,238

Total Funds at 31 Dec 2012 47,938 20,844 4,660 (1,779) - 71,663

32


Note 18 Designated funds

Bala

nce

at

31 Ja

n 20

12

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

2

£’000 £’000 £’000 £’000 £’000 £’000

Development Fund 1,101 31 (137) 46 - 1,041

Albright Bequest 1,200 - - - - 1,200

Houses Capital 8,885 223 - - - 9,108

Curates’ Housing Fund 802 81 (136) - - 747

Education - 407 (638) - 231 -

Viney Hill development 170 - - - - 170

Total Funds at 31 Dec 2012 12,158 742 (911) 46 231 12,266

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.

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 to 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.

33


Note 19 Restricted funds

Bala

nce

at

31 Ja

n 20

12

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

2

£’000 £’000 £’000 £’000 £’000 £’000

Housing for elderly clergy 105 5 - 2 - 112

Ordination training 156 - - 12 - 168

Diocesan pastoral fund 548 80 (268) 80 - 440

Stratton Davis fund 235 12 (10) 16 - 253

Ann Edwards Charity 1,427 74 (15) - - 1,486

Parish Giving Scheme - 1,332 (1,332) - - -

Other (170) 127 (224) 4 - (263)

Total Funds at 31 Dec 2012 2,301 1,630 (1,849) 114 - 2,196

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.

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 Other Restricted funds include a negative fund balance of £302k for Glebe revenue. This relates to professional fees paid out over the last three years for getting Stone Glebe land ready for sale (the asset is held in the Glebe Property endowment fund – see not 20). The land is expected to be put up for sale in 2013, with the related costs being offset by the sale proceeds.

34


Note 20 Endowment funds

Bala

nce

at

31 Ja

n 20

12

Inco

min

g

Reso

urce

s

Reso

urce

s Ex

pend

ed

Net

t ga

ins/

(loss

es)

on a

sset

s

Tran

sfer

s

Bal

ance

at

31 D

ec 1

2

£’000 £’000 £’000 £’000 £’000 £’000

Pensions & assistance 105 118 - 13 - 236

Benefice property 31,954 660 (29) - - 32,585

Diocesan stipends fund 16,221 - - 1,275 - 17,496

Ann Edwards Charity 581 - - 25 - 606

Glebe property 5,103 - - 212 - 5,315

Total Funds at 31 Dec 2012 53,964 778 (29) 1,525 - 56,238

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 on page 12 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.

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.

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.

35


Note 21 Statement of consolidated cash flow: 2012 2011

£’000 £’000

Nett (outgoing) resources for the year (631) (1,102)

Depreciation 42 26

Decrease in stock 498 162

(Increase)/Decrease in debtors and prepayments (203) 783

Increase/(Decrease) in creditors and accruals 771 (487)

Investment income and interest paid (664) (760)

Surplus on disposal of tangible fixed assets (1,001) (229)

Cash outflow from operating activities (1,188) (1607)

Note 22 Financial Commitments: Operating Leases 2012 2011

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

which expire within one year 2 1

which expire between two and five years 5 9

Operating leases; equipment 7 10

which expire within one year 1 1

which expire between two and five years 13 9

Which expire after five years 25 25

Operating leases; property 39 35

Other Commitments Diocese of Western Tanganyika The GDBF has made a commitment to an initial loan of £48k to its sister Diocese of Western Tanganyika for the building of the Brinkman School. This initial loan will fund phase one of the project. At the end of 2012, £10k had been sent to the project (showing in the Development fund debtors), with the remaining £38k being sent once the initial part of the loan has been accounted for, and as required. Redundancy payments At the end of 2012 GDBF entered voluntary redundancy agreements with 4 members of staff. The cost of these redundancies and related contributions were fully expensed in 2012.

36

Notes to the consolidated accounts

for the year ended 31 December 2012

Note 23 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 £23,430 to £33,103 for 2012. 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 11 (2011 -9). In addition two directors received reimbursement of expenses in connection with their ecclesiastical office.

Directors’ expenses for 2012 and 2011 were less than £1,000.

gloucester diocesan board of finance annual report ... · revd canon john wright (resigned 30/1/13)...

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