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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
Directors’ report for the year ended 31 December 2014
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
Directors’ report for the year ended 31 December 2014
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
Directors’ report for the year ended 31 December 2014
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
Directors’ report for the year ended 31 December 2014
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
Directors’ report for the year ended 31 December 2014
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
Directors’ report for the year ended 31 December 2014
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’ report for the year ended 31 December 2014
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.
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
Accounting policies for the year ended 31 December 2014
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
Accounting policies for the year ended 31 December 2014
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
Signed: 27th May 2015
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
Signed: 27th May 2015
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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
Notes to the consolidated accounts for the year ended 31 December 2014
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.