Gloucester Diocesan Board of Finance Annual Report & Accounts 2013

Contents

board of directors Board of Directors and Principal Officers ...... 1 Rt Revd Michael Perham (President) Rt Revd Martyn Snow (ap 10 Oct13) Mary Adlard (Chair) Summary results...... 2 Revd Craig Bishop Revd Nicholas Bromfield Directors’ report ...... 3 Canon Nigel Chetwood Revd Deborah Forman Strategic report ...... 6 Anna Griffiths Dr Steve Grindrod Very Revd Stephen Lake Report of the auditors ...... 11 Anthony McFarlane Canon Ian Marsh Accounting policies ...... 13 Revd Canon Richard Mitchell Revd Canon Mike Parsons Les Reilly Statement of financial activities ...... 16 Revd Jacqueline Rodwell Tom Rucker (resigned 10 Nov13) Summary income & expenditure account...... 17 Henry Russell Ven Jackie Searle

Revd David Smith Statement of total recognised gains & losses ...... 17 Graham W Smith Ven Robert Springett Consolidated balance sheet ...... 18 Michael Storey Prof Jennifer Tann Rt Revd John Went (resigned 11 Mar13) Parent balance sheet ...... 19 Revd John Wright (resigned 30 Jan13) Statement of cash flows ...... 20 principal officers Benjamin Preece Smith – Secretary Notes to the accounts ...... 21 Julie Ridgway – Head of Finance

solicitor auditors Jos Moule; Diocesan Registrar Mazars LLP Veale Wasborough Vizards Clifton Down House, Beaufort Buildings Orchard Court, Orchard Lane Clifton Down, Clifton, Bristol BS1 5WS Bristol BS8 4AN bankers investment managers Barclays Bank plc CCLA Investment Management Ltd 288 Britannia Warehouse 80 Cheapside The Docks London EC2V 6DZ Gloucester GL1 2YJ registered office Company limited by guarantee Church House Registered number 162165 College Green Gloucester GL1 2LY Registered charity number 251234

How have we done? Highlights from this year’s accounts number of stipendiary clergy funded

2013: 2012: change: -1.5% 129 131 parish share contributions

2013: 2012: change:

£5.8m £5.6m +4.6% general fund net outgoing resources (“loss”)*:

2013: 2012: change:

£794k £992k -20% balance sheet value (nett assets)

2013 2012 change:

+ % £ m 3.0 74 £72m

*Excluding Good & Faithful Servant Ltd: 2013: £718k, 2012: 1,118k, change: 36%

Directors’ report for the year ended 31 December 2013 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

Directors’ report for the year ended 31 December 2013 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 under review; owing to the restructuring it was not introduced in time for the start of a new triennium. 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 – 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; . 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 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).

Directors’ report for the year ended 31 December 2013

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.

Directors’ report for the year ended 31 December 2013 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

Funding the provision of clergy

The principal expenditure of the board is funding the provision of clergy which constitutes 82% of the general fund expenditure of the Board. During the year there was a modest reduction in the number of stipendiary posts funded. This was the result of planned reductions for 2014 being taken at appropriate timing during the year. The Board agreed at Diocesan Synod in October 2012 to reduce the number of parochial clergy posts by six full time equivalent posts between 2013-15. By the end of 2013 slightly more than half of this reduction had been made. Looking ahead the Bishop’s Staff Team are looking at the general deployment of clergy across the diocese and ensuring this represents both a fair distribution of clergy to reflect community size and need and a sustainable pattern of ministry for clergy seeking to fulfill their vocations. Two key strands within this are the strategic development of non-stipendiary ministry set out in Effective Ministry in Every Parish and the decision of the Board at their meeting in December 2013 to direct the income from the proceeds of future glebe sales into funding pioneer ministries, curates and ministry in new housing areas. These plans are long term but with significant glebe sale proceeds expected in 2015 these changes will have an impact in the near future. Management of Synodical Funds

Due to another strong year in the investment markets the Balance Sheet for GDBF increased by £2.1m, ahead of inflation. Whilst this offers good comfort for maintaining spending value there is evidence that over a number of years the balance between capital and income gains on investments has been weighted too heavily to capital gains. As a result the Finance Committee is investigating the Charity Commission’s recent guidance on total return fund management policy to ensure a better distribution of gains which are currently tied up in capital for accounting purposes.

Glebe management had a very good year in bringing forward sites for development. In early 2014 a significant planning application was submitted for the most valuable site in the portfolio and three other sites were sold to promotion contracts. The cash flows from these sales are expected to commence in 2015.

Directors’ report for the year ended 31 December 2013

Provision of Support Services

There was a substantial review of diocesan departments and staffing in late 2012 and 2013 driven by a combination of budget necessity and a review of Central Services. This has led to a significant change for staff with almost all staff employed by the Board ending 2013 with a different job description than they started the year. It has also led to substantial job losses, with Note 11 to the accounts evidencing the loss of seven full time equivalent staff. Whilst all have been affected there are three key strategic changes to note:

i. The Department for Mission and Ministry has been created from the former Department of Discipleship and Ministry, the Department of Social Responsibility, the Diocesan Missioner and part of the former Department for Children and Young People. This new Department will also work with a Council of Reference which will ensure a specific “user group” will be able to have direct input into shaping its work. This has been a year of change and transition for the departments involved which it is hoped will enable 2014 and future years to see great development in its work. ii. The refocused Department of Education under the direction of the Diocesan Board of Education (DBE) has been engaging successfully with the growth of Academies. The Director of Education is now a split role with Canon Helena Arnold also acting as Chief Executive of the Diocese of Gloucester Multi-Academy Trust (DGAT). DGAT is governed, one step removed, by the DBE. During the year DGAT took on the direct management of two Academies and has a business plan to grow this to ten schools by the end of 2016. To help enable this, the DBE has made a grant from its funds of £250k towards the growth of this important activity iii. The Department of Communications has become a shared service with the Dean and Chapter of Gloucester Cathedral. This has helped ensure a more coordinated and joined up external presentation of these two central diocesan bodies alongside the Bishops, it has also enabled much stronger internal communication and relationships between the two offices.

With all proposed support service savings within the strategic plan 2013-5 made before the end of 2013, it is believed that 2014 will be a year for developing the opportunities which exist within the new structures. Financial Review

Ongoing Activities

The financial year to 31 December 2013 was a period of great change within the central diocesan offices funded by GDBF. Twelve posts (including both full and part time) were made redundant during the year. This has enabled on-going cost savings of over £300k to be made; in line with Synod’s budget for the year. A further £100k has already been identified and removed from the budget for 2014. This saving is evident in the prior year comparatives across virtually every cost area other than stipends and pensions. Despite these budget savings the deficit still remains high. This highlights the core balance needed within the GDBF budget is for parish share to pay for the provision of clergy, an imbalance of £1.3m in 2013 (2012: £1.5m). It is crucial to a balanced budget in 2015 that the commitment to increasing parish share and reducing clergy numbers by six is held to. Current plans seek to do this by seeing the total cost of the provision of clergy kept static in cash terms and parish share increasing to £6.2m, which will still leave a funding deficit on clergy costs of around £0.9m.

Directors’ report for the year ended 31 December 2013

The Parish Giving Scheme has been growing at a wonderful rate, almost trebling in size during this year. This is already being shared across four dioceses and is in the process of being transferred into a separate entity to service the whole Church of England. In late 2013 a grant was awarded by Archbishop’s Council to fund enhancements to the scheme and the transfer of the business to a shared ownership company. This has been a great success for GDBF in serving parishes within the diocese and now across the Church. Good and Faithful Servant suffered an accounting loss for the first time. It was noted in the annual report last year that this should be expected and is a result of delays in starting a substantial project meaning there was no income to cover running costs. The future of G&FS however remains good and two planning permissions were obtained within the year including a valuable new development in Leckhampton; works on this site should start in autumn 2014. The Voluntary Schools Fund has made a substantial commitment to growing educational support for schools in the diocese by investing in the Diocese of Gloucester Academies Trust, an entity over which it has synodical oversight. This is an exciting development for Church support of education but will be funded outside the GDBF and therefore these accounts will see a slight reduction in income and expenditure in coming years. Other Activities

The diocesan retreat house was closed in the year and the freehold of Glenfall House reverted back to GDBF. This is to be sold in 2014; in the meantime it is being managed on a holding basis. Cash-flow was easier in 2013 than 2012. 2014 will be a challenging year to balance investment in housing and Good and Faithful Servant developments, with a restructure of the non-benefice housing portfolio and the sale of Glenfall House.

Plans for future periods

As noted above the Board has taken a radical approach to ensuring a balanced budget by 2015. All central cost savings within this plan have been made. Parish Share for 2014 is currently slightly behind budget and needs to increase. Clergy reductions for 2014 have been enacted and the process for identifying savings for 2015 is currently in train. As noted above the Parish Giving Scheme is to be moved to a new shared ownership charitable company in the first half of 2014.

Principal risks and uncertainties

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’ report for the year ended 31 December 2013 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 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. For commentary on investment performance please see Management of Synodical Funds on page 6.

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 2013 between £2.7m and £4.7m). 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 2013 free reserves stood at £0.8m 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 £12m which shows that management is able to resource asset restructuring to ensure there is not a concern for the GDBF’s future as a going concern.

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.

Directors’ report for the year ended 31 December 2013 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

In 2014, in line with best practise, the appointment of auditors will be put out to formal tender.

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

Signed: 13th May 2014

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 2013 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 2013 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.

Ian 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 21 May 2014 Mazars LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

Accounting policies for the year ended 31 December 2013

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 £2,066k (2012: surplus of £1,306k).

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.

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.

13 Accounting policies for the year ended 31 December 2013 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.

14 Accounting policies for the year ended 31 December 2013 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.

15 Consolidated statement of financial activities for the year ended 31 December 2013

As restated t t

Total Total

fund Designated funds Restricted funds Endowm funds General 2013 2012

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

Voluntary income: parish share contributions 1 5,811 - - - 5,811 5,550 church commissioners 2 29 - - - 29 30 grants, donations & legacies 3 285 322 379 - 986 786 parish giving scheme 3a - - 3,562 - 3,562 1,332 Activities for generating funds 4 378 100 - - 478 1,568 Investment income: interest & dividends 5 655 30 81 - 766 727 rents receivable - - 109 - 109 94 Income from charitable activities: fees, chaplaincy & other income 527 - - - 527 449 Other incoming resources: gain on disposal of fixed assets - - 68 1,081 1,149 1,002 other 6 3 14 - 23 28

Total incoming resources 7,691 455 4,213 1,081 13,440 11,566

Resources expended

Costs of generating funds 4 143 - - - 143 1,046 Charitable activities: provision of clergy 6 6,964 111 32 - 7,107 7,076 management of synodical funds 208 14 261 - 483 556 provision of support services 7 983 683 100 29 1,795 2,038 pensions liability 146 - - - 146 109 parish giving scheme grants 3a - - 3,562 - 3,562 1,332 Governance costs 8 41 - 1 - 42 40

Total resources expended 8,485 808 3,956 29 13,278 12,197

Net (outgoing)/ incoming (794) (353) 257 1,052 162 (631) resources

Transfers between funds 929 189 (37) (1,081) - -

Net incoming/(outgoing) resources before 135 (164) 220 (29) 162 (631) gains Gains on investment assets 14 - 18 155 1,515 1,688 1,643 Realised gains (glebe disposal) 14 - - - 206 206 42

Net movement in funds 135 (146) 375 1,692 2,056 1,054 Funds brought forward at 1 Jan 13 963 12,266 2,196 56,238 71,663 70,609 Funds carried forward at 31 Dec 13 18 1,098 12,120 2,571 57,930 73,719 71,663 16 Consolidated summary income & expenditure account for the year ended 31 December 2013

2013 2012 £’000 £’000 Gross income 12,291 10,564 Total expenditure (13,278) (12,197) Net expenditure for the year (987) (1,633) Net realised gains on disposal of fixed assets 1,355 1,044

Net surplus/(deficit) for the year 368 (589)

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 15. Gross income represents total incoming resources of £13,440k less the gain on disposal of tangible fixed assets of £1,149k. 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 2013

2013 2012 £’000 £’000 Net surplus/(deficit) for the year 368 (589) Unrealised gains on revaluation of investment assets 1,688 1,643

Total recognised gains/(losses) for the year 2,056 1,054

17 Consolidated balance sheet as at 31 December 2013

As restated

2013 2012

Notes £’000 £’000 Tangible assets 13a 47,864 48,232 Investments 14a 22,993 21,155 Fixed Assets 70,857 69,387

Stock and work in progress 15 330 -

Debtors: amounts falling due after one year 16a 328 316

Debtors: amounts falling due within one year 16a 796 751 Cash at bank and in hand 3,245 2,988 Current Assets 4,699 4,055

Creditors: amounts falling due within one year 17a (653) (575)

Net Current Assets (Current assets less creditors <1 year) 4,046 3,480

Total Assets less current liabilities (Fixed Assets plus NCA) 74,903 72,867

Creditors: amounts falling due after one year 17a (1,184) (1,204)

Net Assets 73,719 71,663

Endowment funds 18,21 57,930 56,238 Restricted funds 18,20 2,571 2,196

Designated funds (unrestricted) 18,19 12,120 12,266 General fund (unrestricted) 18 1,098 963

Reserves 73,719 71,663

Approved by the Board of Directors on 13th May 2014 and signed on its behalf by

Mary Adlard, Chair Signed: 13th May 2014

18 Parent company balance sheet as at 31 December 2013

As restated

2013 2012

Notes £’000 £’000 Tangible assets 13b 46,759 47,127 Investments 14b 23,118 20,645 Fixed Assets 69,877 67,772

Stock and work in progress - -

Debtors: amounts falling due after one year 16b 329 514

Debtors: amounts falling due within one year 16b 1,594 1,811 Cash at bank and in hand 2,248 1.787 Current Assets 4,171 4,112

Creditors: amounts falling due within one year 17b (674) (556)

Net Current Assets (Current assets less creditors <1 year) 3,497 3,556

Total Assets less current liabilities (Fixed Assets plus NCA) 73,374 71,328

Creditors: amounts falling due after one year 17b (1,184) (1,204)

Net Assets 72,190 70,124

Endowment funds 18,21 57,311 55,632 Restricted funds 18,20 1,067 754

Designated funds (unrestricted) 18,19 12,120 12,266 General fund (unrestricted) 18 1,692 1,472

Reserves 72,190 70,124

Approved by the Board of Directors on 13th May 2014 and signed on its behalf by

Mary Adlard, Chair Signed: 13th May 2014

19 Consolidated cash flow statement for the year ended 31 December 2013

2013 2012

Notes £’000 £’000 Parish Share SoFA 5,811 5,550 Other net cash outflows (7,830) (6,738) Operating activities 22 (2,019) (1,188)

Dividends received 5 682 569

Interest received 5 84 124 Interest paid 10 (24) (29) Return on investment and servicing finance 742 664

Purchase of tangible fixed assets 13a (569) (1,585)

Sale of tangible fixed assets 13/SoFA 2,047 2,114 Purchase of fixed asset investments 14a (1,097) (1,718) Sale of fixed asset investments 14a 1,153 2,248 Investing activities and capital expenditure 1,534 1,059

Increase in cash in the year 257 535

2013 2012 Reconciliation of net cash flow to movement in net funds: £’000 £’000 Funds as at 1 January 2013 2,988 2,453

Cash inflow 257 535

Funds as at 31 December 2013 3,245 2,988

20 Notes to the consolidated accounts for the year ended 31 December 2013

Note 1

Parish Share

2013 (memo) 2013 2013 in Received re 2013 2013 in Received years re prior Committed in in Committed 2013 2012 £’000 £’000 £’000 £’000 £’000 Gloucester City 515 488 - 488 459 Severn Vale 518 514 4 518 504 Forest South 413 407 1 408 384 Wotton 624 629 8 637 613 Stroud 715 707 30 737 684 Cheltenham 1,061 1,052 13 1,065 1,029 North Cotswold Deanery 694 684 14 698 664 Cirencester 754 737 7 744 738 Tewkesbury & Winchcombe 506 504 12 516 475

Parish Share contributions 5,800 5,722 89 5,811 5,550

Note 2 Income from the Church Commissioners 2013 2012 £’000 £’000 Guaranteed annuities 2 3 Grant re Bishop’s share of registrar’s retainer 27 27

Church Commissioner grants rec’d 29 30

21 Notes to the consolidated accounts for the year ended 31 December 2013

Note 3 As Grants, donations & legacies restated 2013 2012 £’000 £’000 Ecclesiastical Insurance Group grant 101 101 Voluntary Schools Fund grants 217 267 Landfill Tax Credit Scheme grants 12 18 Other grants 251 348 Ordination Training (restricted) donations 65 - Bishop’s Mission (restricted) donation 250 - Donations 90 52

Grants, donations & legacies 986 786

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 2013 grants were made to a total of 268 (2012: 115) parishes totalling £3,562k (2012: £1,332k) funded by donations of £2,872k (2012: £1,076k) and related Gift Aid of £690k (2012: £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 through grants towards these costs, funded from the Dioceses of Chichester and Winchester.

Note 4

Activities for generating funds restated

Net Net

Profit Profit

2013 Expenditure 2013 Income 2012 Expenditure 2012 Income 2013 2012 £’000 £’000 £’000 £’000 £’000 £’000

Rental of vacant housing 390 - 390 364 - 364 Investment Management costs - (34) (34) - (30) (30) Other income (SLA etc) 33 - 33 46 - 46 Property Development: G&FS - (73) (73) 1,100 (974) 126 Educational services: JF Ltd 55 (36) 19 58 (42) 16

Total 478 (143) 335 1,568 (1,046) 522

22 Notes to the consolidated accounts for the year ended 31 December 2013

Note 5 As Interest & dividends restated 2013 2012 £’000 £’000

Income from fixed asset investments 682 661 Other interest receivable and similar income 84 71

Interest & dividends 766 727

Note 6 As Provision of clergy restated 2013 2012 £’000 £’000 National Church responsibilities: Training of ordinands 250 247 Pooling of ordinand support costs 3 (13) Mission agencies pension contributions 10 14 Retired clergy housing costs (CHARM) & grants 81 72 Diocesan responsibilities: Stipends and National insurance contributions 3,043 2,960 Clergy pension contributions 980 938 Housing costs income removal and resettlement 1,437 1,549 Selection of Ordinands 220 201 Diocesan training 85 84 Ministerial support, assistance and wellbeing - non-staff costs 341 341 - staff costs 547 615 Parish support during vacancy and illness 52 30 Other costs 58 38

Provision of clergy 7,107 7,076

23 Notes to the consolidated accounts for the year ended 31 December 2013

Note 7 As Provision of support services Direct Over- restated costs heads 2013 2012 £’000 £’000 £’000 £’000

Churches Buildings 96 54 150 220 Pastoral Committee 111 - 111 95 Social Responsibility inc families 211 - 211 323 Education (designated) 392 143 535 674 Youth Strategies (fixed term designated) 10 - 10 66 Communications 88 40 128 121 Giving 92 - 92 72 Ann Edwards Charity 13 - 13 12 Legal & Professional 154 - 154 93 Grants made payable (see below) 132 - 132 104 Grant to Archbishops’ Council 230 - 230 230 Diocesan Office* 29 - 29 28

Provision of support services 1,558 237 1,795 2,038

* 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.

24 Notes to the consolidated accounts for the year ended 31 December 2013

Note 7 continued Provision of services: Grants made 2013 Detail of grants over £1,000: number £’000 purpose

Berkeley 1 12 LT South Cheltenham Youth Projects 1 10 DV Gloucester Historic Churches Trust 1 10 CR The Rock 1 50 DV Glenfall House 1 50 CS

Grants made in the year 132

2013 2012 2013 2012 Summary of grants made: number number £’000 £’000

Church repairs (CR) 1 2 10 13 Landfill Tax Credit Scheme* (LT) 1 2 12 18 Closure Support (CS) 1 - 50 - Development Grants (DV) 2 52 60 78 Repayment 2008 Grant: Cecil Adams - - - (5)

Grants made in the year 5 56+ 132 104

* 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.

Note 8 As Governance costs restated 2013 2012 £’000 £’000 Diocesan Office 11 8 Synod expenses 15 17 Auditor’s remuneration 16 15

Governance costs 42 40

25 Notes to the consolidated accounts for the year ended 31 December 2013

Note 9 As Net incoming/(outgoing) resources are stated after charging: restated 2013 2012 £’000 £’000 Depreciation 13 15 Auditors remuneration - audit 18 17 - non-audit 1 1 Interest on Church Commissioner’s loans: Loan for Solar Panel installations 9 6 Value Linked Loans on parsonage houses 31 40

Operating leases: Land and buildings (note 23) 31 39 Operating leases: Other (note 23) 8 7

Note 10 Interest on long term loans 2013 2012 £’000 £’000 Interest on loans wholly or partly repayable beyond 5 years 24 29

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).

26 Notes to the consolidated accounts for the year ended 31 December 2013

Note 11 As Employees and office holders restated 2013 2012 Costs of employees and officer holders £’000 £’000 salaries and stipends 1,193 1,452 social security costs 103 127 other costs 95 183 other pension costs 311 484 Employees, incl. clergy in DBF employment: 1,702 2,246

stipends 2,812 2,669 social security costs 227 225 pension costs 980 936 Parochial clergy funded by the DBF: 4,019 3,830

As restated 2013 2012 Number of employees including clergy in DBF employment Number Number £’000 Full time equivalent 39 46 Parochial clergy funded by the DBF 129 131

The number of employees whose emoluments exceeded £60,000 were as follows:- Employees earning between £60,001 and £70,000 1 1* Employees earning between £80,001 and £90,000 - 1* Employees earning between £170,001 and £180,000 - 1*

The employer's pension contribution for staff earning over £60,000 was £18,367. (2012: £21,880)

*The 2012 emoluments bandings above include the various redundancy and severance payments following the restructuring exercise that was undertaken in that year.

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.

27 Notes to the consolidated accounts for the year ended 31 December 2013

Note 12 Pensions

Church of England Funded Pensions Scheme

The Gloucester DBF participates in the Church of England Funded Pensions Scheme and employs 123 members of the Scheme out of a total membership of approximately 8,500 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 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: o 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 o for investments backing liabilities prior to retirement, a 100% allocation to return-seeking assets.

- Investment return: 3.2% p.a. on gilts and 5.2% p.a. on equities;

- RPI inflation of 3.2% p.a. (and pension increases consistent with this);

Increase in pensionable - 3.2% p.a. stipends: Post-retirement mortality in accordance with 80% of the S1NMA and S1NFA tables, with - allowance 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 DBF 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 DBF’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).

Contribution rates will be reviewed at the next valuation of the Scheme, due as at 31 December 2015.

28 Notes to the consolidated accounts for the year ended 31 December 2013

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. The next formal valuation of the PBS is due as at December 2013 and the work will be performed over 2014.

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 5 active members in the PBS at 31 December 2013.

Church of England Defined Benefits Scheme

Gloucester Diocesan Board of Finance participates in the Church of England Defined Benefits Scheme (DBS), part of the Church Workers Pension Fund.

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 DBS. A valuation of the Fund was carried out as at 31st December 2010 and the Gloucester Diocesan Board of Finance’s contribution rate in respect of future accruing benefits was revised to 28% pa of pensionable salaries and additional contributions in respect of the shortfall in the Employer sub-pool of 3.3% pa are payable until further notice. The next valuation of the Fund is due as at December 2013 and the work will be performed over 2014.

At 31st December 2013 the Employer had 28 active members and 24 deferred pensioner members in the Fund.

29 Notes to the consolidated accounts for the year ended 31 December 2013

Note 13a Group Assets Leasehold Tangible Fixed Assets under property Freehold Office construction improvements Property Equipment Total Cost or valuation: £’000 £’000 £’000 £’000 £’000 At 1 January 2013 294 - 47,957 51 48,302 Additions 51 177 279 62 569 Disposals (84) - (814) - (898) Transfers (86) - 86 - -

At 31 December 2013 175 177 47,508 113 47,973

Depreciation: At 1 January 2013 - - 35 35 70 Additions - - 29 10 39 Disposals - - - - -

At 31 December 2013 - - 64 45 109

Net book value: At 1 January 2013 294 - 47,922 16 48,232

At 31 December 2013 175 177 47,444 68 47.864

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.

30 Notes to the consolidated accounts for the year ended 31 December 2013

Note 13b Parent Assets Leasehold Tangible Fixed Assets under property Freehold Office construction improvements Property Equipment Total Cost or valuation: £’000 £’000 £’000 £’000 £’000 At 1 January 2013 294 - 46,846 51 47,191 Additions 51 177 279 62 569 Disposals (84) - (814) - (898) Transfers (86) - 86 - -

At 31 December 2013 175 177 46,397 113 46,862

Depreciation: At 1 January 2013 - - 29 35 64 Additions - - 29 10 39 Disposals - - - - -

At 31 December 2013 - - 58 45 103

Net book value: At 1 January 2013 294 - 46,817 16 47,127

At 31 December 2013 175 177 46,339 68 46,759

31 Notes to the consolidated accounts for the year ended 31 December 2013

Note 14a Group Assets As Fixed Asset Investments under Total restated Properties construction Investments 2013 2012 £’000 £’000 £’000 £’000 £’000 Market value at 1 Jan 2013 3,865 311 16,979 21,155 19,999 Additions - 64 1,033 1,097 1,719 Disposals (94) - (853) (947) (2,206) Unrealised inv. gains/(losses) - - 1,688 1,688 1,643

Market Val at 31 Dec 2013 3,771 375 18,847 22,993 21,155

Historic cost at 31 Dec 2013 - 14,558 14,558 14,953

Gains on investment assets Unrealised gains (as above) - - 1,688 1,688 1,471

Gains realised on disposal (glebe) 206 - - 206 172

Total investment gains 206 - 1,688 1,894 1,643

Note 14b Parent Assets As Fixed Asset Investments under Total restated Properties construction Investments 2013 2012 £’000 £’000 £’000 £’000 £’000 Market value at 1 Jan 2013 3,865 311 16,469 20,645 19,514 Additions - 64 1,684 1,748 1,719 Disposals (94) - (853) (947) (2,206) Unrealised inv. gains/(losses) - - 1,672 1,672 1,618

Market Val at 31 Dec 2013 3,771 375 18,972 23,118 20,645

Historic cost at 31 Dec 2013 - 14,915 14,915 14,265

Gains on investment assets Unrealised gains (as above) - - 1,673 1,673 1,445 Glebe revaluation - - - - 130 Gains realised on disposal 206 - - 206 42 (glebe)

Total investment gains 206 - 1,673 1,879 1,617

32 Notes to the consolidated accounts for the year ended 31 December 2013

Investments comprise:- Group Parent

2013 2012 2013 2012 £’000 £’000 £’000 £’000 (i) Listed investments (equities) UK Investments 5,748 5,133 5,620 5,019 Non-UK investments 6,428 5,729 6,329 5,640

12,176 10,862 11,949 10,659 (ii) Listed investments (fixed interest) UK Investments 728 648 728 648 Listed Investments total 12,904 11,510 12,677 11,307 (iii) Unlisted investments Property 1,897 1,699 1,850 1,657 Fixed Interest 3,586 3,354 3,342 3,095 Other 460 416 452 409 (iv) Good and Faithful Servant Limited - - 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 shared 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 18,847 16,979 18,972 16,468

33 Notes to the consolidated accounts for the year ended 31 December 2013

Note 15 Stock and Work In Progress Stock and work in progress comprises work in progress amounting to £330k (2012: Nil) 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..

Note 16a Due within one year Due after one year Consolidated group debtors

As As restated restated 2013 2012 2013 2012 £’000 £’000 £’000 £’000 Prepayments and sundry debtors 588 512 79 113 Staff car loans 1 1 - 2 Loans to parishes 78 91 249 201 Due from the Church Commissioners 129 147 - -

Debtors 796 751 328 316

Included in debtors is an amount of £191k (2012- £231k) 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 Due within one year Due after one year Parent company debtors

As As restated restated 2013 2012 2013 2012 £’000 £’000 £’000 £’000 Prepayments and sundry debtors 491 525 80 113 Staff car loans 1 1 - 2 Loans to parishes 78 91 249 201 Good & Faithful Servant Ltd 824 1,005 - 198 Jumping Fish Ltd 71 42 - - Due from the Church Commissioners 129 147 - -

Debtors 1,594 1,811 329 514

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 £273k (2012 - £248k) due from related charities. These charities are administered by staff of the Board, but the trustees are separate from the directors of the Board.

34 Notes to the consolidated accounts for the year ended 31 December 2013

Note 17a Due within one year Due after one year Consolidated group creditors

As As restated restated 2013 2012 2013 2012 £’000 £’000 £’000 £’000 Accruals and sundry creditors 336 412 - - Loans 60 60 - - CBF Loan (Solar Panels) - - 750 750 Value Linked Loans (Church Commissioners) 217 103 434 434 PGS: Loans from other Dioceses 40 - - 20

Creditors 653 575 1,184 1,204

Included in 'Accruals and sundry creditors' is a total of £51k (2012 - £53k) 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 Due within one year Due after one year Parent company creditors

As As restated restated 2013 2012 2013 2012 £’000 £’000 £’000 £’000

Accruals and sundry creditors 357 393 - - Loans 60 60 - - CBF Loan (Solar Panels) - - 750 750 Value Linked Loans (Church Commissioners) 217 103 434 434 PGS: Loans from other Dioceses 40 - - 20

Creditors 674 556 1,184 1,204

Included in 'Accruals and sundry creditors' is a total of £51k (2012 - £53k) due to related charities which are administered by staff of the Board and whose trustees are also trustees of the Board.

35 Notes to the consolidated accounts for the year ended 31 December 2013

Note 18

Analysis of net assets by fund:

Summary

General General Funds Designated Funds Restricted Funds Endowment Funds Total Funds at 31 Dec 2013 are represented by: £’000 £’000 £’000 £’000 £’000

Tangible fixed assets 247 11,309 1,170 35,138 47,864 Fixed asset investments - 820 1,493 20,680 22,993 Current assets 3,067 909 720 3 4,699 Creditors (1,168) (651) (18) - (1,837) Inter-fund indebtedness (1,048) (267) (794) 2,109 -

Total Funds at 31 Dec 2013 1,098 12,120 2,571 57,930 73,719

Funds include the following unrealised gains on investments: Unrealised gains at 1 Jan 2013 1,450 106 274 3,824 5,654 Net gains on revaluation in the year - 18 155 1,721 1,894

Unrealised gains at 31 Dec 2013 1,450 124 429 5,545 7,548

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.

36 Notes to the consolidated accounts for the year ended 31 December 2013

Note 18 (continued)

Analysis of net assets by fund

fund

Detail -

Fixed Assets Fixed Asset Fixed Investments Current Assets Creditors Inter Indebtedness Tangible Tangible Total £’000 £’000 £’000 £’000 £’000 £’000

General Fund 247 - 3,067 (1,168) (1,048) 1,098

Development - 820 909 - (746) 983 Albright general 1,246 - - - (96) 1,150 Houses capital 9,893 - - (651) (134) 9,108 Curates’ Housing Fund - - - - 709 709 Education ------Viney Hill 170 - - - - 170 Designated Funds 11,309 820 909 (651) (267) 12,120

Housing for elderly clergy - 35 37 - 42 114 Ordination training - 152 - - 97 249 Diocesan Pastoral Fund 160 1,000 92 - (738) 514 Stratton Davis - 266 23 - (11) 278 Bishop’s Mission Fund - - - - 185 185 Ann Edwards Charity 1,010 - 536 (1) - 1,545 Education - - - - 10 10 Brinkman High School DWT - - - - (13) (13) Other restricted funds - 40 32 (17) (366) (311) Restricted Funds 1,170 1,493 720 (18) (794) 2,571

Pensions & assistance - 117 - - 136 253 Benefice Property 33,095 - - - (510) 32,585 Diocesan Stipends Fund 663 16,162 - - 2,126 18,951 Ann Edwards Charity 95 525 - - - 620 Glebe Property 1,285 3,876 3 - 357 5,521 Endowment Funds 35,138 20,680 3 - 2,109 57,930

Total Funds at 31 Dec 2013 47,864 22,993 4,699 (1,837) - 73,719

37 Notes to the consolidated accounts for the year ended 31 December 2013

Note 19

Designated funds

Balance at Balance 13 Dec 31 Balance at Balance 1 2013 Jan Incoming Resources Resources Expended Net gains/(losses) assets on Transfers £’000 £’000 £’000 £’000 £’000 £’000

Development Fund 1,041 36 (112) 18 - 983 Albright Bequest 1,200 - (50) - - 1,150 Houses Capital 9,108 - - - - 9,108 Curates’ Housing Fund 747 73 (111) - - 709 Education - 346 (535) - 189 - Viney Hill development 170 - - - - 170

Total Funds at 31 Dec 2013 12,266 455 (808) 18 189 12,120

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 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.

38 Notes to the consolidated accounts for the year ended 31 December 2013

Note 20

Restricted funds

Balance at Balance 13 Dec 31 Balance at Balance 1 2013 Jan Incoming Resources Resources Expended Net gains/(losses) assets on Transfers £’000 £’000 £’000 £’000 £’000 £’000

Housing for elderly clergy 112 2 (4) 4 - 114 Ordination training 168 65 - 16 - 249 Diocesan pastoral fund 440 117 (149) 106 - 514 Stratton Davis fund 253 12 (11) 24 - 278 Bishop’s Discretionary Mission Fund - 250 (65) - - 185 Ann Edwards Charity 1,486 74 (15) - - 1,545 Education - 10 - - - 10 Brinkman High School DWT - 39 (52) - - (13) Parish Giving Scheme - 3,562 (3,562) - - - Other (263) 82 (98) 5 (37) (311)

Total Funds at 31 Dec 2013 2,196 4,213 (3,956) 155 (37) 2,571

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 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.

39 Notes to the consolidated accounts for the year ended 31 December 2013

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. Grants for £52k were sent to DWT to cover the first stages of the building project, and were funded by £26k worth of donations from parishes and £26k from the GDBF. The negative fund balance of £13k is made up of the remaining £13k in donations received less the £26k grant sent by the GDBF.

The Other Restricted funds include a negative fund balance of £363k 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 20). The transfer of £37k relates to an internal management charge to the general fund.

Note 21

Endowment funds

Balance at Balance 13 Dec 31 Balance at Balance 1 2013 Jan Incoming Resources Resources Expended Net gains/(losses) assets on Transfers £’000 £’000 £’000 £’000 £’000 £’000

Pensions & assistance 236 - - 17 - 253 Benefice property 32,585 1,081 - - (1,081) 32,585 Diocesan stipends fund 17,496 - (29) 1,484 - 18,951 Ann Edwards Charity 606 - - 14 - 620 Glebe property 5,315 - - 206 - 5,521

Total Funds at 31 Dec 2013 56,238 1,081 (29) 1,721 (1,081) 57,930

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. The transfer made from this fund during the year relates to the profit of house sales to the general fund.

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.

40 Notes to the consolidated accounts for the year ended 31 December 2013

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 2013 2012 £’000 £’000 Net incoming/(outgoing) resources for the year 162 (631) Depreciation 39 42 (Increase)/Decrease in stock (330) 498 (Increase) in debtors and prepayments (57) (203) Increase in creditors and accruals 58 771 Investment income and interest paid (742) (664) Surplus on disposal of tangible fixed assets (1,149) (1,001)

Cash outflow from operating activities (2,019) (1,188)

Note 23 Financial Commitments: Operating Leases 2013 2012 Annual commitments in respect of operating leases £’000 £’000 which expire within one year - 2 which expire between two and five years 8 5

Operating leases; equipment 8 7

which expire within one year 6 1 which expire between two and five years 25 13 Which expire after five years - 25

Operating leases; property 31 39

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 to 24th March 2014 (£2k a quarter).

41 Notes to the consolidated accounts for the year ended 31 December 2013

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 £23,900 to £32,360 (2012: £23,430 to £33,103). 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 12 (2012 - 11). In addition two (2012: two) directors received reimbursement of expenses in connection with their ecclesiastical office. Directors’ expenses for 2013 and 2012 were less than £1,000.

Note 25 Restatement of comparatives

The 2012 comparative figures and related disclosures have been restated to better reflect the nature of certain items of income and expenditure. Also certain debtor balances associated with developments have been reclassified as assets under construction within tangible fixed assets and investments respectively. These restatements and reclassifications do not impact on the results for 2012 or the net assets at the yearend date.